Understanding the diversity of housing markets. (page 1 of 2)

The traditional "Ozzie and Harriet" nuclear family continues to decline as a percentage of American households. Because the lending system relies on recent housing type sales to establish value, builders and developers find it difficult to finance new and innovative mixed-use building types. As a result, the same housing options continue to be built. In many regional markets this includes one type of garden apartment, one type of townhouse/condominium and, of course, the ubiquitous detached single family suburban home.

Builders and developers tend to build more of what sold last year, and are reluctant to take a risk on an unproven housing type that may be hard to finance. This "producer-driven" system stands in contrast to many "consumer-driven" industries that have recently re-engineered themselves in response to customer demands.

Some economists and researchers are looking to the field of geodemographics to expand the pool of "financeable" building types. This is especially important in the case of more compact New Urbanism and "smart Growth" housing types.

Geodemography is the practice of linking demographics to place. Leaders in the discipline, such as the Claritas Corporation, have defined distinct population "clusters" at small geographic scales down to the Census block level and profiled them according to interests, occupational orientations, incomes, product choices and lifestyles. The icons at right illustrate some of Claritas' clusters.

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