GuildQuality Member Predictions in the 2nd Quarter of 2010

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This summary of feedback is from GuildQualityʼs Q2 2010 Market Predictions Survey. This survey is a follow up to the survey we began in October 2008, and have contin- ued on a quarterly basis since then. In this and prior sur- veys, GuildQuality requested feedback from the owners and operators among our more than 500 home builders, remodelers, contractors, and real estate developers that use our service. In each of the surveys, more than 100 people provided feedback.

Our members are representative of the best businesses in the building, remodeling, and real estate profession. And just as the strength of the building industry has his- torically forecasted the strength of our entire economy, I believe that our member sentiment is a leading indicator within the building industry.

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GuildQuality Member Predictions in the 2nd Quarter of 2010

  1. 1. Guildmember Predictions About GuildQuality This summary of feedback is from GuildQualityʼs Q2 2010 North Americaʼs best builders, remodelers, contractors, Market Predictions Survey. This survey is a follow up to and real estate companies rely on GuildQuality to help the survey we began in October 2008, and have contin- them monitor and improve the quality of their work. ued on a quarterly basis since then. In this and prior sur- GuildQuality provides customer satisfaction surveying, veys, GuildQuality requested feedback from the owners web-based performance reporting, peer benchmarking, and operators among our more than 500 home builders, and performance marketing for construction and real es- remodelers, contractors, and real estate developers that tate companies that seek to deliver a consistently excep- use our service. In each of the surveys, more than 100 tional customer experience. people provided feedback. GuildQuality offers a trial membership to all homebuild- Our members are representative of the best businesses ers, remodelers, developers, and contractors. Experience in the building, remodeling, and real estate profession. GuildQuality first-hand with a free trial. And just as the strength of the building industry has his- torically forecasted the strength of our entire economy, I believe that our member sentiment is a leading indicator within the building industry. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2010 GuildQuality Inc. Page 1 of 5
  2. 2. Guildmember Confidence Index The Guildmember Confidence Index is a forward looking indi- cator that summarizes the predictions of the members who participated in our survey. A positive number suggests that more members predict improvement than decline. In Q2 2010, members continue to predict improvement in both their companyʼs performance and the market, but they forecast less improvement than when they were asked the same ques- tion in Q1 2010. Guildmember Confidence Index. A positive number indicates more people forecast improvement than decline. A negative number indi- cates more people forecast decline than improvement. 100% would indicate all respondents forecasted improvement; -100% would indi- cate all respondents forecasted decline. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2010 GuildQuality Inc. Page 2 of 5
  3. 3. Confidence Level Distribution When asked what kind of change they expect in the market in general, the majority (53%) of members predicted conditions would stay about the same. When asked about their own companies, the largest percent- age predict improvement or significant improvement, though that number is down considerably to 54% from 73% in the first quarter of 2010. Of note, the percentage of members predicting decline or sig- nificant decline increased substantially for the first time since weʼve been conducting our survey. Confidence Level Distribution. Guildmembers were asked to predict whether the performance of their company and the market would sig- nificantly improve, improve, remain the same, decline, or significantly decline over the next six months. GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2010 GuildQuality Inc. Page 3 of 5
  4. 4. Comments: Each quarter we alternate between asking a exodus. We are hopeful of a strong season starting back in mid October handful of open ended questions, and not asking any open thru march 2011. ended questions. In Q2, we asked no open ended questions, 11. Our market is being supported by the Fort Lee Virginia BRAC at this time. though a handful of members provided us with additional feed- Military buyers are about 75% of our business right now. back. Their comments: 12. Our market is weak! Leads are down by about 30% from 2009, same period. Quality of leads is down 80% when factoring in how many leads are shopping for price! Losing projects to people 30-40% less expensive. 1. Business has picked up in the last two months and seems to be slowly At least we are still getting paid for Design and estimating. Do have one but steadily improving. We are optimistic about the coming months. Custom Home but that does not keep very many of our employee's busy. Backlog of remodels right now is lowest since 1997. Trying to keep 9 em- 2. After the expiration of the most recent tax credit things have slowed sig- ployees busy, down from 22 in fall of 2008. nificantly! 13. Our revenue for 1st 5 months of 2010 is down significantly over same 3. Customers in this market are totally driven by price and are ignoring period 2009. value and service altogether. The primary home market seems to be im- proving while the secondary home market continues to lag. 14. People are still shopping but project size is beginning to increase. 4. Homeowners continue to be very cautious with their expenditures. Sales 15. Politicians, Banks and Wall Street have combined their greed to empty cycles are running very long. the pockets of main street America. I could just puke. 5. I believe that the market is going to make another downturn in 2011. I 16. Significant shifts in what home owners and businesses are willing to con- believe it will get much worse before we see real improvement. sider due to their concern with lagging economic improvement. 6. I believe the economy will take another dip before years end. If the 17. That "pent up demand" they were talking about may finally be making it's spending by our government does not stop 2011 could be very challang- way to market! ing. 18. The government is killing us at the local, state, and federal level. Locally 7. Lets hope that it continues to get better !!!! they are increasing real estate taxes and all fees like permits, impact fees, etc. The federal government is also choking us with increased taxes 8. Locally, things are picking up incrementally. We have been keeping quite and mandates. Consumers aren't buying because there is so much un- busy and have an optimistic forecast through this year and into next. certainty and lack of confidence in government leadership. Unfortunately Land may become an issue in a year or 2. our government is incompetent and corrupt. 9. Our company is in the remodeling industry and we have taken a signafi- 19. The improvement appears to be gradual, and we certainly will not be cant "hit" to our business. Comparing our numbers from January 08 to back to anywhere near the revenues of previous years June 1st 08 to 2009 and 2010 for the same time period our business is down 50%. Comparing 2009 to 2010 for the same time period our num- 20. The market has flattened out over the last couple of months. It feels like bers have stayed the same, which is a good thing - I just don't see any we are boucning on the bottom. increase in business as far as leads and / or sales are going - so far we're 21. The market is about on par with what we saw last year. We still have very taking it day by day. cost conscience clients with no significant urgency. Some glimmer of im- 10. Our last six months have been wonderful, sales volume at close to levels proving consumer confidence is returning but not enough to change our of three or four years ago. We've had to reduce margin but are closing planning relative to taking a conservative position on hiring and overhead. sales. The next four or five months will taper off as we've hit the summer 22. The market is still inconsistent. More people are requesting remodeling but there are huge price pressures! GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2010 GuildQuality Inc. Page 4 of 5
  5. 5. 23. There is a significant change in the amount of new jobs we are signing as clining home values have been our single biggest net challenge to over- well as a significant increase in new work to present quotes on. While come. labor prices remain low many manufacturers are still raising their prices. I 33. While I have marked us down to remain the same over the next six cannnot see any reason why they should be except for good old fash- months, there is no denying that our business is up substantially from a ioned greed. Many of my clients are selecting products that are priced to year ago and if we remain the same for the rest of the year, we will far match our current economic climate and are shying away from manufac- surpass last year's numbers. tureres who are raising their prices. 24. Things are picking up slightly after a very bad 4th QTR 2009 and 1st QTR 2010. However, the improvement is only slight because of downward price pressure to get jobs. Thanks to all those that participated! 25. Very competitive market right now. Margins are considerably lower. I greatly appreciate your participating in the survey and welcome any 26. Very difficult to predict the trend in the near future. People want to do projects but are very slow about making the decision to start the project. comments, suggestions, or requests you have about this and future People employed by utilities and colleges seem pretty secure about their reports. futures. To review prior reports, visit the search for “predictions” on the 27. We are cautiosly optimistic, though we are not out of the woods yet, and GuildQuality Blog. there are a number of challenges facing us,(local and national) there is still reason for optimisum. 28. We are expecting to increase our remodeling business in Seattle Sincerely, 29. We are off 10-15% from last year YTD and last year was down 40+%. We Geoff Graham continue to work harder than ever. We continue to try new - but inexpen- Founder & President sive marketing strategees. We look forward to a turn around soon! GuildQuality Inc. 30. We have experienced significant "fall out" in our design area. Several geoff@guildquality.com clients who paid design fees have delayed or cancelled projects this (888) 355-9223 Spring. However, we have had a good "up tick" in design and construc- tion projects. We expect to end the year with a positive net income, where as this Spring has been "dry". As opposed to last year, prospects do fear the economy. 31. We have seen a lot more leads come in about new work. However the interest level and committment is still a struggle. It seems everything has to be just right before a client will commit to a project. Design time is still drawn out longer than before. 32. We see things being rather stagnant until there starts to be some steady increase in home values. Congresses reactionary response to their past mistakes, lenders extremely conservative positions and appraisers ten- dency to project current trends, all which have resulted in lower and de- GuildQuality is Building a Community of Quality (888) 355-9223 www.guildquality.com © 2010 GuildQuality Inc. Page 5 of 5

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