The Northeast suffered significant blows during the disastrous 2008 economy, but not the full-blown devastation seen by some Sunbelt markets.
Anecdotal evidence suggests that the market saw drops of 20 percent to 25 percent in new construction. While anything but painless, such a slowdown pales in comparison with the 50-, 60- and 70 percent hits suffered in other regions.
Many say the slowdown wasn’t as bad as in some Sunbelt states because the Northeast housing market never grew as radically, and therefore didn’t have as far to fall.
“When the real-estate boom hit, we certainly enjoyed a boom in the Northeast, but not like Florida, Arizona, Southern California and Nevada,” said Lawrence Caniglia, executive director of the Northeast Spa & Pool Association. “If you’re in Arizona and your house went up 500 percent and then it went down 400 percent, you really got hurt. Here, if your house went up 60 percent, but it went down 20 percent, you’re still OK.”
The Northeast construction industry also doesn’t have the tradition of home-and-pool-builder alliances seen in other states, so it’s rare to find pool builders relying on home contractors for the majority of their business.
However, segment by segment, the patterns mirror those of the rest of the nation. Sales dropped most severely at the lower- and mid-level price points, due to fears of layoffs and the credit crunch.
“We’ve completely lost the customers who need financing,” said Michael Giannamore, vice president of Aqua Pool & Patio in East Windsor, Conn.
The high-end market held its own as wealthier customers, many of whom can pay in cash, still are able to fund construction and renovation. In New York, New Jersey and Connecticut, this business comes from the exclusive suburban homes owned by those working in the Financial District. Farther north, it’s vacation homes.
“The second-home market in the coastal areas of Maine, Massachusetts and New Hampshire has been a relative bright spot,” said Walter Perry, regional service center manager of APSP Region 9. “Whether it’s along the seacoast or in some of the mountain resorts or around the major lakes, that market has not precipitously dropped off. I wouldn’t say it’s doing well, but there is work to be had.”
Next year, however, even companies that build high-end pools may suffer because many consumers in the investment community are expected to scale back spending in response to this autumn’s stock market debacle.
“Long Island has been recession-resilient in the past, but now it will be feeling the effect,” said Pete Cattano, president of Paco Pools & Spas in Baldwin, N.Y. “No one can escape it. I was just talking to a supplier and he doesn’t see anything in the pipeline. Not a thing.”
Retail activity has dwindled mostly to the sale of chemicals and parts. Whereas in the past, homeowners might have replaced a major piece of equipment, they now choose to have it repaired.
“I ask them if they want to upgrade — get a new filter, pump or heater, or upgrade the gas line,” said Marc Brown, president of We’re Your Pool Service Company, a service and fiberglass-pool firm in Waldwick, N.J. “They say, ‘No. Just fix it. Get me through another season.”
Portable spa and aboveground pool sales, which have suffered for a couple of years, remain low.
As in the rest of the nation, the most promising segment has been service, with some industry members reporting significant increases in work. “Service is up 30 percent from 2007 [for us],” Giannamore said.
In response, many builders and retailers are putting more focus on service, maintenance and repair work to fill the gap left by thinning construction activity. And builders are less likely to refer their service work to local service-only firms, Caniglia said.
But, in the final analysis, pool and spa professionals in the Northeast find the market conditions there as confusing as anywhere else. “I’ve never seen anything like this. My father’s never seen anything like this,” Giannamore said. “It’s a unique situation, and it requires a unique approach if we’re to survive.”
Linda G. Green contributed to the reporting of this article.
