DS News

56 C O V E R S T O R Y / S E T H W E L B O R N e property preservation landscape is changing. Here's how the industry is working to maintain its balance. As natural disaster risk continues to increase and regulations continue to change, property preservation has had to adapt. e industry faces damaging waves of natural disasters, cost and vendor management, and a thousand other daily challenges. How can the industry best survive and thrive in the years ahead? THE LAY OF THE LAND Housing remains a bright spot in economic growth, according to commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. Risks to the ESR Group's forecast remain biased to the downside, while trade tensions between the U.S. and China continue to pose the greatest threat to growth, but housing is expected to be a source of strength in the near term. With this improved economic activity in housing, competition between service providers remains strong. However, according to Chad Mosely, Chief Relationship Officer at MCS, competition brings its own complications when it comes to maintaining a top-notch team. "As we are currently experiencing a strong economy, we have seen that finding vendors and employees can often be challenging," he told DS News. "In addition to not having as many vendors and employees looking for work, we are also competing against a robust homebuilding industry." Alan Jaffa, CEO, Safeguard Properties, noted that current employment conditions, at least in the property preservation space, could be impacting costs. According to Xactware pricing trend data, 2018 average property preservation and maintenance retail labor rates rose by an average 4.3% across the board, with drywall installers showing a 10% increase. "e labor market also is tightening for skilled talent for inspector/contractor networks," said Rob Martin, Product Manager for Property Solutions at Xactware. "As volumes decline, it is not as profitable for them to invest time and money in maintaining their mortgage field services businesses." e price of property preservation and maintenance has also been in flux in recent years, according to Martin, and with pricing so volatile, costs may not be what they seem. "Cost data indicated price volatility throughout many categories during 2018 and early 2019," Martin said. "ese price fluctuations, some of which were quite sudden, rendered older and outdated pricing data sets too unreliable for making business decisions." Cheryl Travis-Johnson, COO, VRM Mortgage Services, noted that one of the biggest challenges in property preservation is costs between the servicer and the vendor. "e seller wants to keep costs down, and the vendor needs their costs to cover their profit margin," Travis-Johnson said. "If they don't meet in a good place, you risk having the vendor compromise to remain sustainable."

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