This year marks the 20th consecutive year of our Financial Analysis and Operational Study. In 2012, the market began to show improvement as the series of economic charts included in this report demonstrate. The average profitability of the group increased from 4.04% in 2011 to 5.58% in 2012. 

During 2008, the industry experienced a drop in average net profit before taxes from 7.96% in 2007 to -0.75%, which is nearly a 9% reduction. In 2009 the industry declined further from -0.75% to -1.16%. Since we started tracking profitability in the early 1970s, 2008 and 2009 represent the only years that we have seen an average negative profit. The 2010 results mark the turnaround point back to profitability. 

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When preparing for the Buyout or bidding of a project, there are several crucial tasks that must be performed. Plan review, refining the Scopes of Work, creating the Material Specifications, bid pricing documents, deciding what will be offered as standard options, setting up your purchase order database, Instructions to Bidders and assembling the preferred Trade Partners list for bid. 

In this third volume of The Art of the Purchase, I will be addressing the importance of Preparing Your Instructions to Bidders.

Instructions to Bidders--The Instructions to Bidders is where you set your expectations for your Trades and Suppliers. You are the one who is providing them an opportunity to work on your project. Therefore, you have the right to have the Buyout (Bidding) executed per your standards. Be specific on what those standards are. If you have the luxury of a Bid Portal, this is the best place to post these instructions. If not, include them in your bid package if you are performing this manually or in the Invitation to Bid if you are doing this electronically.

 2012 brings a new set of challenges to builders as they work to meet the new Energy Conservation Codes prescribed by the IECC (International Energy Conservation Code). Specifically, all new residential construction where the 2012 IECC is adopted will be required to meet air leakage testing standards by a visual inspection AND whole house blower door testing. Previously the 2009 IECC allowed two options for compliance with air leakage requirements: visual inspection or whole house blower door testing.

 

In 2012 both of these compliance methods must be satisfied. Furthermore, the required air tightness of residential buildings will be 5 ACH50 (air changes per hour at 50 Pa) for zones 1 and 2 and 3ACH50 for zones 3 thru 8. Incorporating into the building design a properly installed housewrap air barrier will help achieve these testing results. 

 

 

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As the market has been improving and builders are looking at and specifying new products, we have been working closely with our members to educate them about the manufacturer partners in our program and to get them to look more closely at their products.

Through our Product trackers, our members have identified several additional programs for which they can collect incentives, increasing their per-home returns through the program.

They have also been able to identify manufacturers in which they have an interest so that we can connect them with a regional representative in their area.

Manufacturers have been able to gain a better understanding of the builders' needs and have made additional training available for Builder Partnerships members on how to differentiate their homes with their products.

This outreach has helped us to increase conversations between manufacturer and builder partners so we can find solutions that work for both groups. The conversion rate within Builder Partnerships has increased significantly, and we are seeing the benefits of our work through other programs.

Addison Homes Featured in Builder Magazine

Sherwin-Williams Teams Up with Pottery Barn

Paint company, Sherwin-Williams has announced color for the Fall/Winter collection of Pottery Barn colors. The collection runs the range from soft pastels to bold hues and includes color palettes for kids and teens. 

To learn more, click here.