Homebuilders compete with used homes for buyers, and usually it's based on price. Our leg up against the existing home market is that we can do a better job of meeting the needs of the way people currently live. Used homes make people settle, and right now they're settling because they can't find what they want in a new home. So, if the only competition is price, they'll settle for a used house.

But we have the fantastic opportunity to craft something that responds to the way they live now. There are a lot of things that have changed in the last 5, 10, 15 years that we can do better. That's the overarching theme. We have to be better than used houses, and there's a lot of places we can improve in our design to get buyers attention. Among them are:

• Improving the homeowner entry to the house. Don't send them through the laundry room any more.
• Offer more garage options to meet auto and storage needs.
• Pocket offices in the center of the activity
• Pet spaces for the 39 percent of households that have dogs and the 33 percent that have cats
• Ethnic kitchens the meet changing demographic needs
• Gamer rooms for all generations

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When you decided to be a home builder you likely had building homes in mind. You also have a business to run. As Drucker said, "A business is an organization that has customers." Without them, your desire to build homes becomes less rewarding. The complexities of managing a staff of one or more can be overwhelming. Focusing on the fundamentals helps you create a team that creates customer loyalty, thereby allowing you to build more homes.

1. Walk Your Talk

Your example sends a message that overcomes slogans, mission statements, and wall plaques. Model the service behavior you want to see from your staff. The way you treat employees, associates, and home buyers sets the tone for everyone.

2. Recruiting/Interviewing

Nordstrom's practice is to "Hire nice, train cash register". Ensure that your hiring processes include a healthy dose of attention to service, beginning with the ad. A willing student can learn about construction, home sales, selections, or warranty, but an experienced grouch is not a good addition to your firm.

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Homebuilders must have a reasonable gross margin in order to succeed financially. These days, have less than the 25 to 30 percent necessary, mainly because their direct construction costs are too high as a percentage of sales.

Every year, Builder Partnerships asks industry experts to give us their thoughts on what the homebuilding industry will be doing in the year ahead as well advice on how to prepare your business to meet the new reality. Our experts' insights run the gamut from business performance to economic expectations to design trends. We hope these snippets will give you an overall view of what to expect in a market that is still very combustible.

As we enter the 2014 selling season, it appears that the buyer is back in the market. Consumer attitudes have improved, and the stronger economic growth should support an increase in household formations. However, with the increase in housing prices and interest rates, housing affordability has dropped, which is impacting the first time homebuyer....

Chuck Shinn, Builder Partnerships

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