As it relates to housing, are you an Innovator, a Laggard or somewhere in between? I often raise this as a discussion topic in my strategy class in which I lead participants in a discussion of the timing in which people buy into certain neighborhoods. The discussion topic is the result of my application of Everett Rogers’ Diffusion of Innovations theory and Richard Florida’s work on the “Creative Class” to the housing market.
Because Property Innovators are first movers into a community, they often take on the most risk, but also reap the most rewards.
Property Laggards on the other end are late to the game—they wait until everyone else has taken all of the risks before they buy and as a result reap the least rewards. In fact, being a laggard may be the most risky of them all because laggards may be at a greater risk of losing their initial investment.
We see this in the housing market all of the time. People who are first movers into distressed inner cities take on a lot of risk, but potentially reap the most rewards when revitalization occurs.
Conversely, those who are last to market discount or ignore the population shifts taking place. As a result, they are oftentimes left holding the bag–upside down on the mortgage with no viable options. They look around and every one is gone.
