Has housing’s recovery begun? It’s a burning question of the moment, and anyone with eyes that can see around corners can tell you the answer. Unfortunately, we are not gifted with that ability. We’re also pretty sure that if we so much as hint at a conviction one way or another about it here in the Dog Days of early August, a flood of early to mid-September data points will consign our convictions to the “permanently delete” folder.
Still, here it is nigh on mid-August, and we’re asking the question. The prior two years, it became clear by mid-May of 2010 and 2011 that the answer was “no.” Now, at least, signs of resilience across a spotty grid work of a couple of hundred or so submarkets around the country seem like they’re taking on a life of their own. But recovery?
We were talking with one of the denizens of Capitol Hill housing lobby circles who spends a lot of time in the trenches talking to home builders with names and faces. To tell whether recovery’s real or not, he says, two things must happen:
The first occurs when a home builder courts a tough customer, and reaches a point after concessions, accommodations, enhancements, incentives, and backflips don’t seem to be adding up to a deal. “When a sales associate can say, ‘You might just want to go down the street and talk to other home builders in the market, because we may not be able to give you what you need,’ then you know we’re recovering,” our source tells us.
Secondly, he says, home builders once and for all will stop using the mantra of the housing depression, uttered ad infinitum for the past six years, “It is what it is.”
Which suggests a challenge for all of us: It isn’t always necessarily what it is.
It’s just that the very things we need to predict as we make the up-front capital, talent, and time investments it takes to serve the economy’s need for home building—people wanting homes and banks wanting borrowers so they can earn profits—we can’t predict. There’s little that can be done about that, except everything.
Everything, that is, that’s in your power: architecture, real estate management, engineering, construction operations, finance, marketing, and sales. For each of these disciplines, there’s a delta that separates what you do from what you can do better.
The challenge is to build and market what can and will sell. The challenge is also to do it in an environment characterized by ongoing adversity, uncertainty, and volatility.
So, our September issue focuses centripetally on change, and the choices you make to do it or not. We have a piece, John Caulfield’s “Filling the Void,” on a tranche of young Turks that gives a human flesh and blood dimension to the question of change and who’s behind it.
We also flash on transformation that is occurring. Amy Albert’s “Modern Family” highlights the complex notion of multigenerational living. For some, the wake of the Great Recession makes multigen floor plans a household’s financial answer to lesser means. For others, such as The New Home Co.’s Lambert Ranch, not so much. It’s rather a cultural solution to new community building, and that’s where there’s opportunity to meet a rising need.
Finally, we look in John Caulfield’s analysis, “Lost Cause,” at the policy rat’s nest that is housing finance and its sub-issues, taxation and regulation. Is change afoot in Washington? Who knows? What we do know is that it’s current among housing lobbyists to quote the Hippocratic Oath’s “First, do no harm,” as they urge policy-makers to continue to accommodate governmental support for homeownership, but otherwise remove the tonnage of doubt caused by imbalances of debt and the ability to pay it all back. Sometimes, to “do no harm” can hurt, and hearing the doctor say, “This is going to hurt,” can help.
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