A New House & Home Paradigm That Spells Opportunity!
There has been a short delay in the release of this blog post. It’s all due to my moving into a different home.
My house was not listed for sale, but a young Millennial with the help of her Dad was passionate about owning my house and agreed to a purchase price that I could not pass up.
EXPERIENCE Insight Group works with a lot of house & home clients and every weekend of open houses represents expanded insight in an ongoing cultural study.
Looking at homes you can get a feel for what are the icons of the new generational breed of housing.
Many emerging Gen X empty-nesters and many Baby Boomer grandparents are confronting personal scenarios of having more home space than they need and use.
And having to climb a set of stairs to a primary bedroom on a second floor is emerging as a daily obstacle.
The housing market right now is turned upside down.
Millennials who purchased the affordable “homes they could design with their personal signature of style” are confronting financial and operational “reality checks” due to the reality of home updating and remodeling.
They are learning quickly that what they see on the HGTV shows is actually staged and not real.
For example, the process of removing a popcorn ceiling is such a rude awakening that a growing share of Millennial new homeowners are posting text about an emerging insight that popcorn ceilings actually do better sound management than flat ceilings.
What was once termed linoleum is now actually what many even refer to as “recycled and re-processed hard wood eco-green, easy-care flooring.”
Enough for now about home renovation and remodeling.
This blog post is about the hottest housing trend that is reshaping the market dynamics of home cocooning and very, very, very few market trend setters and brand leaders are embracing it.
An article with a title, “Construction of Rental Houses Balloons” posted in this morning’s Wall Street Journal.
The article cites that in 2023, single family rental home communities jumped up inventory wise by nearly 40% across the U.S. and so far this year, the count is up by another 48%.
The single family rental home communities are exploding on the suburban fringe and in what conventionally has been termed “smaller satellite towns.”
The article specifically showcases a development being built in Santa Clara outside of LA of three dozen single family homes. The brand new 3 bedroom / 2 bath craftsman style homes are leasing for $3,500 per month.
The homes are shiny new. The yards and landscaping are covered in the $3,500 per month rental amount. Home repairs are as well. There are no charges for access to the pool and tennis court. The folks calling the rental homes home pay no local real estate taxes.
Not sure how many readers are fully aware of the housing costs in Santa Clara.
NBC Nightly News aired a feature story about the new rental housing market and also showcased the one in Santa Clara. NBC’s news story cited that the average price for a home in Santa Clara in 2023 posted at $2 million.
What’s emerging with alternative rental single housing complexes is not a flash-in-the-pan fluke. What is emerging is perhaps what some circles might call a Mega-Trend.
The Wall Street Journal article cites similar developments emerging in places like Kansas City, Boise, Columbus, OH, Tacoma, Charlotte and Baltimore.
Here at EXPERIENCE Insight Group, what is emerging is already cited to be one of the major trends that will be showcased in the 2025 Trendcast Report.
How communities are developed, integrated into local neighborhoods, channeled through local housing regulations, managed and coordinate in personal financial portfolios will tap into an array of new thinking and innovation.
Back before the Pandemic hit and the network was part of the merged giant Warner Bros. Discovery, HGTV had a program that featured home rentals. In addition to “shopping” for the best option, the show played around with design and decorating.
With colors surging, wall decor hip, accessories like lighting and cabinet hardware providing avenues of personal signature and vegetable gardens emerging as a new family gathering point, how these elements will be managed with rental single family homes is all being explored.
Yesterday evening, I went over to a home accessory retail store operating under the brand name “At Home” and purchased a couple of items for the house I moved into and got a chance to chat with some of the shoppers.
The conversations were among Millennial couples. Two of the couples had kids… the other couple did not.
All three were leasing their homes and all three were not leasing apartment flats. Two leased smaller size houses and the other couple leased a townhouse.
Two of the couples were shopping in the area rug section of the store. When I asked if they were purchasing a rug to go on top of laminate hardwood floors, both told me “no.”
One couple was purchasing an area rug to go over wall-to-wall carpeting. They told me that they hoped that the area rug could add color and pattern to the room. They were not allowed to paint the walls any other color than the off-white it was already painted.
The other couple was purchasing an area rug to actually hang on the wall. They were purchasing a rug with a geometric pattern that was similar to the way a couple put accent boards up on a wall that a friend had posted on her social media home page.
I asked all three couples if they did similar things to apartments they leased in the past and all three said, “no” … and went on to add that they did not because they did not plan to live in the apartment long.
All three are anticipating living in the homes they now leased for at least 7–10 years as long as the rent they were paying “did not jump up high in cost.”
Between now and when I post the 2025 Trendcast in about 5 months from now, I plan to go out and do a whole set of roundtable chat groups and one-on-ones with individuals moving into the leased home developments.
At this point in time, there are some key insights to take from just the first surge of the news stories…
- Residents will see the units as homes… not apartments
Many who lease an apartment do not perceive the unit itself as a home. A Gallop survey conduct in fall of 2023 found that 72% of Millennials residing in an apartment complex of 25+ units referred to the apartment as their “space”… only 11% referred to the apartment as their “home.”
If the dwelling leased is a stand-alone, as many as 65% of Millennials refer to the unit as their “home.”
Possessive pronouns like “our” is also used more often in referring to areas of the dwelling like “our” kitchen, “our” home office and “our” primary bedroom.
Marketers, community leadership and service providers may want to make sure that the evolving terminology is adjusted accordingly!
2. Residents will seek to put personal signatures on the space and will have to get creative in doing it
Just as I shared in the stories of Millennials I conversed with while shopping the local home accessory store, At Home, many individuals electing to lease a homestead are getting creative in how to personalize the space.
This alone spells opportunity for many conventional house & home brands.
Those moving in are a brand new market group. When they see ads showcasing the products and service in the context of home ownership, they face challenges that cut short the ability to relate.
Showcasing a brand story on a social media platform alone is very old school.
Innovation and adaptation of stories in the new, emerging context of home space is competitive smart.
3. Community roots will form but the residents will not be paying any local real estate taxes
Politicians have an interesting challenge coming up. Even in the town where I live in which only about a third of the residents own the space they reside it, there are some politicians talking about issues in the context of taxes.
Many of the GOP candidates use the context a bunch. Few of the GOP candidates get elected to office.
Linking residents to their neighborhoods and community where yes… they are sinking down roots… is going to require some new storylines and referral models.
4. Boomers and retirees may emerge as significant a residential group as Millennial families and Gen Z / Tweener couples
I have shared this perspective with a number of business and community peers and a good share of those folks refer to those leasing as Millennials. In fact, many see the situation as a short-term issue that will fade away when Interest rates drop.
Another article that ran in the NY Times and WSJ this week centered around a growing number of retirees who are having to carve into savings and sources of equity to assist in rising insurance, grocery, supplies and utility costs.
The article even mentioned that more retirees are contemplating freeing up their home equity by converting over to leasing vs. owning their home.
When I went and checked out the websites of developments cited in the Wall Street Journal article, copy on home pages highlighted not only “all-on-one floor home plan options,” but even community selling points like “close to healthcare” and “parks designed for walking.”
The paradigm of housing, the concept of a home, the financial model of community residence is shifting.
For those who embrace it, the opportunities are significant!
