Too many starts combined with too few sales, so there are too many new homes for the number of buyers. Too many people are priced out of the market. Too many people can't sell their existing home, so they can't close on a new home. Too many investors who were buying new homes are now selling their almost new homes. Too many home buyers are getting cold feet, backing out of contracts, and cancelling their orders.
Orders are down. Cancellations are up. Inventory is swelling. Confidence is shaken. People aren't buying.
But people are buying, albeit at a slower rate. Maybe somewhat under a million new homes in the current 12-month period, versus a peak of over 1.3 million.
You'll hear that all day. But, even if the new-home economy falls off between 20 percent and 30 percent over the next 12 to 18 months, we can tell you without hesitation that there are heroics going on out there. Even if your business is taking that much of a hit, which we doubt, it would still mean that big builders are collectively closing on a pace of more than 1,000 homes a day, which ballpark, works out to $200 to $300 million a day in booked revenue for big builders.
For BIG BUILDER, Monday, Oct. 2, 2006, worked out as the day we'd get to “embed” ourselves in five companies in five geographical regions by coincidence. Each of us had two weeks to identify a builder in our respective markets. One after another, literally like clockwork, the opportunity to spend a good hunk of time with an associate or a team in the trenches each worked out for the same Monday.
Like anywhere in production home building, Mondays are mid-week days, with a few hours shoehorned into Wednesday and Thursday serving as a weekend for its denizens. That fall Monday, we got to sit in on sales and status meetings, walk the sites, eat donuts in the morning and Subways for lunch, and basically walk in the shadows of pros in Orlando, Fla.; Dallas; Washington, D.C.; Orange County, Calif.; and Detroit.
Each new marketing or sales idea, every customer phone call, every mortgage qualification, every moment's progress on a new-home buyer's house, every piece of minutia that a customer or prospect mentions he or she wants or would like to know, every conceivable detail that moves a home buyer across the tightrope from interest to handshake to deposit to close, is laden with extra importance. It all means more on Oct. 2, 2006, because sales nationally are somewhere on their way down, and everybody's obsessed to know where the bottom is.
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