Here is what we know as of today as it relates the virus and our industry.
We still have hundreds of thousands of new folks moving to Texas each year. At one point earlier this year we had over 400 people per day moving into North Texas.
We do not feel this will change dramatically once we are all back up and running. Companies who will be moving their headquarters here will still need to staff their operations.
What we think this means is there will still be tremendous demands for employees and housing in North Texas.
Financing
Rates are low and credit standards are up. At the writing of this newsletter FHA loans are hard to secure due to liquidity issues in the secondary market. We are hearing that some mortgage companies and banks have paused their lending all together.
What we think this means is if you have good equity and credit you will get a great rate. If you have some credit dings it will be harder to get approved. Be careful of which lender you use as they may not be able to perform. We hear of lenders refusing to fund at the closing table.
Supply Chain
The Supply Chain has been under stress for quite some time. It’s getting worse, as factories and distribution centers close across the planet. Inventories are being depleted and products are becoming unavailable.
Allocations and delays are increasing weekly. Even when we “open up”, production it will take time to replenish the distribution channels and shortages are expected to increase in 3rd and 4th quarter.
What we think this means is if you work with builders who do not have solid distribution partners you may be waiting longer for deliveries to your home site. It also means if you delay making selections or make changes you could hold up your home’s construction schedule. We do not anticipate relief until first quarter of 2021.
Home Pricing
Unlike the last recession in 2009, the supply of housing in our region has no excessive inventory. Do not expect significant discounting on new homes. Prices may trend higher due to supply chain constraints. There may be value in used homes as some are forced to sell due to employment challenges.
What we think this means is if you don’t have to sell now, wait. If you are buying do not expect builders to discount new construction. It will take longer to build new homes as material deliveries are delayed.
City Operations
With city staffs working remotely, there have been meetings canceled, permit delays and hold ups in inspections. We anticipate this being an ongoing operational structure for the near term.
What we think this means is significant delays in getting projects approved for construction. With many lenders requiring the permit be issued prior to closing this will require some planning as it relates to scheduling closing dates.
The Building Process
With showrooms and design centers closed it is difficult to set up in person selection appointments.
What we think this means is more virtual appointments and conference calls. This will remove some of the experience of playing with items and the “kicking the tires” when homeowners are walking showrooms. We do anticipate everyone returning to the showrooms once the virus fears subside.
Home Design
With many companies being forced to do remote work with employees, this will become more common as “normal” operations. There is also more concerns about how to supply a family for future quarantines as it relates to food, water and of course toilet paper.
What we think this means is homes will offer options for remote conferencing and advanced communication options. You can also expect to see larger and/or second pantries being added for storage in case of future quarantines.
Home Health
As we are now more aware of our personal health habits, we expect to see homes continue to be come healthier spaces for families.
What we think this means is homes feature more touch less faucets, lighting, soap dispensers and access controls. Air and water filtration systems will be in higher demand as well. Ultra violet lights, premium air filtration and whole house water filters will be more commonly found as options on new homes.
In closing, as with most other industries there will be noticeable changes in how homes are designed, built and lived in. We will continue to keep our friends, owners and Professional Partners updated as we learn more.