Green House

With recent hikes in mortgage rates and decline in consumer sentiment the market is unquestionably slowing. Recent report by the National Association of Home Builders indicates that last month's decline in home construction was led by a 12.3% plunge in starts for single-family homes, which fell to an annual rate of 1.577 million. With the weakness seen in this industry report our recent financial statements are also reporting declining orders.

What can we do to reverse this trend and weather the slowdown in the industry better than our competitors? The answer that our department came across is the environmentally friendly, ÐŽogreen houseÐŽ±. Green house is designed to conserve water, timber and energy. Our department substituted natural, renewable materials for dwindling resources, such as bamboo for oak, and this can significantly reduce the materials cost and thus increase our profit. Also green house provide energy savings of 30 to 35 percent over houses of similar size and standard construction that we typically produce.

With energy bills soaring and householders aspiring to lifestyles which can reduce pollution, global warming and waste, eco-housing may be a long-term solution to slowing demand for KB Home products. Also, there are other financial benefits to building a green house. Fannie Mae, a federal lender, will help builders of green houses to meet certain engineering standards by sharing the cost of carrying the builder's development and acquisition loan.

Eco-friendly houses aren't just a fad anymore- they've become a specialized niche. Green house is a home that is, perhaps more than ever before, sensitive to environmental considerations and land use. With slowing market KB Home needs to be better positioned in the markets that we serve by product differentiation and targeting niche market. I strongly believe in our new product line and establishing leadership in environmental energy and design, which can help improve our bottom line tremendously.