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Top 10 New Housing Markets

I hate to admit it, but I've raised a direction-challenged child. I'm not referring to my daughter's ability to follow suggestions. She just doesn't have a sense of direction when she looks at a map.

Last month, while on a two-day orientation visit to her new school, she was lost from the moment I dropped her off at her dorm. Even with the campus map, she couldn't navigate three blocks to the student center for the first meeting. Her explanation was that the campus's tall masonry buildings skewed her view of the horizon. I hope her roommate will be able to help her.

I never had this problem with my two sons. They always seemed to find a shortcut, whether it was on a map or not.

But my daughter did find a way to deal with her lack of direction. The next morning, she folded her campus map and placed it in her purse. She had adopted a well-meaning sophomore campus guide as her own personal compass. It seemed to work and she was on time the rest of the weekend.

I guess we all can learn a lesson from my daughter. It's easy to navigate in a strange place when you have the right help in getting directions.

For many managers, this downturn in new home sales is a place they have never visited. In late May, researchers at Hanley Wood Market Intelligence (HWMI) reported that new home sales were down 24% from last year. We haven't experienced such a level of residential construction since 2001.

The news regarding the current residential market may influence many managers to react unwisely because not every part of the country is experiencing the same decline. In fact, some areas are growing robustly. The housing growth rate in the 75 markets HWMI studies is 6.1 (earning a HWMI rating of B–), suggesting many smaller markets are still growing (see here for the Top 10 New Housing Markets, according to Hanley Wood Market Intelligence.

What does this mean for producers? Successful concrete producers must allow their managers to operate locally. Those facilities that consistently meet customer demands for timeliness and quality will survive. Those that react by price will fail.

This downturn will also pressure many larger producers to search for ways to reduce overhead in a business environment where overhead was already well-managed. This will open the door to expansion for these efficient local producers.

I predict that concrete homes will anchor our industry for the next three years. New products from precast plants, along with homes built from self-consolidating concrete, will expand, along with masonry block and insulating concrete forms (see here). Our cover story (see here ) reports on the explosion of concrete roof tiles. Also, read about the re-emergence of concrete tiles, thanks to local producers' efforts to increase quality standards (see here).

To see the most current information on the residential construction markets and to sign up for a free newsletter, please visit the Hanley Wood Market Intelligence Web site at www.hanleywood.com/hwmi.

Rick YeltonEditor In Chief
ryelton@hanleywood.com