Construction In Todays Economy
Right now the construction world is booming and even finding a general contractor or worker can be difficult. It is really like 2007 all over again! But what happens when that stops? What happens when the leads die off and customers are not calling?
These are great questions and mean 2 very different things depending on wether you are a contractor or homeowner so lets look at both views:
How Things Will Change As A Contractor:
When the market begins to slow down (and it will!), contractors typically thin out. What I mean by this is that if you have 120 contractors in your town or city during the boom, as soon as things slow down and go back to “normal” contractors will thin down to about 60 active licenses. This is extreme, but it is reality. I can remember in my home town, this was the exact stat for licensed contractors from 2007-2009. When things are hot, everyone seems to be a contractor or home building professional. When they cool off, only the experienced or lucky survive.
Similar things happen with realtors as well, but this is a construction blog, so we will keep things relevant.
When the economy turns, what can you do to survive? The seasoned contractors with have their life long referrals to fall back on, but what about a new contractor who is actually good at what he does? What can he do to keep busy?
One thing I could suggest that a lot of old school contractors don’t do is online marketing. It is over looked by many, especially in a boom period, but effective in all economic times. Having a great website and online presence can really set you apart from everyone. So many contractors have yet to get this mindset and are missing out or are going to miss out when things turn. Don’t wait! Get started right now!
If you don’t know where to start, I would suggest a course like what DIY Contractor Marketing has put together. You can’t beat it to be honest.
How Things Will Change As A Home Owner:
Right now, the cost of construction for a homeowner is crazy. Prices are up on materials and labor, so if you are looking to build your dream home, or even just a home to live in, maybe now is not the best time!
Material prices are up due to supply and demand. Contractor prices are up because they have more work than they need so they can charge more. Pretty simple really.
But what will happen when the economy turns? This is what you want if you are looking to build. Materials will begin to fall. Land prices will come down. Contractors will get hungry for work and start to bid against each other. It is no different than what happened in 2007-2008. Economies cycle and it is always good to be ready for the next one.
I would venture to guess we are close to a downturn soon as it is overdue. As a homeowner, this is a great time for you to wait and get ready for price breaks.
Final Thoughts:
Keep in mind, these are just my suggestions and opinions, but if history is any indicator as to our future, we are soon to hit a downturn shortly.