2015 Third Quarter Market Prediction Survey results from home builders, remodelers, and contractors

We’ve received the results back from our quarterly Market Predictions Survey on the state of the market and predictions about the future. To conduct this survey, we reach out to home builders, remodelers, and contractors and ask them to give their opinion on the state of the market, changes they expect to see in the market, and how their company’s performance will change.

Current State of the Market

When we asked our survey respondents to share how they felt about the current state of the market, favorable responses (Good and Excellent) dropped from 77% in Q2 to 73.9% in Q3. 2015 Q3 sentiments are also down from Q3 of 2014 in which 75.5% of respondents answered favorably. As for unfavorable responses, we did see a decrease in the number of respondents that said the market was in “Horrible” condition. Last quarter, 1.3% of respondents said they felt the state of the market was horrible, and that number went down to 0% this quarter.

Expected Change in the Market

Respondents were asked to give their predictions on whether they thought the market would improve, remain the same, or decline. Q3 results show that 63% of respondents expect the market to remain the same while 26.5% expected it to improve (25.4%) or significantly improve (1.1%). Historically, respondents tend to answer more negatively in Q3 on this question, but we did see a 10% decline in positive responses from Q3 of 2014 (36.5%) to Q3 of 2015.

Expected Change in Company Performance

This quarter’s results on this question were also lower than what we’ve seen over the past few years, with 62.9% stating their company would either improve (55.2%) or significantly improve (7.7%). That’s down from 73.3% in Q2 of this year and 74.2% in Q3 of 2014.

Emerging and Waning Trends

While these questions are both open-ended, we did see a few trends that stuck out in both categories. For emerging, larger projects and people more willing to spend on higher end finishes/quality were the two most prominent answers. A few other responses that received multiple answers for emerging trends were homeowners doing more research and being more informed than ever before, modern design, outdoor spaces, and some sensitivity to price.

Some of the waning trends that were shared were bathtubs (many even shared their customers are asking to have bathtubs removed), green and energy efficiency and cheap and quick projects. One thing to note about the decrease in green/energy efficiency is that many homeowners expect this to already be in their homes, so they’re not necessarily asking for that anymore.

Near and Long Term Strategy

We allowed respondents to give open-ended responses on what they’re focusing on both near and long term for their companies. Both long and near had the same basic trends, with hiring being the number one focus for both.

1. People – many of our respondents shared they’re looking to hire new talent, expand on training and education for current and new hires, and/or invest in ways to keep current employees. This is a huge issue in the industry as a whole right now, and our survey respondents are also feeling the pressure of the shortage in the labor pool.
2. Marketing/Advertising – respondents also plan to increase their marketing/advertising efforts. Many shared they’re planning to invest more in their website, online reviews, social media, and overall brand recognition both online and offline. (Tip: Here are 5 ways to use customer feedback in your marketing)
3. Internal processes – creating and improving upon internal process were key for many of our respondents. Whether that was improving communication with customers or creating scalable processes, our respondents are focused on having more efficient, effective ways of doing things moving forward.
4. Customer satisfaction/service – many of our respondents shared they get a lot of business from referrals, so the desire to improve and focus on customer satisfaction is key. Also, using customer feedback to identify areas of strength and weakness was important as well as maintaining relationships with their customers.

Additional Comments

Below are comments from some of our survey respondents. As was the case last quarter, labor is still an issue for many of our respondents. We’ve also have some that commented on improvements in their markets and some that have not seen improvements.

Where did all the skilled labor go? Does the real traditional carpenter still exist?

Labor is the issue for now. We have deactivated many of our lead sources due to the volume of the work load.

We have literally doubled our leads from last year, and the leads are higher quality and better projects than ever before. We have more work than we can actually handle as a company, and are therefore making large changes to the structure of our company to accommodate.

The market has improved dramatically over the last 6 months. We are seeing more demand in larger design build projects. It may be pent up demand or the fact that the economy is better, but for some reason we are experiencing more leads and more business as a result.

CT market never fully rebounded and is now heading lower.

The Portland region has declared war on the single-family home. At some point, we will need to either embrace the Stack-em and Pack-em high density in-fill approach, or leave town.

Line of Business and Region

(Note: Respondents were able to select multiple options for both line of business and region.)