Market Analysis of Tiny Houses

Tiny House: Target Market Analysis The tiny house market for homes "typically between 100 and 500 square" has a wide demographic outreach in terms of its age range: "Millennials, who have limited funds and might not be able to afford a traditional mortgage because they have to pay off college loans; and Baby Boomers, who are retiring and seeking ways to stretch their pension by finding affordable homes" (Hyde n.d.). The concerns of both groups are strikingly similar.

Idealistic Millennials embrace the environmental benefits provided by such homes and Baby Boomers are seeking to save money on utilities. However, demographically, the impressive size of the Millennial generation makes this an even more attractive potential target market: "By sheer numbers, the 75 million members of the millennial generation overtook baby boomers last year" (Lee 2016).

Slice of Heaven's emphasis on the luxury market of tiny homes would allow both demographics to enjoy homes in gated communities where they can associate with like-minded individuals yet still pay a fraction of the cost of a standard-size home in such a neighborhood.

"Those in tiny houses are often well-educated (with many being artists and writers, and the majority of those surveyed saying they had at least some college education), with cultured tastes, who are seeking to live simpler lives" and free up more disposable income to pursue other things as well as save for or enjoy retirement (Hyde n.d.).

The socio-economic demographics of the tiny house market are relatively wide, given the varied costs of such homes but there still is a fairly deep base even in the higher-end section of the marketplace, given that even the most expensive tiny home is still cheaper than a modest full-sized home. Particularly for couples who do not want children immediately or whose children have grown up, tiny houses allow buyers to have the privacy of their own structure without many of the financial burdens of ownership.

The placement within a community which allows community sharing of amenities such as fitness facilities further allows a balance between the financial benefits of small home ownership and many of the perks of still owning one's own structure. Customer/Consumer Analysis Millennials are questioning their parents' traditional assumptions that home ownership is always an unquestioned benefit, financially and personally. "Developers have been catering more and more to affluent baby boomers, building larger and more expensive dwellings, which makes buying a first home even more difficult for young adults ..

less than 20% of new construction in recent years has been for entry-level properties" (Lee 2016). Millennials are better-educated than the previous generation of young people yet have less disposable income and fewer choices in terms of builders catering to their needs. Mortgages are also less affordable for young people burdened by debt. The communal living also facilitated by the creation of a gated community allows something parallel to dorm life, which may be attractive to twentysomethings for whom college is still a recent memory.

The memory of the recent Great Recession caused by the housing market has caused even many affluent Millennials to question the value of putting so much equity into a home, versus focusing on other life pursuits. Young adults are also postponing having children longer, which further intensifies their interest in the small housing market. The market share "of 18- to 34-year-olds who are married and with kids has fallen steadily to 20% from almost 50%.