Strategic Mapping Home Building Drivers

Strategic Mapping Home Building Drivers

Mapping strategic drivers: Green building

PEST, standing for political, economic, social, and technological issues, is one mnemonic used when mapping external environmental strategic factors for an industry. Another mnemonic is represented as PESTEL "(the L. And the E. stand for legal and environmental)" (Map strategic drivers, 2009, Third Sector Foresight).

For the green home market

Political:

There is widespread distrust of the housing and banking industry in Congress. The banks financed mortgages that fueled the housing boom and bust and triggered the current national economic crisis. Congress is working to bolster failing banks, encouraging them to extend credit to worthy consumers, including credit for mortgages. The recently-proposed $700 billion bank bailout bill would buy mortgage-backed securities or 'troubled assets' in danger of defaulting and will hopefully give banks more confidence and a greater incentive to lend prospective homebuyers money (Amadeo 2009).

Economic:

The economy is still lagging, with every month predicted as the 'new bottom.' Some positive signs have emerged, like the recent mini-rally in the stock market. However, consumers are afraid of losing their jobs and may be too anxious to spend money on any large purchases, such as green home improvements like energy-efficient windows, even if they may save the consumer in the long run. But first-time home buyers may be looking for bargains. For example, in California, there was an epidemic of subprime lending. The state boasted second-highest rate of mortgage foreclosure filings in the United States, 1 for every 78 households. Today "foreclosed properties present buyers with huge bargains and home and condo sales were up 43% in February from a year earlier…of the existing homes sold, 58.4% were foreclosed properties" (Pockets of strength push U.S. housing market rebound, 2009, Reuters). This bodes well for the housing industry, but it could mean that consumers are solely bargain-shopping, and not looking for green, but merely cheap homes, although home purchases of foreclosures usually means that extensive home improvements are necessary, possibly with green technologies. The large number of foreclosures in the west and southwest can be promising for green building, given that interest in environmentalism is strong in these areas, and water conservation and solar power are important to buyers.

Social (and environmental):

Socially, there is a general trend frowning upon extravagance and in favor of downsizing one's life, even for people who have jobs. But there is also greater interest in going green, whether by driving a Prius or living in a green house. The president has made green technology a core aspect of his economic development program.

Legal: