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Friday, August 26, 2011

Bigger families, smaller spaces

This week, I had the privilege of talking to a conference of executives from the home furnishings industry, including a diverse range designers, manufacturers, textile companies, furniture retailers and more.  Obviously, the fortunes of this group are tied to the housing market (at least to some extent).

I challenged this group to think about how the housing market (and the family) has changed.  First of all, household size has grown, according to recent Census statistics (see how in this USA Today report).  This expansion is due both to immigration (from cultures where multi-generational households are more common), as well as the foreclosure mess, which caused many families to move in with someone after losing their home. 

At the same time, the number of household has contracted.  I recall a report from last year suggesting that up to 1.2 million households were lost during the great recession (click here to see that MSNBC report).  Presumably, these are households lost to foreclosure, in which one family/owner moved in with someone who could help, be that a parent, sibling, other relative or friend. 

Implications:  First, how long can it be before families that sought shelter with friends or family decide they’ve had enough of multi-family housing, and strike out to re-form their personal households?  This might mean renting a down-sized living space, or perhaps a home very similar to the one they lost!  Or, depending on credit default forgiveness and evolving credit options, perhaps getting back into a home of their own.  This market could soon become a significant opportunity for folks in the home furnishings industry.

Second, aside from those companies who cater to co-op owners in places like Manhattan… who is catering to the needs of families who find themselves crammed-in to a rental, or those multiple families who are jammed into a conventional house?  This lifestyle calls for smaller home furnishings than the huge, mini-mansion-style furnishings that were popular just a few years ago.  Smaller furnishings and accessories might be a really big opportunity.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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