Momentum Builds at Home Building Conference

Posted by on Feb 22, 2013
Momentum Builds at Home Building Conference

I was among thousands who recently flocked to Las Vegas for the International Builders’ Show (IBS), which is organized each year by the National Association of Home Builders. The largest residential construction show in the world, IBS is a Mecca of the latest and most advanced building products, services and trends.

During my 25 years of attending the show I’ve gone both as an exhibitor, and working on behalf of my clients. This year, with rumblings about the pace of a market rebound, I was on the lookout to see what brands were highlighting, and to find out attendees’ perceptions.

The good thing about attending this show for so long, it’s easy to spot significant trends, and this year I came back with five insights; here it goes:

  1. About-Face. While attendance was on par with previous years, brands that were once staple exhibitors like Pella, Andersen, and leading cabinet and appliance manufacturers, were once again absent. Considering the struggling housing market that has plagued us for years now — this wasn’t surprising to me.  With attendance being flat compared to last year, the biggest difference were the attendees’ faces. People were smiling for a change; and, the faces were younger — evidence that the next generation of tech-savvy leadership is beginning to take control.
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  3. It’s Personal. I wasn’t surprised to hear from builders they were looking for ways to improve their bottom line. I was, however, surprised to hear that homebuyers were looking for more custom features again, an insight further supported in the Wall Street Journal. Based on this shift, builders are becoming keen that they don’t give away features consumers would be willing to pay extra for. This concern stems from the fact that in the past many builders had either included too many standard features, or offered rigid upgrade packages reducing option variables, all in an effort to keep things simple and efficient. I see this dynamic evolving in a few ways. There’s tremendous opportunity for smaller builders who are able to decipher the upgrades homeowners will want and be willing to pay extra for. However, where there’s opportunity for small builders, there’s threat for big builders. It will be harder for large production builders to maintain the efficiencies and scale advantages they have traditionally enjoyed — while offering increased customization. On another level, this trend also presents the need for manufacturers to accommodate personalization in their product offerings.
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  5. The Good Life. The trend toward personalization brought big crowds to the highest-end offerings at the show, more specifically, features that enhanced daily life. For example, anything that promised a different kind of connectivity between the indoors and outdoors was big, like expansive glass walls and Kolbe’s lift-and-slide door system, which pockets away and has a 60-foot panoramic view. The manufacturer also displayed a massive floor-to-ceiling corner unit with electronically operated awnings. Everyone was also talking about Kohler’s $200 singing showerhead, the Moxie, which can stream music from your Smartphone, computer or Mp3 player. Another big hit was the Brew Cave, an $8,000 walk-in fridge that can store over 30 cases of beer and four kegs, and also features a draft beer dispensing system.
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  7. Growing Pains. According to the National Association of Realtors, in 2012 sales of existing U.S. homes rose to their highest annual level in five years. Meanwhile, new home construction rose 12% in December and finished 2012 with the most new homes started since 2008. Overall, 2012 saw a 28% increase of new home starts from the year earlier.Sounds great right? Well, not so fast, 2012 was the third worst year for new-home sales on record dating back to 1963. As a result, manufacturers and builders have becoming incredibly lean in order to survive. And in speaking with builders, while their new lean process has sustained them, it has them nervous about the magnitude of the rebound that’s looming. They don’t want to be caught off guard.I see this dynamic manifesting in a few different ways. First of all, builders will not grow in the same way they did in the past. They will continue their lean process, and instead of bloating staff and overhead they will compete to attract the sub contractors. Some builders are already offering their subs two-day payment terms.  Manufacturers will also continue their increased focus on efficiency; however, with a possible shortage of building product on the horizon it’s possible we’ll be looking at an increase in prices.
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  9. Take Pride. Made in America pride is nothing new, but it seemed to be heightened among many brands this year. Armstrong flooring promoted its domestic hickory and oak lines as an alternative to African mahogany and other exotics. Cambria pointed out it’s the largest U.S.-based maker of quartz countertops, and with its recent product launches at the show the Minnesota-based manufacturer now offers more than 100 designs. Formica, meanwhile, celebrated 100 years of business in the U.S. with a new Anniversary Collection, with cool graphic patterns it evokes a mid-century American modern spirit. GE made clear that its new hot water refrigerator was manufactured in Louisville, Ky., and its Wi-Fi wall ovens in Lafayette, Ga.Interestingly, Chinese manufacturers more prominently displayed their nationalism this year as well. In addition, the Chinese product offerings seemed to be expanding, more aggressively entering categories such as vinyl windows, cultured stone and roofing materials.

Overall, my impression this year was one of optimism. The positive attitudes of the attendees were contagious, and the new products were impressive. More than anything, I left Las Vegas looking forward to the changes I know are coming, and with it exciting new opportunities for manufacturers and builders willing to embrace it.