The private home building industry does not have adequate access to the debt side of the capital market. There is access to equity, but that equity is searching for a yield that is unattainable without debt. This problem will worsen as the housing market recovers.
The innovation I’d like to see is a modern take on the savings and loan institution, a bank focused solely on the housing industry. This would provide the American public another place to save money, backed by federal insurance. More important, it would provide developers and builders—not day traders, not commercial developers, not hedge funds—a place to obtain construction loans.
A modern savings and loan that is capitalized to keep debt on the books would provide a greater connection between the capital and the asset throughout the process, solving problems as they occur and reducing the chance of default. Our company is fully capitalized, but we could certainly use some new debt as well as a new source of home loans for our buyers.
With the tremendous strides in technology over the past decade, there is significant opportunity to improve, streamline, and automate communications with clients, co-workers, and associates. These opportunities offer many benefits, from marketing efforts to construction quality control.
We utilize Web-based solutions for company newsletters and communicating project information. Currently, we are working to develop more Web-based systems that would allow us to use our in-house systems to communicate with everyone involved in a project. That system would limit information to what is applicable for each user and provide it in a simple, easy-to-find format. The system will have automated indicators and reminders as steps are due, to keep each person on task and every project on schedule.
Having current information and instructions at clients’ fingertips empowers them and gives them confidence in the system and their priorities. By providing real-time access to plans, specifications, details, and scheduling, trade partners have the information they need to support us to their fullest.
Innovation is a challenge in an industry that builds based on practices that date back to the pyramids.
We never understood how a high-dollar volume business with a low number of transactions and tremendous barriers to entry spent so little on research and development. Centerline Homes and the rest of the industry are long overdue on spending R&D dollars for market intelligence that can create energy-efficient livable designs that are government recognized (not supported), and make existing inventory obsolete.
Centerline Homes recognizes that innovation created by technology can go from enhancing the selling experience to decreasing the number of days in the cycle time to build a home. We are continuing to improve our software and Web-based portal to take the buying process into our system from the first time a client walks in the door until we respond to the last warranty item.
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