A preview of our February issue:
1. Forget about it. (For those in the Northeast, fuggedaboudit.) Typically associated with senility and soft-mindedness, forgetting may be an asset in the coming months and years. Builders and remodelers must somehow purge the memory of the go-go housing market of 1995 to 2006. We will not see its like again for some time. But the memories of easy sales, fast turns of inventory, and lotteries to buy homes in new communities are strong.
While conducting research for this month’s report on “16 Tips For Driving Consumer Traffic,” I came across an interesting fact about technology and consumer behavior.
This past September, we wrote extensively about the state of builder and buyer financing, which no doubt is one of the most-difficult challenges home builders face today.
Our cover story this month focuses on the opportunities being afforded by social media and the Web in general. And although many remodelers aren’t buying into the social media movement, there’s ample reason you should be. (Our most recent survey on social media, published in the September 2010 issue, showed only 51 percent of remodelers ever visit social media sites, let alone use them for business.)
This past September, we wrote extensively about the state of builder and buyer financing, which no doubt is one of the most-difficult challenges home builders face today.
When this magazine was launched as Practical Builder in the spring of 1936, the outlook for Americans and the rest of the world was far bleaker than what we face today. Back then we were in the throes of an extended economic downturn that would only subside after World War II ended nine years later. Since that time — 1945 to the present — housing and the American Dream have been inextricably linked.
One of the primary obstacles to obtaining private project financing is understanding the differences between the formal banking experiences that home builders are accustomed to and the new world of private project financing. Here are some of the characteristics and business practices that clearly differentiate banks from the private market: Private project financing entities...
It's not getting a lot of attention in the partisan bickering over the tax compromise in Washington last week, but remodelers hoping for an extension of the energy efficiency tax credits look to be the big losers. The credits (for windows, insulation, etc.) set to expire at the end of this year are being extended -- but at the much lower pre-2009 levels of 10 percent of project cost, capped at $500. Credits for window replacement are capped at $200.
Another survey, another sign that consumers still are not sold on a housing recovery. The latest came out today from Trulia and RealtyTrac, which found that 58 percent of Americans think the housing market will not recover for at least two years. Nearly a quarter won't recover until 2015 or later. About 15 percent think the market already has recovered or will next year.
If you’ve ever been in an interview and heard a question that started with, “Tell me about a time...,” then you’ve experienced a behavioral interview question. Behavioral interviewing is said to be 55 percent predictive of future on-the-job behavior, while traditional interviewing is only 10 percent predictive. As a result, more companies are adopting behavioral interviewing methods. Don’t let the name intimidate you. The process is quite simple. All you need to remember is STAR:
I had hoped to hear some great insights (if not encouragement) at the October Urban Land Institute meeting, but there wasn’t much to go around. The short version: we’re still in for a long, slow recovery so don’t expect to see huge improvement anytime soon. The lone bright spot appears to be the multi-family sector. With occupancy rates hovering above 90 percent, apartment projects are cash flowing and lenders feel comfortable enough with the underwriting to lend on them.
The current housing downturn has caused a lot of problems to all members of the supply chain on many levels, and its effect goes deeper than one might think. We are all aware of the obvious: wide spread layoffs, branch closings, bankruptcies, etc. But there have been more subtle and “disguised” changes in the structure and thinking of some of the members of the supply chain. Here are just a few examples. • Many manufacturers and trade contractors have deemphasized their home builder strategies and programs and have re-focused on the remodeling market segment.
Two years ago, at the height of the global financial crisis, investor Warren Buffett pulled out this gem of a quote to describe the situation. “It’s only when the tide goes out that you learn who’s been swimming naked.” And while this is an accurate expression of what happens to weak businesses when there is a downturn in the business cycle, it seems particularly apt as a description of the builder market before and after the housing market bubble burst.
Remodelers are more optimistic than they've been about the remodeling market since 2005 according to our latest survey. For our upcoming issue, we surveyed our readers on their outlook for next year and 64 percent said they expect business to increase in 2011, and only 15 percent expect it to decrease. We haven't seen numbers that good since the height of the housing boom.
These days any job is a blessing. In the rush to take advantage of the moment often opportunities are lost because we take the owner’s perception of what he wants over providing the service of delivering what is needed. All too often this opportunity only comes once while the owners are living in the home. For example:
While conducting research on a builder for a recent issue of Professional Builder, I did what most people do first when they want to learn more about a company, or any subject for that matter. I went to Google.
It’s hard to say who has taken the “a la carte” mentality to the most absurd level, the airlines or the rental car companies. Pay for food, pay for sodas, pay for bags, and one of the discount airlines is now charging for both checked bags and overhead storage.  This is beyond the pale. If you show up at the gate with your briefcase or backpack and a roll-a-board, you are paying $45 to take it on with you, but “only” $40 if you check it. Add that $80 - $90 round trip to the cheaper fare and the deal becomes no deal.
I had the chance today to spend some time talking with Manfred Seitz, chairman, president and CEO of Bosch Power Tools, during a visit to the company's U.S. headquarters. We talked about several topics, including the company's outlook for the housing market. He said the company is being very cautious, projecting small growth for 2011 in new construction and remodeling, and slightly better growth for 2012.
The residential market's "shadow inventory" is up more than 10 percent from a year ago, according to real-estate research firm CoreLogic. That puts overall inventory at more than 6.3 million unsold homes on the market, nearly a third of which are "pending supply" -- those homes that are seriously delinquent, in foreclosure or being held off the market by banks or other investors.


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