We’re bombarded with tales of the new normal. These narratives focus on the scary notion that unemployment and economic growth levels might stagnate right where they are today and stay there forever. But we’re also hearing about the people who make up the new normal. In just the last couple months of REALTOR® Magazine’s Daily News items alone, headlines question the opportunity the future holds, thanks to shifting demographics and changes in people’s economic values:
- First-Timers Make Up Smaller Share of Buyers
- Millennials Will Become Home Owners Later
- Financial Crisis Sparks Housing Commitment Phobia?
- Did the Housing Crash Affect Home Ownership Views?
Just last week we learned that the word “underwater,” as pertaining to home value vs. loan amount ratio, was added to the Merriam-Webster dictionary. Was there ever so concrete evidence that the Great Recession has entered our cultural lexicon?
Perhaps American consumers are entering a new phase. But is that necessarily a negative thing? And are you ready for it?
This may just be the perfect moment to pick up Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live (Jossey-Bass 2010), by John Gerzema and Michael D’Antonio. Though it’s not brand new, the book remains a hopeful account of what the change in consumer attitudes means for industries of all types.
Gerzema and D’Antonio traveled the U.S. talking to people who are changing their spending habits. But it’s not that they’re pulling out of the economy. If anything, these consumers are investing more deeply and more meaningfully than they had in years. Perhaps some are spending less, but they’re all getting more out of it.
The authors describe the people they observed as having “subtly adjusted their lives to seek greater balance and a more fulfilling existence.” They insist that nearly 55 percent of Americans are part of this “undeclared movement.”
Gerzema and D’Antonio go to Boston to learn how pre-fab housing is giving post-crisis Americans “permission to downsize,” while at the same time making the adoption of green living more realistic. In Vegas, they find “a cure for the trust virus in the much-maligned housing and mortgage sectors.” In Michigan, they point to an “I Live Here” attitude and the “Detroit Declaration” for evidence of how cities that had been written off by industry as rusty cast-offs are reinventing themselves as communities greater than the sums of their parts.
Even without the moments where they focus on housing specifically, the book still holds key lessons for real estate professionals. It illustrates how today’s consumer has shifted and how brands have become even more important in a marketplace focused on values as much as value. As marketing expert Philip Kotler says in his introduction to Spend Shift, “The lessons in this book are useful to anyone examining their business strategy after the crisis. They explain the new psyche and values shifts that are influencing the spending habits of the American consumer.”
Maybe this new, more conscious phase of American consumption can help explain the success behind real estate do-gooders such as our Good Neighbors, or the popularity of Michael J. Maher’s “generosity generation.” Perhaps they too have learned that best way to appeal to these “spend shifters” is to focus on growing one’s community as much as farming it.