It’s all about the message.
When it comes to marketing a place to live to the American consumer, you’ve got to take your shots when you can. Consider, for example, the NAHB, which reports monthly the number of housing starts in the United States and tends to remain somewhat generic (“Housing Starts Increase 15 Percent!”) when apartment construction is on a roll but gets sector-specific (“Improvement in Single-Family Masked by 8.3 Percent Decline in Multifamily Starts”) when characteristic volatility in multifamily groundbreakings sours the single-family picture.
Not that the apartment sector doesn’t pull any punches. The NMHC, for instance, titled its 2008 annual report “The End of the Ownership Society,” quoting former FHA commissioner William Apgar boldly on the cover in announcing that “the bloom is off of homeownership” alongside a graphic of a single-family home cracking in half. In the report, the NMHC details how renters save an average of $560 in monthly costs by eschewing homeownership and graphs out how a $100 investment in housing between 1985 and 2008 would be worth only $210 versus the $710 gained in stocks over the same time period.
“I would never use the word ‘war,’ but there is definitely some marketing competition that goes back and forth between interested parties on the multifamily and single-family sides,” admits former NAHB CEO Colton. “There’s no question that the renter side is winning that back-and-forthing right now, but I think we ultimately trend back towards equilibrium in ownership versus renter statistics.”
Indeed, a precipitous drop in the U.S. homeownership rate predicated on (or responsible for) the U.S. economic recession between December 2007 and July 2009 is likely to continue into 2012.
“We have of course seen the homeownership rate drop about 350 basis points, and I think the short time frame in which it has dropped is noteworthy,” says Rent.com’s Aragon. “I think it remains to be seen if that will reverse within just five or six years. This is a long economic downturn despite what the economists say about it being an 18-month event. To the man on the street, it feels like we never came out of the recession.” (For more on the fluctuation in homeownership, see “Homeownership Rate,” on page 33.)
Rent.com alluded to consumer sentiment and negative feelings about homeownership in 2011 with a controversial YouTube commercial that paid homage to Apple Computer’s famous “1984” ad and featured a young adult running down the street, away from automatonic masses pressuring homeownership. The spot concluded with a brick being thrown and shattering a single-family home built of glass. But Aragon says that the film was never intended to further the either/or dichotomy of renting versus owning, even if it tapped into changes in consumer sentiment toward that dichotomy.
“I think there is still an emotional connection that people make with their homes, and if the time comes when the economy is flourishing again, people may forget some of the lessons of these more difficult economic times,” Aragon says.