There are plenty of obvious things to think about when it comes to the housing market without going looking for more. But more information is better than less, and Zonda principal Todd Tomalak walked an audience of more than 400 people through his list of “10 Things To Think About” at the Builder 100 event in Dana Point, California.
Here’s his list of things to contemplate:
1. Fewer moves
The household moving rate has declined to its lowest level ever—people aren’t moving like they had before. That means 2023 will likely be remembered as the year the fewest moves in U.S. history took place.
2. Entrepreneurship uptick
After a 40-year decline in entrepreneurship and labor market dynamism, things started ticking up again in 2019. That means more people are starting to consider changing their industry—and that could lead to an uptick in mobility.
3. Matchy, matchy
Twenty years ago, if you liked a song you bought a CD and gambled the rest of the songs would be as good as the one that caught your ear. Spotify changed this—now you get exactly what you want. The same thing is happening in home building—technology allows consumers to be more selective about what they want to buy.
4. I quit
There’s been a surge in quitting and taking on that risk—it takes a lot of gumption to leave a job for a new one. Switching jobs is just like moving to a new home; it seems people are more willing to shake things up, and that could increase mobility.
5. Crime
There’s been a measurable shift in crime patterns, and more people are choosing to move rather than put up with increased criminality in their neighborhoods. This isn’t about upgrading to a new house, it’s about upgrading your lifestyle.
6. Lack of choice
People are struggling to find the right home, and it’s even harder to find one when there are bidding wars involved. Those who bought houses after 2020 plan to remodel to get things closer to their tastes, because they often bought houses that weren’t a great fit.
7. Look back
It feels like we’re in uncharted territory, but anyone trying to understand the 2023 housing market would do well to look to the forgotten depression of 1920-1921. There’s a good historical precedent—things bounced back stronger than expected after a short economic shock brought on by rising interest rates and a lack of housing inventory.
8. Kitchen sinks
There’s a data point that backs up point No. 7: Kitchen sink sales rebounded sharply after that short period of economic depression. There aren’t many economic measures that give us a good read on that time, so this one is priceless.
9. Baby boom
There’s been a bump in the number of babies born to college-educated women age 30 to 34. That’s a big deal for housing; they haven’t started to buy yet, but their purchases are likely in the pipeline.
10. Specific spends
A new home, and a baby, translates into increased spending on kitchen and bath products. These families are most likely to seek out a large backyard, but they will accept a smaller yard if there’s an outdoor kitchen on offer.
