For Pete's Sake

This just in from the Diesel Technology Forum: Registrations of diesel cars in the U.S. are up 24%. Hybrids are up 33%. These increases represent disproportionate growth because total automobile registrations only climbed by 2.7% between 2010 and 2012.

“This consistent growth in clean diesel registrations in the last three years is particularly noteworthy since it has occurred during an economic recession, which was topped off by some of the highest diesel fuel prices in U.S. history,” says Allen Schaeffer, the forum’s executive director. “Even in the face of these significant challenges, diesel buyers are seeing the big picture and long-term value by investing in record numbers of clean diesel cars and SUVs.”

What? Consumers are seeing the “big picture and long-term value?” I was surprised by this statement, until I read more data in new research about the psychographics of the old-house owner commissioned by Old-House Journal magazine.

In addition to being publisher of Clem Labine’s Period Homes and Clem Labine’s Traditional Building magazines, I am also Old-House Journal’s publisher. (All three magazines were founded by Clem Labine, who still writes prolifically for Restore Media.) On the occasion of Old-House Journal‘s 40th anniversary, I decided to commission research about the information needs of its readers, as well as their demographic and psychographic profiles. The readers of Old-House Journal are, in many cases, the clients of the traditional building industry professionals who read my letters and blogs.

So, I thought you might be interested to hear what we learned from our research and how Old-House Journal and Period Homes, for that matter, have anything to do with diesel fuel. The chart, below, shows you how.

Old-house owners who hire professionals to restore, renovate, design and build their room additions and period homes place a high emphasis on quality and value. In fact, according to the research, almost 70% say they “buy high-quality products even if it costs more,” while 47.5% claim they are “willing to pay more for environmentally friendly products.” But then they also tell us, “I like to be thrifty. Being economical or careful with money and avoiding excesses are important.”

That’s the connection between consumers of old-house products and services and consumers of diesel cars and hybrids. Last time I checked, diesel fuel, and the cars that use it, are more expensive. So are hybrids. This reality suggests that there was a flight to quality in the recession and continuing adherence to a conservation ethic begotten from hard times. How do we reconcile the contradiction between people who are willing to pay more for quality and the same people who want to be “thrifty?”

Value! Look at the portion of the chart showing how old-house lovers think “tradition and preserving time- honored customs are important to me.” What should we take away from this insight into the hearts and minds of old-house lovers?

One thing we learn, or are reminded of, is that the perception of value has always been a driver of consumers’ purchasing behavior. But consumers have differences in the way they perceive value. Some care deeply about what you make or the service you provide, and others do not. Some make what I like to call “high intensity” purchases; others make “low intensity” purchases.

Buyers only take the time to understand the value of a product or service if they really care about it. Do your clients consider what you offer to be a high-intensity decision? Do they have the knowledge to appreciate the quality and value you provide? Or do they lack an understanding of what you do and therefore devalue it, as if it is a low-intensity decision?

A low-intensity purchase decision is based on low price. A high-intensity purchase is based on high quality and perceived value. Which decision are your clients making? Chances are, what you sell costs more but gets better mileage.

Who is most likely to put a high value on the quality you provide? It’s probably the client who says, “I buy high-quality products even if they cost more” and “I like being thrifty.” This is the client who associates quality with durability and durability with thrift.

“Seeing the big picture and long-term value” is a concept well understood, it seems, by the owners of hybrids and old houses.

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At a recent conference for retailers, this seminar caught my eye: “How to Take Your Business Back from Amazon.” It acknowledged the meteoric growth of online retailing in America, now $186.2 billion annually, not including airline tickets, which add another $55 billion. People following e-retailing predict there will be 175 million online shoppers by 2016.

The seminar and e-retailing statistics reminded me of several conversations I’ve had with traditional building professionals, whose fees and prices are increasingly second guessed by clients who do lots of research and shopping online.

One prominent old-house renovation contractor told me that the biggest change in his business has been “transparency in pricing.” In his bids and proposals, he has removed mark-up from the materials he installs—goods and prices easily researched by his clients—and replaced it with a higher mark-up on labor. Interior designers I talk with complain that their well-heeled clients do not want to pay a mark-up on products designers would normally research and source. Even wealthy clients would rather acquire those products on their own, usually on the Internet, and pay less.

According to a survey conducted by our company, Restore Media, 95% of traditional building professionals and their clients research products and services online, and 75% buy products online. The products most frequently purchased include decorative hardware, lighting, plumbing fixtures and faucets, decorative molding and ornamental metal, tile and wood flooring, salvage and other unique materials not easily found in retail stores.

At the recent Historic Home and Designer Craftsmen Show in Philadelphia, where 100 displays showed everything from antique reproduction furniture to American crafts and fine cabinetry, I frequently overheard collectors and buyers asking vendors, “Do you have a Web site?” Surprisingly, some did not. Restore Media’s research also shows that almost twice as many people in the business buy online than sell online.

Whether it’s the speed and convenience of information gathering the Internet facilitates or a recession that makes everyone more price conscious (or both), there’s been a huge migration from window to Web shopping, from paying retail to buying wholesale on the Internet.

That movement to online sources is why Restore Media, along with consumer publisher Home Buyer Publications, both information companies that educate buyers and connect them with sellers, are collaborating to launch an e-commerce Web site called REX.

REX will curate period products in a virtual marketplace for buyers who want to search, compare, shop and purchase products online. The products REX presents will be authentic in period detail, high quality and not readily found elsewhere. Many of the products you see advertised in Clem Labine’s Period Homes, Clem Labine’s Traditional Building, Old-House Journal and Old-House Interiors magazines will be available for sale, direct from the supplier, on REX.

Research has also told us that buyers want supporting data to inform their purchases. REX will surround period-product storefronts with product know-how, written by experts in the field, your fellow traditional building professionals, and enthusiasts who have tested these products. REX will deliver much of the functionality that other e-commerce Web sites do, but REX will sell only products meant for traditional and period designs, both commercial and residential.

REX is in beta test now but will go live in 2013. As such, your thoughts and feedback on the new site are welcome; just go to www.rexsellsdirect.com. We have only a handful of storefronts up now but will add more as the year progresses. If you would like to see a copy of the e-commerce research I mentioned, let me know.

I feel like an old man when I lament the transformation of a “relationship economy” to a “transaction economy.” Like me, you probably wish more people answered their phones and gave you good, honest, cheerful advice about the products you want to buy. Like me, you might miss the independent retailers who have been replaced by Amazon.

But the Internet has changed all this in a way that is good for consumers and professionals. The democratization of information made possible by the Web has made us all smarter and more informed, and one way some companies are taking back their business from Amazon is by contributing to that flow of info and getting into e-commerce themselves.

For all of us, it’s a new, and we hope prosperous, day.

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I attended the International Builders’ Show in Las Vegas late last month. The mood was decidedly upbeat. Though cautious, optimism prevailed in both the classroom and on the exhibit floor.

Most suppliers I spoke with said they had twice the number of visitors in their booths than they did in 2012. On the other hand, attendance was down about 5% from last year’s event, and exhibit space was off 10% from 2012. In fact, IBS exhibits, measured by square feet of space, have nose- dived from a peak of 1.2 million square feet before the crash to 360,000 at last month’s show.

The decline in attendance was attributed to stay-at-home small and medium-size builders. While big production builders are on the rebound, a significant number of smaller contractors are prudently skipping the annual event, held this year in Las Vegas. Even so, the show is hard to resist and not only because of the Vegas venue. It’s an attractive and useful package of education, entertainment and networking events. Seminar topics included green building, marketing via social media, concept houses and the “reinvention” of our industry and our business selves.

As it happens, the biggest reinvention in Las Vegas came from the show’s producer, the National Association of Home Builders (NAHB), which announced that its flagship event, formerly the grandest of its kind in the housing industry, will merge with the Kitchen and Bath Industry Show in February 2014. The two largest residential design and construction industry trade shows, both shadows of their former selves, will combine into one big extravaganza and try to reclaim their former glory. I estimate the new event will measure 500,000 square feet of exhibit space when it debuts next year.

Everyone is poised for a continued rebound in housing construction. The restoration of housing prices, up 6% nationally in 2012, makes a big difference. According to the NAHB’s chief economist, David Crowe, two-thirds of the markets measured by the NAHB, just over 240, are improved year over year

Household formation is on the rise. Although nowhere close to the robust two million-plus formations in 2005, the number did grow from an average of 500,000 a year between 2007 and 2009 to 850,000 in 2011-2012. The NAHB correlates all-important job growth with growth in household formations.

The multi-family rental market showed the most growth in 2012, up 38% over 2011, on top of a 56% increase the prior year. This trend is projected to continue until the rental market segment reaches the average recorded between 1995 and 2003, a high water mark of more than 315,000 units.

The new normal for single-family starts is ugly but gradually getting less so. Back in 2000-2003, when I was young and handsome, the “normal” pace of housing starts per year was about 1.3 million. The actual numbers and predictions for the period between 2010 and 2014, according to the NAHB, aren’t nearly so rich.

2010 471,000 housing starts
2011 434,000
2012 535.000
2013 650,000
2014 844,000

Residential remodeling will show “slow and steady improvement,” according to NAHB economists. Contrary to widely held perceptions, remodeling is not counter cyclical to new construction, although it is more buoyant. After a peak of $140 billion, the remodeling market dipped below $100 billion in 2011 but is expected to climb back up to $110 billion by next year.

So the recovery moves ahead, slowly but surely. The rate of job creation continues to improve modestly, the stock market looks stronger, housing values are on the mend and consumer confidence is better. Quite aside from these numerical indicators, however, I learned about a very different kind of recovery when I visited during the convention with Stephen Giumenta of the Architectural Grille Company.

In the warm Las Vegas sunshine, 2,500 miles from Stephen’s hometown of Brooklyn, NY, I heard how Hurricane Sandy had devastated Architectural Grille’s factory, which sits along the Gowanus Canal, adjacent to the East River in New York. The storm surge filled Stephen’s factory with 5 feet of salt water and shorted electrical power for 12 days. All the machinery, used to make beautiful ornamental grilles and grates, was destroyed, and orders in production were ruined.

Despite the devastating blow, Architectural Grille Company is persevering. Employees and management have worked 24/7, replacing damaged equipment, completing orders in production prior to the flood and even filling new orders. Its perseverance was on display at the IBS, where it had a beautiful exhibit manned by cheerful and knowledgeable salespeople. Led by the indefatigable Stephen Giumenta, they were making their own recovery, on their own brave terms.

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Millennials are the largest generation. Once they pay off their student loan debts and qualify for mortgages, they should—should—buy houses at a rate that matches their baby boom parents, who fueled the housing industry’s best years to date.

On the other hand, according to a Federal Reserve study, from 2009 to 2011, this cohort bought half the number of mortgages as the same age group ten years ago. Have millennials given up on the American Dream? Will homeowners be eclipsed by renters in the future?

This was the question posed by Derek Thompson of The Atlantic magazine in a recent article titled “The Cheapest Generation.” His question was a thesis really. He postulated that millennials have no interest in buying houses, and he used the Federal Reserve numbers as proof.

He went on to assert that because people between the ages of 21 and 34 are so well connected via social media, they have little need for the connections made possible by an old-fashioned neighborhood. And he pointed to a corresponding decline in car purchases by millennials as further proof. In 2010, this age group bought just 27% of all new cars sold in America, down from a peak of 38% in 1985.

This worried me. Back when I bought my first house in 1983, I was part of the boomer demographic that pulled the housing market out of recession and drove growth for 20 years. I have been counting on the millennials to do the same thing—any day now, in fact. But any day now becomes tomorrow and tomorrow and tomorrow, and the housing recession lingers on, despite record low interest rates and record high numbers of people in the prime home-buying age group. Maybe Derek Thompson is right.

But for every 20-something I talk with who is burdened with student loan debt or scared off by his cousin’s upside-down mortgage, I hear about the more fortunate millennial who is the benefactor of an unprecedented transfer of wealth from his parents. The money being handed down from baby boomers to their kids will be a staggering $2 trillion per year for the next ten years, the largest inheritance in history. During lunch with a custom builder in Washington, D.C., I heard about the $5 million houses he is building for 30-year-olds. “Where do they get the money?” I asked. “From daddy,” he replied.

Then I talk to my kids and their friends, my kitchen cabinet of advisors on all things trendy. They are the kids who still live at home because they are recently graduated from college and still unemployed. “Hey, kids,” I ask. “Do you want to buy a house some day?” “Duh, yeah,” they say, “but not until we find a job.” “How come you want to buy and not rent?” I respond, looking for anecdotal evidence to refute the “cheapest generation” thesis I find troubling. “Because rent is a rip-off,” they say, “and because we want to make our own space.”

“Where do you want to buy a house?” I continue, hoping to cash in on inside information from the generation that could easily revive the industry I serve. “In the city or a close-in suburb,” they answer firmly.

My homespun research only confirms what the real estate experts already know. According to RCLO, a housing consultancy, 43% of millennials prefer to live in urban places where they can walk to shops, restaurants and work or take public transportation. And they know smaller houses and walkable neighborhoods are sustainable, something they care about, a lot.

Suddenly, I am not worried. Instead, I’m elated, because cities and close-in suburbs are where old-house renovations, period-style new construction and adaptive re-use of old buildings take place. And young people want to personalize their houses, albeit smaller houses, the same way they personalize their Facebook pages.

Moreover, moving to, fixing up and preserving older neighborhoods are undeniable economic drivers. “The shift away from suburbs toward denser urban living could have major economic growth implications,” Thompson writes. “Research shows that doubling a community’s population tends to increase productivity by between 6 and 28 percent. Economists have found that more than half of the variation in output per worker in the U.S. can be explained by density.”

Maybe millenials will rescue the housing industry, after all. And finally, perhaps, there will be a cohort of future home buyers who share the values my generation holds dear. Are you ready?

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In a late afternoon seminar at the recent Remodeling Show titled “Burgers, Beer and Intelligence,” I skipped the food but got food for thought instead, learning about new market data called the Residential Remodeling Index (RRI). Produced by Hanley Wood Market Intelligence, the research division of the Remodeling Show’s parent company, Hanley Wood, the RRI measures local home improvement activity and defines the household characteristics that drive remodeling demand for contractors, designers and their suppliers.

The RRI is a quarterly report covering home improvement and replacement activity in 366 metropolitan markets (It does not include residential repairs, however.) The seasonally adjusted index shows the relative level of activity in each city compared to 2007, a year that represented the peak of remodeling activity, nationally, in the prior 10-year period. An index of 100 or above indicates a current level of activity higher than it was in 2007.

I got a copy of the most recent RRI for Washington, DC, where I live. It contained index numbers for several hundred Zip codes within the Washington, DC, Metropolitan Statistical Area. My Zip code has a remodeling market activity index of 88. One of the only scores at or above 100 was for Gaithersburg, MD, a suburb of Washington, DC, that has more than 45,000 households and a healthy number of “Elites,” a household type that represents the sweet spot for remodeling spending.

Elites is one of nine consumer types profiled in the RRI and explained in detail during the Remodeling Show seminar, and they added up to perhaps the most interesting part of the presentation by Jonathan Smoke, executive director of Hanley Wood Market Intelligence. Elites, he said, are “one of three key groups that are most important to remodeling.” The other two are “Active Adult Elites” and “Family Life.”

Active Adult Elites are 55 years old on average. They are wealthy and for the most part employed in management or professional jobs. They have a national average income of $75,000-$150,000, and 97% own their own homes. They are likely to be members of a country club and heavy watchers of cable news. They go to the opera and contribute to PBS and trust what they read in magazines. They are referred to, in Madison Avenue terms, as “Cosmopolitans.”

Elites are very much like Active Adult Elites, except they’re younger (35-64), better educated (most have post-graduate degrees) and even wealthier, with average incomes of more than $100,000. They account for 9% of all U.S. households. More than nine of 10 own homes. According to Smoke, they have “custom tastes, shop at Nordstrom, spend a lot of time on the Internet and watch golf on TV.” In the parlance of market research, they are referred to as “Movers and Shakers.”

“Family Life” is the third group. In it, Smoke explained, are “traditional upper-middle class families who are very focused on their children.” Eighty-seven percent own homes. They represent 8% of all U.S. households and have average incomes of $75,000-$150,000. Their houses carry a mean value of $500,000. This demographic group is the most likely to sell or change homes in a year, and its members are the most likely to finish an attic or a basement. They have a high propensity to shop online. They watch the Disney channel. They are nicknamed “Upward Bound.”

And upward is where the remodeling market is headed in 2013, with forecasts ranging from a 3% to a 7% increase, nationally. Remodelers I talked with at the show said that after a disappointing summer, the phone is ringing again. As the RRI indicates, activity will vary, sometimes greatly, by city and even by Zip code, but the direction, especially for the three groups I just described, is finally clear. Things are looking up.

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I press on with my “c” word series by writing about a big and important word, “change.” I’ve been thinking a lot lately about what permanent changes will take place as a result of the prolonged recession in the housing industry.

“Change” was the theme for the American Institute of Building Designers’ annual convention, which I attended recently in historic Wilmington, N.C. Change was the topic of the AIBD’s keynote speaker, Sam Rashkin, chief architect at the Environmental Protection Agency (EPA) and author of a new book, “Retooling the U.S. Housing Industry: How it Got Here, Why It’s Broken and How to Fix It.”

Rashkin has managed the Energy Star Program for Homes since its inception in 1996. There are over one million Energy Star homes in the United States. Prior to joining the EPA, during his 20-year career as a licensed architect, Rashkin specialized in energy-efficient design and completed over 100 residential projects in California and New York. He serves on the development team for EPA’s Water Sense and Indoor airPlus labels.

Rashkin’s audience at the AIBD convention consisted of residential designers, some licensed, some not, who draw up the plans for much of the production housing in the American suburbs. His message was that the current housing “crisis” is a “learning moment.” We can and should design and build better houses moving forward. These houses should be “high-performance houses,” he said, better oriented to their sites and graced with quality construction, smaller footprints, and high-quality detailing and amenities.

As an industry, we need to do a better job of marketing and selling these new kinds of homes to home buyers, who for a long time have been conditioned to settle for less: badly planned developments with inefficient, shoddily built houses. Rashkin argued that for 50 years, low-cost production has been the primary driver in the housing industry; in striking contrast, he insisted, a new high-performance design ethic could keep energy costs down and offset higher construction costs.

In his keynote speech and in the book, Rashkin outlined five important components for “retooling” the housing industry: smarter, sustainable land development; more elegant design; high-performance design and construction; quality construction and effective home sales. In a chapter called “Design Trumps Everything,” he chides production home builders and custom builders alike for ignoring these basics.

The part of his argument to the convention that resonated most with me is how thoroughly regimented home builders are in this age of advanced manufacturing technology. There has been little attention paid to the use of local, natural materials; vernacular styles; authentic, traditional detailing and craftsmanship. Although the builders, architects and designers who read this blog are immersed in these topics, the subjects aren’t close to being on the radar of America’s corporate builders.

Another point Rashkin articulated well is how right-sized homes with generous circulation, multi-purpose rooms, good indoor-outdoor connectivity, day lighting, varied ceiling heights, contextual design and better architectural detailing are what buyers want but are not getting in spec or even semi-custom housing. It seems like the only question home buyers know to ask builders and designers is, “What is the price per square foot?” This question is analogous to asking an auto dealer, “How much per pound for that car?”

“It is time to recognize value in the [new-home] transaction process,” Rashkin said. “Retooled homes lower risk with more viable communities; [offer] superior designed homes which are more likely to stand the test of time and [provide] more affordability, improved indoor air quality, improved durability, greater disaster resistance, state-of-the art technologies and rigorous quality assurance.” However, “appraisals, mortgages and insurance practices are indifferent to these retooled improvements.”

While all this seems obvious to you and me, it was a good thing the message was directed at designers whose builder clients need to change. Congratulations to AIBD for giving Rashkin a bully pulpit! I wonder if retooled houses will be a permanent change when our industry recovers. As Steve Mickley, AIBD’s executive director put it, “We all know we can do better. After our event and the ‘Retooling’ presentation, we are better equipped to collectively and confidently move forward as ambassadors for responsible home design.”

It is encouraging to know that the EPA’s chief architect is on the same page you and I are. His book makes a good gift for your less enlightened clients and associates.

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Perhaps you have read my occasional “what I learned” reports on national conferences and trade shows, like the annual AIA convention or the International Builders’ Show. I routinely cover conferences as part of my national news beat for Restore Media’s magazines, Clem Labine’s Traditional Building and Clem Labine’s Period Homes, and I scout good seminars and speakers for our own events, the Traditional Building Conference Series.

Because my company, Restore Media, produces the Traditional Building Conference, I have refrained from writing about it so as not to toot our own horn. Until now. I am indeed learning from these local and regional conferences, too, so I’m writing to tell you about them. (After all, “conference” begins with a “c”!)

The Traditional Building Conference Series, now in its second year, includes four events in 2012. We have held two so far, the first in Winston-Salem, NC, (April) and the second in Denver (June). Because these are two entirely new locations for us, they were both experiments designed to see if smaller markets, with perhaps fewer traditional structures in their built environments, had enough interest in historic restoration, renovation and traditional building. They did!

Turns out, Winston-Salem was a central location for visitors from North Carolina. The venue was the historic Norman Revival Graylyn Estate, a 1927 stone manor house with a mews that doubles as a conference center. Across the street is Reynolda, the more famous house and garden museum built by R.J. Reynolds, the tobacco tycoon. Traditional Building Conference attendees were treated to tours of both landmarks. Each house reflects the eclectic tastes of wealthy owners influenced by their world travels: Moorish decorative surfaces amidst French Norman ironwork, for example.

Conference attendees included architects, contractors, building owners and facility managers who are engaged in residential, commercial, and institutional historic preservation, as well as adaptive re-use. They were joined by architects and builders who build new single-family houses in period styles. The meeting of the minds between preservationists and classicists was productive; these two groups had more in common than they thought, so new relationships were forged! There was no acrimony about period-inspired construction being phony or preservation being obstructionist.

In fact, preservationists and classicists both believe that a sustainable building is durable in design and construction, walkable and adaptable over time. Both are committed to the revitalization of cities and close-in suburbs because these places have beautiful historic architecture, considerable density and the right transportation infrastructure. Both prefer organic solutions for climate control, like traditional designs well suited to their sites, rather than modern products and systems, like reflective plate glass or HVAC on steroids.

Another common bond was everyone’s interest in technical topics, including seminars on subjects like how to combat failing paint and how to use traditional hand tools in the making of historic millwork. Typically, when we do a design seminar aimed at architects, contractors are not that interested. But when we do how-to sessions on construction details or restoration techniques, everyone—designers, builders and installers—pays attention.

During the conference, we had a revelation about how much preservation is going on in North Carolina, from the re-use of tobacco warehouses to the restoration of tobacco barns. In Charlotte, an exemplar of the modern Southern city, new construction in contemporary styles has fallen way off, but in markets like Winston-Salem, Wilmington, Raleigh and Durham, a wide range of historic building types are being renovated to meet the needs of a market that is transforming from old money based in furniture and tobacco to new money derived from health care, education and technology.

The Traditional Building Conference in Denver was our first-ever event west of the Mississippi River. The experiment proved successful, in part because the conference curriculum is new and different for Westerners. There is no shortage of historic, turn-of-the-century buildings in Denver, whose mayor at the time, M.D. Van Horn, attended the 1893 Chicago World’s Fair and returned with his own vision for a city beautiful—and acted on it.

There are strong local and state preservation organizations in Denver and Colorado generally, a number of which participated in the conference, including Colorado Preservation and Historic Denver. The dean of the University of Colorado-Denver’s College of Architecture and Planning, Mark Gelernter, gave a rousing presentation titled “Addressing the Modernist Objections to Traditional Design,” which armed the audience with new ammunition for selling the value of classicism. Not everyone agreed with Mr. Gelernter, but all gave him credit for a well-reasoned argument.

Denver, like Winston-Salem, was vibrant, which made a smaller audience feel big. In both markets, the sponsors were at first skeptical then pleasantly surprised by the level of traditional building activity, as well as the enthusiasm of the engaged professionals attending. Denver Post writer and author Michael McPhee treated the audience to a presentation of work by his grandfather, Denver architect Jacques Benedict (1879-1948), who designed Beaux-Arts inspired houses, churches and public buildings that are now local landmarks. McPhee is writing a book about Benedict.

The Denver-based Rocky Mountain Chapter of the Institute of Classical Architecture & Art was also a partner and strong collaborator. Chapter leaders Tom Matthews, Don Ruggles and Gail Breece worked hard in advance to help us find good local speakers and to get the word out to ICA&A members. Their energy and commitment paid off, for both the conference and their chapter. We also got help from the Association of Preservation Technology International. (Similarly, the Charlotte Chapter of ICA&A, led by James Collins and Charles McLarty, collaborated with us on the event in Winston-Salem, which gave their members a rallying point and a chance to earn Continuing Education Credits for content relevant to their business.)

Less is more. One of the lessons I’ve learned at the new Traditional Building Conference Series has been the advantage of intimacy. In these smaller, two-day, local-regional conferences, everyone mixes easily at a relaxed pace that is conducive to learning and networking. The speakers are more accessible at the coffee breaks. The sponsors have more time to spend with attendees who have technical questions about installation or life-cycle performance. Attendees meet the editors from Period Homes and Traditional Building and tell them their stories.

Finally, the food and wine were good (and were included in the price of admission!). In this frenetic life of ours, it is nice to relax, network and learn, all at the same time, in a beautiful historic setting.

We work hard. We deserve this!

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The Thompson Reuters Consumer Sentiment Index increased in May 2012 for the ninth straight month, a new record for the index, which has been tracking consumer sentiment in the U.S. since 1978. Americans are more upbeat than they’ve been in four years. In addition, Gallup reported in May that its Economic Confidence Index held at 16, also the best reading in four years.

The job and stock markets continue to hold steady. High-end consumers are beginning to spend money they had sidelined for three years. In the commercial and industrial construction markets, what was down has now started back up, albeit gradually.

Nevertheless, in conversations with our readers, conference attendees and advertisers, most of whom are small business owners used to success, I find little but demoralization. Although their outlook has indeed improved from 18 months ago, what I see are architects, contractors and suppliers who once made money but are not now. Even their best ideas have failed in this economy, which has caused a crisis of confidence.

Confidence is my next “c” word. Lacking it, many people I talk with feel like quitting. They think they have lost their ability to succeed. In this competitive environment, where every nickel is negotiated, they feel under valued. Few are whining out loud or for publication, but when off the record, they confide that their confidence is low—or missing entirely.

The measure of a person’s character is not how he behaves when times are good but how he behaves when times are tough. We are all going back to school on staying tough, persistent and positive in the face of adversity. We are learning how to focus on what we can control and tune out things we cannot. In this high-tech world, the most important software is our own internal operating system.

If you are a sailor, you might recognize the Outward Bound flag (shown here) used by ship captains when the sea is stormy. When a ship is anchored in port and the sea starts to swell, the wind kicks up and the rain stings his face, a ship’s captain hoists this flag and sails into the jaws of the storm. Out at sea, even in bad weather, that captain is on the move, sailing with purpose and momentum, safer away from the rocks and other boats.

High winds make most of us cautious. Storms make us retreat. But if adversity does indeed mother invention, stormy economic times should motivate us to move forward. So if you haven’t already, man the rigging, hoist your sails high and take on the storm–confidently.

I’m predicting better weather in the second half of the year, by the way, and, believe it or not, maybe even a little tail wind. What a welcome boost to our confidence that would be.

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My journey through words beginning with the letter “c” takes me next to one we all like but rarely have enough of, “cash.” And the sad fact is that in our industry, nobody does have any. And because it’s an “elephant in the room” topic, I almost skipped writing about it.

If your receivables have moved from 30 to 120 days, or more, you are not alone. These days, our payment terms are almost as important as our prices. Make it easier for clients to buy from you by negotiating terms if not price. And be sure your accounts receivables person is an A-player.

If possible, try not to allow cash shortages to obscure your strategic thinking. It’s easy to let short-term panic eclipse long-term planning. Stay calm, carry on and, as the saying goes, “Fake it till you make it.”

About the same time the Great Recession hit, our company put in place a five-year plan that outlined major initiatives and priorities. The plan makes us look down field and stay focused on exciting new ideas and improvements. It has been good for our company and our staff morale, especially when we talk about the progress we are making.

However, not all our progress lately has monetized. There are things we, and you, are working very hard on that have yet to pay off. But stay committed to doing the right thing, especially when you are stressed out by cash flow.

When Christmas rolls around and I wait until the last minute to buy gifts, I always end up spending too much money. I replace planning and creativity—that is, finding the perfect gift that’s just right for the recipient—with money and end up overspending to compensate. That was when I had money!

Now, we all need to turn up the intensity on planning, communication, creativity and hard work. All are good substitutes for spending money. Even if it doesn’t result in a big victory, it makes us feel better.

 

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I am eight “c” words into my series of 10 for this blog. Each describes something that is going on in the $170 billion traditional building industry. So far I have covered conservation, compatibility, content, control, competition, capacity, certainty and choice. I’d like to insert an additional, 11^th “c” word that wasn’t in my original lineup: “catharsis.”

My mother, Patricia Hicks McNitt, 1926-2012, died peacefully and painlessly on February 19. You may remember her walking the show floor at our Traditional Building Exhibition and Conference. Maybe you rode the bus with her on one of our architectural tours or sat next to her at our annual dinner honoring winners of the Palladio Awards. She was a regular at Restore Media’s events and always insisted on buying a yearly subscription to Clem Labine’s Period Homes magazine, even though I would have sent it to her for free.

She has a different name from mine because she married Admiral Robert W. McNitt in 1973, a union that took her to nearby Annapolis, Md., where she and my stepfather bought and restored a historic house, which I painted one summer years ago.

Her health had not been what she wanted it to be so she set off on what she called her “next adventure.” The official cause of death was pneumonia, but, knowing Mother, I think she just didn’t want to be a burden to anyone any longer. She was anything but that, ever cheerful and always eager to support me and my career in architecture, interior design and construction media. In fact, she indulged it.

For example, several years ago, when Restore Media acquired Old-House Journal magazine, my mother celebrated the occasion by making one of her famous scrapbooks, which she called “Peter Miller’s Old-House Journal.” In it, she pasted photographs of every old house our family had lived in from 1953 to 1973, including an early-1900s design created by Stanford White himself in Kalamazoo, Mich. Receiving that book from her was the first time in my career that I realized how honestly I came by my passion for historic architecture. Mother was good at helping me understand myself.

Whenever I asked my mother what she wanted for Christmas, she would answer, “Give me the gift of time.” So every year we would hit the road to look at architecture and art. These trips together included visits to Taliesin, Fallingwater, Mount Vernon, Montpelier, Longwood Gardens, Monticello and countless historic chapels and institutional buildings. Her enthusiasm for what we saw was contagious, and she would gleefully point out architectural detail with a professor’s aplomb.

When I was remodeling a Sears Four Square built in 1924, I asked my architect to design a new fireplace. He drew up a firebox with a gable roof and a circle of plywood in the gable’s peak. It looked like a headlight on a train, but I deferred to the architect and approved it. Later, my mother came to visit. She took one look at the design and said, “Oh, that’s sooo Postmodern! It will be out of date next year! You should take that headlight off!” When I told the architect, “Mother doesn’t approve,” he resisted, but only faintly, then removed it. He knew better than to argue with a grand dame of architectural correctness.

A few days after my mother died, I saw a cherry tree in full bloom. In the past, such an observation would have been the occasion for a phone call from her. “Can you believe it?” she would have exclaimed. “Cherry blossoms in February! Let’s take a picnic and go see!” That cherry tree brightened a gloomy day and reminded me that no matter how grave a situation, my mother was ever cheerful, always looking at the bright side of things. She saw the best in everyone and never complained. Sometimes this trait could be aggravating, I must admit. If I disparaged something or someone, she would invariably take the other side and remind me to see things from that point of view. She could be contrarian in this, like a cherry blossom in February.

My sisters and I have been sorting through Mother’s belongings, dividing up the family heirlooms. As you can imagine, this has brought back many memories, too many to share here. We struck gold when we emptied our mother’s file of paintings, drawings and prints, art she created while a 70-year-old student working on her bachelor of fine arts degree at the University of Maryland 15 years ago. There are block prints and nude drawings, colored paper collages and abstract acrylics. I knew she was talented but had no idea how prolific she was.

Besides her family and architecture, her passion was art. In recent years, however, her eyes had gone bad so she could not read, write, paint, draw or even revel in the colorful glory of her garden. It’s a cruel irony when an artist cannot see. But she was never blind when one of her loved ones walked in the room. She would light up like the sunrise in her painting and make you feel as though you were her work of art. Thankfully, we all are.

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