SPECIAL REPORT: Unsettled Housing Industry Results in 11 Percent Drop in Builders Show Attendance
- Feb 13, 2008
By Teresa O’Dea Hein, Managing EditorOrlando, Fla.–“What a difference a year makes,” noted Bill Donges, CEO of the Atlanta-based Lane Co., during a press conference about the state of the multifamily industry held on the first day of the International Builders’ Show in Orlando. “This last year proves that real estate indeed is cyclical.”Despite the challenges in the housing industry, over 90,000 people are reportedly in attendance here—the convention’s last year in Orlando until 2011—for the 64th annual convention and exposition sponsored by the National Association of Home Builders (NAHB). Attendance was reported to be down about 11 percent from the previous year. More than 1,900 exhibiting companies are also present in force to showcase new and popular building products.At the press conference, Donges reported that in the last year, Lane was able to switch over about 8,000 units that had been originally slated as condos to be developed as apartments instead. However, he added, buyer traffic has picked up since the holidays. “Fundamentally, the condominium market is here to stay,” Donges added, because more people are interested in the lifestyle advantages offered by condos and they are a newer option in many cities.“Depending on the market, I think it’ll take 12 months to two years to burn off the existing supply of condos,” Donges believes. He did point out that the psychology of the marketplace is also a critical factor, with fear feeding on itself. “But location, lifestyle and value are now driving the condo market—not the ability to flip them.”Steve Patterson, CEO of ZOMUSA, headquartered in Orlando, is also focusing most of his company’s resources on for-rent products, with one condo project left to sell late this spring. He believes in the current economy, the future of rental apartments is very bright. “Home ownership rates continue to decline—they’re already down 90 basis points,” reported Patterson, who is also vice chairman of NAHB’s Multifamily Leadership Board. He also pointed out that only 100,000 apartment units are projected to be completed in 2008, down significantly from the last several years.Larry Swank, president of the Sterling Group, Mishawaka, Ind., warned of the impending crisis in the affordable housing sector unless rent increases are decoupled from utility charges.The housing economy also was a topic of discussion for the husband-and-wife political team of Mary Matalin and James Carville, who spoke during the convention’s gala opening ceremonies that also featured songs by Florence Henderson, Disney characters, Universal Studios films and Sea World performers.Matalin applauded the NAHB’s Political Action Committee’s unprecedented move to halt contributions to election campaigns until Congress takes more action to help the troubled housing industry.