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America, circa 2001.

Less than 10 short years from now, we will be drinking a toast to the 21st century. What will America be like? There will be major shifts in the attitudinal, demographic, social, and locational topography in America of the 21st century. These changes will create market opportunities which members of the real estate industry will be able to exploit--if they are aware of them.

In 2001 we will be 10 years older. But in spite of that, the values and attitudes that shape the way we look at our work, our society, and even our families will change very little. Generational attitudes are implanted within us when we are relatively young. Therefore, in the year 2001, those in their 50s and 60s, who will be in charge of most of our businesses and institutions, will continue to reflect the environmental and anti-authoritarian attidues they carried when they were joining anti-war protests in the 1960s.

These attitudes will place them in conflict with younger generations then just as it has placed them in conflict with older generations in the past. It is important to remember that just because a 40-year-old today is 50 to 10 years does not mean that he or she will be thinking like today's 50-year-old.

Another much discussed change in the demographic makeup of the population in the year 2001 is the changing ethnic and racial composition of the U.S. population. The influx of immigrants will combine with the relatively high growth rates among Asian and Hispanic households to allert the makeup of the American population.

A rainbow population

During the decade of the '80s, the Asian population grew by 107 percent, the Hispanic by 53 percent, American Indians by 38 percent, African-Americans by 13 percent, and white non-Hispanics by only 6 percent. As of 1990, one out of every four people in the United States was African-American, Hispanic, Asian, or American Indian. By 2030, non-Hispanic Caucasians will be a minority in the United States.

An important factor shaping the social topography of the nation is the decrease in the cohesion of values. This lack of societal cohesion is wrecking the upward mobility ladder that had historically provided the means by which many of the urban poor could climb to higher economic status. This is a social reality that we have to face as we continue to make our central cities less desirable to middle-class residents and workers and the businesses that employ them.

But, if we are to understand the social topography of the 21st century in America and perceive market opportunities, we must avoid the trap of thinking of minorities as a monolithic group. For example, while the current Asian migration does include poor and unskilled individuals, it also includes large numbers of well-trained professionals and extremely wealthy people.

By the year 2001, you will find fewer white males in the workpalce, while women will account for almost one-half of the total labor force. By the 21st century, 80 percent of all women aged 25 to 54 will be in the labor force but, because of the psychological attitudinal differences between generations that I have described before, many of the under-40 women-particularly mothers--will be resentful that they are required to hold full-time jobs. In 1990, in the annual Yankelovich Monitor Survey, for the first time in 20 hears the share of women who favor a career for mothers dropped below 50 percent.

A new work ethic

Indeed, it is likely that many in their 30s will have a different perspective on work than those of us who are in our 40s and 50s. Both younger females and males are more likely to place a higher value on leisure and time spent with family than those on the far side of 40.

In the 21st century, the further decrease in the size of the under-40 workforce will cause employers to make many more employee concessions than are made today. Eve many smaller-sized employers will be forced to offer greater flex time, child care, and parental-leave provisions.

The shortage of skilled workers will also cause many in managerial positions to develop corporate programs aimed at creating mobility opportunities. In an era in which one out of four workers will be a minority, many of whom will be unskilled and with limited knowledge of English, in-house training and other programs will be needed to provide the skills and attitudes that workers must have to compete in the global economy.

Advertising in 2001 will incorporate the social and demographic changes that have taken place. This advertising will take cognizance of the fact that the family has been redefined and broadened. Households that the Census now defines as non-families, such as non-married and homesexual couples, will be legally designated families in the 21st century. More than one-half of all American children will spend part of their lives in single-present households, and many of these children will have interracial parentage.

Marketing to difference

This decrease in the ability of the under-class to achieve upward mobility is working with changes in transportation, communication, and our arrival in a global capitalistic marketplace to alter the locational geography pf Americans' workplace and residence. By the 21st century, relatively new suburban and rural workplace centers will replace many of the activities now housed in our central cities.

The locational geography of America in 2001 will have spread to activity centers in the suburbs of the country's metropolitan regions. Markets will be more differentiated, and we will have to grapple with the problem of arriving at shared values in the face of increased class differences, as well as intergenerational and cultural variances.

Business, including real estate, that understand important subcultures within America will be able to target their products to the cultures, lifestyles, age groups, and value perspective that exist. Failure to target both product and marketing strategies to these subgroups will be disastrous because relatively few businesses will be able to prosper with shotgun attempts to serve the entire market. Three examples indicate some potential target markets for real estate consideration.

* Hispanics and Asians will continue to outpace all other racial categories in rate of growth. What this means in the real estate industry is that we need to know how to design product (both residential and retail) and market this product to these significantly growing subroups.

For example, if you plan to sell real estate to the Asian buyer, you could familiarize yourself with the philosophy of Feng Shui, an ancient Chinese philosophy of harmony in the home environment.

According to this philosophy, good chi is an invisible energy source that travels "gently and softly" on a curved surface, while bad chi travels on a straight line and is dangerous because it can viciously strike you. Savvy home builders and brokers will seek out Feng Shui experts to help them with their product design and marketing.

It is also important to understand that the typical Asian buyer expects to bargain for a better deal even after the sale ostensibly has been closed. In order to avoid ongoing misunderstandings, you will need to educate your prospective Asian client in the way business is conducted in the United States. Better yet, employ and/or work with an Asia associate who can help explain these cultural differences to you and to your prospective buyers.

An example of meeting the Hispanic market is provided by Upland, California-based Lewis Homes. Networking with the Hispanic community through area employers and banks, offering brochures printed in Spanish on one side and English on the other, and using bilingual sales agents are some of the techniques utilized by this company to attract the Hispanic market.

The company has learned through focus panels that Hispanic households are willing to compromise quality items such as tile roofs in order to keep down the price tag. They are also willing to accept smaller room sizes in order to obtain at least four bedrooms in what are typically 1,000-to-1,4000-square-foot homes. (About 50 percent of Hispanic households have four or more members, according to the Census Bureau.) Last year, 80 percent of the 300 homes sold by this company were purchased by Hispanic households.

* As a growing under-class forms a significantly larger proportion of our central cities by the 21st century, most real estate opportunities will occur in the suburbs and smaller sized communities lying at the outskirts of our metropolitan regions.

Smaller sized communities that have been able to avoid center city problems, but are located a one- to two-hour drive from a major central city, will be in high demand.

Part of this trend has been induced by the significant increase in the price of closer-in housing that occurred in the '80s--especially in high-demand areas such as California and Florida. Much of this increase was due to restrictions on land usability and densities.

Middle-class flight is not a new phenomenon in America, but it escalated in the '80s as so many cities became less safe and less pleasant places. The increased visibility of homelessness added to the forces propelling the middle class out of our central cities.

In a September 1990 New York Times article headed "Gentrification Grinds To A Halt," journalist Ellen Uzelac noted, "Demographers and geographers studying data collected in the 1990 U.S. Census say a preliminary review of education and income levels indicates that those who embraced the back-to-the-city movement have rejoined the middle-class migration to the suburbs."

It is also a fact that an increasing proportion of all working adults are shifting to employment nodes outside our central cities. Many are able to move to these outlying communities while commuting to jobs that are located less than an hour away.

A major opportunity for those residential developers who have the staying power is to seek larger parcels located in close proximity to an existing smaller sized community. The downside risk, however, is that almost all of these smaller, more rural communicites have serious infrastructure shortfalls--particularly with respect to the urban/suburband market they will be serving.

Many older baby boomers, as well as retirees, will be enticed by this option of living in a non-threatening, non-urban environment. But, more importantly, these are groups can also be expected to have the financial wherewithal to pay to escape both the perceived and real ills of urban life.

* Leisure-time opportunities--particularly those that serve specialized niches like the second home market or the retiree travel/resort market--will also present an important opportunity in the 21st century.

The impetus of the demand for second homes will originate from the two-wage earner household that continues to live in major metropolitan areas, particularly those who remain in our center cities. But, in 2001, spending will often be focused on nonwork--particularly the family.

The future for second-home resorts will not only occur in naturally scenic areas like ski resorts and beaches, but will also be created in the rural outskirts of many of our larger metropolitan areas. Golf courses and other built-in recreational activities will compensante for the lack of natural wonders. The trick will be to stick to the rule that the weekend home must be located within a two- to three-hour drive for the second home owner's primary residence.

And this driving thime radius cannot only hold true for today, but for the build-out of the project. If future traffic congestion adds significantly to the travel time, future sales and resales will be adversely impacted.

It will also be important to emphasize environmentally sensitive planning. More and more Americans consider themselves "green." A March 1990 Gallup poll reveals that 76 percent of Americans think of themselves as environmentalists. This is a percentage that keeps increasing. In today's resort market, a nature preserve is not only useful in getting permission to build -- it sells.

An increasingly large pool of the elderly will be seekers of retirement
 U.S. Immigration by
 Continent of Origin--1988
Asia 41.1%
North America 38.9%
Europe 10.1%
South America 6.4%
Africa 2.9%
Other 0.6%
Source: Bureau of the Census

homes. Typically, their homes will be located in aesthetically pleasing, but lower cost, areas. The travel industry can also be expected to benefit from an increased market for year-round vacationing--particularly that part of the industry that caters to the recreational vehicle.


When we drink that toast to the 21st century, we will be toasting a very different and very much less homogeneous America. To be successful in the 21st century, those of us in the real estate industry will be required to concentrate our efforts in meeting the product needs of specific ethnic submarkets and in taking advantage of the escalating pattern of decentralization of our major metropolitan regions.

Change is threatening, and rapid change is downright scary. But the one prediction I am willing to state with 100 percent certainty is that, like it or not, in 2001 we will be facing a very different society than the one in which we are now living. Those who wake up in the dawn of the next century with an understanding, acceptance, and willingness to take advantage of this change will find a host of opportunities awaiting them.

Nina J. Gruen is executive vice president/principal sociologist of Gruen Gruen + Associates. She specializes in applications of demographics and social research techniques to real estate, marketing, planning, and public-policy problems.

Ms. Gruen received the B.A. degree with high honors and M.A. degree in psychology from the University of Cincinnati. She is a member of the American Sociological Association, the American Association of Public Policy Research, and is the past president of the Western Regional Science Association. She is also a member of Phi Beta Kappa and Lambda Alpha. She served on the board of trustees and the executive committee of the Urban Land Institute.
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Title Annotation:demographic changes
Author:Gruen, Nina J.
Publication:Journal of Property Management
Date:Jan 1, 1992
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