May 12 2008 1:13PM | Permalink | Email this | Comments (0) |
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I was reflecting the other day about the 44 years that I have been in this industry and about the things that I have experienced during that timeframe. As you can imagine, I have witnessed and experienced a lot and, I am happy to say, that most of it was good and positive. The home building industry is a great industry with some great people.

As you can imagine, I have been through a lot of cycles during my 44 years and I was reflecting on two downturns, the one in the 1977 timeframe and the downturn in 1990-91. I will say that those were the two worst I have experienced until this one that we are living through right now. One thing that happens when the market swings back is that there is always a new “wrinkle” in the supply chain. For example in the upturn in the 80’s we saw the birth of public builders and the start of consolidation. In the 90’s and early 2000 years we lived through the age of consolidation of builders, distributors, contractors and even manufacturers. All of these changes had a profound effect on the industry.

Now I am wondering what major changes will occur as we come out of this current down cycle? Here are my thoughts:

o Consolidation of public builders
o Continued evolution in the distribution segments with continued consolidation, more services offerings.
o Foreign investment in the supply chain
o Privately-held builders who survived the downturn will emerge stronger and smarter
o A whole new strategy regarding land acquisition and development because key investors have been purchasing land at $.10 to $.25 on the dollar.
o Obviously there will be new and stricter mortgage policies.

What are your thoughts on the subject?