Page 36 - Green Builder May-June 2020 Issue

Interest in Buying versus Remodeling

“Prices are Holding”

Ken Gear, CEO KG: We put out a call to action on protective makers that they need to do a short term loan
Leading Builders of America gear. As an organization, we conducted an or credit facility so servicers can pay investors.
industry-wide effort, and delivered 175,000 We have seen signs of FICO score increase for
(representing production
pieces of equipment to hospitals and medical home purchases. They are saying not lending
builders, Washington, DC) facilities. That was literally cleaning out stock anymore, unless it is to a super high quality
GB: How is COVID-19 changing things for rooms and backs of trucks. These were masks buyer. This is an issue working hard to educate
production builders? and eye protection. The production builder folks on the hill.
KG: These are unprecedented times. Everyone CEOs put out a call to get this equipment to GB: Do you foresee permanent change in
is doing his or her best to comply, with the the medical industry, and we are very proud the industry going forward?
number one issue being the safety of workers of how the industry responded. We set up 20 KG: I guess what I would say this is very
and customers, and making sure protocols drop off spots in the top 20 markets. Some different from the great recession. I think
are in place. Clearly, there has been a drop in contractors personally delivered equipment reaction will likely be different as well. We had
customer traffic through the job sites, but in directly to hospitals. very stable and hot market coming into the year
most places we can stay up and running with GB: What’s the biggest challenge for this time, so there was demand there. Mortgage
social distancing in place. production builders in the coming weeks? standards are tighter, and most people have
We’re seeing a lot of creativity with virtual KG: One of the critical issues now, the life equity in their homes and are not under water
home models, including using Zoom to walk blood of the industry, is mortgage liquidity. like during 2007-8. They have equity and
around with an iPhone and show a virtual tour. We are seeing what the government did with the housing supply is tighter dramatically.
It’s challenging, but most of showings are by the CARES Act, and providing forbearance Fundamentals are good and builders will look
appointment, with no one else actually in the [for renters and home owners] and that is forward to getting back to work.
home. Trades are allowed in the home one at a a great idea in this time. But what about the GB: [But] some financial business can be
time, so ten workers maximum. This may slow servicers? The payment from the buyer goes to done online now, right?
down construction time.
a mortgage servicer, who takes some money, KG: Yes. Because people can’t get together,
GB: Have you been forced to lower prices? and then the rest goes to the investors of there are online or drive-through closings in
KG: To date, prices are holding. Traffic has mortgage-backed securities. Servicers have most states. The notary stands next to the
slowed down, but the crazy thing is that it was to pay the investors regardless of what’s car, or even if they do meet in person, there is
already a great year for the housing market going on. Without the money coming in from Plexiglas down the center of the table. There are
coming into [the virus crisis]. The fundamentals the buyers, the banks are now afraid to take on also Zoom meetings and DocuSign allowing the
are strong. We’re still seeing people out there new loans, so that creates a liquidity problem. notary to watch from afar.
looking, but it is more challenging. Sales are not Mortgage and rents make this system run and
as strong as a few weeks ago. when they stop you can’t expect people in Note: Other online virtual conference
GB: Your organization got involved with PPE chain to meet obligations. formats are probably more secure than Zoom,
gear, yes? LBA is doing its best to explain this to policy including Microsoft Teams. —Editor

30 GREEN BUILDER May/June 2020 www.greenbuildermedia.com

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