When we look into our car’s rearview mirror we see where we have been, as well as the distant horizon; the vanishing point of times past. In the home building industry’s rear view mirror, I gladly see the depths of home building’s bottom slipping over the horizon. What makes me think so?
First, many sectors of the economy and their metrics are undeniably improving - employment, consumer spending, household formations, and most importantly, consumer sentiment. A long time ago, I remember doing a detailed study which plotted numerous economy and industry data points against new home sales, in search of the best new home sales predictor. The closest predictor we could muster was consumer sentiment and this study suggested there was a 4-6 month lag between improved consumer sentiment and new home sales activity. Well, guess what? Consumer sentiment started upward 3 months ago, and according to the University of Michigan’s most recent press release, this consumer sentiment improvement accelerated in November! Play this forward and I think we are going to have a nicely improved spring 2012 selling season!
The second indicator is our recent experiences with new home builders. We currently work with 80 home builders throughout North America, and nearly every one of our clients is reporting improved market conditions. This rosier client base reporting, combined with a record number of phone calls from prospective home builders wanting to focus on customer satisfaction as a differentiating in their improving markets, corroborates the numbers.
We have definitely seen a shift among home builders from “surviving strategies” to more forwarding thinking “thriving strategies.” We have also experienced builder optimism at levels not seen since 2007. Perhaps it is time for all of us to stop looking in the rear view mirror and start navigating and driving our companies toward our futures. I like what I see through the front windshield! I believe that what lies over that 2012 horizon is increased market share and success for those home builders delivering great homes, in good neighborhoods, with outstanding customer satisfaction.
Lets all say “Goodbye” to the rearview mirror and its challenges of 2011, and “Hello” to the unlimited promise of 2012!
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