Spring selling season – accurate or not as a time-period within which most households inclined and financially able to buy a new home in 2023 will decide to do so – is a tale of three parallel realities for firms vying for their piece of the action … and battling for dear life.

Based on who’s losing sleep at night or who’s resting well, everyone’s fully aware that the filter that matters most right now in defining which reality you’re navigating challenge, risk, threat, and opportunity is capital C Capital.

In two of those parallel universes, operators and enterprises either drawing on public equity and debt or undergirded by a patient deep-pocketed foreign-based or domestic corporate strategic angel. They’re performing – albeit rigorously — with optionality and staying power as a given.

Then, there are the rest. Hundreds, or perhaps thousands of operators that make up two-thirds or more of U.S. new home construction activity, are working with little to no margin for error, grinding each project, each day, each payment out, each booking of revenue in, with a weather eye on credit balances and the small print in their loan covenants. Strings attached to bank financing, privately accessed investment funds, friends and family, country club …  you name it … are tugging nervously tighter.

They’re only not under water if land – some of it purchased in vintages as late as this time last year – on their books proves to be worth what it was modeled at at the time it was purchased.

In addition, the sales benchmarks will provide timely insight into real-time changes in the market as it relates to pricing and absorption. This will allow the sales team to pivot when a market change occurs based on accurate data.

Finance

When looking to acquisition or expansion into new market areas, the finance team needs to know the operating dynamics (cost / ASP / GM% / absorption / Cycle time) in order to complete the proforma for the executive team to use as a basis for a decision.

The Common Data Model benchmark platform allows the finance team to review the aggregate metrics across all these dimensions in real-time for the given market area.  They do not need to spend weeks working with consultants to research and document these findings, but instead can run several reports to get the underlying basis for the market area in question.

Information Technology

IT teams spend a significant amount of time managing integrations to 3rd-party platforms across an organization. For homebuilders, it is critical that the ERP has timely and accurate sales and construction metrics that are typically generated in 3rd-party tools. These integrations are business critical and there is typically a dedicated resource who manages these.

In an environment where the Common Data Model is used, Constellation will have a pool of connectors pre-built for the most common homebuilding 3rd party platforms. Constellation will own the development, maintenance, and operation of these connectors, thereby freeing up internal homebuilder IT resources to focus on value-add for the builder.

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