So why does a replacement window manufacturer think about housing starts. Historically there was a direct link between housing starts, used home sales, and remodeling sales levels. With the housing collapse in this country a few years ago that relationship has become quite fuzzy at best. We used to be able to forecast our business increases or decreases pretty accurately using a six month lag to used home sales in the markets we serve. Housing starts didn’t have much correlation to our business, but there was a connection between starts and used home sales that could give you a longer forecast horizon, but that gets really complex.
In 2008 and 2009, our business along with the entire construction and remodeling industry really went into a nosedive. In 2010 we started to see some life come back into the remodeling sector, not dramatic, but certainly better than the bottom. The Energy Tax Credits at the end of 2009 and 2010 also gave a big fourth quarter boost for those that wanted to take advantage of the credits. The weather in 2011’s first quarter impacted the entire country and slowed sales dramatically. But we are seeing a true awakening in the remodeling industry starting in March of this year.
Normal trend was someone wanted to buy a new house so they may fix up the old one with new windows to try to get a better price before selling it, but they frequently bought the lower end type products. The bigger trend was someone buying a used home who wanted to fix it up for themselves – that’s were they looked for the best product – the best value - around. That is still happening and used homes are starting to increase in sales, albeit still well below the levels enjoyed a few years ago, but at least a definite rebound.
The new trend is people staying put. It is really tough to sell a home today, and if you could sell it you would be forced to take a price substantially lower than the home was worth even a few short years ago. So people are making the decision to stay put. They are looking around and doing some of the improvements that will make their life more comfortable and more enjoyable. Luckily new high performance, maintenance free, vinyl replacement windows and doors fit that definition perfectly. Many homeowners are finding that the reductions in their energy and maintenance costs are virtually covering the monthly payments for their new windows. They learned that they were paying for their new windows whether they bought them or not, and now they are more comfortable, they’ve added value to their home, and they look great.
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