By letting the industry do what it does best, we can creatively work our way through this problem
By Zack Johnston
If lately you have felt like you’re living through a moment in history, it’s because we are. With the world facing a severe public health crisis and an uncertain economic future, we are all understandably a bit unnerved. Even as the months go by, we will be feeling the effect of the novel COVID-19 outbreak and the unintended consequences of the response.
However, take solace in the fact that we all are experiencing this hardship together, and we can begin turning things around with swift and decisive action. Within the homebuilding industry, builders and developers should be relatively concerned about their futures, but with a ray of optimism that this too shall pass and we can learn a great deal from this experience.
Our hats are off to the dedicated builders who have been able to responsibly remain operational, as the industry must press on one way or another. As companies chart their best course of action, stay positive knowing that federal, state, and local officials are all working to contain this crisis and to return things to the status quo.
In late March, Congress passed the Family First Coronavirus Response Act, which will guarantee paid family and medical leave, paid sick leave, and new tax credits for those affected by the outbreak. It also lays out provisions for free coronavirus testing, enhancing unemployment insurance, expanding food security initiatives, and increasing federal Medicaid funding.
Builder and Developer Magazine recently interviewed the chairman of the National Association of Homebuilders, Dean Mon.
“In the near-term, builders should prepare for delays in approvals and inspections, check on their sub-contractors and workforce, and watch their cash reserves,” Mon detailed. “Once efforts to mitigate the spread of the coronavirus are relaxed, housing should be set for a rebound, given low mortgage rates, solid builder confidence, and market opportunities for single-family builders.”
With the majority of folks now spending significantly more time inside their homes, one can’t help but think about what we would do without our strong, robust housing industry. During these uncertain times, it is truly a luxury to have a safe and comfortable home where we can still feel some stability.
Still, we cannot close our eyes and pretend that challenges are not there. A large portion of the population that has been remaining at home is likely staying in a place they don’t own even if they’d like to. Many renters and prospective first-time home buyers still struggle with finding suitable and affordable housing, and we look to the homebuilding industry and its creativity for solutions.
“America’s economy will likely recover faster and stronger than in many other countries, but the housing crisis facing its citizens will still be there waiting for the building industry to address as things eventually return to normal,” writes Patrick Duffy, Principal with MetroIntelligence and contributor for Builder- Bytes.
Obviously much will be determined by the economic forces that are at play, which we have to see how they unfold, but what homebuilders do right now will heavily influence how they fare later on. Many have started to think outside the box in terms of generating productivity and sales in a time of social distancing.
“Miami-based Lennar Corp, one of the U.S. largest publicly traded homebuilders, is inviting buyers to its online showings and offering drive-through closings,” according to Forbes.
It is an excellent time for builders to follow each other’s examples and to focus on virtual presentations and procedures, and the online customer experience in order to stay ahead and drive revenue. It doesn’t have to be a fully immersive VR experience, but using the opportunity as a chance to improve your company’s digital presence could make all the difference in our current moment. The recent housing market data shows that the demand for a simple and speedy purchasing experience is there.
According to Reuters, “Last month, houses for sale typically stayed on the market for 36 days, down from 43 days in January, and 44 days a year ago. Forty-seven percent of homes sold in February were on the market for less than a month. First-time buyers accounted for 32% of sales last month, matching January.”
The pool of soon-to-be first time buyers is still going strong, and there is still momentum built up from the first quarter to take advantage of.
“The report from the Commerce Department on Wednesday also showed permits for the future construction of single-family homes racing to their highest level since 2007, as well as strong gains in housing completions and inventory,” according to the Reuters report.
With new construction on the rise and eagerness among first-time buyers relatively still high, now is time to attack rather than retreat. What “attacking” means in this current era, however, will be something far different and more innovative than before.
Zack Johnston is an Assistant Editor for Builder and Developer Magazine. He may be reached at email@example.com