Home sales slide in January
Existing-home sales — including single-family, townhouses, condos and apartment buildings — declined 0.4 percent last month, to a seasonally adjusted annual rate of 4.89 million units in January from a level of 4.91 million in December, according to the National Association of Realtors (NAR). The results are 23.4 percent below the 6.44 million-unit pace set in January 2007.
Single-family home sales decreased 0.5 percent, while existing multi-family housing units fell 6.5 percent from the previous year.
The national existing-home price median for all housing types was $201,100, a 4.6 percent drop from a year ago.
Total housing inventory rose 5.5 percent at the end of January to 4.19 million existing homes for sale, representing a 10.3-month supply at the current sales pace.
Regionally, sales of existing homes in the Northeast fell 3.6 percent in January, with the West experiencing the second largest drop at 2.1 percent. Sales in the South slipped 0.5 percent last month. However, the Midwest saw sales of existing homes rise 3.4 percent in January 2007 compared to last year.
Lowe’s sees earnings drop on rough housing market
Lowe’s saw earnings drop on a rough housing market, with comparable-store sales taking a hit — although the company’s CEO said he believes impending federal stimulus initiatives could help jumpstart sales in the coming months.
Earnings fell 33.4 percent to $408 million in the quarter, from $613 million last year. Sales were down 0.3 percent to $10.38 billion compared with $10.4 billion last year.
For the full year, earnings were down 9.5 percent to $2.81 billion compared with $3.1 billion last year. But for the year, sales rose 2.9 percent to $48.3 billion from $46.93 billion in 2006.
Comparable-store sales dropped 7.6 percent in the fourth quarter; while for the full year, comparable-store sales were down 5.1 percent from last year.
In a statement, Lowe’s president and CEO Robert Niblock said the fourth quarter fell short of the company’s financial plans, as “we faced an unprecedented decline in housing turnover, falling home prices in many areas and turbulent mortgage markets that impacted both sentiment related to home improvement purchases as well as consumers’ access to capital.”
Niblock went on to say the retailer expected further turbulence in 2008 and predicted sales would remain soft.
“We remain focused on what we can control,” he said, namely customer service initiatives and managing expenses. He also credited interest rate cuts and an impending economic stimulus initiative by the federal government for helping improve the home improvement retail outlook.
“As a result [of those initiatives] many of the headwinds facing the housing market and the home improvement industry should lessen, and consumers’ confidence in investing in and improving their homes should improve,” he predicted.
During the quarter, Lowe’s opened 72 new stores, including two relocations. As of Feb. 1, the retailer operated 1,534 stores in the United States and Canada.
Orgill focuses on expansion at show
Orlando The 2008 Orgill Spring Dealers’ Market, held last week in Orlando, Fla., included news the hardlines distributor was expanding, with a new distribution warehouse opened in Kilgore, Texas, and two more planned for the Pacific Northwest and Midwest, as earlier reported by Home Channel News.
The show also focused on expanding product lines, new dealers, vendor presence — on the show floor and also in the warehouse — and new products.
“We had, I think, 225 new dealer prospects, which is one of the gauges of an event like this for us,” explained Ron Beal, president and CEO of Orgill.
“We’ve got a good representation of dealers from all different parts of the ‘three-legged stool’ there (hardware stores, home centers and pro-dealers),” he added.
Beal said that in light of the tough housing market, he was pleasantly surprised by the show’s turnout.
Orgill also expanded some of its own product lines.
“We’ve redone a lot of our core areas, electrical plumbing, and really have some exciting things going on,” said Beal.
Beal also mentioned a new ‘green’ section that was prominent on the showroom floor. “This is the first time we’ve ever focused on it,” he said. Beal noted that ‘green’ is something Orgill has been hearing its members request more and more, and while the focus on green at the Orlando show wasn’t large, the company plans to expand on it.
“We’re really going to splash green at our Chicago show,” said Beal. “We’re aware of it. It’s real. We’re working on things, and we know it’s an opportunity.”