Look out over the subdivisions, acres upon acres of efficiently produced, template-designed, homes that have come to characterize a 15-year building bonanza. Look out beyond those tracts, and you may glimpse stark realities dawning on home builders and the business of scale for which those homes have become symbolic.
Whether it's a “soft” landing or something worse, the current acid test is not just an issue of interest rates and other still unclear metrics. Those may just be harbingers of a bigger shift in demand, design tastes, implementation, and even what “home” comes to mean for a new generation of buyers. At its heart: the advance of Generation X into home buying ranks, composing a substantially smaller market with a palpably different aesthetic. In short, builders face a buyer's market, made up of buyers of different predilections than they've seen.
This may require builders to re-envisage their processes as other commodity industries have, starting with a greater focus on—and understanding of—a consumer. As simple as that may sound, it poses a notion long considered unseemly for a brick-and-mortar industry: that marketing—if not in the traditional Coke or Nike sense—is necessary to distinguish Home X, as it were, from many, many Home Ys.
BE DIFFERENT OR ELSE “You've got an excess in capacity, an excess of speculative capital, so as soon as you let the air out of this situation, people are going to find themselves sitting not only on real estate they can't afford but real estate that hasn't even been built on [that] they can't afford. Builders may find themselves with a glut of property sitting empty,” says Andrew Zolli, futurist and president of Z+ Partners, Brooklyn, N.Y. “You're still going to have new citizens making babies, needing houses, but it's going to be a market in which you have to differentiate.”
According to Zolli and an ad hoc panel of distinguished “outsider” experts, creating “meaning” in a shifting market may require more informed brand building, more understanding of where a consumer is coming from, and, importantly, how they consider this purchase.
“If location-location-location is everything, it's psycho-location now,” says Jim Taylor, vice chairman of development consultants the Harrison Group, Waterbury, Conn., and a longtime brand steward with blue-chip companies such as Gateway, Iomega, E.F. Hutton ,and, more recently, Lyle Anderson. “It begins with a brand analysis, not an architectural analysis. Pick a target, usually a lifestyle but really a dream state—you find what home really means to these people. This is a shift away from designing to an income point and standard sets of amenities toward a personality and a set of social expectations.”
Between Taylor and Zolli, influential and outspoken New Urbanist Andres Duany; architect Sarah Susanka, author and postulator of the Not So Big Home movement; New York–based cultural analyst Douglas Rushkoff; and marketing veteran Fred Geyer of Zyman Group, Atlanta, a narrative develops. It tells of a coming marketplace shaped by a different kind of consumer, conditioned to a heightened sense of discernment by an information technology revolution, seeking a less costly existence in smaller cities rather than the suburbs whence they came—and how they may be catalysts for a new set of dynamics in home building for other demographics. Former Brandweek magazine editor Matthew Grimm spoke with them about evolving consumer needs that offer home builders branding opportunities and challenges.
Big Builder: What is it about suburbia that seems anathema amid the current generational shift from the Baby Boom to Generation X?
Andres Duany: This isn't my mother's market, it's not my market, and you have kids coming in for whom the suburbs hold no charm. And because of petroleum prices, whatever world we had is not the same world we have. It's incredible how product is the same, from San Diego to Philadelphia, and it doesn't matter anymore if the bathroom is on the left or the right, or the laundry room is upstairs, if it's an open kitchen or a closed kitchen. Some might cost more or less per square foot, but it's only the illusion of choice because it's all the same lifestyle.
BB: This seems to go with the geodemographic movement to smaller, more “livable” cities—sort of regional culture centers—or at least bypassing the more specific suburban rings.