SAN FRANCISCO —The chief executives from two of the nation’s largest home builders, Pulte Homes and Shea Homes, delivered the following message to a large gathering of builders, architects, LBM dealers and manufacturers here on June 25:
The housing industry is cyclical.
Hang in there any way you can.
The business will come back.
Attendees at the annual Pacific Coast Building Conference (PCBC), held June 25 to 27 at the Moscone Convention Center, needed a pep talk this year. On the day the event officially opened, news broke that the average price of a single-family home in the Bay Area had dropped 22.1 percent in the past year, hitting another record low in the S&P/Case-Shiller Index. Show attendance was noticeably light, booths were downsized and many builders, having written off 2008, were already positioning themselves for next year.
Richard Dugas, president and CEO of Pulte Homes, and Bert Selva, president and CEO of Shea Homes, shared their outlook in a well-attended session called “What’s Next : A Housing Market Overview.” While both reported building activity in the Rockies and job growth still strong in Texas and Colorado, neither builder saw definite signs of a recovery. Looking into 2009, the CEOs saw a healthier market, but a changed one.
“There will be less players when the dust settles,” said Selva, addressing the issue of builders merging or going out of business.
Dugas agreed. “The headlines don’t show it, but you’re going to have more consolidation.”
On the issue of reducing the cost of materials—a subject of several seminars on PCBC’s educational program this year—Dugas said he hopes to use value engineered home plans across different parts of the country. He also mentioned a plumber contractor on one project who agreed to provide just the labor, leaving Pulte to buy the materials more cheaply from its own suppliers.
“That was music to my ears,” said Dugas. “These contractors who are trying to think forward will be the ones doing business with us.”
Green building materials did not dominate the show, but several vendors showed solar water heaters, LED lighting systems and energy-efficient ventilation fans. One high-end option gaining in popularity is the removable wall between living rooms and patios. Nana Wall displayed a folding glass wall with insulating qualities,