Currently Reading

Disrupting Ourselves: Meyers Research National Housing Outlook for 2018

Market Data + Trends

Disrupting Ourselves: Meyers Research National Housing Outlook for 2018

A look at the factors currently priming the housing industry for disruption

By Kate Carsella, Associate Editor January 16, 2018
View of Orlando, Florida
If the home building industry is ready for disruption ... who will be the disruptors? (Photo: Pixabay)

The imminent disruption of the home building industry was the topic of the 2018 Meyers Research National Housing Outlook event in support of HomeAid America at the 2018 International Builders’ Show and Kitchen & Bath Industry Show in Orlando, Fla.

In his keynote address, Tim Sullivan, managing principal at Meyers Research, stated that “this industry is ready for disruption,” and asked, “who will be the Elon Musk of home building?” Sullivan believes that it may be individuals or companies outside of the housing industry that may have the clearest view of and most efficient approach for what it needs.

Building on the concept of disruption, the presentation by Tim Costello, President and CEO at BDX, caused several industry experts present to take pause. He outlined three factors priming the housing industry for disruption: over-attachment to the status quo, underestimation of the impact and ramifications of change, and a lack of vision, or appreciation for others’ vision. He added that the burden of these three factors typically affect public companies more than private companies, as public companies are more hesitant to take a loss. Costello argued that many companies seeking to innovate rather than just survive, like Tesla, incorporate losses into their business plans that emphasize innovation and long-term vision.


Home Building's Clock Speed

Labeled home building’s “fog of war,” Costello warned that focusing on survival hampers vision and innovation for many companies. Home building, he said, has a ‘clock speed’ of 20 or more years. This means that it would take 20 or more years for consumers to notice changes in products and processes in the housing industry. With one of the slowest ‘clock speeds,’ conventional thinking in the industry is more likely to become entrenched thinking, and companies are more likely to become resistant to change. “You don’t have time anymore to wait and see how others adopt technology,” he said.

Indeed, Costello warns that the housing industry is “catastrophically” risky, insofar as the risk of doing and changing nothing is worse than the risk of doing something.

Costello views tech as a significant factor that will revolutionize the way home building and builders operate now, and in the future. He cited augmented reality (AR), virtual reality (VR), robotics, big data, 3D printing, and sharing economies as some of the 25+ tech items that will completely change the industry.

Costello stated that such changes coming to home building may not come from the inside. Surveying the room, no one spoke up to describe their own tech innovations. Costello concluded by saying that companies seeking a ‘digital strategy’ are looking at the current market climate incorrectly. He summed this up by saying, “there is no digital strategy, there is only strategy in the digital world.”

In a panel of experts speaking on current market conditions and trends, Tim Costello’s presentation earlier in the morning, and the impact of the new GOP tax law signed by President Trump were recurring themes.


What Keeps You Up at Night?

When asked by the moderator, “what keeps you up at night,” the most common answer was the concept of disruption as described by Costello. Bird Anderson, EVP of Home Builder Banking at Wells Fargo Commercial Real Estate said, “The world of home building got flat about three to four years ago.” While he said that overall the market is healthy, he is watching the impact of consolidation among building firms, and disequilibrium of debt markets. Chad Crow, President and CEO of Builders First Source, views consolidation as an opportunity, “We need to change how we do things [in home building] … The cyclicality of our business is slow to change. This has held us back, from an advancement standpoint.”

Regarding the new tax law, all three panelists thought that it would be a net positive for the housing industry, and that currently, it has not changed the way businesses in housing are running. Scott Stowell, Executive Chairman of the Board at CalAtlantic Group, said that the new law is “not being translated down to the project level,” agreeing that the law is a net positive, despite changes to the mortgage interest deduction negatively impacting high-value markets. Stowell closed the panel discussion by saying that, “thinking and operating in the status quo do so at their own peril.”

Also speaking at the event was Peter Simons, CEO of HomeAid America. Over the past four years, HomeAid has raised $500,000, with over 500 projects built since its founding in 1989. Simons highlighted more of the organization’s milestones, including $230 million in housing built, 10,000 beds filled, and 300,000 people housed over the past 28 years. In addition to housing, HomeAid offers after-school programs, including computer assistance, and offers budget guidance for families seeking financial stability.

Simons concluded by announcing plans for an 18th HomeAid chapter in Texas, joining the 17 HomeAid chapters in 12 states, and a call to action for those attending the event to take on leadership roles within local HomeAid chapters, to involve employees in community outreach, and/or to donate to HomeAid.


Related Stories

Comfort + Health

Rise in Pet Ownership Reported Throughout 2021

Why more animals are finding their furever homes during the pandemic


4 Technologies that Will Transform Real Estate

Crowdfunding is allowing mom and pop investors to invest in big projects that were once limited to institutions.


Old People Don’t Have to Live in Exile

Why is housing designed to help older people stay in the mix becoming a priority? Two words: Baby Boomers.


More in Category


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.