LUMBERYARDS

Survey points to surprises among home buyers

BY HBSDEALER Staff

Consumers still want bigger houses. Plus, design is more important than price.

Those were two of the somewhat surprising results of a consumer survey shared by the keynote speaker during the 2011 Building and Infrastructure Conference last week.

John Burns, the keynote speaker and president and CEO of John Burns Real Estate Consulting, said 44% of consumers said they would want to buy a bigger house in the future, compared with only 22% who said they want a smaller house.

Those numbers seem to contradict a survey of builders conducted recently by the National Association of Home Builders (NAHB). In that survey, the average size of a new single-family home completed in 2010 declined from 2,438 sq. ft. to 2,377 sq. ft. And looking forward, builders are already expecting smaller homes in 2011. 

Burns also explained that the buyers’ market for housing today puts a premium on home design and features — a more important consideration than price, he said

And another surprise: While green technology is expected and demanded by today’s home buyers, Generation Y was revealed by the survey to be the least likely age group to spend more for green features. "They are eco-conscious," Burns said. "But they are also very cost-conscious."

The remodeling business is going to boom, Burns said.

He said the fact that people aren’t buying new homes will naturally promote spending on remodeling. "Remodeling business is going to boom, because people are staying in their homes."

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Looking ahead to recovery, sort of

BY By Ken Clark

New York City — The theme of the 2011 Building and Infrastructure Conference was posed as a question: "Is the recovery upon us?" 

The answer was a variation of, "well, sort of."

At the 2011 Building and Infrastructure Conference hosted by Lincoln International and L.E.K. Consulting, keynote speaker John Burns, said the long-term prospects are bright for building products, but there are some caveats. Construction will double, said Burns, president and CEO of John Burns Real Estate Consulting, but not until 2015. He used the phrase "slow churn" to describe the recovery.  

And for historical precedent, he looked at the long declines in housing that hit Houston in the 1980s and Southern California in the 1990s — both regions took several years to recover from the kind of unprecedented housing slump that the national market is currently working through.

Burns said job growth will be the key to the return. "It’s not housing leading us out, it’s the economy leading us out," said Burns.

On a regional basis, Burns pointed to Texas, New England and Florida as areas leading the recovery and adding jobs. At the other end of the spectrum California is struggling, he said (with exceptions, including Orange County).

The recovery in building product sales is being weighed down by certain factors, including the 5 million delinquent homeowners who have little hope of remaining in their homes, he said. Of the 55 million mortgages in the U.S., 5 million are more than 90 days delinquent, he said.

Another concern is that new home sales are low, despite extremely attractive levels of affordability and low interest rates. For those selling houses, expect another 3.5 years of "pain," Burns said.

 

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Former Stock exec joins start-up company

BY HBSDEALER Staff

Jess Brown, a Wolseley veteran who worked at both Stock Building Supply and Ferguson Enterprises, has been named VP and chief information officer at RelaDyne, a provider of lubrication products and services for equipment management. 

Brown spent nearly 24 years with London-based Wolseley, holding positions with the global building materials supplier, as well as its U.S. units. At Ferguson, Brown held a variety of technical and business operations positions. Most recently he was involved in optimizing Ferguson’s SAP computing platform, as well as establishing programs to gather market intelligence, gauge customer service and establish regional administrative services. Earlier, he was director of business operations.

At Stock Building Supply, where Brown worked from 2008 to 2009, he developed common business processes to facilitate system utilization. Prior to this, Brown was director of Software Applications at the Wolseley Group, from 2004 to 2008. He began his career at Ferguson in 1987 as a support analyst, and steadily rose through the ranks to the position of director of information technology from 2001 to 2004.

RelaDyne, headquartered in Cincinnati, provides integrated equipment reliability management products and services for industrial, commercial, transportation and automotive businesses in the United States. It was formed in November 2010 when four companies — Mid-Town Petroleum, Oil Distributing Co., The Hurt Co. and Pumpelly Oil Co. — joined together. 

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