For the 9th consecutive quarter, more than 100 of North America's best homebuilders, remodelers, real estate developers, and home services contractors offer their near-term predictions for the residential real estate and construction market.

1. Guildmember Predictions
This report contains a summary of the feedback received from our members in the
Q4 2010 Market Predictions Survey conducted on December 9. This survey is a
follow up to the survey we began in October 2008, and have continued on a quar-
terly basis since then. In this and prior surveys, GuildQuality requested feedback
from the owners and operators among our more than 500 home builders, remod-
elers, 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, remodel-
ing, and real estate profession. And just as the strength of the building industry has
historically forecasted the strength of our entire economy, I believe that our mem-
ber sentiment is a leading indicator within the building industry.
About GuildQuality
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Thanks to all those who participated!
We greatly appreciate your participating in the survey and welcome any com-
ments, suggestions, or requests you have about this and future reports. This image is the Wordle representation of every comment received
in the Q4 2010 Predictions Survey.
To review prior reports, search for “predictions” on the GuildQuality Blog.
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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 Q4 2010, members continue to predict improvement in both
their companyʼs performance and the market. Relative to the
past two quarters, there was considerably more optimism for
the market in general, and slightly greater confidence in peo-
pleʼs own companies.
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.
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3. Confidence Level Distribution
When asked what kind of change they expect in the market in
general, 36% of members predicted conditions would stay
about the same. This is the lowest percentage of “no change”
predictions weʼve received since we began the survey. 54% of
members predicted either improvement or significant improve-
ment.
23% of members predicted their own business performance
would “remain the same”. As with their predictions about the
market in general, this is the smallest percentage of members
who predict no change. Of note, for three consecutive quarters
weʼve seen an increased percentage of members predicted
both improvement and decline, with fewer and fewer predicting
no change.
Our Guildmembers are bullish for the near future.
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.
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4. Comments: Each quarter we alternate between asking a people with retirement portfolio's are more comfortable now with dipping
handful of open ended questions, and not asking any open into them. There are a variety of reasons that have provided and oppor-
tunity for a significant increase in remodeling expenditures. Further many
ended questions. In Q4, we asked no open ended questions,
contractors are sitting at home believing that the market just isn't there
though a handful of members provided us with additional feed- and are not marketing and do not have a business plan. Their approach
back. Their comments: and attitude has turned into a big opportunity for my company to market
and sell new clients with little or no competition. Further........we have a
very strong presence in the market in a down economy which instills con-
1. 2010 was a record year for us - top line and bottom line. We have added fidence in our company in our market. Customers comment often about
4 employees to our staff over the course of the year and expect to add at the fact that we have been around forever and that they selected us be-
least one more by year-end. cause of our reputation and presence........even in a down economy.
2. Best fourth quarter in five years. 10. Our 2010 has been good. Last three months slow but the last three
weeks our traffic has increased and quality is good. We expect a good
3. Decline due to weather related (cold) seasonal / normal construction cy-
first quarter 2011. We've seen increases in both new home and remodel-
cle.
ing.
4. Foreclosure wave is more of a factor now than 6 months ago. Many
11. Our local economy continues to decline....we have had major job loss in
banks have finally worked through the process and foreclosures are for
the last 30 days, white and blue collar. However, that is on the back of us
sale or sold, and are in significant enough numbers to be adversely im-
having maybe the best year ever for lot sales, certainly the second best if
pacting appraised values. Appraisers are covering themselves by ap-
not the best since start up in 2003.
prasing new construction at the "average" sales per square foot rate,
which is less than the cost to build. For us to get deals done, clients need 12. We expect to see an increase of over 10% in our sales!!!
to be willing and able to cover the spread with cash. So far, ours have,
13. Prospects are not afraid of remodeling now, but they do take longer to
but it's a case by case basis.
plan.
5. I believe as the real estate market levels out and people see that taxes
14. Quite a few more leads right now, but not necessarily people going for-
will not be rising they will be more encouraged to spend their money re-
ward with any more work.
modeling their homes. Our company is using technology to our benefit
through things like builder trend and GuildQuality. The advancement in 15. Remodeling is stable but no new construction.
smartphones such as the android system are helping greatly as well.
16. Still a very competitive market. Low margins.
6. I feel we are stuck in slow motion. We expect 2011 to be similar to 2010.
17. There are opportunities available, whether they come to fruition remains
7. If the tax credits extend into 2011, we could experience significant organ- to be seen.
izational growth.
18. There has been a lot of recent activity in our market in the $400,000 to
8. It will take a while for the steadiness I see in the market to affect our bot- $600,000 price range and it seems that in this price range prospects are
tom line. Projects usually take 3-6 months in the design process. far more concerned with price than quality and builder reputation. Many
of these prospects have recently purchased deeply discounted lots and
9. Michigan was at the forefront of the economic decline and will more than
are looking to take full advantage of the current economic conditions.
likely lead the nation in the recovery. I have actively planned my business
growth plan based on the fact that I knew there was a pent up demand 19. Things are looking up!
for remodeling projects that clients have not pursued in the last 3 years
due to the economic conditions. Many clients simply cannot wait any 20. Until such time as the market is no longer flooded with foreclosures and
longer, many are more comfortable with the security of their employment, bank owned homes, the real estate industry will suffer. Were it not for
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5. new home sales continuing to be steady, our unemployment rate would pent up demand for remodeling caused a slight rise in activity, it was
be well over 10% nation wide. It appears that the bottom has been shortlived and does not seem to be happening this winter. I had expected
reached and that, nationally, we are lingering at that level now; the only -- and am saddened to be correct -- that 2011 will be a tougher year than
way to go is up if we can clear the market of 'give away' homes by HUD 2010.
and banks.
30. I am adding three new sales personnel, but I do not think I will see the
21. We actually had a very strong past 6 months. We anticipate that this fis- results of their production until Q3 2011.
cal year we will do about 250% of our revenues of the previous year. Of
31. The $8,000 mortgage credit pulled sales forward, but we don't think it
course, this year will still be about 25% less than two years ago. All said,
created very many sales. Our expectation about the decline relates to the
with our new lean and mean systems in place we anticipate that this year
absence of this credit.
will bring very good bottom line results. We are hoping that next year will
bring the same. 32. We are already seeing several commercial projects coming to fruition and
a handful of residential projects that have been waiting for some time.
22. We are adding a sales person to keep work flowing at a constant rate.
The only trouble now is that everyone wants it right now, because they
23. We are not going to see any improvement until the banks change. It's too are tired of waiting and/or don't want any issues to halt their progress.
hard for people to get a mortgage, they are adding hugh fees and high
33. Although, I'm guessing that it may well remain stable and unchanged for
interest rates to builders on their credit line.
the first three months as things continue to balance out.
24. We have a marketing department that is constantly getting our name out.
34. We are designing 5 projects now for construction in 2011. We have had
Website has played a big role and refferalls from other trades, real estate
significant increase in qualified leads during Aug -Dec 2010, 2010 YTD
agents has made me think the next few months are looking good for our
Avg job size has increased from $12k in Jan 2010 to $74k in Nov 2010.
company.
25. We have seen a change in client attitude over the last two months and
are more prone to take on projects and at a higher price point. Not like it
was, but better. However the time from sale to production is still much
longer and no one is in a big hurry.
26. We perceive an improvement in customer confidence. People, while still
cautious, seem to be ready to make decisions on their home and other
spending priorities.
27. We theorize that difficulty buying or selling homes will lead more people
to remodel their existing homes. There aren't very many safe or high-
return investments around, so we see more people willing to spend
money to improve their life in a direct way rather than watch their money
sit in the bank or in low-yield investments.
28. We've been very fortunate to take on a number of projects this fall & win-
ter. Cautiously optimistic about 2011.
29. While all the buzz is that the remodeling industry is recovering the truth is
we have yet to hit bottom in the SF Bay Area. Property prices are still
falling, though more slowly. Money is still impossible to obtain and the
fear factor related to jobs and the future is still at an all time high. The
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