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LCN June 2008 Commentary06-05-08 | 11
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Time to Grow . . .

By George Schmok

A couple of days ago I heard a financial analyst project gloom and doom because of falling home prices. ?EUR??,,????'?????<

Well, forgive me for saying but home prices a year and a half ago were unrealistically inflated. In Southern California, a 1,400 sq.ft. , 4 bedroom home on a 6,600 sq.ft. lot was going for $800,000, when just a few years earlier it was selling for less than $400,000. So, from 2001 to 2007, home prices basically doubled. Now they have adjusted down by a fraction and people are beginning to see the light. Somehow the analyst thought this was cause for jumping out of a fourth floor window or moving to Zimbabwe ?EUR??,,????'?????<

The fact is, (and the good news is) that the number of homes being sold is beginning to rise. Now, if you were a speculator and thought you could build a home for $250,00 and sell it for $800,000, believing that 0% down and 1.5% interest was going to be the permanent norm, I hear the World Poker Tour is looking for new recruits. However, as far as the home building market is concerned, you shouldn?EUR??,,????'?????<

LCN predicted two years ago that home sales and prices would decline until about August of 2008, at which time supply and demand would catch up to each other and allow for things to begin to get back on track. From everything we are seeing now, that is beginning to take shape.

From what we see at LCN?EUR??,,????'?????<Landscape Architect and Specifier News (LASN), the Landscape Architects, along with the Architects out there, are working steadily. This bodes well for the Landscape Contractor, even if there is a delay between planning and the actual installation. The feeling is that there is a lot of work on the boards and as soon as sales begin to escalate (which is beginning to happen), so too will construction pick up ?EUR??,,????'?????<

In the meantime though, it is a great time to look at new avenues to assist your revenue stream. Maintenance is, of course, one of the best and most stable aspects of the business. More than 90% of LCN readers are business-owning Landscape Contractors and somewhere close to 70% of you have a maintenance operation.

A new market is opening up with the banks as well, which have and are repossessing millions of homes and need to keep them up to par with homeowner associations, or simply to keep them in shape to sell on the market.

If you visit landscapearchitect.com and search for the keyword ?EUR??,,????'?????<

For the winter months, though, especially if the store was not brought full this summer, there needs to be more in your palette if you are going to thrive. Snow blowing is a great way to supplement your income and is becoming a mainstay for landscape contractors in the colder regions of the country. Don?EUR??,,????'?????<

Another aspect of the maintenance service is to handle lighting maintenance on low voltage systems. In the colder regions of the country (and of course in the warmer parts too), even if the landscape isn?EUR??,,????'?????<

Another area we are seeing as a growing profit center is pond/waterfall construction. Many homeowners are beginning to ask for decent sized ponds or pondless waterfalls. This is a hot trend that can net thousands of dollars per project and is in the ?EUR??,,????'?????<

The main point here is that with the summer upcoming, your business is going to pick up at least a little, and you may be tempted to just sit back and let things happen. However, with gas prices on the rise, construction a bit slow and new areas to compete in, now is a great time re-evaluate your service options, your contract wording, and who you view as your primary and secondary clientele.

Summer and fall is harvest time for Landscape Contractors ?EUR??,,????'?????<

God Bless

George Schmok, Publisher


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