Exhibitors at International Builders Show Signal Signs of Optimism, Make Predictions for 2010

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(LAS VEGAS, NV) -- The National Association of Home Builders (NAHB) hosted their annual International Builders Show this past week in Las Vegas that drew over 55,000 home builders, remodelers and other members of the home building industry.

While attendance was down from its 2006 peak of 105,000, the mood of the approximately 500 exhibitors was cautiously optimistic for the balance of 2010.

Many of the vendors on the floor also said that they are starting to see a slight uptick in product and material orders in early 2010. This is an interesting trend, as some of these larger suppliers to the construction industry can be viewed as a 'bellwether index' of new home construction activity yet to come in 2010.

Steve Anderson, Contract Marketing and Specialty Products Manager for General Electric (NYSE:GE), a major supplier of home appliance products to the building industry stated, "We've seen a 2% to 4% uptick in orders from the marketplace in the last 60 days. A majority of our orders are for our mid-line home appliance products, but current economic conditions are still affecting our high-end product line sales." Anderson further commented, "Most of our current orders are for the single-family sector, not for multi-family construction."

Ron Cook of Tamko Building Products said, "It's certainly different than it was last year because we didn't quite know what we were in for as the country was still in the midst of the biggest recession since the 1930s, but I'd call it cautious optimism for 2010."

"We came here to network," said Clint Wilson of Hybrid Core Homes in Santa Rosa, Calif. "The show seemed livelier than last year's event", he said, although he and his colleagues were disappointed that The New American Home, the much-anticipated demonstration home that usually draws huge crowds, was unavailable for touring this year because of financing issues - a problem plaguing other builders throughout the industry.

As far as builder market predictions for 2010 was concerned, Sue Barber, Senior VP of Wells Fargo Home Mortgage (NYSE:WFC) stated, "As far as trends in the market for 2010 and beyond, the dramatic population growth of minority communities is expected to be accompanied by a significant increase in first-time home buyers.  Estimates are that 40 percent of the 2010 market will be first-time buyers.  Minorities are projected to represent 50 percent of the nation's population growth."

Barber further commented, "According to the most recent National Association of Homebuilders/Wells Fargo Housing Opportunity Index, nationwide housing affordability, bolstered by low interest rates and low house prices, was near its highest level since the series was first compiled 18 years ago. Additionally, the number of unsold homes on the market continues to shrink.  New home inventory is at its lowest levels in more than 14 years.  Whiles sales activity remains a concern; lower levels of inventory will help the new home market stabilize sooner."

When Real Estate Channel asked these vendors "what keeps them up at night for 2010", the overwhelming response was "Rising interest rates".

The fear here is that if interest rates rise, consumers will buy less and markets will slow down further.

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