Nation's Building News Online: May 31, 2004

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Mortgage Rates Not the Driving Force for Housing in Next 10 Years, Economists Say

On average, housing activity in the next 10 years is expected to hold up to levels that are just about as good as they are now, according to a panel of housing economists, and mortgage interest rates are unlikely to be the make-or-break factor that they used to be.

The analysts appeared last week at a press conference in Washington, D.C. to announce findings of a new Homeownership Alliance publication, “America’s Housing Forecast: The Next Decade for Housing and Mortgage Finance.”

“Household growth along with replacement requirements, second home demand and changes in vacancies will require average production of 1.85 million-2.17 million new housing units per year,” said NAHB Chief Economist David Seiders. “Even the lower end of this range is above the production levels of recent years.”

Current Levels of Housing Activity Sustainable

With the economy and financial markets now heading into a true expansion that has been pushing up mortgage rates, questions about how long today’s robust home starts and sales can continue are on the rise, but Seiders said that “current levels are not above sustainability” and the housing industry won’t have to make much of a transition into the stronger national economy that is emerging.

It is a safe bet that builders will be producing an average 2 million units a year – including manufactured homes — in the decade ahead, he indicated, compared to an average of 1.67 million in the past 10 years.

Conventionally built single-family homes will account for about 70% of the housing supply produced in the next 10 years; multifamily units will have a 20% share of the market and the remaining 10% will be trailers, he said.

A driving force behind the ongoing health of the housing industry will be strong household formations, which will be somewhere in the range of 1.32 million-1.63 million per year, Seiders said.

But mortgage interest rates are unlikely to be a driving factor for the marketplace.

Homeownership Heading Higher

“The data tells us that housing is not going away as long as you have a strong economy and single-digit interest rates,” said David Lereah, chief economist for the National Association of Realtors®.

The nation’s rate of homeownership, which now is in the 68% range, is headed to over 70% by the end of the next 10 years, and could even hit 71%-72%, Lereah predicted, as minority households start catching up with their non-Hispanic white counterparts.

Healthy Price Appreciation Likely

David Berson, chief economist for Fannie Mae, said that home prices probably won’t be advancing at the 8% clip seen in recent years, but they will follow trends in income growth, which should average 4%-6% in the 2004-2013 period. He said home price increases should average more at the upper end of that range.

Conceding the possibility of more anemic home price appreciation, Berson noted that “the risks are stronger that gains will be higher because of communities across the country restricting the supply of homes.”

Berson said that over the coming 10 years, “at some points, mortgage rates will be lower and at other times higher than expected." While that could have some impact on household decisions to rent or to own, it is unlikely to undermine the basic demand for housing emanating from the country’s strong population growth.

The nation has also never before had the assortment of mortgage products that it has today to manage fluctuations in interest rates, said Paul Merski, chief economist for the Independent Community Bankers of America.

Mortgage Debt to Double

“America’s families will likely need 125 million mortgage loans for home purchase or refinance totaling $27 trillion in mortgage originations,” over the next 10 years, said Frank Nothaft, chief economist for Freddie Mac.

“First-time buyers will remain a major component of the purchase market,” he added, buying about 24 million homes.

By the end of 2013, that should put outstanding mortgage debt at $17 trillion, said Nothaft, more than double today’s $8 trillion.

American Dream Alive and Well

“The American dream of homeownership remains alive and well,” said Merski. “For current home owners and individuals and families seeking to buy a home, the economic benefits of homeownership will continue to rise in the years ahead.”

The housing industry can expect the challenge of selling to a more diverse population in coming years, Merski predicted. At least 10 million additional households will become home owners by 2013, and roughly half of them will be minorities.

Building News Coast To Coast

Echo Generation Spurring Wave in Demand for More Rental Housing

The emerging "echo generation" — offspring of the boomer generation — could face a housing crunch if communities do not respond to the increased demand for moderately priced "middle market" rental units in the coming years, according to a study commissioned by the National Association of Realtors® and the Mortgage Bankers Association. "Demographic projections make it clear that we must develop a better understanding of how the middle market operates if we are going to meet our future housing needs," notes Douglas Bibby — spokesman for the study, which was conducted by Harvard University's Joint Center for Housing Studies. The echo generation includes people aged two through 19 and currently represents about 27.5% of the population. While the study finds the middle rental market to be functioning adequately at present, it recommends that communities and lawmakers work to improve housing opportunities as the market grows to encompass this emerging tide of echo boomers, as well as new immigrants, within the next two decades.
Copley News Service (05/24/04) Woodard, James M.:

Lighting the Way

Home owners who prefer natural light and want to slash their electric bills should consider installing a vented skylight. Though more costly than traditional fixed skylights, vented models allow home owners to turn off their air conditioners and naturally cool the residence. They can be opened with manual cranks or remote-operated electric motors, and home owners would be wise to install remote-activated solar screens if the skylight faces the south or west. Home owners can save money by choosing triple-pane plastic for their skylight; but double-pane, low-e argon glass offers a clearer view and effectively blocks sunlight.
Philadelphia Inquirer (05/23/04) P. K1; Dulley, James:

Buying In to Housing Stocks

Despite higher interest rates that threaten to slow the housing market, investors are once again buying the stocks of home builders and home-furnishing retailers. Investors unloaded many of their shares with the first rate hike in March, mainly because builders have had a difficult time selling their inventory in previous high-interest-rate cycles. Among the variables responsible for the recent boost in builders' stocks include a favorable existing-home sales report for April from the National Association of Realtors®; the popularity of cheaper adjustable-rate and hybrid mortgages; and a lean supply of properties for sale. Investors also note that the leading builders have substantial land holdings and access to better financing and material prices than smaller companies, from which they are commandeering even more market share. This, in turn, should keep stocks healthy in the long term. In another good sign, home building executives are now purchasing more shares than they are cashing in. Analysts believe Lennar and Toll Brothers are the safest investments because most of their buyers do not need financing. As for home-furnishing retailers, analysts prefer Ethan Allen Interiors, Lowe's and Home Depot, among others.
Wall Street Journal (05/26/04) P. C1; Zuckerman, Gregory:

Home Equity Loans Prompt Some to Dive Into New Pool

In California and other sunny locales, home owners are cashing in on the rampant appreciation of their dwellings to finance the installation of a swimming pool. Contractors say they are inundated with inquiries and jobs about new pools ranging in price from $30,000-$150,000. Owners who purchased their property during the mid- to late-1990s, when prices were down, have watched the value of their real estate mushroom over the years. In California's San Fernando Valley, for example, the median price of a single-family house vaulted by $260,000 during the seven-year period ended in February. That appreciation, coupled with continued low interest rates, is proving to be an irresistible temptation for many home owners to get the pool of their dreams.
Chicago Tribune (05/22/04) Wilcox, Gregory:

Designs Elevate Front Porch

Traditional front porches were left out of residential designs following World War II, mainly because home owners moved inside to avoid automobile fumes and noise and because they preferred watching television over gathering with their neighbors. However, Shea Homes' Bill Pisetsky says porches are making a comeback as home buyers increasingly seek "almost a 'Leave It To Beaver' kind of lifestyle." In addition to nostalgia, buyers are demanding porches as a means of cooling the ground floor during the summer months to save electricity and offering a shaded place to relax. In its Ladera Ranch development in Orange County, CA, Shea Homes is building wraparound porches to give buyers a space in front to entertain neighbors and secluded areas along the side and rear of the home for personal time.
Miami Herald (05/23/04) P. 16H; Harder, Nick:

Most Back Affordable Housing Next Door

A recent National Association of Realtors® survey of 1,000 residents in 25 major markets found that slightly more than three-quarters of respondents would welcome low-cost housing in their neighborhoods, with 63% even approving of such projects next door to their own homes. The research refutes a long-held belief that "not-in-my-backyard" mindsets have blocked smaller dwellings and multifamily developments in many areas; but NAR believes these newest findings underscore the American public's understanding of the need for affordable housing for teachers, nurses, police officers and other working-class professionals — not just the unemployed and poor. The group's president, Walt McDonald, speculates that "more people know about affordable housing problems than we might have thought." The poll revealed that over 50% of the population believes that high real estate costs will keep their children and other relatives from living near them; but Realtors®, builders and others are hoping to change this by pushing for zoning changes and government programs to boost the affordable-housing stock.
USA Today (05/24/04) P. 1A; El Nasser, Haya:

Affordable Housing Will Be Major Issue in Presidential Election

The National Association of Realtors® has a new survey that predicts the issue of affordable housing will influence the vote of two-thirds of Americans in the November presidential election. The National Housing Opportunity Pulse, a poll of 1,000 adults from the 25 biggest metropolitan areas in the country, reveals that shelter affordability and availability would trail only health insurance availability and job security as the issue of greatest concern for the upcoming presidential election. Moreover, the survey finds that 81% of respondents would favor efforts to put more affordable rental and single-family housing in their areas, as long as the units complement the surroundings. "Our new survey makes it clear that voters are going to take their concerns about affordable housing into the voting booth with them," says NAR President Walt McDonald. (05/25/04) Murray, Barbra:

Room at the Top

Many apartment owners and renters are heading to the roof for a place to relax or entertain outdoors, especially if their indoor spaces lack a traditional living room or are cramped. Some even plant gardens or build their own decks on a portion of the roof, but it would be wise to obtain approval from the building owner to avoid having to tear down their projects later on. Those who decide to move forward with a roof project should use real plants to enhance value, preferably herbs because they can withstand heat and do not require frequent watering. Serving alcoholic beverages is to be avoided, as the hosts could be held legally responsible if someone gets hurt. Despite the benefits of homeownership, some renters are reluctant to leave buildings with rooftop access. 
New York Newsday (05/21/04) P. D4; Fairley, Juliette:

Fire-Wise Construction

There are a number of ways to make residences built in fire-prone areas safer. Home owners should trim tree branches, clean gutters and remove vines and dead leaves; and fire-resistant plants can be used to beautify the landscape while offering some protection against blazes. They also should use materials that are both durable and noncombustible. Steel, clay, concrete and asphalt roofs as well as metal, stucco and stone siding are the most fire-resistant materials. Home owners should be aware that these materials do not provide a 100% guarantee against fire; however they do offer a good measure of protection. Log homes also are reasonably safe because thick timber burns slowly. In general, home owners in vulnerable regions should use mold-resistant gypsum underlayment and fiber-cement sheathing to close gaps in eaves and soffits, as well as replace single-pane windows with low-emissivity tempered glass or cover them with noncombustible shutters. Furthermore, they should take similar precautions with decks, trellises and fences.
Fine Homebuilding (05/04) No. 162, P. 78; Mead, Stephen; Wheeler, Jim:

Priced to Move — and Print, Fax and Scan

HP's OfficeJet 4215 merges printer, fax, scanner and copier functions at a reasonable price for small businesses. The compact, lightweight machine prints laser-quality black text at a rate of six pages per minute. Though it can handle only low-volume printing, the software is easy to install. The feeder holds just 100 sheets, and the machine cannot accommodate magazines or large books when used as a copier. In addition to traditional faxing functions, the 4215 stores numbers, scans documents before dialing and provides a multitude of cover pages, among other things. The device is priced at just $150.
Small Business Computing Online (05/25/04) Kawamoto, Wayne:

Small Talk

Users who want the functionality of a desktop computer and the size and mobility of a personal digital assistant (PDA) should consider the new Ultra Personal Computers (UPCs) to be rolled out by Antelope Technologies and OQO later this year. Both companies offer UPCs equipped with Windows XP, a 1GHz processor, 256MB RAM and a 20GB hard drive, but Antelope's also boasts a mobile processor from Transmeta and Pen & Internet's handwriting recognition software. The powerful devices have a couple of drawbacks in terms of screen size and data-entry. The UPC from Antelope will have a starting price of $1,600.
Entrepreneur (05/04) P. 52; Kooser, Amanda C.:

In Job Growth Discussions, Builders Carry Cement Shortage Concerns to Commerce Secretary

As spot shortages of cement continue in Florida and some other parts of the country, the nation’s home builders are stepping up efforts with Administration officials and members of Congress to alleviate the problem by suspending the prohibitively high U.S. anti-dumping duty on Mexican cement.

In a meeting last week with Commerce Secretary Donald Evans, NAHB Executive Vice President Jerry Howard and Advocacy Group Vice President Bill Killmer said that the situation in Florida has reached the point where contractors are reportedly laying off workers because they can’t get cement.

The exchange took place during a regular quarterly roundtable discussion convened by Evans with key business and industry leaders to discuss the overall health of the nation's economy.

While housing has led the economic recovery in recent years and remains poised for solid growth in the future, representatives from the manufacturing, financial services, energy, telecom, petroleum, retailing, automobile and other key economic sectors for the first time in the last few years all reported positive prospects for sustained growth and job creation.

These gains are showing up in government statistics, with more than 625,000 new jobs created in March and April alone. The Bureau of Labor Statistics reported that in April, "employment rose substantially in several service-providing industries, construction continued to add jobs and there was a noteworthy job gain in durable goods manufacturing."

With payroll employment now posting strong gains and demand for new housing expected to hold steady at an average 2 million units a year for the next decade, Howard said that the only dark cloud on the horizon threatening to curb robust growth in housing is on the building materials front.

Housing Production Could Sputter

Worried that housing production could sputter in areas feeling the brunt of the cement shortages, Howard urged Evans to examine how the barrier to the importation of Mexican cement is exacerbating the problem, and the secretary said that he would actively explore the possibility of suspending the duties to keep shortages from spreading further and threatening robust housing markets.

Several factors have contributed to the cement shortages, which first began surfacing several weeks ago in Florida. Demand in the U.S. has picked up considerably since the fall of 2003 and global transportation problems are constraining imports of cement from Asia, Europe and Latin America.

China’s surging economic activity is tying up shipping lines for cement and other building materials from major exporters to U.S. ports, analysts say. This has had a disproportionate impact on Florida and other Southeast states that import as much as 50% of their cement.

Mexican Imports a Logical Source

As cement supplies tighten, Mexico would seem to be the most logical source for additional imports.

NAHB has been in contact with Rep. Mark Foley (R-FL), who has asked the Commerce Department to investigate what actions can be taken to help alleviate the cement shortages.

Through its newly formed Concrete Home Building Council, NAHB is urging domestic cement producers to increase production and place a top priority on filling demand from the housing industry.

The NAHB Research Center is also studying possible technological solutions and materials that can be substituted for cement.

While it is difficult to predict how much longer this problem is likely to persist, several analysts believe that supplies could remain tight through the balance of the year until the current shipping traffic jam eases.

Housing Snapshot

After flattening out for a week, mortgage interest rates recommenced their slow upward crawl last week and rose to levels that were one full percentage point higher than the same time a year earlier and one-half percent above where they were in April. Nevertheless, the cost of home financing remained relatively affordable by historic standards. On the broader economy, news was mixed last week, with the Commerce Department reporting a 0.3% increase in consumer spending and a 0.6% increase in income in April. The week ended with the price of oil down from its recent high but still close to $40 a barrel. And the University of Michigan reported a decline in consumer confidence in May. Lumber prices continued to improve last week, but still remained considerably higher than they were a year before. According to Random Lengths, framing lumber was down $14 to $443 per 1,000 board feet. The price of 15/32-inch 3-ply CDX southern west-east plywood dropped to $400 per 1,000 square feet, compared to $255 a year earlier, and oriented strand board was down to $360, compared to $211 a year earlier but still its lowest point in some time.

Mortgage Interest Rates

30 Year Fixed Rate: 6.32\%
15 Year Fixed Rate: 5.69\%
1 Year ARM: 3.87\%

Housing Starts: Apr. 2004

Total: 1.969 million\%
Single Family: 1.610 million\%
Multi Family: 359,000\%

New Home Sales: Apr. 2004 *

1.093 million

Existing Home Sales: Apr. 2004 *

6.64 million

* Seasonally Adjusted Annual Rate

You Can Help Solve the General Liability Insurance Problem

Costs for insurance are skyrocketing, and in some markets, builders can’t get coverage at any cost.

This is one of the biggest challenges facing home builders and contractors today, and it is a top issue for our federation.

In response, NAHB has formed a partnership with Marsh, the global risk management consulting firm. In a plan endorsed by the NAHB Board of Directors, our association and Marsh are gathering data from builder, remodeler and trade contractor members to create a comprehensive profile of the home building industry’s risk management needs. Marsh will then use that profile to develop effective new general liability insurance (GLI) products for NAHB members.

The first and most important step is to understand the actual loss experiences of the residential construction industry. Marsh is surveying thousands of NAHB members to learn more about their businesses and their insurance needs. Members will also need to provide Marsh with a letter addressed to their insurance carrier giving the carrier consent to share loss information with Marsh.

Over the next 60 days, NAHB and Marsh will be contacting builder, remodeler and trade contractor members and asking them to complete the survey, put the consent letter on their letterhead and send those materials to: Marsh, c/o Jessica Hatch, 1166 Avenue of the Americas, New York, NY 10036.

Marsh will use the information gathered from builders, remodelers and trade contractors to develop a sophisticated profile of the residential construction GLI market. This broad understanding of the market will enable Marsh to develop risk-management strategies that improve the coverage, cost and availability of GLI for the home building industry.

We need your help.

If you are a builder, remodeler or trade contractor, then we need you to fill out the survey, put the consent letter on your letterhead and send these materials to Marsh. If you are one of the 44,000 members who receives the GLI mailing, then please complete the survey and consent letter and send these materials to Marsh as soon as possible. If you do not receive these materials in the mail, then I strongly encourage you to go to There you will find all the materials from the mail piece.

We need as many builders, remodelers and trade contractors as possible to participate in this effort. Please note that your insurance agent can be an important resource in finding this insurance information.

I want to stress two points: 1) All information in the database will be kept in strict confidence; and 2) Your current insurance agent will have the opportunity to sell new products developed through this initiative.

This is about your business profits. This is about the long-term health of our industry. Taking a few minutes to gather your insurance information and send it to Marsh could be the first step in solving one of our industry’s toughest challenges — and in saving you thousands of dollars in insurance premiums.

Please do your part.

New Home Sales on Their Way to New Record in 2004 Despite April Decline

New single-family home sales dropped 11.8% in April to a seasonally adjusted annual rate of 1.093 million, the Commerce Department reported last week, but sales remained 18% ahead of the pace a year earlier and were stronger than in 2003 overall, which was a record-setter.

“Home sales remain strong following an extraordinary March,” said NAHB President Bobby Rayburn, adding that the association’s Housing Market Index, which is based on monthly surveys of single-family builders, has indicated a brisk marketplace in April and May.

March sales were even stronger than previously reported, and the Commerce Department revised them upward.

“Market fundamentals remain sound despite an increase in mortgage interest rates since March,” said NAHB Chief Economist David Seiders. “We’ve been expecting sales to recede from the pace of earlier this year, but we’re forecasting an annual total of 1.113 million units, which would be about 2% above last year’s record pace.”

Sales slumped 22% in the South, 9.4% in the West and 2.5% in the Northeast; they rose 10.8% in the West.

The 387,000 inventory of new homes for sale in April represented a slim 4.3-month supply at that month’s sales pace. “The inventory situation still is fundamentally healthy, and the number of completed units in inventory still is historically low,” said Seiders.

Mark Your Calendar for NAHB's Fall Construction Forecast Conference

Get the latest forecasts on housing starts, project budgets and other economic bellwethers of the housing industry at NAHB's Fall Construction Forecast Conference at the National Housing Center in Washington, D.C. on Oct. 27. Click here for more information.

Home Resales at Near-Record Level in April

Sales of existing single-family homes rose for the third consecutive month in April to the second highest pace ever recorded, the National Association of Realtors® reported last week.

Home resales climbed 2.5% in April to a seasonally adjusted annual rate of 6.64 million. That was 15.1% higher than a year earlier and just 0.6% shy of an all-time high of 6.68 million units last September.

David Lereah, the association’s chief economist, said that a strong sales number for April had been expected and May should be another big month for housing sales.

“Part of what we’re seeing now is fence jumping from people wanting to buy a home before interest rates move higher," said Lereah. “Even with an additional rise in recent weeks, the good news is that mortgage interest rates now appear to be leveling out in the 6.3% range.”

According to Freddie Mac's weekly survey, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.83% in April, up from 5.45% in March; the rate a year earlier was almost the same at 5.81%.

“It appears that we’ve already experienced most of the anticipated rise in mortgage interest rates and they’ll probably increase only modestly in the second half of the year,” said NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, CA.

Existing home sales in April rose 4.4% in the Midwest, 3.5% in the South, 1.4% in the Northeast and 0.5% in the West.

There were 2.57 million existing homes for sale in April, a 4.6-month supply.

Mark Your Calendar for NAHB's Fall Construction Forecast Conference

Get the latest forecasts on housing starts, project budgets and other economic bellwethers of the housing industry at NAHB's Fall Construction Forecast Conference at the National Housing Center in Washington, D.C. on Oct. 27. Click here for more information.

Schwarzenegger Appoints NAHB Director to Lead California Housing Department

Lucy Dunn, an NAHB director and executive vice president for Hearthside Homes, was recently appointed by California Governor Arnold Schwarzenegger as the director of the state’s Department of Housing and Community Development.

“Lucy’s experience in the housing industry, and her history of support for solutions that benefit the broader community, make her an ideal choice to direct our efforts to address California’s pressing development needs,” said Schwarzenegger.

“I am grateful that Governor Schwarzenegger has given me this opportunity to serve the people of California in this capacity,” said Dunn. “The state faces many challenges as we seek to mitigate housing shortages while balancing the need for intelligent planning and environmental stewardship, and I look forward to getting started.”

Dunn was the executive manager of the Bolsa Chica residential development and wetlands restoration project, which involved the sale of 800 acres of wetlands for restoration and negotiations with a number of local, state and federal agencies.

Dunn served as president of the Building Industry Association of Southern California (BIA/SC) in 2001 and is currently vice president of the California Building Industry Association. She has served on numerous NAHB committees, is a member of the Urban Land Institute; and was a founding member of the Foundation for Economic and Environmental Progress and of the Bolsa Chica Conservancy, which teaches balance in meeting housing needs and protecting the natural environment.

“No one is more passionate about housing issues than Lucy Dunn,” said Richard Lambros, executive vice president of BIA/SC. “The governor could not have found a better leader to help his administration address California’s severe housing crisis.”

For more information, contact Julie Ross at BIA/SC at 909-396-9993

Louisiana Law Encourages the Return of Liability Insurers

On May 21, Louisiana Governor Kathleen Babineaux Blanco signed legislation amending the state’s New Home Warranty Act to reduce the warranty period for major structural defects in homes from seven to five years.

The Louisiana Home Builders Association (LHBA) advocated House Bill 401 as an important step in bringing general liability insurance carriers back to the state.

“We wanted to send the message that the legislature recognizes the absolute need to provide quality, safe and affordable housing to its citizens,” said Michelle Shirley, the association’s legislative affairs officer. She said the new law will help “encourage insurers to return to our market and make general liability insurance more readily available and affordable for our members.”

Shirley credits the success of the bill’s passage to an active campaign by her association’s grassroots membership. “It was a tough fight, but we got it done with lobbying, phone calls and e-mail from our members,” she said.

Adopted in 1986 and considered one of the best in the country, Louisiana’s original New Home Warranty Act was designed to encourage the enactment of builder licensing and the availability of general liability insurance. Under the new amendment, the act now provides for a five-year warranty for defective foundations and structural components; two years for plumbing, electrical, and other system defects; and one year for cosmetic items.

The legislation also includes a Notice and Opportunity to Repair provision, which requires home owners to inform builders of alleged defects and give them an opportunity to make any necessary repairs.

The New Home Warranty Act also contains 19 warranty exclusions for builders, including soil movement, normal wear and tear and mold or mold damage.

“I think we have one of the best laws in the country,” said Shirley.

For more information on the Louisiana legislation, e-mail Michelle Shirley at LHBA or call her at 225-387-2714. For answers to general questions on Notice and Opportunity to Repair legislation, e-mail NAHB’s Sam Leyvas, or call him at 800-368-5242 x8326.

Home Owners Exploiting Political Process to Block New Housing, HUD Conference Hears

Home owners who are latching on to environmental and other laws to boost the value of their properties by blocking residential construction in their neighborhoods were identified by panelists at a recent Department of Housing and Urban Development conference as a major force behind today’s proliferation of regulatory impediments to affordably priced housing.

Brookings Institution Senior Fellow Tony Downs told HUD’s April 22 Conference on Regulatory Barriers to Affordable Housing that there are 18,000 governments in the country with zoning powers, providing ample opportunity for local citizens to keep out working families who are easily priced out of the market.

“Any regulation can be a barrier, even if it serves an admirable purpose,” said Downs. And the two-thirds of households across the nation who own their homes “want to maintain the highest possible value of their house” and are opposed to anything they think will decrease that value.

NAHB President Bobby Rayburn provided a first-hand account of what builders are running into when they try to deliver housing to communities that need it. Even with the support of the mayor and city council, he saw his plans to build a 10-unit rental in Walnut Grove, MS, population 450, thwarted when local citizens filled the city hall parking lot and weighed in against the project at a public hearing.

“We were getting ready to put $850,000 into that community and help families,” many of whom were living in beat-up trailers, said Rayburn. But the public response to the prospect of new housing was, “We just don’t want it here.”

Using the Political Process

“With the house the most sizeable part of their net worth, home owners are conscious of things that might diminish the value of their home,” said Ron Utt, senior research fellow at the Heritage Foundation. “But many home owners are moving beyond that. They are finding out that they can use the political process to enhance their net worth by limiting growth” and they regard growth restrictions as part of their portfolio management.

“We are suffering from regulation that’s giving people in the community what they want,” Utt added. “People don’t move into sprawling suburbs and big lots looking for more people to move in. There is no point of negotiation; they’ve achieved what they want,” and there seem to be ways of discouraging growth no matter what the law. In Virginia, for example, where no impact fees are allowed, downzoning is used and five- to 10-acre minimum lots are capping growth.

“The political market is working,” added Utt. “What matters in elections in fast-growing communities is your position on growth….Local government may be behaving irresponsibly, but not for existing residents.”

Extremely Low Densities

Downs cited Contra Costa County, CA, in the San Francisco Bay area as an example of how extremely low densities are constraining housing growth. The county had a population of 963,000 in 2000, he said, but could have supported a population of 12 million if it had the same density as San Francisco.

More intensive use of the land in such areas can work, Downs said. For example, the county could raise density by allowing multifamily housing in a small area, leaving 90% of existing neighborhoods unaffected.

“You have a responsibility towards making lower-income people able to live in your community,” he said.

While regulatory barriers are a formidable, and growing, impediment to building affordable housing, panelists offered a number of approaches to remedying this problem:

  • Jobs provide leverage, said Downs, and a compelling message for localities is that if they don’t have affordable housing, new employers won’t move in and existing employers may move out. However, he voiced skepticism that this issue should be left in the hands of the local government. “In a democracy,” he added, “when the majority finds ways to exploit a minority, it’s hard to get them to give it up, which is a fundamental problem for our entire society.”
  • In order to receive Community Development Block Grants and other “carrots,” cities and counties should be required to get rid of some of their barriers, Rayburn suggested. Another approach is picking four or five especially egregious regulations and going after them “year after year,” he said.
  • Non-profits need to join with for-profits to make home building more efficient, said Sheila Maith, managing director for the Fannie Mae Foundation, and communities need to focus on reducing permit processing time. And much more work needs to be done to build a constituency for affordable housing for working families earning $25,000-$40,000, she said. “With recent growth in housing values, there is the perception that the housing market is working for us,” said Maith, "but we have 30-year-old kids living in the basement.”
  • One of the biggest obstacles is the public’s perception of the term “affordable housing,” said Angelo Kyle, president-elect of the National Association of Counties, who finds that “homeownership opportunities” receives a better public reception. Rayburn added that NAHB is putting a face on the people in need of workforce housing, who include teachers, police, fire fighters and others serving the community.

Remodelers Finding Opportunity in New Laundry Room Trends

A separate laundry room is at least a plus, and even a must, for 95% of those responding to a recent NAHB consumer preference survey.

“Today’s laundry room has moved upstairs into the living quarters, and it is spacious, practically rivaling the kitchen in finishes and gadgets,” said NAHB Remodelors™ Council Chairman Douglas Sutton, Sr. of Sutton Siding and Remodeling in Springfield, IL. “People want comfortable workspaces no matter what activity they are doing, and they don’t want to lug laundry up and down stairs.”

Catering to consumers who are looking for convenience when they do the wash — a chore that typically takes seven to nine hours a week — laundry rooms are moving into spaces adjacent to kitchens, bedrooms or bathrooms, according to Remodelors™ Council members.

Some home owners also want their laundry room to blend in with the rest of the house, with crown moulding and hardwood or tiled floor to match adjacent rooms, remodelers said.

Other features that are appearing with increasing frequency in remodeling jobs include:

  • More counter space to fold, iron or sew clothes, with granite or Formica countertops like those found in the kitchen
  • Cabinets for storing laundry detergent and other products, often in wood finishes normally found in the kitchen
  • Bigger, high-end appliances — washers and dryers that can handle growing wash loads and even two dryers to keep up with the washer
  • To give the laundry room a more sophisticated look, built-in cabinets or closets to hide appliances when they are not being used

The NAHB University of Housing Offers Courses and Designation Programs

The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, click here.

Re-Tool for the Fastest Growing Population of the Century

Builders and remodelers are in the business of making people’s dreams come true. But what happens when those dreams take different forms, or when dreams of the past have to be reshaped to meet the needs of today and tomorrow?

Older Americans are this century’s fastest growing population. They are living longer and, according to an AARP study, a majority prefer to age in their own homes. They also have more financial security than at any other time in history and are willing to pay for needed and desired amenities to make their lives safer and more comfortable.

Those needs and desires will vary. Some may require live-in family members to provide long-term care. Indeed, 25% of those surveyed in an American Society of Interior Designers (ASID) Aging-in-Place study indicated that they expected a family member to eventually live with them because of aging needs. Others may want better access, lighting and convenience.

Selling to This Market Literally Begins at Your Door

Critical to successfully marketing to this group will be your ability to not only accurately identify their needs, but to master and meet their shifting demands. Will the fastest growing population of the 21st century be able to enter your homes? Exterior and interior steps, elevation changes and steep grades will make or break the opportunity to sell your home to a market demanding effortless convenience for themselves and their loved ones.

Once inside, will home owners be able to reach upper cabinets, replace a burned-out fuse in the basement electrical panel, change a ceiling-mounted light bulb, entertain their grandchildren, receive large furniture pieces or step into a tub? Are door openings less than 34 inches wide or do they have higher than half-inch thresholds? Is there flexibility in height differences or appliance placement?

These may seem like insignificant issues, but research shows they are not.  According to the ASID Aging–in-Place survey:

  • 79% of Americans plan for their future home just as they do for financial and healthcare needs.
  • 57% want a house that is easier to maintain than current home.
  • 40% want a house that is easier to get around in than their current home.
  • 77% are likely to remain in the homes they currently live in as they age.

Equip Your ‘Tool Kit’ to Answer Their Needs

When preparing for this market, will you have the right “tools” in your “tool kit” to answer their needs and fulfill their dreams? Will you be able provide the basics like design, comfort, flexibility and ease-of-use?

This may require:

  • Additional training for your subcontractors, employees and sales staff
  • New and improved suppliers, products or a specification process
  • Adjusting your marketing mix and materials to better target your market

Earning your Certified Aging-in-Place Specialist (CAPS) designation can help build your tool kit. CAPS courses will teach you many of the technical, business management and customer service skills essential to competing in today’s market.

Earning your CAPS designation will give you:

  • The knowledge to provide and install at least one stepless entry on a home’s main level to allow easy entry and exit
  • The ability to build wider doors and maneuverable living spaces on the main level to allow easy passage for living, moving furniture and accommodating guests or relatives who need assistance
  • The foresight and design parameters to provide a full bed and bath on the main floor with enough maneuvering space for a wheelchair, transfer seat, walker or crutches, and bathing access to accommodate two people, if a caregiver is needed.

What Over-60 Home Buyers and Owners Want

Understanding and applying the principles of universal design is also important to meeting the needs and desires of this market. There are literally hundreds of universal design products and applications available.

According to a random national sampling conducted by the Universal Design Alliance, the top universal design features for people under 60 living in their current homes include:

  1. Lever controls on faucets
  2. Light switches 36-48 inches above the floor
  3. The microwave at counter height
  4. 34-inch or wider interior doors
  5. Adjustable shelves in wall cabinets

What they want in their future homes are:

  1. One full bedroom and bath on the main floor
  2. Adjustable shelves in wall cabinets
  3. Under-cabinet task lighting
  4. Base cabinets with pull-out shelves
  5. Adjustable closet rods and shelves

Using universal design costs barely 2% of the initial construction cost of a home, whereas retrofitting cost estimates run as high as 25%-27% of the market value of a home. Many in the market have the finances to get what they want.

My advice to you is to learn as much as you can about how to deliver the basics. You will experience a sense of pride and profit every time your customers effortlessly walk through their front door, enjoy all the built-in conveniences that enhance their living experience and send you referrals because their friends and relatives rave over what makes your homes so special.

Rebecca Stahr, ASID, CAPS, is president of LifeSpring Environs, Inc. of Atlanta, and consults with housing industry innovators to promote their growth in the 50+ market. She is a Registered Interior Designer and Certified Aging in Place Specialist delivering aging-in-place environments for both commercial and residential projects nationally. For more information, e-mail Stahr at or call her at 678-762-3330.

Nominate the Best of the Best for Remodelor™ of the Year

Applications for the Remodelors™ Council’s most prestigious awards program, the Remodelor™ of the Year Award, are now available online at under the Awards section.

The Remodelor™ of the Year Award recognizes exemplary NAHB involvement at any level, superior business management and an outstanding contribution to the remodeling industry. Councils should nominate individual remodelers, but the nominee must write his or her own entry essay.

The winner will be announced at the Remodelors™ Council Gala during the 2004 Remodeling Show in Chicago (Oct. 8).

Local Councils Honored With CADRE Awards

The Council Awards for Demonstrating Remodeling Excellence (CADRE) is awarded to local Remodelors™ Councils for superior member service in the categories of:

  • Membership Recruitment & Retention
  • Community Service Project
  • Public Relations & Promotion
  • Outstanding Associate Member
  • Member Service/Education
  • Government Affairs/Legislation
  • Outstanding Council Chair
  • Outstanding Executive Officer/Council Coordinator

For information, e-mail the Remodelors™ Council or call 800-368-5242 x8216.

University of Housing Offers Courses and Designation Programs

The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, click here.

Remodeling Publications and Resources Available Through offers a variety of remodeling publications online. To view or purchase these publications, click here.

Zero Energy Home to Debut in Dallas Parade of Homes

The 13th annual Dallas Parade of Homes® being held at Lone Star Ranch in Frisco on Sept. 4-26 will feature the first zero energy home to be built in North Texas.

Sponsored by James Hardie, tlhe zero-energy residence is being built to generate as much energy as it uses by combining state-of-the-art, energy-efficient construction and appliances and renewable energy systems available on the commercial market.

“We’re proud to be part of this project and the opportunity to educate consumers about energy-efficiency, sustainability and low-maintenance building practices,” said Brian Romike, a regional sales manager for James Hardie.

The two-story, 3,800-square-foot luxury house will include modern amenities, a screened porch and a 2.5-car garage and will sell for approximately $600,000.

Ground on the home was broken in April and it is scheduled for completion in August.

The home is a demonstration project for the Department of Energy’s Building America program.

“The concept is simple” said the home’s builder, Jim Sargent, who is a principal at AndersonSargent Custom Builders LP. “By using clean, renewable energy sources that reduce pollution and help sustain a healthy environment, the zero energy home is the future for the American home.” 

The house was designed by architect Peter Pfeiffer, who specializes in “sustainable” or “green” building practices, and is considered one of the leading experts on passive cooling strategies and radiant barriers. Since 1987, his firm has completed more than 400 commercial and residential projects that conserve resources and minimize pollution. Last year, Pfeiffer’s home in Austin was named “the greenest home in America.”

Other featured builders in the Parade of Homes include Coppertree Development, Derecor Homes, Drew Custom Homes, Doug North Homes, Myers Custom Homes, Priest Inc. and Sotherby Homes.

Financial Management 101: The Lowdown on Calculating Gross Profits

Gross profit is pretty easy to define. It’s sales minus the cost of sales. As an equation, gross profit looks like this:

Sales – Cost of Sales = Gross Profit

Sales are also easy to define: The term refers to revenue from the sales of homes, which typically is recorded at closing or transfer of ownership.

Cost of sales, however, cannot be nailed down with one pat definition. For one thing, there are two traditional ways to calculate cost of sales: direct costing and absorption costing. For another, while some people factor in “soft costs” when calculating cost of sales, some don’t.

Confusing? Here’s how to sort it out.

Direct costing. If you use this method to calculate cost of sales, include only direct construction costs. These costs are directly attached to the product and typically include the costs of the lot, materials and labor.

Absorption costing. If you use this method to calculate cost of sales, figure out your direct construction costs and add a proportionate amount of indirect construction costs (also known as construction overhead). Indirect costs are the costs of running the construction process and often include superintendents’ salaries, field offices, trucks, construction equipment, temporary toilets, clean-up, etc.

Soft costs. These typically include sales commissions, other sales and marketing expenses, financing and closing expenses.

The following table illustrates two ways of calculating gross profit and includes an example of soft costs. Notice that the calculations vary according to the number of cost and expense items included in the cost of sales computations. Net operating income is the same under each method, as each one accounts for the same dollar amount of costs and expenses. The difference is whether the expenses are recognized above the gross profit line or below it.

Gross Profit Calculation Methods

 Direct Costing

 Absorption Costing

Soft Costs 






Cost of Sales 





Direct construction cost 




Indirect construction cost 



Sales commission 


Other sales and marketing expenses


Financing expenses 


Closing costs 


Total Cost of Sales 





Gross Profit 




Gross Profit Percentage





Operating Expenses 

Indirect construction costs 


Sales and marketing expenses 




Financing expenses 



Closing expenses 



General and administrative expenses 




Net Operating Income 




Net Income Percentage 





Which Calculation Method Is Best Depends Upon Who Wants to Know

Which method should you use to calculate gross profit? That depends on who needs the information.

For management reports, I recommend the use of the direct costing method with the separate recognition of lot cost and direct construction costs. Indirect construction costs and other unit related expenses should be accumulated by category (indirect construction cost, financing and closing expenses, sales and marketing expenses and general and administrative expenses) below the gross profit line.

Segregated costs and expenses let management easily evaluate the performance of each cost and expense category. Each line item clearly identifies the performance of individual areas such as product cost, cost of the land, efficiency of construction operation, sales and marketing, financing and general management.

Generally accepted accounting principles and the Internal Revenue Service both require the use of absorption costing to calculate gross profit information reported to third parties like lenders, investors and state or federal tax jurisdictions

It’s not a good idea to use absorption costing for management reports because this method clouds the cost of sales classification by including items other than lot and product costs.

However, it’s very easy to convert from direct costing to absorption costing. You can do this by allocating the indirect construction costs to both the work-in-process inventory and the cost of sales based on the annual activity and cost incurred during the period.

For example, let’s assume a builder has direct construction costs of $3.5 million and indirect construction costs of $122,500 during the year. He closes $3 million worth of product and keeps $500,000 of product in inventory.

To calculate the relationship of indirect costs to direct costs, divide the former by the latter:

$122,500/$3,500,000 = 3.5%

To allocate the proportional share of indirect costs to work-in-process inventory, multiply the amount of product in inventory by 3.5%:

$500,000 x 3.5% = $17,500

To allocate the proportional share of indirect costs to cost of sales, multiply the amount of product sold by 3.5%:

$3,000,000 x 3.5% = $105,000

Add $105,000 and $17,500 and you get $122,500. The portion relating to the amount of product closed ($105,000) gets allocated to cost of sales. The portion relating to inventory ($17,500) gets allocated to work in process.

To calculate gross profits for comparison with another company, it is cleaner to use the direct cost method. To make the comparison meaningful, it is essential to first define cost of sales and then make adjustments, if necessary, to the same basis.

Emma S. Shinn, a certified public accountant and author or "Accounting and Financial Management, 4th Edition," has worked in the home building industry since 1970. She is a business consultant with the Lee Evans Group in Littleton, CO, and is a guest lecturer at universities and home builder seminars. She is an active contributor to and past chair of NAHB’s Business Management & Information Technology Committee. Has 'Accounting and Financial Management for Residential Construction'

"Accounting and Financial Management for Residential Construction, 4th Edition," available at, helps builders, developers and contractors understand how an accounting system operates and the basic principles for processing financial data. It includes the NAHB Chart of Accounts. To view or purchase this publication online, click here,  or call 800-223-2665 to order.

Run Your Business Better and More Profitably

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The NAHB University of Housing Offers Courses and Designation Programs

The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, click here.

Condominiums a Good Fit for Aging Baby Boomers

Builders and developers in the active adult market who are seeking to tap the potential of today’s aging baby boomers and who understand that what worked for previous generations isn’t the answer for this independent-thinking group are finding that the condominium lifestyle is a good fit.

Having just completed a ranch condominium community for our national franchise network, we have identified nine “must-haves” in condominium communities:

• Maintenance-Free Living. This always had been a key selling point for condominiums and will continue to be. Property management handles all the heavy lifting and time-consuming maintenance so home owners can spend time on the things they value most.
• Security. Boomers expect to travel — big time, according to many surveys. This means they don’t want to worry about the safety of their home, cars and favorite things when they are out of town for extended periods of time. Don’t overlook this must-have in your marketing.

  • Fitness Amenities. Boomers expect to become more physically active in retirement. They see the connection between fitness and long-term health. A must-have is a fitness center up to health club standards with 24-hour access. Paths for walking and cycling and proximity to a golf course, park or nature preserve are all extremely desirable amenities that will make your community more attractive.
  • Location, Location, Location. Unlike previous generations, many boomers don’t want to uproot and start a new life. They want to stay near family, friends and community resources and be close to shopping, entertainment and universities. Successful communities are located where the action is — in large and small metropolitan areas or in smaller, vital towns.
  • Neighborhood Atmosphere. Say goodbye to the traditional, barrack-style image of the condominium community. Boomers are looking for condominium communities that don’t look like condominium communities. For example, our company builds its communities on lushly landscaped grounds and designs them to look like villages of detached single-family homes.
  • Affluent Attitude. The largest segment of the market is looking for an amenity-rich home at an affordable, mid-range price point. While they’re willing to accept limited options, they want sophisticated accents such as fireplaces, ornamental light figures, wood cabinetry and Palladian windows.
  • Spacious Family Hub. Boomers may be downsizing from a larger home, but they still want ample room to entertain family and friends. We’ve found that condominiums with an open floor plan featuring a great room and cathedral ceiling are extremely popular.
  • Age Diversity. Contrary to the traditional formula, boomers don’t want to find themselves surrounded only by retirees like themselves. They want to live in a stimulating community with active adults of all ages or within a larger community of mixed generations. Don’t forget to reflect this diversity in your marketing materials.
  • Lifestyle. With more leisure time, active adults want to socialize, make new friends and belong to a vibrant community. They’re looking for more than housing; they want a lifestyle. They will scrutinize community amenities — the community center, fitness center and pool — because this is where lifestyle begins. Builders who ignore lifestyle proceed at their own peril.

Aging won’t change boomers — they’ll still be savvy customers looking for value and innovation. But by incorporating these nine must-haves in exciting, creative ways, innovative builders are sure to have success winning over the boomer generation to the condominium lifestyle.

Nanette Overly is director of sales and marketing for Dublin, OH-based EPMARK, Inc. She has more than 20 years of experience in the home building profession, with special expertise in marketing communities to active adults and retiring boomers. She has also been active in the Building Industry Assocation of Central Ohio as a Certified Sales Professional Course instructor and was a featured speaker at Building for Boomers & Beyond: Seniors Housing Symposium 2004. More information is available by e mail or call 614-781-1010.

Mark Your Calendar for NAHB's Seniors Housing Symposium 2005

"Building for Boomers & Beyond:" NAHB Seniors Housing Symposium 2005 is scheduled for May 16-18, 2005, in Chantilly, VA. Mark your calendars.

'Analyzing Seniors' Housing Markets' Available at

"Analyzing Seniors' Housing Markets," available at, examines the complexities of seniors' housing markets and explains what developers, investors and other professionals need to know to understand and operate in these specialized niches. The publication familiarizes readers with the various product types and how they relate to the needs of seniors. It also explains market analysis, consumer research, market segmentation, financial analysis, market maturation versus market saturation and gauging performance of seniors' housing. Three case studies of regional markets comparing the development trends of both independent and assisted living within each market are also included. To view or purchase this publication online, click here, or call 800-223-2665 to order.

Guadalajara Conference Explores Opportunities in Mexican Housing Market

The Mexican housing market is expected to top 719,000 new units this year as the purchasing power of the average Mexican grows and demand for middle-income homes explodes.

Builders and building product suppliers interested in entering this lucrative and growing market can get practical advice and make valuable business connections at the Partnership for Prosperity conference and concurrent NAHB trade mission in Guadalajara on June 27-30. Also participating in the conference is NAHB’s Mexican counterpart, CANADEVI.

The conference brings together U.S. and Mexican business and government leaders to discuss the state of the housing sector and growing opportunities to conduct business. Partnership for Prosperity was initiated by President George Bush and Mexico President Vicente Fox to stimulate economic growth and expand trade between the two countries.

The conference will feature a housing development roundtable with NAHB President Bobby Rayburn and CANADEVI President Héctor Aguirre. The two will also sign a partnership agreement reflecting the associations’ intentions to work together to exchange ideas, information and innovations in the housing sector. “NAHB looks forward to a long and productive relationship with our colleagues at CANADEVI” said Rayburn.

In industry professionals attending the trade mission will:

  • Participate in roundtable discussions with government officials and company officials from Mexico’s largest home builders
  • Tour low, middle and luxury housing developments in the area
  • Receive special briefings by the U.S. Foreign Commercial Service and Jalisco Construction Chamber
  • Participate in high-level networking opportunities
  • Witness the signing of the NAHB/CANADEVI partnership agreement

To register for the conference online, visit To register online for the concurrent NAHB International Trade Mission, click here.

For more information, e-mail Matt Monjan, or call him at 800-368-5242 x8419.

Upcoming Conference to Look at Workforce Innovations

The latest initiatives, federal policy developments and practices in workforce investment will be showcased at the Workforce Innovations 2004 conference in San Antonio on July 19-21. The annual event is sponsored by the U.S. Department of Labor and the National Association of Workforce Boards.

A highlight of this year’s conference, the largest of its kind in the nation, will be an address by U.S. Secretary of Labor Elaine L. Chao on recent workforce initiatives. Among those programs is “Skills to Build America’s Future,” an effort designed to promote careers in the skill trades that was announced by Chao at a press conference in April attended by NAHB President Bobby Rayburn and other construction industry leaders.

More than 2,100 workforce investment professionals are expected to be at this year’s conference.

Featured at the conference will be exhibits and plenary sessions and workshops on such topics as: building a demand-driven system; workforce development policy, budget and legislation; and one-stop expectations and program integration.

For on-line registration and conference updates, click here.

Job-Site Radio Provides All-in-One Power Center

Just coming onto the market, a new job site radio and CD player from Bosch Power Tools and Accessories has been designed as an all-in-one power center with unique features that are like nothing else available in today’s marketplace.

The Bosch Power Box is being manufactured by a division of the Robert Bosch Tool Corporation, which is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

Users of the Power Box can plug any electrical tool or equipment into a four-way GFCI power outlet, according to the manufacturer. Additional power resources provided by the product include an integrated battery charger and a 12-volt power outlet for charging cell phones, two-way radios or other devices.

The Power Box offers enhanced features such as preset equalizer settings to provide the best sound possible, says Bosch, and it includes 30 preset buttons for a built-in AM/FM digital radio, a front-load CD player with special anti-skip technology, an LCD clock display and an auxiliary jack for MP3 players.

To ensure that the Power Box withstands the wear and tear of being on the job, it comes in an aluminum roll cage and has an integrated antenna and sealed buttons, speakers and other components to protect if from the elements.

The manufacturer says the product is easy to handle and transport, and it is available wherever Bosch products are sold.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

Builder Ralph Manley, 80, to Re-enact D-Day Jump Over Normandy

On Sunday, June 6, Ralph Manley, a former World War II paratrooper and now retired hometown builder from Springfield, MO, will jump out of a vintage C-47 transport plane over the skies of Normandy — much like he did 60 years ago at the start of D-Day.

Manley will be wearing his old 101st Airborne Division uniform, which he proudly says still fits him. But there will be several major differences between this weekend’s jump and the one he did in 1944.

One difference, of course, is age. Manley is 80, a very fit 80, but 80 nonetheless. He was 20 when he made his D-Day jump.

Another is that Sunday’s jump is a reenactment, part of the 60th anniversary celebration of the historic D-Day invasion of World War II. Manley will be parachuting as the “senior” member — about 45 years senior to the oldest of the other members — of the Continental Airborne reenactment team based in Oklahoma.

He also will be jumping in broad daylight, and as he points out, “nobody will be shooting at me.”

Sixty years ago, Manley parachuted into occupied France in the middle of the night — 12:23 a.m. — his plane was burning and he was loaded down with gear and munitions, 50 pounds of explosives, several anti-tank mines, grenades, a flamethrower, K rations, chocolate bars, a medical kit and more. “We had to take all the things we might need with us,” Manley says. With all his gear and munitions, Manley weighed in at 417 pounds when he jumped.

Manley was a demolitions expert, and he and his fellow soldiers parachuted behind enemy lines to delay any German reinforcements that might try to reach the Normandy beachhead once the invasion began. They mined key roadway intersections, disrupted enemy communications, disabled German pillboxes and prepared bridges for demolition.

Manley was given a Purple Heart and awarded a Bronze Star for his service and valor that day. During the course of the war, he was wounded six times and earned two more Purple Hearts before returning to the States in November 1945 aboard a hospital ship.

A Budding Building Career

After the war, Manley didn’t venture too far from home. He attended Drury College in his hometown of Springfield on the G.I. Bill, married his wife, Jayne, and became a builder — slowly, the way it was done in the late ‘40s and early ‘50s. “I wanted to build my own home, and after it was finished, someone wanted to buy it,” Manley said. So he sold it for $1,500 and built another.

The money was good, so he kept building homes. He built two-bedroom homes back then, no garages and maybe two or three outlets in a room. “I kept building homes, and if someone wanted to buy the home I lived in, I would sell it and build another. That’s what we did then,” he said.

From this one-man shop, the business grew, his homes got more luxurious and he became a fairly substantial builder/developer in the Springfield area. By the time he retired five years ago, Ralph K. Manley & Company had developed 18 subdivisions and built 2,000 homes, mostly single-family, but also duplexes and apartments. “In my biggest year, we built 100 homes,” he said.

Along the way, two of his three daughters followed him into the business. They both now have their own building companies.

Manley was a charter member of the Home Builders Association of Greater Springfield, the local association he helped found in 1954. In the ensuring years, he was the association’s president three different times and remains an active member today.

“Ralph never misses our monthly membership meetings,” said Matt Morrow, the association’s executive officer. “He always introduces our guests because he does it so well. Ralph’s a completely unique individual.”

Though Manley is retired from the industry, he is in no way “retired.” He has been a member of the Springfield city council for five years and currently serves as the mayor pro tem. In fact, he’s been active in city politics for quite some time.

“I’ve been on the zoning and planning commission and I’ve helped with the building codes,” Manley said. “You want to be able to contribute.”

Calendar Guy

Manley didn’t bat an eye when Charlyce Ruth, the association’s office manager, asked him to participate in a project to raise money for community charities in 2003. Her idea was to create a “Home Builders Hunks” calendar with each month dedicated to a different charity and featuring a builder pictured in a pose that reflects his off-the-job interests.

Manley was Mr. February and posed jumping out of a small airplane for the American Diabetes Association. Ten of the 12 builders posed shirtless. Manley wasn’t one of them.

That might have been because that year, he also had the multipurpose room in his old elementary school named after him. Going shirtless probably wasn’t appropriate for the then councilman.

“Ralph is a great example to the rest of us,” said Morrow. “He was a war hero who came back to build a very successful business, literally from the ground up. And on top of that, he gives so much back to the community. He’s the personification of the American dream.”

Said Manley, “If I were a young man today just out of college, I’d do the same thing all over again.”

Calendar of Events

August 24, 2004 

2004 EOC Seminar

Destin, FL 

August 26, 2004 

2003 EOC Association Excellence Awards 

Destin, FL 

September 15, 2004

Innovation in Workforce Housing Awards


September 29-
October 3, 2004

NAHB Fall Board of Directors Meeting

Columbus, OH

October 7-9, 2004

The Remodeling Show

Chicago, IL

October 9, 2004 


Chicago, IL 

October 9, 2004

Remodelor™ of the Year

Chicago, IL 

October 23, 2004 

National Conference on Membership 

Memphis, TN 

October 27, 2004

Fall Construction Forecast Conference 

Washington, DC

October 31-
November 3, 2004

Building Systems Councils SHOWCASE

Austin, TX 

November 4-6, 2004 

State & Local Government Affairs Conference 

Biloxi, MS 

November 7, 2004 

2nd International Housing Conference of the Americas

Mexico City, Mexico 

November 12-14, 2004 

Custom Builder Symposium 

Indian Wells, CA 

January 12, 2005 

Best in American Living Awards 

Orlando, FL 

January 13, 2005 


Orlando, FL 

January 13, 2005 

The International Builders' Show 

Orlando, FL 

To view more meetings & events information on the NAHB Web site, click here.

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