Builders Maintain Optimistic Outlook Despite Housing Industry Slowdown

Walters Group
500 Barnegat Boulevard North, Building 100
Barnegat, New Jersey 08005

Media Contact: Evelyn Weiss Francisco: [email protected], (201) 796-7788

BUILDERS MAINTAIN OPTIMISTIC OUTLOOK DESPITE HOUSING INDUSTRY SLOWDOWN
Ed Walters Jr. Joins Industry Leaders at Shore Builders Meeting

NEPTUNE TOWNSHIP, N.J., May 20, 2010 – Three experts offered their perspectives on New Jersey’s housing market at a breakfast meeting hosted by the Shore Builders Association of Central NJ (SBACNJ) at the Jumping Brook County Club in Neptune. The featured speakers were Joe Riggs, group president of K. Hovnanian Homes™; Ed Walters, Jr., president and founder of the Walters Group; and Arvo Prima, president of Prima Builders. The event was moderated by Peter Reinhart of Hovnanian Enterprises.

The depth of the downturn in the housing industry has hit builders across the country, causing them to cut back on production and reassess strategies. “This recession was far deeper than anyone expected,” said Walters, who explained that his Barnegat-based firm has survived over the years because it was able to diversify. The development firm has expanded its scope to include single-family, multi-family and large-scale commercial projects. He lauded attendees for surviving in today’s housing market stating that, “We should all be proud of the fact that we’re still in business.”

Walters gave a regional viewpoint, explaining that among the struggles facing builders today is the lack of consumer confidence. “People are still nervous about whether or not they’re buying in a declining market. As a result, new construction sales are slightly behind where they were last year at this time. However, pricing has stabilized, and our home prices have increased slightly from last year.”

Walters sees market conditions improving, pointing to an increased occupancy rate at the company’s Atlantic Heights Apartments in Barnegat, reaching 98% from a low of 85% a year earlier. “It’s only one property, but it’s an indication that our economy is getting better and that people are finding jobs and are more confident.”

“We all need to remain positive, work a little harder, a little smarter and a little longer,” advised Walters.

“This is a historic downturn,” acknowledged Riggs of K. Hovnanian, a national home builder. “You have to go back to 1889 to find a time when our industry was as slow as it is today. In the heart of the great depression, 1933, we were doing double the starts per thousand citizens in the U.S. that we are doing today.”

“We all survived; we’re here,” Riggs said. “The things that we need to monitor are the level of supply, liquidity, and consumer confidence. These three things will impact the industry.”

“Overall, the market is improving,” observed Arvo Prima of Prima Homes, a local home builder active in the Ocean and Monmouth County markets. The builder cited a slowdown in sales momentum at two new residential developments opened last August. Discounts and incentives remain an important part of the equation, he explained. “As sales momentum increases, the incentives will be slowly phased out.”

“There is some good reason for optimism,” emphasized Riggs, citing the increase in stock market volume over the past year and low interest rates. “Home prices have definitely stabilized, and there is pent-up demand. We are sowing the seeds of the next housing boom. None of us knows when it will take place, but take place it will.”

To adjust to today’s market, K. Hovnanian has downsized and is now focused on improving efficiency, looking for land opportunities, and reactivating communities that were on ice, according to Riggs. Looking ahead, he advised attendees to “hope for the best, plan for the worst, study history and identify what has to happen for things to improve.”

The SBACNJ is a trade association serving all building-related industries. The association covers Monmouth and Ocean Counties.

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Photo caption: Ed Walters, Jr., president and founder of the Walters Group, was among the panelists discussing the housing market at a recent Shore Builders Association meeting.