Builders have dealt with a lot over the past 18 months: supply chain issues, pricing fluctuations, labor shortages, and more. Overcoming these challenges while trying to maintain profitability has not been easy, so we wanted to find out how builders have been managing these issues.
This year we surveyed builders in North America to find out what building homes in today's market has been like, focusing on sales volume, expectations around number of homes built, build cycle, variances, and trade management.
Here are some of the highlights:
- Material prices and supply chain issues have plagued the housing market in 2021. It’s no surprise that in January of this year, 75% of builders projected they would build more homes this year than they did in 2020. However, by the fall, expectations for some builders were lowered and only 60% thought they would build more than the prior year.
- While the market is still busy, 39% reported that sales volume was “back to normal”, while 38% said it was “still too hot to handle”, and 20% said it was slow.
- 51% of builders are selling homes at the presale stage only, while 1 in 4 (25%) are selling most of their builds after framing or everything is structurally complete. With the uncertainty around costs to build a home, builders shifted their focus to selling homes after the majority of costs have been determined.
- The volatility experienced this year also impacted build cycle times. Historically, the majority of builders (52%) said it took 120-180 days to build a home. For 2021, most (48%) said it would take more than 180 days.
- Given the material pricing volatility that builders have experienced over the past year, keeping costs in check and building to budget has been no easy feat. 1 in 4 builders (25%) reported a variance of 15% or more. Most builders managed to keep their variances within 10% of their sales price, but only 26% reported a variance of 2% of less.
- Scheduling and managing the job site is such a critical factor in building efficiently. And with a trade shortage, builders want to make sure they are a builder of choice. 61% of builders said the jobsite was often ready when trades arrived, and 46% felt they were maximizing their trade availability.
Want to learn more? Download the ECI Residential Home Construction Builder Survey Report.
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