Sales of new homes

May 24, 2007

Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether the worst of the nation's housing slump is over.

The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the tiny 0.2 percent gain that economists had been expecting.

However, the median price of a new home sold last month fell to $229,100, a record 11.1 percent decline from the previous month. The big price decline indicated that builders are slashing prices in an effort to move a huge overhang of unsold homes.

The jump in sales was the biggest increase since a 16.4 percent surge in new home sales that occurred in April 1993.

However, analysts cautioned against reading too much into the big gain, especially in light of other surveys showing that builder confidence has sunk in recent months over worries that troubles in the subprime mortgage market will further crimp demand in coming months.

There was also concern because all of the strength in sales came in one region of the country, the Northeast, which saw a surge of 43.1 percent.

Sales were down 28.1 percent in the Midwest and 25.4 percent in the West. Sales fell a smaller 3.4 percent in the South.

The drop in median prices in April compared to March was a record one-month decline. If the April sales price was compared to the sales price a year ago, the decline was 10.9 percent, the biggest year-over-year drop since 1970.

In other economic news, the Commerce Department said that orders to U.S. factories for big-ticket manufactured goods posted a moderate 0.6 percent increase in April, helped by a continued rebound in business investment.

In a third report, the Labor Department said that the number of newly laid off workers filing applications for unemployment benefits rose to 311,000 last week, an increase of 15,000. But even with the gain, claims remain at a level indicating a healthy labor market.

While the increase in orders for durable goods was less than had been expected, the government sharply revised the March performance to show a 5 percent surge, much stronger than the 3.7 percent gain previously reported.

Analysts believe that U.S. factories, which have been buffeted by the weakness in housing and slumping demand for autos, are starting to stage a moderate rebound, helped by reviving interest on the part of businesses to spend money to expand and modernize.

The overall economy slowed in the first three months of this year to an annual growth rate of just 1.3 percent, the weakest performance in four years, as a steep slump in housing continued to weigh on the economy's performance.

Analysts are hoping that spending by consumers and businesses will be able to overcome the weakness in housing and keep the country out of a recession.

The report on durable goods offered encouragement in the area of business investment. It showed that demand for capital goods excluding airplanes, considered a good proxy for business investment, rose by 1.2 percent in April following, the second solid monthly increase.

The 0.6 percent rise in total durable goods orders came even though demand for transportation products fell by 1.3 percent. This reflected a drop of 10.7 percent in demand for commercial aircraft and a 1.9 percent fall in orders for motor vehicles.

Excluding transportation, orders would have been up by 1.5 percent, the same performance as in March.

There was strength in orders for primary metals such as steel which rose by 4.3 percent and orders for electronic equipment and appliances, which rose by 3.8 percent.

But demand was weak for computers, which fell by 7.8 percent, and communications equipment, which dropped 5 percent.

Facebook.com on Thursday took the wraps off its highly anticipated makeover from a members-only club into what it hopes can allow it to become a software operating system for all sorts of Internet media.
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The college student social networking site, which opened up to users of all ages over the past year, said it has signed up 65 partners, including Microsoft Corp. and Amazon.com Inc., to build Web applications within Facebook.

Other companies building services within Facebook include photo-sharing site Photobucket, multimedia presentation site Slide, music discovery site iLike, new-style instant messaging site Twitter.com and Web-calling companies Jajah and Jaxtr.

Founded in 2004 by then-undergraduate Mark Zuckerberg as a socializing site for fellow Harvard students, Facebook now has 24 million active users and is growing by 3 percent a week.

The company, which operates under the radar of much of the traditional tech industry, is looking to transform itself from a Web site into what Silicon Valley calls a "platform" -- a foundation service on which many other applications can run.

The No. 2 social network site, behind News Corp.'s MySpace, will allow developers to build services that work both inside Facebook's site and on their own independent sites.

"Until now, social networks have been closed platforms. Today, we're going to end that," Zuckerberg, Facebook's 23-year-old CEO, told a gathering of software developers.

Facebook has developed a fanatical following, despite going relatively unnoticed by many users on the wider Web. Half of its users, or 12 million people, return daily to the site to check on what their friends are saying and doing.

Zuckerberg cited industry data showing how Facebook is now the sixth-most-trafficked U.S. Web site. Recently, growth has surged in Britain. One in ten Canadians has joined Facebook.

The company made these announcements at "f8," a carefully orchestrated event in San Francisco for 750 developers with more the air of a college job recruiting fair than a trade show. It featured an eight-hour "hackathon" showcasing software built by Facebook engineers and partners.

Facebook aims to be a central clearinghouse for software developers, borrowing a few pages from the decades-old strategy playbooks of Microsoft or IBM, while retaining the flexibility of the new generation of Web-delivered services.

For example, Amazon.com has developed "Book Reviews," an application that allows Facebook members to write book reviews, share what they have written with people in their private social networks, and even buy the books on Amazon.com.

Facebook itself has created a video application that allows any user with a Web-connected camera or mobile cameraphone to share live, personal videos with their network of friends on Facebook. Cameraphone users can shoot video on the go and the video instantly will appear on their Facebook profile.

The Palo Alto, California-based company has created a new Web programming language of its own called Facebook Markup, a variant of the basic Hypertext Markup Language (HTML) coding that underlies all Web pages, with a few special features.

Independent developers can sell ads or incorporate tools for conducting online transactions and keep all the resulting revenue, said Zuckerberg, casually dressed in surfer sandals.

Executives of Facebook, which in November was widely reported to have rebuffed a $1 billion take-over offer by Yahoo Inc. "I already thought Facebook should remain independent," Zuckerberg said. "This (announcement) just strengthens that."

In today's challenging environment, most managers and executives are desperately trying to excel in three areas: increasing productivity, retaining talent and recruiting those who will be a good fit. Despite the ongoing need for focus in each of these areas, most people have no long-term strategy to ensure success.

The most effective strategy is to become known for how you intentionally develop those on your team. If you differentiate yourself by truly becoming a master people developer, your recruiting, retention and productivity will greatly improve. I'm sure you are assessing your own abilities and past efforts as you read the opening sentences of this article. I will give you credit for already doing some intentional people development, but most would have to admit it is not being done in a proven, intentional way.

Most leaders succeed in building their teams by mentoring them, not coaching them. The difference is that these successful individual contributors, now managers and executives, share their insights and solutions with teammates when a crisis hits. They always seem to have the knowledge required to help others get out of a bind. As mentors, their past experiences help their teammates find the right solutions. This is a very common attribute found in many good managers and executives. But does it really differentiate them? Does it really make them unique and highly sought out? It has not proven to be enough to give these leaders an advantage when it comes to retaining or attracting top talent.

Building Champions coach Bill Hart calls this advantage your ULP, or Unique Leadership Proposition. The concept is that in order to really set yourself apart from your competition, you must be skilled at executing and articulating the strategies you employ that make you better than the rest. So as a leader, what is it that sets you apart? I'll walk you through an easy-to-implement set of steps that will do just that—set you apart and make being a Coaching Leader your ULP.

But first you must understand and believe the following: Most people do not leave their companies—they leave their leaders. Countless employee surveys have been done, and the results continue to pin the majority of retention challenges on the employee's direct supervisor, not the company's structure, systems, pricing, compensation or lack of products. Building and retaining a champion team is about how intentional and skilled you are at leading and growing each of your team members. What we have seen is that by improving how you coach, your culture, leadership effectiveness and overall results will improve.

The benefits of making this your top initiative are far-reaching. The three entities that will benefit most are the individual teammates you choose to coach, your organization and you, yourself, as a leader. Most of your teammates are longing to have someone who cares about their success, both on and off the job, take an interest in helping them to improve. By intentionally coaching them, you will give them more clarity, deeper convictions, better plans and defined action steps that will lead to their desired improvements. Your company benefits as a result of you raising the bar and helping your teammates grow in effectiveness and productivity. Even in the rare cases when you help your teammates do the same amount of work with less effort, the company benefits because this leads to higher employee satisfaction. And finally, you benefit as you reap the rewards of knowing that you are truly making a difference in the lives of those who call you leader.

So let's now walk through some easy-to-execute steps that, if followed, will enable you to add more value to those on your team and gain even better results.

Step One: Complete the Team Assessment and Development Tool for those who directly report to you and whom you want to coach in the months ahead. I suggest you start off with no more than eight direct reports.

Step Two: Create your coaching model. How often will you meet with your teammates one on one? How long will each coaching session last? What we have found is that by starting off with one 60-minute coaching session per month, you can really begin to add value to your teammates. So go ahead and block out the time for your monthly coaching sessions with those you want to coach for the remainder of the year. We have found that most Coaching Leaders like to have coaching sessions with their teammates on the same day or two every month. They are also more focused if they conduct the sessions in one block of time instead of spread out over the day or week. Your model should include an action plan follow-up and should always end with an action plan recap.

Step Three: Meet with those you want to coach and invite them to participate in this process. Share your desire to help them reach higher levels of success in all aspects of their business and life. Share how your coaching model is going to work and ask them if this is something they would like to try for a six-month trial period. Let them know that the only things that will be discussed in these coaching sessions are their goals, their plans, their opportunities and their challenges. Remember, this is all about them!

Step Four: Complete the Team Assessment and have all of them do the same for themselves. Meet with them individually to review your findings and map out their areas to focus on in the months ahead. This initial coaching session should include any ground rules you want to agree upon so that both parties know what to expect. Examples include showing up for sessions, being prompt, instruction on how action plans are to be created and followed up on, etc. Again, you will end this first session by stating what was agreed to and when it is to be completed.

Step Five: Take notes during each session and highlight all action plans and due dates agreed to. Then schedule your own follow-up reminders so you can encourage and hold your teammate accountable to the action plans he agreed to. This step is key and needs to be a priority for the coaching to really make a difference.

Above, I have given you a very concise version of this coaching system (it usually requires 208 pages to cover it all!), but my hope is that this shows you a new vision for what it means to be a leader. I have seen this very model lead to great results for leaders and their teams, and the beauty of it is that it is also one of the easiest models to master. By becoming a Coaching Leader, you will truly differentiate yourself from the pack and enjoy even greater success as you attract, develop and retain your teammates.