Friday, September 9, 2011

NEW HOME SALES FALL TO LESS THAN 300K FOR THE YEAR

New home sales fell for the 4th straight month to a seasonally adjusted annual rate of 298,000 in July 2011. Assuming this trend continues, new home sales are on track to finish this year as the worst on records dating back 50 years.

Sales of new single-family houses in July 2011 were at a seasonally adjusted annual rate of 298,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.7 percent below the revised June rate of 300,000, but is 6.8 percent  above the July 2010 estimate of 279,000.

If my calculations are accurate, that means that there will only be 8,950 modular homes built for the year.  Assuming that there are only 100 +/- modular home factories left in the US, that means that they are producing approximately 1.5 single family houses per week.  Most factories have a capacity of  7-10 home a week.   

Do the math!  That's only 15-20% of production capacity and I know most of these factories have a breakeven somewhere around 50%. 

Design Homes closed their doors about 2 months.  Out of business!

Just how much longer do President Obama and the Fed think we can sustain a viable new home industry with these numbers?

6 comments:

PA factory owner said...

1.5 houses per week. I would love to have that much to build. I can't wait for the replacement houses in PA and NY to hit my production. I feel bad for those people but I have bills to pay and people that need work.
My other problem is that I am down to 3 sales people and I know I'm going to lose a lot of homes because they are spread so thin,

Anonymous said...

Maybe you should get off your ass and hit the road selling your own homes. It makes me angry when someone that owns a factory blames poor sales on the sales people and doesn't do anything to help.
If you think you are above hitting the road, maybe its time to get someone in there that has some fire in their belly.

Anonymous said...

Maybe Coach can setup some sort of ebay system here where customers and factories can inter-act and find each other to seek out true price/service discovery levels.

Factories can show when they have openings to build and customers can show when they want a house delivered. Might save some jobs especially as we look at the historically slow winter months.

Anonymous said...

The list of factories that have open production slots is endless. The modular home builders that need customers is endless. The number of "qualified" new home buyers is finite.
Nothing Coach does will change that.

Anonymous said...

Customers and factories dont always know about each other as the lack of qualified salespeople shows. Competition is good for everyone.

Anonymous said...

let's bash obama that will make everything okay right?