A recent issue of The Construction Forecast Monthly, published by Reed Construction Data, found that single-family homes continue to appreciate in value in many areas of the country—although "location, location, location" was still a factor.

Three construction distributors from diverse regions of the United States—New England, Florida and California—recently weighed in on this and other related topics.

Home appreciation in New England, "kind of depends on the town," said Bill Olson, president of Marathon Tool Co., in Medway, Mass. "There are some towns where you can't help thinking 'There's no way they'll get that much for the house.' But they still do."

Home appreciation is still going strong in Florida and California, Construction Forecast Monthly reported. However, CFM adds, "a speculative element is clearly present, which puts these regions [Florida and California] at a high risk for a collapse in demand.... Owners of empty investment homes will scramble to sell them quickly."

On the West Coast, Hal Look, vice president of marketing and business development at Orco Construction Supply in Livermore, Calif., finds that in the California markets, housing appreciation "varies by anywhere from a minimum of 5 to 8 percent, to as high as 20 percent in some areas," while adding that the latter is more an exception.

In Florida, Eric Seiden, vice president at Interstate Screw Corp. in Hialeah, finds homes increasing in value throughout the state, but sees an ironic twist to it all, being a homeowner himself.

"I had someone tell me what I could sell my home for," Seiden explains. "And at that price, believe me, I'd love to sell it. But then I realized I couldn't afford to buy something else!"

Weather, of course, is always brought up when construction distributors talk about their work—especially when talking about the home-building markets. With rugged winters finally behind them—or, in Florida's case, 2004's hurricane season a vivid memory—the three are optimistic that what has been good, profitable years will continue through 2005.

A good portion of Marathon's business is in the general carpentry, home building and refinishing markets, Olson explains. This year got off on a somewhat shaky note, he explained, pointing out that "people were shoveling rather than nailing!" as January and February slogged on.

But [about March 1], it really picked up," he said, hoping it is a back-to-normal sign, as Marathon "had our best year ever in 2004."

Shoveling snow conjures up ideal images of sunny Southern weather, but Olson's colleague in Florida, Seiden, had his own weather concerns to share.

"Look, there's nothing you can do to prevent Mother Nature from sending a hurricane to Florida," he said. "And Mother Nature, being the perverse person she is, decided to send us four last year."

Seiden concedes that his weather-influenced problems did add to Interstate's business, as four hurricanes meant a lot of clean up and rebuilding. Interstate is the largest fastener distributor in the state, he says.

Reflecting on the historic hurricane season he experienced, he comments that "Hey, we're in Florida... The rumor is we're busy," adding more seriously that "we're buying stuff as fast as the factories can make it."

Even supposedly sunny California was offered little weather solace, Orco's Look explained.

"We have operations in California, Arizona and Nevada," he said. "Our region had a pretty brutal winter. This was one of the most severe winters we lived through, and it hit all our markets hard."

So while all three are enjoying strong business and expect to have a good 2005–06, what areas worry them?There is some leeriness about the housing boom peaking and then declining. Talk in various regions continues as so-called experts analyze when the bubble may burst. All will be watching interest rates, of course.

In New England, Olson commented that "I've been doing this for 19 years and it seems like when [interest rates] get to 8 or 8½ percent, it can slow things down," he says. "If the prime goes up a quarter percent, for example, I think that could spur people to buy and spend. They'd think if it goes up now, could it go up again later?"

Eight percent is the figure that California-based Look watches for as well. While he thinks interest rates could get up into the sevens this year, he said he isn't concerned that much.

"If something bizarre happened where interest rates got up into the high sevens and cracked the eight barriers," he says, "that would start slowing things down. But right now, that looks like it will be stable."

Staying with the "bubble" analogy, it may be more of the bubble shrinking a bit as opposed to a dramatic burst.

Many Florida observers and real estate columnists, Seiden says, have opined that the housing market bubble will soon burst. He shares some concerns in this area but tells a tale that shows how relative the term "burst" can be.

"It used to be that they'd put a 'For Sale' sign up on a house, and the following weekend it would be gone," Seiden said. "Now there are homes that sit on the market for, say, three weeks...."

New England, Florida and California share other concerns and interests, including steel prices and availability.

In Florida, Seiden hopes the steel market and its impact on parts availability remains consistent. In the hurricane aftermath—and people anticipating other storms and wanting to be better prepared—some parts have become more difficult than ever to obtain.

"There's a six-month wait for certain fasteners needed for hurricane shutters. They simply can't make them fast enough," he said.

Steel and parts shortages have him concerned on another level. Seiden bluntly states that he has some concerns about certain contractors who, in his opinion, will cut corners in a building operation. While a specific nail, for example, may be called for, he has seen some who will use a cheaper, theoretically less-strong, nail, whether it's to save money or because of part availability.

Contractors will buy a case of the required nail, Seiden explains, and then buy generics of inferior quality at less money and use those on the job, he said, adding that not all generics make for good substitutes in building situations.

"I see contractors cutting corners and building [potentially] unsafe things to save money," he said.

Seiden adds that he has even called county officials to complain but has yet to see any action taken.

"They have inspectors who will inspect the job," he says, "but the problem is that once a nail is installed, how do you know it's the right nail?"

Olson admits that "the whole steel 'thing' impacted nails dramatically [in '04]. We had maybe two or three waves [of price increases] where we were buying nails at what we were selling them for [mid '04]. But customers seem to have adjusted since."

Look agrees that on the West Coast, steel's influence on various commodities used by Orco was "very challenging in '04. Maybe 50 to 60 percent of our products are commodities," he explained.

"This year, there may be inflation again," he says, "but we don't anticipate allocation issues like we did last year or the shortage issues either. There may be a bit of price inflation but not as crazy as last year."