Hot Market Optics: The Triple-Threat Of Sizzling-Sales

The moment's alignment of stars – economic, social, and environmental – give the positive tidings of order-volume, deep demand, especially for lower-price-tiered new homes, and profitability, a darker side.

John McManus June 21st, 2021

People who lead homebuilding, development, and investment enterprises often get tarred with a brush of blame, unfairly labeled villains in knee-jerk narratives that need good-guys and bad-guys.

The moment's alignment of stars – economic, social, and environmental – give all the positive and constructive tidings of order-volume, deep demand especially for lower-price-tiered new-home product and communities, and profitability, a darker side key stakeholders cannot ignore, even as they face challenges on the supply and workforce capacity constraint front.

Here, a New York Times piece, reported by staffer Jack Healy, maps a freighted optics challenge for builders and developers, triangulating on working conditions for construction labor, a construction juggernaut that prices in the few and prices out the many, and devil-may-care development in the face of climate collapse.

A brutal heat-wave scorching the nation's Southwest and SoCal region – with an elevated risk of wildfires, power outages, and water shortages – serves to accentuate disparities among day-laborers who're doing the hard work and the attainment ability of those who're buying the new homes in the new communities.

Healy writes:

Across the West, housing markets and temperatures are both scorching hot. A punishing spring of drought, wildfires and record-shattering heat is amplifying questions about the habitability of the Southwest in a rapidly warming climate. But it has done little to slow the rapid growth of cities like Phoenix, where new arrivals are fueling a construction frenzy — as well as rising housing costs that are leaving many residents increasingly desperate to find a place they can afford to live.
The result: a double heat and housing crisis whose sweltering toll is falling hardest on people who have little choice but to suffer the sun and on those who can’t afford the housing boom powering the economy.

Even in a time that, of all moments in history, has sharply and profoundly affirmed a primal, fundamental value in new-home community development and construction, the leadership and management challenges that overarch that sound demand are ever more complex, especially as interests fracture, polarization and divisiveness intensify, and less and less is what it seems to be.

This is, we believe, the housing leader's quintessential challenge for the 2020s decade – one that focuses entirely on consumers, fellow workers, the planet and voters – as higher-ranking stakeholders in value creation, on a par with shareholder value.

Optics, as unsavory and nagging as they feel, may turn out to be strategists' most helpful motivators to move enterprises toward being the value-creators they can be versus the profit generators they've been.

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John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.


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