Notorious R.O.B.

Lawrence Yun, the Chief Economist of NAR and my doppelganger, has a new post up in which he discusses the growth in global population:

In regards to the United States, some have claimed that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future. This ignores one simple fact about the broader population and not just the baby boomers. Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.

…

The stabilizing population, according to experts, is to be around 9 to 10 billion people. Hard to think about what all this means. Demand for real estate is automatically created. But how many by that time will be able to say that they own a property of their own?

He ends by saying, “So imagine a condition where you see twice as many people around your local town and spatial area. Is that too much or it that absorbable?”

I’d say I’m one of those who have claimed that the large number of Baby Boomers retiring and eventually going to join the great Drum Circle in the sky would mean less housing demand in the future. So I find Lawrence’s line of thinking very, very encouraging: 3 million more people live in the U.S. every year. Hence, housing demand will be robust.

Maybe. But three things come to mind here.

First, global population growth is not U.S. population growth.

Second, housing demand as a function of population growth clearly ignores the very troubling trends in the generation most likely to replace the Boomers in the United States: the Millennials (or Gen-Y).

Third, the issue for real estate industry isn’t so much generic “housing demand” but what kinds of housing demand we will see.

Read the rest of this entry »

How's that hopey-changey stuff working out for ya?

One of my pet hobby topics is to fret about the Millenials (the twentysomethings of today). I’ve written about this “largest demographic group like evah” here, here, and here – as well as peppered throughout this blog for a while now. A lot of people — especially in real estate — like to point to the older reaches of the Millenials (the young 30somethings) and think that they are the future of the industry.

Well, to be sure, from pure demographics standpoint, the Millenials do point to the future of the industry. But you should worry about that. A lot. My opinion about the Millenials is that they are the most Screwed Generation in American history who have had their initiative beaten out of them by overprotective parents, teachers and “safety” bureaucrats; their future mortgaged by irresponsible politicians of both parties with full-throated support by the Boomer Generation; their expectations of what is a good life totally unmoored from reality by Hollywood; their options foreclosed by a college-industrial complex that burdened them with absolutely unsustainable student debt (that is not dischargeable in bankruptcy); and of course, they screwed themselves with their attitude of entitlement and superiority complex based on nothing more than the fact that they know how to text message real fast and post pictures to Facebook.

It appears that even the dinosaurs over at the LA Times have noticed that the Hopeychange Generation is actually the Totally-Screwed Generation:

Call it Generation Vexed — young Americans who are downsizing expectations in the face of an economic future that is anything but certain. Career plans are being altered, marriages put off and dreams shelved.

Welcome to the real world, LA Times. Jump right in, the water is freezing.

Read the rest of this entry »

In my first blog conversation post, I wrote about Millenial family formation. That was fun stuff, and Travis Robertson, my dialogue partner, has posted his response. Go check it out; it’s worth a read, and the discussion is fun. But I thought I’d move onto some of the real meat.

Travis claims in the video (embedded in the first post) that companies — and specifically real estate brokerages — have to change the way they operate in order to recruit the Millenials. I don’t think so; I rather think Millenials have to change the way they operate and view the world in order to be recruited by employers, including brokerages (at least the ones that demand something of their agents).

I’m going to be referring to Travis’s posts and his eBook; and I do encourage you to go check them out.

In this part, let’s address the issue of managing Millenials.

Read the rest of this entry »

Travis Robertson is one of my new friends from RETech South. He’s one of the brightest, most thoughtful young men I’ve met in recent years, and I think the world of him. And of course, when I can debate significant issues with intelligent people I genuinely like, that’s pretty close to nirvana for me. Well, adding a few mugs of beer and doing it in person would be best… But lacking that, Travis and I agreed to carry on a series of blogposts in which we debate the impact of the Millenials (sometimes called Gen-Y).

First, let me urge you to watch Travis’s speech at RETechSouth. It’s an hour long, but it’s fully worthwhile, if only for yours truly being mentioned in an amusing context:

This is going to be a topic we won’t settle in one post. But longtime readers know that I’ve been skeptical about the Gen-Y’s future for a variety of reasons. I’m already on record as suggesting that real estate won’t be saved by the Gen-Y; Travis agrees, but suggests Gen-Y will change real estate.

Well, every generation changes the world around it. But what I’d like to challenge is the phenomenon of Millenial Triumphalism, in which the Gen-Y and its enablers make the kind of statements about why Gen-Y is unlike any other generation that came before it, and talk as if the Millenials are the change that they’ve been waiting for. My admittedly more tempered view is that before the Millenials will change the world, the world will change Millenials.

In this post, let’s talk specifically about family formation — the topic that spawned my comment about polygamy — as one of the driving factors behind home sales is family formation: people meeting, falling in love, getting married, and starting a family.

Read the rest of this entry »

Image: Barack Obama, on Flickr

Starting a few years ago, I’ve been hearing a lot about how the Gen-Y or Millenials (people aged anywhere from 18 to 30 today) are going to change everything — but particularly in real estate.

A random sampling of opinions about how the Millenials will affect real estate, from a Google search I just ran, turned up these recent posts and articles:

MILLENNIALS – The New Face of Real Estate:

Text messaging, email, IPods, Facebook and being mobile as ever is a part of the new generation, the Millennial.  The Millennial are the young workers ranging in age between 21 to 29 years old.  They have the potential to create a lasting change in the real estate workplace because of the way they live, communicate and more importantly, the way they view their jobs.

80 Million Reasons to start changing your marketing….Millennials.

What do you think , will typical marketing work to attract someone that is buried in a laptop, ipod, FB, Twitter etc.. and values friendship more than work?

Hear Them Roar: Millennials make up almost a third of the U.S. population, and they will fundamentally change how you do business.

“Real estate agents may wonder why they should care about the Generation Y age group, ages 18 to 30,” Jessica Lautz, a senior research analyst at the National Association of Realtors, wrote on the organization’s website in 2008. “These unique home buyers are the youngest of the home buying segment and are the most likely to purchase a home in the next two years in comparison to any other age group.”

Sustainability, Urbanity, and You: How Millenials will Change the World (and Architecture)

Millennials grew up in suburbia; bland environments dependent on others for mobility. They are entering the adulthood seeking lifestyle: vitality, diversity, and community. But, Millennials are not the only ones who will be driving this sea change from suburban to high quality urban environments. Baby Boomers will soon be retiring by the boat load. Retirement communities in their current form resemble warehouses more than they do the most desirable of retirement “villages”—real communities where retirees can be independent and empowered, such as the Upper East Side and Key West.

And so on and so forth.  If you cared to, I’m sure you can find dozens, hundreds of other musings on the Millenials and how they force real estate professionals to be ever more online, ever more sensitive to these 80 million strong “Generation We” people who care more about walkability and lifestyle than large colonials on three acres, and so on.

The whole drive towards social media’s ascendancy in real estate was fueled in part by the insight — as is clear in the ActiveRain post above — that these Millenials are the FaceBook generation who are natives of the digital realm.

But a couple of recent articles make me wonder just how the Millenials will impact real estate; it may be rather different than what we imagine today.

Read the rest of this entry »

I want to sell real estate, coach!

I love that Wendy Forsythe, VP of Broker Services for Better Homes and Gardens Real Estate, often blogs on Gen-X and Gen-Y issues in real estate. I suspect that Wendy and I are both Gen-Xers, and if you searched our past photographs, I’m sure there will be a few blackmail-worthy examples involving neon clothing, Z-Cavaricci’s, penny loafers, pastel blazers, Aqua-Net, and The Cure t-shirts.

Her latest post, however, makes us Gen-Xers out to be some sort of emotionally fragile prima donnas:

Professional sports teams have managers and coaches. The reason for this is because these are two different jobs. In most real estate offices, the leader has to wear many hats. If you want to attract and retain Gen X and Gen Y agents you have to wear your coaching hat, not your manager’s hat.

With all due respect to the redoubtable Ms. Forsythe, I’d like to extend the sports analogy a bit more and beat it until it completely collapses under its own weight.

Yes, professional sports teams have both managers and coaches.  If you’re going to wear the coaching hat, and do everything positive and shiny, then by golly, make sure someone is wearing the General Manager hat and being a total results-driven hardass.

The coach might be telling some young rookie, “Hey, kid, I believe in your abilities — just get out there, focus on the ball, and swing away.  The hits will come.”  The GM, however, is like, “Hey you — you hit .220 for the past twenty at-bats.  It’s time for you to get sent down to the minors.”

Wendy gives us this as an example of the difference between manager and coach:

• Manager’s message: “You’ll have to be patient, it takes time to get established in this business. It is not going to happen overnight.”
• Coach’s message: “You can do it. You are doing all the right things. Keep focused.”

Let me add the General Manager’s message:

• General Manager’s message: “Get your ass in gear and start producing, or I’m cutting you to make roster spots for someone who will.”

Look, Gen-Xers are in our 30′s.  We’re no business neophytes with stars in our eyes and dreams in our heads.  Most of us remain idealistic, perhaps, but I can say with reasonable confidence that the Gen-Xers who have moved on into the real world are hardnosed, experienced businesspeople who know how to get things done.  Ain’t no use in whining and crying.  When it’s game time, it’s game time.  We know that.  All the excuses in the world won’t turn that routine flyball into a base-clearing double.  We know that too.

I am now in the position of working with the so-called Millenials, who report to me.  You know what?  I’m finding that the good old fashioned motivation works just fine with this so-called “coddled generation” as well.  Sure, have all the freedom and initiative you want — but when it’s game time, it’s produce or else, kiddo.  If that don’t make you happy, well, it’s a big wide world; I’m sure there’s a job out there for ya.

Strangely, they all get it.  They all respond to such clear, unambiguous direction.  I don’t feel like I have to coddle them, or be their therapist.

If anything, I think every employee of whatever generation responds better to clear, unambiguous goals and expectations.  There really is not fudging around, “Hit this number to keep your job; hit that number to get promoted.”  Just like in sports — there’s no getting around that final score that determines who the winner is and who the loser is.  Gen-X’ers, Gen-Y’ers, Millenials, Boomers, Greatest Generation — we all understand it in the end.

The continual Oprahization of our society, including our workplace, is causing confusion amongst the employees.  And I write as an employee and as a manager both.  Trying so hard to “feel your concerns” and “understand your motivations” and such is actually counterproductive.  At the end of the day, business is simple: the money coming in has to be greater than the money going out.  This iron law of business has not changed since the day Thag traded his woolly mammoth tusk to Krang for the pretty cowrie shells, and it will not change until the end of time.

And you, as part of an organization, are either helping to have more money coming in or to have less money going out.  Simple, isn’t it?

So… yes, by all means, be nice to your people.  Be sweet and kind to your employees.  They’ll maybe be motivated better and respond.  But really, if you’re going to do the coaching thing, encouraging and motivating, then make sure they also see the General Manager thing, that expects, demands results.  Or else.

It’ll be good for both of you.

-rsh