In a client meeting yesterday, the question of how we define a goal arose.
It came down to a classic marketing truth, expressed in two questions, the second of which is the answer to the first.
Do you want a better vacuum? Or do you want a cleaner room?
The second question is a response to a truer challenge than the first. A skill, a proficiency, a solution--when it's its most genuine--frames a real challenge in real, down-to-earth terms.
And so it is with housing, new home construction in particular, housing finance, and both of their relationship with jobs and wages.
Jobs and wages are a construct. They are the "vacuum."
From a housing, development, housing finance, and new construction standpoint, a "better vacuum" is more jobs, higher wages, and expectations for higher incomes.
The "cleaner room" in this analogy? In our view: education. And importantly to a new-normal broadly dispersed economy, training. Education and training progress would serve as a stronger proxy for fundamental housing gains than employment and unemployment data.
For instance, look here at the Census Bureau Economic Census visualization of mining and oil related jobs in the United States.
The geography, today, may match near-term and medium-term impacts to housing, specifically insofar as they affect consumer confidence and expectations around household wherewithal.
A more important heat-map, we believe, is this one, and it points to one of housing's biggest directly related, but massively unappreciated challenges. Education and training.
We think it's one of housing's biggest, most monstrous, solvable challenges. Education and training. Solvable, not in the flip-a-switch sense. Solvable in the concerted 36-to-48 month sense of road-mapping a path, lowering the barriers, and elevating the ambition- and purpose-level among those who are invested in the outcome.
Importantly, Animal Spirits play a big role in economics, in business cycles, and it our nation's sense of its own resilience. When spirits flag, businesses crater, entrepreneurs stand on the sidelines, investment slows.
Educational attainment is the single best proxy for income and wage wherewithal we have. Training attainment will become a close second in its importance as a proxy for attainable livelihoods, wage growth, and a reasonable shot at the American Dream.
Think about it. Jobs and wages are a better vacuum. Education and training will allow for nimble, brilliant, transformative approaches to what jobs and what value they produce will be essential to our future.
We're going to take a few days off. From an amazing team of colleagues, leaders, rock-stars, and strivers here at Hanley Wood, BUILDER, Metrostudy, and the Residential Group, we wish you healthy, happy, serene, and warm (in a good way) holidays. We'll be back Dec. 28, live, restored, and in-person.