They’re doing things differently now at NAHB
“My forecast is built upon an imbalance of supply and demand,” said David Crowe, chief economist at the NAHB, who estimates the country currently has more than 1.5 million existing and new homes available for sale or for rent that no one wants or can afford to buy.
Building a forecast based on understanding supply and demand is, apparently, a brand new idea at the National Association of Home Builders.
Calculated Risk has just two words to sum up a litany of negative prognositications offered as the show kicked off Tuesday:
Grim and grimmer. Must be a fun convention.
Place this type of insight into the “we don’t need a weather man to tell which way the wind blows” category.
Housing’s downturn is four years in. What’s the likelihood that the NAHB has it’s predictions right now?
For many denizens of the home building industry, the point for the past 24 months or so has been to get an ever shorter list of critical agenda items done and done well.
For production home builders, the big challenge has been to get the cost of their dirt out of the way of selling new homes into the teeth of the crisis. That’s a financial management tactic, but they also need a story because even home shoppers who are able to buy right now won’t unless there’s a story.
82 year-old Pardee Homes, which has been building in Las Vegas since the 1950s, believes “green” is an essential part of its recovery story, and it’s taking a run at embracing the strategy well in advance of recovery’s glimmer… This way, green won’t be a faddish bolt-on tactic, but an anchor to the company’s business plan.
We spent much of Tuesday driving the four far reaches of Las Vegas’ expansive desert valley, visiting Pardee communities at Lake Las Vegas, Vista Verde, and Eldorado Highlands, which happen to be diametrically far apart from one another in the city’s periphery.
Our hosts for the tour were Pardee vp of marketing Joyce Mason, marketing director Kathy Hilty, Adrian Gonzalez, marketing coordinator, and their public relations consultant Linda Faiss.
Here’s Adrian demo-ing some new technology they’re using in their model homes at Pardee’s new Horizon community at Eldorado Highlands, one of Pardee’s original master planned communities in Vegas.
Adrian Gonzalez, Pardee Homes
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Though it pains me to say it, I don’t think the builders are too stupid to get suppply and demand. It’d be more satisfying to say they were stupid, but I just think they overestimated how long their scheme could go on before it collapsed. Perhaps greed does really take over the brain at some point.
Warnings back in the early 2000s should’ve told this industry to stop doing things like overbuilding, stop predatory lending (builders had their own lenders or affiliated lenders, and were in on all the toxic lending practices), stop getting unqualified buyers into houses with down payment assistance programs that were really laundering money for builders and inflating propert ‘values.’ They should’ve stopped taking construction shortcuts, and stopped hyping homeownership as an investment. It hasn’t been THAT long since the last housing bust that we can’t remember. But many naive first time buyers didn’t realize it was hype and many flippers figured they’d get in and out before it went bust. There was fraud going on too, actual crime like forgery, etc.
In other words they behaved IRRESPONSIBLY. What a concept that it didn’t work out. Now they want a bailout.