Rising Prices, and How Hartford is Staying Ahead in Today's Market
To be a buyer in today’s market is quite the rollercoaster ride! Bidding wars, escalating prices, skilled labor shortages... Why is it happening and what does it all mean? Hartford Homes’ VP of Purchasing, Amanda Meek, sheds some light on the current housing market and the effects that rising costs have had on her team and Hartford Homes, as a whole.
The last two years have really been the “perfect storm” for the construction industry. Here’s what we know:
We’ve seen a scarcity of materials as a result of manufacturing shutdowns due to the pandemic, paired with a tremendous demand for new housing.
With the increased demand for new housing, builders in nearly every market feel the need to increase production to meet demand.
The need for skilled labor has also increased, often with the need outpacing the available resources in the market.
This scarcity of resources, both human and physical, has driven the cost of both up, which in turn increases the cost of the goods.
How has the skilled labor market changed in the past two years?:
We’ve seen several shifts in the subcontractor market over the past two years.
During the beginning of the pandemic, many trades were eager to drop their prices for fear the market would slow down and they would lose the work they had under contract.
However, the unpredictability in the market from both a material and labor perspective resulted in trade partners raising prices to protect their own margins. Since material supply is unpredictable, most trade partners end up making multiple trips to complete work, impacting productivity and efficiency.
How has Hartford ensured reliable skilled labor for the future?
At the beginning of this year, we’ve started to see a shift as new trade partners become acclimated to doing business with Hartford Homes. Word of mouth from trade partner to trade partner has reinforced our reputation within the market, driving new trades to approach us. That’s exciting!
In a market like the one we’re in today, trades can pick who they work for. When they choose us, it’s a recipe for a long-term, successful partnership.
We are affected by the global supply chain disruption, just like every other homebuilder. Why is Hartford different?
We’ve been intentional and disciplined in our approach to current market conditions.
We’ve decided to suspend “dirt start” homes and instead build “quick move-in” homes. With quick move-in homes, the Hartford team selects the floorplan and finishes, and ensures the materials with the most unstable pricing have been delivered and installed. Then, it’s time to release it for sale!
This allows us to commit to a sales price for our buyers instead of surprising them with a huge price increase, 30-days prior to closing.
We can be more conservative on price increases allowing us to remain competitive and to offer fair, market value prices to the buyer.
It also allows us to predict our margins, so we remain financially healthy as a company and can continue to operate successfully for years to come.
We are local and have been in business for over 30 years with a reputation for quality and fair business practices. Our trade partners want to work for a stable company that won’t be “here today, gone tomorrow”
When we have the best trades in the market, they engage with us on alternative products and value engineering strategies that bring value to our homeowners and preserve quality.
Meek wraps up by saying, ”Price increases are an inevitable result of current market conditions, but through thoughtful work, discipline, and a commitment to our buyers, our employees, and our trade partners, we can minimize the impact.” At Hartford Homes, Great places, Great relationships, and Great finance are our top priorities. Like a three-legged stool, if one leg is off balance, the rest of the stool is affected. With more than 30 years in the home building industry, you can rest assured, knowing that Hartford will always put you first.