In the Denver market, we had a bad month after quarantine measures effectively shut down the local real estate market, but we haven’t missed a beat. The pandemic has actually surfaced new opportunities for builders who are ready to adapt.
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New home construction is generally out in the suburbs, and more and more people are making the decision to leave the city core. Where in the past, people were cringing at living in the suburbs because of Denver’s traffic flow, it’s now more attainable. With more and more people having the ability to work remotely, it’s allowing them to get out of the city. These older Denver houses were never made for somebody who works from home.
With inventory levels being so terribly low, home builders for the past two years have been very fortunate. They haven’t had a lot of challenges when it comes to selling homes. The challenges are when it comes to labor.
Changes resulting from the pandemic put more control in builders’ hands on that point, too — at least on the sales side. I don’t like to use the word “wasted time” because in my mind, every interaction could lead to something down the road, but in the past, there were a lot of people who took advantage of a builder’s sales office. They might want to go look at a house, but they were getting ideas for their own house; they weren’t going to buy.
Now that sales offices have largely stopped allowing walk-ins, builders can streamline their sales operations to focus on more qualified leads. It also helps builders develop more targeted marketing campaigns. By having potential buyers fill out a reservation form to set up an appointment and texting them a confirmation, builders can make sure they’re not getting fake phone numbers.
The sales people are the ones that get frustrated because they’re out there on the front line. They’re the ones touching the doors and meeting with people. They’re the ones wearing the masks and wiping down the houses, so this could save them a ton of time.
Financing is important. One of the things that is really critical to ensure is that any home builder working with a buyer absolutely needs to have the right lender in place; either a lender partner or potentially a local lender. We’ve got to make sure people are fully approved, not just qualified. We’re seeing some qualification, but now there’s the litmus test of COVID.
Buyers may have been furloughed or could be in the future. Those are things that lenders are looking at. It’s really good to make sure they’re pre-approved and have a little bit of reserves.