Steelmakers want home builders to test their metal.
The steel industry is targeting consumers like Dan and Pattie Nickel, who are putting up a $2.5 million, 10,000-square-foot, Spanish Colonial-style hacienda in San Clemente, Calif., overlooking the Pacific Ocean.
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In June, when they started building their “Casa Nada” (so named because it sometimes seemed as if it would never be built at all), the Nickels paid $10,000 to change their drawings from wood framing to steel, a material commonly used to frame skyscrapers but rarely homes.
“A lot of people are saying, `Wow. That’s new. That’s unique,'” says Nickel, 39, chief executive of computer firm Nitech, a division of Nickel Technologies Inc. “Some think I’m spending a lot of extra money but I’m actually not. I have spent less.”
The Nickels say they were sold on steel after noticing their neighbors in wood-framed houses had problems with mold and termites. They also thought steel would stand up better to forest fires.
They figure the switch also saved them $120,000, because it required the use of less rod iron and less concrete.
Although in some cases steel building materials can be cheaper than wood, labor costs in steel construction are usually higher.
The steel industry, which struggled for decades, doesn’t want to miss its chance for a piece of the booming housing market. Having consolidated in recent years, larger and better-managed steel companies are on a quest to create new markets and to better exploit existing ones.
Home building is “one of the targets steel has had in its sights for more than a decade now,” says Don Moody, general manager of NuconSteel, a unit of Nucor Corp.
About 1.6 million new homes go up each year, he says.
“If every house is framed in steel in the United States, that would be a 14 million-ton market per year. The steel industry hasn’t had a new opportunity like that since the invention of the automobile.”
The industry is pushing steel’s ability to withstand hurricanes, termites and earthquakes, and to keep a house cool.
Although steel framing makes up less than 2 percent of new, single-family home construction in the U.S., it accounts for 72 percent in Hawaii, where insects wreak havoc on wood. And steel makers are teaming up with concrete suppliers to push the idea of homes with concrete exterior walls and steel interior walls.
Still, high prices remain an obstacle. Steel prices have come down a bit this year, after doubling in 2004, and supplies remain spotty in some areas. Meanwhile, wood prices are climbing steadily, rising 20 percent in the 12 months that ended in October, according to a weekly composite index of wood prices.
Steel companies have had a hard time persuading consumers that steel is a better value.
The rising price of steel “has greatly damaged their potential for picking up a larger share,” says Michael Carliner, an economist with the National Association of Home Builders.
With their push into home building, steel makers are throwing themselves into direct competition with suppliers of asphalt roofing shingles.
Commercials paid for by the Metal Roofing Alliance are running on various TV channels and in several magazines.
One TV ad features a real estate agent offering a metal roof as a selling point, while showing a home to an astonished couple. “People who know about metal roofing love metal roofing,” the agent says. “We call it investment-grade roofing, because it adds value to your home and pays for itself many times over time.”
Another ad says, “Over the course of 50 years, you could have three children. You could buy nine cars. You could take 66 vacations. You could own seven pets. And you could need only one roof — provided you invest in a metal roof.”
Steelmakers want to sell metal roofs directly to people like David Kidd, a retired Air Force chief master sergeant, who decided to spend $14,000 on a metal roof for his 30-year-old house in Roy, Wash., after replacing the asphalt roof twice.
“We are retired and didn’t want to mess with any more roofs, so we just wanted to have a metal roof put on,” Kidd says. “We won’t have to put another one on.”
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Colorful, shiny metal roofs are starting to appear on new homes dotting the slopes of Colorado’s Rocky Mountains. Although snow melts and slides off metal roofs, some architects and builders say metal roofs, like asphalt roofs, can still develop leaks near seams and require repairs, particularly if they aren’t put on correctly.