Those who jump on this opportunity by investing in engineered or composite materials and component manufacturing capacity, say Dickens and others, are most likely to be those supplying builders large and small in the future. “The biggest changes in this industry will be in construction techniques and materials,” says futurist Marvin Cetron, Ph.D., founder and president of Forecasting International in Arlington, Va., who predicts at least one of the Big Three automakers will invest in factory-built housing. “They learned their lesson against the Japanese with cars, and they’ll leverage their experience with robotic assembly.”
Conservation and Branding Consumers will demand homes that are more resource-efficient and seek out builders committed to that goal.
If not leveraging Martha Stewart or J.D. Power, the next generation of home builders will most likely latch on to labels reading “Energy Star” or “LEED” to build a brand that attracts buyers and investors. “The green movement is getting an enormous amount of attention,” says James Hackler, program manager for the Leadership in Energy and Environmental Design (LEED) program for the U.S. Green Building Council in Washington, D.C., which is currently piloting a residential sustainable building rating system following success in the commercial realm. “It’s getting to the point where big builders are being asked, ‘Why aren’t you green?’”
By the end of 2002, U.S. consumers had purchased more than a billion products qualified by the federal Energy Star program, and more than 100,000 homes had earned an Energy Star certification, a remarkable (and telling) achievement for a “brand” with only a 20-year history—and challenging dealers to stay current and provide an adequate inventory of products that meet those standards.
As traditionally tapped natural resources across the board and around the world continue to dwindle and become more expensive, consumers will crave the cost savings (if before the resource efficiency) of sustainable construction. “Unfortunately, consumers don’t think a lot about energy until it directly affects their finances,” says Alex Wilson, president of Green Building, Inc., an industry watchdog group and publisher in Brattleboro, Vt.
A prolonged period of escalating energy prices, primarily in petroleum and then other energy sources, he says, will drive demand for energy-efficient homes. “And buyers will want to be assured that the home will save energy and money,” he says, thus requiring builders to earn third-party certification (and brand endorsement) by Energy Star, LEED, and other national and local programs.
Consolidation and Technology Builders and suppliers will communicate and transact business electronically to reduce mistakes and speed construction.
Turn back a few pages to the vision of a builder involved in a variety of different housing projects and try to imagine how, given the demand for products and people such a scenario might require, that builder manages it all.
The answer (again) is technology. Though housing is woefully behind like-sized industries in its high-tech investments, companies with more than $1 billion in annual revenues—such as the largest home builders—are the most likely to spend money to get there, according to the Association for Financial Professionals in Bethesda, Md.; currently, 27 of the top 100 home builders bank that kind of cash, compared to just nine of the top 100 dealers.
Already, electronic B2B transactions among compatible suppliers and customers, from purchase orders to delivery schedules and payments, has proven to reduce the cost and errors of rekeying data while also efficiently resolving returns and disputes and lessening data storage and handling issues. A standardized and synchronized flow of accurate and timely information promises to reduce end-to-end supply-channel costs by up to 3 percent, according to a report commissioned by the Köln, Germany–based Global Commerce Initiative (GCI) in 2002.
