Today’s custom home builders and remodelers work amid unprecedented times. The global pandemic, supply shortages and now the war in Ukraine has brought rising costs. However, builders that know how to navigate these challenges find themselves in a market ripe with opportunity, where the demand for home remodels and new home builds continues to rise to record levels.
To operate in this growing market, it’s critical that builders and remodelers know their costs and respond to customer RFQs with accurate estimates and bids.
Global events and spiraling costs can be overcome
Builders must contend with a rapidly changing marketplace. The whole-of-house cost of residential construction was up more than 14% in 2021-- the highest increase since the late 1970s, fueled in part by rising material costs.
Economic forecasts predict these costs will continue to rise through 2022, partly due to the more recent concern with the war in Ukraine, as war-related shipment interruptions are expected to increase the cost of fuel, copper and aluminum. Even before the war, copper and aluminum component costs at the end of 2021 increased year-over-year by 23% and 55%, respectively, according to U.S. Produce Price Index data compiled by The Associated General Contractors.
Despite these trends, builders and remodelers can’t afford to sit on the sidelines and miss out on today’s market opportunities. Angi, a digital marketplace representing nearly 250,000 home services pros, estimates the U.S. home improvement market at $376.9 billion. And according to real estate website Zillow, the national inventory of homes will continue to increase over the next two years.
Modern tools offer a path to success
To succeed amid the uncertainty, builders are increasingly using cloud-based software to gain greater efficiency and transparency into their business. Using construction management software like Buildxact, online takeoffs can generate materials lists up to 80% faster than manual methods. Builders can also ensure orders are complete and require only one request from the dealer for the best price.
By streamlining material quoting, dealers cut out wasted administrative time that prevents builders from quickly getting back to customers. In a recent builder survey conducted by market research firm The Farnsworth Group, quick dealer response and fast delivery of supplies were more critical to builders than even low prices.
The same Farnsworth study found that dealers and builders can spend up to four hours to finish a single material quote. That’s wasted time that the builder could use on the job site and the dealer could use to truly collaborate with customers to decide the best materials for the job.
The more modern and efficient way to communicate pricing is through online, digital collaboration. Builders are working with dealers to use online platforms to integrate material pricing directly into their estimating and quoting. This integration frees builders to research materials and pricing at a time most convenient to them.
To learn more about how builders can use cloud-based software to create more accurate estimates in less time, visit Buildxact.