Rise And Fall Of Construction Industry

ElliottDoor

Hello,

I'm not a dumb guy (yeah Im sure you've heard that before right?) I also have a sense of humor hence the introduction.
Investing time and money on possibilities is a gamble. Now in CA you can look down the street and see construction sites halted because of the economic problems were having with the housing market and the bank loans. Im wondering (and I always do this). Is there a site, forum or any easily obtainable public information that can give statistics on anything relating to this crisis that can help me or anyone else prepare for the better, or worse?

Im not savy on the stock market and the news is tainted with too much crap for me to decide whats really going on as opposed to media drama. Maybe a columnist or something in this field?

Better yet, opinions are like ***holes, everyone has one. What do you guys think about this? Any input on the construction industry as it is today?

Any help would be appreciated thanks.

rbsremodeling

It has diffinitely slowed down here for alot of quys. The bigger remodeling projects are not as frequent. For about two months nothing happened everyone was at a wait and see point. The phones are ringing again but they are mostly kitchens, baths, basments and small additions. None of the massive gut and remodel jobs. Homeowners and banks are concerned on pricing and checking your references and past clients no one can afford to hire the pickup truck contractors anymore. Whats funny to me is I am more afraid of the banks than they are afraid of me. I know of atleast two small mortgage companies that dissappeared overnight.
I now ask the Banks for financials and 3 references make sure they are still gonna be around.

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KentWhitten

I usually have gut feelings. My gut feelings are almost always right and I hope this time it isn't. IMO this "slowdown" is going to get worse, much worse. You and I are going to see the face of construction change dramatically. I think people are going to go modular or pre-built more and more.

There are going to be creative ways to make that custom home modular or pre-built. Spec homes by big builders will soon be factory made. I have seen high quality workmanship in my neighbors' 2 houses. Just as good if not better than any custom job.

And watch for Chinese labor in your rear view mirror. You might just see all the lumber exported to China, then see modular homes on boats coming back.

__________________
If you correct your mind, the rest of your life will fall into place ~Lao Tzu

Custom Cabinetry - Portland, Cape Elizabeth, Scarborough, Kennebunkport, Yarmouth, Falmouth, Cumberland, Ogunquit, Maine

Salmon Falls Cabinetry

ElliottDoor

I sense that too Framerman. Not so much the specifics but that its going to get worse. The banks wont budge on the debt owed to them and they have to sell their foreclosers at the same price to get what is owed on them. The banks would have to take a major hit in (I dont know what you would call it) revenue?
The only way things would get back to normal the way I see it is the banks have to lower their newest interest rates so people can afford the monthly payments AND they need to count the foreclosers as a loss..

Heres the thing though. People made this happen, not the banks. The gamble with a variable interest rate can and eventually will work against you. When its low, "WERE STAYIN"! When its high, "what the hell! Im outa here!" Hence all the foreclosers.

My interest rate is going up 2 percent. Which equals an additional 33 percent of my monthly payment we have to pay per month. I can afford this but if construction slows down (and it is) because of the derylics who didnt know (or knew and decided to ignore the contract) a domino effect occurs slowing the rate of construction and I eventually suffer. Yeah you know the guy who paid his bill.

Im hoping and praying things get better, there has to be a way.

boman47k

Seen on Tv yesterday about the big boys writing off so many billion in loans. As they said, "put pen to paper". No longer a rumor or a wait, it is on paper and has happened. Something about them being down 17 per cent. Their stock? As you can see, I am not astute at all in finacial matters, but something else I have noticed is ads for truck drivers in the Sunday paper are way down. My son is a driver, and I guess that is why I noticed this. I may be wrong, but this tells me freight is waaay down. All and all these are worrisome times.

ApgarNJ

I don't sense too much of a slow down around here. I guess the larger additions aren't as common, but still around. I never wanted to get into building spec homes because land is so expensive around here. gotta have really deep pockets to build a spec home in my county. I stick to additions, renovations, kitchens, baths etc. and i'm already planning larger jobs that will take me to the end of next summer. and i'll have a bunch of side jobs to do during those jobs.
i hope the rest of you guys do ok and don't have too much of a slow down.

sheeter

The real concern that I have is, a downward spiral to an economic depression. Every man, woman, and child is affected by the global economy. For example, construction slows down, construction workers have to tighten their belts and watch their funds. Therefore, we buy fewer groceries and material items. Tyson Foods, Betty Crocker, and Budwieser all report lower earnings and begin laying off employees, because I'm not spending what little money I have. Their employees were the people who would spend money to get the the new decks, sunrooms, kitchens. Also affected are the employees of the companies such as Kitchen Aid, Kohler, and Merrillat. I am a relatively young fellow, but this may be the onset of the recession I've heard my parents speak of.

__________________
Sheeter
"It's hard to be humble when your good"

Tmrrptr

Elliot, try search for the housing bubble blog
...the Bakersfield on seems to be wilder than others, in some respects.

The whole scenario is a tragic mess caused by greed.

It shall snowball. Already is...
r

constructionldr

Hey Im with u....winter is usually my slow time in the midwest...but for some reason im getting swamped...knock on wood. Remodels mainly, but some commercial.(apartments, hotels, condos, etc) May be due to the fact that I do "overalls" and am not in a specific trade and can do a little of everything?. I do wish u that arent busy the best and hope things work through

concretemasonry

framerman -

The Chinese do import wood from the US, Russia and some SE Asian countries, but little is used for housing. You might have to worry about the Chinese importing wood and exporting homes. - The Chinese do not accept wood as an acceptable form of housing since it has been found to be inefficient, ecologically bad and a waste of available resources.

They have better things to do with what is grown on their land that is not damaging to the ecology in terms of land use.

If we decide to sell them lumber, then there is a chance it will come back in the form of home, but from a practical standpoint the shipping numbers don't work.

__________________
Dick

Engineer, designer and consultant recently active domestically and internationally on construction and design in about 35 countries.

tekwrytr

Do some research on the "dotcom bust" and the underlying causes. Construction industry, same underlying factors, same scenario.

Specifically, the fuel is greed, and the promise of easy money and quick profits. The driver is potential. Tamper with those two, and the industry "normalizes" or "adjusts downward" to the real value as opposed to the "projected" or "future value."

In plain English, people are more reluctant to buy or build when the chance for easy money diminishes. It is no more complex than that. In a hot market, in which prices are rising, everyone believes they will make a huge profit by buying or building now; in a flat or declining market, there is little or no incentive to do either.

Additionally, in a flat or declining market, many adopt a "wait and see" attitude, believing they may get a better deal (and in turn, make more money) when the market tanks six months from now.

tekwrytr

Consider the Japanese manufacture of plwood, and how that affected the forestry and construction industries. Then consider the amount of exchange that is developing between China and South America; China has huge manufacturing and technological facilities, South America has huge "natural resources." Great combination for competition in a global market.

Tom M

Im all for knocking on wood. Im not real busy but at least Im working. I have been working more the last 2 months than I did the last 6 months. The only thing is I put $100 in my tank this week and I wasnt on empty. The last time It cost that much was 1 1/2 years ago when gas was over 3 bucks. The suppliers were raising thier rates every other month so if gas starts rising and construction costs go up / people will really stop spending.

Amber

If you go to MSN there is an article on-line about the coming comsumer crunch. I think that it's the first article that I have lately that addresses the situation properly. What people forget is that it's not just about the investors or less then knowledgable homeowners that are losing thier homes in this current forclosure situation, it's about the rest of us that are feeling the pain because of their foolish investments. The city that I live in ranked #1 in the Nation for forclosures. I have been watching friends in the business lose jobs, and plumet into financial abyss through no fault of their own, but from the foolish mistakes of others that will eventually effect all of us. The job losses will span everywhere due to consumer spending starting to lag so it's not just going to be about the construction industry. The actions of the lenders pushing through these risky loans almost seems criminal.

KentWhitten

I agree with this 100%. Everyone says "If you couldn't afford it, then you shouldn't have bought it" While this is true, it is also equally true that the ones loaning this money to people who were borderline are to blame. And to be quite honest, I think Greenspan really blew it. He was the one ultimately in charge of all this. He left it be, didn't raise rates enough back when it was white hot and now we have a similar mess as the savings and loan bailout back in the 80's

__________________
If you correct your mind, the rest of your life will fall into place ~Lao Tzu

Custom Cabinetry - Portland, Cape Elizabeth, Scarborough, Kennebunkport, Yarmouth, Falmouth, Cumberland, Ogunquit, Maine

Salmon Falls Cabinetry

ElliottDoor

Someone said under 3 dollars a gallon? Hell, were at 3.30 here. Someone also said the banks are partially to blame because they loaned the money. I agree with that to an extent. They should have screened more thouroughly. Used stiffer credit scores to loan. I wonder why they did'nt? To get the sale? on a short term get it quick and collect what you can NOW mentality?

I think that in combination with the "not so savy" homeonwners are to blame for this domino effect. Yes, it only takes 1 of the world leading economic peices of the puzzle to affect it all. Doesnt matter if its banks, war, oil, food, or wages. The war in iraq + this hous loan mess made this happen. Cost of living always goes up in incriments (-sp but it seems to have skipped a few this time arround. What do we do? Punt! thats all I can think of.

Ive said it before to people. If we could only put a blue collar regular joe in a position of authority in congress maybe we would see some real changes because lets face it. 1mil in your bank and 3.20 a gallon, your not sweating. These people who don't have the backgrounds most of us have are making (or not making) decisions based on statistics while they go home and eat like kings. Blehh Im getting bitter again..

Whatever happens, happens.. and I really hope things turn out better than I see them turning.

Dawgnuts

Anyone on the west coast in the commercial industry have any comments on when you think our market is going to pick back up?

SelfContract

Lets da time bomb go ticking. At least 2 more years ... till da sun shining again... 2010!!! Now, time to save save save$$$....

Brock

If you build homes, you have about two years before your bancrupt if you on the coasts. The closer to the center of the country you are, you can get 3-4 more years before your done. Remodeling will stay strong. People don't need to borrow to remod a bath. The fixer upper networks will continue to fuel this market.

JustaFramer

What the hell are you talking about commercial is booming. I have been doing commercial/gov work steady the past two years. And working on a project that is slated to finish in December.

What part of the west coast are you talking about?