As residential construction continues to boom, commercial contractors are jumping into the action. Some of the customers driving the boom are first-time buyers—who are making tech-enabled purchases without ever actually seeing their new home.
Strong Demand for Housing
With the residential housing market red hot—and commercial construction lagging due to the pandemic, commercial contractors are shifting with the action. In New York City, for example, Plaza Construction is returning to luxury home building in response to the surge in demand. As CEO Brad Meltzer explained to Construction Dive, this decision was partially in response to requests from commercial clients:
“The demand has been significant,” said Meltzer. “We’ve been receiving calls asking us to do it, as opposed to us chasing clients, which is the normal way business works. We decided, let’s redouble our efforts and focus on it.”
Other general contractors have shifted into the affordable housing market—deemed essential during the pandemic. The demand for homes is creating jobs:
The impact of the pandemic on residential and nonresidential construction has been anything but even. While many commercial projects have been delayed, shuttered or canceled completely, homebuilding has boomed, as buyers seek single-family homes in less densely populated areas away from urban centers.
Employment levels in the residential construction sector are back to pre-pandemic levels, while nonresidential construction has only recouped 60% of the jobs lost from February to April of 2020, according to the Associated General Contractors of America.
The result has been commercial contractors soaking up excess demand for housing jobs.
Tech-enabled home buying is another disruption speeding up the residential housing market. According to The New York Times:
The share of first-time buyers in the housing market reached 36 percent in April 2020, according to the National Association of Realtors, up from 31 percent in 2018 and 2019….Millennials — generally defined as those born between 1981 and 1996 — represent the largest contingent of home buyers in the United States.
Millennials have one extra tool in their shopping arsenal, and that’s their tech-savviness. According to an October survey from realtor.com, nearly half of millennial home shoppers were planning to buy a home sooner than expected because of the Covid-19 pandemic.
The increased pressure on the market has been coupled with the widespread adoption of tech tools that allow buyers to not just browse real estate but also apply for loans, finalize deals and even have documents notarized, all while social distancing from their sofas. Sixty-three percent of buyers who used Redfin in November and December went on to make an offer on a home they hadn’t seen in person….
Available In Every State: Support for Bidding and Bonding
As building contractors of all kinds pivot to take on new types of work at accelerated paces across the country, Colonial Surety Company is ready to help. A leading, national provider of surety bonds, Colonial makes a wide portfolio of digital bonds instantly available to contractors from a user-friendly online platform.
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All contract companies that complete our brief pre-qualification application receive, for free, Dun & Bradstreet scores. Those who pre-qualify for a surety line of credit, go on to upload a few more documents that help Colonial better understand their operation and underwrite the Partnership Account®.
Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.