Home Builders Gather Under Cloud of Housing Market Slowdown
With a once-robust South Florida housing market in a yearlong decline, hundreds of local housing-industry professionals will attend the 63rd International Builders Show, held Wednesday through Saturday at the Orange County Convention Center in Orlando.
The largest trade show in the world attracts home builders, architects, contractors, designers, manufacturers and other professionals involved in every aspect of residential and commercial real estate construction.
Last year’s show drew a record 105,000 industry representatives from 95 countries, according to the National Association of Home Builders.
The group anticipates that even with Florida mortgage decline down and contract cancellations rising, at least that many people will attend the event this year.
“It’s an opportunity to see what manufacturers are offering to put in a house to improve livability,” said Joshua Fowler, executive vice president of the Palm Beach County Gold Coast Builders Association.
“Important trends for local builders,” Fowler said, “include senior housing and green building. But most of the show is dealing with new things to put in a house and better ways to build.”
The Big Show, the theme for his year’s event, is certainly the place to be to see the latest trends in technology and home building.
The show is not open to the public, and features nearly 300 educational seminars and hands-on workshops on everything from “Understanding Housing Markets and Consumers” to “Designing for the Active Adult.”
A new educational track this year, “Changing Markets,” will offer tips on how to navigate the housing market decline, plus forecasts for the home-building and remodeling industries and a seminar on construction cost cutting.
These and other seminars should be well attended, given the shaky condition of the new-home market.
New home sales fell last year by the largest amount in 16 years, according the Department of Commerce. Meanwhile, major home builders like Lennar Corp., D.R. Horton and Pulte Homes have been revising their 2007 sales forecasts downward as new-home buyers have slowed their pace.
Across Florida, home sales did increase for the second straight month in December, raising hopes that the worst of the housing downturn is ending.
Department of Commerce studies reported that December sales rose 5 percent, following a 7 percent rise in November.
Those two increases, however, were not enough to salvage the entire 2006, with total home sales of 1.1 million units, down 17 percent from 2005. That marked the biggest sales decline since an 18 percent plunge in the housing downturn of 1990.
The housing slowdown is occurring after a boom in which sales of both new and existing homes set records for five straight years. The lowest Florida mortgage loan rates in more than four decades powered a surge in sales that was bolstered by investors making purchases in hopes of turning around and reselling the properties for quick profits.
Analysts attributed the big declines in 2006 to a cooling - or return to normalcy - of that speculative boom. Moreover, the housing slowdown trimmed 1.2 percentage points off overall economic growth in the July-September quarter.
Analysts are looking for an equally severe hit in the final three months of 2006, which haven’t been revised, with housing expected to be a continuing drag in the first half of this year.
Despite the slowdown, home building is still going on, of course. But how much of it will take place - and what will builders’ profit margins look like - if Florida home mortgage rates rise in 2007 and demand remains flat?
