What To Make Of Buyer Optimism As Producers Everywhere Battle Price Surges And Delays
Buyer prospect optimism continues to surge in the face of supply constraint. So, is it about you? Or, rather, about how to find ways to delight them?
As the entire ecosystem of builders and their partners across the real estate, construction, and distribution channel frets over how to deliver – and when the interest-rate punchbowl gets taken away – would-be buyers are feeling, oddly, good.
Pandemic fatigue, and the adrenalized expectation of return to more normal times may be fueling a surge of heady expectations despite intensifying, in-the-trenches battles to source everything from microchip-powered home technologies to resins-based building materials, to the spruce, pine, fir-based and other engineered lumber and materials to assemble structure and systems into homes.
The National Association of Home Builders Eye On Housing economics team this week highlights not one, but two measures of rising buyer expectations and confidence.
One, from NAHB assistant vp for Survey Research Rose Quint, cites that "More Buyers Expect House Search Will Get Easier in Months Ahead," with millennials out in front as the least daunted by supply constraint factors.
A majority of buyers (61%), however, still expect the house search will become harder or stay about the same in the near future, essentially unchanged from a year earlier (62%). The improvement in some buyers’ perceptions about the availability of homes reflects the fact that more new and existing homes were sold in the first quarter of 2021 than in the same period in 2020.
A second, also from Quint, cites an uptick in buyers' sense of the affordability of homes leaning in a positive direction. She writes, here:
For some home buyers, housing affordability has improved. According to the Housing Trends Report for the first quarter of 2021, 35% of buyers report being able to afford half or more of the homes available for-sale in their markets. A year earlier, that share was 23%. The increase is an indication that still relatively low mortgage rates continue to have a stronger impact on some buyers’ perceptions of affordability than rising home prices. Nonetheless, a majority of buyers (65%) do report being able to afford fewer than half the homes available in their markets, but that share is down from 78% a year earlier.
Again, it's the millennial cohort – biological clocks, earnings-curve rising, and work-from-anywhere-you-only-live-once attitudes at work – leading the pack in confidence about better attainability in the offing.
What we see then is a spread, growing, between what consumers are feeling, sensing, and expecting of economic near-term recovery behavior, and the struggle builders are enduring to deliver what consumers expect.
It's no time to lose – even for an instant – the opportunity to learn and focus on how to meet consumers' expectations ... even half-way.