Tag Archives: luxury goods

One expanding housing market: upscale, off-campus college housing

Posted on by

Several builders are preparing for an area of the housing market that is set to expand: upscale, off-campus housing for college students.

These days the companies have begun to build upscale houses with bedrooms clustered around gourmet kitchens and access to amenity-filled clubhouses. Known as cottage-style housing, the relatively new product is becoming popular with operators and students.

Nationwide, there are 35 cottage communities with nearly 19,000 beds. Another 18 are under way or in the works, with roughly 12,000 beds, said Wes Rogers, chief executive of Landmark Properties Inc., which has built roughly one-third of the cottages in the U.S. While cottage-style housing represents a small percentage of the nearly 500,000 beds controlled by the sector’s top companies, industry watchers expect the bed count to increase as the product catches on…

Developers are building these properties to house an expanding student population: More than three million high-school students are expected to graduate annually until the 2018-19 academic year, well above the roughly 2.5 million graduating in 1993-1994, according to the Department of Education.

Moreover, universities don’t have enough beds and much of the current supply, tall towers with communal bathrooms, has lost favor among the McMansion generation. Schools, many struggling with budget cuts, can’t afford to build new dorms.

It’s not college, it’s luxury living! Or at least a small approximation of it.

A few thoughts about this:

1. Assuming this off-campus housing expansion continues, does this mean colleges will have to engage in an arms race for housing to keep dorms occupied? In other words, these nicer off-campus opportunities might impede campus cash flows if more students are drawn out of dorms.

2. The article doesn’t talk about this but could this lead to more of a have vs. have-not attitude on campus? Not everyone can access this kind of living quarters.

3. I wonder if better housing has any positive effect on student learning and development. Do students act differently if the (off-campus) housing is nicer?

What you lose by having a 3-4,000 square foot home compared to a 5-6,000 square foot home

Posted on by

If you are going to move into or build a 3-4,000 square foot home instead of a 5-6,000 square foot home, what do you lose? A game room, among other things:

Customers increasingly are opting for alternate uses for the room that used to house the pool table and bar. Real estate agents and builders cite a number of reasons, from people’s tastes changing, a sign of the economic times or a baby boomer generation growing older, as reasons.

Going without a game room is not necessarily a sign that people are entertaining less, but more an indicator that custom homebuyers are making more practical decisions about what they want their living space to contain, says A. Faye Scoller, of the Scholler Group Prudential PenFed Realty…

“Additionally, we are seeing a lot less of the ‘keeping up with the Joneses’ in terms of the total square footage,” Booth notes. “Where we used to build 5,000- to 6,000-square-foot McMansions, now customers are reducing their space requirements, and now custom homes, with the same high-end amenities and extras, are in the 3,000- to 4,000-square-foot range.”

A smaller footprint comes from eliminating the game room and dining room and making one large and airy great room that can serve multiple uses, Booth said.

Both home sizes are large but you would have to make changes if you lose several thousand square feet.

The most interesting part of this to me is that although these houses may be smaller, this one builder suggests the smaller homes still have the “same high-end amenities and extras.” People may not want space but they still want the luxury items associated with a big home. At the same time, does this mean that a pool table and a bar are no longer desirable status symbols?

From luxury item to throwaway good: cable TV

Posted on by

Following up on Joel’s post from Wednesday, Figures from the last quarter suggest the cable TV industry continues to lose customers:

The phone companies kept adding subscribers in the second quarter, but Dish lost 135,000. DirecTV gained a small number, so combined, the U.S. satellite broadcasters lost subscribers in the quarter — a first for the industry…

Sanford Bernstein analyst Craig Moffett estimates that the subscription-TV industry, including the untallied cable companies, lost 380,000 subscribers in the quarter. That’s about one out of every 300 U.S. households, and more than twice the losses in the second quarter of last year. Ian Olgeirson at SNL Kagan puts the number even higher, at 425,000 to 450,000 lost subscribers.

The second quarter is always the year’s worst for cable and satellite companies, as students cancel service at the end of the spring semester. Last year, growth came back in the fourth quarter. But looking back over the past 12 months, the industry is still down, by Moffett’s estimate. That’s also a first.

The article goes on to mention a number of reasons for this: a bad economy so consumers are cutting back, younger people don’t see the necessity of cable, and there is a lot of content available through the Internet.

More interesting to me is the idea that cable TV is no longer the luxury good that it once was. Once the industry began in the 1970s and later consolidated, cable moved from being a rarity to being a necessity. As late as mid 2009, “11% of U.S. TV homes only have the capability to receive TV reception “over the air”.” Having cable simply became part of how Americans spend their disposable income. Cable became prism through which many Americans viewed the world. Certain channels arose, such as MTV which has been getting a lot of attention recently because of its 30th anniversary or ESPN which was the subject of an interesting book, and became part of the national consciousness. These channels, for better or worse, came to represent American culture and were exported around the world. I wonder if having cable at home signaled a middle-class lifestyle even if other traits don’t match this standing.

But now the world may have moved on. (At the same time, despite all the articles suggesting people stop paying for cable, bad economic times, and more competition, the drop in subscribers was only 0.2-0.3%.) How exactly will cable companies convince people that their product is a necessity, particularly among the younger generations? What will be the new narrative regarding cable that will push people to include this in their lives?

Emphasizing the McMansion interior

Posted on by

Many times, McMansions are defined by their exterior: a many-gabled roof or a mish-mash of architectural styles or a cookie-cutter home or a large home that seems to overwhelm its relatively small lot or doesn’t fit into an older neighborhood. But a Sarasota blogger suggests that one could have a small home with a “McMansion interior”:

They have a new development out at Lakewood Ranch called Central Park, and even though it’s very generic and a little closely packed for my taste, they have finally done what I have been hoping somebody would do for years—build a small, inexpensive house that suggests a McMansion inside, but on a tiny scale. By that I mean it has things like a particularly nice master suite and fancy master bath, high ceilings—many coffered and trayed, lots of windows, imaginative layouts, big, well-integrated kitchens, cute little dens and lanais, entrance foyers—all for well under $200,000.

This definition suggests that McMansions can be more about the luxurious interior appointments than the garish or ostentatious outside.While the exterior qualities tend to draw negative attention, would this interior flourishes get the same criticism? I would guess no for several reasons. The interior is not as obvious to outsiders and so it is harder to call it ostentatious. Also, there seems to be a higher level of tolerance for interior appointments: the Subzero refrigerator or Viking stove or 60″ LED TV seem more acceptable as consumer items that are still useful.

Additionally, this story hints at what is likely already a trend: smaller homes with luxury upgrades. A homebuyer no longer needs large amounts of money to buy the square footage typically associated with luxury. Although your home might be just over 1,300 square feet (the size of the model reference above), you too can feel like you live in a mansion.

What the advertising in the magazines you subscribe to says about you

Posted on by

One book one of my classes is recently reading, The Suburban Christian,  offered this simple method for measuring your consumption levels (or perhaps what you aspire to consume): look at the advertising and the goods for sale in the magazines that you subscribe to.

This reminds me of something I noticed a few months into my first subscription to The Atlantic. I like this magazine for its reporting and commentary but I noticed that the advertisements were for luxury items I had no hope of buying and had never really even dreamed of buying. These goods were on par with the commercials that suggest that buying your spouse a Lexus with a giant bow on the top is the appropriate Christmas present.

This diagnostic would seem to fit with Juliet Schor’s ideas in The Overspent American about reference groups. Schor argues that media, television in particular, has presented Americans in the last few decades with a distorted view of the middle class. The typical TV middle-class family lives in a large house, seems not have any financial problems or even worries, has all sorts of popular consumer objects, and it is hard to tell if they even work. The average American watches these kinds of shows and starts comparing themselves to these middle-class TV families and raising their consumer aspirations to match what they see. Similarly, magazine advertisements suggest a certain lifestyle or things that the average American needs. These pitches can have a subtle but marked impact on who we compare ourselves to and what we think we need.