What is your forecast for the building industry in 2019?
You can still see the remnants of Hurricane Florence. You still have people who can’t live in their homes, who didn’t get their insurance money yet, and who are still on the fence about whether to repair, rebuild or buy a new home.
It has taken us some time to get back to normal, but I think we’re back now. I’m seeing traffic pick up. We’re getting a lot more people in the door. They’re not always selecting a home; some of them are pre-looking in advance of retiring here.
Interest rates are coming down, which is a good thing. Let’s hope that trend continues, because I think it’s going to spur the ones who had missed buying the last time around and decided to rent instead. People get scared by interest rates, especially with the price range in Wilmington always creeping up because of land costs. So, hopefully we’ll get renters into their own houses this year.
Our company was recently at a trade show in New York and we came home with the most leads we’ve ever had. It was packed, and we got 246 leads.
So, I think people have short memories when it comes to something like a hurricane. They’re still interested in or planning on coming here.
Looking through 2019 into 2020, I think one issue we’ll deal with is just getting through uncertainty, whether it’s uncertainty in the stock market, the political arena, the tariffs or interest rates. I think there are a lot of things we all have to be aware of and be smart about. Don’t be scared but be smart.
To be honest, a little breath of fresh air wouldn’t hurt my feelings too much right now. I don’t want to see a decline, obviously, but a little leveling off to let the sub-contractors and vendors breathe some wouldn’t be such a bad thing. Getting through 2019 and into 2020 is where I think we’re going to see that happen.
For the last month, it feels like we’re finally starting to really catch up. Jobs are loaded, they’re running efficiently, and we’re finding a rhythm again. Before the storm – and then inflated by the storm – the last six months were a little bit more of a grind, overall.
I think the labor market is going to continue to be an issue this year because it’s an ongoing issue. There’s a stigma about using your hands and being out in the field, and that’s not easy to change, but you can make a really good living doing a trade now.
It’s interesting – there’s almost more work than people to do it in our market. There’s a natural supply and demand, and there’s more demand than supply with our current labor force.
What concerns me in the bigger picture is value. Even at the higher custom levels, people want to see that they’re getting good value for their money. Companies with good crews are paying to keep them, so that eventually trickles down to the end user.
Just a little bit of an increase across the board can impact the overall budget. We might hire 40 to 45 companies for a particular job and if they all increase prices by three or four percent, it adds up to real dollars.
That’s why with that, on top of interest rates and everything else, I kind of see us as being at a pinnacle in terms of loss of value. There is so much pressure on pricing, in general, that the end user – or their respect of the value – affects our livelihood.
I lived out on the west coast for about 10 years and we track what’s going on in the housing market there. They seem to lead us a lot; the trends from the west coast tend to trickle out to us. And what I saw was that some of my counterparts there seemed a little scared going into summer 2018.
I think we’re an insulated market. This is such a desirable place to live and that shields us a little bit. But being in California during the height of the high and low of the low, I’ve adopted a kind of cautiously optimistic, borderline-pessimistic outlook.
For a quarter century, Majestic has offered a wide selection of products for homebuilders, from counter tops, shower enclosures, shelving, door hardware and accessories for kitchens and bathrooms, in North and South Carolina. Acquisitions just within the last year of many well-established companies – including Builders Glass & Hardware Inc. in Wilmington and similar businesses in Greensboro and Charlotte – allow Majestic to be the most professional trade partner. Visit www.gomajestic.com or call (910) 762-2252 for more information.