At the same time I was reading Generation Me I started a new book titled Fascinate, by Sally Hogshead. Excellent read and fun as well--just finished it. Each year I do summer reading. Started when I was a kid. My mother would take me to the library when school let out and each week I'd check out books, read them and get more the next week. I did lots of pool time in Arizona, but I still fondly remember laying on the cool concrete floors reading when it was 110+ outside. I should add that my mother and father were both teachers, so this behavior wasn't totally eccentric.
I'll comment more on Sally's work (click for her site) in a later post, but it is relevant here. What's it gonna take to fascinate the target demographic likely to lead the real estate recovery? Thought about that for a few moments and realized something disturbing. Houses are sometimes fascinating, as are neighborhoods, scenic vistas and lush gardens. The very decision to buy is often based on some degree of fascination (often termed resonance) with a particular house or setting. In contrast, the real estate industry, ie the business of buying and selling houses is almost devoid of fascination. Look at the forms, the disclosures, the inspections, the advertising, the self promotion of agents/firms--where are those fascination triggers? Same goes for trade organizations--only more so. An industry that accounts for $50 BILLION in commissions, not to mention all the ancillary capital flowing in and around it, exhibits a striking fascination deficiency. I read a lot of books on marketing, decision making, organizational dynamics, consumer psychology and VERY rarely see any examples drawn from real estate--booze, cars, technology, food, etc., etc. are held up to illustrate creative enthusiasm in advertising design and cutting edge brand creation--but there's nothing from the real estate realm. Think about that while I move into the foundation of the demographic landscape we are facing now that the Boomers are retiring (in more ways than one).
Gen X is typically defined as those born in the 60's and 70's, putting them between 30 and 50 years of age in 2010. That's the next younger group of consumers of real estate services and real estate. How do they differ from Boomers? Let me count the ways! Obviously, there's a wide range of characteristics and some Gen X people have learned to behave outwardly much like Boomers, most often in industries run by Boomers (wanna guess what one of those might be?). There are some strong trends in Gen X psychology supported by extensive research.
One obvious contrast with Boomers is that Gen X folks are in the peak years of income production. Boomers are retired, thinking about retiring, working less or starting new careers not focused primarily on income. The Gen X crowd didn't rush out there and seek instant wealth though. Consistent with their sense of self esteem (real or created), many took their time exploring their true passions and desires. Some have now settled on a career (maybe the 2nd or 3rd---I should talk--LOL). The economic downturn certainly affected Gen X, but, on average, they owned less real estate and still have significant years to pursue a recovery of personal finances. Many will enjoy sufficient financial success to become buyers of coastal resort property. The Boomers who sustained coastal resort real estate for the past 15+ years often took a major financial hit and are likely to take a pass on coastal resort property that ranges far above $500,000 for even entry level cottages. They'll stay in vacation rentals and hotels and resorts while they look wistfully at the coastal houses they used to covet or may have even owned. Some Boomers may have Gen X children who are successful--but that's another topic for another post.
Assuming Gen X represents the next wave of resort property buyers, what about their psychology is relevant in evaluating the current real estate business trends to determine goodness of fit.
Boomers grew up firmly in the grasp of group psychology. The war produced mass societal movements (physical, emotional, societal) and necessitated conscious thought about what others thought and expected. Groups were organized for all aspects of the war effort abroad and at home. Individual identities were secondary to a hierarchy of groups. The "ME" was present, but didn't have a very large voice much of the time. During the 60's and 70's Boomers explored self actualization and protest, encouraged by times marked by economic growth, but groups were still an important part of life. The younger portion of Gen X grew up in an school and home environment that often encouraged self absorbed pursuit of dreams fueled by self esteem that lacked any real foundation.
I'll end initial section here and pick up the real estate aspects of Gen X in the next post.
Boomers grew up firmly in the grasp of group psychology. The war produced mass societal movements (physical, emotional, societal) and necessitated conscious thought about what others thought and expected. Groups were organized for all aspects of the war effort abroad and at home. Individual identities were secondary to a hierarchy of groups. The "ME" was present, but didn't have a very large voice much of the time. During the 60's and 70's Boomers explored self actualization and protest, encouraged by times marked by economic growth, but groups were still an important part of life. The younger portion of Gen X grew up in an school and home environment that often encouraged self absorbed pursuit of dreams fueled by self esteem that lacked any real foundation.
I'll end initial section here and pick up the real estate aspects of Gen X in the next post.
No comments:
Post a Comment