An interesting note popped to my inbox today: the final tally from the International Home Builders Show. The National Association of Home Builders, which runs the show, reports this year’s show was the largest in history, by number of exhibitors - more than 1,900 - and by space - one million net square feet of exhibits. Attendance did not break last year’s record, just over 105,000, but it only missed it by a thousand or so.
Given the downturn in the housing market this year, and the scary stats coming from the nation’s public home builders in their quarterly earnings reports, you would have thought this annual trade show would be a bit of a downer this year. Housing starts are down, home builders are struggling to get rid of unsold homes, cancellations are very high, and negative price appreciation in some areas of the country are limiting the amount of money consumers can take out of their homes for improvement projects. But the builders and the companies that make the stuff with which to build, renew and improve were out in full force.
I spoke with NAHB president David Pressley next to the Sears display at the Orlando show:
“We recognize that in the past 12 months there’s been a change in the housing market. Indeed permits are down, sales are down, they’re not down significantly though – they’re down to the level in ’03, or ’04, but the builders are coming to the show to sharpen their skills – go to these educational seminars, these training seminars, to see these new products here on this great trade show floor, so that they can indeed incorporate the newest, the most technical, the most sophisticated techniques into their homes for their consumers.”
Mr. Pressley, of course, has to be optimistic; after all, he represents thousands of builders. But the builders themselves have shown increased optimism over the past few months, buoyed by increased traffic through their homes and a slight uptick in sales. They also understand that whatever the cyclical bumps in building, demographics drive the industry, and demographics are in their favor. Again, Mr. Pressley:
“We have an internal demand of about 1.8 million units per year. Last year we did about 2.1 million units. This year we’ll do about 1.7, 1.75 million units, which is right under the demand. Which says – across the country – there is a significant demand for homes. Interest rates are still relatively low and that demand will sustain many builders across the country.”