The Phoenix Housing Market Letter reported recently that the average cycle time, from permit to closing, for builders in that market had expanded to 229 days in October 2005, from around 120 days five years ago. “There's very little that builders can do about cycle time,” says R.L. Brown, the newsletter's publisher. By their actions—or lack thereof—many builders and contractors would seem to agree. One extreme example is a Maryland builder that now takes 156 days just to get to the drywall stage of construction, versus 140 days to complete an entire house five years earlier.
Robust demand and rising home prices can make up for a multitude of operational sins. But construction delays often signal larger, more serious management flaws that manifest themselves in shoddy workmanship or communication breakdowns at one or more points of the selling, designing, building, and closing stages.
The following stories provide numerous examples of builders that are addressing these problems and are successfully shaving days and weeks from their cycle times in the process. Tools such as prefabricated building products and process-management software are facilitating the smoother handoff of construction stages from trade to trade, as is a greater appreciation for the importance of jobsite supervision.
If buyer demand and prices eventually soften, builders that can achieve production efficiencies could be moving toward sustaining their profitability and fortifying their reputations with customers via more-reliable, on-time delivery of defect-free products.
Learn more about markets featured in this article: Phoenix, AZ.