THE BUZZ The latest industry updates, news and events. BUILDER CONFIDENCE IN THE 55+ HOUSING MARKET STRENGTHENS IN SECOND QUARTER Builder confidence in the single-family 55+ housing market strengthened in the second quarter of 2017 with a read-ing of 66, up 11 points from the previ-ous quarter, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI) re-leased today. This is the 13th consec-utive quarter with a reading above 50, which means that more builders view conditions as good than poor. “Demand for 55+ housing continues to grow, and this quarter’s index is a re-flection of that,” said Dennis Cunning-ham, chairman of NAHB’s 55+ Hous-ing Industry Council and president of ActiveWest Builders in Coeur d’Alene, Idaho. “Consumers in this market want a home that addresses their specific needs, and 55+ builders and develop-ers are able to create homes and com-munities that cater to these needs.” There are separate 55+ HMIs for two segments of the 55+ housing mar-ket: single-family homes and multi-family condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, pro-spective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). All three components of the 55+ single-family HMI posted increases f rom t he prev ious qua r ter: E x pected sales for the next six months increased 12 points to 80, an index high, while present sales rose eight points to 70 and traffic of prospective buyers jumped 19 points to 53, also an index high. The 55+ multifamily condo HMI rose seven points to 53, with all three components posting gains in the sec-ond quarter: Present sales increased six points to 56, an index high, while ex-pected sales for the next six months and traffic of prospective buyers both rose eight points to 55 and 45, respectively. All four indices tracking production and demand of 55+ multifamily rent-als posted gains in the second quarter: Present production rose three points to 53, expected future production climbed 14 LBM JOURNAL SEPTEMBER 2017 eight points to 52, current demand for existing units increased two points to 66 and expected future demand rose five points to 67. “We are seeing strong demand in the 55+ housing sector due to favorable market conditions, such as record highs in the stock market and rising home prices,” said NAHB Chief Economist Robert Dietz. “This quarter’s reading is in line with our forecast, as we expect to see continued gradual gains in 2017.” NEW HOME SALES EDGE UP IN JUNE Sales of newly built, single-family homes in June inched up 0.8% to a seasonally adjusted annual rate of 610,000 units from a downwardly revised May reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. “Although we saw modest gains this month, new home sales have risen nearly 11% since the start of 2017,” said Granger MacDonald, chairman of the NAHB. “Our members remain optimistic as the single-family housing market continues to recover.” “The month’s sales report is consistent with our forecast, and we should see further gains throughout the year as the labor market continues to strengthen,” said NAHB Senior Economist Michael Neal. “While new home inventory rose slightly in June, it remains tight as builders face lot and labor shortages and increases in building material costs.” The inventory of new homes for sale was 272,000 in June, which is a 5.4-month supply at the current sales pace. Regionally, new home sales increased 12.5% in the West and 10% in the Midwest. Sales were unchanged in the Northeast and fell 6.1% in the South. TOUGH CALL ANSWERS ANSWERS TO OUR JULY TOUGH CALL: BRIDGING THE SALES/CULTURE GAP What to do when your relationship-based sales reps collide with price-only buyers? Your Votes Online at LBMJournal.com 58.33% 4.17% 20.83% 16.67% SALES TRAINING. You clearly need to find a sales trainer who focuses on selling to millennials, so George and Harold can learn to adapt. CUT PRICES. If the millennial buyers only want to talk price, then arm George and Harold with the prices they need to earn back the business. ©iStock.com/shapecharge GIVE IT TIME. Once their crews have problems with the other suppliers, the buyers will see the light, and their purchases will rebound. CHANGE REPS. If George and Harold aren’t connecting with the millennial buyers, then perhaps some of the younger salespeople on your team should be enlisted. Thanks to everyone who voted on the July Tough Call. See page 80 for this month’s Tough Call.