Suffice it to say that 2020 was an unusual year for housing, one in which rosy and robust forecasts flew out the window in March only to return beyond anyone’s expectations by the late summer and continue at a torrid pace into 2021.
As it was, the responses to our annual reader forecast survey picked up where builders left off a year ago, and then some. Representing the industry spectrum nationwide, there remains a general optimism despite lingering concerns and ripple effects from COVID-19, namely lumber supply shortages (and resulting price increases) and delays in delivering homes to satisfy record sales, which several builders noted.
Consider that while 41% of housing professionals expect to build the same number of homes in 2021 as they did in 2020 (a slightly higher share than predicted a year ago), another 52% expect to exceed this year’s numbers … some by a lot (see first chart, below). And more than two-thirds of builders also expect their revenue to increase in 2021, as they did coming into 2020 (see second chart, below).
With that, far more predict 2021 will be a “very good” year (11% think it will be “excellent”; see chart, page 17) and 77% consider the overall health of their companies to be “good” or “very good” going into the new year (see fourth chart, below).
If there are any side winds or headwinds, it is with the cost and ability to build. More than 80% of builders expect material costs and bid prices to increase, while that and finding qualified labor are the top two challenges by far (see Top 5 Challenges chart, below).
As for whether the pandemic will continue to affect business into the new year, survey respondents seem to be taking it in stride. “It definitely changed the way we do business,” said one, while another added, “We are used to the challenges now.”
Methodology and Respondent Information:
The 2021 Reader Forecast Survey was distributed to Pro Builder’s print and digital readers between Sept. 8 and Oct. 5, 2020, as well as to builder members and clients of The Shinn Group–Builder Partnerships, Do You Convert, TrueNorth Development, SMA Consulting, IBACOS PERFORM, and the Housing Innovation Alliance. Recipients were offered the chance to win one of four $50 Visa gift cards for completing the online survey. Gift cards were awarded in November 2020. As many as 445 responses were recorded and 378 surveys were completed. Results were rounded to the nearest whole number.