24.8% Drop In New Home Construction For 2007!

buildenterprise

I knew it was bad but I didn't think it was that bad. The biggest decline in 27 years I hear. We don't have anything to do with new homes but the remodeling market is slowing also. Thankfully, we do most everything so we're better off than some of the niche guys, such as painters, drywallers, etc. As it is I am actually subbing work from someone for the first time in awhile, just to keep myself busy.

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Celtic

I had read some more "doom and gloom" predictions at nj.com:
NJ economy predicted to lag rest of country 'til 2017

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buildenterprise

If you're working at the shore or northern NYC 'burbs, I think you'll still be doing ok, everywhere else in the state is hurtin'....

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Celtic

Hudson, Bergen and Union are the areas I frequent.....getting slow.

I have an EC friend in Middlesex/Monmouth who is quite busy...as fate would have it, he called me today asking how I was doing....long story short, we may be collaborating on a job (mid-sized comm.) down by him.

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Kgmz

I am so sick of all the doom and gloom reporting from the media.

You know if this crap wasn't reported, most people would not panic and most might not even notice that anything has changed.

My Mom is one of these people who watches the news and says things are going to start slowing down and starts worrying. She owns a business and when I just helped her with her yearly books, I told her look your sales have increased by at least 10% across all catagories and her sales for the month of January so far have increased by 20% daily compared to January 07. The I showed her the Washington State economic report and forecast. Unemployment is at almost a all time low, construction forecast are way up for commercial, etc. etc.


Now I will attach the Construction starts for "New Privately Owned Housing Units Started" from the US Census from 1959 to 2007


These reports always fail to mention the big drop in the early 70's.

Also were any of you hurting from 1990 to 1995, 2007 figures are better than this period. I can remember the big drop in residential from 1989 to 1990 and everyone up here thought they were going to die or something. If you look at these figures it wasn't that bad, and was actually the tail end of a long slow down. Same thing in this period happened as is happening now, residential slowed but commercial took off. And we were still busy then as we are now.

So what I would like to see is a report on both residential and commercial, and see how that averages out.

Attached Thumbnails

 

Celtic

The nature of the business is a cycle...a 10 year cycle one can almost map out with a fair amount of accuracy from that chart.

The trick is knowing when a point is plotted and when a point is an anomaly - and acting accordingly.

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JustaFramer

kgmz comes in with the facts. But and the big but is there were nearly 3/4 of a million less starts that 05 and a half million less starts than 06. Those figures are dire straits for the residential side.

There is also two types of commercial light and heavy. Light is easy to ease into for a residetial contractor. Heavy there is no way anybody is going to hire a residential contractor for a heavy job.

cleveman

Thank you, kgmz, for the figures. I wanted to review them, but I can't see them now. When I scroll down, your list is gone. What struck me was the volatility of the '70's. Do you remember those times? The oil shocks and the grain embargo? Interest rates and unemployment above 20%? Michigan was hit hard back then as well. Labor was hit hard. I remember reading about how the union workers had their homes, vacation homes, boats, campers, etc., then they lost it all.

Then I remember the farm crisis of the early 80's. Farmers killing their neighbors and bankers, losing their farms. This was the result of prices rising dramatically, as they are doing now, then stagnating, even falling.

I guess the key is stability. Even if you have no growth or 1% growth, it is better than 5% growth, then 0 growth.

cleveman

Now I saw the figures again. I think you can see what I mean. There was volatility into the 80's. Remember the trouble that the older Bush had in the late 80's /early 90's? There you see it. the longest expansion is soon to follow. So the country went from "soon to be overtaken by the japs" to top of the world again. Now the talk is about the banks being overtaken by 4n capital, same as it was when the japs bought rockefeller plaza and some movie makers (sony entertainment?).

Anyway, stability seems to be the key.

Kgmz

Yes the biggest drop in history 1974 was during the 70's gas crisis and the other problems. But by 1978 we were back on the gravy train where housing starts were as high as they were 2 years ago.

I look at this as just a correction where things are somewhat back to normal. And if everyone was smart they would have banked some money while they were on this last gravy train ride.

I know a couple of contractors that jumped into contracting during the upswing, and it was easy almost anyone could make money. But these guys also spent the money as fast as they made it, thinking there was no end in sight. And now they are scared. These are the guys I call paper contractors, they general the spec homes and sub everything out. And they were building them as fast as they could, with people paying more than asking prices. So when things started slowing down they kept building, and now they have way too many homes just sitting there. They are discounting their prices but the homes are not selling. And the other problem is they bought way too many lots, so they have the payments on these also. The main problem is everything is financed, so with no money coming in to make the payments I am wondering how long they will last. One of the guys built himself the dream contractors home a million plus, but then mortgaged it to the hilt to help finance the building of the spec homes and down payments of the lots. Also everything else he owns is either leased or on a loan with little down, new diesel pusher motorhome, lots of cars, new Harley, etc. I was talking to his wifes Dad awhile back and he is really worried about them, but also thinks they were really stupid to spend like there was no end in sight.


The bottom line live and spend like it is a normal average year, and bank the money in the boom years. Or maybe spluge on something in the boom years, but make sure you pay cash.

cleveman

wiser words have seldom been heard.