NBN Online for the week of February 19, 2007

Housing Expected to Improve as the Year Progresses

It’s only a matter of time before housing begins to recover from its first major downturn in about 15 years, industry economists said two weeks ago at the International Builders’ Show in Orlando, Fla., and fundamental improvements in the marketplace could already be taking hold by this year’s second quarter.

“We knew we were in a correction process a year ago, and it was an inevitable occurrence” following the unsustainable boom years of 2004 and 2005 when stimulative financing conditions and speculation from escalating home prices resulted in a “grossly overheating market,” said NAHB Chief Economist David Seiders. Indeed, “the downward movements in sales and starts were even deeper in 2006 than expected.”

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Lumber Prices Provided by Random Lengths

Grants Available to Local HBAs for ‘Buy-Now’ Campaigns

In an effort to bolster home sales in markets hit hard by the current housing downturn, NAHB has launched a multi-million dollar grant program to assist local home builders associations in conducting “buy now” advertising campaigns.

“This represents a major effort by NAHB to reach out and help our local HBAs that are struggling to rebuild consumer confidence in markets where home sales and production have dropped significantly over the past year,” said NAHB President Brian Catalde.

Approved during NAHB’s recent board of directors meeting in Orlando, Fla., the “buy now” ad assistance program will provide grants to qualifying HBAs in three different categories:

Big Builders Prepare for an Acquisition ‘Feeding Frenzy’

The current housing slump has brought consolidation in the residential construction industry to a screeching halt, but the top 10 public builders in the nation are preparing themselves now for the next round of mergers and acquisitions, maybe even a “feeding frenzy,” when the markets return to normal over the next couple of years, according to housing analysts at the recent International Builders’ Show in Orlando, Fla.

“The buyers are looking at candidates this year,” said Jody Kahn Klein of Michael Kahn & Associates in Pointe Vedra Beach, Fla. At the present time, however, they are “putting out fires and liquidating so that they will be in a good position to get those companies and better-priced land.”

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