Lumberyards top choice for builders, remodelers
Builders and remodelers steer the majority of their business to LBM dealers, according to a study just released by The Farnsworth Group.
Conducted via online surveys with 400 independent builders, remodelers and builders/remodelers in the United States in November 2010, the results showed that both builders and remodelers use lumber and building material dealers as their primary source for purchasing materials 70% of the time. Warehouse home centers serve as the primary source for nearly one-third of remodelers but just 12% of builders.
Specialty wholesale distributors were the primary source for about 10% of both builders and remodelers, while specialty wholesalers were a clear third choice for remodelers at 13%
Fewer than 20% of builders and remodelers anticipate purchasing more through different channels in the future.
Builders and remodelers cited somewhat different priorities for selecting suppliers, though for both, product availability reigned as the No. 1 factor. Price was nearly as important as availability for builders. For remodelers, availability was followed by quality products, customer service and price, which were all rated similarly. The importance of availability as the top factor in the decision-making process illustrates that in some cases remodelers are willing to pay a little more for the sake of having the product in stock and ready to install.
Both builders and remodelers were unequivocally certain about how they wanted to receive communications from manufacturers and suppliers: e-mail, followed by magazine advertising, Internet and websites. They similarly prioritized the type of information they were interested in: new products, technical specs, specials/offers/discounts and industry information.
The Farnsworth Group is an Indianapolis-based strategy, consulting and market research firm in the home improvement, construction and building supply industries.
Stock expands its Coleman Floor business
Stock Building Supply’s Coleman Floor Co. began serving four new markets in the eastern United States.
The new areas of business are described as Washington, D.C.; Baltimore/New Jersey/Pennsylvania; Charleston, S.C.; and Greenville, S.C.
The company now serves seven Eastern U.S. markets and will continue to expand, according to Steve Wilson, Coleman’s director. “Flooring choices have become increasingly important in residential building and remodeling. We provide customized solutions and reliable installation to keep our customers’ projects on schedule and within budget.”
Through its Coleman Floor division, Stock offers professional home builders and contractors a full range of installed flooring products.
In the Northeast, Mike Hagen has joined Coleman Floor as market manager. Hagen has more than a decade of flooring industry and production experience and most recently served as branch manager for Creative Touch Interiors’ New Jersey-Pennsylvania market. Wayne Martin, a 31-year veteran of Coleman Floor, will lead its expansion efforts in South Carolina in addition to his management responsibilities for the North Carolina operations.
Outlook positive for multi-family sector
A survey of multi-family builders and property managers by the National Association of Home Builders (NAHB) indicates an improvement in housing starts and a decline in vacancies compared with the previous quarter, both of which spell positive news for apartment and condo builders across the United States.
The NAHB Multifamily Production Index (MPI) increased to a value of 35.6 for the third quarter of 2010, up from the 26.6 level reported for the second quarter. This is the highest the MPI has been since 2007.
The MPI is a weighted average of components based on respondents’ ratings of starts currently versus the previous quarter. All three MPI components increased in the third quarter.
Meanwhile, the NAHB Multifamily Vacancy Index (MVI) registered a decline (fewer vacant apartments) for the fifth quarter in a row — down to 39.2. The MVI has been declining steadily since reaching a peak of 70.2 in the second quarter of 2009.
"Since 1985, [the] NAHB has been producing the Housing Market Index, which gives an indication of what the coming months will bring in the single-family market," said David Crowe, NAHB’s chief economist. "We are confident that the MPI and MVI will provide equally useful information for the multi-family sector."
"It is important to remember that, although both the MPI and the Census Bureau’s measures of multi-family production are increasing, they are rising from historically very low levels, with multi-family starts remaining well below a rate that would be sustainable under more normal market conditions,” Crowe added. “Further improvement in multi-family production depends upon resolving the formidable problems that currently exist in accessing credit to develop and build economically viable multi-family projects."
For more data tables, visit nahb.org/mmi.