Pending home sales down
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, fell this month due to poor economic conditions after a strong gain in August, according to the National Association of Realtors.
Pending home sales stood at 89.2, down 4.6 percent from an upwardly revised reading of 93.5 in August. However, that is 1.6 percent higher than September 2007’s reading of 87.8.
“The month-to-month weakening in pending home sales is understandable, but because the index remains above year-ago levels it means weOre still in a broad period of stabilization,” said Lawrence Yun, NAR chief economist. “Conditions remain mixed around the country, but markets that are showing annual sales gains include Long Island, N.Y.; Boston; Minneapolis; Denver; and Washington, D.C., in addition to consistent solid gains in California and Florida.”
The index in the West rose 3.7 percent to 113.6 in September and is 39.5 percent above a year ago. In the Midwest the index fell 0.7 percent to 83.3 and is 3.1 percent below September 2007. The index in the South fell 7.9 percent to 89.0 and is 11.3 percent below a year ago. In the Northeast, the index dropped 16.8 percent to 66.4 and is 9.4 percent below September 2007.
Existing-home sales are expected to total 5.02 million in 2008, rising to 5.32 million next year and 5.62 million in 2010.
New-home sales will likely total around 487,000 in 2008 and 413,000 in 2009 before hitting 520,000 in 2010. Housing starts, including multi-family units, will probably total 936,000 units in 2008 and 781,000 next year and then jump to 886,000 in 2010.
BMHC sells off equipment, properties to stem losses
Building Materials Holding Corp. (BMHC), the industry’s fifth largest pro dealer, has reported a $45.2 million loss for its third quarter, which ended on Sept. 30, 2008. Sales were $364 million, a 39 percent drop from sales of $594 million a year ago.
So far this fiscal year, the company has lost $111 million on sales of $1.1 billion. In fiscal 2007, BMHC posted a profit of $18.6 million on sales of $1.8 billion for the first nine months.
In a conference call with analysts, Robert Mellor, BMHC’s chairman and CEO, listed a number of steps the company has taken to preserve liquidity. In addition to negotiating a permanent amendment to its credit facility, BMHC has sold off $4.2 million in excess vehicles and equipment as well as properties it owns.
Costs are also being cut through closings and consolidations. A Northern California location in Dixon that provided concrete services is in the process of winding down, Mellor said. In Southern California, in the city of Colton, BMHC is negotiating to sell its concrete services. If the sale falls through, the operation will close, according to Mellor. A reload center in Southern California, in Mira Loma, will close in the next 30 days and be put up for sale.
In Colorado, a door shop and millwork facility in Fort Collins and a wall panel plant in Greeley will be moved to other BMHC facilities. A Puget Sound, Wash., distribution center is being relocated.
The sale of these and other surplus properties is expected to generate $45 million in the next 24 months, Mellor said.
Some of these closings are part of BMHC’s restructuring of its two former divisions, SelectBuild and BMC West, into one organization. In a question and answer session with analysts, company president and chief operating officer Stan Wilson said the company will be looking at SelectBuild’s wide array of construction services — for example, plumbing, electrical and other related trades — with an eye toward profitability.
“They need to be contributing to income, or we will be exiting those,” Wilson said. SelectBuild is also becoming a more “sales oriented” operation rather than an “order taking operation,” Wilson said, adding, “It’s a major difference than the way we used to operate.”
CEO Mellor, commenting on the company’s delisting from the New York Stock Exchange last week, said: “We were disappointed that the New York Stock Exchange did not follow the lead of NASDAQ in suspending the trading requirements during these economically turbulent times.” BMHC’s move to over-the-counter trading would have no effect on the company’s credit agreement, he noted.
Bosch Lumber wins award from local university
Bosch Lumber, a Dickinson, N.D.-based Do it Best lumber and building materials dealer, won the Blue Feather Award for contributions to Dickinson State University, Do it Best announced.
Bosch has contributed both time and money to the university, as well as supporting the DSU Foundation, Blue Hawk Booster Club and the Dickinson Area Chamber of Commerce.
Bosch Lumber, founded by Joe R. Bosch in Dunn Center, N.D., in 1946, opened locations in Killdeer in 1952 and Dickinson in 1959. In 1975, five of Joe’s sons, Paul, Joel, Bill, Jim and Keith, joined together to buy their father out. Today, Paul, Joel and Joel’s son, Troy, own the company.
The Blue Feather Award is given each year to individuals who have made a significant contribution to the university through dedicated service, promotion, financial support and other efforts.