By Mike Sunnucks | Rose Law Group Reporter
The impacts of COVID-19 are prompting some revolutionary changes to the home building and real estate industries.
That is according to two top industry CEOs — Taylor Morrison Homes Chair, President and CEO Sheryl Palmer and Meritage Homes Chairman and CEO Steven Hilton.
Palmer and Hilton talked about how COVID-19 is propelling major technology and operational changes in the home building industry during a virtual forum hosted by Belfiore Real Estate Consulting.
“I think this will forever change our industry – in a good way,” said Palmer during the forum.
She said the Coronavirus is forcing homebuilders to up their technology offerings to consumers – including virtual tours and sales.
Palmer and Hilton said both Taylor Morrison and Meritage have seen upswings in virtual sales during COVID-19’s shutdowns.
Palmer expects the changes to be long-term.
“We are communicating with the consumer. We are giving them a choice to interact with us how they want,” she said.
Palmer said traditionally home builders have been a latter adopter of technology and event. The pandemic has forced them to offer virtual tours and sales as well as finding ways for prospective buyers to tour model homes privately.
“Virtual sales have taken off,” said Jim Belfiore, president of Belfiore Real Estate Consulting of the industry born since COVID-19’s shutdowns in March.
Hilton said the first quarter saw some of the best performance for home builders he has seen during his 35-year career.
“Our business in January and February in Phoenix was red hot,” Hilton said.
That has all changed with COVID-19 shutting down much of the economy, inflicting Great Depression like surges in unemployment and pullbacks in business and consumer spending.
Hilton said Meritage plans on moving forward with developments and land deals – but with some caution.
“We are not going to buy land that’s not in the fairway,” Hilton said. “We’re not going to take the same kind of risks we were doing before.”
Both Meritage and Taylor Morrison are based in Scottsdale.
Hilton said all the job losses in other industries could encourage new interest in construction. Labor shortage and high material costs have challenged builders and developers. Those could both change with COVID-19 upending the labor market, reducing prices for materials and commodities, and delaying or scuttling some projects.
“Maybe we don’t have a labor shortage now. Maybe we can get more people to come to residential construction,” Hilton said.
Walters said Sunbelt has seen buyers ask for escrow extensions in pending land deals. He said the Scottsdale real estate development and land company has previously taken long-term steps to reduce the risks in its deals and investments.
“For us, a delay isn’t the end of the world,” Walters said.