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Exclusive Research: Building Community Likes What It Sees For 2018

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Exclusive Research: Building Community Likes What It Sees For 2018

Builders and architects still expect more upside in the economic cycle


By By Mike Beirne, Senior Editor November 30, 2017
Scaffolding around a home construction site
This article first appeared in the December 2017 issue of Pro Builder.

Confidence that the economic cycle for home building
is still on the upswing remains steady as half of
builders and architects in Professional Builder’s 2018
Market Forecast expect to sell/design more houses
next year.

Just 13.9 percent project completing fewer projects
in 2018. More than 85 percent rated 2017 as either good, very
good, or an excellent business year for their company. Those
findings track with a separate midyear survey that industry
consultant Builder Partnerships (BP) distributed to 336 home
builders asking if their actual closings numbers thus far had
changed from what they forecast at the beginning of the year.
More than 43 percent—almost all of them projecting to close
more houses than in 2017—said there was no difference between
their estimated and actual pace; 10.4 percent reported
actual closings exceeded expectations by 5 percent or less, and
20 percent saw midyear closings increase by more than 5 percent
from their original estimates.

Entry-level homes ranked among the top market opportunities
for 2018, although building for first-time buyers trailed
far behind custom and production move-up clients. Move-up
homes, which have been the primary engine for the industry’s
recovery, were cited as a growth opportunity by most respondents,
followed by smaller houses. In the BP survey, just 7.4 percent
of members said they were building smaller this year; 17.8
percent were constructing larger houses, and 67.5 percent said
that their average square footage was the same as the previous
year. See the charts that follow for more survey results about
expectations for 2018.

2018 Home Forecast Chart.png

2018 Home Builder Revenenue Forecast

Strongest Building Activity Chart

2018 Home Building Sentiment.png

Homebuilders top opportunities chart.

Homebuilders top challenges chart.png

2018 Bid prices chart.png

2018 Material Prices ChartThe majority of survey respondents expect the cost of materials and labor to increase yet are generally optimistic about their prospects for 2018.

Methodology

 

Written By
Senior Editor

Mike is the senior editor of Pro Builder and Custom Builder magazines. A two-time Jesse H. Neal Award winner, Mike has nearly 30 years of journalism experience plus numerous news and feature writing awards, including honors from the Society of Professional Journalists, the American Society of Business Press Editors, and the National Association of Real Estate Editors. He also operated a masonry restoration business for more than two decades. [email protected]

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