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Market Update from Granite Source, Inc.
Quarterly Newsletter - May 2011
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Sourcing Neutrality
As volume returns to a subcontractor market that has slashed capacity, purchasing teams are paying careful attention to the ability of their providers to maintain quality through the surge. The other side of this - the supply side - is equally important and often overlooked.
The concept of source neutrality is an attempt to protect the builder or contractor from secondary source supply interruption by specifying products that can be obtained by any provider at any time at a reasonable price with a reasonable delivery window. Here are some of the best practices we focus on at Granite Source.
Brand
· Do not love the brand more than the line item profit
· Do not let a brand lock you into an underperforming vendor
· If pricing is similar, select the brand with the best name recognition.
Accessibility
· Profits come from meeting construction schedules
· Source items with local warehousing and multiple vendors
· Contract a back up model and disclaim to clients on 100% of jobs.
Selections
· Design Center offerings must be able to scale to sudden rapid increases in demand
· Limit selections and build in flexibility to enable changes as the market shifts
· Involve construction in design team selections and allow for honesty by eliminating emotion. |
 Features of the Average Home Released at the end of 2009, here is a sampling of information about what we are building as we come out of the recession.
- Average single family home was 2,438 sf
- 34% had vinyl siding
- 88% had air conditioning
- 53% had 3 bedrooms, 34% had 4
- 17% had a 3 car garage or larger
- 49% had 1 fireplace, but only 5% had more than one
- 62% use gas as the primary heat source
- 24% were financed through FHA
- Average sales price was $270,900 or $83.89 per square foot.
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Understanding Housing Starts Stats
Housing starts fell 8.2% in February and rose 7.2% in March. How is there such enormous fluctuation, and what does it all mean? Here are some key points to interpreting the data.
New Housing Sales
All new single family houses are measured as part of the 'Starts' data, but only those built for sale are included in the 'Sales' numbers. Custom built homes, owner built homes and homes built for the rental market are not included. This is why starts are often higher then sales. Depending on your particular trade, one of these numbers is probably more important to your forecasting.
New Housing Starts
This is truly boots on the ground work with Census Bureau employees sampling permit office data in person and interviewing the permit holders for specific home data like number of rooms and bathrooms. In geographic areas where building permits are not required, they actually drive around looking for homes being built. This sampling is used to build estimates of work underway, but the data can be skewed relatively easily.
New Housing Permits
These are generated through monthly mailed surveys to permit offices and weighted samples produce the final numbers. One large common anomaly here is that jurisdictions frequently classify townhouses as multifamily, even though the government classifies them as single family. This can lead to inflated multifamily permit numbers of as much as 22%. |
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Rodding the Countertop
For those of you fortunate enough to have avoided this issue on your job sites, rodding is a process where a small slit is routed out of the stone countertop underneath the weakest portions, then a rectangular strip of metal is inserted and sealed in place with a polyester resin. The concept is that the metal strip adds rigidity to the stone and prevents the most stress-prone areas, such as sink and cook top cutouts from failing.
So, when is rodding necessary? And is your countertop not fabricated to the highest standards if it is not rodded? The answer is complicated and must take into account that in the process of rodding, we are removing some of the thickness and strength of the original material. The final decision will be based on a combination of our experience with your particular material and the layout of your project.
Our experience with the tens of thousands of rods that we have installed is the following: - Rodding saves money in the long term and is not considered an expense, but rather a normal part of quality fabrication. Rodding decreases the likelihood of sudden and catastrophic failures during the transport of and installation of stonecountertops.
- Rodding will not stop a stone from cracking if enough pressure is applied - such as a cleaning crew standing on the cooktop bridge areas. It will, however, stop it from separating and allow us to effect a more efficient repair, if required. Rodding is not useful in the more dense materials with less movement.
Overall, rodding is here to stay, and we encourage your feedback and personal experiences to help us continue to improve the process. |
 The Wholesale Focus of Granite Source Granite Source, Inc., is now the only wholesale countertop supplier that remains in the DC area market.
For NKBA and NARI members this means that we are a resource to you, rather than a competitor for your clients. We have been able to set a price point where remodelers are back to winning 100 percent of countertop sales on their jobs.
Builder members of NAHB and NVBIA please take note that our volume allows us to outbid even the cut-to-size quotes that some companies are still soliciting, and deliver the product faster and with precision using the automated measurement and fabrication processes we implemented within the last couple of years.
Our ultra-modern measuring and fabrication equipment are fantastic assets, as are our staff members. For a tour or quote, please contact your representative directly.
Our favorite marketing tool is a tour of our shop and an explanation of our systems, but if time or location does not allow for a visit, you can find a copy of our new client brochure on the Press/Awards page of our website or even watch a short video. |
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Quick Links...
Finally in Writing! For clients who ask, "How much overhang?," we answer here.
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Resource We Recommend...
For Home Mortgage Lending:
Eric Hopkins MetLife Home Loans
Vienna, VA
703.380.4522
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Granite Source, Inc.
Headquarters:
14554 Lee Road, Chantilly, VA 20151 -- 703.961.9557
Richmond Area: 10530 Northlake Park Drive, Ashland, VA 23005 - 804.752.1660
www.granitesource.net -- nicholas@granitesource.net |
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