If you build it, will they come? Yes.
Phoenix — A packed ballroom of LBM industry executives, including dealers and vendors, received solid news at the opening session of the 2017 ProDealer Industry Summit.
Ivy Zelman, CEO of the Zelman & Associates – the housing market research firm – said there is plenty of room for growth and increased sales in the coming years during a presentation that focused how the housing industry might look in 2018 and beyond.
While some have argued that millennials are not interested in purchasing new homes, Zelman counters that members of the generation are marrying and having children at an increased rate. “As this massive tailwind comes through, people are going to need shelter — and we don’t have enough,” Zelman said, while noting that 40% of all mortgages in the second quarter of 2017 were from millennials.
“Home ownership rates are going up and I think the American Dream is alive and well,” Zelman said.
Zelman & Associates forecasts single-family housing starts to increase 12 percent in 2018 and 9 percent in 2019 with home improvement spending growing by 5 percent next year. The New York and Cleveland-based research firm estimates that home improvement spending is up more than 6 percent this year.
A key to growth is the lack of existing homes on the market. Within the top 30 U.S. housing markets, entry-level homes are at a 2.8 month supply, while “first-move-up” homes are a 3.2 month supply, Zelman says. Overall, the nation’s housing supply is at a 30-year low. “It’s eerily similar in many parts of the nation.”
The need for more housing and new housing are ingredients for fueling a surge in new construction. Baby Boomers are aging in place and in no hurry to sell. Rather, they’re spending on upgrades and renovation.
“Millennials want new construction,” Zelman says. “But smaller homes of available product are desperately needed.” Given these conditions, the Cleveland-based analyst suggests that builders become “pioneers more than ever,” primarily due to land inflation, and build more entry-level homes in new, untapped areas.
Yard Force cuts the cord
Yard Force says it has become the world’s first garden tools manufacturer brand that has obtained a UL certificate.
Recently the Yard Force 120vRX series of yard tools, with the R&D cooperation of domestic and overseas company teams, produced by SUMEC Hardware & Tools, have passed the UL latest test of garden manufacturing industry standards.
The line operates with the advanced technology in 120vRX Lithium-Ion batteries, the company said.
With obtaining the world’s first UL certificate for the 120vRX series, the power performance of Yard Force can be comparable to the conventional power sources. Yard Force 120vRX series solved various problems associated with run-time and performance compared to similar gas-powered products, the company claims.
“The Yard Force 120vRX series contains many new features which can bring powerful, trustful, reliable usage experience to end users” says Joh Plocic, president of Merotec Inc. the North American business unit of Sumec Hardware & Tools. “Torque-Sense Technology provides higher running speeds and power when cutting wet or dense grass and saves battery energy under normal cutting conditions” he continued.
The mower has dual battery ports for extended run-time and speed-adjustable self-propelled drive is essential for yards with hills and slopes of all degrees to maintain a consistent cut and is safer by providing more control during operation. The Yard Force 120vRX series represents the future trend in manufacturing technology.
Estimating the right way
Phoenix — Chances are you’re not using a rotary phone when discussing business with customers.
Technology has improved by leaps and bounds in the past decade with just about everyone carrying a smart device in their pocket. The same can be said with how dealers can complete an estimate for builders.
Neil Faulkner, a 25-year-veteran of the LBM industry and a technology representative with MiTek, challenged dealers to use the latest technology to improve their bottom line while providing an excellent sales vehicle.
“The industry as a whole is using technology. Your customer as a whole is getting younger and much more comfortable using technology,” Faulkner told a room full of dealers at the 2017 Pro Dealer Industry Summit
“Technology can be part of the sale process for engaging customers.”
Faulkner began his career doing estimates with a pen, paper, and a ruler before embracing Excel at its advent. But he compares the use of Excel when estimating to a smart ruler. Today’s 3D imaging programs create 3D models of projects while actually counting the objects in a takeoff. And it’s not relegated to just studs.
“3D imaging is figuring out siding totals along with openings in the house,” Faulkner explained. “The programs provide instant feedback that can then be exported into a POS system.”
Today’s estimating and takeoff technology also provides and avenue for a bigger quote and bigger sale. “Lumber is your gateway. But why are you only quoting lumber? You should be quoting trim and drywall,” Faulkner told dealers.
A key byproduct of the programs is cutting down on material waste as well.
While some customers might be value-driven, others might be relationship driven. “The lumber price across the board is going to be the same. So, let’s make your estimate and the service you provide the best value for the customer,” Faulkner says. “Ultimately it’s the lowest cost to the bottom line they are looking for with the most accurate quotes and delivery system while reducing your number of deliveries and shortages that affect the bottom line.”
“It shouldn’t be the complete cost of materials. It should be the materials with an accurate and complete takeoff that you deliver to your customer.”
Training the right personnel to use the system is pivotal as well. As key employees reach the age of retirement their estimating knowledge might be walking out the door with them. Faulkner urges dealers to fold company intelligence into today’s technology. “Find someone who is willing to learn and learn how to read blueprints.”
By building a complete and up-to-date estimating process, dealers can improve their standard of excellence. This includes providing consistent and detailed quotes that are uniform in appearance while containing detailed, categorized breakdowns of materials. “Make your quote the standard that everyone trusts and your competitors have to live up to,” Faulkner says.