Buyer Confidence Bounces Back – Selling Market Slow

While a Redfin Q4 housing-confidence survey determined that only 28% of participants say now is a ‘Good Time’ to buy a home in their neighborhood, this is still an increase from Q3, where a mere 24% of participants answered with the same result. This is still a large drop off from the 2012 Q4 survey, where nearly 50% of respondents believed it was a good time to buy a home in their neighborhood.

Another positive sign for buyers was the drop in respondents who believe it is a ‘Bad Time’ to buy a home in their neighborhood, with only 10% agreeing in Q4, dropping from 14% in Q3. This was the lowest response rate since Q4 2012, when 5% of respondents agreed. Rounding out the survey, 58% said it was an ‘OK Time’ to buy a house, while 4% were unsure, keeping on pace with the Q3 responses of 59% and 3%, respectively.

If you’re looking to sell, Q4 is not the time to do so. Only 46% of respondents agreed that it was a good time to sell, dropping off from 63% in Q3 and the 2013 peak of 66% in Q2. While there was an 8% increase in those responding that is was an ‘OK Time’ to sell (up to 37% from 29% in Q3), those claiming it is a bad time to sell doubled from 5% in Q3 to 10% in Q4.

For the fifth consecutive quarter, Low Inventory is the biggest concern for buyers, with 60% of respondents unsatisfied with the amount of homes on the market. Following closely are Rising Prices (52%) and Rising Mortgage Rates (41%).

The housing marketing looks quite mixed, with buyers slowly trending in a favorable manner, but still not at an ideal position. Sellers are rapidly losing confidence from a strong Q2 and Q3. Looking forward, homebuilders are caught in a rough spot. In fact, award-winning editorial director for the Residential Construction Group, John McManus, is boldly predicting that 2014 will be a ‘fend for yourself’ year. According to McManus “…what will characterize the year ahead will be a ‘you’re on your own, don’t ask me for help’ mode. If you can survive, thrive, and dominate next year, there’s a good little stretch awaiting in the years after that.”

It is crucial for homebuilders to have a strong and detailed plan heading into an unknown 2014. The housing market is constantly changing and unfortunately without many warning signs. SBS Group has a team of homebuilding industry experts that can help analyze your organization with a variety of solutions that can be tailored to your needs. Contact us for more information.

Housing Starts Dip Again – “National Association of Home Builders” Lower Projections

The expected bad news for homebuilders was released by the National Association of Home Builders – the 2013 and 2014 forecasts for US single-family home starts has been lowered due to high interest rates that are slowing the growth rate of the housing market.

April projections showed single-family home starts are 672,000 for 2013, but that number has now been lowered to an expected 629,000. The 2014 number also dipped, from a forecasted 858,000 to an expected 826,000. However, even if the lowered 2014 projection is hit that would still be an increase of over 53% from the 537,000 housing starts in 2012.

In 2015, Chief Economist David Crowe expects to surpass the 1 million start mark, climbing to a projected 1.16 million starts. This would still only be “about 93 percent of ‘normal,’” according to Robert Dent, the National Association of Home Builders Vice President for forecasting and analysis.

According to Crowe, the housing slump was due to “…unexpected softness in the spring,” with mortgage rates rising over 1 percent from very low May rates. Sales of new and existing homes began to slow almost immediately.

Mark Zandi, the chief economist for Moody’s Analytics Inc. believes that the US needs to produce around 1.7 million new homes and apartments each year to provide replacement for obsolete residences and support population growth. This number would be a great jump from the 353,000 housing start low in March 2009, but still far short of the peak number of starts of 1.82 million back in January 2006.

While homebuilders continue to see growth, the overly optimistic signs from July are beginning to marginally reduce, winding down quite a volatile 2013 on a low swing. SBS Group can help minimize the unpredictable housing market effects with solutions that can provide flexibility to maneuver through the competition. Contact us for more information and to speak with an industry expert.

Homebuilders: Is Your Accounting Software Up to Par?

Successfully managing job operations in the homebuilding industry requires a host of dependable, experienced personnel performing their tasks with diligence. Everyone involved in the homebuilding process, from your project managers, to your sales and marketing team rely on up to date information. And although with continued advancements in technology it’s easier than ever for your team to stay connected, outdated homebuilding accounting software can hinder your professional progress, costing you time and money.

Understanding the need for an upgrade is great, but as a homebuilder, it may be difficult to determine if your current system isn’t operating at the level you need it to.

If you want to be sure that your accounting software stacks up, ask yourself these questions:

• Can it compare standard costs estimates with the actual costs accrued on the job-site

• Can it offer real time information from site superintendents on current labor costs and the subsequent worker’s compensation codes for certain activities?

• Can it organize sub-contractor data, work agreements, and certifications according to specific jobs?
• Is it able to direct accurate billing information to the proper personnel for efficient approval?

If you answered no to any of these questions or are unsure of your software’s capability, it may be time to do some research and look at something new.

The answers to these questions will ascertain how much time and money your company can save by using an efficient homebuilding accounting software and will determine the level of advantage you can gain over your competitors in attracting, signing, and constructing new contracts.

 

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The Future, Today: The Paperless Office Trend

BusinessWeek wrote an article back in 1975, containing one of the earliest predictions of the ‘Paperless Office’, among other office revolutions that have proven to be fairly accurate. Obviously offices are still not paperless, but the trend continues to grow, with paper consumption decreasing throughout the world, with the exception of China.

From Australian pilots to India’s State Legislative Assembly, more and more groups are adopting a paperless program. Another industry joining the paperless transition is the homebuilding industry. Homebuilder stocks have fallen the past few months, after a strong start in 2013, and homebuilders have to cut back.

David Drees, CEO of Drees Homes in Cincinnati, saw “…his family’s business get sliced in half” during the housing decline. In order to operate more efficiently, he converted “…to a paperless record system that allows Drees’ supervisors to monitor multiple construction sites.” The results in 2013? Drees Co. was ranked 23rd according to Builder magazines Top 100 Builders list, with a 2012 revenue of $593 million.

Many of the other top builders in the industry are also moving toward a paperless office for a variety of reasons, but the overwhelming theme is convenience. Externally, businesses can consolidate all of their bills to a few clicks and avoid mailing statements and checks, which can be lost or delayed, adding to payment costs. Contracts, purchase orders, and vendor communication are critical components to the homebuilding industry and they can all be simplified with a paperless vendor portal.

Internally, going paperless has more financial benefits. Coupled with better technology in the supply chain lets companies track shipments and orders in greater detail, providing more accurate information to determine labor schedules and keep customer satisfaction high. Payroll, invoices, and accounting can all be utilized online with the correct software. Keeping everything together is better for departmental organization and reduces digital storage space.

Moving to a paperless office saves time, costs, and the environment. Make sure to utilize the right products for your business needs. SBS Group can help ease the process with a variety of products from Microsoft Dynamics. Contact us with any questions: http://www.sbsgroupusa.com/contact-us/contact and you can follow us on Twitter and Facebook.

10 Questions to Ask Before Considering ERP

Now that the economy is getting better, builders need to prepare for the future.  The new millennium generation has very different ideas on the entire home buying experience and future compliance issues will force builders to have robust systems to remain competitive in the marketplace.  Is now the time your business should be considering an ERP Solution?

Here are 10 questions to ask to determine if your business is ready to get started with implementing an ERP strategy and begin evaluating ERP software options:

1. Are there limitations to growth within my business? Is it hardware, software, operations, people, training, technology, etc…
2. Does my business have industry specific requirements that are not met by my current software?
3. Is my staff spending too much time on manual or mundane tasks that lower productivity and morale?
4. Is communication a problem between people and departments? Do we have a data communication problem?
5. Do the right people have access to the right data to get their job done in an efficient manner?
6. Are there security controls and rules in place to ensure that the right data is shared by the right people?
7. Is my business at risk of internal fraud or theft? Do I suffer from revenue leakage or inventory shrinkage? Are there things that worry me about my business and keep me up at night?
8. Is my business able to compete in today’s market? Are my competitors out performing when we really do have a better product or service?
9. Is the cost of doing business eating into our profits?
10. Is my business ready to take the next step to grow?

Want to speak to a Homebuilding Expert and learn more about ERP for Homebuilders? Let’s start a discussion!

 

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