Housing, Like Politics, Is Local

It’s easy to focus on the national, the big picture. National is exciting. National news outlets regularly cover housing starts and sales. What makes residential construction a media darling is that our industry is the one consistently positive area of our national economy. It is the Gatorade in a grueling sporting event that seems to get weirder every day. WorldCom, Enron, Arthur Andersen, Qwest and their other soon-to-be subpoenaed pals are convincing people to put their money into their homes, where it is safe.

Remember, it wasn’t that long ago that the stock market was a better place for your money than even a 7% mortgage. Better to move your family into a rented studio apartment so you could day-trade shares of Pets.com than to hold up your money in a house. But even then, housing starts were at extraordinary levels. They were performing well locally.

Is there a bubble here? Thankfully, we are past that talk, as analysts understand that a staggering number of American boomers and echo boomers, whose numbers are enriched by boomer and echo boomer immigrants, want to live in a house that is around people who resemble themselves.

The Bush administration is pushing for loans and assistance so minorities who do not have their first home can achieve this dream shortly. Work is being done to establish tax credits for builders and developers who serve low- and moderate-income home buyers.

By the end of this decade, less than eight years from now, the administration wants the United States to have more than 5 million new minority homeowners. This will not occur nationally. It will, again, occur where eligible minority groups have found work and an accepting environment.

Housing starts in the first four months of this year were up nationally. Also in the South (+6.5%), Midwest (+1.6%) and West (+0.3%), while the Northeast (-3.3%) was down. But sales of existing homes in the Northeast showed the highest month-over-month growth along with the South and West.

But not everywhere in the South or in the Midwest or in the West is construction going on. Only in target areas with stable employment and people who want more for their families and themselves. I remember reading that a family living in a major city spends most of their time within a four-block radius of their home. This small radius determines what they eat and much of what they do.

Here’s the thing: Despite everything else, home building is a local business. Sometimes it is so local it feels like it is an individual job-site business. Sometimes it feels like it is a business so local that it comes down to one house’s framing schedule.

Even for the national builders, with all the purchasing power and resources at their disposal, success still comes down to operators at the local level making the right decisions. For builders, local is all that matters. If the local supplier does not meet your needs, you find another local source that offers a solution. It is also the local supplier that can mess up the project you thought would carry your business for the year. That supplier’s local commitment is a key determining factor in your performance for the year.

For all the national news — what the Giant national builders are doing, what layoffs are occurring two states away, what the stock market is doing — remember to care for what’s local. Success means focusing on what’s in front of you and nurturing those relationships that affect the bottom line — those with customers, suppliers and trade partners.