value chain

Safe, durable, comfortable, efficient-performing, relatively affordable, and attractive.

We'll say it again.

Safe, durable, comfortable, efficient-performing, relatively affordable, and attractive.

Who's not in that business? And yet, whose work proves that they are, 100% of the time on 100% of the jobs? Are each of those features and functions and traits a value your homes deliver to your market? Let's explore why we believe the six of them may no longer be an option.

Now, for 2015, the year drawing to a close, the two biggest headline-grabbing stories in new residential construction and development were separate on the surface, but wove together in their DNA, like strands of a double-helix.

You can name them each with one word.

Labor. Millennials.

Ad nauseam, the plot and drama around labor capacity is that it's fundamentally constrained, which presents a structural barrier to the production of low-cost, new "starter" homes at a high enough volume on cheap enough land to be profitable to the producers. Similarly, the pervasive narrative around Millennials, whose leading edgers are just turing 35 years old as we speak, by the way, is that they're turned-off to homeownership, suffocating in college loan repayments, and in need of far more geographical nimbleness than property-ownership would allow.

Headlines and hype, notwithstanding, we think a more profound, real, and constructive theme characterizes the home building landscape in 2015. Not that the supply of predictably-priced specialty contractors and crews isn't important, and not that the disposition of a 75.3 million population of young and emerging adults toward the American Dream of homeownership is not critical.

We see those themes as part of a grander, more structural, and, we believe, more encouraging master-trend playing out, starting somewhere in 2013 and reaching its zenith in the next 24 months or so.

One might call it the Great Value Reset.

It could be that the dark abyss of the economic and real estate meltdown signaled a grave, very human error in understanding value's meaning and its role as ballast in society, business, and culture.

A function of this mistake, the assumption that homes could act as short-term, speculative investment tools since their prices were always rising and everybody always made every payment on them no matter what, proved disastrous.

In a sense, a building block of how we mentally and emotionally freight the notion of value, the amount of work and money and discipline it takes to own, and pay off, and gain advantage from homeownership lost keel, and teetered on meaninglessness.

The years hence, from about 2010 through now, asked painful questions and exacted even more painful tolls on those of us who wanted to see a restoration of down-to-earth, demonstrable, sustainable measures of value in the experience of residential property ownership.

At a basic level, we had to come to grips with the pay-back period we'd have to endure if, in fact, we wanted to buy homes to live in them rather than to simply have them long enough to sell for more.

So, what 2015 has had running through its core of macro-data ups and downs, its monthly benchmark puts and takes, its momentum fits and starts, and its current offset of headwinds and tailwinds, is a single, slowly reconstituted, adversity-tested, and steady return of basic, indisputable, meaningful values to being an owner-occupier of a home, and, sometimes, a new home.

The steady shift from investor purchases and cash purchases to primary residence buyers, and mortgage borrowers has occurred, even as permits and starts data have feinted and dodged and jabbed and hooked. The housing recovery is still happening.

It's happening because people are beginning to buy homes and buy into communities to live in them and enliven them. It's happening because people who work on the crews that build those homes are learning to trade on a more meaningfully real valuation for the jobs they do. It's happening because the economy--at the hyperlocal, the regional, the state, and the national level--is starting to perceive, trust in, and bank on the contribution of home and community building as a necessary ingredient to sustainably improving productivity, multiplier-effect household spending, and gross domestic product.

Value's return to the home building and residential development landscape is like the Big Dig, way late and way over budget.

It's welcome, nonetheless, and it means that some of the word-of-mouth, Animal Spirits effect that can sustain and intensify a housing recovery can kick into gear at any time. Are we ready?