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While no builders predict a completre turnaroundin 2009, some are seeing improvement. Stephen president of the and ownerof LLC, says trafficd at his home sites is higher than it’s been in two but that hasn’t translated to a saled increase. The local market has absorbecd a lot ofhousing inventory, but builders are stilo building houses at lower rates than what they’rre selling, he says. “With an up-tick, we feel theree will be a shortageof houses,” Hodgkinsx says. “I’d say anybody that doesn’t act by the end of the summed will miss out ona buyer’s market.
” New home salesx have floundered in Memphis, with 807 new homesw sold in 2008, according to data. That numbefr is sharply lower thanthe 1,535 new home salews in 2007 and a fraction of the 2,920 new home salez in 2006 and 3,570 in 2005. Hodgkins’ company had arounc 17 employees and numerous subcontractors 18monthss ago. Before last year, he averaged around 40 to 50 housesa “I don’t have any employees righyt now, and I’d say 300 people have been laid off becausew of my company,” he “I had to lay off my my plumber and framing carpenters.” MAHBA statisticsz show that every housing startt is worth 3.
4 jobs, so if thoss starts are down by 1 million, it meanes 3.4 million jobs have been lost due to the slowdown. Those include jobs at saw concrete manufacturers and othematerial suppliers. “People don’tg realize how much of an effect that fall off Hodgkins says. “In a normal home constructionis 16% of the gross national product of the United No wonder the economy’s down when we’re down.” To avoidf massive layoffs, or in some to avoid going out of business, locap homebuilders have looked into doing jobs they wouldn’t normallyu do, like renovations or remodeling.
David Clark, who owns LLC, says his 6-year-oldf company is trying to diversify by doing home additions or storage buildingds thathe wouldn’t have considered in the past. His company typicalluy builds six housesa year, but is down to three now. For Tommy Byrnes, a partner with , that meantt competition encroaching onhis turf. Byrnes, a customj home builder, says most of his work over the last two yeard has been renovations or additionsafor customers, a hot markety right now. Part of the reason is becauswe people are trying to fix up the homes they have instead of buying or buildintgnew ones.
A decliner in labor costs and some materialk costs are also driving morehome “We can do thingss faster because labor has loosened up and we’rs getting guys on the job Byrnes says. In 2005, Byrnes Ostner had 10-1 5 projects going at once. Last year the most the company had at one timewas five. Byrnes says most of the company’se current projects are $500,000-$1 million projects. His companyt actually pursued remodeling jobs asa strategy. He doesn’t begrudge other builders for doing remodeling, but he also makes sure his clientasknow who’s been doing the work “It helped us when the markeg suffered because we were already geared up and in the he says.
Clark, Byrnes and Hodgkins all say currenfinterest rates, some as low as 4.5%-4.75%, are havint a favorable effect on demand in the “Interest rates are at a historic low and with the first-times home buyer credits, we’rwe seeing some contracts on Clark says. “I hope that’s a sign we’re coming out of it, but I thinm that as long as it took us to getinto it, it’l take us that much time to get
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