The home building industry is finally embracing energy efficiency, if February's International Builders' Show (IBS) in Orlando, Fla., was any indication. It sometimes seemed like every manufacturer among the convention's 1,900 exhibitors was touting the energy-saving properties of its products. Numerous seminars told builders about "green" advances in everything from solar panels to water heaters, and how to build environmentally friendly houses. The two NAHB-sponsored show homes were certified by the Florida Green Building Coalition and were Energy Star?rated.
It appears the industry is making pre-emptive moves in anticipation of tougher state and federal energy regulations. Indeed, the NAHB, which manages the convention, used the event to announce its intention to develop a residential green building standard. Working with the International Code Council, NAHB would develop codes for residential and commercial construction.
One of two NAHB-sponsored 2007 IBS show homes certified by the Florida Green Building Coalition, the New American Home includes a photovoltaic system and a cistern that collects rainwater for irrigation.
Credit: Photo: James F. Wilson
Builders and suppliers are tapping into home buyers' energy consciousness at a time when the industry is limping through its first major downturn since the early-1990s. In February, new-home starts were at an annualized rate of 1.53 million units, 28.5% below the rate a year earlier. David Seiders, NAHB's chief economist, projected a 14% decline in starts for all of 2007.
As they wait for buyers to get off the fence, many of the show's 104,000 attendees sought ways to shore up their profitability by improving their operations. It wasn't surprising, perhaps, that one of the best-attended seminars focused on jobsite supervision. Builders also were searching for that next niche they could exploit, which may explain why there were multiple sessions on the active adult market. NAHB revealed findings from a survey of 1,000 condo buyers, nearly half of whom had opted to purchase a condo without considering any other housing type. Condos accounted for nearly half of all multifamily starts in 2005, but market observers expect that share to recede to 30% over the next few years.
During softer home-buying periods, some builders take on remodeling projects. The good news for them is that remodeling activity should be strong over the next decade. Harvard University's Joint Center for Housing Studies presented a study that projected remodeling expenditures to increase 21% between 2005 and 2010, and 19% between 2010 and 2015, to $453 billion.
On the show floor, the mood of exhibitors was surprisingly upbeat. Most hoped for a turnaround in the housing market by midyear. But they concede that business could be tough for a while. "We're going back to that four-letter word: S-E-L-L," says Stephen McNally, vice president of marketing for roofing and decking supplier Tamko, echoing comments from other vendors.
There were as many line extensions as new-product introductions, such as DeWalt adding a series of 28-volt (and eventually 18-volt) lithium-ion cordless power tools to its existing 36-volt lithium-ion offerings or Andersen Windows adding 54 sizes to its 200 Series of wood windows. Suppliers couldn't go wrong by saying their product was mold-resistant or helped prevent moisture infiltration. And elaborate patio door systems were the rage.
Suppliers predictably steered any conversation away from price–at a time when their customers are demanding better deals–and toward value. "Builders are smart enough to know they need to create value, and they can't do that solely through price," says Jeff Wagner, executive vice president, OSB for panel producer LP Building Products.
–John Caulfield is a contributing editor for ProSales.