The Future of Construction: How volume home builders can improve communication with construction software (Part 3 of 3)
The future of construction: This week, we bring you the third post in our series that highlights expert interviews on the future of construction. The series includes interviews from a custom home builder, a remodeler/green builder and a volume builder.
Did you miss parts one and two of our series? Check out our interview with Adam Copenhaver of CopeGrand Homes and our interview with Bob Deeks from RDC Fine Homes. Both experts discuss the need for building apps in the future of construction.
Ehrenburg Homes Ltd. builds a variety of housing options in the cities of Saskatoon and Regina, located in the Canadian province of Saskatchewan.
The company name is a play on their family name, Ehr, and Ehrenberg Castle built in 1296 near the Austrian/German border. Ehrenburg Homes finds it a testament to quality materials and craftsmanship that the castle ruins are standing over 700 years later.
President Conrad Ehr offers a variety of tips on how to run a large volume building company in this fluctuating economy. He remains focused on never deviating from quality. If that means less homes on the market at a given time, then Ehrenburg Homes adjusts.
Customer service and strong communication falls under the Ehrenburg Home commitment to quality. Conrad shares how Buildertrend’s construction software has transformed their communication process.
Q: What have you seen as the biggest change in the industry in the last couple years?
Conrad: I think consistency is one of the biggest things. Inconsistencies from supply, shut downs and lack of labor have caused a lot of price increases — this as well as government intervention and interest rate fluctuation.
In Saskatoon, our provincial government has imposed a sales tax on all goods. We’ve been through the highs and lows of supply chain, labor, taxation and interest rate changes that have made it very draining on the industry. We have a 5% GST (Goods and Service Tax) on everything and a 6% PST (Provincial State Tax) on most things. This means an 11% tax on new housing.
Q: How has tech altered the way you build? What processes have you digitized?
Conrad: Buildertrend has really transformed how we communicate during the different phases of construction. In our province, there are two major cities. We’re operating in Saskatoon, and we just moved into the second largest city, Regina, and have started construction there.
Buildertrend has helped us keep our communication consistent in both cities and migrate our construction process to Regina. Buildertrend’s construction software has made it possible to basically copy and paste our process to another market.
Q: How do you see your business changing in the future with the use of tech?
Conrad: I think tech will help the industry evolve and become more efficient, but the necessary capital to make that happen will become quite tedious. I don’t think we will be the one front loading a lot of tech in the future.
We just went to a seminar talking about robotics in the future of housing manufacturing. There are some pretty neat concepts. I think we’ll see more manufacturing in the assembling line and less on site.
One of the benefits of being a home builder is you can have a large impact with a small overhead. With tech it’s about communication and we’re moving in the direction of tech becoming more integrated.
Q: You have 52 homes for sale right now. How do you stay on top of it all with the economy ‘doom and gloom’?
Conrad: Well, 52 homes is about a three to four-month inventory for us. I typically like to have about 100 homes for sale at a time. In terms of inventory, we’ve actually reduced the number of homes for sale. As interest rates rose, we removed a lot of the homes we had for sale.
The 52 homes we’ve advertised right now will quickly sell by showing them our quality product. Whenever we go through highs and lows in the market, the key is the quality product. We never deviate from that.
In regards to ‘doom and gloom,’ I think our provincial market will actually be OK. Our economy is diversified and includes oil, gas and agriculture — which are all actually really strong around us.
Q: What’s the economic forecast for Canada?
Conrad: The war in Ukraine has had a direct impact on our economy. Saskatoon is the leading producer of potash, and Ukraine was number two. Because Ukraine was a close second, we’ve had to pick up the slack and our province has seen a huge increase in employment.
We are a small province with 1.4 million people. While we’re doing OK economically, there’s still an issue with consumer confidence. Clients are not aware of how little inventory there is. Unfortunately, this will make it challenging for consumers in 2023.
Q: What processes have you streamlined with the use of a construction app?
As a builder, all we do really is communicate. Primarily, our business is to connect with subcontractors and to buy supplies. We’re always buying and selling and communicating with trades. When the product is ready, we correspond to get it installed.
We buy land. We buy labor. We buy materials. We’re a communication company just as much as we are a builder.
Q: What trends in the construction business do you find worth paying attention to? And which ones can we ignore?
Conrad: We’re 100% solar ready and 100% secondary suite ready.
Right now, people want to finish their basement as a secondary suite to rent it out. This is helpful with the interest rates being so high. People can rent that suite out and make $1,000 per month.
If there’s a solar option, this can offset their electric bill $80-$100 month.
From a consumer’s perspective, we’ve paid attention to buyer’s needs on savings. There’s no flashy new thing we’ve done — we’re just concerned with the quality product.
Q: Do you have advice for other builders navigating today’s market challenges — supply chain, rising labor cost and inflation?
Conrad: I think it’s really important right now to communicate your opinions to your local politician.
We’re a good advocator for our business. If there’s an issue that’s affecting us as a business, we’re sure to communicate that to our local home builders association.
First, they make sure it’s an industry issue and not just a company issue. Then, they have a direct line to Parliament to communicate these issues.
We’ve seen a lot of change in the last two years — labor, interest rates, price increases — we’ve almost had a decade worth of change in the last 12 months. We want to push it back to our politicians to tell them how difficult it is out there.
Another thing we’ve done is try not to force things. We’re just going to wait and see. It doesn’t make sense to saturate the market right now. Like I said, there’s a decade worth of change so let’s make sure that what we’re doing is correct for this market.
Q: How can volume builders, both large and small, prepare for the future of construction?
Conrad: I can use an analogy for this. I coach my son’s soccer team. When we lose a game, that next practice we go back to the basics.
Our industry hasn’t lost, but we’ve had some challenges — lets go back to the basics and just build quality homes for our clients and then go from there. That’ll be our approach anyways.
Q: What are the construction needs for tomorrow’s buyers?
Conrad: I think buyers want consistency. What they want in a home is a place to go where they’re comfortable. Just having a well-built home. Basic homes priced well are what sells.
Tech streamlines communication for volume builders
The success of Ehrenburg Homes is a testament to Buildertrend’s construction software and its capability to streamline communication and connect all parts of the business.
As Conrad pointed out, they’re as much a communication company as they’re a builder. The need to be in contact with your people while building over 100 homes is hugely important.
Buildertrend is there to help your company focus on what you do best — building great homes for your clients. Schedule a demo today.
Want to contribute to our blog?
We believe in building a community for construction – sharing is a big part of that. If you have industry expertise or a story to tell, your voice can reach thousands here.