Tag Archives: 2008 Recession.

The 2018 Builder 100 List: How the 10 fastest-growing public builders found success after “The Great Recession”

Recent findings show we are close to reaching the all-time high in the home building industry in terms of the number of homes sold when comparing the numbers from a decade ago, before “The Great Recession”. In 2007, we had a record high in home closings of 389,902 units in comparison to 2017 with 326,984.

The numbers are a sure sign of a healthy growth year over year, especially after one of the worst market crashes since the great depression. We have explored the past decade in providing hundreds of home builders with mission-critical integrated software solutions.

We found that many of the Top 10 fastest growing public companies listed on the Top Builder 100 list not only leveraged Constellation’s software but also shared a common theme when it comes to business operations during recession recovery.

They Doubled Down on Resources in a Down Market

As company growth stalls, builders invested back into their communities to produce more homes and tried to be mindful of their bidding strategies. As the recession hit the housing market, so did all other resource assets related to infrastructure. Builders tightened up their budgets and running costs to invest in the long term. Although this has not been a complete comeback, 2017 did see higher revenues in the homes sold to due to a rise in the average home price as demand is also rising and home builders were more willing to innovate with their products for higher margins. Last year saw $133 billion in revenue versus $123 billion from 2007.

Managing a Tight Market with Automation & Innovation

With limited internal support, growing builders turned to cost-cutting strategies that streamline processes on the job site, that eliminated manual work in the back office, and provided insightful reports for better decision making – this became a necessity for every real estate investment after the recession. Many growing builders stayed afloat by spending less time administrating tasks and more time on strategy. They also leveraged software at any given opportunity, time became of the essence in investing in real-estate. Builders waited for key pockets of metropolitan neighborhoods close to a bigger builder’s community to ensure buyers would come. Builders constantly assessed and reassessed plots of land, they integrated accounting into all their business functions for increased financial analytics, scheduling became the law of these firms as any building errors were simply too much to pay for.

Simultaneously, as precision home building became more and more automated, design center upgrades became a trend. New homeowners wanted personalization from production home builders. With integrated décor centers, home builders were able to offer up “premium” finishes to home interiors that improved margins without sacrificing too much building time. Some builders have even integrated their contract addendums to their homeowner’s selections for real-time data on profits and capital costs of each home.

Also try, “Top 5 Builder Tips for Efficient Décor Centers to Drive ROI” for improved design center appointments.

Rebuilding Teams with Goals and Effective Processes in Mind

As the housing downturn affected where people worked, home builders carefully restructured their companies with key talent that understood the company’s deliverables and goals. Key members were usually sales driven and understood the necessity of streamlined processes. This new generation of builders figured out that the old way of building needed to change as new technical solutions became available, with data and metrics injected into the workplace culture of building companies. Accountability to achieve financial success was heightened, while streamlined process left more time for home product innovation.

The Verdict

The fastest-growing public home builders today are where they are because they believed in their trade. During the recession, they doubled down where they saw fit and planned for future developments. They invested in automation technology and best practices that became cost-effective ways of completing the same task with less effort. They also innovated but did so in accordance with what they can afford by measuring, tracking, and budgeting. Overall, home builders chose to innovate and offer better homes than before by rebuilding their company culture around goal setting and improved workflows.

The Housing Leadership Summit

At this year’s Housing Leadership Summit, we are proud to be supporting Hanley Wood and “Top 200” builders as a gold event sponsor. We are happy to announce that builders can now anticipate and maximize productivity with the latest advanced home building technology. From artificial intelligence to the design studio, access real-time business predictions so you can focus on improving all aspects of your work processes. We look forward to meeting all top thinking builders at this year’s event.

Source

“The Great Recession: Builders Look Back” by Jennifer Goodman | Builderonline.com

“The 10 Fastest-Growing Public Builders” by Hanley Wood Data Studio, Charlotte O’Malley | Builderonline.com

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