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News for Product Manufacturers from Hanley Wood CEO Frank Anton
The Key to the Future
It was 1995. Housing starts were hovering around 1.3 million units, up from the cyclical trough of 1 million units in 1991, but still far below the cyclical peak of 1.8 million units in 1986. At Hanley Wood we were wondering why the rebound was so modest, and we guessed that home buyers were discouraged because housing prices, when adjusted for inflation, had been flat for about 10 years. To test our theory, we surveyed consumers.
Turned out that we were wrong. When asked, an overwhelming majority of Americans indicated that the American dream of homeownership was alive and well. Moreover almost all of them agreed with the statement, "My home is my castle." In short, emotion largely overrode economics. Those same consumers then triggered an unprecedented boom in housing that lasted for more than 10 years.
Fast forward to 2009. It's now hard to remember those good times. Nonetheless, housing probably has hit bottom, an assertion supported by the recent increases in both new- and existing-home sales and the slow erosion of standing inventory. Once again at Hanley Wood we have been wondering about the new-home buyers' state of mind. So, once again, we surveyed Americans — 700 of them who were shopping at new-home subdivisions in May and June. Turns out their state of mind, at least about housing, is surprisingly positive. For example, even though 95 percent of those we surveyed thought the overall economy was a mess and two thirds of them were worried about losing their jobs, 60 percent think it's a good time to buy a house.
Emotion is still a factor. Four of every five people we surveyed said spending time at home with family was more important to them now. In addition, two thirds of the new-home shoppers agreed with the statement, "I'm not going out as much, so my home is more important." In the end, however, economics trumps emotion. An overwhelming majority of the buyers we surveyed said they were thinking of buying now because they figured they could get more for their money.
In short, they're bargain hunting. What's their idea of a bargain? For those under 40 years old — the group that will make or break housing in the long run — we think it's about a 1,300-square-foot house loaded with energy-saving features. (Among all those surveyed, 85 percent have a strong environmental orientation and 90 percent agreed with the statement, "I'd be more willing to buy a home with an energy-savings guarantee.")
I'm not saying that housing will boom if we simply start building smaller, more energy-efficient homes, but it will probably suffer from the slowdown longer if we don't.
Send e-mail to Frank Anton |
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News and Trends from Hanley Wood Magazines
Shoppers Seem To Want More Than Big Flashy Houses These Days
Results of new home buyer survey show that community and energy efficiency top their lists of priorities. (BUILDER, July 2009)
Introducing the NEW metamag Web Site
The Web site for Hanley Wood's magazine about the metal construction industry has been redesigned and relaunched, with expanded coverage, searchable articles, and product information for architects, building owners, and contractors.
Special Report: Innovation in Architectural Lighting
ARCHITECTURAL LIGHTING's Sixth Annual Innovation Issue salutes people, projects and products that are reinventing the industry.
Innovative Products 2009
A roundup of tools and materials found on the show floor at JLC Live in Providence, R.I. (JOURNAL OF LIGHT CONSTRUCTION, July 2009)
Appraisal Angst
New rules governing appraisals are jeopardizing builders' sales. Get the details on the Home Valuation Code of Conduct and how it has affected builders across the nation. (BIG BUILDER, July 2009)
2009 Site Commander Winner Drives Off with Grand Prize
With the roar of 101,000 NASCAR fans greeting him, Larry Allar stepped across the race track at the LENOX 301 at New Hampshire Motor Speedway, picked up the keys to the Site Commander Sweepstakes grand prize, and drove off with the most awesome work truck on the planet. (TOOLS OF THE TRADE, June 29, 2009)
Green Aversion? Working Around It by Stealth
A Michigan remodeler steers trade contractors toward green building methods without ever uttering the dreaded "G word." (REMODELING, July 2009)
Special Focus: Readers' Choice Finalists
AFFORDABLE HOUSING FINANCE features 35 finalists in the competition for its fifth annual Readers' Choice Awards for the Nation's Best Affordable Housing Developments. (AFFORDABLE HOUSING FINANCE, July-August 2009) |
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Housing Statistics and Analysis from Hanley Wood Market Intelligence
- June New-Home Sales: New-home sales surged in June, providing further evidence that the housing market finally may be stabilizing. Seasonally adjusted new-home sales jumped 11.0% from the previous month to an annual rate of 384,000 units. New-home sales for the previous three months were revised lower by 5,000 units. On a year-over-year basis, new-home sales are down 21.3% from the 488,000 figure in June 2008 and 51.6% less than the June 2007 figure of 793,000. The annual pace of new-home sales are now at their highest levels since November. A sharp drop in new-home prices along with the expiration of the government's home buyer tax credit approaching sparked demand recently. New homes sales surged in three out of the four regions across the country, which pushed new-home sales significantly higher last month.
- On a regional basis, June's seasonally adjusted new-home sales showed monthly increases in three out of the four regions, while only one out of the four regions posted an increase from the same time last year. The South was the only region to post a monthly decline in new-home sales. Sales were down 5.3% from May and were down 34.4% from June of last year. New-home sales in the Midwest were the most stable in June with sales up 43.1% from May levels while posting a 5.8% increase from the same time last year. New-home sales in the Northeast were up 29.2% from last month, but down 11.4% from June of last year. The West region increased 22.6% from May, but posted a 9.6% drop from June of last year.
- June New-Home Prices: In June, median new-home prices fell to $206,200 from a downwardly revised number of $219,000 in May. Median new-home prices are down 5.8% from last month, and are 12.0% lower than the same year-ago period. Increased competition from the existing-home market and higher mortgage rates caused median new-home prices to plunge back to their lowest levels since March. Median new-home prices have now recorded six straight months of year-over-year declines.
For more from Hanley Wood Market Intelligence, vist our redesigned and relaunched Web site. |
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Reinvention 2009, September 14-16, Seattle
The New, New Reality: Expanding the Architect's Role through Outreach,
Innovation & Collaboration
The model for nearly everything architects do is being
rewritten. It's not just "more with
less," it's also "more with more" — more complexities, risk, and
innovation than anyone thought possible.
Join us for the sixth annual Reinvention Symposium and find out how
architects are already redefining the scope, capacity, and relevance of
their practices. For more information, visit the Web site. |
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