Leadership

Fret Less, Focus More On Buyers Market Volatility Won't Deter

Cost shocks have upended both consumer households and business operations. The level-set ahead will no doubt trace to a timeless well-spring: Value.

Leadership

Fret Less, Focus More On Buyers Market Volatility Won't Deter

Cost shocks have upended both consumer households and business operations. The level-set ahead will no doubt trace to a timeless well-spring: Value.

May 19th, 2022
Fret Less, Focus More On Buyers Market Volatility Won't Deter
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It's Thursday, May 19, 2022, and here are 10 things we know among countless dozens of things we don't but wish we did:

Builders – with a go-to-any-length blitz on completions -- have been tending to concede to chokehold-transitory rush-charge premiums, plus on top of that, an X-factor core-inflation to secure their build cycle inputs.

Basically, builders have been in the same boat their homebuyer customers have been, swarming scarce inventory, and driving direct costs upward with little visibility into healthy restoration of supply chains.

The disconnect – a collective conscious ceiling on payment power vs. price and ownership costs for homes – has come. Many homebuilders, their data analytics partners, their investors, and their manufacturer and distributor partners fell prey to a data gap. That gap – today's actual data belying tomorrow's data – created a business visibility wedge between not-enough and too many, and an equally harmful wedge between what they have to pay to produce and what they have to charge to make money.

The business has its truism – the models work when the market's rising, but after it peaks, not so much. That truism is playing out.

Time to call it a buyers' market?

Not so fast.

In a buyers' market, buyers sense they're in the driver's seat. They well with confidence they've seized an upper hand, and can get more bang for their buck.

Here's a telling piece of data on what Americans – voters, consumers, business people, leaders, community officials, politicians, etc. – believe about who can do something about the shockingly high, and increasing, prices of essentials right now.

Source: Morning Consult/Politico

What this data tells us is that it's way too early to declare late-Spring 2022 as a tipping point into a buyers' market – where conditions, options, locations, price-points, negotiating leverage, etc. pivots profoundly in favor of buyers.

Right now, the buyers for whom the market has decidedly shifted are discretionary buyers – the ones with time, money, security, optionality all on their side.

They are the value buyers. They're the ones who'll re-set the floor of demand, and work with you as you work out of the vicious-circle of paying sky-high prices for directs, and can more easily tolerate 60 or 90 days added to the build-cycle for a home they regard as their dream home.

Despite the severity of convulsions over the past 24-plus months, "these are the good days" for tens of millions of Americans. They're value-driven, not price sensitive.

So, to get on the beam of the things we know, and fret less about what we don't, focus on what you can do to cause your value buyer to experience a simpler, clearer, more valued path to your doorway.

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ABOUT THE AUTHOR

John McManus

John McManus

President and Founder

John McManus, founder and president of The Builder’s Daily, is an award-winning editorial, programming, and digital content strategist. TBD's purpose is a community capable of constant improvement.

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