Everyone has an opinion about real estate. Mostly these are based upon interpretation of “the market”, economics or maybe just past experiences. We have another way of looking at it. We look at the buyers, the only people who really matter when all is said in done. Who are they, what will they do under different circumstances and how will that play out over the years ahead. And using a massive global study that pinpoints who the people are that drive economic prosperity and real estate growth, we are incredibly confident that Denver is in great shape and only going to get better.
Based upon acclaimed international research in to who really spends money and why, we can show that just 24% of people in society drive a whopping 57% of all consumer spending. And it isn’t the 1%, Millennials or the Millionaires Next Door. Going beyond demographics and income measures, this group, known as the New Economic Order (NEOs), spend more, more frequently than any other sector of society. And the greatest single expression of the personal values that drive their economic importance is their home.
The reason we are so confident is that Denver has the highest NEO ranking of any city in the country:
Denver is a NEO city.
NEOs don’t fit in to traditional definitions. They may be 52 or 27, male or female, married or single. They likely have a college education and although they likely have good careers are often not defined by them. They are in plain sight, but traditional thinking means that most cannot see them or their potential. These are the people who are driving the regeneration of Denver and will do so for many years to come. They start more businesses, eat out more often and spend more across every category, especially real estate, than any other group. So when you pass through the city and see the places that are buzzing you are seeing evidence of NEOs and how they are reshaping everything – the Hotel Halcyon in Cherry Creek, L5 in LoHi, Super Mega Bien in RiNo, Dairy Block, Infinite Market Theorem, Laws Whiskey, Central Market, Tavernetta and pretty much everything in and around Union Station, including the condo sales at The Coloradan. If you want to understand where Denver is going, you need to understand NEOs.
Here are some things to know about NEOs:
- NEOs are 8 times more likely to buy a new home than any other group.
- NEOs are most highly concentrated in urban areas with high levels of culture and the opportunity to self-expression (sports, creativity, new experiences). There are NEOs in the suburbs but not with any concentration.
- Design is emblematic to NEOs. Making something unique and functional while beautiful unlocks their passion (and wallets)
- NEOs eat out 3 times more often than any other group
- NEOs travel more frequently than anyone else
- NEOs spend measurably more per item on things for their home than any other group.
- NEOs are comfortable with debt. They are much more likely to have a mortgage, freeing up funds for other things that they are passionate about.
- NEOs are economic pragmatists, driven far more by their sense of their own personal economy than media commentary of economic conditions. As a result, even after economic shocks, they resume their previous spending way earlier than anyone else.
All of this is great but not a guarantee for real estate success in Denver. The most important thing to understand about NEOs is that if they don’t find products that fit them then they won’t compromise and just buy what is available. Instead they will wait or improvise and create the homes that reflect their individual personalities, changing neighborhoods as they do. Market statistics are purely a reflection what buyers did with the options that were available to them, not what they would do when the right options are put to them in the right way. When it comes to NEOs and real estate, you rarely can see them by looking backwards. They are immune to normal marketing messaging around “luxury” and “lifestyle”. If it doesn’t speak to them, you simply don’t exist. Get it wrong and you simply don’t stand a chance.
This is why we are launching a division of our real estate marketing company here in Denver. The NEOs are already here, we are bringing the expertise, to work with developers and investors who want to go where their eyes and the data are showing us where to go. Fingerprint Strategies will bring a new level of project real estate expertise to Denver based upon over $6 billion in sales success, allied with the research and understanding of who NEOs are and what they want.
We literally wrote the book on it.
We are bullish on Denver. Not just because we love it but because the data is incontrovertible. The mismatch between product and the NEOs already in Denver presents an epic opportunity. A hidden demand that cannot yet find its way in to “the market” because there simply aren’t the right products for them to buy.
We plan to fix that.
Chris Norton is the CEO of The Spending Group and its real estate division Fingerprint Strategies. He is widely acknowledged as one of the leading experts on consumer spending and how that translates to real estate development across North America. The NEO typology is based upon a global study of over 1 million consumers over a 10-year period and over 2 billion measures of their spending and attitudes. Mr. Norton co-wrote the best-selling book 113 Million Markets of One, with the former head of Global Research for KPMG.