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Natural Disasters Fuel Opportunity For Home Builder and Contractor Marketing

2017 was one of the most destructive years on record according to the National Oceanic and Atmospheric Administration booking over 306.2 billion dollars of damage.

With over 16 separate billion dollar events, the housing market was not business as usual across the U.S. A recent study by realtor.com revealed that storm affected areas saw a delay in -or disruption to - an estimated 18 to 32 percent of home sales in the month of the disaster.

Any delay in the construction industry usually spells disaster but builder and contracting marketers should focus on making lemonade in 2018 from last year lemons.

2017, A Record Breaking Year For Natural Disasters

There were 16 weather and climate disaster events with losses exceeding $1 billion each across the United States during 2017. Resulting in the deaths of 362 people, these natural disasters include 1 drought event, 2 flooding events, 1 freeze event, 8 severe storm events, 3 tropical cyclone events, and 1 wildfire event.

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The last record-breaking year was 2005 due to the impacts of Hurricanes Dennis, Katrina, Rita and Wilma. These monumental natural disasters affected the central and west coast communities of the United States.

Natural Disasters Cause Short Term Losses

According to Javier Vivas, director of economic research for realtor.com, “...when an event hits, what does it look like with online searches for homes? We found that it did hinder sales and demand in those local markets. About one in four sales were delayed or disrupted.” These findings are based on “expected sales or page views, anticipated sales or page views for the month if no disaster occurred. Estimates are based on previous month’s actuals and account for seasonality.”

This isn’t a new finding.

Hurricane Katrina, responsible for killing more than 1,800 people when it struck the Gulf Coast in 2005, displaced about 750,000 households. Four years following the disaster, homes sold in New Orleans were found to have dropped 23 percent from May 2008 to May 2009 according to the Daily Real Estate News.

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Disaster Market Rebounds

As waters rise, one might ask why coastal real estate prices stay afloat. It seems no matter the cost of insurance, we just can’t stay away from disaster prone real estate.

Let's take a closer look at Houston, Texas. Hurricane Harvey pummeled Houston and left many homes with flood damage in 2017. Just two weeks after Hurricane Harvey made landfall in Texas, Redfin data analysts and real estate agents saw home buyer and seller activity rebound. Looking ahead to 2018, the Houston Texas real estate market is poised for growth. According to Bloomberg “prices and rents are expected to rise given the sudden housing shortage. Out-of-state investors have even started to swoop in to acquire damaged homes to repair and sell or rent.”

When a natural disaster may spell doomsday for some, these short-term catastrophes spell pay-day for others. In Houston’s case, the storm caused an existing real-estate shortage in an already hot market. Job growth continues to climb, creating more economic opportunity. 

Making the Best of Tough Circumstances

Natural disasters coupled with economic factors can have disastrous effects to a local economy - or they can present the perfect environmental circumstances for marketing construction services.

What once was built often now requires demo or repair. This is the perfect opportunity to position contractor services to service disaster affected areas. Beyond excavation and tree removal, other ancillary services such as storage facilities see a boost in business. In fact, the self-storage industry is one of the fastest growing segments of the commercial real estate industry, covering the U.S. more than three times the size of Manhattan in storage units.

Contractor marketing can extend beyond the obvious tree removal and roof repairs. These life-changing events can also spurn growth in the remodeling industry.

  • Once homeowners have established what insurance will cover, they will naturally start looking for a contractor.
  • This rebuilding fuels opportunity at all levels from contractors to suppliers, homes and businesses require rebuilding. “Entering 2017, most members projected 5-8% increases.” Many are exceeding that range. “Assuming no cataclysmic global event and interest rates remaining low, 2018 looks like 10-12% growth,” SEN’s Leah Peterson reports.
  • Why the bullish outlook? This is in part due to natural disasters in Florida, Texas, the Caribbean and Northern California, where there will be massive rebuilding in 2018.
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Responsible for positioning your contractor marketing for this rosy outlook? First take the tactical approach.

  • If you are a supplier, ensure your product supply chain. Disaster affected areas can suffer from delivery delays and other environmental challenges. Do you have boots on the ground? Ensure your crews and equipment are ready and able to perform where needed.
  • If supplies and crews are in place, take a moment to ensure that your customer’s experience doesn’t include frustration coordinating with insurance representatives. Ensuring a smooth estimate process helps to ensure payment is also complication free. Remember, your customers may be remodeling, but this opportunity for you was not initiated by your customer, rather the decision to remodel was dictated by mother nature.
  • Lastly, fine tune your marketing strategy to include personas and buyers journey’s affected by natural disasters. Everything from the psychology behind the purchase to the keywords used to search out your services will be affected by the circumstances your potential customers now find themselves.
  • Review your existing persona profiles and make adjustments where necessary. Not sure where to start? Download our persona checklist as a quick check to use when reviewing your ideal customer profiles.

When the wind howls and the waters rise, the short term losses may feel devastating. Real estate inventory shrinks and the economic vitality of an area comes to a grinding halt. But remember, not all is lost. Wherever there is loss, opportunity also arises and given the right conditions your construction business may be ideally positioned to capitalize on the calm after the storm.

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