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What Our Reader Survey Reveals about the Future of Our Industry
With 2011 behind us and the new year already begun, many are wondering what 2012 will bring to the building industry. Though last year had a number of ups and downs, the National Association of Homebuilders (NAHB) monthly reports showed a slow but present growth in both single-family and multifamily housing starts and permits. During the NAHB construction forecast webinar in the fourth quarter of 2011, economists forecasted improvement for 2012 with more significant gains on the horizon in 2013.
At Engineered Wood we’ve taken a look beyond last year’s numbers and this year’s forecasts to see what our readers, the people facing the recession head-on, have to say and how engineered wood materials can help.
As the industry has suffered under the weight of the recession over the past several years, many of our respondents see new trends and a new standard in homebuilding emerging. We gave readers the opportunity to tell Engineered Wood where they think homebuilding is headed.
Many of those surveyed have seen a trend toward smaller homes and energy efficiency as their customers seek greater value for the money they’re spending. One builder in Utah thinks homes will be “smaller” with “lifestyle‑based home features” as consumers seek “quality over quantity.”
One builder in California said, “The new norm is that buyers expect more for less. They expect energy efficiency without having to pay more for it.”
Another builder in Oregon wrote that he expects a “downsizing in the home’s footprint,” “better use of space,” and “more durable siding and trim options for decreased maintenance.” Engineered wood siding materials can meet this need. Products like LP® SmartSide® Trim & Siding are less prone to breaks and cracks than fiber cement and have greater impact resistance than both fiber cement and vinyl options.
On Energy Trends
“Energy conservation will be more in demand.”
—Respondent from Texas
“The new normal is green building or energy-efficient building.”
—Respondent from Utah
“I think the trend will be toward smaller, more energy-efficient homes.”
—Respondent from New Mexico
One respondent from California wrote, “I think buyers will expect new materials, more efficient construction, and lower energy consumption measures, all in an attempt to lower overall costs for a more affordable home.”
Incorporating a radiant barrier roof sheathing in new projects can block up to 97 percent of radiant heat in the panel from entering the attic, reducing attic temperatures by up to 30 degrees and potentially decreasing the tonnage requirements of a home’s HVAC system. Builders are able to reduce system costs and pass on greater efficiency to their customers. Products like LP® TechShield® Radiant Barrier Roof Sheathing can reduce monthly cooling costs by up to 17 percent and potentially allow builders to reduce the size of the HVAC unit, helping them save money.
For our respondents in the housing industry, many have seen a shift in homebuyers’ preferences, leading them to anticipate new trends. In line with the “New Home in 2015” results released by the NAHB last year, two out of three of our readers surveyed expect a decrease in home size in future houses while 13.7 percent have seen a desire for sustainable and efficient elements as standard features.
“I think that current trends in the efficiency of the home will continue to be driven by regulations, but monthly utility expenses will become more important as the market gets stronger,” wrote a builder from Houston, Texas.
Forty-one percent of our respondents expect the current status of the market to continue, while 35 percent anticipate a steady increase in demand as the market rights itself. Only 14 percent think there will be a waning interest in new construction this year. These numbers fall close in line with the NAHB’s forecast for continued slow growth. But even with last year’s growth, many builders are still facing the market’s challenges.
On Home Size
“There will be smaller, more efficient homes.”
—Respondent from Pennsylvania
“I think people will try to cut down on the square footage in their homes to be able to build at the price point they want to be at. They will probably not have as many upgrades in quality as they previously had.”
—Respondent from Indiana
“There will be smaller homes with flexible spaces.”
—Respondent from Massachusetts
“Foreclosures have to stop so value will stabilize and you can sell a new home for a profit,” wrote a builder out of Atlanta, Georgia.
One builder in Massachusetts, like many, is having to overcome falling home prices. He wrote, “Our market focus is on the empty nester segment. This move is totally dependent upon our buyers selling their existing homes. Market realities have not set in for them yet in that their home is not currently worth what it was during the bubble a few years ago. They need to focus on what they originally paid for their home against today’s market value to price it fairly.”
As we saw in our fall issue, a number of builders have had to make strategic changes in order to stay competitive in today’s market. Of the readers surveyed, 46 percent have realigned their market focus since the recession. Given a choice of five possible categories (commercial, light commercial, remodeling, multifamily, and single-family sectors), the majority of respondents who made this sort of strategic adjustment indicated they shifted to remodeling, followed closely by light commercial, then commercial.
As industry professionals look toward the new year, more than half of our readers surveyed plan to increase the use of value-added products to meet new codes as they seek products that can help cut costs without cutting quality.
On Market Factors
“With the large amount of existing inventory, our buyers are looking for something different, a focus on style, function, and operating efficiency”
—Respondent from Texas
“Consumers are looking for better value for the dollars they are spending.”
—Respondent from Florida
Using a value-added product like fire-rated OSB sheathing can help builders meet fire codes with the benefits of OSB, including strength, durability, and consistent performance, and with less time required to install than a two-layer gypsum-structural panel system. Plus fire-rated OSB products like LP® FlameBlock® Fire-Rated OSB Sheathing can cost less than a combination of gypsum and structural sheathing.
Beyond value-added products, the NAHB New Home in 2015 survey showed that builders expect more single-family homes to incorporate engineered wood. Products like LP® SolidStart® Laminated Strand Lumber, I-Joists, and Rim Board are a structurally sound alternative to traditional lumber that provide stronger support and stability. Plus, LSL resists warping and twisting for less waste on the job site, something all builders can use in these times. ■
This information and the websites identified above are provided solely as a convenience to the reader. They are not intended to state or imply that the editors of Engineered Wood or LP Building Products sponsor, recommend, endorse or are affiliated or associated with the companies or products listed.