Are the Phones Dead?

Christina Lewellen
January 12, 2011
THE TALK...

It's official. We're in the new year and the $1,500 tax credit is over. As we've reported in recent weeks, many manufacturers and dealers saw quite a rush in the last few weeks of the year as homeowners scrambled to get their window and door upgrade projects done in time to claim the incentive on their taxes.

As 2010 wrapped up, we also heard rumblings from window and door companies that the first quarter of 2011 would likely be slow because of the pull-forward phenomenon created by the credits. Some companies' leaders predicted that the phones would stop ringing for a while because most consumers who were planning window and door projects moved their timelines up a bit to get the work done in 2010.

Please let me know what you're experiencing. Is there a tax credit hangover? Have your phones stopped ringing now that the $1,500 carrot has gone away? Are you talking about the new lower credits? Send me an email or post a comment below.

Contact Christina Lewellen, senior editor, at clewellen@glass.org.

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Our phones are dead as well.  The tax credit was not hurting anyone.  It created thousands of jobs that are now going to be lost.  It is not a drug, it was a great incentive to decrease our energy costs while being compensated for the expense.  It was a win/win all around.  I'm very worried, in 20 years my phones have never been this dead.

Ditto John, I couldn't have said it better myself!    Deborah 

The note about the tax credit being a drug is most definitely true and the analogy to drugs is very accurate. The Energy Tax Credit portion of the ARRA was simply a 2yr version of the Cash 4 Clunkers. 

"Stimulus" programs like those are successful in the sense that politicians can point to the increased activity during the period in which the plan is active and take credit for it, but then conveniently ignore the fall off after the "stimulus" ends. December was a big month for most of us because those who would be buying during Q1 and probably most of Q2 2011 simply purchased their windows sooner, as evidenced by the influx of calls we received toward the end of Q4 and into the waning weeks of December. Nearly every call was "Can I have these windows before 12/31 so I can get the tax credit?". Now we read that lobbyist groups like the WDDA and such are back begging the gov't for more drugs for our industry. It makes me sick -- that our industry would become dependent on government. Such dependency always leads to more power and corruption in Washington.

Survey Results for 01/12/2011:

Have sales decreased dramatically with expiration of $1,500 tax credit?

Yes

  

 

82%

No

  

 

18%

A pretty one-sided response this week. Let me share with you some of the emails that came my way:

"Typically the phones are usually slow in January, but this year they are dead. It is kind of creepy right now," writes one reader. "I hope that this government involvement doesn't do the same thing to our industry that cash for clunkers and the homebuyer credit did to those industries. Sales fell of a cliff after the incentive 'drug' was removed. The [government was] succesful in robbing demand from the future."
 
"There is definitely a January lull going on," writes another reader. "No great surprise; two hundred dollars incentive on a project like replacement windows is very close to a non-issue. Probably would have been better in hindsight to have split the difference and done a thousand as a credit for a longer period of time. Anyway, you are spot on in your article. we were very busy in November and December. Let's hope it’s just a lull."
 
Still, a fair share of folks, about 18 percent, are convinced that January may be slower primarily because it's January.
 

"Looking out the window at 18 inches of snow, and expecting another 9-12 inches with today’s blizzard, I’m not sure whether the weather has more or less of an influence on business than the expiration of tax credits," wrote one Northeast reader during last week's storms. "I suspect the former. While we probably will feel some effect from the reduction in tax credits, the taxpayer in me realizes that we cannot continue to spend money we don’t have.

"Energy efficient windows have always been a wise investment," he continues. "Somehow, we were able to sell them prior to the artificial stimulus, and I’m certain we’ll be able to continue to sell them after all the dust settles."
 

Phones Are Dead.  With the lost of the tax credit, the lead paint issues.  The replacement market is slowing to that of the new housing market, here in Michigan.

Michigan here also.. The tax credit prolonged the inevitable....Things look much worse than better.