Tim Costello, chairman and CEO of Builder Homesite, spoke to a sold-out crowd at the 2011 CEDIA EXPO about learning to thrive in the “new normal” economy we live in.
Builder Homesite’s Tim Costello returned to CEDIA EXPO to deliver this year’s keynote address.
“Why are we all here in Indianapolis?” Costello opened up with rhetorically. “We’re here because we want to learn.”
Costello shared his three decades of homebuilder market experience to discuss the “profound changes” that have taken place.
He used the first half of the presentation to explore key demand signals, such as buy, build, and remodel; wealth creation and concentration; demographics; and the economy. The latter part of the keynote identified 10 opportunities that have emerged driven by the dramatic industry transformations the CEDIA channel has experienced.
Costello made sure not to mince words in his economic report, which anyone that caught his 2010 keynote in Atlanta will also remember. Not only did he warn the audience, but CEDIA chairman Randy Stearns also offered a cautionary note that this wasn’t the cheeriest speech, but despite that, “I think we’re in for some exciting times ahead,” he says.
Despite the negative element of the first half of the keynote, he believes CEDIA dealers are well equipped to adapt to the changing tides because of the basic product technology in the industry and the way it has historically been in a state of constant evolution. He noted the successful transition the industry has made to mobile products and tablets.
Costello proceeded to detail how 25 to 30 percent of all U.S. homes are underwater, seven million households are behind on their mortgages, and a series of statistics on mortgage delinquencies and foreclosures, as well as new home sales. One silver lining he outlined is that the high end begins to recover first. Costello continued to sprinkle a fair dose of optimism throughout all the gloomy data. “We should be able to master these changes and command our ships through these waves and currents safely into port.”
After concluding the “gloom and doom” portion, Costello discussed how to attract the small pockets of great wealth that still exist in this country despite the dismal housing and employment outlook. The 10 such opportunities for the new normal were gracefully aging baby boomers; green buildings; Gen Y consumers; the minority majority; mobilized and networked homes and apartments; security; religious facilities; the rental market; going where the money is; and operational excellence through eliminating waste.
The key to tapping into most of these markets is in figuring out exactly where the consumers are. Coming from a housing background, Costello continually stressed the importance of knowing local homebuilders association members and their specific projects.
Beyond all the specific market opportunities, the ultimate take home point was about embracing the unique changes the CEDIA channel faces today. And with 25 percent of attendees this year being first timers, according to Stearns, the interest and passion in the industry seems alive and kicking.