Two decisions make this business of home building above all a local one.
One is the decision of the property owner to sell. Often, motivating that decision is a desire, a construct that phrases itself in the mind roughly as, "I want to get more for less."
Two is the decision of the buyer, who in almost every instance would be thinking of his or her purchase as an opportunity whose roughly-phrased expression might be, "I want to get more for less."
A home builder, one who succeeds in this real world of galloping complexity anyway, finds that making both of those decision-makers winners on a relatively consistent basis is a pretty surefire way to stay in business. Maybe pass it along someday to the next generation coming up, or maybe sell it to one of the big publics, who almost always have an appetite for a company that knows how to play the asymmetry game well. The asymmetry game, of course, means that Z becomes a "leveler" of the playing field between X and Y, based on timing, and motivators of one versus motivators of another.
But how those two decisions come down, which essentially give buyer, seller, and builder each the sense that stars aligned around "the right place, at the right time, for the right money."
Home building, by its nature, needs to make winners of people who agree to get less (in the eye of the person on the other side of the equation).
What technological and sharing economy disruptive change adding to the conversation has to do with how we experience value.
Buying a home (the transaction) is one dimension that gets at value, and it's the one that gets all of the headlines when it's rolled up into local, regional, and national data points every month. However, this is a single dimension of value (as it's a single dimension of cost ...i.e. what is sometimes referred to as "first cost").
Living in a home is another dimension of value, and one we don't often hear about. Much like the young kid who doesn't talk at all for the first four or five years of his life, to the worry of his parents, who get him checked by experts and analysts, none of whom can explain why it is he doesn't speak. Until, one day, the kid says, "the soup's not very hot." Overjoyed, the mother says, "You can talk! You can talk! Why didn't you ever speak before now?" The kid's response is, "Everything was fine up until now."
So, too, value got from living in a home is often unappreciated. When you use your 2-year-old iPhone to Facetime a loved one, and it's a perfectly clear image and perfectly audible conversation, and you almost feel as if you're right there with each other, what's the thought? The experience might be, "This iPhone is awesome!" It may be old, in fact, relatively, but it becomes as new as that experience of connecting with one's beloved. The Facetime moment is in the present, and it has the capacity to make the device feel brand new every time.
A home can work that way too.
Buying a new home may be a thrill, and it should be. It should feel as if it's a dream literally becoming real. But three, or five, or eight years later, that same home should give its owners an experience that is as fresh as the day they took hold of the key and the deed. A home that you've built, even if it's not brand-spanking new and being delivered to its first resident, should be capable--and it probably is--of giving your customers the same kind of feeling as an iPhone user who's Facetiming on his or her two- or three-year old device. It's as new, and wonderful as the magic of that call.
So, think about value among those who live in your homes, not just the snapshot of time that they buy them. This value gets measured in various nameable ways: safety, healthfulness, durability, efficiency of operation, fun-ness, privacy, access to necessary resources like fresh water, all of these sub-notions of the term "livability."
Finally, there is the value, to your home buyer, in the moment they become the property seller, which brings us to full circle, as every discussion in real estate tends to do.
Value, in other words, occurs in three states and stages for a home buyer. The transaction, the duration of time spent in the home, living there, and finally, the exit plan.
We're starting to see innovative approaches to building new single-family homes for rent that suggest to us that some of those classic assumptions around who sells, who buys, and who attains value during the time in the home are fluid.
What about home builders who stay invested in the communities they build, as ongoing service providers to the homes--their improvement and evolution--and the neighborhoods themselves?
It could begin to change, fundamentally, the relationship of dependency on the decision of a property seller and the decision of a home buyer that home builders endure. Having become so competent at making winners of both the land seller and the home buyer, a home builder may ensure a winning path ahead as well.