Q1 2010 Predictions & Strategies Report: Homebuilders and remodelers share their forecasts and plansMarch 23rd, 2010 by
Since the fourth quarter of 2008, we’ve regularly surveyed our members, asking their opinions about the near term future for both their company and the the construction and real estate industry. (click here to view all past reports)
In each Member Predictions Survey, we ask our members to answer two primary questions:
“Relative to the previous six months, what kind of change do you expect in YOUR COMPANY’S PERFORMANCE over the next six months?”
“Relative to the previous six months, what kind of change do you expect in THE MARKET over the next six months?”
As in prior quarters, more than 100 of our members participated. This quarter’s feedback (provided between mid-March and yesterday) showed the most optimism since we began our “Guildmember Predictions” surveying. What follows are two ways of viewing their feedback, as well as all of the many comments provided by our homebuilders, remodelers, real estate developers, and contractors.
Guildmember Confidence Index (GCI)
The Guildmember Confidence Index boils all of the answers down to a single number. We calculate the GCI by subtracting the percentage of members predicting decline from the percentage predicting improvement. Therefore, a positive number means more members predict things will be getting better than worse. The only quarter in which the GCI has been negative (so far) has been Q4 2008.
Distribution of Answers: Your Company’s Performance
The highest ever percentage of our members predict improvement in their own company’s performance over the next six months (73%). An all-time low percentage (about 3%) expect decline.
Distribution of Answers: The Performance of the Construction & Real Estate Market
Our members’ optimism also extends to the larger building and real estate market.
Each quarter, we alternate between either asking a number of open ended questions about your strategies, or simply closing the survey with the question “Do you have any additional comments for us?” Last quarter, we asked the abridged survey. This quarter we asked every question and you provided 350+ comments. There’s a ton here, so if you don’t have time to go through everything, I encourage you to check out the meatier Additional Comments.
Use these links to jump straight to each set of comments:
Improving our sub contractor base.
Trying to generate as much traffic as possible through the sales centers with promotions and advertising, cost cutting…
Keeping remaining employees busy.
Cutting overhead wherever possible. Increasing grassroots marketing efforts.
Looking for alternative sources of construction lending.
Created a handy man/home services division over a year ago, became a contractor affiliated with the state focus on energy program, learned how to downscale projects not having to use the best products available.
Diversifying into remodeling.
Hiring – carefully and continuing to market and network heavily.
Talking about budget work to be with in budgets, reviewing lots of options and the impact of those options.
Continuing to get rid of overpriced lots. Tying up good lots.
Liquidating or improving non-performing or under-performing assets. Increased emphasis on cash flow.
Cutting overhead and maintaining a low exposure to any speculative homes.
We continue to glean through our former customers, more networking, more low-cost community presence endeavors.
Keep marketing – networking, client open houses, web marketing. Emphasize our expert design ability.
Focusing on the client’s needs and focusing extra attention to service.
Building with less amenities and lower spec level to bring price point down. Smaller plans.
Costs cutting / value engineering plans.
Focusing on design services to get our clients involved in the process early and keep them motivated as we proceed through the estimating and specification phase.
Ramping up marketing.
Reduced overhead and profit, delivery faster to close, and new systems to stream line.
For the first time ever we are offering discounts to try to fill our schedule. It is much rougher in the market now than this time last year which is not what we expected or planned for.
Working harder, keeping track of cash, low receivables, quick turnaround on payables.
Really taking very good care of our existing clients . Also spending more on marketing.
Listen to customers, sell our wares.
Selling to value. Open book presentations.
Biggest challenge is still to build a backlog of work. We have the processes we use to market and sell. So far we are having success with the new systems.
Survival is our most pressing short term issue. With the crash in the market and reduced volume, we did not cut back fast enough and are now heavily in debt and do not have the cash flow to make payments on the interest. Reducing debt or filing for bankruptcy protection is a must in order to continue in business.
Pro active marketing.
Cutting over head learning to work with less help.
Very careful on cash flow.
More event promotion to bring traffic to the development. Staged small home show with 8 or 9 homes and events promoting lifestyle in the development. Courting additional builders expecting smaller production out of each.
Cut overhead Cut profit.
Keep our costs down and sub out more to sub-contractors to keep costs defined for projects.
Tightening our processes.
Looking for land to fill the pipeline that will be profitable; monitoring and improving customer satisfaction via GuildQuality.
Laid off one carpenter. Evaluating all marketing and adjusting. We are doing TV now and it works.
Work sharing schedules, keeping overhead low.
Strong focus on sales generation. We are working harder on prospecting than we ever have before.
Reevaluating and consolidating all of our systems, taking a team oriented approach to the sales, administration and on site work.
Running a tight ship. We are not hiring, except for in the sales department. Trying to get higher quality people in place. We are looking at trying to survive and then keep things tight after we think we have survived.
Taking advantage of every opportunity.
Increase marketing-going back to former customers to do other work.
Thinking of hiring.
Reduce risk to the customer. Convey a call to action that creates urgency.
Selling harder and selling better.
Working sales much harder!
We are continuing to meet daily and get possibly two designers looking at a project. We also include the field super to see where costs can be saved without losing money or presenting a sub-par product.
Cutting overhead selling land.
We offer more options to the customer being a design build firm that also specializes in kitchens and baths.
We’re providing a special financing vehicle that carries back 20% of the purchase price of a condo so that the buyer only has to show up with 80% of the contract price. we then split the future sales proceeds with the buyer when they sell the unit to another buyer in the future. it basically defers our profit in a stalled condo project so that the units can sell and comps are weakened. We’ll make money someday in the future, but be able to get our equity out and pay off the bank now. Time to move onto the next deal!
Hiring more people.
Continue to pursue new and innovative products. Market, market, market……and it is working. We just closed our best February sales ever in 41 years of business.
We are working on generating leads for energy efficiency upgrades.
Hiring more employees.
Remarketing and using existing past customers for leads.
Continuing education, involving green certifications, additional contractors license and web site development.
Keeping overhead low and advertising/marketing high to ride out the current economy.
We have completely re-vamped our website and SEO and held a party for clients, vendors, prospects and others to announce our new website, have joined the Chamber of Commerce, we have a referral program in place, and entering projects in competitions.
We have increased our marketing budget, and based on our marketing analysis we are focusing on the relationship based marketing that is yielding the referrals and repeat client leads that create over 90% of our sales.
Providing the most cost-effective price possible by reducing our margins as tightly as possible. We are also taking on renovation projects to o help fill gaps.
We are constantly working with the trades to find out what they are hearing and networking with supply yards and architects.
Sticktuitiveness. Making decisions and sticking to them. This is not a time to waver in the market.
Aggressive community involvement to stay top-of-mind. Continued refinement of process and services for our clients.
Bid as tight as possible.
The business has been working on cutting overhead and creating savings where possible. We are attempting to work with a tighter staff where possible. We have also been working on time management.
Becoming more flexible in how we partner with our clients. If a client wants to self-perform part of the work then we’ll let him…with a few strings but we’ll let him.
We have expanded our market area. We are spending more on direct mail advertising, and working closely with local Chamber of Commerce’s to be on their sites.
CHANGE! Need to do what it takes to survive.
Getting leaner and contacting client base for leads or work.
Larger focus on marketing.
Aggressive pricing, aggressive pursuit in sales, aggressive pursuit of customer follow up.
Broader marketing, entering different niches.
Promoting our small jobs division and our new kitchen/cabinetry showroom that will open this summer.
Spending more time with clients. Really listening to their wants and needs. Introducing them to all of the subs and the team players. Having them over to the office for the proposal presentations.
Looking at how we can touch past clients each day.
Trying to educate customers on trade-offs, and looking for ways to suppress costs.
Better quality marketing Improve our services.
Taking on smaller jobs and doing quality work to increase “word of mouth” marketing that eventually will lead to larger projects.
Taking time now when it’s slow to prepare for when things pick up. (i.e. evaluating programs and procedures for efficiency, evaluating costs and cutting where necessary, preparing for future project starts…)
Applying a process or system to everything we do and incorporating this processes into a web based resource. Embarking on going paperless and reviewing file organization for better more efficient access.
Cheap, effective marketing, increasing customer service to “above and beyond”.
Being very intentional, increasing face to face grassroots promotion of our company, cutting overhead expenses, staying in touch with our circle of influence and continuing to provide a great experience to our clients investing in their homes.
Cash is king, so cash management is essential to surveying for the long term.
Reduced overhead by 35%, and the above.
Decreasing dependence on debt.
Continued customer service and marketing. Possible expansion into new locations – with a carefully planned execution.
As much low budget marketing as possible.
Developing our own land and controlling our own destiny.
Continuing to develop our brand and refining internal systems & procedures.
Planning on being one of the few old companies that are still standing when this is over!
We’re emphasizing our professionalism, our expertise, and doing some presentations for service organizations in some of the segments of the market which we are uniquely qualified to address.
Change procedures to accommodate our current reality and keep our lean model in place. Get better a packaging and producing smaller jobs.
Creating / fine tuning systems. This helps the short term by becoming more efficient and saving cash and positions us well to handle the added work load when the damn does break.
Advertising, quality and referrals.
Working every deal.
Securing land positions that are significantly below market prices…
Strategic planning and hiring.
Delivery of quality work rapidly… more exposure, giving some services away.
At this point we are just trying to hold on.
Website Optimization, blogging, trying to become thought leader in my market.
Marketing ………… the only area that we increased our budget this year.
Building relationships with clients.
We have changed the structure of our company and our basic business model. Focusing on projects WE enjoy doing and we are good at. No more all things to all people.
We are trying to reduce debt, minimize overhead costs, and seek out clients who are in a position to spend discretionary money on improving their homes to transform them into one that meets their needs and lifestyle changes.
Removing debt, lowering operating costs, eye on efficiencies.
We are willing to change for the new market smaller jobs and more of them thinking of investing in the housing market buy houses for cash for pre qualified buyers and re sell to them after repairs.
Advertising & marketing, social media.
Live to tell the story!
Keep marketing and reduce debt.
Becoming more organized and providing great customer service.
Tightening our processes.
Focus on marketing/social media, finding land in great locations and improving customer satisfaction.
Still working on improving systems. Hired another designer/salesperson in Jan. Training employees more. Marketing our brand for long term. We bought two vans in Dec. due to tax write off and are putting large logos on them. We bought a building site in Nov. 09 and are cautiously planning a new building for 2011.
Shifting marketing to web-based vehicles, more targeting to quality-oriented home-owners, and niche segments that appreciate our business model.
Working on systems internally. Completely overhauling our marketing program (website, logo, etc…).
Offering more consumer events, seminars and open houses.
Improving our processes and keeping our ear to the ground. We won’t relocate so we’ve got to adapt to our local markets and get out ahead and stay ahead of competition.
Same as above, Trim costs.
Increase marketing-focusing on making our existing customers super happy (which we have always done) and going back to past clients to see if they have other projects for us.
Creating relationships with in the industry.
More targeted marketing.
Broadening marketing strategies, expanding custom options and features, adding new floor plans.
Better systems, continuing education and working together with Vendors & Trades.
Expanding our services.
Increased marketing revamping the website.
Continue to look at ways to reduce costs and overhead, shop our vendors more than we ever did, and continue to put more emphasis in Social Media, blogging, newsletters and website marketing.
We’re focusing on incremental land development rather than big push efforts. On vertical construction projects, we’re focusing on MF Rental product and workforce housing right now. We’ll still do office or hotel on a build-to-suit basis, but no spec.
Hiring better people.
We will no longer work with any manufacturer who offers direct installed sales! We are also staying away from products being sold at the Big Boxes. We think those manufacturers are interested in one thing only – more market share – and at any expense. Our business is built on respect and loyalty to our clients, employees, trades and suppliers. We work for our clients respect and loyalty, we give and demand respect and loyalty from our trades and manufacturers. The current trend by manufacturers and suppliers to pursue installed sales is short sighted and lousy business decision that we cannot except in any circumstances.
We are working on harvesting information to make estimating more efficient and streamlining policies and procedures to make the day to day more efficient as well.
Training, educating, promoting.
Remarketing ourselves again.
Attempting to exceed each customers expectations every day
Continuing to improve infrastructure to be able to grow into a larger and more efficient company when the economic growth comes back.
Website modifications, increased community involvement, hired an additional staffer to take over most design and production function from the president so he can concentrate on sales without interruption.
We took serious steps to control overhead; Marketing, tracking, upgrades and adjustments across the board position us well in our market area; Listening to our client’s feedback using GuildQuality gives us the opportunity to adapt and respond to client’s needs and concerns.
Offering energy efficient building options.
Just adapting to the ever changing market. Adjusting to the new trends from our clients.
To increase the likelihood of my employers success, they are searching for the best investment at the lowest cost.
Extensive planning, market research, training development. We have the players in place, now we need to ensure that all of our players are trained and ready to execute our plan.
Bid tight, plan well, no waste.
Our company has been marketing to architects, high end designers, etc. We have been paying attention to all of the jobs and are attempting to maximize our chance to create raving fans with our clients.
Better marketing plans.
Investing in the professional development of our personnel.
Looked at all levels of the company. Cut back were the clients will not feel the impact. Making Customer Service our number one priority.
Revising some marketing thoughts, just revised website and created a monthly e-mail newsletter blast and a blog. Working on facebook type social media for future as well.
We make sure our clients are very satisfied with our services, and we always look for ways to improve our services.
Continuing to improve customer service and quality. Over time, this is what builds our business.
Sales training, website optimization.
Getting out there further through networking and targeted marketing. Keep giving excellent value and excellent customer service.
Maintaining our diversity of services (commercial, institutional, residential).
Trying to maintain a profit margin.
Keeping our name out there and doing a great job for our current clients.
Marketing campaigns, and increasing focus on customer treatment and satisfaction.
Pay more attention to core business. Solicit customer feedback.
High quality at a fair and competitive price.
Customers are willing to due without the prime locations and extravagant upgrades in order to have the ability to purchase. Customers are still expecting large incentives from builder.
Looking for more customization even at production pricing. Energy efficient homes and single story architecture, walking trails, green space.
Looking for value, cost conscious.
Increasing energy efficiency and lowering utility costs.
Smaller scale projects that are value and cost driven.
Not enough business to see any trends.
Value, less is more, very focused splurges.
Slow to make decision, smaller job sizes.
Quality amenities over sq ft.
People are still asking for the world in home options but demanding a lower price.
Projects are much smaller, components for easily-replaceable selections are not top-of-the-line.
Kitchens, baths, siding, remodels with little or no expansion
Clients are still very slow and cautious, however they are buying and paying for professionals.
Price, price, price. Very price conscious and still slow to make decisions.
Very cost sensitive, heavy shopping, price drives all decisions, they will settle for less to hit a price goal.
First floor master bedroom/ living designs.
More efficient use of space.
“Looking for value, less worried about a “”gold plated”” solution.”
Less tire-kicking, more deciding, but value-minded.
More design quality for the dollar and greater value for the effort.
An unprecedented level of price concern. Past clients who had a fantastic experience are price checking us against other contractors all the time.
No one wants to commit.
Kitchens and baths still seem to be happening. Major renovations are few and far between . The client now is calling due to needs not desires.
Homes more attuned to actual consumer needs as opposed to speculative investments. Buying homes to live in rather than to re-sell.
Value and cost effectiveness. Re-sale value. Overall cost reduction. How can I get the wow design for as little money as possible.
We are seeing the return of larger projects. Not a flood of them, but an increase.
Over the last few years our clients have been the 50 and up couples, or Empty Nesters. They seem to be in the best position financially in terms of peak earnings, low mortgage, low debt and do not want to move. They love the location where they have lived for many years.
Beginning to spend more.
I really donÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢t what I am seeing is the people that have the money to remodel that have been on the fence since the great depression are sick and tired of waiting and are moving forward to do there job thank god for that. I cant have another year like 2009.
Leads for additions again.
“Continued expectations of “”give away”” pricing and something for nothing shopping. Homes continue to shrink in size but keep the bells and whistles.”
We are finding more and more people are electing to stay in their existing homes and remodeling rather than building or moving into a larger home.
Mostly focused on remodeling High degree of focus on energy efficiency. Smaller with higher quality.
Looking to incorporate energy efficiency into their projects, whether it be with the use of closed cell foam insulation or more energy efficient windows and doors.
Clients are becoming more value driven.
Homes that are less extravagant, but still very nice (more affordable).
Spend more time in design to make the right decisions. It takes longer to close. Consumers are researching more. We are seeing smaller jobs $10k-$50k and larger jobs $120k-$250k and little in the middle. Design and selections advice is valuable. We are considering raising our design fees.
Self-funded projects, strong evaluation of value relative to price, improvements based on need vs. want.
Less square footage homes, lower carbon footprint, more value.
Mosaic tile, open showers & frameless shower doors, free-standing tubs.
More custom type options in kitchens, baths and flooring. want outdoor living areas. Higher quality and more storage.
Smaller jobs. No real increase in business though.
Clients are becoming more and more knowledgeable about products in the market and build science.
Relationships and value.
They want it all at less cost.
Value, Value, Value. Not just dollar-per-square-foot. Customers are increasingly big-picture focused. Dollars and location, yes, but quality, custom options, home feel, community, lifestyle, etc. all play huge factor in determining exactly how much a buyer wants to spend.
More value per SF.
People seem to be waking up. I liken it to the eye rubbing sensation after a long nap. There seems to be a lot of interest, but still some hesitancy.
With little home-equity loan money available, customers are writing checks for projects they would otherwise have financed; thereby greatly reducing the size of the project (typically).
Stained woodwork less square footage more hard surface flooring drop zones.
They are seeking many more quotes, taking longer to make decisions, expecting more for lower budgets, less willing to sign LOI’s and pay retainers.
Our sales prospects’ willingness to make a buying decision is loosening. Their capital has grown over the past 18 months and they feel more comfortable in the stability of our local economy (especially) and somewhat reassured about the future of the national economy. But they want to spend less rather than more – and are willing to settle for a smaller home and smaller mortgage in the process.
There is a huge pent up demand for remodeling work and past and new customers are calling for work to be done. That being said the biggest trend we are seeing is that clients are scaling back on the level of work they are doing to keep projects in budget.
The desire for greater energy efficiency.
Want everything cheap.
Smaller size projects with corresponding budgets.
More interest in green building technologies More interest in aging in place/universal design.
A lot of kitchen and bathroom remodels. People are realizing they are a good return for the money if they sell the house.
We are having more conversations about the longer term value the improvements will add to the home. This is related to clients cash and credit conservation concerns.
Smaller square footage of homes.
People are staying in their homes longer, and more likely to spend money on expensive improvements.
Reinvesting in kitchens and bathrooms.
“Other than wanting the “”best price”” on everything? 🙂 They want good features like granite counter, tile floor included in the base price. They want the lots they want now- not waiting for next release. And they are beginning to feel urgency to buy at the bottom of the market.”
Smart planning. Getting the most for the invested dollar. Long-term sustainable products are high on the list as are smart storage and layout solutions. Many clients are reconfiguring existing space rather than adding new.
Smaller better design.
We have noticed that our clients have been requesting smaller scale projects with less luxury. The projects have become more basic with less frills.
“They still want the same things but they want to know that they’re not overpaying. “”Value”” seems to be driving the decision-making process.”
Most homeowners have realized they are going to stay in the home they are currently in. They are now starting to remodel for their liking, not for resale. The quality of the projects is rising.
Timeless, family oriented, remodeling, very few green design.
We see a strong surge of people who want it cheap! This I feel due to a continued perception that everyone is working cheap due to economy and due to many people, new home builders, subcontractors and frankly many unemployed, doing remodeling and only making a wage, thus putting legitimate companies in peril.
People are looking to buy older homes in need of more work.
Slightly larger budgets, customer traffic and leads are trending up somewhat.
Release of pent up desire to improve/spend.
Time and materials contracts.
More value for the price, long-term energy savings.
Residential projects are smaller and more practical: bathroom and kitchen updates, windows and doors, flooring upgrades. Large-scale additions/remodels are few and far between.
Clients purchasing their own fixtures. 30 somethings are shopping strictly price and seem to consider remodeling contractors as commodities.
Smaller jobs, people looking for a more economical approach.
They seem willing to sacrifice quality for lower prices many times. Everyone is looking for the lowest possible bid on the front side of a project.
More cost conscious. More demanding.
Timeframes for project completion.
Customers not willing to pay for extravagant upgrades, energy efficient products less important because of cost, etc.
Vaulted ceilings, large outdoor area’s.
Large or extravagant remodels.
Slightly less focus on incentives.
High end projects, large additions.
Overall luxury – people are picking and choosing at a more refined level where to splurge.
Showy stuff they are much more practical and budget aware.
Room by room electronics moving to all wireless.
Sq ft over quality amenities.
I have not noticed a lessening of request for options, just a lowering of willingness to pay for options.
Clients are less concerned with image. They are also less concerned with scheduling, making it more difficult to differentiate between professional and in-the-moment remodelers.
Porches, large decks, master bedroom suite additions, whole house remodels.
High end products are not being considered with any regularity; good quality over style.
Nice to have items and anything extravagant.
Heavy amenities and big spaces. High ticket upgrades.
Green building…Buyers don’t want to pay for it..
Added expense of consultants.
Bigger is not better any more.
Big houses are a thing of the past.
High end is a dying breed.
More for mores sake. They are looking for efficient use of space and materials.
Our customers are starting to be more cost conscious and believing they don’t have to have the best of everything. They are beginning to compromise, downsize their projects and spread them over time.
Tile is hot.
The high-end appliances and fixtures but they are still spending on the mid to high range for those items so they get the look that people were doing in their kitchens and baths before.
The bigger the better.
Few know about green or truly care.
Keeping up with the neighbors.
Large footprint McMansions.
Having a tub in the master bath, most customers are removing the tub to increase the square footage of the shower.
Big houses. People want smaller, more efficient homes that feel big but without all the extras space to pay for and manage.
“”Want” jobs vs “need” jobs.
Not willing to pay for value.
Location. It will never be erased completely as a buying factor in real estate but people increasingly are willing to move to new areas or to areas they hadn’t previously considered because they found a home that met all of the criteria listed in the emerging trends question.
Customers are removing extras to stay in a more affordable budget.
The big grandiose house seems to be dying for sure.
Whistles and bells.
3/4 baths in the guest bedroom.
Not looking for top of the line materials, willing to do facelifts vs complete remodels.
Less important is the idea that a bigger home = status. The new status symbol is financial longevity.
Having the absolute best quality – they will purchase mid range priced products and still keep the elements of quality design and proper installation.
More is better.
Length of time job takes or to start job.
Insured and certified contractors ……… to save money they would risk hiring a handyman.
Aesthetic for aesthetic sake. Form follows function and maintenance free are more the watch words.
Clients have done more research and know what they want when they first meet with us rather than having no ideas and depending on us to give them ideas. They are more careful with money–sometimes choosing to scale down projects, or do in phases, so they can save up first.
We are seeing less plus $500k projects, so it appears small is beautiful at this time.
Commitment to spending more for green products.
All the bells and whistles. Just straight forward remodels.
Green. People are all talk, no action. if it costs more, they won’t do it.
Size/scale of projects has decreased. People seem to be doing more with less. A better sense of spatial planning is necessary as is knowledge of smart storage and organization so that clients don’t need to build such large additions or renovations to gain necessary function and desired style.
Large high end.
Some of the high luxury items have not been in the plan at the moment (i.e. over the top audio systems).
Premium brands are being requested less.
Right now the trend is to see how cheap you can get it. We are seeing lead who are talking to 6 – 10 people before making a decision.
Downscaling due to budget constraints.
Fancy products, large homes.
High-end additions. Folks are more practical and cautious with their remodeling budgets.
Smaller amounts of good quality versus larger amounts of crap.
Bigger and better.
I am expecting a very long and slow recovery short of Al Gore inventing another internet.
We have seen a good increase in contracts over the last five months by working each deal on its own merit. We are operating outside of our normal mode but getting results. We are selling at price points about 20 – 25% below recent past. We are feeling a little bit better than we have in two plus years.
These are the toughest times I have ever seen in 35 plus years . Lots of contractors that are working for a wage .My experience has shown this just prolongs the slow and painful failure of the business. I pity the people that are just starting their businesses. Without a 35 year customer base we would not have survived .
We have seen a large increase in interest since the first of the year. We have more leads in ten weeks than we got in the last six months of 2009! The size of the projects is also increasing. So far, 2010 feels like a much better year than 2009.
The remodeling market has been turned upside down and the future is uncertain. Our economy, consumer spending being 70% of it in the past, has relied on the housing ATM machine for the past 20 years. With the drop in home values of 30% plus in some markets, the days of home equity loans financing major remodeling projects are over. At least until some other means comes about to fund projects. The housing bubble, mortgage crisis, bank and Wall Street bailout fiscal is not over. As one of the experts I follow on the subject since 2006, had predicted the chain of events that unfolded, has stated that the whole housing bubble and aftermath is like a three baseball game event. Currently the United States is taking batting practice as Greece and other countries are finally facing the music of out of control national debt and not having the income or revenue, (taxes), to cover the interest on the debt they accumulated. The Federal Reserve continues to print money and hide the root of the disaster that is waiting to unfold. Things are becoming very interesting in the Global Financial Crisis as China has begun to stop buying US securities. The money from China that has funded our consumption for 20 years is now coming to a halt. Events could happen over the next 12-18 months that we never dreamed possible. After all, who would have ever thought that General Motors would file bankruptcy, and that Merrill Lynch along with Lehman Brothers and Bear Sterns would cease to exist in the future. The Federal Reserve dumping $1.2 Trillion into Fannie and Freddie Mac in an attempt to keep them solvent has not solved the housing mortgage crisis. It’s just prolonged it. Financial reform is needed but it will not happen this year as no one in Washington wants to make bold moves in an election year. And who are the biggest campaign contributors in Washington? Bankers, Wall Street investment firms, law firms and lawyers. Housing has been the core of our national culture and individual Americans worth. For millions, that wealth is gone and there are no signs of it returning any time soon. The country has lost 7-8 million jobs since 2000. There is no sign of those being replaced or new jobs being created for college grads and new people entering the job market. What is needed to turn things around for a better future are jobs, jobs, jobs and a reduction in both State and National debt levels. The economy can not begin to truly grow until there is enough income to pay for the past debt and leave some discretionary money left over to invest in the future.
I still think we will experience some roller coaster effects, but generally uptrend.
Pray a lot.
Slight improvement in the market but not significantly. Clients are very focused on competitive pricing.
Design build is becoming more important. Internet and social media has worked for us. We are exploring financing options help to pull in more prospects.
I have seen customers sit back at the presentation and basically demand money off. The homeowner knows they have contractors by the cojones and are taking advantage of it. Many contractors will do work for no margin and cut corners as much as they can. The homeowner will then get poor work and complain they got screwed in future years when the installation problems become noticed.
“We continue to look at ways to improve and offer the customer that “”something”” that creates value.”
Michigan is at the bottom of the barrel economically – yet we see a significant pent up demand for work and we are pursuing it with various marketing efforts that are paying off very nicely. Clients are buying. Many remodeling companies have gone out of business and their clients are looking for a new remodeling company to develop a relationship with. If you are not marketing you will not get the opportunity to work with new clients. Further…..if you are not marketing your past and existing clients may think you have gone out of business. There has never been a better time to advertise, send newsletters and to look at new ways to keep your name in front of potential clients. Start small and slowly build up your marketing effort – the sales will follow.
The overall consumer confidence seems to be improving, albeit very, very slowly and cautiously.
People seem to be uncertain about the direction of economy over the longer term. Credit and the ability to obtain 2nd mortgages is also an issue people struggle with.
My company did $1,597,808 in sales for the year 2006. Last year we did $246,819. I let all of my staff go by the end of 2008. I let my last lead carpenter go in may of 2009. Now the company consist of 3 people. Me, myself and I. I’m operating as a one man band, just as I did when I started my business in 1980. As Yogi Berra said, “It’s like dejavu all over again.”
I guess it’s all relative when I say the remodeling market will “improve” over the next six months in my area. I do business in Ann Arbor, Michigan and have been operating since 1980. I experienced the 1980’s recession in Michigan and this one is much worse. The state of Michigan is going on 10 years in a row of job losses. Since 2000, the state has lost about a million jobs. My market will not improve until more jobs are created.
Are your customers telling you the whole truth?