Adobe Stock

The residential construction industry is ripe for change, George Casey said as part of his keynote presentation with Margaret Whelan at the ProSales 100 Conference in San Antonio, Texas. While the changes may seem sudden, Casey, the CEO of Stockbridge Associates said, changes have been developing below the surface for decades.

“The structure of the players will change rapidly and there is huge opportunity, and risk, in this change,” Casey said. “The forces driving behind these changes are kind of like a volcano. The dramatic explosion is actually the result of a lot of pressure and force that has been going on for years and decades under the surface.”

Whelan pushed back against the notion that innovations such as modular housing will be disruptive, suggesting instead such innovation may be confusing but also saying old ways will not open new doors. Whelan said the construction industry is the least digitized industry in United States, making the time for innovation now.

She said the housing industry is highly concentrated, with more than half of the new starts in the country happening in California, Texas, and Florida. Such concentration makes off-site construction a more attractive option. Additionally, rising costs in construction coupled with unchanging labor constraints make off-site construction a more viable option. Several new product initiatives, including BMC’s Ready-Frame, are tapping into prefabrication solutions.

“The nice thing about low adoption rate in product is that it gives you the chance to get it right,” Whelan said.

Whelan said builders are increasingly using prefabrication for elements of the building process, either roofing, trusses, or wall panels, and many would prefer turnkey construction if it was an option. The future of change is coming soon, she added, but there are things those in the LBM industry can do to prepare for these changes.

“Get people outside the industry, plan for the long term, know that it is going to be hard—change is going to be hard—but you have to find partners you can collaborate with and be flexible,” Whelan said.

Casey said while the housing industry is a long way from factory-built homes being the only option, factory-built options will increase in use in the coming years. He said that changing landscape of the industry means future builders will operate in the shelter business, will search for ways to serve customers for life, and reduce the number of sub-contractors they employ by finding tradesmen who can perform multiple services. Those in the industry will increasingly focus on improving manufacturing efficiency, ensuring material quality, and reducing home cycle times, Casey said.