Diversifying Builder Management: A Mindset for Engaging with All Local Housing Needs

This is the second installment of "The Intersection of Housing Management and Branding". Welcome back.

Soaring material costs and uncertain delivery times—the housing industry is currently at a major turning point.

Precisely because we are in such an era, there is something I would like all builder managers to consider right now.

That is, the diversification of builder management.

Instead of setting goals solely based on the number of new builds, it is about shifting toward management that engages with all local housing needs, including renovations, the utilization of vacant houses, and enhancing the value of existing homes.

I believe this is the mindset that will be required of builders from here on out.

So, why is diversification necessary for builder management right now?

In this installment, I would like to organize the background of this situation and the perspectives that will be required moving forward.

1. The uncertainty of "distribution, pricing, and delivery" that stalls management decisions

Due to the influence of the situation in the Middle East, great uncertainty is spreading throughout the housing industry. The prices of essential items for home building—such as naphtha-based materials, equipment, paints, insulation, and resin-based components—are rising. Furthermore, recently, we have begun to hear not only that "prices are high," but also that "it is difficult to obtain supplies" and "delivery times are unpredictable."

This is a difficult situation to navigate for both customers and housing companies/builders.

From the perspective of customers considering custom-built homes, there are concerns such as the following:

When this happens, naturally, it becomes difficult for customers to move forward with their plans.

The same applies to housing companies and builders. Even after receiving a contract, there are concerns about:

Amidst this uncertainty, many companies are likely becoming cautious about actively seeking new orders.

2. Communicating "Now rather than waiting"—Facing the reality of prices and creating plans that satisfy customers

However, I don't think it's quite right to simply view the current situation as 'new construction is difficult.'

Considering the possibility that housing prices will continue to rise, despite the instability of costs, one could actually view it as 'the house you build now is the cheapest.'

Building material costs, labor costs, logistics costs, and a shortage of skilled workers. Looking at the long term, it is hard to imagine a future where housing prices will drop significantly.

If that is the case, then for our customers, we shouldn't just say, 'It's unstable right now, so let's wait.' ...

I believe this kind of communication is becoming necessary.

Also, spec homes have a value unique to the present.

For spec homes that are already built, you can see the actual product, and the price is clear.

Unlike custom-built homes, there is less uncertainty about how much the price will go up or when it will be completed.

Therefore, for today's customers, it has become a very easy option to choose.

Even for spec homes whose prices have risen due to the recent surge in costs and labor expenses, if construction costs continue to rise in the future, looking back later, it might turn out that 'this house, which was already built, was the cheapest.'

That is why companies dealing in spec homes should not simply move inventory through discounts, but rather

I believe it is important to properly convey these values to customers.

Also, regarding used homes, there is a possibility that they will move forward positively in the future.

In particular, homes that are relatively new and can be lived in without major renovations, or used homes that were originally built solidly as custom homes, will likely attract attention in the market.

From now on, it will be easier to focus not only on homes being built, but also on homes that already exist.

I think we are now in this kind of market environment.

3. The breadth of proposals becomes the strength of the home builder—protecting new construction while increasing points of contact with the community through renovations and the utilization of vacant houses.

So, what should local builders be thinking about?.

I do not believe you need to give up on new construction.

Rather, you should carefully communicate the value of new homes once again.

However, relying solely on new construction may become a bit difficult from now on.

That is precisely why I believe builders need to keep valuing new construction while also firmly turning their attention to areas such as relationships with existing customers, renovations, utilizing vacant houses, and improving the value of pre-owned homes.

3-1. Strengthening how you engage with existing customers under the grand cause of "protecting local living"

First, what is important for builders moving forward is to face existing customers more than ever before.

Visit these customers one by one, perform inspections, and take on consultations for repairs, renovations, and remodeling.

This is not about doing renovations reluctantly because new construction is difficult.

Even after building a home, you continue to protect that way of life.

I believe that is where the true value of a local builder lies.

Of course, renovations do not always lead to large profits immediately.

They take more effort than new construction. The unit price may also be lower.

Even so, deepening relationships with customers, protecting local homes, and viewing this as work that leads to future rebuilding or major renovations—is there not meaning in tackling this in earnest right now?

3-2. If builders take action, it turns into value—the strength of being able to become a leader in utilizing local "vacant houses"

And another thing that UNIIDEO has been proposing for some time is the utilization of vacant houses.

There are many houses in the region that can still be used.

We lease houses that have been left vacant, perform necessary repairs, and convert them into rental housing, community spaces, group homes, or lodging facilities to transform them.

Building new homes and utilizing vacant houses are not mutually exclusive.

It is important to build new homes in the region. At the same time, it is also important to make use of the existing housing stock in the region and transform it into new value.
It is important to build new homes in the region. At the same time, it is also important to make use of the existing housing stock in the region and transform it into new value.

Being able to engage in both is a major strength of local builders.

In promoting such vacant house utilization, collaboration with local real estate companies is essential.

Builders 'repair,' and real estate companies 'connect to people.' With these two wheels in place, vacant houses will turn into new value for the region.

4. Protecting local living and creating the future of the region—a necessary mindset shift for builders from now on

The housing industry is currently at a major turning point.

None of these are simple problems.

However, precisely because it is this kind of period, I believe it is also a time to rethink how the company should be.

If the way a company is changes, the value conveyed to customers and the areas in which the builder is involved will also change.

Builders are not just companies that build houses.

While valuing new construction, it means engaging broadly with local housing, including renovations, utilizing vacant houses, and improving the value of existing homes.

I believe that is where the potential for builders lies in the future.

I believe that in itself will improve regional brand power and contribute significantly to regional revitalization in the future.

Believing in this, UNIIDEO will continue to walk alongside builders and real estate companies.

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