Builder Confidence Steady

Sometimes, not changing is a good thing. According to the latest NAHB/Wells Fargo Housing Market Index (HMI), released this week (March 17), builder confidence in the market for new single-family homes stayed the same for March, and NAHB experts predicted recovery later this year.

“NAHB applauds the Federal Reserve’s aggressive actions in response to escalation of financial market pressures,” said David Seiders, NAHB chief economist, in a press release. “Provided that the necessary actions are taken promptly, a housing market recovery most likely would take shape by the second half of this year.”

The NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as either “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

The index gauging current sales conditions for newly built single-family homes held firm at 20 while the index gauging traffic of prospective buyers stayed at 19, following a significant gain in February. For more: http://www.nahb.org/news_details.aspx?sectionID=0&newsID=6447.

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Statistics for Builders: U.S. Census

Besides keeping track of how many of us live in the U.S. (281,421,906 as of April 1, 2000), the U.S. Census Bureau also tracks, on a monthly basis, a wealth of construction and housing statistics.

Specifically, the Bureau measures the number of housing units authorized by permits, started, sold or completed, and the dollar value of all construction put in place that month. It also tracks residential construction in 30 metropolitan areas across the country each quarter and the sales of new single-family homes in those areas each year; and keeps tabs on the dollar value of residential improvement and repair work each quarter.

In addition, the Bureau’s Census of Construction Industries, taken every five years, gives a comprehensive overview of the construction industry. For more information and links to other industry-related resources, log on to: http://www.census.gov/const/www/index.html.

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Ask for the Sale

An article in this week’s Nation’s Building News online edition recaps a presentation at the recent International Builder’s Show in Orlando about closing new home sales – a good topic anytime, but especially valuable now.

The piece includes sound advice from industry experts, including that sales offices and communities should highlight visible signs of activity, such as “sold” signs displayed prominently on homesites and updated community maps with sites marked with “sold” icons.

The article also reiterates that, not only is it a good time to buy a home, but from a financial standpoint, it’s also a smart time to buy a home – and sales staff should convey that to potential buyers. Mortgage rates remain at low levels, so showing customers the money they’d potentially pay out even if rates increased by one percentage point could be just what they need to convert them from browsers to buyers.

Other points in the article include negotiation tips and getting referrals from existing customer. For more, check it out online at http://www.nbnnews.com/NBN/issues/2008-03-10/Sales+and+Marketing/index.html.

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"Subprime": Word of the Year

Call it a little “housing humor” – or not.

Falling into the category of “who knows, who cares, but oh my that’s interesting,” the American Dialect Society, a group that’s dedicated to the study of the English language in North America, plus other languages, says the selection is based on a word’s importance.

“When you have investment companies losing billions of dollars over something like bundled subprime loans, then you have to consider whether [a word is] important,” said Wayne Glowka, chair of the New Words Committee of the American Dialect Society in a press release. “You probably also want to think about paying off that third mortgage.”

Other home finance-related finalists included exploding ARM (loans that explode beyond the borrower’s ability to pay for them); liar’s loan/liar loan (money borrowed under false pretenses); NINJA (No Income, No Job or Assets); and the always popular scratch-and-dent loan (a loan or mortgage that has become a risky debt investment, especially one secured with minimal documentation or made by a borrower who has missed payments.

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Home Builders and Baby Boomers

Builders with excess inventory to move should concentrate on what might just be the one segment of the market with the funds to move it: “seasoned” homebuyers.

According to an NAHB study released at the International Builder’s Show this year, those buyers who are 50+ “have substantial equity in their existing homes and greater accumulated wealth," says Mark Stemen, senior vice president with K. Hovnanian's active adult division in the mid-Atlantic and a member of NAHB’s 50+ Housing Council.

These buyers are all about lifestyle – and a very active one at that – so don’t give ‘em rocking chairs on the front porch. Rather, it makes more sense – and might just mean a sale – if you give them space to park their plane, scooter or vintage Aston Martin; a marathon training group; wine tastings; and progressive dinner clubs.

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