weather icon Partly Cloudy
RJ App
Vegas News, Alerts, ePaper

More optimistic outlook expected from Builders Show exhibitors

John Stephenson expects to see a more positive outlook from exhibitors at the International Builders’ Show that runs today through Thursday at the Las Vegas Convention Center.

The senior vice president of marketing for Cary, N.C.-based Ply Gem has been attending the world’s largest home-building trade show since 1989, and the mood has not been upbeat for the last four to five years, he said.

“The housing market is at a historic low,” Stephenson said. “If you look at housing starts from the Depression, they were still building a million homes after the Depression. What I truly believe is the last five years or so, as unpretty as it was, it was an unsustainable low.”

It appears now that the housing market has hit the elusive bottom and is showing signs of recovery with a bump in new-home construction and price appreciation.

Las Vegas, among the hardest-hit markets in the nation, saw a 39 percent increase in new-home sales through November and 7.4 percent increase in new-home median prices, Home Builders Research reported.

Attendance at the International Builders’ Show – alternating between Las Vegas and Orlando, Fla. – dwindled during the downtown, though Stephenson expects to see about 45,000 to 50,000 industry professionals stream past Ply Gem’s 9,000-square-foot, bi-level exhibit, which is 35 percent larger than last year. The company manufactures exterior housing products such as siding, windows and stone veneer, and will introduce its new cellular PVC trim and mouldings at this year’s show.

“This is the largest builder show in the world. It’s important that we’re at the show and demonstrate our commitment,” Stephenson said. “We’ve seen people pull out of the show. It’s dollars and cents.”

The annual show by the National Association of Home Builders features the latest innovations in building products and services in more than 300 industry categories.

Ply Gem dedicated 2,000 square feet to a stage with seating for its ProTalk series of educational seminars and economic presentations.

Svenja Gudell, senior economist for Zillow.com online listing service, said most markets have hit bottom, and 2012 was a better year than 2011 in terms of home value gains.

November data from Zillow showed Phoenix with a 23 percent year-over-year increase in home prices and Las Vegas up 11 percent.

“Are we out of the woods? For five years we lost value, and 2012 was the first year of gain after 2007,” said Gudell, scheduled to speak today at Ply Gem’s stage. “It’s surprising how quickly the market is turning around, driven in part by the inventory shortage.”

Negative equity remains a drag on the market, she said. Roughly one-third of U.S. homeowners with a mortgage are underwater, owing more than their home is worth, and can’t put their homes on the market unless they short-sell.

That gives builders who took a step back during the recession the opportunity to ramp back up, though it’s not going to happen overnight, Gudell said.

Tim Costello, chairman and chief executive officer of Austin, Texas-based Builder Homesite, said everybody he knows is anxiously looking forward to the show in Las Vegas.

“It’s been a long four or five years. The last few builder shows have been a little depressing. You could walk through and shoot a cannon off,” he said. “We had a couple false starts, and that reversed in 2012 with continuing increased starts and sales. It’s really bolstered builders’ spirits that it’s getting better.”

Inventory is more manageable, confidence in the job market is picking up and the nation is beginning to see more household formation as young adults who moved in with parents strike out on their own again, Costello said.

“I think the biggest issue is not about becoming overnight millionaires in real estate. This is about stabilization,” Costello said. “If you’re in a home that’s too small or an apartment and you want to move, the obstacle to moving is not whether you’re going to get rich. The biggest obstacle is they’re afraid to lose money. There are a lot of frightful issues standing in the way of acquisition.”

Builder Homesite does work for a consortium of home builders, providing marketing to reach the 85 percent of consumers who start their search online. Costello said he’ll meet with hundreds of vendors and builders from around the world that he wouldn’t be able to see anywhere else.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

Don't miss the big stories. Like us on Facebook.