|
Custom Builders Say They Are Faring Well in Downturn
Custom home builders and architects appear to be faring better than large production builders during the current housing downturn, according to a recent survey by Residential Design & Build magazine.
“Despite all the bad news the mainstream media reports on a steady basis about the housing market being in crash mode, those in the custom home market maintain their positive attitudes,” says publisher Rob Heselbarth in the magazine’s April issue.
Nearly 700 readers were surveyed for the publication’s 2007 Market Trends survey. Just less than half represented construction firms, 36% were from architecture firms and 15% worked for design/build companies. The largest segment of the construction firms represented in the survey (34%) reported annual revenue between $1 million and $5 million.
Most of the custom home building and design firms that responded to the survey (66%) design or build 10 homes or less.
Among survey responses suggesting a relatively more positive outlook for custom builders and architects than the home building industry as a whole:
- When asked to rate their outlook for the 2007 custom home market, 58% of those polled said excellent or good; 34% said fair.
- Ninety percent said that they planned on hiring either more staff this year or maintaining their current staff level. Less than 7% said they would be letting people go.
- The number of clients paying cash for their new custom homes has held at a steady 33% over the past four years.
- From 2004 and projected into 2007, the percentage of architecture/design firms making profit margins between 11% and 25% rose from 37% to 48%, an increase of 11 percentage points. During that same time period, the percent of those firms with profit margins less than 5% dropped from 13% to 10%.
- The number of construction firms making between 11% and 25% profit margins rose from 53% in 2004 to a projected 62% this year. Over the same period, the percent of construction firms with profit margins of less than 5% dropped from 12% to 6%.
Custom builders have not gone entirely untouched by the slowdown in the housing industry, however, with more than 30% of those surveyed indicating that they saw their inventory of unsold homes rise last year.
Landscaping, countertops, cabinetry and plumbing fixtures were at the top of the list of where customers scale back when budgets get tight, according to the survey results.
The most asked-for room features in 2006 were: home offices, outdoor living space, great rooms and multipurpose family/media rooms; all were cited by at least 50% of those surveyed.
Discussions From
 Construction Forecast Conference Now Available on the Internet
The simultaneous Webcast of the Construction Forecast Conference — Spring 2007 held in Washington, D.C. on April 26 is available for purchase for the next three months.
Those interested can purchase the conference Webcast, which includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
Purchasers will receive unlimited access to the Webcast archive for three months, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections.
To Purchase the Webcast
To purchase the Webcast, visit www.nahb.org/cfcwebcast.
 Where Are the Top 100 Metropolitan Areas for 2008?
Find out in HousingEconomic.com’s Metro Forecast (sample). Access the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
 NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
|
