This story was originally published in Builder.

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Getting to "the why" is a hot concept these days. It makes "the what" and "the how," and for real estate and housing behaviors, "the where" make sense.

Still, what deeply motivates us as people on some sort of journey map toward a home purchase--almost inevitably involving our devices to search, filter, and zero in, as we reported yesterday--tends to be simple.

"The why's" range, from need to desire, from preference to must-have, from spark to obsession, doesn't take advanced psychological training nor rocket science to decipher or decode.

Here, from National Association of Home Builders economist Carmel Ford's February analysis of the responses of 8.8 million home buyers within the past four years as part of the American Housing Survey, is a breakdown of "the why" motivating home buyers of various age segments, including young adults.

Ford writes:

First-time home buyers are more likely to move ‘for a better home’ (65 percent) than trade-up buyers (49 percent). Unsurprisingly, first-time home buyers are also more likely to move to ‘form a household’ (61 percent) than trade-up buyers (25 percent). About the same shares of first-time home buyers and trade-up buyers move for ‘a better neighborhood’: 49 percent and 45 percent, respectively.

Home builders, developers, and their host of partners, ranging from capital investment, to manufactured products, to distributors, it turns out, have pretty straight-forward reasons for being in business: to help people find a better home.

And for younger adults, to help them form their household.

These days, for more and more young adults, both "a better home" and "forming a household" means moving out of mom and dad's.

What more basic root cause, or poignant human instinct, for demand could there be? It's this profoundly simple, pure, human driver that makes what you do, your work, your daily focus, and your nightly source of anguish and anxiety, among the more noble and special vocations anybody could have in any society. It's primal.

It also turns out "the why" plays a big role in "the where." With "the why" motivators--finding a better home and forming a household--as drivers, people vote with their feet. They move or stay put--in-migrate, out-migrate, or settle where they are--based on their odds and abilities to match housing choices with their ability to make a living.

A team of analysts at Zelman & Associates took a close look at migration patterns among a middle-Millennial age grouping, 25-to-29 yearolds, and came up with some counterintuitive findings.

As with many of the data benchmarks Zelman develops, there's a greater level of rigor in the analytics than looking at the broad-stroke Census data on migration by age. Instead, they looked at each state's "steady-state" share of 25-to-29 year-olds as a percentage, and did the math on ratios of change--inbound or outbound--to that original percentage, sorting which states are "winners" and "losers."

The most recent The Z Report carries an analysis entitled "What States are Magnets for Young Adults? You Might Be Surprised." Among the key insights:

"Washington [state] accounts for 2.8% of national 25-29 year old households but captured 4.5% of movers crossing state lines. The other top states were Colorado, North Carolina, the District of Columbia and Maryland. California, Ohio, Texas, New York and Michigan led states not claiming their fair share.

"Texas being a relative loser surprised us, and likely our readers. But it is true that Texas captured only 7.7% of these movers despite holding a 9.3% share of all 25-29 year old households. However, unlike the other aforementioned losers, Texas protects its existiong resident base better than any other state as 25-29 year olds leaving Texas represented just 6.3% of out-migration across the country, well below its market share of these households."

Data, like food being prepared for a delicious meal, comes both raw and cooked. Clearly, as we look at the odds among players in home building, development, building products, investment and related businesses to survive and thrive amid the onset of challenges ahead, four distinguishing characteristics will, we believe, stand out.

  • Operational excellence
  • Culture and character
  • Cost of capital
  • Quality of data

Residential real estate development, investment, construction, and related businesses have access to a crush of raw data. A lot of it may fascinate or even mesmerize us in its abundance and scope. Often times, however, succeeding as a business comes down to a game of small numbers, where a match of income and outgo, a match of product to customer, a match of the what and the where to the why really matter.

Big data impresses, but little, granular, targeted, specific, and helpful data points can mean the difference between your being around through another cycle or two, or not. That's the difference between three homes per selling community per month and five.

This story was originally published in Builder.