Builder confidence in 55+ housing market improves
Builder confidence in the 55+ housing market for single-family homes showed continued improvement in the fourth quarter of 2012 compared with the same period a year ago, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI) released today.
The index rose 10 points to 28, the fifth consecutive quarter of year-over-year improvements.
“We continue to see increased optimism from builders and developers in the 55+ housing segment,” said Bob Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “Those customers who had been on the sidelines waiting for more stability in their local markets are starting to make their move toward either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle.”
There are 55+ HMIs for two segments of the 55+ housing market: single-family homes and multi-family condominiums. Each index measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor. An index below 50 indicates that more builders view conditions as poor than good.
Present sales for the 55+ single-family HMI climbed 10 points to 27, expected sales for the next six months increased 12 points to 38 and traffic of prospective buyers rose nine points to 24.
“Like the overall housing market, the 55+ segment of the market is undergoing a slow but steady recovery,” said NAHB chief economist David Crowe. “That said, there are serious obstacles to a continued and stronger recovery. While problems with tight credit conditions for buyers and obtaining accurate appraisals are still lingering, new problems like spot shortages and rising costs for labor, materials and lots are beginning to emerge.”
Mixed results for Beacon Roofing Supply
Peabody, Mass.-based Beacon Roofing Supply sales increased 4.9% to $513.7 million in the first quarter, up from $489.9 million in the same quarter last year.
Existing-store sales declined 4.6%, or 7.7%, when adjusted to the same number of business days.
In existing same-store markets, residential and non-residential roofing product sales decreased 5.4% and 6.1%, respectively, while complementary product sales increased 2.9%. Part of the decline can be blamed on “last year’s very high level of re-roofing activities, including the beneficial impact from mild weather in December 2011 and strong business in several markets that experienced significant storms in 2011, and lower average residential roofing selling prices this year,” said Paul Isabella, president and CEO.
Net income for the first quarter was $18.2 million, down 4.8% from $19.1 million in the same quarter of 2012.
The company pointed to some shrewd bargaining that put it on track for a strong showing in 2013. “Toward the end of the first quarter, we took advantage of our financial capacity and flexibility to purchase key products ahead of announced industry-wide price increases scheduled mostly for February and April,” Isabella said.
Also, in announcing its earnings, the company took the opportunity to mention its acquisition streak. “We continue aggressively to seek quality companies that fit our target acquisition profile, such as McClure-Johnston and Ford Wholesale, which we acquired in the first quarter,” Isabella said.
Boise Cascade continues its hot run on Wall Street
After a successful initial public offering Wednesday, shares of the newly public Boise Cascade continued to perform well on Thursday.
The Boise, Idaho-based wood products company also replaced Jewett-Cameron as one of the 30 companies tracked on the HCN Stock Watch.
Sold on the New York Stock Exchange with the ticker symbol of BCC, Boise Cascade’s share price is set at $21. The price rose to a Wednesday opening of $25.44, and thee shares have risen above $27 in trading late on Thursday.
Based in Boise, Idaho, Boise Cascade describes itself as “a large vertically integrated wood products manufacturer and building materials distributor with widespread operations in the United States and Canada.”
Boise Cascade intends to use $25.0 million of the net proceeds to repay borrowings under its revolving credit facility and the remainder for general corporate purposes.