Positive metrics in 2013 may lead to more of a seller's market in 2014.
What goes down must come up, and the 31 home-building executives who responded to this year’s survey have pointed out many impressive positives over last year’s study and are projecting even better results for 2014, albeit with a few additional challenges. Last year’s respondents who saw the home building glass as half-full are vindicated because 2013 brought us both increased new-home sales and higher profits, too!
The most improved areas of 2013
2013 growing pains
Four things to feel good about
The big 2013 improvement?
About the StudySurveys were sent to 50 geographically diverse home building executives. Sixty-two percent (31) of the respondents completed substantial portions of the survey. These 31 respondents closed 5,322 homes in 2013 (an increase of 32 percent from 2012). While this study has significant quantitative data, it also includes empirical data, opinions, and comments more qualitative in nature. We would like to thank the respondents for sharing their information, opinions, and 2014 outlook with our readers. The survey was administered, interpreted, and this article written by Charlie Scott of Woodland, O’Brien & Scott. He can be reached at CharlieS@woodlandobrien.com.
What about the customer?
What successful home builders are saying about the coming year“We are trying to be more proactive with our lumber partners and locking prices longer.” — Mike Tuskes, Tuskes Homes“Customers are starting to realize the days of open-ended negotiations for a home are over.” — Jim Clarke, Robertson Homes“We are very bullish for 2014. We believe the Texas market will continue to attract jobs at a rate above the national average.” — Don Klein, Chesmar Homes“We had a number of challenges in 2013 from hard cost increase to land acquisition terms and employee recruiting. However, we are very optimistic about our market and are currently looking for field and sales staff to support our expansion.” — Kevin Egan, American Legend Homes“We see customers becoming more demanding given the trade shortage and on-time delivery challenges. We have prepared a communication piece to teach our customers the challenges of today’s home building and to set proper expectations in regard to potential delivery delays.” — Anonymous, Texas“We feel good about 2014. We could face headwinds if Washington fumbles the ball on the budget early in the year. We are also concerned about interest rates.” — Anonymous, Texas“We believe customers are becoming more realistic about what they can afford and less demanding as interest rates and prices increase.” — JD Espana, Piedmont Residential“In good times, plan for the bad times and in bad times, plan for the good times. As far as Vantage Homes is concerned, we view ourselves as being in the people business, not the building business.” — George Hess, Vantage Homes“Switching from survival to growth mode caused a variety of struggles. We were surprised at some of our struggles given we kept our best staff through the downturn. Our old processes and experiences were not as quick to reboot as we expected and this was also compounded by trade partner shortages. For 2014, we believe customers will continue to become more demanding in terms of features and service.” — Gene Brown, Atlantic Builders“More competition is entering our market and driving up prices of land and trade contractors. On the customer side, customer demands will remain unchanged even as the market moves to a more normalized or even a seller’s market because customers are becoming more savvy buyers.” — Mick Michael, HHHunt Homes