Felt cushion purchases can predict who may be a reliable mortgage borrower.

A home builder wakes each day in the 2nd decade of the 21st century with a dilemma, and most are keenly aware of it. The home builder, mind you, may be a carpenter, a general contractor, or he or she may be the treasurer of a multi-regional real estate and construction empire called a home builder. The dilemma is the same, and it is neither trite nor optional. It's basic.

Roughly, it's a question that is really two questions that mirror one another: What needs to stay the same? What needs to change?

Homes--or housing, as its known in its economics context--is like food. We need it to live. There can be too little of it. There can be a glut of it. There can be healthy portions and compositions of it. And, like food and diets, there can be the wrong type of it.

Former Wall Street trader-turned cultural and economic wise man and author Nassim Taleb writes two aphorisms that apply, as quoted by Paleo Manifesto writer John Durant:

  • Technology’s double punishment is to make us both age prematurely and live longer.
  • Deficits are similar to carbs: the more you eat, the hungrier you get.

So, where do all these thoughts criss-cross?

Here. A challenge for home builders when they open their eyes in the morning is how to get people to be willing to part with resources enough to acquire the most expensive consumer durable of a lifetime--a new home. To be in the business whose sole, obsessive purpose is to do that is to commit to an unending pursuit of answers to the question, "what needs to stay the same and what needs to change?" Fact is, people don't have to buy a home, let alone a new one. They have a choice. To awaken each day and have a livelihood that depends on getting people to make that choice stirs the daily dilemma. What changes? What stays the same?

The ranch house, for instance had been relegated to the dustbin of midcentury relics, until, of course, it regained favor, but in an entirely new and different light. Un-noted in this Wall Street Journal piece by Katy McLaughlin is a notion that many buyers today confer more value to a home whose width across the front footage of the street is greater. Here's what she does say about the ranch renaissance:

Today, as luxury developers revisit the ranch, they’re keeping some aspects of the style, such as long, sleek lines and abundant access to the outdoors. But they’re replacing the ranch’s characteristic low lines, simplicity and darkness with high ceilings, walls of glass, sanctuary-like master suites, loft-like great rooms and patios as elaborately designed as the interior space.

BUILDER, too, recognized that ranch style homes were making a come-back--starting in the West and in Colorado, and heading east--as the indoor-outdoor tsunami gained purchase in new home design trends across more geographies.

So, if there was ancestral wisdom locked up in the lines and footprint of a ranch, it took someone asking that question--what needs to change and what needs to stay the same?--to unleash that wisdom.

Let's look at a few forces that are catalyzing change right now within the light of this dilemma.

  • Energy: what happens to the form and function of our homes when we--within the foreseeable future--get the capability to free ourselves from the grid to power our homes?
  • Supply chain: how has "captured knowledge," cheaper sensors, and improving analytics changed the way base minerals and synthetic materials make their way through the cost, geography, and time continuum to our homes?
  • Jobs: what if automation, artificial intelligence, and other advancing technologies were looked at beyond dread, as giving us time back to imagine how we might make a good living after robots have taken our jobs?

Or as Harvard Business Review authors Thomas H. Davenport and Julia Kirby phrase it in their June 2015 issue piece, "Beyond Automation:"

What new feats might people achieve if they had better thinking machines to assist them? Instead of seeing work as a zero-sum game with machines taking an ever greater share, we might see growing possibilities for employment. We could reframe the threat of automation as an opportunity for augmentation.

Automation's effects, from a Harvard Business Review analysis.

What if you knew, for instance, that someone who's gone into a Home Depot in the past couple of years and bought felt cushions to attach to the bottom of the legs of all the furniture in a rented apartment was more likely than not to both 1) be trolling home builder websites within the following 12 months, and 2) be a highly credit-worthy borrower prospect?

Can knowing which renters buy felt cushions tell you that much? According to Naked Statistics author Charles Wheelan, it's not out of the realm of possibilities.

A New York Times Magazine article entitled “What Does Your Credit Card Company Know about You?” described some of Martin’s most intriguing findings: “People who bought cheap, generic automotive oil were much more likely to miss a credit-card payment than someone who got the expensive, name-brand stuff. People who bought carbon-monoxide monitors for their homes or those little felt pads that stop chair legs from scratching the floor almost never missed payments. Anyone who purchased a chrome-skull car accessory or a ‘Mega Thruster Exhaust System’ was pretty likely to miss paying his bill eventually.”

So, when you know and can know all of this, what needs to change? What needs to stay the same?

Good morning.