Housing starts fall from February
According to the U.S. Census Bureau and Department of Housing and Urban Development, housing starts for the month of March fell 11.9 percent to 947,000 from a revised February estimate of 1.075 million units. That figure is 36.5 percent below the 1.491 million housing starts recorded in the same period last year.
Single-family housing starts in March were at a rate of 680,000. This is 5.7 percent below the February figure of 721,000.
Issuance of building permits fell 5.8 percent in March to a rate of 927,000. Year-over-year, the rate of building permit authorizations fell 40.9 percent.
Still, builder confidence remained unchanged this month, according to the National Association of Home Builders. The trade group reported a builders confidence index at 20, the same as in March.
“With the traditional home buying season now well underway, we have not seen the bump in sales activity that we normally would this time of year,” said Sandy Dunn, NAHB president. “At this point, all eyes are on Congress and its efforts to craft meaningful legislation to help support the housing market and stabilize our nation’s economy before it heads deeper into recession.”
The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either “good,” “fair” or “poor.” Any number under 50 indicates that more builders view sales conditions as poor than good.
Regionally, the index’s results were mixed in April, with a one-point gain to 22 registered in the Northeast, a one-point decline to 15 registered in the Midwest, a two-point decline to 24 posted for the South and a two-point gain to 17 posted for the West.
‘Pinnacle Conference’ held in Boston
Boston The theme for the Pinnacle Conference was winning — specifically, “Winning city. Winning conference. Winning team.” While technology and efficiency were the major topics at the Activant users group meeting held here, there was also a good amount of old-fashioned money-saving business strategies.
More than 750 attendees from pro dealers, hardware stores and home centers took part in the three-day conference. That number “demonstrates the commitment of this marketplace to the future,” said Steve Bieszczat, senior vp and general manger of Activant’s hardlines and lumber divisions, during the opening session. While he pointed to softness for pro dealers, he described the hardware and home center businesses as holding steady.
“On the LBM side, people are looking to get greater automation and efficiencies and less dependency on adding head count,” Bieszczat said. “In hardware and home center, what you see is an inordinate amount of demand for all things retail — having the same kind of POS as some of the more innovative chains and those taking customer relationships to a new level.”
Some of the educational sessions accentuated some positive news from the housing industry: specifically, the growing population. Household growth from 2005 to 2014, according to Harvard’s Joint Center for Housing Studies, should exceed by 2 million the growth of housing during the boom years 1995 to 2004.
Still, the conference spoke to the difficult market partly through a session titled, “Customer success strategies for succeeding in today’s market.” The session pointed to a number of tactics companies can employ right now to optimize operations during tough times.
In addition to limiting hours and reducing head count, the ideas brought forth included implementing more aggressive measures in accounts receivable, raising deductibles for health insurance plans, using bank issued payment cards that offer rebates and even replacing company e-mail systems with free Google e-mail.
“If it doesn’t add value, quit doing it,” said Johan van Tilburg, president and CEO of Knoxville, Tenn.-based Tindell’s Building Materials.
NAHB economist breaks out the ‘R’ word
The National Association of Home Builders (NAHB) chief economist said the economy is in a “mild recession,” the result of the deepening slump in the housing markets that “seriously eroded” consumer sentiment.
“The worse-than-anticipated housing downturn, combined with systematic weakening of the labor market and rapidly rising energy and food prices, has taken a heavy toll on American consumers,” said NAHB’s David Seiders. “It’s now clear that we have entered what we anticipate will be a mild recession, running through the first half of this year, and there are substantial downside risks to this economic scenario.”
The NAHB, which has a track record of generally optimistic forecasts, downwardly revised its official housing forecast to a 30 percent decline in housing starts for 2008, instead of the previously forecast decline of 27 percent down.
The NAHB is lobbying for immediate steps that it says will guard against a longer and deeper downturn. The recommendations target the housing market, such as a temporary home buyer tax credit, modernization of the Federal Housing Administration and oversight reform for the housing-related government sponsored enterprises.
“Stopping the downward trend in housing prices is key to bolstering consumer confidence as well as mortgage credit quality, and a temporary home buyer tax credit is the best way to do that,” he noted.