The Assembly Line of Homes
Issue 43 - July 30th, 2021
On December 1, 1913, Henry Ford installed the first moving assembly line for the mass production of an entire automobile. His innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes.
Will we ever see a similar process for homebuilding in the next decade?
“Homebuilding assembly line company reduces time from production to move in day from 14 months to 3 months.”
In the home-building world, there are numerous companies attempting to replicate this assembly line process for home construction. It is a lot harder than assembling a car in this fashion, but I am hopeful for the future for this part of the construction industry and housing market in general.
In theory, it makes a lot of sense for consumers who could customize a home in an online portal similar to building a car online today. The homeowner could pick out every single detail that would go into their future home, and all they need to do is identify the land and make sure permits etc. allow for the home on the lot.
The problem currently in this market is the cost of building homes in this fashion is still far more expensive than the traditional building route. There are also uphill battles with permitting and zoning rules with municipalities all over the country that need to be changed and adapted to allow this industry to truly scale.
Big ideas and innovations have to swim upstream to get mass market adoption, and this is one sector I am a big believer in as the world moves forward.
Consumers in today’s world love customization options, and I would love to be able to go through this process below to build a home from scratch:
Bedrooms and bathrooms?
Pool?
1 story or 2 story?
Garage?
Choose a style
Outdoor fireplace?
Imagine all of the other fun features you could pick and choose as you move through this process…
Newsworthy Links To Share
Will Smith and Jay-Z participate in $165 million dollar funding round for home-financing rent-to-own startup Landis. If Landis’ technology determines a mortgage qualification could come within the 12- to 24-month period, the company will give the customer a budget for a home, which Landis then moves. Next, the customer moves into the home as a renter and a Landis coach works with them to become mortgage-ready. Once the customer reaches the mortgage state, they buy the house from Landis and switch from paying rent to paying a mortgage.(Finledger)
Don’t sleep on iBuyers. A new report out this week showed iBuyers are making super competitive offers in a lot of markets and most are not that far off from the true market value. In the past, iBuyers would offer slightly under market value for the certainty of a transaction moving quickly. iBuyers are dialing in their operations as they continue to expand and more and more homeowners are considering selling their homes in this non-traditional fashion. (PR Newswire)
Cloud-based brokerage Real continues to gain steam since going public recently and now counts over 2,500 agents across 31 states. (Inman) (REAL website)
Austin,TX was 'the biggest winner' of COVID tech migration. Austin has regained 97% of its lost jobs from spring 2020, according to the Austin Chamber of Commerce. Unemployment was a seasonally adjusted 4.6% in May, down from a pandemic peak of around 12% in April 2020. Company relocations added 12,421 new jobs last year, a record high. The housing market is one of the hottest in the country, with demand soaring from out-of-state arrivals. Studies show there wasn’t a California exodus to Texas, but Austin has benefited from company expansions and tech migration.(San Francisco Chronicle)
Podcast worth checking out: “How I Built This with Compass CEO Robert Reffkin”.
Robert Reffkin had a hard time fitting in when he was growing up: raised by a single mom in Berkeley California, he was both bi-racial and Jewish, and had to learn to "feel comfortable with being uncomfortable." Even though he was a self-described C student, he was admitted to Columbia and landed a series of prestigious investment banking jobs, but often felt like he was failing.
Then in 2012, Robert was tasked with writing a business plan as part of a job interview, but the plan was so intriguing that he was encouraged to launch it as an actual business. So with a partner, Robert launched Compass, a real estate company that focused on building technology to make agents' jobs easier.
Less than ten years after launch, Compass is a publicly traded real estate brokerage with about 20,000 agents, valued at around $6 billion. (NPR)