Overcome Housing Industry Inertia

moving companies

Home sales are down and might stay that way for a while. With fewer people moving, there’s less business for your moving company. To make it through this slump, moving companies need new strategies to overcome the housing industry inertia.

The Housing Industry Slump

According to Reuters, existing home sales in the U.S. dropped to a 13-year low in September 2023. Between a tight supply and rising interest rates, many would-be first-time homebuyers can’t afford to purchase a house. As a result, existing home sales dropped by 2.0% and home resales by 15.4%. Applications for home loans have also dropped, suggesting that sales may decline further.

U.S. News says new construction has also slowed due to high mortgage rates and reduced demand. Housing starts dropped by 11.3% in August, reaching the lowest rates since the summer of 2020.

The Impact on the Moving Industry

IBISWorld says moving industry revenue has decreased at a compound annual growth rate of 0.7% over the last five years. The housing market slump is a significant cause. When people buy homes, they need to move their belongings, leading to an increased demand for moving services. When people can’t afford to buy homes, they are more likely to stay in their current residences, which causes the demand for moving services to decrease.

Adapting to the Market

Anyone who’s hoping for a quick reversal of the current slump may be in for disappointment. Additional declines in moving industry revenue are likely because home sales are expected to decline further. Industry leaders need to adapt. There are two ways to do so.

1. Do Things in New Ways

Processes that worked in the past may no longer be adequate in the current market. Moving leaders need to look for ways to improve and save money. The goal shouldn’t be to cut corners – that will only lead to unhappy moving customers and reduced business down the road. Instead, moving companies need to find ways to innovate.

Technology is a great place to start. For example, most moving companies still require customers to call and deal with a representative to book a move. In other industries, online booking has become the norm. Many customers prefer the convenience of this approach. Who wants to wait until normal business hours and then be put on hold when they could just go online anytime? Adopting online booking can reduce administrative costs and help movers differentiate themselves.

2. Create New Revenue Streams

Moving companies are seeing their revenues drop. To stay profitable, they need to reverse this trend. Some movers may try to buckle down and find more business, but since home sales are declining around the nation, this will be an uphill battle. A smarter approach is to find new revenue streams.

Third-party moving insurance is a prime opportunity. Moving insurance protects customers. If something goes wrong, a moving insurance policy can prevent ugly disputes and bad reviews. Even better, by offering moving insurance, movers can tap into the resulting revenue.

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