Why new houses aren't selling... the real reason.

Why new houses aren't selling… the real reason.

I have been reading in industry trade publications for the past couple of years about the problem with housing sales. Bold predictions about the impending rebound have not come to pass and optimism has turned to anxiety and fleeting hope. For all the bold predictions I find they are all neglecting the fundamental reason people aren’t buying new houses; they’re ugly.

If you look at the majority of houses built today they are virtually unchanged from the houses built 30-years ago. In any other industry this stagnant design change would be considered negligent. The current trend of housing design and quality reminds me of the story of the Volga car. The Volga was the car made in the USSR during the communist reign. Its dominance in the captured USSR market was lost when the free markets opened up. After the communist regime fell, no one would buy a Volga because the cars like Mercedes, BMW and others were far superior.

In any other industry this stagnant design change would be considered negligent.

Consider the following picture and you realize quickly why the Volga didn’t sell when more choice was made available. I think the US home market is in a similar place. They are building the same house without change and they wonder why they aren’t selling.

My trade magazines are blaming poor sales on millennial debt, stagnant wages and a slow rebound, all of which undoubtedly contributes to poor sales. I guarantee though that if American home builders focused on design and quality instead of cost and square footage they would find a steady stream of buyers.

The opportunity for building beauty is HUGE. The opportunity for a rebound I think is as big as the coffee-house before Starbucks. For years we were drinking bland and bitter coffee and then Pete’s and Starbucks exploded on the market. The idea of a coffee-house in America before Starbucks was not viable, yet now it is undeniable.

Build beautiful houses and the home building market will explode. Give us a product we can’t live without. Too many people have decided the would rather rent then own something ugly. Its time for a change.

-B

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