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Understanding the industry build_products 08-03-2006
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Posted by on August 3, 2006, 12:34 am
I am doing research on the Home Building industry and am trying to
figure a few things. Would welcome responses from anyone familiar with
the area.

1) Are the large production builders actively moving to larger
organized framing operations like stock building supply, building
material holding corporation (SelectBuild) for their framing needs?

2) Now that housing is slowing, and builders are facing pressure on
their margins, they are trying to push this margin pressure down the
supply chain. Is this pressure sticking, i.e., are their suppliers
(including framers) offering the builders significant discounts, which
would reduce their own, i.e. supplier's, margins. As an alternative,
in order to maintain their own margins, the suppliers could offer
cheaper solutions to help the builders cut their cost of building.
However, this solution may not be acceptable to the builders. Would
love to know the perspective of some of the suppliers dealing with the
big builders?

3) Is construction labor still in short supply?

4) How much of a residential construction slowdown is happening?


Posted by on August 5, 2006, 1:49 am
http://housing-watch.com/regionview.aspx?city=Phoenix&pct=75&g=m

and end of the article:
http://thehousingbubbleblog.com/?p=1192


build_products@hotmail.com wrote:
> I am doing research on the Home Building industry and am trying to
> figure a few things. Would welcome responses from anyone familiar with
> the area.
>
> 1) Are the large production builders actively moving to larger
> organized framing operations like stock building supply, building
> material holding corporation (SelectBuild) for their framing needs?
>
> 2) Now that housing is slowing, and builders are facing pressure on
> their margins, they are trying to push this margin pressure down the
> supply chain. Is this pressure sticking, i.e., are their suppliers
> (including framers) offering the builders significant discounts, which
> would reduce their own, i.e. supplier's, margins. As an alternative,
> in order to maintain their own margins, the suppliers could offer
> cheaper solutions to help the builders cut their cost of building.
> However, this solution may not be acceptable to the builders. Would
> love to know the perspective of some of the suppliers dealing with the
> big builders?
>
> 3) Is construction labor still in short supply?
>
> 4) How much of a residential construction slowdown is happening?


Posted by on August 5, 2006, 2:54 am
I can say on the Mid Atlantic states it is slowing to the point that people
are getting laidoff even sales staffs.

I know people that have worked for businesses for 15+ years that are being
let go because the developer cant sell the homes they built on spec. or
that buyers have backed out on because they lost their jobs.

They told me In Delaware there is a surplus of over 5000 homes which has
been growing for the past year and since MBNA / Bank of America merger
Dupont and GM Layoffs and closings there is so much office space available
that prices are too cheap to build more.

Now there will always be a need for new homes and businesses but
Labor is not in short supply.

The crews here are getting about 1/3 the rate of Baltimore and Phily.
I dont know if its because we have a weak union here or more likely
because every trade here now has a good percent of illegal aliens.

If you work in concrete I know you are lucky to get a buck over minimum
wage.
almost every concrete crew and street crew is Illegals

I would say a good % maybe 35% of paint / drywall crews and 25% of Framing
crews are also Illegals.

Mechanical Trades are lower and Electrical is lower too but Plumbing is very
high maybe 50%+ when you are talking New Homes

I think as they continue to lose money they will turn more towards hiring
Illegals.

also In Delaware they Hire outside the State. Most Materials are shipped in
from Pennsylvania.
Even Comcast Hires out to a firm in Boston Mass to build and Maintain their
Network.
Verizon is doing the same.

Not to mention that Electricity Prices are up 50% and water / sewer is up
over 100% in most small towns here.

If youre in the trades or selling homes its tuff in Delaware now.





>I am doing research on the Home Building industry and am trying to
> figure a few things. Would welcome responses from anyone familiar with
> the area.
>
> 1) Are the large production builders actively moving to larger
> organized framing operations like stock building supply, building
> material holding corporation (SelectBuild) for their framing needs?
>
> 2) Now that housing is slowing, and builders are facing pressure on
> their margins, they are trying to push this margin pressure down the
> supply chain. Is this pressure sticking, i.e., are their suppliers
> (including framers) offering the builders significant discounts, which
> would reduce their own, i.e. supplier's, margins. As an alternative,
> in order to maintain their own margins, the suppliers could offer
> cheaper solutions to help the builders cut their cost of building.
> However, this solution may not be acceptable to the builders. Would
> love to know the perspective of some of the suppliers dealing with the
> big builders?
>
> 3) Is construction labor still in short supply?
>
> 4) How much of a residential construction slowdown is happening?
>



Posted by on August 5, 2006, 7:55 pm
I am sorry to hear this.

In any case, is the situation in the trades different from what it was
let's say six months ago.

In addition, do the large builders care if the framing contractor that
they hired is using illegal labor?

Also, in order to save money at a time when home prices are coming
down, will the large production builders gravitate towards crews which
are able to offer lower prices because they use illegal aliens.


moo@anonamoo.com wrote:
> I can say on the Mid Atlantic states it is slowing to the point that people
> are getting laidoff even sales staffs.
>
> I know people that have worked for businesses for 15+ years that are being
> let go because the developer cant sell the homes they built on spec. or
> that buyers have backed out on because they lost their jobs.
>
> They told me In Delaware there is a surplus of over 5000 homes which has
> been growing for the past year and since MBNA / Bank of America merger
> Dupont and GM Layoffs and closings there is so much office space available
> that prices are too cheap to build more.
>
> Now there will always be a need for new homes and businesses but
> Labor is not in short supply.
>
> The crews here are getting about 1/3 the rate of Baltimore and Phily.
> I dont know if its because we have a weak union here or more likely
> because every trade here now has a good percent of illegal aliens.
>
> If you work in concrete I know you are lucky to get a buck over minimum
> wage.
> almost every concrete crew and street crew is Illegals
>
> I would say a good % maybe 35% of paint / drywall crews and 25% of Framing
> crews are also Illegals.
>
> Mechanical Trades are lower and Electrical is lower too but Plumbing is very
> high maybe 50%+ when you are talking New Homes
>
> I think as they continue to lose money they will turn more towards hiring
> Illegals.
>
> also In Delaware they Hire outside the State. Most Materials are shipped in
> from Pennsylvania.
> Even Comcast Hires out to a firm in Boston Mass to build and Maintain their
> Network.
> Verizon is doing the same.
>
> Not to mention that Electricity Prices are up 50% and water / sewer is up
> over 100% in most small towns here.
>
> If youre in the trades or selling homes its tuff in Delaware now.
>
>
>
>
>
> >I am doing research on the Home Building industry and am trying to
> > figure a few things. Would welcome responses from anyone familiar with
> > the area.
> >
> > 1) Are the large production builders actively moving to larger
> > organized framing operations like stock building supply, building
> > material holding corporation (SelectBuild) for their framing needs?
> >
> > 2) Now that housing is slowing, and builders are facing pressure on
> > their margins, they are trying to push this margin pressure down the
> > supply chain. Is this pressure sticking, i.e., are their suppliers
> > (including framers) offering the builders significant discounts, which
> > would reduce their own, i.e. supplier's, margins. As an alternative,
> > in order to maintain their own margins, the suppliers could offer
> > cheaper solutions to help the builders cut their cost of building.
> > However, this solution may not be acceptable to the builders. Would
> > love to know the perspective of some of the suppliers dealing with the
> > big builders?
> >
> > 3) Is construction labor still in short supply?
> >
> > 4) How much of a residential construction slowdown is happening?
> >


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