Market Solid In Face Of Uncertainties

by WOHe

Market Solid In Face Of Uncertainties

Statistical barometers connected to the housing and kitchen/bath
industries continued to be generally positive as of last month,
although a considerable amount of uncertainty has crept into the
market as a result of continued economic weakening, a decline in
consumer confidence and the Sept. 11 terrorist attacks on the World
Trade Center and Pentagon. Among the key statistics released by
government agencies and industry-related trade associations in
recent weeks were the following:

Housing Starts
The terrorist attacks on the World Trade Center and Pentagon “may
well change” the market for housing starts and new-home sales, but
it is still too early to tell,” the National Association of Home
Builders said last month (see related story, Page 12). According to
the Washington, DC-based NAHB, a limited telephone survey of home
builders in the wake of the Sept. 11 attacks revealed “that sales
were at the same level that they had been the weekend before, but
that traffic was moderately lower.” While this seems to suggest
“that those intending to buy will probably go through with their
intentions, it is still too early to say if there will be
longer-term negative consequences for the housing market due to
recent events,” the NAHB said.

Home Sales
Despite some recent easing in the pace of existing single-family
home sales, sales should remain above the five-million watermark
level for the second half of the year, the National Association of
Realtors predicted last month. Citing 30-year mortgage rates that
had dipped to near-historic lows of under 7% in September, the
Washington, DC-based NAR projected that homebuying demand is likely
to “soon pick up once again,” and that resales would ultimately
reach 5.19 million units in 2001, the second-highest year on
record. “We project that the economy will rise from its slumber in
the third quarter and be fully awake by the fourth quarter,” said
NAR senior forecast economist Lawrence Yun, adding that mortgage
rates “will hang around at the current low levels.”

Cabinet & Vanity Sales
Sales of kitchen cabinets and bathroom vanities showed no signs of
slowing in August, rising 6.0% over sales in August of 2000,
according to the Kitchen Cabinet Manufacturers Association. The
Reston, VA-based KCMA said last month that manufacturers
participating in the association’s monthly “Trend of Business”
survey reported that year-to-date cabinet sales through the first
eight months of 2001 were up 5.1% over those of the same
January-August time period last year. Sales of stock cabinets
year-to-date were up by 4.5%, while sales of custom cabinets were
up by 8.8%, the KCMA noted.

Appliance Shipments
Domestic shipments of major home appliances rose 14.8% in August
over those of August 2000, but were still running behind last
year’s totals for the first eight months of 2001, the Association
of Home Appliance Manufacturers reported. According to the
Washington, DC-based AHAM, year-to-date appliance shipments through
August totaled some 42.4 million units, down 4.9% from the 44.6
million units shipped from January through August last year.
Despite recent declines, however, 2001 appliance shipments are on a
pace to total just under 63 million units, according to AHAM. This
would be down from the record total of about 65 million units
shipped last year, but, nevertheless, would still represent the
second-best appliance-shipment year on record, AHAM noted.

Market Analysis

Baths Post Gains in New Homes, NAHB SAYS

Washington, DC The number of bathrooms in new single-family
homes continues to rise apparently as a reflection of a broader
long-term trend toward larger and more luxurious new residential
construction, according to the National Association of Home

Citing the latest statistics released by the U.S. Census Bureau,
the Washington, DC NAHB said that a larger-than-ever share of new
homes now contain more bathrooms, as well as more total living

“The number of bathrooms in new homes is often a good indicator
of the luxuriousness of new homes,” observed NAHB economist Dean

According to the NAHB, 54% of the new homes built in the year
2000 had 2.5 baths or more, up from 52% and 53% in the previous two
years. By comparison, 20 years ago, only one-quarter of the new
homes completed had 2.5 or more bathrooms, the association

The number of new homes with three or more bathrooms has also
risen in recent years, increasing from 16% in 1996 to 19% in 1999
and 20% in 2000, the NAHB said.

The largest incidence of new homes with 2.5 or more baths was in
the Northeast, at 67%, the NAHB reported. In both the Midwest and
West, approximatelyt 56% to 57% of new homes had 2.5 or more baths,
compared to 49% in the South, the trade association added.

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