Jun 14 2009 7:30PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Professional Builder columnist, John Rymer, is spending June doing sales training for a home builder in Moscow. He will be posting regular updates and observations on this blog.

New Homes in Moscow are typically delivered as “partially finished.” This equates to a home in drywall stage in US. The tradition of not delivering a home totally complete goes back to the Soviet days when public housing was brought to the market in a similar fashion. A cottage industry has of “home finishers” is now part of the Russian homebuilding landscape. “Finishers” are typically one or two man companies and will often live in the home – for months at a time – while they install everything from plumbing and lighting fixtures to flooring to cabinets. It is not unusual for the work done by finishers to reach $150 per sq. ft. on mid-to-hi...Read More

Jun 11 2009 3:45PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Professional Builder columnist, John Rymer, is spending June doing sales training for a home builder in Moscow. He will be posting regular updates and observations on this blog.

The financing of homes in Russia has no national agencies, such as FNMA or FHA. Builders and developers must negotiate with banks on an ad hock basis to bring financing to their customers and rates float according to the market. The result is that interest rates on home loans have soared since last fall as banks believed that home loans deserved a far greater risk premium. Those able to get a loan ( a minimum of 25% down payment, and more typically a 50% down payment) now find they have interest rates in the low teens! In addition, banks were known to cut off credit to customers whose homes were already under construction and had executed mortgage agreements. As a positive note, because ...Read More

Jun 10 2009 9:47AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Professional Builder columnist, John Rymer, is spending June doing sales training for a home builder in Moscow. He will be posting regular updates and observations on this blog.

Single family homes in Moscow are referred to as “County Cottages.” Even though today’s homes can often exceed 5,000 sq. ft. in size, and are only a few blocks or miles from hi-rise condominiums, the name appears to be a derivative from the old Soviet days. Under USSR rule, Party big wigs were the only ones who were eligible to live in suburban single family homes in Moscow. As everyone was suppose to be “equal,” under Soviet rule, the name appears to be an attempt to convey that the homes were not an ostentatious lifestyle but simply a substitute for “Sky Homes” or state supported high rise apartments which housed the vast majority of Mosc...Read More

Apr 8 2009 1:10PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

"A billion here, a billion there. Pretty soon, we're talking real money." Sen. Everett McKinley Dirsken

Transposed numbers? The deal between Pulte and Centex has been reported by the Wall Street Journal as a $1.3 billion deal. Other news outlets in addition to the two concerned parties place the deal at $3.1 billion. 

The reality? The announced transaction says Pulte will pay $3.1 billion in stock for Centex. Along with that comes $1.8 billion in debt. $3.1 billion minus $1.8 billion equals $1.3 billion.

The final verdict? It's a $1.3 billion deal.

Gut instinct? Follow the Wall Street Journal.

Apr 8 2009 7:56AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Today it was announced Pulte will buy Centex for $1.3 billion in a stock deal. The acquisition will finalize in the 3rd quarter of 2009, so until then the companies will operate independently. Click Here for the Wall Street Journal article on the deal.


Lots of room for speculation on this. Comment below.

1. Surprised? Not Surprised?
2. Will the deal go through?
3. Does it benefit the home building industry?
4. Is this the future of home builder? Should we look for the KB Homes/Beazer merger next week?

Fire away.

Mar 26 2009 7:59AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

There are conflicting stories out there about the economy and the housing market. Home builders have to wonder which way is up. Consider this statement released by Secretary of HUD, Shaun Donovan yesterday.

"This week we have seen some encouraging news on housing. Sales of both new and existing homes rose in February for the first time in more than six months while home prices are starting to stabilize. Although there will be many ups and downs in the coming months, this news should reinforce the importance of the steps we have already taken to stabilize the housing market and strengthen our economy, including measures that have contributed to the nearly the lowest mortgage rates in decades and the $8,000 tax credit for new homebuyers included in the American Recovery & Reinvestment Act (ARRA). Stabilizing the housing market will help address the problems a...Read More

Mar 18 2009 8:14AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

NAHB has done a great job of disseminating information about potential opportunities for home builders and remodelers as a result of the stimulus package. You gotta figure some portion of the $750 billion should help the residential construction industry.

My questions. How real are these opportunities for individual business people? Are you out selling new water heaters because of the stimulus? Energy-efficient retrofits? Homes for entry-level buyers? Are your customers asking about it? Have you created marketing materials that support this initiative?

I want to know what's working. Drop me an email at paul.deffenbaugh@reedbusiness.com. If you want to share your secrets with the whole world, comment here. Thanks.

Mar 11 2009 8:45AM | Permalink | Email this | Comments (2) |

By Paul Deffenbaugh

The Professional Builder editorial staff has been discussing whether it is appropriate to select a Builder of the Year this year. Traditionally, we do this and report the honoree at the end of the year. Their consensus is that we should.

What do you think? Is it appropriate to recognize a builder this year for excellence in this environment. If so, should the criteria for selection reflect the current economic circumstances. Here's a link to the criteria so you can get an idea what they are. 

We'll get the call for nominations updated to this year, but the deadline date will be about the same.

Mar 5 2009 9:07AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

If you're like me, you've probably had it up to your ears with pundits and loudmouths yammering on about what this stimulus element means or what that stimulus idea will do for our economy. Too often, we trust one side or the other to interpret what's happening for us.

I find it ironic that in this age of instant information, we are turning more and more to Fox News, MSNBC and other media with decided biases for our news. Why not go straight to the source. So, what does yesterday's proposal for "Making Home Affordable" have in it. Want to know? Go to www.FinancialStability.gov. Read the fact sheets, learn what's actually proposed.

Want to get the tainted view? Go to ...Read More

Feb 26 2009 9:18AM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

We have a few new bloggers up and running on HousingZone, bringing their unique perspectives and expertise. Most important to their success is your participation. So bop on over and read their stuff. Comment. Engage. Send your friends.

For home builders:

Rodney Hall of The Talon Group talks about HR issues and all elements of the personal side of home building at PeopleZone. 

Jan Mitchell is a well-respected writer for the housing industry on sales and marketing ideas. Catch her insights at ...Read More

Feb 25 2009 3:36PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Feeling a little down about your business? Not seeing much traffic at your models? You're not alone, and a lot of builders are concerned that maybe we've turned some psychic corner where homebuyers will never come back. If you've gone down that deep, dark well and you're despairing, take heart.

The Pew Research Center did a survey last October and learned that American's really do like owning their homes. 90% of respondents said their home "was a source of comfort." Whew.  That's a relief. Now, let's get them out of their comfort zones and beating the paths towards your models.

Check out the full report here

Feb 23 2009 1:33PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

Take the test! You've been hearing about the National Housing Quality Awards for years now, and you've probably wondered whether you've got the goods to measure up. Well, now you can determine on your own whether it's worth your while to put together an application.

Go to www.probuilder.com/nhq and click on the link to the self-assessment test we just posted online. It's quick. It's easy. It may even be a bit of fun.

Feb 4 2009 12:00AM | Permalink | Email this | Comments (1) |

By Paul Deffenbaugh

Home builders looking to the remodeling market as an opportunity to capture business and keep the revenue flowing should think long and hard about it. The draw is obvious: low barriers to entry, ready pool of prospects that are living in homes you built, experience in the construction field, and such fragmentation that there’s market share for the taking.

 

But consider this. Home building is about designing and building a product. Remodeling is the delivery of a service. That means the margins you’re familiar with are nonexistent. The 20 to 25% gross margin you’re used to working with? Not in remodeling. Think 45% gross. If you price the same as you do for home building, you’ll lose money even faster than if you didn’t work at all.

...Read More

Feb 3 2009 8:02AM | Permalink | Email this | Comments (3) |

By Paul Deffenbaugh

During the recent Builders' Show in Las Vegas, everybody commented on how the crowds weren't as small as they expected. NAHB announced attendance was slightly more than 60,000, so that means the crowds were just more than half of what they were two years ago in Orlando. Clearly, people have lowered their expectations mightily.

The same seems to be true with home building in general. We're getting rosy reports of increased traffic that seem to have bolstered people's optimism. The truth -- told by the December numbers -- is that new homes sales are in the dump.

I tend to be an optimist, but I think we're in the realm of false hope here. We've got another round of mortgage defaults in the pipeline due to interest-only, adjustable mortgages coming due. Some housing experts predict the number of those mortage failures will exceed the failures caused by the sub...Read More

Jan 16 2009 3:43PM | Permalink | Email this | Comments (0) |

By Paul Deffenbaugh

This is the 42nd year Professional Builder has done the Annual Report on Housing's Giants." This year, as you can imagine, we expect massive changes. We're encouraging everyone to complete a form, which you can download here.

Traditionally, we've listed the 400 largest home builders in the United States. Last year (which reports 2007 numbers) the smallest of those builders had just over 80 closes. I expect we'll see a much smaller number at the bottom of the list. In fact, I won't be surprised if we don't even reach the 400 number.

Either way, it's going to be an interesting report. Please go to ...Read More