Three domestic economic forces--albeit glacial in their impact on day to day job site activity and sales center and model park traffic--are housing tail winds that should raise the tide of demand for new homes and lot development into and through 2016. They are jobs, household formations, and household debt and spending levels.
One might guess that, at the same time, a gradually more accommodating regulatory environment for mortgage and residential real estate commercial lending over the next stretch--at least through election season 2016--will serve as accelerants to the tail winds.
On the other hand, there's a countering force--a head wind whose magnitude and meaning is harder to size and characterize--in the global demand slowdown. We understand it's important, but quantifying which threads of risk will exert what level of drag on our own shores and in our own business community is stuck in grey-area interpretive debate.
So, what better time for a home builder to focus on keeping it simple? We talk a lot here about external forces versus the matters a builder or a home building enterprise is directly in control of. It's vital to stay abreast of the externals, prepare your operation's resources and investments to expand or contract nimbly as demand and liquidity ebb and flow. But nobody's going to get credit for being smart about the externals if his or her disciplines are iffy or the company practices rely excessively on favoring demand, credit, and operational trends.
The basics of what you do control, doing what you say you're going to do, doing your work right the first time, staying close--not just in words, but in action--to your customer, and keeping your team motivated, are where you do the things that are going to mean the most to your bottom line in 2015. They come down to making people trust you versus distrust you, and, related to that, making it so that people who buy from you or sell to you or work for you are less fearful.
Evolution's fix is in, and fear and suspicion have proven to be extremely valuable survival instincts across the millennia. A home builder, in a very real sense, is an answer to human beings' primal need for safety and primal value around surviving, thriving, finding joy, etc.
A new subdivision or project job site is nothing so much as it is a hive of people trusting or distrusting one another, converging around approximations of mutual interest, aligned value, and a bond that either grows or corrodes, but seldom stays the same over time.
Sometimes interests polarize, values de-couple, confidence vanishes, but that phenomenon occurs rarely when people say ahead of time what they intend to do and then do it.
How simple a notion is that? To do what you say you're going to do. When there's a track record of that, people become willing, voluntarily, joyfully, and virally, to take a pathway to dealing with you as a boss, a customer, a client, a partner, or an employer.
Household formations, perhaps thanks to the steady expansion--even amid uncertainties as to how structural and secular shifts are changing industries inside out--of head-counts, are on the rise. Household formations are perhaps the most pivotal of housing's directional measures. They're where economics, business, society, and culture merge.
So, now, with what we hope are better safeguards against financial insanity, household formations, job growth, and reduced household debt levels are going to set the housing juggernaut back into forward motion.
It's more important than ever that you're practiced in the all-to-rare art of causing people to trust you and believe that you can take away their fear.