Analyzing Twin Cities: What’s Denver Missing?
November 12, 2019
Calgary’s twin city to the south, Denver, Colorado, shares much in common with our equally cosmopolitan city. Calgary and Denver are both a quick drive to the Rocky Mountains, they’re both situated at high elevations (Denver’s at 5,300 feet vs Calgary at 3,500 feet), and both cities were founded around the time of the gold rush.
But the facts on paper are much less impactful than actually seeing both cities in person. Not only is the architecture strikingly similar (many preserved heritage buildings are from a similar era), Denver and Calgary also have similar infrastructure – city life planned around amenities like parks, playgrounds, biking and walking trails, and natural green space. The root of the similarities between Calgary and Denver comes down to the most important element to consider when analyzing a housing market: The People.
What Millennials & Baby Boomers Want
Calgarians and Denverites both value a healthy, active lifestyle that offers plenty of opportunity for outdoor recreation, quality time with family and friends, and short travel times to work and amenities like shopping and dining.
The majority of homeowners and potential homebuyers fall into the millennial and baby boomer age groups in both cities. No matter where they live, we know millennials make purchasing decisions based on values and lifestyle rather than just product type (read more on how to sell to millennials). Baby boomers’ buying habits are slightly less values-driven, but they are at a stage in their lives where downsizing and moving into a walking- and biking-friendly community makes more sense than ever.
Looking at Denver’s housing trends over the last decade, the highs and lows look very similar to what Calgary has experienced. Denver is in a sustained housing boom right now thanks to the high cost of materials, a growing population, and low housing inventory. Experience makes it easy for the Chatterson team to see areas for even greater growth, and how well-advised homebuilders can capitalize.
The Missing Middle in Denver
This is the simple answer to how some builders around North America have found even greater success than their competitors in an exploding housing market where land is at a premium and sellers hold the power: building diverse products and selling the lifestyle they deliver.
Basic logic may tell you that when land is at a premium, it’s best to build as many units as possible in the smallest area – like high-rise condos. However, changing buyer demographics in Denver, like those in Calgary, is leading to less demand for the lifestyle and limited space that comes with condo towers.
Welcome to “The Missing Middle,” mid-size, multi-family homes for average homebuyers. These are not luxury estate homes in the suburbs and they are not condo buildings with hundreds of units built in the downtown core. “Missing Middle” homes include duplexes, townhomes, low-rise apartments/condos and garden or carriage suites that provide homebuyers the space, style and location of homes they want. (Our founder Jason Hardy is the Executive Director of the Real Estate Development Institute, where he has taught at length on the topic of the “Missing Middle” and other critical real estate topics).
Millennial homebuyers are reaching a new stage of adulthood and want room for their growing families, without losing their urban lifestyle. They want a short commute to work possibly via bike (this is very important for many younger workers, whereas older workers are used to commuting long distances by car). And accessibility to things like dining, shopping and groceries is a must for both millennials and baby boomers. Speaking broadly, neither of these groups wants to be in amenity-poor communities like the traditional commuter suburb. Forward-thinking, master-planned suburbs are including “Missing Middle” homes to attract all lifestyles. These groups want to be connected to city life but also want homes larger than a shoebox.
Selling the Lifestyle, Not the Product
How do you market “Missing Middle” homes to your audience in order to improve quality lead generation, move product quickly and capitalize on the booming market? Don’t just sell the product, sell the lifestyle and experience of living in an amenity-rich community, either urban or suburban, with enough space to feel comfortable and fulfilled.
Your marketing activations can’t just showcase the floorplans of your builds, they must highlight the amenities both inside the building and nearby. Advertise the yoga and fitness studios down the street. Tell people how close they can be to downtown while still getting the square footage they crave. Does your new low-rise apartment have a dog run? Because millennial urbanites love their dogs and want room and services for them. They want effortless access to bike lanes, walking trails, and public transit. They may not even want parking spaces for their cars, and if they do, they don’t want three car garages.
Focus your marketing efforts on creating a sense of place and community, making your new project a destination with connections to a desirable city lifestyle. This audience is somewhat averse to traditional advertising (but definitely not immune to it) so ensure your media spend includes a heavy lean into digital for both paid and organic social media, as well as a warm and inviting web presence that highlights the things they care about (learn about Chatterson Express (CX), our simplified custom site builder specialized for homebuilders).
You can see what creating a sense of place looks like in the real world by reading about one of Chatterson’s clients, the community of Currie, and how we transformed a former military barracks into one of Calgary’s most vibrant and exclusive urban destinations. Read about Currie.
One Final Note on Emerging Trends
Detached single-family homes and the lifestyles they provide will always be in demand. As buyers adjust to new family and economic realities that require they get more out of their homes, carriage and garden suites are becoming increasingly popular. Sometimes built above garages or in the backyard, these units can provide space for extended family or can be rented out to improve buyers’ ROI.
What marketers and homebuilders can learn from this trend is that everyone is demanding more out of their home and requiring their hard-earned dollars get them even farther than before.