People ask me how I spend my time at when I'm at an industry trade show like PCBC. Do I go to sessions? Do I walk the trade show floor? Do I set up meetings with sources? All of the above is the real answer, although I spend probably 80% of my time doing the latter. It's not unusual whatsoever to see me parked in a strategically located hotel lobby for a number of hours with a carousel of characters rotating in and out of the seat next to me.

Because I'm meeting with, on average, between eight and 10 companies every day I'm at a trade show, I take in a huge amount of information. And unfortunately, there are not enough hours in the day to write about every single thing I heard. (As it is I'm pulling about a 16 or so hour day every day I'm at one of these things, so I need a little time to sleep and write.) But with that said, let me just do a quick run down of what seems to be top of mind when I ask builders and other industry experts what they're dedicating bandwidth to.

The great appraisal issue. When I sat down with Tim Kane, president of MBK Homes, and asked him what's worrying him these days (as if there's just one thing given the sad state of the housing market), the first thing that popped out of his mouth was appraisals. This is a topic that I've written and blogged about a lot of late, so I wasn't all that surprised that he said that. (The long and short of the issue is that many builders feel that new regulation is causing appraisal quality to nosedive and artificially drive down prices on new homes.) But it was interesting timing that the same day I received an e-mail from a California-based appraiser. She wrote:

"USPAP requires an appraiser to have knowledge of the market. The AMCs [Appraisal Management Cos.] are sending appraisers to areas they have no knowledge of. ... I am certified, experienced, and my reputation is spotless. I have glowing letters of recommendation. But here I sit with very little work since May 1st while the lesser qualified appraisers are busy. The AMCs are sending the cheapest and quickest appraisers to our area from other areas. It is causing real problems."

Ouch. And she's right. This is quite possibly one of the most important issues facing the industry right now. Click here to tell Big Builder what you're seeing in appraisal trends.

Mortgage mayhem. Many of the builders I spoke with indicated that home buyer financing is another issue. While government-sponsored loans--Fannie, Freddie, FHA, USDA--have filled the void as conventional lenders clamped down on consumer credit, it's not all honky dory.

First, the mortgage limits established by HUD are set to expire at the end of December. There's a certain degree of uncertainty as to whether the new limits will stick, which bakes in some additional risk for builders. The fear is that a builder will sell a home at a certain price which is within today's limits, but by the time of the closing, as much as four five months later for a dirt sale, the limits will have changed and the buyer will be ineligible for that government-secured financing.

Second, there's growing concern over the extra fees that Fannie and Freddie are tacking on to their mortgages. These mortgages, which were deemed more affordable, now have fees that builders say can be up to 3% of the total loan value.

Interest rates and inflation. Although mortgage rates have settled back down in the past couple of days thanks to a rather tame inflation report, builders seem to be bracing for more bad news. The argument, as Jeff Burton of American Dream Development, explained to me is that during an inflationary period, while everything else goes up in value, housing will go the exact opposite direction. How? Think about it this way: The cost of a home is really what it costs the consumer on a monthly basis. When interest rates tick up, monthly payments go up. But if a consumer can only afford a certain monthly payment, the price of the home has to go down to offset the increase in interest rates. And we can guess what that does not only to home values but builders' margins.

I have more information to share, but unfortunately I've got to catch a plane, so stay tuned for more.