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Marketing & Sales

Notes On A Fall Weekend For Homebuilders In 21's Home Stretch

What do the 'dynamics' of housing, the economy, policy, the pandemic, and social upheaval challenge building's leaders to do as 2021 leads to next year?

Marketing & Sales

Notes On A Fall Weekend For Homebuilders In 21's Home Stretch

What do the 'dynamics' of housing, the economy, policy, the pandemic, and social upheaval challenge building's leaders to do as 2021 leads to next year?

John McManus
October 8th, 2021
Notes On A Fall Weekend For Homebuilders In 21's Home Stretch
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Alarmism, like hope, is not a strategy.

  • Fact: consumers hold the key to what happens next, no matter what anybody predicts as to how the economy will behave in the next three to 12 months.
  • Fact: builders are damned good, after all, at "getting" what consumers want, through ups and downs.

A silver-lining of one of homebuilding, development, and investment's bigger challenges right now – an aging leadership corps – is deep experience.

This business and construction community's leaders – founder-principals, entrepreneurs, professional corporate strategists, logicians, operational field marshalls, project management gurus, super sales pros – may not have "seen it all." No one ever has.

Fact is, though, the housing business community's leaders have been through the mill before. Time and adversity and loss and crisis have tested them.

They've lived to tell the tale, and more than that, they've led others – through doomsaying, danger, dismissal, doubt, downturns, and devastation – to the other side, time and again.

Source: Len Kiefer, Chief Economist, Freddie Mac

Inflation is a dirty word. So are higher interest rates. Along with getting windows and doors to a job site, and now, pressure to get all team members – among firms with 100 employees or more – their Covid vaccines, these are business issues that go with the turf. Leaders have been there, done that, led onward.

These budding blooms of peril are known challenges on the cost-side of builders' ever-tenuous balance sheet and operational model – enormous front-end capital real estate speculative investment, followed by a drawn-out white-knuckled vigil awaiting return on that investment, with a frenetic hurry-up-and-wait vertical construction start-to-completion cycle in between.

The business, a chain of value creation whose tentacles include manufacturing, engineering, capital investment, architectural and design services, marketing, distribution and transport, information and data technology, consumer retail, project management, materials and environmental science, legal services, engages in a constant rebalancing act between face-to-face issues and long-term business fitness.

The context for builders – like in literally every other go-to-market business and economic sector right now – looks roughly like this:

In short, supply chains depend on containers, ports, railroads, warehouses, and trucks. Every stage of this international assembly line is breaking down in its own unique way. When the global supply chain works, it’s like a beautifully invisible system of dominoes clicking forward. Today’s omnishambles is a reminder that dominoes can fall backwards too.
And then there’s the labor market. In the U.S., job openings have hit record highs in restaurants, hotels, and other leisure and hospitality sectors. But companies are struggling to fill these roles—and to keep factories and some other businesses operating at full capacity when Delta infections roll through."

Amid this heaving, unpredictability-riddled, ridiculously-over-complicated process – now occurring at an annualized rate of 1.6 million times, give or take – two extraordinary things happen.

  • People get a home, a neighborhood, a place to live in and, maybe, flourish.
  • People get livelihoods, careers, paths of prosperity making that happen.

Housing's business community leaders can and should take credit for that, as much as they're hammered from all sides for their offenses, or for what they don't do, or for what they're not.

Fear's not in the DNA of many homebuilding company cultures, nor among their leaders.  Here's an encouraging look at what the community's role models, sources of inspiration, motivation, and empowerment will be leading through and toward over the next year or so.

As growth slows, economic activity will likely settle on levels exceeding pre-pandemic expectations — and this is where operational focus should be. This can be challenging while strong gyrations play out in labor and product markets, but hiring difficulties as well as price growth are likely to abate in the course of 2022. Knee-jerk tactical reactions to the current situation, such as premature price hikes that risk the loss of market share, are unlikely to pay off.

Sounding alarms, stoking panic, mongering fear may be good for clicks and shares and views online. What happens during periods of unpredictability is that predictions proliferate, and they get a lot of oxygen.

Showing up at work and doing the job that needs to be done, being trustworthy, and trying to do the right thing in every detail may sound boring.

It may account for why homebuilding firms have made themselves fit for the moment's challenges and for business conditions to come, come what may.

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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.