2016 - The Year of Building Dangerously: Bridging the Margin Gap

Thursday, January 21 | 10:00 - 11:00 AM
Location: North 254

Format: Building Knowledge Session 
Level of Content: Intermediate 

Appropriate for: Multifamily Builders & Developers, Designers, Architects, Engineers & Planners, Single Family - All

Track(s): Business Management & Operations

Speaker(s): Scott Sedam, TrueNorth Development Inc, South Lyon, MI

What It’s About:
In 2016, 90% of all U.S. home builders will sell more homes but at a lower profit margin. That's building dangerously. Demand for new homes is up significantly nationwide, yet two huge obstacles to profit loom large. First, seven major cost categories in home construction face a substantial increase, with predictions from 6-8%. Second, significant resistance across the market limits sales price increases to a mere 3-5%. Does the profit margin decrease have to affect you? Not if you do some things differently in 2016: you will need to understand and make significant reductions in product and process waste built into every home – often more than 20% of your sales price. This session will help you do that.

What You'll Learn:
Understand the unique dynamics of the current market that are holding down retail prices increases, even in the face of historically strong demand.
Recognize that the seven major cost categories in home building are unavoidably rising, and in combination with limited price increases, this means lower profit margins.
Learn how to significantly increase profit through the systematic identification and elimination of product and process waste.
Understand the role of new home design in contributing to product and process waste, which significantly impacts profit.

Continuing Education: NAHB - 1.00 CE hour(s), NKBA - 0.1 CEU(s)