
A real fix might go something like this: Make things easier for people and companies who can and will pay back the money they borrow, whether it's a home loan or a business loan. A corollary: Make it harder for those who can't and won't pay back the money without a big tailwind of price appreciation to assist them. Right now, the way the economic complex works to increase or decrease the supply of available money for loans, it's harder for everybody–whether they can and will or can't and won't pay back the money. One more thing, it's uncertain whether things are going to get worse than they are right now as regards the availability of money for loans, or better.
Meanwhile, housing starts statistics record 1980s-era year-on-year declines without exerting a tad of favorable impact on standing inventory levels, so the thought of $250 tax rebates for all citizens strikes one as ludicrous in light of the magnitude of the challenge. There are still too many starts; foreclosures to come; people can't sell their homes to buy new ones–and a few-hundred-dollar check in the mail is supposed to help how?
Your voices–as the Fed, Congress, the President, and all the Presidential candidates form their respective understanding and plans around the new-home economy –count. Although the national stage is where Wall Street and most of the attention focuses, we also need to be mindful that it's local and regional governments that need to take a second look at the paralyzing costs and processes they've created that conspire to add to the ultimate costs of homes for potential buyers. And clearly, the agendas of nationally-elected officials focus more on doing what they need to do to get votes to get reelected than to sincerely address what needs to be fixed to get housing back on track–not just for GDP, but for people and society.
We're seeing massive business model transformation and adjustment to business conditions the economy has thrown at home builders. As Centex re-conceives its core from a geographical, operations, and product offering standpoint and exits markets like Ohio, Kentucky-based Fischer Homes picks up what Centex no longer needs. Your organizations are doing all they can to readapt business models and operational programs for a stretch of uncertainty that may go on for a while. In many instances, that means morphing companies to half their former sizes just to cut enough cost to survive. No one's unscathed, as those who retain jobs are now doing what three people did a year ago.
This month, Big Builder holds its lens up to the intrepid souls who head up finance at your organizations. Here at Hanley Wood, it's those folks whose office lights and computer screens have been burning early mornings, late nights, and on weekends as they try to match business reality up with resources, expectations, what gets spent, what's coming in, and when. Strategies for growth are a memory; strategies to secure a future turn operations, processes, even deliverables inside out. All that stays the same is your culture.
So what's your position? Tax rebate for consumers? Tax credits for businesses so they can generate capital and continue to hire? Or big government rebuilding projects that improve infrastructure? What's best for big builders? Tell us.