Wednesday, April 30, 2008

Kitchen/Bath Dealers Average 38 Prospects, 23 Sales in March

Spring brought good news for kitchen and bath dealers in the form of more showroom visitors and more sales, according to NKBA's Business Barometer Survey for March. Respondents averaged 37.6 showroom prospects during the month, up from an average of 28.9 prospects in February.
Dealers reported closing an average of 10.8 kitchen sales and 12.3 bathroom sales in March, both up from February results. Reported average price of a kitchen job was $33,544, and reported average price of a bath was $12,792. However 53.6% of respondents reported fewer kitchen sales in March, 2008 than in the same month last year, and 44.6% reported fewer bath sales than in March, 2007.
Some 45.4% of respondents expected sales to rise during the period April-September over the previous six months. Another 28.2% expected a sales decline over the next half-year.

If you are a dealer and would like to take part in the current survey, click here.

Scenes From the Mortgage Crisis, Part Next

Sources tell the Wall Street Journal that the G-Men are finding evidence of wrongdoing in the mortgage approvals at Countrywide, connected to a company program called "Fast and Easy" in which the lender handed out mortgages without documentation of the borrowers' finances. It was reported elsewhere that the lender lost $893 million in the first quarter. Chariman Angelo Mozilo was paid more than $22.1 million and another $121.5 million in stock options last year for his management skills...

Now that cold weather is abating, hundreds of thousands of utility customers across the country may be facing disconnect notices, says USA Today. Most states in the Midwest and Northeast have moratoriums on disconnecting utilities in winter months, which are ending now.

And an investment columnist for the Wall Street Journal urges his readers to hoard food.

GDP up 0.6% in First Quarter

Subject to revision, natch. However, The price index for gross domestic purchases (prices paid by U.S. residents) increased 3.5% in the quarter. Real disposable personal income is said to be up 1.4%.

Missed it by THAT much!

The wonderful blog PaleoFuture finds a 1930 newspaper prediction about tomorrow's kitchen, which assumed that the kitchen of the future would still have an ice-box for food preservation. (For young sprouts, before electrical refrigeration came along, kitchens had ice-boxes serviced by yeomen who would deliver blocks of ice from wagons daily. Then horseless carriages came in, and....)

Tuesday, April 29, 2008

Consumer Confidence Down 41% in April

The Conference Board's Consumer Confidence Index nose-dived to 62.3 (1985 = 100) in April, down 41.4% from April, 2007, and down 5.5% from March levels. The Present Situation Index decreased to 80.7, while the Expectations Index was virtually unchanged at 50.1.
Consumers' short-term outlook remained quite grim in April. Consumers expecting business conditions to worsen over the next six months increased to 27.0%, while those anticipating business conditions to improve increased to 10.1%. Those expecting fewer jobs in the months ahead increased to 32.8%, while those anticipating more jobs increased to 9.0%. Consumers expecting their incomes to increase declined to 15.1%.

Masco First Quarter Sales Dip 13%

Sales by Masco Corp. dipped 13% in the first quarter of 2008 to $2.4 billion.
Masco forecasts 2008 housing starts will decline an additional 25% to 33%, to a range of 900,000 to one million units. It also thinks that consumer spending for home improvement products will be weaker than originally anticipated, and that its 2008 percentage sales decline will be low-double digits to mid-teens compared to 2007.

S&P Home Price Index Continues Sharp Decline

The Standard & Poor/Case-Shiller Home Price Indices show declines in the prices of existing single family homes worsened in the second month of the new year, with 17 of the 20 now reporting MSAs posting record low annual declines, 10 of which are in double-digits.
"There is no sign of a bottom in the numbers," says David M. Blitzer, chairman of the Index Committee at Standard & Poor's. "Prices of single family homes continue to drop across the nation. All 20 metro areas were in the red for the February-over-January reading. In addition, 19 of the 20 MSAs are still reporting negative annual returns."

First Quarter Foreclosures More than Doubled

Foreclosures during the first quarter of this year rose 112% over the same period of 2007, according to RealtyTrac. Nearly 650,000 properties were foreclosed upon in the first three months of 2008, up 23% from the last three months of 2007. One in every 194 U.S. households received a foreclosure filing during the quarter.
"Foreclosure activity in the first quarter increased on a year-over-year basis in 46 out of the 50 states and in 90 of the nation’s 100 largest metro areas, demonstrating that most regions of the country are seeing more foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac. “In some areas there are also some unusual, non-market factors impacting the foreclosure numbers. For example, the city of Philadelphia in late March issued a temporary moratorium on all foreclosure auctions for April, and the city has since adopted a program that will delay foreclosure proceedings on owner-occupied properties until the owners have met face-to-face with lenders to attempt a loan workout plan that would prevent foreclosure."

Thursday, April 24, 2008

March New Home Sales Plummet 37%

Sales of new homes tumbled 36.6% in March from the same month in 2007 to an annualized rate of just 526,000 units, according to the Census Bureau. Through the end of the first quarter, new home sales were down by a third from the same period last year to just 142,000 units sold.
Median sales price of a new home in March was down 13.3% from March, 2007's median, to just $227,600.

How the Bond Rating Services Exacerbated the Mortgage Crisis

A lot of food for thought in this New York Times article.
A sample: "Almost immediately, the team noticed a problem. Usually, people who finance a home stay current on their payments for at least a while. But a sliver of folks in (mortgage security Subprime) XYZ fell behind within 90 days of signing their papers. After six months, an alarming 6 percent of the mortgages were seriously delinquent. (Historically, it is rare for more than 1 percent of mortgages at that stage to be delinquent.)
Moody’s monitors began to make inquiries with the lender and were shocked by what they heard. Some properties lacked sod or landscaping, and keys remained in the mailbox; the buyers had never moved in. The implication was that people had bought homes on spec: as the housing market turned, the buyers walked.
By the spring of 2007, 13 percent of Subprime XYZ was delinquent — and it was worsening by the month. XYZ was hardly atypical; the entire class of 2006 was performing terribly. (The class of 2007 would turn out to be even worse.) "

13% of borrowers to lose homes?

Credit Suisse says that 12.7% of all borrowers in the U.S. could see their homes foreclosed upon by 2012.
The pessimistic report also sees home prices bottoming out next year.

Wednesday, April 23, 2008

Are You Better Than You Were?

A provocative thought from marketing guru Seth Godin's blog.

A Bathroom With a Painted Floor

A splendid bit of Trompe L'Oeil floor painting, supposedly done in a 10th floor condo bath on the West Coast. (click to enlarge)
UPDATE: I am reliably informed that this is Photoshop fakery and not an actual floor. But it IS way cool.

Better Homes & Gardens Study Finds Kitchen Is Most Important Room

A survey of more than 2,000 home enthusiasts around the country by Better Homes and Gardens magazine finds their number one priority is a "new kitchen that looks great and is fun to work in."

Second was "the right amount and type of customized storage," and third was "a master bath and bedroom that feel like a luxurious hotel room."

Other findings:

  • More than half want green remodeling options;

  • 40% say outdoor kitchens are as important as indoor ones;

  • About one in three baby boomers expect an aging parent to move in with them in the next five to ten years.

'Kitchens in the News' Update!

There's a picture of the alligator in the kitchen. Sad to say, it only shows part of the alligator and even less of the kitchen.

Tuesday, April 22, 2008

Shiller: Housing Prices May Fall More Than 30%

Yale University economist Robert Shiller, pioneer of the Standard & Poor's/Case-Shiller home price index, notes prices are halfway there (down 15% since 2006) in this interview with the Houston Chronicle.

Kitchens in the News

A Florida woman finds an eight foot alligator in her kitchen.

March Existing Home Sales Dip 19%

Sales of existing homes fell 19.3% in March from the same month last year to a seasonally adjusted annualized rate of 4.93 million units, according to the most recent figures from the National Association of Realtors. Sales of existing single family homes slipped 18.4% to a rate of 4.35 million units.
Through the end of the first quarter, some 964,000 existing homes have been sold, some 21.8% behind the pace for the first three months of 2007. At the present sales rate, there are 9.9 months' worth of unsold homes on the market, up from 7.5 months' worth in March, 2007.
Median sales price for an existing home in March dipped 7.7% from the median in the same month of 2007 to $200,700. But that figure was a 2.6% increase over February's median price.

The Middle Class Squeeze

The Wall Street Journal creates an alarming infographic on the trend that will hinder economic recovery. (Hat tip to The Big Picture blog.)

Arson to Avoid Foreclosure?

The Los Angeles Times suggests a disturbing trend.
"Some folks celebrate their last home mortgage payment by setting fire to their loan agreement. "Lately, some people behind on their mortgages are simply setting fire to their homes."

Monday, April 21, 2008

2008 Salary Survey Underway

The NKBA’s 2008 salary surveys have begun.
If you are, or work for, a kitchen/bath dealer and would like to participate, click here.
If you are, or work for, a kitchen/bath or interior designer and would like to participate, click here.
Participants can see preliminary results; full reports to be published here later.

Thursday, April 17, 2008

Harvard Sees 5% Remodeling Drop for 2008

The Joint Center for Housing Studies in Cambridge releases its most recent Leading Indicator for Remodeling Activity, and forecasts a 4.8% drop this year in remodeling spending.
It looks unlikely that we will see any improvement in the remodeling market until 2009,” remarks Kermit Baker, director of the Remodeling Futures Program of the Joint Center. “Currently, the second half of this year is shaping up to be weaker than the first half.”

K&B Dealers: Take the Business Barometer Survey

Click here for this month's survey.

Last month's results are here.

Pure Contemporary

Visit a new and stylish addition to the blogroll.

Join Our Free Webinar, April 24 at 1 pm EDT

The NKBA will be holding a free webinar next Thursday, April 24, at 1 pm Eastern Daylight Time to discuss kitchen and bath market conditions. If you would like to participate, drop an e-mail to

The Fed Stood on the Shore, With Teardrops in Their Eyes

It was sad when the great ship went down.

Wednesday, April 16, 2008

Loan Umbrellas on Rainy Days

The Retail Contrarian offers 50 ways to improve your customer's experience, many of which will apply to kitchen and bath dealers.
51. Always go above and beyond for every customer.

Construction Wages Up 4% in March

Weekly wages for construction workers increased an average of 4.2% in March compared to the same month last year to $828.36, or roughly $43,000 per year. Hourly construction wages were up 4.4% to an average $21.46, according to the most recent figures from the Bureau of Labor Statistics.
For all workers, weekly wages were up 4.6% in March to an average $607.49, or just under $32,000 per year.Hourly wages averaged $17.92, a 3.9% increase from March, 2007.
However, the BLS also announced that the Consumer Price Index has risen 4.0% between March, 2007 and March, 2008, led by a 17% increase in energy. Energy costs increased 8.6% just over the past three months, further pointing why "green" design will be on the minds of many consumers.

One in Every 33 Homeowners May Be Foreclosed Within Two Years

A new report from the Pew Charitable Trust details what states are doing to cope with the mortgage crisis. In some states, the outlook is especially grim; for instance, nearly one in 11 homeowners in Nevada is projected to be in foreclosure and one in 18 Arizona homeowners may face the same circumstance over the next two years. And an additional 40 million neighboring homeowners may see their property values and their municipalities’ tax bases drop by as much as $356 billion, largely over the next two years.

Brutal March Sends Starts Down 37%

March housing starts fell 36.5% from the same month in 2007 to a seasonally adjusted annualized rate of 947,000 units, the lowest pace since 1991. Single family starts had even rougher going during the month, down 43.6% from March 2007 levels to a rate of 680,000 units, according to the Census Bureau.
Permits during the month fell 40.9% from March, 2007, to a seasonally adjusted annualized rate of 927,000 units, and single family permits were down 46.4% to a 606,000-unit pace.
For the year to date, total starts are 30.2% below 2007's pace at 224,700 units started, and permits are down 37.3% to 227,700 permits issued. Single family starts in the first quarter fell 39.0% to 158,400 units started so far in 2008, and single family permits are down 43.9% to just 147,200 permits issued.

Tuesday, April 15, 2008

March Kitchen Appliance Shipments Down 11%

Kitchen appliance shipments in March dipped 10.5% from the same month last year to 3.97 million units, according to the most recent figures from AHAM. Through the first quarter, some 9.4 million kitchen appliances were shipped, down 12.1% from the first quarter of 2007.
For the quarter, electric cooking appliances were down 12.8% to 1.2 million units, gas cooking appliances down 13.9% to 698,100 units shipped, and microwave ovens down 13,6% to 2.5 million units.
Refrigerator shipments dipped 11.3% in the first three months of 2008 to nearly 2 million units; dishwashers were down 10.9% to 1.5 million units; disposers down 10.1% to 1.4 million units, and compactors down 18.1% to nearly 21,000 units shipped.

The Captain Stood on Deck With a Teardrop in His Eye

96 years ago today, 'twas sad when the great ship went down.

How HUD Made the Housing Crisis Worse

What "Brownie" was to Katrina, Alphonso was to the subprime meltdown, as detailed by the Washington Post.

March Foreclosures Up 57%

Foreclosures during March were up 57% from the same month in 2007, according to RealtyTrac. One in every 538 U.S. households got a foreclosure filing during the month, totalling nearly 235,000 properties.
“On a year-over-year basis, default notices were up nearly 57% and bank repossessions were up nearly 129%, but auction notices were up only 32%, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender," said James J. Saccacio, chief executive officer of RealtyTrac.

Back from an Upbeat Kitchen/Bath Industry Show

Exhibitors and attendees were optimistic at the Kitchen/Bath Industry Show in Chicago. The people I talked to said business was weaker but still there, and that business was being written on the show floor. More on the event in the days to come.
Next year's K/BIS is at the Georgia World Congress Center in Atlanta on April 30 - May 3, 2009.

Tuesday, April 8, 2008

See You Shortly

K+B Delta Vee will be dark until April 15, since I will be on the road at the Kitchen/Bath Industry Show in Chicago. Hope to see you there!

10 Things You Should Know About the Kitchen & Bath Industry

1. Americans spent more than $220 billion on kitchens and bathrooms in new construction and remodeling last year.
2. Six out of every seven new kitchens last year were remodeled, while only one in seven were new construction.
3. Almost three quarters of new bathrooms last year were remodeled, while just a little more than a quarter of them were new construction.
4. Despite the downturn in the housing market, the number of kitchen and bath remodeling projects actually increased in 2007 over 2006 levels.
5. Dipping home values and prices act as a spur to kitchen and bath remodeling; consumers trying to sell often decide to improve their homes in the hope of attracting buyers, while consumers staying put improve their homes for an enhanced lifestyle and increased home value.
6. A National Kitchen & Bath Association survey last month found about 84% of kitchen/bath dealers are planning to expand their business or carry on as usual; just 16% are pulling back.
7. With at least 36 states facing water shortages by 2015, the need for conservation will be a new driver for remodeling bathrooms, which account for more than half of all household water use each day.
8. For every 20 bathroom projects undertaken last year, nine were master baths; eight were other full baths and three were powder rooms.
9. The NKBA, owner of K/BIS®, has been representing the industry for 45 years and includes more than 40,000 members in the US and Canada.
10. K/BIS is expected to have more than 44,000 attendees from around the world, viewing more than 900 exhibits.

Monday, April 7, 2008

Your Competitive Advantage

Retail Contrarian explains how retailers can "not simply survive but thrive during the current financial (insert whatever word you'd like to use here - situation, opportunity, challenge, crisis)." And although it's aimed at big box stores, there's a lot there that a kitchen/bath dealer can take to heart, even if he's Single Showroom Charlie.

Scenes From the Housing Crisis, Part Next

The Mortgage Bankers Association is having trouble paying the mortgage on its own headquarters.

Friday, April 4, 2008

March Residential Construction Employment Dips 10%

Residential construction employment fell 10.1% in March from the same month last year to 875,400 jobs, according to the Bureau of Labor Statistics. Residential specialty trade employment dipped 8.0% year-over-year to 2.1 million jobs, and overall construction jobs were down 4.6% to 7.3 million jobs.
Some 1.17 million workers in the construction trade were unemployed in March, a 12.0% unemployment rate.
Weekly wages in construction rose 4.2% in March compared with the same month last year to $828.36. Hourly construction wages were up 4.4% over that span to $21.46.

Scenes from The Mortgage Crisis, Part Next Plus One

The Chicago Tribune finds that lenders in places where home values have fallen very low are foreclosing but refusing to take title, letting empty homes fall derelict to avoid maintenance costs and property taxes.

And Janet Yellen, President of the Federal Reserve Bank of San Francisco, says the crisis is fueled more by falling home prices than by mortgage interest re-sets--and that home prices are likely to fall still further.

Thursday, April 3, 2008

Scenes From the Mortgage Crisis, Part Next

The New York Times finds workers who want to relocate but cannot sell their existing homes may be a further negative impact on the economy.

Have You Lost This Cat?


Wednesday, April 2, 2008

Exploring the New World of Appliance Colors

An insightful look at consumer choices by Susan Serra, CKD, of The Kitchen Designer (listed on our "Sites to See.")

From Status Symbols to Status Stories

TrendWatching offers a report on a new twist in brand marketing.

Maax For Sale

A report says the Canadian-based plumbing giant is on the block.

Tuesday, April 1, 2008

Somebody Was in Charge of Housing? Really?

Housing & Urban Development Secretary Alphonso Jackson gets evicted.

February Residential Construction Family Down 19%

Spending on residential construction was at a seasonally adjusted annualized rate of $463.8 billion in February, according to the Census Bureau, down 18.6% from February, 2007, and off 0.9% from the previous month. The AP notes that February marks the 24th consecutive monthly drop in home building spending.