You still need furniture whether you own or rent
Thomas Russell -- Furniture Today, October 5, 2010
Thomas Russell
For years, owning a home was viewed as living the American Dream. It gave one a sense of stability, a way to save money and a tangible asset to pass down to one's family in the future.
But given the state of the economy, homes may be more of a curse than a blessing, a point raised in a Sept. 6, Time Magazine article called, "Rethinking Home Ownership - Why owning a home no longer makes economic sense."
In the past, it states, the idea of owning a home had a number of benefits ranging from social and financial stability to safer neighborhoods and kids who did better in school. The problem is that we just experienced what the article calls the "biggest housing bust since the Great Depression." This bust has had the reverse effect, causing problems ranging from foreclosures to "neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in home wealth than they did three years ago."
Worse still, it has caused people who have trouble selling their homes from moving to where the jobs are. It quotes one professor of economics in England as observing that places with high home ownership rates also have higher unemployment rates. "In a typical year," the article said, "some 40 million Americans move - and nearly 20% do so for a job. Unless, of course, they can't."
Such arguments may cause alarm in the home furnishings industry, which is so dependent on the idea of home ownership. When home sales and home construction falter, so does the industry. The housing slowdown in recent months certainly explains the lackluster activity at many retailers and an ongoing sense of puzzlement and frustration among many suppliers. One month, sales are great. The next they are way down.
The good news is that whether you own or rent, you are still a consumer of home furnishings. Perhaps too often the industry ignores this important fact. Yet, oddly enough, the industry also has taken steps to meet the needs of renters by creating smaller scale furniture. Much of this furniture also has a contemporary design edge, which is popular among the urban centers rich in rental units.
At premarket this week, there likely will be some exciting new smaller scale product aimed at either starter homes or small scale condos and apartments.
None of this is to downplay the importance or benefits of owning a home. We just need to remember that apartment dwellers are consumers too. They just don't have to pour huge amounts of their disposable income into things like real estate taxes, replacing an air conditioning unit, or replacing a roof. In today's depressed housing market, it may be difficult to get any of that money back. Apartment dwellers on the other can spend that money on things like furniture.
That's why suppliers and retailers who haven't done so already may want to consider ways to market to this important segment of the population.
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