ForConstructionPros.com

I asked one of the regional bankers I know, "Are you lending money?" and the answer was "yes." I also asked, "Are you looking for new business?" and the answer was "Yes." And last, I asked, "Are you lending into the construction/real estate industry?" and the answer was "maybe."

It appears the banking industry is still in business, because if they don't loan money, they don't make any money. Who they loan it to and under what circumstances is the question. What I am hearing confirms what we have been saying the last couple of months. If you have a banking relationship stick with it. If you don't have a sound business plan, put one together. If you can't demonstrate an ability to go with the flow while remaining right side up, you need to think it through so you can make a reasonable presentation.

Is the end to the downturn in sight?
The latest data regarding housing is that the current low interest rates will help soak up the existing inventory of unsold properties. Buyers and sellers are finally realizing that values have come down. They will sell at a lower price than intended, but also get a great buy on the other end. Moving from one house to another in the same price range may be a push at this point in terms of how much house you get for your money.

If the interest rates do help eliminate the excess units on the market, it may mean housing bottoms out around mid-year. Not bad considering what they were saying three months ago. Of course, commercial construction will fall off once current work is completed, but hopefully the stimulus and infrastructure work will kick in to keep the work flowing.

If all these things come to pass, this downturn may come to an end sooner than we think. Even so, you have to manage a conservative operation until new work starts coming in.