The real estate industry, it is a-changin. And it’s the generation known as “Y” or “Millennial” that is setting the course. As noted in a recent article in Business Insider, millennials are different from previous generations in many ways. For example, they want text messages rather than calls from their Realtors and thrive on the ability to research everything before ever walking through the front door. Other articles have noted that millennials are looking for affordable, sustainable housing, a market that did not exist until recently. Robert Murray, chief economist and vice president of Dodge Data & Analytics, forecasts that affordable, multi-family building construction will to increase by another 7% to 405,000 units in 2015.
What does this mean for the precast concrete industry? For one precaster, the signs so far indicate it means good – albeit slightly different – things.
“We plan to construct a number of affordable housing units to plant the feet for precast in areas we currently see no success for the product,” said Stacey Harvey, president of Superior Walls of East Tennessee. “Everyone seems very excited about this since there is not enough for the volume of consumers interested.”
Residential precast projects make up 90% of Superior Walls of East Tennessee’s business. Harvey said precast concrete is gaining steam in the residential sector because owners and architects want a building material that does not require high maintenance.
“They want non-combustible exteriors and something they can dress up with some stone accents or exterior insulation and finish systems,” Harvey said. “They don’t want to have high maintenance costs moving forward and that’s why they are looking at using precast concrete.”
Harvey said this new push has forced the company to change its focus in 2015 from producing precast concrete products for five or six major projects to instead many more small projects. This is an unfamiliar direction for the company, but one that is working and is opening new opportunities.
“The volume of projects has increased every year in our market area for the last three years, but it’s been at a very slow pace,” Harvey said. “I just have to position our product so its attractive to the builder. We have to change our business model and turn it into more of a production base financial model, which is exactly what we’ve done.”
If you’re a precast concrete manufacturer and supply products to the housing industry, let us know how your region is performing in the comments section. We’d love to hear from you.