Building Blocks

Those perhaps most affected by the housing slowdown are also the ones most poised to lead its resurgence: the small businesses that dominate the housing industry.

A National Association of Home Builders report paints the following picture of the housing industry:

• Slightly more than 65 percent of all homebuilding establishments had annual receipts below $1 million. Almost 31 percent generated between $1 million and $10 million.

• In 2007, 41,483 new single-family general contractors (building on the owner’s land) did less than $1 million in business, about a 70 percent share of the 58,679 businesses in this group. Among multifamily general contractors, which generally are larger, 42 percent also recorded less than $1 million in sales/receipts.

• Eighty-four percent of 73,888 residential remodelers and 61 percent of 6,462 land developers had sales of less than $1 million.

• At least 96 percent of residential builders and remodelers are small (defined as doing no more than $33.5 million in annual business). Ninety-four percent of land developers (less than $7 million) and 98 percent of specialty trade contractor (less than $14 million) establishments also were considered small.

The study comes on the heels of the release of the November housing-starts data from the U.S. Commerce Department. Nationwide housing starts rose 3.9 percent in November to a seasonally adjusted annual rate of 555,000 units, the first upward movement in new-home production since August. The gain was due to a nearly 7 percent increase of new-home production on the single-family side.

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