Home prices and consumer confidence drop
29 Apr, 2008 By: Jamie J. Gooch LDB SolutionsHome prices have fallen at record rates, which coupled with high gas prices, have consumers feeling less confident about the economy than they have since the invasion of Iraq in March 2003, according to survey data released by the Conference Board. The private firm builds a monthly survey by sampling 5,000 U.S. households.
 Source: the Conference Board |
"This continued weakening suggests that not only has the feeble level of growth in the first quarter spilled over into the second quarter, but that economic conditions may have slowed even further,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers' inflation expectations continue to rise and this measure now matches the all-time high reached in the aftermath of Hurricane Katrina. The percentage of respondents intending to take a vacation over the next six months has fallen to a 30-year low, another sign of consumers turning more cost conscious. Looking ahead, consumers' outlook for the economy, the job market and their income prospects remains quite pessimistic and little changed from last month."
Home prices not done falling
According to Standard & Poor’s Case/Shiller Home Price Index, which tracks 20 of the largest housing markets, prices have dropped 12.7% for the 12 months ending in February. Seventeen of the 20 markets had record low annual declines, 10 of which are in the double digits. Las Vegas and Miami have dropped the furthest over the past year. Charlotte, N.C., is the only market that has seen overall positive growth over the past 12 months, but it has been in decline for the past six months.
“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. The monthly data show that every one of the MSAs has now declined every month since September 2007, marking six consecutive months. On top of that, the declines have remained steep with eight of the 20 MSAs and both composites reporting their single largest monthly decline in February.”
 Source: Standard & Poor's and Fiserve |
While common sense would dicate that a weak housing market, a poorly perceived job market and less disposable income would have a negative affect on the Green Industry, at least one segment seems to be feeling no pain as of yet.
Throwing a wide net
Despite the continued drop in the real estate market, the majority of landscape architects remained busy in the first quarter of 2008, according to the latest Business Quarterly survey by the American Society of Landscape Architects (ASLA). Fifty-five percent of respondents described their billable hours as average or above in Q1 2008, and 53 percent reported average or above inquiries during the same period. Additionally, 38 percent plan to hire in the Q2 2008 — unchanged from the previous quarterly survey.
“While the majority of firms reported steady or increased work, the housing troubles have certainly slowed some segments of the market—especially major real estate developments,” says Nancy Somerville, executive vice president and CEO of ASLA. “Landscape architecture firms have turned to high-end residential work, commercial development and public sector projects to mitigate most of the slowdown from the housing market.”
The survey also asked about interest in sustainability, with nearly 72 percent of respondents reporting clients as “very interested” in sustainable issues.
| ASLA survey: top sustainability issues: 1. Water (bioswales, stormwater management) – 72.3% 2. Energy Efficiency (irrigation, low-maintenance, native plans, less lawn) – 68.1% 3. Accreditation (LEED points, national/state/local guidelines) – 54.7% 4. Habitat (open space, preserving natural habitat) – 32.2% 5. Green Roofs – 28.0% |
In uncertain economic times, it pays for landscape businesses to diversify their revenue streams. Companies focusing exclusively on residential work may find it tough going in the months ahead.
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