In a segment we’re calling Friday Round Up we gather the most important and interesting stories from around the web as it pertains to home building.
Construction Job Openings Steady, Hiring Slowing
Source: Eye on Housing
The count of construction job openings held steady in July, as hiring in the home building sector slowed. The open position rate for the construction sector held constant at 2.1% for July. The open rate has been trending upward since 2012, with the current three-month moving average near the cycle high set during May (2.4%). The construction sector hiring rate, as measured on a three-month moving average basis, declined to 4.9% in July, continuing decreases in the rate of hiring that began in March. The quits rate for construction held at 1.7% in July.
US Government: Number of Builders Declined 50% Between 2007 and 2012
Source: Eye on Housing
Results for the residential construction industry for 2012 were recently released, officially confirming what we already knew: a significant number of builders went out of business in the five years between 2007 and 2012. According to this official count, the number of establishments whose primary activity is new residential construction fell from 98,067 in 2007 to 48,557 in 2012, a dramatic 50 percent decline. The latest tally is the lowest number of builders reported by the Economic Census since 1997, the first time builders were reported separately from remodelers.
Millennials Will Buy Homes But Their Frictionless Journey May Look Different
- Millennials expect a Frictionless Journey
- While online platforms like Zillow are creating an extremely competitive landscape, the most successful realtors and independent home sellers are leveraging the information millennials are finding online to develop more connected, transparent in-person relationships. Millennials are a “connected” generation, and as such, they expect every touch point of their home buying journey to connect; whether that is online or in-person, millennials want a seamless, frictionless experience.
- Crowdsourcing is the new norm
- Seventy percent of millennials agree that they feel more excited about doing something when their friends agree with what they are doing. On top of that, 68 percent of millennials will not make a major decision until they have discussed it with people they trust. Instead of pressuring a millennial into making a major purchase, encourage them to engage their peers and create an inclusive environment that is open to their friends and family.
- Neighborhood brands matter
- Hometown pride is also a huge value for a millennial generation of homebuyers that is more likely to shop local. They have a very strong expectation that owning a home means more than just paying for four walls and a drive way. Millennial homeowners want to be a part of a community that they can share with their friends and family.
How Many Subcontractors Does it Take to Build the Average Home?
Source: NAHB Now
A study by the NAHB clearly shows that builders’ use of subcontractors remains as strong as ever. For example, 70 percent of builders typically use somewhere between 11 and 30 subcontractors to build a single-family home. On average, 22 different subcontractors are used to build a home.
Check out this nifty infographic:
Home Buyers Top Five Touchpoints
Source: Builder Online
SmartTouch Interactive, an Austin-based digital marketing solutions company specializing in real estate, recently analyzed four years of data on new home sales after working with home builders across the country. The analysis showed that the average home buyer requires 52 touchpoints, spanning from initial research to contact with a realtor/home builder to actual purchase. Here are the top five most crucial touch points:
- Online form submission
- Phone calls
- In person visit
- Text messages
Here is how builders can make the most of each touch point:
- Speed is critical. The probability of reaching an online lead goes down the longer you wait with a follow-up email or call
- Depending on the stage of where the buyer is in the purchase cycle, personalization is important, too. The closer you get to closing, the more personal that communication needs to be.
Where Are The Start-Ups?
Source: Builder Online
Home building and its ecosystem are nothing if not a proxy for entrepreneurial resilience, cycle after cycle. So, where are the new companies? Earlier this week, the National Association of Home Builders economics researcher Rose Quint lit on an astonishing piece of data from the Census Bureau’s Economic Census that, as dramatic as it is, confirmed what we know. The Recession of 2007 to 2011 annihilated home builders.
It’s not the big public powerful builders who are suppressing recovery, or who are “unwilling” to risk building for people who can afford only $200,000 or $250,000 on their homes, as opposed to $300,000 or $400,000. It’s the entire ecosystem that broke and decided that half of the people and half of the companies in the new residential construction business had to go that we’re up against in the new home supply vs. demand crunch.
Rose Quint, I think accurately, says it’s going to be start-ups, new home building companies who can make a go of it in today’s environment where land costs are not depressed, where home buyers are as discriminating as ever, and where a AD&C loan or a home loan is not a slam-dunk, who will be the make-or-break, not just of NAHB membership, but of our economy’s ability to continue clawing it’s way back above water.