Mar 25 2020
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4 Factors You Should Know When Marketing to Gen Z

By Industry News

Consumer trends and desires revolving around baby boomers and millennials have been popular topics in recent years, as the last of the boomers begin to enter the 55+ age bracket and millennials have all primarily entered the workforce. But a growing emphasis is being placed on the up-and-coming generation of young adults: Generation Z.

Generation Z — generally defined as those born between 1995 and 2010 — comprises 26% of the U.S. population, noted Kate Good of Hunington Properties during her session “Gen Z: End of the Alphabet & Beginning of a New Era” in the Multifamily Central at the 2020 International Builders’ Show. Described as the “selfie generation,” Gen Z came of age during the Great Recession, and as such, is very debt-averse. It is also the most diverse generation, which factors into its values of inclusiveness and authenticity.

So why should home builders and developers pay attention to this growing demographic? By 2020, Good stated, Gen Z will command nearly 40% of all consumer shopping. They also are primary drivers of their parents’ purchasing decisions: 93% of Gen Z parents say their children influence their shopping choices.

Although the youngest Gen Zers may still be in elementary school, the oldest Gen Zers are beginning to enter the workforce — and the home buying and rental markets. Gen Z is attracted to brands that are engaged in social good (especially if the companies offer an outlet for Gen Z to get involved), promote healthy living and provide empowering messages.

They’re also loyal customers. “If they love your brand, they care about your brand,” shared Good, with 43% willing to write or record a product review as a result of great customer experience. For example, to help better engage Gen Z residents in providing reviews, her company has added a confessional booth on its properties for residents to share why they love living there.

So how can you capture their attention? Here are four key factors to keep in mind:

  • Ensure a streamlined digital experience: 60% of Gen Z shoppers won’t use apps or websites that load slowly or are difficult to navigate.
  • Make it quick: Gen Z has a short attention span — 15 seconds, to be exact. “If you don’t grab them in those 15 seconds, you’ve lost them,” Good shared.
  • Be responsive: Gen Z is highly mobile and expects fast responses. For example, 60% will hang up on a phone call if it’s not picked up in 17 seconds.
  • Use real people and real messages: Gen Z doesn’t respond well to celebrity spokespeople; 63% would prefer real people in marketing messages to celebrities.

See more educational materials from NAHB Multifamily, including the IBS Multifamily Central, at nahb.org.

Mar 25 2020
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NAHB Publishes Construction Job Site Guidance for Coronavirus

By Industry News

The Construction Industry Safety Coalition (CISC) today published guidance for construction employers, employees and contractors on coronavirus exposure prevention, preparedness and response. NAHB is a key member of CISC.

The guidance describes how to prevent worker exposure to coronavirus, protective measures to be taken on the job site, personal protective equipment and work practice controls to be used, cleaning and disinfecting procedures, and what to do if a worker becomes sick. The documents are specifically tailored to construction job sites.

The materials include a customizable response plan, notifications for employees, a checklist and quick reference guide, and a toolbox talk for employers. The guidance is organized into sections that include:

  • Responsibilities of Managers and Supervisors
  • Responsibilities of Employees
  • Job Site Protective Measures
  • Job Site Cleaning and Disinfecting
  • Job Site Exposure Situations
  • OSHA Recordkeeping
  • “Essential” Industry Designations by States with Business Closure Orders

Home builders, general contractors, contractors and other companies conducting work on construction job sites are encouraged to download the guidance, customize it for their companies, and distribute or display to workers.

Examples of guidance specific to the construction industry include:

  • Clean shared spaces such as trailers and break/lunchrooms at least once per day.
  • Disinfect shared surfaces (door handles, machinery controls, etc.) on a regular basis.
  • Avoid sharing tools with co-workers. If not, disinfect before and after each use.
  • Arrange for any portable job site toilets be cleaned by the leasing company at least twice per week and disinfected on the inside.

Access the resources in the Coronavirus Preparedness and Response section of nahb.org.

For any questions, please contact Rob Matuga.

Mar 25 2020
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Builders Say Coronavirus Hurting Traffic

By Housing

In a survey conducted by NAHB online in recent days, 81 percent of respondents said the coronavirus has had an adverse effect on traffic of prospective buyers.  The survey, which was publicized in various internal NAHB communications and social media, collected 308 responses between March 18 and March 23.  The largest share of responses (51 percent) came from single-family home builders.  Two-thirds of the respondents were the owner, president or CEO of their companies.

The survey listed seven possible impacts of the coronavirus and asked if each has so far had a major, minor, or no adverse effect on respondents’ businesses.  The most widespread problem the virus has been causing in the industry, by a substantial margin, is reducing traffic of prospective buyers.  A total of 46 percent reported virus-induced traffic reduction to a major extent, and another 35 percent to a minor extent.  Five of the items were clustered in a group having adverse effect (either to a major or minor extent) on 50 to 57 percent of respondents’ businesses: the supply of N95 respirator face masks, how long it takes to obtain a plan review for a typical single-family home, supply of building products & materials, amount buyers are willing to pay for a new home, and how long it takes to obtain an inspection from the local building department.  Willingness of workers to report to construction sites was the least common problem on the list so far, although even that one has had at least a minor negative impact on 42 percent of respondents’ businesses.

One caveat to keep in mind is that the above results are based on an online survey.  So the survey was not sent to a representative sample of NAHB members, and was not subject to other quality control measures NAHB’s Economics and Housing Policy Group typically employs.  Many of the usual procedures were foregone in this case, in the interest of obtaining timely results in what has been (to say the least) a rapidly changing environment.

Mar 25 2020
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Most Likely (Unlikely) New Single-Family Home Features

By Housing

Home builders make a lot of decisions about how to run their businesses every day.  Among their most critical determinations is what features to include in the homes they build.  Experience, region, trends, target audience, and many other factors play a role in a decision that directly affects their bottom line.  In order to provide our members with actionable research, NAHB conducts a nationwide survey annually to find out the most likely (and unlikely) features builders will include in the typical home they build during the upcoming year.

The graph below shows the features builders are most likely to include in their homes in 2020.  At the very top, with average ratings of 4.8 or 4.9 are a walk-in closet in the master bedroom, low-e windows, and a laundry room (on a scale from 1 to 5, where 1 means not at all likely and 5 means very likely).  Also likely to show up in homes this year are energy-efficient features:  efficient lighting, programmable thermostat, and Energy Star appliances and windows.  Kitchens most likely will have a central island, a walk-in pantry, and granite countertops.

 

On the other hand, there are features builders are rather unlikely to include with the price of the home.  Heading this list are cork flooring for the living areas of the main floor, geothermal heat pumps, solar systems, and dual toilets in the master bath.  Also unlikely are specialty rooms like a sunroom or a media room as well as two-story family rooms or foyers.

Mar 24 2020
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Strong February New Home Sales

By Housing

New home sales were solid in February before challenges associated with the coronavirus set in on the economy.

Contracts for new, single-family home sales declined slightly in February by 4% to a 756,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. However, this marked a 14% gain over the February 2019 pace. Moreover, the January and February sales figures, helped by warm weather during the winter, were the best recorded seasonally adjusted annualized rates since the Great Recession.

 

 

The current months’ supply of new single-family homes stands at a healthy level of 5.0 after peaking at an elevated 7.4 in December 2018. After rising over much of the post-Great Recession cycle, new home inventory measurably declined from January of 2019 until stabilizing in September and rising slightly in recent months. The count of completed, ready-to-occupy new homes is 75,000 homes nationwide.

The pace of new home sales will decline during the second quarter due to the impacts of higher unemployment and shutdown effects of parts of the economy, including elements of the real estate sector in certain markets. However, given the momentum housing construction held at the start of 2020, the housing industry will certainly be a sector leading the economy in the eventual recovery.

Mar 23 2020
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First-Time Home Buyers Top Features

By Housing

After rising for six consecutive years (2010 to 2015), the average home size in the US has fallen steadily for the past four years (2016 to 2019).  In fact, estimates indicate the average home built in 2019 was the smallest since 2011.  This trend is evidence that builders are working to meet the demand for smaller homes; that they are trying to shift their production mix toward more entry-level homes affordable to first-time buyers.

Given this reality, it is important to keep in mind what it is first-time buyers most want to have in a home.  Below are some of the findings recently presented at the 2020 International Builders’ Show (IBS).

What type of home do first-time buyers want?

  • 77% prefer a single-family detached home
  • 1,977 square feet is the median size home they want
  • 59% would prefer to live in the suburbs
  • 40% want a 2-car garage, but 12% want no parking facility at all
  • 76% want the kitchen and the family room to be completely or partially open
  • 57% want the laundry room on the first floor
  • 70% want stainless steel kitchen appliances

What specific home features top their wish list?

  • Laundry room
  • Hardwood flooring for the living areas of the main floor
  • Energy Star windows
  • Walk-in pantry
  • Patio

What do they expressly say they don’t want?

  • Elevator
  • Charging station for electric car
  • Cork flooring
  • Wine cellar
  • Golf course community

If first-time buyers had to choose (for the same amount of money) between a smaller house with high quality products/amenities and a bigger house with fewer amenities, 62 percent would opt for the former.  Translation:  after about 2,000 square feet of space, most first-time buyers will derive more value from quality amenities than from size.

A complete copy of the IBS presentation is available Here.