We Hear You, Home Builders!
If the last year and a half have taught us anything, it’s that the only constant in life is change. As the home building industry continues to see fluctuating levels of demand, battle supply chain delays, and face labor and land shortages; new opportunities (and challenges) arise constantly. Builders, we at OpenHouse.ai hear you and are eager to help.
With everything changing around us, the way builders think must change too. As an industry, it is standard practice to make high-impact business decisions based on intuition, purchased market research, or historical sales data. But with the market in a state of constant change, builders need a way to safeguard the decision-making process to stay ahead of the curve.
In this week’s blog, we dive into the impact of real-time data as a tool to future-proof your business. We are going to investigate some of the challenges home builders face today and explore how real-time data can inform your strategy across your entire business. Let’s get into it.
RISING MATERIAL COSTS
There’s no avoiding it. The cost of materials, particularly lumber, has skyrocketed this past year adding tens of thousands of dollars to the cost of building a single-family home. And we know, this problem is a doozy. Along with lumber, other materials like concrete, metal products, and roofing supplies also continue to rise in cost. As interest rates remain low, buyers are still motivated to purchase despite the rise in prices. But with so many homes under contract yet to break ground, builders are facing a growing queue and extended timelines. As a result, buyers are fed up with cost renegotiations and construction delays, leaving builders vulnerable to the risk of buyers canceling contracts.
Although the rising cost of materials is out of your control, builders can leverage data to optimize pricing, and protect margins during times of rapid inflation. With the OpenHouse.ai Builder Intelligence Platform, you receive a bird's eye view of your customers, operations, and surrounding market. This technology sifts through behavioral and product-level data to detect trends and forecast events that help home builders make the most informed decisions.
Rather than receiving a retroactive report, builders can see market changes in real-time. The future of our technology will equip builders with insight into the market to improve operational visibility. Builders can know the impact of external factors on construction costs and timeline, and effectively communicate this with customers. With this insight, builders can promote transparency with their buyers, ultimately limiting the risk of churn. It’s frustrating when external factors impact your workflow and your home buyer’s experience, but by having accurate data about your market, home builders can be informed and strategize not only operational decisions but also maintain customer expectations.
LABOUR AND LAND SHORTAGES
As we know there are plenty of buyers hungry to purchase, but not enough labor to do it or land to build on! Associated Builders and Contractors (ABC) estimates that construction companies need to hire 430,000 more workers than they employed in 2020 to keep up with building demand. But, before the shovel even enters the ground, builders need construction-ready land which has also been in decline hitting a five-year low in 2020.
So how can builders combat this challenge? By optimizing the land, they do have available. Builders can leverage real-time data to gather insight into what home buyers are most interested in. Connected to your website catalog, the OpenHouse.ai Builder Intelligence platform leverages website traffic to generate product preference and engagement data.
Using machine learning technology, the platform personalizes the search experience and learns what prospective buyers want in their next home. All this data is collected and analyzed to ultimately inform builders on what floor plans to build, to ensure you are selling what the market wants. This real-time data empowers builders to have a deep understanding of market trends to determine the optimal product mix, ultimately protecting their business from cost erosion and unlocking the highest profits.
Although land is limited and skilled labor is hard to come by, builders can optimize the land they do have by selecting floor plans that will resonate most with their unique market, to match the right home to the right buyer. OpenHouse.ai’s solution is simple- help you to turn website data into capital efficiency, by building what the market wants.
Home builders, we know it has been an extremely difficult time. With demand pushing you to grow while supply shortages and rising costs squish your margin. You and your business continue to face many challenges. We hear you, and we see the obstacles you face. That’s why our team continues to improve our product and release features that will benefit more functions of your organization.
The future of our technology will support builders in leveraging data-driven strategy to ensure you are making the most informed decision, every time. Insights into lot acquisition and development design will help you stay ahead of the increasing market demand for new home construction, to help you best serve your market. Also, by accurately managing inventory and using data to determine the optimal product mix, you can ensure you are building what your buyers want, all while protecting your margins. Things are changing at breakneck speed, and home builders need more information to safeguard their decision-making. With the power of real-time data in your pocket, you’re ready to take on the unpredictable market and find success, every time.
- The OpenHouse.ai Team