Red hot. That was the only way to describe this year's Pacific Coast Builder's Conference (PCBC), held June 20–23 at the Moscone Center in San Francisco. With the City by the Bay basking in unseasonably warm temperatures in the mid to upper 90s, a record crowd of more than 34,000 builders, dealers, manufacturers, and specialty suppliers were treated to some great California sun between educational seminars and walking the 200,000 square feet of show space in two convention halls.
Some conference-goers enjoyed the sun and the show at the same time, as was the case at the W Hotel on June 22 when Maumee, Ohio–based Therma-Tru Doors hosted several hundred conference attendees on the hotel roof for the unveiling of the company's Tru-Defense Fiber-Classic and Smooth-Star patio door systems. As Jim Morrison and the Doors' “Light My Fire” befittingly blared from the PA system, people checked out the new products, but much of the small talk at the reception—and nearly everywhere else at PCBC—was reserved for the current pace of the residential construction market.
Lukewarm. That's where a lot of the buzz regarding the housing market centered during the conference. While opinions from attendees still varied wildly, from those who claimed to have an in with big builders that were definitely feeling the heat to those who said they think 2006 and 2007 are going to be great years for continued growth, the general attitude of most attendees at the conference was a cautious optimism that the housing market was indeed slowing up, but without any type of gut-wrenching, precipitous drop.
Official statistics released by the federal government before and after the conference offered more discrepant views on construction activity. While housing starts for May increased by 5 percent from April, permit issuance lagged 8.5 percent behind May 2005 numbers, according to data released on June 20 by the U.S. Commerce Department. On June 26, the U.S. Census reported that sales of new single-family homes rose 4.6 percent to a seasonally adjusted, annual rate of 1.23 million units, slightly less than 2005's 1.28 million units recorded by the Commerce Department. Expect to see even wider variances in state-by-state comparisons, suggests the NAHB's State Housing Starts Forecast released July 12. In a press release accompanying the report, NAHB economist David Seiders notes, “Each market has different factors that affect its local economy and housing market, but overall we are forecasting an orderly slowdown in housing starts.”
If you count yourself among the progressive and prepared dealers in the industry, the news should come as little surprise, suggests PROSALES columnist Mike Butts in this month's installment of New Dimensions (page 40). Many have “become progressive and proactive,” Butts writes, “focusing on core strategies for strengthening existing business relationships, improving margin management and cost control to prepare for the future.” If you find yourself on the outside looking in, however, Butts says the time to start is now.
Like every copy of PROSALES, this month's issue offers a wide variety of proven tactics and original ideas to get you started, many of which focus on diversified market opportunities far from new construction woes. Contributing editor Rich Binsacca provides insight into leveraging the power of house plans to create new profit centers in “Future Plans” (page 77), while contributing editor John Caulfield delves into several pro dealer strategies for powering up commercial sales in “Commercial Developments” (page 21). Elsewhere in the issue, our Tech Trends column (page 24) profiles Mansfield, Mass.–based National Lumber's unique video system used for improving manufacturing efficiencies, and a feature article by Margot Carmichael Lester (page 64) tackles loss prevention to show you how to protect investments in inventory and property that you have already made.
Sure, everybody is talking about the housing market, watching the prices and counting the permits. It is only human nature to stand and watch as things change, particularly when they seem headed south. But evolution and improvement are also human nature, and if you use the time now when the going is still good to develop services, hone customer service, and fine-tune sales to secure a place in your market, you'll never be left out in the cold.