Mining the data field: Why the housing market incline and project decline means money in your pocket

This week we’re back to mining our data field, and we discovered a gold mine of exciting industry insights to share with you. We study Buildertrend customer activity to uncover facts and figures that give extra perspective on what’s happening in the construction industry.

Because one million construction professionals have used Buildertrend and two million projects have been completed using Buildertrend software, we have access to a wealth of information. Our team analyzes this data and puts it into bite-size nuggets to help you prepare your construction business for what’s ahead.

Today, we bring you results on how Buildertrend users are on-trend, or even slightly above, with national trends. We evaluated our Buildertrend user data and one outside source to determine that while housing prices have jumped from 2019 to 2022, construction jobs per builder have declined.

With housing prices soaring and construction jobs back to where we were pre-pandemic, what exactly is the key takeaway?

Builders are now able to charge more per job. And with the help of Buildertrend construction software, you’re also able to streamline tasks with the help of tech.

Home sale prices have increased 33%

Based on a sample of Buildertrend users, median home sale prices in the United States have risen approximately $110,900 or 33% from 2016 to 2022. Pre-pandemic housing prices fluctuated a bit but stayed within about a $20K range.

Since 2019, housing prices have been on the rise. Prices rose slightly from 2019 to 2020 and took a sharp 21% increase from 2020 to 2022. In 2022, we now sit at an average home price of $440,800.

Utilizing user data and taking a big picture look at the numbers, we can start to put together what this means for your construction business. Keep reading to get the full picture on how this data relates to your bottom line.  

Median home sale prices in the United States are roughly in line with Buildertrend users

Median home sale prices on the national average have also risen from 2016 to 2022. This data shows us that Buildertrend users are close to the national average.

In the chart above from the Federal Reserve Economic Data (FRED), we get a little more detail on the ups and downs by quarter. Overall, it seems to follow the same trend as we see from Buildertrend users – a steady and steep incline in housing prices from 2020 to 2022.

Jobs per builder are the same as 2019

We used our Buildertrend data to chart out jobs per builder from 2019 until 2022. This reflects the rise and fall of jobs per builder. As housing prices have increased, jobs per builder also rose on a steady incline. Prices hit their peak in 2021 before starting to steady out to where they were at pre-pandemic.

We’re back to about where we were in 2019, but the difference from 2019 is that home prices are up at least 33%.

Jobs were at their peak in 2021 and have been steadily declining with a slight uptick in the first quarter of 2022.

Key takeaway

The takeaway here? No need to panic.

As we move into a possible recession, jobs may slow, but you can charge more for your work.

Why? The increase in home prices is greater than the reduction of contractor jobs.

We can determine that the rising price in housing will offset the reduction in work per contractor and total compensation should continue to trend upwards.

The average job per contractor has gone down 11% from 2019 to Q3 2022, but the average increase of home values is about 33% for Buildertrend users. Consider this difference as extra money in your pocket. The appreciation in home values has offset the reduction in jobs per contractor.

Keep up the good work, and your sales will stay on track or grow. Even though project counts are going down, your total revenue opportunity is increasing because of the appreciation of home values.

Our data mining shows that builders are able to price out jobs at a higher value, and Buildertrend users are showing very similar data to the national average.

Let Buildertrend help make your construction business even more competitive. Our construction project management software can help with hitting deadlines, meeting budgets, managing leads and client communication – to name a few.

Schedule a demo today.