Chuck Shinn offers suggestions on how builders can trim fat from their construction processes.
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Ever the optimists, a clear majority—55 percent—of the 744 home builders who responded to our “State of the Industry” survey say 2008 is the year the downturn hits bottom and the industry begins to recover.
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Still looking for a New Year’s resolution worth keeping? Try cutting costs in 2008.
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For builders, the current market conditions are no game and the stakes are nothing less than survival. You can’t afford to drop the ball because there just aren’t that many opportunities right now to put points on the board. That’s why it’s critical to master the fundamentals of the business: hiring and hanging on to good employees, holding a customer’s hand through the sales process, controlling your jobsite, and building customer satisfaction through warranty service.
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ONE OF YOUR JOBS AS A BUILDER IS to make your houses as desirable as possible without breaking the bank. Anyone can add high-end baubles that cost serious money, but how do you achieve an upscale look for a relatively low cost? Adding cool features to the bath is a good place to start.
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With economic conditions for the housing industry looking grimmer and grimmer, the competition is upping the ante in a big way: The resale market is slashing prices; big builders are giving away cash, cars, and fully equipped home theater rooms; and local builders are trying every trick in the book in an effort to stand out from the crowd.
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Walk a jobsite at Woodland Village—Lifestyle Homes’ community 18 miles outside of Reno, Nev.—with Jon Delaurentis, the builder’s former president, and he inevitably brings up how “clean” the site is: no wasted materials or equipment lying around, no mud being traipsed into houses under construction by contractors. Delaurentis notes in passing that subcontractors police the desert surrounding the construction area for loose debris.
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The mood in the home building industry is officially glum. Buyers are playing a waiting game, and inventory isn’t moving. Except in the case of that builder around the corner whose homes are being snapped up faster than free NFL tickets on Craig’s List. What gives?
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