Builder Confidence Erodes Further in October

[hausdok]

NAHB News Release - Washington, Oct. 16th

Builder confidence in the market for new single-family homes was further shaken in October due to continuing problems in the mortgage market, substantial inventories of unsold units and the perceived effect that negative media coverage is having on potential buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI fell two more points to 18 in October, its lowest point since the series began in January of 1985.

"Builders in the field are reporting that, while their special sales incentives are attracting interest among consumers, many potential buyers are either holding out for even better deals or hesitating due to concerns about negative and confusing media reports on home values," said NAHB President Brian Catalde.

"Consumers are still trying to sort out market realities and get the best deals they can," noted NAHB Chief Economist David Seiders. "Many prospective buyers may very well have unrealistic expectations regarding new-home prices as well as how much they can expect to receive for their existing homes. When the market is in proper balance, people can recognize a good deal when it comes along; at this point, they view a good deal as a moving target."

The positive news from today's report, said Seiders, is that builder expectations for sales conditions in the next six months held steady at 26. "Builders believe they are taking the right steps to reduce inventories and position themselves for the market recovery that lies ahead," he said. "Indeed, NAHB's housing forecast indicates that home sales should stabilize within the next six months and show significant improvement during the second half of next year."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three component indexes of the HMI declined in October. The index gauging current single-family home sales and the index gauging traffic of prospective buyers each declined two points, to 18 and 15, respectively, while the index gauging sales expectations for the next six months remained unchanged at 26.

Regionally, the West accounted for a substantial portion of the decline in builder confidence this month, with a four-point reduction in its HMI to 14. The Northeast and South each reported one-point declines to 26 and 21, respectively, while the Midwest posted a two-point gain to 15.

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EDITOR'S NOTE: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be accessed online at: www.nahb.org/hmi. More information on housing statistics is also available at www.housingeconomics.com.

[kurt]

You gotta quit printing this stuff, Mike; you're bummin' me.

Feels like 1979 for new builds; it's gonna get uglier before it gets better.

[hausdok]

I know, it's depressing.

However, I learned long ago that if you don't bring the news into these forums to the home inspectors, a lot of them will stumble onward, blissfully ignorant of what's going on around them, and won't realize that things aren't so hunky-dory until it's too late for them to take measures to ensure they survive this kind of thing.

OT - OF!!!

M.

[Chad Fabry]

Times like these can mean that your chosen profession may account for 50% of your income. It's good to have a back up plan to weather the storms.

It's better to have a wife that makes 6 figures.

I have a back up plan.

[n/a30]

In most businesses you need backup plans or professions. Necessity is the mother of invention and necessity can also be a bitch in an aggressively competitive dog eat dog world. Times change and we need to move with the markets.

http://www.usnews.com/usnews/biztech/best_careers_2007/

and

http://www.usnews.com/usnews/biztech/ar ... .intro.htm

and concerning real estate agents.

http://www.usnews.com/usnews/biztech/ar ... estate.htm

[Rick Bunzel]

I disagree that you need a backup profession or wife with lucrative career. If you have a good business plan and execute to the plan, you will have an income stream.

Look at your local MLS numbers. Have sales dried up entirely? I doubt it. Are they off by 20%, perhaps. But that means that 80% of sales are still happening. Will you get a piece of that business, you should!

I know I can pay my bills if I do XX inspections a month. I really want to be at YY inspections a month. To do that I challenge myself to have at least 30 realtor contacts a month and at least 4 other marketing oriented activities. My wife helps with this. Does it work all the time, no. But after doing this for 6 years, I can look back and say there is a direct relationship between marketing, personal contacts and business coming in.

This month I am wearing my salesperson hat more often than my inspector hat. Not happy about that but its what you have to do in this marketplace.

//Rick