Demographic Need is Fundamental - Mark Zandi

At a recent ULI meeting that I attended, economist Mark Zandi painted an optimistic financial future for America based on personal and corporate balance sheets and earnings growth. He stated, “its not if they start investing their cash, its when and how.” Although that gets the developer in me excited, the real takeaway from that discussion was his repetitive point that “demographic need” determines the decision-making in every household. In times of low economic activity, therein lies the opportunity. Figure out how to meet the needs today, not so much the wants.

The often “Field of Dreams” mentality of the development industry should take note of this point, and work toward revamped products to meet these consumer demands. Mark used a personal example: his family’s need for a larger vehicle. It was a recent purchase based on need, and it was inevitable in his mind regardless of economic climate. There are certain needs today that are influencing mixed use and urban infill redevelopments; ie. the need to reduce monthly energy costs, to be closer to employment, to accommodate changing household formation, etc. Combine these needs with a credit spigot that is loosening, and personal balance sheet cleanliness (a drop from 430 million credit cards to 320 million over last 36 months) and it appears momentum toward our industry has some real steam behind it. Now, how do we make sure we capitalize on it for our industry, businesses, and personally?

Photo - Mark Zandi in Time Magazine