How A Pandemic Fundamentally Changed Our Business
As far as I know, there’s no playbook for dealing with the aftermath of a pandemic.
Even as the experts struggle to find new adjectives to describe the unprecedented events we all experienced over the last 18 months, recent indications suggest that we may finally be nearing the threshold of a post-pandemic return to normalcy.
Vaccination numbers continue to rise. COVID cases, and the severity of those cases, are on the decline. Restrictions are being eased. Workers are returning to their offices. In-person events are on a comeback. While the safe bet may be to remain cautiously optimistic, the progress is certainly positive, if not a bit tentative.
But that’s how it’s been since the beginning. If there’s a trend that emerged in the past year, it’s uncertainty. Who would have ever expected that a potential economy-ending apocalypse would have resulted in the creation of historic consumer demand for housing? Yet despite all the unknown territory that we have collectively navigated, there is one undeniable truth that has emerged from all of this. The pandemic has fundamentally changed our business. And for many of us, far-reaching effects will persist long after the pandemic is behind us.
Consumer Expectations Have Changed
Some of the earliest adaptations we had to make as an industry were in response to rapidly shifting consumer preferences. This time the driver was more than convenience, it was health and safety. Physical showings and open houses were replaced by virtual tours and video walkthroughs. Walk-ins became scheduled video conferences. In-person closings went curbside. For many in our industry, this was uncharted territory. There was a lot of “figuring it out”. It involved changes to processes, procedures and our own comfort with technology.
Nowhere was the shift in preferences more apparent than MHVillage, where our website is on the front lines when it comes to identifying rapid changes in consumer sentiment. Like many companies, as the market pivoted we responded to the needs of our customers by developing a virtual open house product, supporting new virtual tour formats and making it possible to include more photos across our listing categories, all in record time. These changes were essential to serving the needs of our customers, so they could continue to serve their customers.
Even as the pandemic subsides, these enhancements are helping to make the consumer experience better. Much like online order pickup, same day delivery, and movies that stream the same day they hit movie theaters, many of the improvements companies made to to serve their customers during the pandemic are here to stay. They’re no longer optional. They’re expected.
The Concept of Home Has Changed
Because of our leadership position in housing affordability, manufactured housing has always been at the forefront of preserving the American Dream. That dream is more important than ever in a post-pandemic world. Home is security. Home is comfort. Home is uniquely individual.
The events of the past year have brought the concept of home into even greater focus as kitchen tables became classrooms and bedrooms transitioned into work spaces. What consumers want in a home has evolved. More space. More function. Multipurpose areas. Outdoor living. It goes beyond having a home office for those able to work remotely. For some, economic realities have necessitated adult children to move in with their parents. Likewise, many adult children have had to become caregivers to one or more of their aging parents. People have taken on new hobbies. Started home businesses. Turned that formal dining area into a fitness room. Retired earlier than anticipated.
The demands on the home are greater and will shape the features and amenities we build into our product for years to come. And it’s not just the product. It’s also the location. Suddenly, people don’t have to live near where they work. They can live on a lake. Or in the woods. You’ve heard about the exodus away from the major urban centers. That trendy, pricey apartment near downtown became less appealing when everything was closed. Location has always been everything, and the pandemic has prompted consumers to evaluate where they live as much as how.
Interest in Manufactured Housing Has Changed
There’s a well known aphorism that “a rising tide lifts all boats”. One might say that’s true about the overall housing market and the manufactured housing industry.
As site-built housing inventories remain at all time lows and residential real estate prices continue to push the boundaries of sanity, let alone affordability, interest has slowly turned to manufactured housing as a potential solution. Whether it’s the desire for a more affordable alternative, a better method of building a second home or an accessory dwelling unit (ADU) as an income property, the pandemic may be the catalyst for sustainable heightened levels of interest in manufactured housing, at least as long as the residential real estate market continues its ascent.
Point2, a division of Yardi Systems, recently cited that 23 U.S. states have seen manufactured home searches increase by 50% or more according to Google Analytics data. This increased activity in consumer interest is mirrored by our internal data at MHVillage, which saw year-over-year increases in search volume ranging from 52% to 149% in many markets at various points during the pandemic.
While the roller coaster ride that was the early weeks of the pandemic has stabilized, the year-over-year increase in national search activity continues to hold in the 35 to 40% range and shows no signs of abating. Backlogs are evidence of that. Backlogs to get homes. Backlogs to get homes delivered and set. Backlogs to get on-site work completed. This may be the new normal for a while.
Our Embrace of Technology Has Changed
Our industry has historically not been one for early adoption of technology. When the day comes when manufactured home buyers want to pay for homes in cryptocurrency, I can assure you that MHVillage will be one of the first to support it, but as an industry, we tend to favor a more decided approach. We like what’s reliable, tested, proven. All things that tech advancements often are not.
That said, the industry has been on a technology trend. Pandemic-fueled business growth has necessitated changes to internal systems to support higher levels of activity. Months of travel restrictions put a renewed emphasis on everything from property management systems and online resident screening platforms to remote monitoring systems and apps where residents can submit concerns or maintenance requests.
We all seemed to take the opportunity to find better ways to run our businesses.
At the very least, perhaps priorities have shifted, affording time to tackle long standing projects that just never seem to progress among the usual gauntlet of in-person meetings, site visits and industry-related travel. Our technical team has done more integrations with third-party software on behalf of our clients in the past year than we’ve done in the five years previous. This isn’t going to go away. If anything, success with technology is going to accelerate these decisions.
The Cost of Doing Business Has Changed
One of my colleagues recently forwarded me an internet meme that read: “I have a sheet of thick plywood. Will trade for 2018 or newer Corvette. No lowballers. I know what I have”. Has anyone seen the price of lumber lately? Seriously, it’s no joke.
What goes up is supposed to come down, but sadly that never seems to be the case. At least not as quickly as anyone would like. Everything has gotten more expensive during the pandemic. Raw materials. Freight. Services. Labor. Labor, that is, if you can find it. I’ve read a number of articles recently that pretty much said the combination of heightened demand during the pandemic coupled with increased order volume for the impending recovery has created backlogs for everything, everywhere. Hot tubs. Generators. Pickles. Yes, pickles. Apparently they can’t get the jars.
I missed the boat on patio furniture last summer, so when the order I placed then finally arrived a couple weeks ago, I thought I was in good shape. Until I went to order another matching piece. Backordered until October. Oh well, maybe next year. I don’t think there’s anyone who hasn’t been affected by a shortage, surcharge or delay related to at least one aspect of their business. It takes a toll on productivity and on profits. From the looks of demand, it may be some time before there is any relief.
Ultimately, and perhaps most importantly, the way we do business has changed. It had to, and mostly for the better. As we near the turning point of the pandemic, we may all be able to finally breathe a sigh of relief and get back to the usual array of non-COVID challenges. We’re incredibly fortunate, as an industry, and as a company. I, for one, will do my best to never lose sight of that. There may not be a playbook for dealing with what comes next, but that’s the best part. It’s an opportunity to write the next chapter of our own future.