UCLA Anderson Forecast sees clouds in the horizon of U.S. economy for year 2007. Housing sector will cool off and that might put brakes on for the economy as a whole, because real estate and construction sectors feel the bite and could suffer job losses.

In their news briefing, UCLA Anderson Forecast does not give any indication on what might have caused the slowing of the housing market. I would claim that long-lasting housing boom has already enabled many people to acquire a house, which might lessen the housing demand. Another clear factor for market turn is the rise of interest rates. Money costs once again as well as houses, and together these factors form a vicious circle.

How this slowing affects log home market? Luckily log homes are still speciality products and life style arguments are very strong while considering log home purchasing. On the other hand, alternative housing price goes down and temptation to acquire normal housing also grows. It is hard to say what will be the overall effect. My guess (not even educated) is that log home demand will still remain stronger than overall housing demand.

FORTUNE magazine has chosen Hovnanian Enterprises as one of the 100 fastest-growing companies in the U.S. for a third consecutive year. Such a growth mirrors the growth of U.S. housing market. Company is also doing many things right on its own right. Market share has been growing steadily and product portfolio has been diversifying.

One thing that puzzles me is that why house builders, despite widening product portfolios, largely neglect the market segment of log homes. Is it because normal house building is easy to subcontract to smaller builders, resulting into a management firm? Log home manufacturers make log home kits that are then mostly assembled by subcontracting companies. Are log home companies on housing business at all or are they at wood processing business?