HomeSphere CEO Glenn Renner Talks Managing Margins with Builder and Developer
June 12, 2019
HomeSphere’s CEO Glenn Renner recently offered words of advice in Builder and Developer for home builders looking to manage margins. The answer? Well, builders shouldn’t look to just one answer, and instead search for efficiencies in all areas of their businesses.
Renner’s advice is based on HomeSphere and BTIG’s Builder Intelligence Report, a monthly survey that goes out to more than 2,600 regional builders. According to survey results, trends are looking good coming out of Q1 2019, but builders have made it clear the quarter has had both its sunny and cloudy spots.
The sunny: Sales are slowly rebounding from late 2018, while building costs appear to be coming down. The cloudy: Builders are finding it difficult to manage higher material costs with higher home pricing. But Renner warns there isn't only one solution for managing costs.
From the article:
Builders with entry-level exposure continue to fare well. The economy remains strong, and the housing supply relatively low. In our view, builders have a choice in the way they manage the slowdown. A builder can choose to lower prices, offer incentives, get lean or wait it out with the faith that the economy will remain healthy. Perhaps the answer is all of the above. In this last month, five percent of our respondents opted to lower some or all prices, 39 percent increased incentives and a little more than 50 percent stayed the course.
