{"id":2710,"date":"2022-03-22T09:15:22","date_gmt":"2022-03-22T13:15:22","guid":{"rendered":"https:\/\/adsintelligence.marketing\/?p=2710"},"modified":"2023-10-13T13:39:21","modified_gmt":"2023-10-13T17:39:21","slug":"supply-chain-disruptions-hamper-housing-market","status":"publish","type":"post","link":"https:\/\/adsintelligence.marketing\/2022\/03\/22\/supply-chain-disruptions-hamper-housing-market\/","title":{"rendered":"Supply Chain Disruptions Hamper Housing Market\ufffc"},"content":{"rendered":"\n
Recently, we\u2019ve been seeing a year-over-year downward trend in the organic traffic in some of our home-building client reports.<\/p>\n\n\n\n
But noticing trends is only the first part of the analysis.<\/p>\n\n\n\n
To fully understand the data we were seeing, we needed to find the cause for this dip in traffic.<\/p>\n\n\n\n
And, as usual, it\u2019s not just one factor but a combination of things causing these noticeable dips.<\/p>\n\n\n\n
Let\u2019s delve in and discover together why we\u2019re seeing what we\u2019re seeing.<\/p>\n\n\n\n
The pandemic created a unique situation. Worker shortages affected supply chains across the board (in the housing and almost every other industry). This made housing materials suddenly more expensive. Zonda (a home data analyst firm) has reported that these costs are up 35%<\/a> YOY.<\/p>\n\n\n\n And the same worker shortage that affected supply chains impacted the construction industry. ABC (Associated Builders and Contractors)<\/a> reports that the shortage continues, meaning the industry needs an additional 650,000 skilled professionals in 2022 above regular YOY expansion to meet the demand for new housing.<\/p>\n\n\n\n Both shortages increased the time needed for new home construction, according to 97%<\/a> of builders surveyed, and resulted in fewer new homes in total. Once interest rates hit the epic lows<\/a> they dropped to in January of 2021, there was a metaphorical feeding frenzy. The inventory of new homes began to quickly dry up.<\/p>\n\n\n\n This dearth of new homes came at a time when customers were searching for more homes with more space\u2014places they would be happy to spend most of their time in, with enough room for family and work\/learn-from-home necessities. Due to the law of supply and demand, each new home became an even more valuable commodity which raised prices (as supply and demand is wont to do). <\/p>\n\n\n\n Due to both lack of workers and supply chain issues, according to another report by Zonda, 92%<\/a> of builders are deliberately using techniques to slow down sales due to lack of inventory and construction workforce. As housing prices continue to increase to cope with the shortages and the sales deceleration, prospects have been growing weary.<\/p>\n\n\n\n Without letting these pandemically enhanced shortages recover, world events disrupted global supply chains even further. This statement is by no means meant to trivialize the humanitarian horrors happening in Ukraine right now. It is just illustrating how connected global supply chains really are. <\/p>\n\n\n\n This second disruption has just made the housing industry crawl even slower. Indeed, 77%<\/a> of builders are now citing both building material availability and building material costs as their top two challenges. Using a bit of educated speculation, we can easily conjecture that the dramatic price increases and virtually no supply (both in resales and new construction) are causing homebuyers who want<\/em> a new home\u2014those who want to take advantage of the equity in their current homes to move to something bigger and better\u2014to find there are very few choices for them to move to. They are surrendering to buyer fatigue, giving up on their search, and remaining where they are.<\/p>\n\n\n\n Zonda\u2019s January 2022\u2019s Pending Sales Index<\/a> shows that new home sales are, indeed, down 14% YOY. As supply chain shortages, worker shortages, low home inventory, and rising prices all contribute to these lower sales, it become pretty clear why we\u2019re seeing the downward trends in organic traffic we mentioned at the beginning of this blog.<\/p>\n\n\n\n But there is a potential sunrise on the horizon: buyers who need<\/em> a new home are still looking.<\/p>\n\n\n\n Supply chain and worker shortages will continue to dominate the industry. For a time. But we must look to more than just one past statistic to see the true picture.<\/p>\n\n\n\nThe Supply Chain is Disrupted Again<\/strong><\/h2>\n\n\n\n
Our strategy reaches the eyes that need to see<\/strong><\/h2>\n\n\n\n