It’s neither hypothetical nor a matter of theory. It’s as real as the day is long. It’s not “pent-up;” it just is. It is demand.
Here’s just one affirmation, from Redfin economist Nela Richardson: demand is up. Demand is up in the teeth of global doubt and universal uncertainty and local angst. Demand proves to be resilient; it protects its access to what keeps it viable. Or does it?
The question is not, “is there sufficient real demand for new home construction?” The question is, “what happens if this demand is unmet?” The question is, “what happens when supply fails to meet demand?” Does demand evaporate? Stay tuned. We may find out.
The economy, our society, our American Dream culture as we know it, faces this risk.
We live today as witnesses to what happens when pseudo-free market enterprise, regulatory overreach, and vested self-interest logjam the natural flow–uneven as it may be–of supply and demand for new homes.
Our nation has shown in the past five years or so that it can, and does, and will add population, expand jobs, create households, stabilizes incomes, behave confidently as consumers, and, most important of all, economically, make new families.
What it has also shown–specific to housing and community development–is capital availability, thirst for yield, brilliant innovation in intellectual and real material development, production, and distribution, engineering advances, and a torrent of new ideas that blend form and function.
What it has not shown is a disposition to invest in people, giving them the means, a set of pathways, a cause-and-effect program of motivators that provide that powerful sense of attainability that forms the base of great and worthy efforts.
We may be at a crossroads as a society. Our economy is more complex than it has been, and Economics 101 no longer introduces us to its challenges. The properties of Supply and the discrete nature of Demand, once upon a time defined themselves separately, and in equilibrium.
Today, demand exists. New home demand exists. The risk to recovery is not meeting it. It’s not that home builders aren’t willing, developers aren’t able, manufacturers aren’t capable, that the processes are broken. It’s a bigger question than that, and it boils down to whether Americans at the local town and city level have the political will to sustain this idealistic belief in an American Dream of upward economic mobility, and of homeownership. It’s what makes a neighborhood.
