Building Business

Building Business



The Wells Fargo/NAHB Builder Confidence survey, for February, reported a historic drop in Builder Confidence.

Elon Musk, the founder of PayPal, the SpaceX project, and the promising new Tesla Motor Company, is the kind of entrepreneur you want to have in your neighborhood. He is the Bill Gates of his generation, creating good, high-paying jobs that will likely last for years. 

Not so long ago basements were merely utility space, but those days are gone. Two projects presented in the September edition of Custom Builder include basements that figure prominently in their respective plans.

In the fall of 1998, I attended my first Benchmark Conference as a new senior editor on Professional Builder magazine. What struck me about the gathering was the camaraderie among industry competitors. It was a large group, about 300 attendees, and yet it felt like a small reunion of old friends. And, as our columnist Scott Sedam told me when I met him there, not only was it a reunion of old friends, but it was also a continuation of the same conversation—how to sell more, build better, build faster and drop more money to the bottom line.

Remodeling and custom home building are similar in that both are ‘high touch’ relationships. Not to say that production home building is not high touch; but there is a gap. People who build one-of-a-kind custom houses expect a lot of your time when they commission you to design and/or build their next home. Nobody wants to feel like they are ‘owned’ for any period of time, but if you were somehow able to crawl into the mindset of most clients, they feel like they ‘own’ a good portion of your time during the building process.

I had the distinct pleasure of attending the first Pacific Coast Builders Conference (PCBC) ever held in San Diego. Previously, it had been staged in San Francisco for more than 50 years. I was not sure what to expect this year, but the combination of a new venue and an improving market certainly netted a positive result.

I recently re-read Moby Dick and have to say that I was stunned by how vivid and modern it seemed. I felt transported to the streets of New Bedford, Mass., in the 1820s and to the decks of the whaling vessel Pequod. The clarity of the writing and its vibrancy are among the many reasons why Moby Dick is considered one of the Great American Novels, and Herman Melville, a giant among great writers.  

My eight-year-old son was asked recently about what I do. After describing my activities, typing on the computer and talking on the phone, he finally told his classmate, “He’s a magazine guy.” I find this amusing because I don’t think of myself as just a magazine guy. Frankly, the focus around our office is home building. We spend a lot of time at industry events, with our ears to the ground, attempting to discern movements in this incredible business. It’s a big job. 

Very few industry trade shows exude a raw enthusiasm and excitement like the Kitchen & Bath Industry Show. Last month in New Orleans, the lift in the overall residential construction market was quite palpable. So I asked many of the show attendees how they managed through the downturn, and if they are seeing more and better jobs now that home building and remodeling are stronger. The number of kitchen designers and custom builders who challenged the premise of my question—that their businesses must have experienced a decline over the past few years—struck me.

Six months ago we asked Bob Toll, the executive chairman of Toll Brothers, how he saw the market recovery playing out. Back then the home building market was clearly improving, but the extent and path of the recovery were hazy. He predicted strong demand, very limited supply, and almost shockingly he projected that prices would double in two years. Toll, who brings a perspective honed by several downturns, is on target so far. 

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