Trends and innovation in the home building market


A slower economy, increasingly savvy buyers, and new technologies are combining to cause change in the home building market.

But some builders are finding opportunities to experiment and innovate.

Custom market opportunities

Since the economic downturn, smaller builders are finding banks increasingly conservative. "In the past, someone building 10 or 20 homes could purchase and finance land, and then build. But land is expensive and banks are now quite tight on their lending restrictions; often they want to see sales before they'll proceed," says Doug Overholt, Power Smart New Home Program representative. Overholt says this means increased costs and pressure, where only larger builders with higher capitalization are able to gain the financing required.

Small builders are moving to the custom market, where they don't have to deal with land costs, bridge loans and timing pressures. But they do have to deal directly with buyers. There's more competition now in the custom market, which means builders need to be able to appear knowledgeable. That's driving another trend: education.

Green education

Smaller builders are beefing up their knowledge of building science, particularly elements of green building, which any buyer can research online. Customers aren't just looking to buy a product — they're educated and are looking for builders to deliver the home that they want, says Overholt. "You're probably dealing with a fairly educated clientele, who want to be able to ask you question, or confirm the answers they found on the Internet."

Sustainable design

To offer better quality, some builders are going back to what Overholt says used to just be called good building practices — elements that emphasize energy efficiency and provide value to discerning buyers. Aligning windows with bearing points to eliminate excess lumber in the wall, which decreases insulative value, or increasing air sealing and balanced ventilation systems wherever possible. Some builders are ensuring homes are designed so they're ready to easily accept green technology in the future, like solar panels. "There's a drive to make homes as green as possible, as affordably as possible," says Overholt.

Collaboration beyond building

For some builders, there's strength in numbers. Collaborations such as Kamloops Laneway Home Builders are bringing together individuals with complementary skills to offer different housing forms — a sort of virtual company that Overholt says may become a more common approach in future.

Local leadership

Collaboration brings a stronger voice in advocating for new housing standards and municipal bylaws. "The Kamloops group is working to raise the issues and provide information about how laneways can be positive," says Overholt. Another builder is focusing on a Passive House build so his community can tour it, and learn from it up close.

Another way some builders are leading is by experimenting with technologies themselves. By putting solar panels on your own home, you learn how they work, you understand the pros and cons, he says. Builders really walk the talk when they're helping buyers decide on features in their homes.

Energy efficiency

With discerning buyers looking for quality, and a need to differentiate in the market, Overholt sees a continuing trend to energy efficiency. "Some builders have experience with net zero building, others with passive house, others are just following general best practices for energy conservation," he says. It all comes down to a higher attention to envelope design and being able to downsize the HVAC systems as a result. People used to pass over these new technologies and approaches because the market would snap up anything you built as fast as you could finish it. Now, it makes more sense to build in quality and efficiency up front and it's getting easier to do as the market adapts.