In the real world, we see that 2.3 million new homes have shrunk to half a million. In the real world, we're seeing home prices, new and used, slide down the scale toward norms we'd all—save perhaps Robert Shiller—thought no longer applied. In the real world, our wishful-thinking actuarial tables on who was worth the risk and how much the risk would return on each dollar invested proved to be just that—wishful thinking.
And in the real world, all of those who were making a buck in the artificial bubble world are now among the mass of us giving back a buck to pay in real sweat labor for the extravagance we'd begun to get so used to.
We're in economic war time. Nobody's willing to say it. Nobody's mapping a plan of sacrifice, of methodical work-outs, of what bitter pills to swallow to begin to heal.
The presidential candidates have had too much to lose to say what it is we should think about picking, prioritizing, and leaving behind. They counted electoral votes in too measured and anxious a way to be able to declare that our biggest war is against fear at home and our most important move now is to set out a plan we can live by.
If you're of the post-World War II Baby Boom generation, you'd heard from your parents of the Depression days, perhaps until you were bored to tears. You saw the way they'd save soap slivers, the way they'd wrap up a few leftovers from a meal, the way they'd plan car-use to conserve as much gas as possible, and the way they'd religiously make deposits in their passbook savings accounts and talk of some figurative “rainy day.”
We were born of parents who lived through an era they believed with all their hearts people should never have to experience ever again. Working hands went idle. Working minds went numb with the loss. But in the end, families, households, street blocks, villages, towns, and cities dug out of the hole.
We can't do everything. The money and time for one or two efforts cancels the resources for a third. There are only three good pragmatic ideas for every five there once were. There are only three people who can work onward through a plan that required four or five only months ago.
Warming the credit markets will only come with the dollars in our pockets. Central banks and national treasuries have already fired most of the bullets in their collective barrels, and there's little recourse but for people, for small to medium-sized businesses, for this land's salt of the earth to draw a line in the sand and rally behind it.
Home building's business reality is that starts as such need to go as close to zero as is possible as quickly as possible. The math behind home building companies' expense still needs to shrink. Supply needs to shut down, with all focus on spurring demand for existing, foreclosure, and new-home inventory for the next 12 months until there is an absolute bulge and clamor for new homes to meet your real customers' needs.
In a way, as you make your way through the pages of this issue, you will see that its theme is dire necessity. Whether you're delving into why NVR shook off a near-death experience to become home building's surest bet for a future, or looking at the graphic tale of housing's domino effect across the economy, or extracting insights on what projects find a way to outperform their geographic market peers, the story in each case is about what must be sacrificed to navigate our way to terra firma and a tomorrow.
We need to pick. We can't keep thinking this is just a bad dream that we'll all wake up from.