Answers to the question, “How’s business?”
Clients who already have money are beginning to spend it on remodeling and new homes, but those who must rely on banks for loans continue to have a tough time
Access to money remains a problem for the housing industry, according to the builders, remodelers and architects I speak to. Banks continue to be overly selective when deciding which homeowners – and sometimes home builders – they lend money to, I’m told. This continues to stall a significant housing recovery.
As someone who is lucky enough to travel around the country and meet with many of you on a regular basis, I ask many of you, “How’s business?” I’ve been asking this question a lot lately, and the answer most times is, “Better than it has been.”
While this is nice to hear, it not a good-enough answer, so I always follow up with, “Does that mean the phone is ringing more, or that clients are actually spending money with you?” This is when the answers begin to differ.
Half the people I ask tell me clients are beginning to spend money now, which they weren’t doing a year ago. Great news. The other half tells me that many more homeowners are talking seriously about doing work to their existing homes or building new ones. These people emphasize “talking seriously” and then elaborate by saying that clients haven’t been serious in many months. Again, the news could be better but it’s still positive.
When I ask the second group of builders, remodelers and architects, “What’s preventing the ‘serious talkers’ from pulling the trigger,” they tell me fear, lack of confidence or limited access to money, or all of the above.
It seems most times it’s the people who already have money who are spending it. For example, I was in Salt Lake City this week and gave a group of about 15 of your colleagues the “how’s business” routine, and three of the builders said they have jobs either lined up or in the ground already. More good news. But, during the conversation it was revealed that these homes are being built in an area where homeowners have cash money to spend. They don’t need banks.
When I was in Green Bay the week before, I heard similar stories about clients with money who are beginning to spend it, which they weren’t doing a year ago.
So I guess I’m making two points here: 1) Find clients with money; and, 2) Banks must begin to trust again.
By the way, how’s business?
