At this point, it’s safe to say that a lot of folks in the residential building industry may not be thrilled with my observations. It’s not like I’m the only person crying foul. Some don’t fully understand and see my comments as a personal assault. Others recognize that they are, in fact, an assault! Both are effectively true. In the South we have an old adage, “a hit dog hollers!” Basically, if the shoe fits… A little pedestrian but wise nonetheless. Essentially, if you are trying to succeed in the industry while being a positive force that addresses the health of the industry, I laud you. Doing it right is always hard. Construction, as a business, isn’t a cake walk. It’s evident you can see past the end of your nose. Just like farmers, we have to manage the field. My extended family had a farm in the Carolinas. I remember a few hundred acres broken into equal plots. One plot was always rotated with alfalfa that would be plowed under to enrich the soil. No crop. Smart thinkin’. Keep the ground that feeds you healthy for tomorrow. The practice actually reduced costs for fertilizer and other chemicals and improved margins at sale. Unfortunately, another philosophy is to support the land by artificial means. Use chemicals and costly fertilizers to maximize yield and increase profits. Besides just exhausting the soil, one downside is a lesser quality product. Tomatoes that taste like cardboard for example. Remember, every solution breeds new problems.
Now if you’re exploiting the industry beyond its ability to support and sustain consumer health, you are the problem. This can be a conscious act or, you just don’t grasp the long term impact of your business model. So, I’m certain that my practice may take some heat for shedding light on this current poop storm. It’s not like I have a practical option. The decline I am trumpeting is not coming in the future. It’s been here for a while and we’re all in the middle of the storm. Some might say “whistling by the graveyard”, as if some miracle will break the reality before us. It’s simple. Like the frog in the pot of water, somehow we missed that the heat was turned up. It’s gone from toasty to boiling folks. If consumers cannot afford your services in a sustainable way, you won’t have a business for long. This is the horizon for home building.
I’ll close with this truth. My design practice has been based for 44 years on a middle-income consumer. Not upper end but middle income. That class of consumer was large, stable, active and growing. They added bedrooms for a new arrival or some other modification to address their changing family dynamic. They often looked at older homes and considered expanding an existing house rather than building new. Making use of the old through repurposing. The business model was healthy and boundless. Now, our market is drying up like water in the Mojavi. Our middle-income client is practically non-existent and we must transition to a higher income client model. Smaller market, fewer players and fewer clients. I have one client with significant financial means but they are crying uncle at the costs we are seeing. So, if I seem urgent in my message, duh!
The point is that you must be aware to take charge of your own future. You need to avoid bad players and reward good players. The trick is to recognize the difference. Today’s internet driven market makes it exceedingly difficult to recognize bad players. Regardless, it’s incumbent upon us, the consumer, to find a way.
