He’s spotlighting a common misstep with research, which is a tendency to “drink our own Kool-Aid,” and confirm our biases when we set out to discover what will motivate buyers.
For home builders and neighborhood developers, this is critical.
Tons and tons of survey research speak volumes of the attitudes, preferences, and values of Millennials. They say they don’t want this. They insist on that. They prefer these offerings, and covet those.
What we lack, we must remember, is a verifiable—and projectable--knowledge base of this: What they buy.
Of course, there are exceptions.
In home building, there are almost always exceptions. We say the “rule” is that inexpensively-priced new homes simply can not be produced in an era where land costs, local fees and regulations, labor expense, shipping, and even some materials prices are spiraling.
But some builders figure that out, and offer homes priced to sell to that quintessential entry-level buyer—the one who wants out of multifamily rental’s vicious circle of skyrocketing monthly lease payments, escalating renewals, and a grim outlook when it comes to saving a bit of money; the one who needs a mortgage loan; the one whose realized Dream pays forward into motivated contribution to community, to society, and to culture.
Those types of builders look at the survey data and conclusions that would suggest that young adult buyers’ attitudes dictate that they’re not interested in homeownership; they prefer not to live in the suburbs; they value their mobility above all; they don’t opt into their parents’ version of the American Dream.
That’s often what the data in surveys and focus groups of Millennials would lead people to conclude. That’s also not what the albeit tiny first-wave of Millennials have actually done. They have bought.
They’re the beginning of the new knowledge base, one rooted in actions and behaviors, not the theoretical realm of attitude, preference, and values. Those insights are important, but they’re not what’s going to tell us specifically whether 65% or 63% or 61% of the 77 million people in the cohort known as Millennials will buy homes or not, … and if they will, when.
Fact is, most builders will tend to believe the myth that “entry-level” new homes can’t be done in most markets, thanks to lot costs and local encumbrances that heap time and money into the process to develop new homes.
Some won’t. They don’t have to. They’re set up to watch and act on “what people do,” not just what they say.
There are always exceptions. Makes this an interesting time in a fascinating community.