Housing Market
As evidenced by the news media and the Nation’s economic picture, the new-home construction industry has been severely challenged for the last two years. Factors affecting the industry include a combination of bank lending practices, over-leveraged speculators, government intervention, over-inflated home values and the economy. These factors have contributed to record numbers of short sales, foreclosures and the ultimate reduction in home values. There are differing opinions on when the market will reach bottom, but the one thing history proves following economic down turns is the market for new homes will once again surge as part of the recovery process.
Responding to Market Demands
Today’s shrinking demand for new homes creates a rising level of competition among builders for limited new housing starts. In order to survive, builders will be forced to be more efficient and/or be able to differentiate their products from the competition. Terraso, Inc. is tapping into this opportunity by providing savvy builders and home buyers with the next generation of home building technology. A Terraso licensed builder can produce a more cost-effective, higher energy efficient house compared to any home currently in a competitor’s inventory or likely to be constructed by a builder utilizing today’s home construction standards.
Build Green Now
Today’s market is actually a great time for home builders to incorporate new home building technology. In addition to builders being receptive to products and technologies that can provide them with a competitive advantage, the “green” movement and “energy-efficiency” are both big in the news and on government platforms today. In the economic recovery plan signed by Congress and President Obama, over $80 billion is dedicated to our nation’s energy future. Billions will be flowing into renewable and efficient energy, and this will likely be a focus of the administration and our nation for at least the next four years. Terraso, Inc. parallels the energy efficiency movement supplying us the needed leverage to position ourselves before the housing market experiences the next wave of building.
Economics
New home construction numbers have been at extremes over the last few years. The peak of the housing boom in 2005 saw 1.3 million new homes built that year. In 2008, at the bottom of the market, about 464,000 new homes were built in the United States. If the entire new home market was built using Terraso Solution technology, it would save homeowners over $1 billion each year in energy savings. In addition the Terraso Solution technology on these homes would eliminate over 10 billion pounds of CO2 emissions entering the atmosphere each year.
Because of tightening market conditions, builders are looking for an edge to help them stand out from other builders and compete with foreclosures. The Terraso Solution is the answer that enables builders to offer a superior, affordable product that homebuyers will want to buy.
A National Association of Home Builders study shows that green home construction is expected to be worth $12 billion to $20 billion (6% to 10% of the market) this year (2009). The study goes on to state that by 2012, the market is expected to double to 12% to 20% in market share or $40 billion to $70 billion and that over 40% of builders think building green helps them market their homes in a down market. What this indicates is that even in a down market, there is growth in green and energy efficient home construction. The Terraso Solution will be able to capitalize in this new developing trend.
