February 4, 2011
Dear FHT Builder,
FHT continues to build our high quality custom modular homes for our builders and their retail customers. We currently are six weeks ahead of production in 2011 compared to 2010. Our positive business relationships with our trusted builders are imperative to both our home building Success! The following economic assumptions may be helpful to your home building operations:
The overall housing economy has stabilized and is at the bottom of its economic cycle; we still belief all potential home deals need to be negotiated aggressively with the retail home buyer.
Interest rates will remain low in 2011; but may tweak up a full percentage point higher from the low rates that were available in late 2010 (mid 4.5% in 2011).
The overall housing inventory measured at almost a year will continue to move lower in 2011; a positive sign for housing. The foreclosures in our housing market are beginning to slow down dramatically.
Home prices have stabilized in 2009/ 2010 and may move up slightly in 2011; this is a favorable trend projection that will help our industry and margins and this year will be perceived as an excellent time to buy a new home.
Owning a home in certain markets along with the itemized tax deductions (interest and real estate tax benefit) has created further disposable income for a home owner compared to renting. In many areas, housing costs have become very affordable and less expensive than renting compared to the past 20 years of on going higher costs of home ownership.
Overall, new homes being constructed by FHT are slightly smaller and the retail customers are on budgets. However, retail customers that are willing to pay for FHT engineering costs along with mortgage application fees are usually well informed of what they need to accomplish for closure on their new home. Therefore, new home owners are moving ahead with buying their homes; whereas bank mortgage commitments remain stringent for only qualified buyers who have positive credit ratings and equity down payments. Customers remain committed to buying their new homes with customized design and options compared to buying an existing older home.
FHT Builder communications; page 2
Expect our nation’s gross national product to continue growing 4-5% in 2011; higher than recent 3rd and 4th quarter 2010 actual results; unemployment will remain high, however there will be positive job hiring in 2011 lowering unemployment. For the people who are currently employed, their overall job security and consumer confidence will improve in 2011; these workers have provided substantial success to their current Company’s earnings.
Expect the stock market to show gains in 2011; this bodes well for investors needing their savings as equity for a home purchase. Also, personal savings will remain high in 2011 at almost 4% compared to less than 1% during strong economic growth years. Debt repayments will continue as consumers remain cautious of the economy and not desiring to be over extended (2009 and 2010 may have been the first year this reverse trend has occurred in over 20 years). Consumer confidence will continue improving and personal spending will help move our economy forward.
Ultimately, our builders must continue to sell and market FHT modular homes and with our FHT sales representative assistance, close the home deals that will benefit our partnership. FHT is committed to building our modular homes at the highest quality and service excellence and offering modular products that have value. We remain steadfast with providing affordable pricing to our builders but expect small increases in pricing since supplier inventory is limited and their material costs have begun to move up. Furthermore, FHT will communicate next month about additional value added items in our homes for 2011.
I certainly believe the housing storm is behind us; working together as a team, and our perseverance of selling, marketing and building quality homes will remain bright for our future business.
Please make sure everyone continues to click our website at www.futurehometechnology.com and direct your customers to this valued website. Our website comes up very high on the search engines and we refer retail leads to our builders. Again help us achieve success with our website search engines by staying active hitting our web site from as many different computers as possible.
Happy New Year; and good tidings for our business partnership!
John Longabucco, CEO
Cc: Ed Opalka, Steve James, Katie Strattman, Mike Keppick, Mike Kosko, John Schell, Tom Ralston, Rich Zanghi, FHT Engineering, Production and Service Departments
No comments:
Post a Comment