Homebuilders: Smaller Builders Muscling In On Remodeling [Housing Tracker]

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Homebuilder Trends

Does Growth Pay Its Way?: Home Builders Say Study Of Jefferson County, Port Townsend, Shows Surplus For Local Government. Maryland: “According to a study of Jefferson County by an economist from the National Association of Home Builders, the 288 homes built in Jefferson County and Port Townsend during 2007 will generate a net surplus of about a million dollars a year to local governments and create 297 permanent jobs… The 288 homes [also] generated about 915 jobs during the construction phase... About 646 of those are in construction, 139 in wholesale and retail trade, and 81 in business and professional services. However, the permanent jobs created would be 297.” (Port Townsend & Jefferson County Leader, Oct. 1)

Home Builders Feeling Economy's Pinch. “Central Kentucky homebuilders say the credit crisis — especially banks tightening up on loans for builders and buyers — is hitting them hard. Not only are fewer houses getting started in Lexington, fewer homes are getting finished as builders run out of money and can't borrow more from the banks, said Dewey Crowe, director of building inspection at the Lexington-Fayette Urban County Government. The number of building permits voided because of inactivity for more than 180 days is slowly rising, he said.” (Herald Leader, Oct. 1)

Stovall: Rising Hopes for Homebuilders? “Sam Stovall, S&P Equity Research: [Remarkably,] the S&P 1500 Homebuilding subindustry index has become a member of this week’s high momentum list… As of Sept. 26, Homebuilding's trailing 52-week price performance was in the top 10% of all subindustries in the S&P Composite 1500 index (consisting of the S&P 500, MidCap 400 and SmallCap 600 indexes). In the past year, this subindustry eked out a 0.7% advance, as compared with the S&P 1500's decline of 19.8%. In fact, the Homebuilding group was only one of 13 subindustries to post 12-month price gains. The remaining 122 subindustries in the S&P 1500 declined.” (BusinessWeek, Oct. 1)

Downturn Takes Toll On Fall Parade Of Homes.  “After peaking in 2006 with 110 homes, participation in the [Michigan] fall Parade of Homes is down to 40 this year, the lowest since its creation in 1995… The number of builders in this area has decreased considerably as some moved out of state to find work and others closed… Upjohn Institute for Employment Research: The number of new housing units placed under contract during Q2 in the Grand Rapids area plummeted by more than 47% from Q2’07. And membership in the Home & Building Association of Greater Grand Rapids is down about 50% from three years ago, falling from nearly 1,500 to 750.” (Michigan Live, Sept. 28)

Remodeling Activity Down, Gives Clients Upper Hand. “NAHB: Home remodeling has slowed as pessimism about home values sets in. Activity remained sluggish in Q2… Expectations for future activity were nearly flat. Total money spent on home improvements and maintenance is expected to dip this year by more than 4% to $216.3 billion from $226.4B in 2007, the NAHB estimates. The group doesn't expect spending to reach 2007 levels again until 2010… The housing slump is also introducing new competition into the remodeling arena as smaller homebuilders diversify their businesses to weather the downturn. These homebuilders are snapping up larger, [pricier] remodeling projects like additions, recreation rooms and porches.” (AP via Forbes, Sept. 26)

'Big Move' Blitz Results In 40 Home Contracts. “A homebuilders blitz held last month in the Birmingham area garnered 40 confirmed contracts on the more than 300 homes offered at a discount. The Greater Birmingham Association of Home Builders held “The Big Move” in mid-September to help its members unload excess inventory and jumpstart new-home sales… A wide range of incentives were offered to potential buyers – from up to $100,000 off to certain percentages off the asking price and special mortgage incentives.” (Birmingham Business Journal, Sept. 25)

                                                   

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