Woodhaven Homes Competition
Now Viewing Woodhaven Homes's competition in: Residential Real Estate Construction (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Does the company do work for developers or does it develop its own properties? - Most construction firms own the properties they build on.
In how many markets does the company operate? - Large companies may serve many markets, but most builders operate only locally.
Does the company use a sales force to sell homes? - Large companies have their own sales force, but small companies contract with real estate brokers.
What type of home buyer does the company target? - Builders often study local demographics to appeal to a particular type of buyer.
Does the company usually build homes within a particular price range? - Builders frequently specialize in a price segment.
What is the typical period from construction completion to home sale? - For new homes, the average is four to five months.
Has the company ever had to discount prices to sell homes? - With an average gross margin of just 20 percent, builders often have little ability to cut prices.
Has the builder requested unbundled pricing from its suppliers? - Analysts say homebuilding seems to be headed toward an unbundled pricing system, where builders buy materials, delivery, installation, and warranty services separately.
How has industry consolidation affected the company? - In 2007, the 100 largest homebuilders accounted for 40 percent of residential construction.
What percentage of sales is generated from the company's website? - Builder websites have become a major marketing tool, since a growing number of home buyers are using the Internet to research builders and new home communities before visiting showrooms and models.
Competitive Landscape
Demand for new housing depends on population growth and is linked to low interest rates. Large builders have some advantages in purchasing and marketing, but building methods are essentially the same for large or small builders. While larger builders have efficiencies because they can repeatedly build the same home models, they generally develop projects on large pieces of land. Small builders, therefore, build most homes in dense urban markets where little land is available.
Full Industry Overview For Residential Real Estate Construction
Business Challenges
CRITICAL ISSUES
Highly Cyclical Demand for New Housing - Demand for new residential buildings can change rapidly, depending on the economy and interest rates: from 1984 to 1991, annual US home construction dropped 35 percent; from 1996 to 2006, it increased 40 percent; and from 2006 to 2007, it fell 25 percent. In local markets, changes in demand can be even more severe.
Profitability Strongly Affected by Home Prices - Because a large number of homes are built speculatively, builders bear the risk that changing market conditions will produce lower selling prices than they'd anticipated. In some markets, home prices can be highly cyclical. Even in markets where prices don't fall, builders may anticipate getting a higher price than they eventually receive.
Industries Where Woodhaven Homes Competes
- Construction
- Construction & Design Services
- Residential Construction(primary)
- Construction & Design Services
