Millennials are hard working, mid-20s and 30 year olds who form almost a quarter of the US population. As many are now becoming parents themselves, they are entering the housing market for the first time. Switching rental life for their own slice of suburban bliss, millennials are looking for affordable housing with convenient amenities nearby. This is known as Hipsturbia.
A successful ‘hipsturb’ is somewhere close to the city with excellent public transport and transit. It is easily walkable and has a good selection of retail, dining, and general recreational options. Hipsturbia is forecasted to be one of the biggest trends in real estate in 2020, so it’s important to understand it as much as possible now.
Is Now the Right Time to Innovate?
The driving factors behind the trend of Hipsturbia is millennial’s desire to live, work, and play all in one place. Bearing this in mind, how can the real estate sector meet these demands?
A shift in any market trend is sure to put many industry leaders on edge. As Hipsturbia is set to shake up the market in the coming year, many businesses will be hesitant to make any big changes to their approach. But now is the ideal time to change your innovation strategy: it could launch you ahead of your competitors.
What Are the Key Factors?
There are many socio-political and cultural factors which can impact the real estate industry as a whole. This change in demographic doesn’t just mean targeting a new generation of people, but understanding the world they live in, their needs, and their motivations.
For example, the climate crisis and subsequent increased temperatures have led to an increased need for houses with air-conditioning in cities like Seattle, where demand has risen to over 25% from just 6% in the previous decade. This excessive heat will also have an adverse impact on property investments, as homes in cities with increased temperatures can increase the building cooling load by 13%.
When considering the audience of millennials, the industry must cater towards their specific needs. Millennials are a connected generation, spending an average of 7 hours per day online. This means that digitizing processes and bringing property into the digital realm is essential to maintain market interest. With more and more millennials preferring flexible working arrangements, there is a decreased demand for owned office space, with some office real estate companies reserving 25% of their offices as lease-only ‘flex space’. Therefore, focusing on real estate investment in other areas instead could be a better way to appeal to millennial demands.
Innovating for Hipsturbia
Now that we know some of the key factors to be aware of during Hipsturbia, we can now start to think of new ways to innovate. We know that living, working, and playing are three important factors for a thriving Hipsturbia, so what does this involve?
This involves reliable transit access into the city, easy walkability, plentiful retail stores, eateries, and a range of recreational options. There has also been an increased interest in co-living among adults as a response to housing scarcity and higher costs of living. These aren’t the only factors that drive people to cohabit well into their 20s and 30s, it’s a way for people with common interests, values and concerns to convene in a like-minded environment.
These aspects of Hipsturbia opens up a realm of real estate opportunity. This article offers the prospect of buying up cheap, derelict buildings outside of cities such as old strip malls or warehouses and repurposing them to meet these demands. They can be transformed in to co-living spaces, or turned into hubs for recreation, retail, and affordable dining.
The demand for green markets in urban spaces now exceeds 8,700, which is significantly up from just 2,000 a quarter-century ago. With an increased demand for high-quality, locally sourced, ethical food produce and restaurants from the ‘foodie’ generation, this leaves an opportunity to create spaces for pop-up food stalls and markets. Somewhere with good transport links from local farms with adequate seating and facilities to attract the local community on a regular basis could be a fantastic opportunity for development.
When it comes to appealing to the tech demands of millennial buyers, there is a huge scope for innovation. It opens up greater possibilities for integrating properties with IoT (Internet of Things) technologies, making smart homes that have tech ingrained into them. This gives millennial buyers the power to control aspects of their homes, from lighting and temperature to media and security, all from their devices.
Why Should Your Business Innovate During Hipsturbia?
We’ve discussed the key points and highlighted some ways for real estate businesses to innovate during Hipsturbia. Now, it’s time to answer the title of this article. Why should your business focus on innovation during Hipsturbia?
One thing all businesses know is that in the face of big changes like Hipsturbia, competitors will find new ways to get ahead and new competitors will appear. But finding innovative solutions as early as possible will help your business to adapt and thrive. As we’ve seen, Hipsturbia is set to be a massive change to the real estate industry, which means the best time to innovate is right now. Failing to do so means that you will be blindsided by the challenges presented which can negatively impact your company in unforeseen ways.
Innovation shouldn’t be a task allocated to a select few members of your organization: idea generation works best with a vast range of people. Take a look at your target audience and understand what they’re looking for. Try to integrate millennials into the decision-making process. Understand that their needs are vastly different from the previous generation, and what has worked in the past isn’t going to work anymore. With their feedback, you can take it to your people who have experience within the sector and use their collective intelligence to find more innovative solutions than one person alone could ever generate.