The 2019 Housing Market Will Be All About Perspective
As 2018 comes to an end, I am reminded that it is all about perspective. I started my day this morning hearing Former Fed Chairman Alan Greenspan being quoted in MarketWatch telling stock investors the gains we’ve seen in 2018 are over and they should “run for cover.” That stuck with me as I jumped on my bike and listened to the Cannonball Mindset podcast and an interview with Jim O’Connell, Hulu’s VP of West Coast Advertising, about their subscription video on demand business. It has changed the way we watch television, totally disrupted broadcast sales and established a successful new business model. A model based on specialization, customization, automation and attribution, driven by listening deeply to the customer.
The stock market has been buoyed by a number of things that economists say seem to be waning, and old business models are changing, creating opportunities for customer-centric new ones. From my perspective, the new home construction and community development industry is faced with a choice in perspective on this eve of 2019 as well.
Last week I met with one highly regarded market economist who used the “R” word (Recession) for the first time. The very next day an equally regarded market economist called what’s ahead a “speed bump.” I am no economist, rather, I spend my days working with developers and builders to interpret market demand, uncover consumer insights, and collaborate with teams to define a vision, product segmentation and development programs for new home communities.
It’s been about six months (maybe a little longer for some) since talk about a housing slowdown began. In our “long view” business, that’s long enough for many to choose the path they’ll take in 2019 as they build and sell products in what may very well be a slower market. I’m ending the year with what I am hearing from the builders, developers and designers I work with, not about what they are afraid of but about what they are most excited about for 2019.
What has struck me about these spur-of-the-moment email and text message replies is the energy these industry innovators are bringing to 2019 as a year to drive change in their business. They don’t attempt to predict the future, rather they lay down the challenge for us all to stay flexible, listen to customers, create great experiences (not just products) and be ready to collaborate to succeed in the year ahead.
Motivating for sure, here’s what some of these leaders I interact with across the country are most excited about for 2019:
- I am most excited to see how our planning and preparation for current and oncoming project strategies unfold within the market climate. Have we given ourselves enough flexibility to adjust and capitalize on the market? What can 2019 teach us about how we can do better?
- I’m excited about proactive collaboration between retail, office and residential developers to crack the code for the new generation of mixed-use developments.
- The opportunity to get better every day. And the chance to dig into how we can turn every single interaction, big and small, into a chance to build a meaningful relationship with our buyers, vendors and developers. How do we inject meaning in everyday interactions and elevate our level of experiences with each other?
- First, I think new construction gets introduced to many new home shoppers that wouldn’t have considered it before because of the still low inventory on the resale market. The floor plans will be more innovative and design forward while keeping complexity at a minimum to aid new home shoppers and keep costs down. Neighborhood programming and opportunities to connect people in the neighborhood will grow exponentially. For builders to compete, the product has to expand to outside the home into the space between. You’ll see more connectivity to homeowner groups and their initiatives, like fundraising, 5k charity runs, and places and spaces to collect talent like artisans who live within the neighborhood.
- Builders have been able to ‘ride’ the market/buyer upturn for 7-8 years. Now, with attainability being a HUGE factor, many are beginning to understand they have to deliver a different housing product, opening the doors for new, better “targeted” lifestyle home design on smaller lots. Smart builders will start the design process with an eye to attract consumers based on design and ‘attainability’.
- I’m excited to see how the forward-thinking, entrepreneurial developers of 2019 and beyond break out of the “MPC” mold to deliver community in a way that truly fits the way today’s generations want to live and interact together.
Keep these perspectives in mind as you head into 2019, no matter what important part of the business you are involved in. Every single one will matter.
—Teri Slavik-Tsuyuki is the principal of tst ink, bringing a customer-focused “how might we?” approach to creating communities and brands that connect and engage with how people want to live their lives.