NAHB forecasts housing turnaround in mid-2008
The year-end housing forecast by the National Association of Home Builders (NAHB) contained some dire possibilities for 2009, with a nationwide recession and a wave of foreclosures looming in the foreground. But NAHB’s chief economist said he believes that the federal government will take the necessary measures to aid economic recovery, leading to an improvement in home sales by the second half of 2008.
“It’s touchy, but I think we’ll get through it without an actual recession,” said David Seiders, speaking in a teleconference on Dec. 20.
Seiders noted that there are still 2.1 million unsold homes (new and existing) on the market, and he expects to see further erosion of home prices through 2008. Single-family starts are down 55 percent from their peak in early 2006, although multi-family housing has declined only 25 percent during that same period. Apartment construction is outpacing all other types of residential construction, he noted.
Growth in housing starts will begin when “residential fixed income” — a number that combines housing starts, new and existing home sales, manufactured home production and remodeling activity — stops contracting, Seiders said.
“This will be a much more gradual recovery than the ones we’ve seen in the past,” added Jerry Howard, CEO and executive vp-NAHB, who joined Seiders on the call. “Overheated” markets like Florida and Nevada may not show any meaningful increases in residential construction, Howard warned.
On the remodeling front, Seiders predicted a 5 percent decline in 2008 with a recovery starting in 2009. “This market by its very nature … is growing all the time, so there’s more to remodel all the time,” he observed. “In the future, remodeling will be grabbing bigger and bigger pieces of the overall construction activity market.”
Founder of ABC Supply dies in accident at home
Ken Hendricks, founder, chairman and CEO of ABC Supply, passed away in the early morning hours of Dec. 21 after falling from a construction site at his home. Hendricks was 66 years old.
The cause of death was a massive head injury. Hendricks died in surgery following the accident on Thursday evening.
Hendricks started his career as a roofer and went on to found the industry’s largest distributor of roofing materials, with 390 locations in 46 states. Headquartered in Beloit, Wis., ABC Supply also distributes siding, windows and other exterior building materials. The company ranked fifth on HCN’s Top 350 Pro Dealer scoreboard in 2007.
St.-Gobain targets Denmark, Estonia
St.-Gobain, one of the largest global distributors of building materials, has announced its plans to acquire the building materials division of DLH Group of Denmark. Reuters reported the purchase price as $115.5 million.
The acquisition, subject to regulatory approval, would bring St.-Gobain 18 outlets and a logistics center in Denmark, where DLH is the third largest player in the building materials industry.
St.-Gobain is also in exclusive talks with Famar Desi, the leading building materials distributor in Estonia. Famar Desi’s network includes 16 locations, including two in Latvia. Also subject to regulatory approval, the deal would establish St.-Gobain’s first building materials operations in those countries.
St.-Gobain’s building materials distribution network includes more than 4,000 outlets in 24 countries.