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The "Sharing" economy and custom cabinet shops.

6/16/16       
Nostradamus

The AirBNB business is eventually going to impact residential cabinetry companies. As boutique shops we depend on sentimental customers upgrading their homes for emotional reasons.

People who buy real estate for pure profit motive don't have any reason to make the kitchen any nicer than needed to get the job done.

There is trend right now for Wall Street to buy houses in desirable areas. These REITs are self funded and do not require a mortgage. When they learn a house is on the market they just stop by with a bag of cash. If they want the property bad enough they will offer to buy it with all the contents so you don't even need to clean out the cupboards. If you can be out by 4pm they will throw in air plane tickets to Hawaii and give you a stipend for buying new clothes at the airport.

These REITs are circling properties with the best ratios right now. As their portfolio saturates at the best end of the market (slightly above entry level houses) they will start to buy up down-market. Like a starfish slinking its way across the mudflats they will eventually suck the life out of every clam they can find.

Similarly AirBNB is really attractive in the short term, much like the other "sharing" juggernaut UBER. UBER pitches their concept as just trying to help out struggling retirees who need some extra cash. All UBER is trying to do is convince people they don't need to own a car. By the time this happens they will have forged an alliance with Toyota or GMC for self driving automobiles and that poor UBER Driver is going to kicked to the curb faster than UBER can say "I don't need to share my revenues with anybody!"

http://www.inman.com/2015/04/07/blackstone-group-americas-no-1-homeowner-is-changing-the-real-estate-industry/

6/17/16       #2: The "Sharing" economy and ...
Kim

Cuba is the place for you. Or maybe North Korea. There the government controls everything, not some pesky capitalist.

6/17/16       #3: The "Sharing" economy and ...
nostradamus

Kim,

I think my post was politically neutral. It neither advocates for government interference nor admonishes capitalism. It merely describes a landscape that we will eventually occupy.

Personally I think that driverless cars are a wonderful concept. There will, however, be a lot of collateral consequences to this change. In the short term cabinetmakers should benefit from the conversion of all of the in-city garages to AirBNB rentals. This will offer to the enterprising woodworker an opportunity to develop murphy bed type storage for these smaller living spaces.

The unemployed UBER drivers will have a whole bunch of orphaned automobiles with which to shelter themselves.

Win-Win for everybody.

6/17/16       #4: The "Sharing" economy and ...
Pat Gilbert

The more things change the more they stay the same.

Maybe rich guys will want some cabinets for their bomb shelters?

Things are always changing. And yes if you make buggy whips you are going to have to change.

Look at this graph and realize that you are concluding that a very long trend is going to reverse. Go luck with that.


View higher quality, full size image (606 X 212)

Graph from here

6/17/16       #5: The "Sharing" economy and ...
Jim Member

In my 40 years I have done work for all kinds of people from all economic backgrounds. I would much rather work for a wealthy client than a poor one.

If the 1% go away it's not a pretty picture for those of us that actually sell the thing we enjoy making. I'm a happy guy every day I get to get up and do this thing some call work.

6/17/16       #6: The "Sharing" economy and ...
Pat Gilbert

No worries Jim, there will continue to be opportunities for you.


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