AddThis

HIRI Conference tunes into “That ‘90s Show”

Arlington, Va. — At last year’s Home Improvement Research Institute (HIRI) Spring Conference, the assembled researchers, guests and partners — all thirsty for good news — were told by Morgan Stanley analyst Ian Sugarman that the modest, pre-bubble year of 1999 is the “new normal.”


Fast-forward to this year’s event, held here at the Doubletree Crystal City, and a very similar group of attendees were told to brace for even more simulated time travel — this time to 1996.


“The theme is, we’re going back to the mid-1990s, 1996, in terms of consumer activity, housing market and mortgage lending,” said Michael Fratantoni, VP research and economics for the Mortgage Banking Association and the leadoff speaker of HIRI’s daylong series of presentations.


Things could be worse than 1996. Single-family starts — that’s just single-family— finished the year at 1.160 million, up slightly from 1.076 million in 1995. To be clear, today’s absolute numbers have no resemblance to the mid-’90s, but the growth rate should look familiar.


The MBA is forecasting a 1.7% housing start increase in 2011 to 595,000 — and a more significant leap to 850,000 starts in 2012. 


Also reminiscent of the ’90s, home-ownership was hovering in the 65%-range, which will become more familiar in 2011 as we see a shift from owner-occupied housing to renter-occupied housing, Fratantoni said.


The series of seminars carried the theme “Understanding Today’s Home Improvement Industry” and kicked off with a detailed examination of some unpleasant and lingering macroeconomic trends. Other charts presented by the day’s seven presenters picked up where last year’s conference left off, by establishing a “the worst-is-behind-us” view of the home improvement industry.


“I think the main message we heard is the market is improving,” said Fred Miller, managing director of HIRI, a nonprofit organization whose members share the cost of industry research. “And it’s often the smaller projects or the spontaneous emergency projects that are helping to boost home improvement spending.”


Another theme of the diverse collection of presentations is that the national picture is obscured by regional variations. Color-coded maps revealed the hot and cold spots, with the sand states of California, Nevada and Florida generally lagging.


“Texas probably survived the economic downturn better than any other state,” said Jim Gillula, of IHS Global Insights. 


To those who point to pent-up demand as a reason to launch optimistic housing starts forecasts, Fratantoni has another term to consider: “pent-up supply.” He defines this term vaguely as the number of houses that aren’t on the market currently, but will be when the homes’ owners see signs of buying activity and home price stabilization. 


“There is pent-up demand, but there is also a lot of pent-up supply out there,” Fratantoni said. 


Another balancing factor that gets little play is the number of demolitions. “There are about 300,000 demolitions per year,” he said, showing that housing is barely breaking even with household formations. 


And what would a research conference be without mention of the researchers’ tool du jour, social media? Jim Longo, VP client development and marketing for iTracks, asked that question, and then addressed it. He described social media as a tool that’s here to stay and an effective method of identifying influencers. He added: “It’s important to understand how your brand is being viewed on Facebook and Twitter.” 


The daylong HIRI event attracted about 70 research professionals — members as well as non-members — from a wide variety of home improvement companies. HIRI is a nonprofit organization that pools resources to provide quality industry research for members.

© 2014 Home Channel News. All Rights Reserved.