Nation's Building News Online: June 28, 2004Print All Articles Text Version |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sponsored by Countrywide Home Loans National Builder Division |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pilot Home Buyer Counseling Program to Make Ten Lucky Families Home OwnersTen lucky families in St. Louis, Miami, Philadelphia, Seattle, Chicago, Atlanta, Detroit, Minneapolis, Columbus, OH, and Kansas City, MO, will be able to become home owners through Homewise, an innovative program unveiled on June 24 by the Department of Housing and Urban Development. HUD, in cooperation with the National Housing Endowment, Wells Fargo Home Mortgage and NAHB, hopes the program will encourage housing counseling nationwide by offering an opportunity to share in the American Dream of homeownership. Under the pilot program, the National Housing Endowment will purchase 10 HUD homes and will work with a local NAHB-affiliated builder to renovate each property using in-kind donations of labor and materials as well as $100,000 donations from Fannie Mae and Freddie Mac. Once restored, the homes will be sold to selected home buyers at a 50% discount. “The President is committed to increasing homeownership and creating new home buying opportunities for lower-income households,” said HUD Secretary Alphonso Jackson. “This pilot program will help accomplish his goal of creating 5.5 million new home owners by the end of the decade while also promoting the value of homeownership counseling.” “The National Association of Home Builders has an ongoing commitment to housing America’s working families,” said NAHB President Bobby Rayburn. “This pilot program goes directly to the heart of that effort by helping to provide affordable homeownership to families who would otherwise be priced out of the housing market.” To be eligible for the program, families must be first-time home buyers who have completed an approved housing counseling course and earn 80% or less of their area’s median income. The application period will continue through July. Those interested in applying can find information and an application on the HUD Web site at www.hud.gov/offices/hsg/sfh/nsc/homewise.cfm, or they can call 888-297-8685. After applicants are screened, a list of those who meet the criteria will be forwarded to local officials who will make the final selection randomly. Buyers will be required to sign a 15-year mortgage that is at or below the market rate, for an amount that is one-half of the home’s appraised value. They will also be required to sign a lien for the balance of the appraised value, which will be forgiven if they remain in the home and make timely payments for five years. “This program is certainly one of the highlights of National Homeownership Month, our educational outreach effort designed to provide important home-buying information and financial tools to families,” said Jackson. “While the nation’s homeownership rate is at an all-time high, just below 70%, minority homeownership rates fall well short of that. Creative efforts like Homewise will help reduce that margin.” Building News Coast To CoastHousing Crunch Revives Old Cities; Sun Belt Booms, Northeast BloomsSuburban cities in the Sunbelt and the Northeast are benefiting from home buyers' search for affordable housing, while some of the nation's oldest and largest cities are losing residents. Suburbs of Sun Belt cities such as Phoenix, Los Angeles and Las Vegas have experienced the most growth since 2000. Meanwhile, older cities in New Jersey, Connecticut and California that formerly had been in decline now are being revived as first-time home buyers, many of them immigrants, seek affordable housing in areas with easy access to major employment centers. One city that has experienced significant growth lately is San Antonio, which has claimed Dallas' slot as the eighth-largest U.S. city. Other major locales where growth has slowed or declined — such as Chicago, Boston and New York — have seen their populations expand into the suburbs. Online Permit System Coming for Contractors, BuildersBy March of next year, builders and contractors in Chattanooga, TN, will have access to an online system that will allow them to apply for permits, schedule inspections, renew licenses and submit project plans. The system also will let users check properties for permits and code violations. Builders and contractors approved the $10 permit fee that will be imposed to pay for the new technology. According to Associated General Contractors President Roger Tudor, the system will benefit both the city and the building industry by streamlining the permit process and helping to quickly add properties to the tax rolls. Black Women Rushing to Buy HousesConventional mortgages to single black women in the metropolitan Atlanta area mushroomed 114% between 1997 and 2002, making the demographic one of the fastest-growing home buying groups in the region. While unmarried African-American males actually recorded the greatest mortgage growth locally, single black females purchased more properties. Unwed women were treated as a credit risk by lenders 20 or 30 years ago; but, today they are benefiting from a combination of independent incomes, low interest rates and automated underwriting systems that eliminate race and gender biases. Foam HomeDesigners searching for ways to make inexpensive, earthquake-proof houses in Afghanistan are using expanded polystyrene, the same material used in coffee cups and packing peanuts. Builders have devised a building panel known as Thermasave that consists of a four- to 12-inch-thick core of expanded polystyrene fitted between two half-inch cement sheets. On a building site, the 120-pound, four-by-eight-foot panels connect like Legos. A Thermasave home can be framed in one-third the time required to erect a typical house made of sticks without the use of trained craftsmen. The new construction system will not only be employed for homes in Afghanistan but also for numerous residences set to be built in California and Texas over the coming few months. The nonprofit organization Shelter for Life International intends to construct 20 test homes this summer in Kabul, Afghanistan, with imported foam walls kept in place by wire mesh and hand-plastered with cement. Experts believe that a 226-square-foot house with walls that are 10 inches thick would need $523 in foam and $370 in concrete, compared with the $1,000 it costs to erect a typical mud-brick house. Construction Costs Seen RisingConstruction costs in the United States are expected to increase by 2.22% between the first and second quarters of this year, according to Turner Corp.'s quarterly forecast. The Dallas-based builder is reporting a rise in its building cost index from 631 in the first quarter to 645 in the second, driven by higher labor costs and the volatile steel and cement markets. "Although construction activity appears to be increasing, the overall competitive environment is counteracting some of the pricing pressure," notes Karl F. Almstead, a vice president at Turner. Fitness: New Home Exercise Rooms Focusing on YogaA number of home owners are moving away from traditional fitness rooms in favor of yoga spaces — complete with mats, mirrors, balance bars, laminated wood flooring and fountains. Experts say many yoga aficionados are young transplants from the West Coast or South American and Asian countries, but older home owners with achy knees and joints also are interested in practicing yoga in the privacy of their homes. Yoga rooms are popping up in new homes, but owners of existing dwellings can incorporate them as well. Floor space and a mat are the only essentials, but some go as far as transforming dens and offices into what some call "Zen rooms." Less Heat on U.S. InsurersWhile home owners insurance climbed 7.4% in 2003, the Insurance Information Institute is calling for growth of just 2.8% in costs this year. That gain, which puts the average premium at $608 per year, is the smallest in five years. The reasons behind the anticipated slowdown in the price of coverage include research revealed last month showing that "toxic" mold — which spawned $3 billion in payouts in 2002 — actually is not as big of a health risk as initially believed. Moreover, most states — 46, to be more precise — have relieved insurers of liability for mold claims; and frightened home owners who purchased terrorism riders have since calmed down. Hanley Wood Enters the Consulting IndustryAfter five years of negotiations, publisher Hanley Wood has completed its purchase of the Meyers Group consulting firm. Hanley Wood, publisher of Builder magazine, does not plan to reorganize or eliminate any positions. The Meyers Group informs builders and developers of the latest happenings in the new-home market. CEO Jeff Meyers will remain at the helm of the California-based company. Lukewarm Response to a Liquid AssetWhile many home buyers express initial interest in dwellings with swimming pools, they often change their minds when they take into consideration the amount of time and money that owning and maintaining a backyard pool requires — even when it is not in use. In general, pools increase the cost of a new home by $20,000-$40,000. Climate can play a role in buyers' attitudes toward pools. In warmer environments, for instance, they are part of the lifestyle, according to Gopal Ahluwalia, research director for NAHB; while in regions like the Northeast, pools are less desirable since they are in use only a few months per year. The buyers' family also can influence demand for a pool; many parents of young children prefer not to buy a home with a pool because of the risk of drowning. To avoid this potential hazard, experts recommend that home owners install high fences with secure, child-proof locks. Community pools can be an attractive alternative at condominium and new-home developments because maintenance costs usually are covered in condo and home owner association fees. Indoor pools, meanwhile, appeal to older condo buyers — who can use them for therapeutic purposes. Nextel Offers Voice Memos Sent as E-MailNextel Communications' new NextMail service lets users send voice messages recorded on their mobile phones as e-mail messages. The service, described by Nextel spokeswoman Cheryl Hawkins as "an evolution of the push-to-talk service," costs just $7.50 per month. Users simply key in the recipients' addresses at Nextel's Web site, select as many as 50 addresses on their phone screens, record the voice mail and send it as an MP3 file. No other cell phone provider offers the service at this time. I'll Take Color Laser Printers for $500Hewlett Packard recently rolled out an affordable color laser jet printer for small businesses. The $499 HP 2550L prints 20 pages-per-minute in black and white and four pages-per-minute in color. Users will shell out 12 cents for every color page and 2.4 cents for every black and white page printed by the machine. Though the HP 2550L offers good print quality, it prints slower than other color printers in the same price range. It is also fairly bulky at just under 50 pounds and holds only 125 sheets of paper at a time. Small businesses that want to link their printers to a network would be wise to spend $600 on the HP 2550LN instead. Wireless Godsends for BusinessesScores of companies want to bolster productivity through technology, and wireless capabilities will be among those adopted to achieve greater efficiency. Cellular phones, for instance, now link to the Internet, send e-mails and track stocks and bank accounts, among other tasks; and users might be able to connect them to their desktop computers sometime in the near future. Nextel Communications already offers phones that transfer data in real-time and let companies track the locations of their employees. Meanwhile, insurance adjusters are using Sprint's cellular service to handle claims in the field, find local repair shops and immediately cut checks for claimants. Furthermore, mobile workers will soon be able to access accounting systems, inventory and other back-end data located behind company firewalls with the help of IBM's Web Sphere. "The overarching goal is the true mobile office," says palmOne spokesman Jimmy Johnson. Congress Passes Long-Term Authorization for National Flood Insurance ProgramIn a victory for the nation’s home builders, the Senate on June 15 approved S. 2238, flood insurance legislation that reauthorizes the National Flood Insurance Program (NFIP) through Sept. 30, 2008. The House passed the measure on June 21 and the bill is expected to be signed into law shortly by President Bush. The legislation addresses the most important aspects of NAHB’s flood insurance policy: long-term, four-year reauthorization of the national flood insurance program and full eligibility for property owners and “severe repetitive loss properties.” Earlier this year, lawmakers extended the Federal Emergency Management Agency's (FEMA) statutory authority to issue flood insurance polices until the end of this month. The four-year reauthorization plan approved by the Congress will ensure the long-term viability of the program. In addition to reauthorizing the NFIP, the bill establishes a $40 million pilot program to reduce repeated payments to owners of a few relatively flood-prone areas that are considered "severe repetitive loss properties." Under the pilot program, owners of severe repetitive loss properties who refuse mitigation assistance and who suffer additional, costly flood damages would face an increase in their premium after each flood-insurance claim. However, the premium can never exceed market rates for flood insurance. NAHB successfully lobbied lawmakers to ensure that all properties located within a FEMA-designated flood plain, including severe repetitive loss properties, remain eligible for flood insurance. While the legislation addresses all of NAHB’s objectives, the association was seeking additional guarantees that redevelopment could occur on FEMA-purchased properties, but the authors of the bill did not want to encourage redevelopment in flood-prone areas. However, NAHB was able to ensure that under the severe repetitive loss pilot program, flood damaged structures can be demolished and rebuilt in an effort to prevent future flood damage. Specifically, the legislation:
To view the bill, click here and type S. 2238 in the upper left hand corner. For more information, e-mail Jim Tobin or call him at 800-368-5242 x8470. Housing SnapshotMortgage interest rates subsided slightly last week, and Freddie Mac economists are predicting that they will remain in the affordable 6%-7% range for the balance of this year. In the last week, the Commerce Department has released a wealth of statistics indicating that the economy continues to grow vigorously. The Gross Domestic Product was 3.9% in this year's first quarter, down slightly from 4.1% in the previous three months; consumer spending was up 1% in May, the strongest increase in two-and-a-half years; and incomes in May were up 0.6%, following an identical increase in April. Inflation in the first quarter averaged 3.2%, up from 1% in the final quarter of 2003. The rate of inflation will dictate how rapidly the Federal Reserve Board pushes up interest rates in coming months, but so far the consensus is that prices will remain fairly well behaved despite today's convincing pick-up in the nation's economy. On the lumber front, prices continued to recede. Framing lumber dropped $10 to $409 per 1,000 board feet, according to Random Lengths. The price of 15/32-inch 3-ply CDX southern west-east plywood dropped $40 to $315 per 1,000 square feet, and oriented strand board was down to $300, also representing a $40 decline from the week before. Mortgage Interest Rates30 Year Fixed Rate: 6.25\% Housing Starts: May 2004Total: 1.97 million\% New Home Sales: May 2004 *1.369 million Existing Home Sales: May 2004 *6.80 million * Seasonally Adjusted Annual Rate You Can Help Solve the General Liability Insurance ProblemCosts for insurance are skyrocketing, and in some markets, builders can’t get coverage at any cost. 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 www.nahb.org/gli. 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. Bursting Bubbles and Other Housing MythsBy Mick Pattinson This might shock these amateur economists, but housing prices are not primarily a function of interest rates. Housing prices are set by two forces (stop me if you’ve heard this one): supply and demand. We pretty much know what demand is going to be. Nationwide, it’s about 2 million homes a year. In California, it’s about 250,000 units annually. That part of our housing destiny is set by demography and will not change soon — not as long as people keep having babies that grow up and want their own homes. What changes is supply. In California, we build nowhere near the number of homes that our customers demand. The headlines tell the story. Day after day, we are assailed by news stories that describe the “environmental victories” of local governments taking tens of thousands of new homes off the drawing boards and off the market. In California, it is now fashionable to talk about a housing crisis, while ignoring the environmental restrictions that created it. Strip away the word “crisis,” and what is left is the truth. What we have is a man-made shortage, not a crisis. The shortage of new homes is the fundamental factor driving prices higher and higher, not interest rates, high or low. Make no mistake, interest rates matter — but not as much as a new family willing to commute 100 miles a day just to find an affordable house. And not as much as NIMBYs determined to stop new construction, new roads and new schools for whatever reason they can make up at the time. For those still talking about a bubble, let them come to Murrieta, CA. Two years ago, my company opened an affordable condo project that sold faster than we could build it. Today, these same units, after experiencing a 30% annual increase in value, disappear in hours when they are put up for resale. It’s not the interest rates that are causing this almost desperate hunt for new, especially first, homes. It’s the shortage. Almost every housing market in America has seen the crushing aftershocks of these environmental “victories.” Many of these areas have also seen a healthy increase in prices. We are seeing lots of reasons why, all supporting the same irrefutable fundamental: anywhere we stop building homes, prices will rise. Federal Reserve Board Chairman Alan Greenspan recognized the long-term stability of housing prices when he said recently that, “It is worth bearing in mind that any sustained increase in rates presumably would occur only in the context of a more vigorous upturn in the pace of business activity, suggesting that the net effect on housing might be relatively limited.” He went on to say that, “Clearly, after their substantial run-up in recent years, home prices could recede. A sharp decline, the consequence of a bursting bubble, however, seems most unlikely.” Houses are not pork bellies or tulips. People buy them — and hold on to them — because they need them. The overwhelming majority of home buyers are not speculators or even investors. They just want a place to live. That doesn’t change because interest rates might tick up, or environmentalists discover a new species of rat. Long before any bursting bubble, we will see more rental vacancies, housing taking longer to sell, foreclosures staying on the resale market longer; and other indications of economic anemia. We are not seeing even a hint of these indicators today. The housing market will not stay the same forever. At some point, the demand for multi-million dollar estate homes on lots with a view may diminish. But for every couple seeking that kind of high-end trophy home, thousands of young couples with children in strollers patrol our models every weekend looking for their first home and their first stop on the ladder of homeownership. These people are not going to disappear like some bubble. Their desire for a new home, their first home, and their willingness to do anything to get it, are just about as real and solid and lasting as a rock. And rocks don’t burst. Michael “Mick” Pattinson is president of Barratt American in Carlsbad, CA. Home Energy Efficiency Tax Credits Still Stand a Chance in CongressResponding to high gasoline prices, the House on June 15 approved H.R. 4503, a comprehensive energy package that includes home energy efficiency tax credits supported by NAHB. The bill, which was approved by a 244-178 margin, is identical to H.R. 6, legislation that cleared the House last year and is now stalled in the Senate. The Senate is unlikely to act on the House measure because several Senate Democrats oppose a provision in the bill that would grant liability protection to producers of methyl tertiary-butyl ether, or MTBE, a gasoline additive that has contaminated groundwater. However, there is still a chance that Congress will approve legislation that contains home energy efficiency tax credits. The Senate recently voted to incorporate the tax incentives from the overall energy package — including the home energy efficiency tax credits — into S. 1637, the “Jumpstart Our Business Strength” (JOBS) bill that passed the chamber last month. The energy credits included in the Senate bill would provide powerful incentives for millions of home owners, renters and buyers to conserve energy and save hundreds of dollars annually in utility costs. Specifically, the legislation would provide:
The House on June 17 approved its version of S. 1637, but it does not include home energy efficiency tax credits, and will have to be reconciled with its Senate counterpart in a House-Senate conference. NAHB will urge the conferees to include the home energy efficiency tax credits in the final conference report. To read the legislation, click here and enter the bill number in the box at the upper left. Builders Continue to Urge Commerce Secretary Evans to Help Alleviate Cement ShortagesWith the Commerce Department announcing record new home sales for May and builders in Florida and across many parts of the country reporting difficulties meeting their construction schedules due to a shortage of cement, NAHB last week reiterated its call to the Administration to eliminate barriers to imports of cement from Mexico. “The U.S. has long relied on imports of cement to supplement limited domestic production capacity, and as the economic recovery proceeds, demand for this critical building material continues to grow,” said NAHB President Bobby Rayburn. On May 28 and June 4, NAHB wrote to Commerce Secretary Donald Evans to report that builders were experiencing cement shortages in a number of states. To help ensure that there are adequate domestic supplies, NAHB urged the Administration to eliminate, at least temporarily, the high anti-dumping duties on Mexican cement. “Today, as the situation deteriorates, we urge the Administration to take prompt action to help increase supplies and to relieve upward pressure on cement prices, which have soared in recent months,” said Rayburn. In 2003, about 20% of the cement used in the U.S. came from imports. Strong demand from China, which produces and uses more than 40% of the world’s cement, has monopolized the ships needed to carry products to the U.S., and that has led to tight cement supplies in some areas of the country. Mexico is the most logical source of supplementary imports. A cement shipment from Asia takes 44 days on average to arrive at a U.S. port, compared to a delivery from Mexico, which can be made in only four days. However, an anti-dumping duty of $57 per ton makes Mexican cement financially infeasible. Cement is the key ingredient in concrete, and concrete is used for housing in everything from foundations, driveways and sidewalks to, in some cases, even full construction. A report released this month by the Portland Cement Association has found evidence of cement shortages in 23 states. “U.S. consumers of cement need a reliable, efficient source of supply for that portion of the U.S. market that must be met by imports. Mexico can meet much of that demand if allowed to do so,” said Rayburn. San Diego Builder Forecasts Moderation in California's Harsh Climate for HousingIn a state bedeviled by housing supply shortages both in good times and bad, prospects for California’s residential construction industry may be looking up, with the election of a new governor and growing concerns in the business community that the supply of affordably priced housing for their workers has just about run out in major growth areas along the Pacific coast, according to Sherman Harmer, president of the California Building Industry Association (CBIA), at a PCBC press conference in San Francisco on June 16. As in the rest of the nation, recent times have been good for home builders in California, with production slowly increasing from the trough of the mid-1990s and expected to surpass the 200,000-unit mark this year, according to CBIA. But supply has lagged behind demand for 13 consecutive years, the association says, and that housing deficit continues to accumulate. Citing findings by the California Department of Finance, NAHB President Bobby Rayburn told reporters at the annual conference that “builders in this state will need to construct about 230,000 homes and apartments per year over the next 10 years just to keep up with demand from newly forming households, immigrants and the loss of obsolete housing units.” “In high-growth metropolitan areas across this country, we’re seeing time and again that local governments don’t have the political will to prioritize affordable workforce housing,” Rayburn said. Rayburn recounted a newspaper account in March of a family earning $100,000 a year pulling up stakes from Los Angeles and moving to Las Vegas because they couldn’t afford to buy a home in that area. A median-priced home in Los Angeles costs about $400,000. He also said that impact fees, a major cost-factor in California, have reached as high as $110,000 a unit in one community in the San Francisco Bay area. The encouraging news, in Harmer’s view, is that the political climate in California — which has been anathema for the building industry — is starting to shift in response to mounting worries among corporate leaders that the state will soon experience a mass exodus of jobs unless it comes to grips with solving its housing woes. “Every level of government — on a state, regional and county basis — has been coming to us and asking for help,” Harmer said. “They are asking, how are we going to be able to provide incentives to get you to build where we want housing?” In the new emerging climate, “new housing will be just as important as water, just as important as highways and just as important as any other piece of the infrastructure,” Harmer said. “If you don’t have it, you can’t have jobs.” At the top of the agenda, the state association president predicted that “the biggest change since Proposition 13 in how we tax housing” is headed for the ballot box. Current tax law encourages localities to favor commercial over residential development, he said, because they can keep only 13% of residential property tax and they have to send the rest to Sacramento. “We have to reconnect jobs with rooftops,” said Harmer. “We can’t afford two hour commutes; the quality of life is horrible.” Solutions include mandating a 20-year supply of land zoned for housing and redevelopment of built-out cities in coastal zones, he indicated. Joining in the effort to provide housing for the state’s workforce, Harmer said that his company, Urban Housing Partners, is building at a density of 400 homes to the acre in a 19-story high-rise in downtown San Diego. First dibs on the properties will go to people who work downtown.
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. New Home Sales Surge to Record Level in MayFueled by the continuation of an outstanding climate for housing finance and solid potential for home price appreciation, sales of new single-family homes rose in May to a record-high seasonally adjusted annual rate of 1.369 million units, the Commerce Department reported on June 24. This was 14.8% ahead of April’s upwardly revised sales pace. “This is one more confirmation of what builders in the field continue to report: buyer demand for new homes remains strong as the economic expansion strengthens and job growth accelerates,” said NAHB President Bobby Rayburn. “And NAHB’s Housing Market Index for June only shows continued high levels of home sales and builder confidence.” Rayburn added that a thin supply of new homes for sale provides a further indication of the ongoing “health and good balance of this market.” The Commerce report showed that inventories of unsold new homes in May were down to a 3.3 months’ supply at the current sales rate. Sales of new single-family homes in May posted double-digit gains in some regions, most notably in the Northeast, where they jumped 53.2%. The South and West registered 20.3% and 6.5% gains, respectively, while sales in the Midwest were flat following strong sales in April. “The extraordinary sales pace for May probably involved some acceleration of transactions in anticipation of higher interest rates down the line,” said NAHB Chief Economist David Seiders. “But it’s clear that underlying housing demand is quite strong and the current supply-demand balance is excellent.” NAHB is now forecasting another record year for new home sales in 2004, Seiders said. In addition, “this powerful performance in the second quarter will certainly keep housing as a strong, positive component of the nation’s Gross Domestic Product,” he said.
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 Re-Sales Set New Record in MayMay was a record month for existing single-family home sales, which climbed 2.6% to a seasonally adjusted annual rate of 6.8 million units, the National Association of Realtors® announced on June 25. The previous record for housing re-sales was 6.68 million in September of last year. The rate of this May’s existing home sales activity was 15.8% ahead of the same month a year earlier. David Lereah, the Realtors® chief economist, attributed the strong showing to fence straddlers deciding to make their move to buy before mortgage rates increase any further. While noting that “fundamentals are still very favorable for a vibrant market,” Lereah said that home sales probably will not peak again for a while. Despite an expected slowdown in sales during the second half of the year, “they will remain at strong levels and 2004 is on track to be a record,” he said. The median existing-home price was $183,600 in May, a 10.3% increase from a year earlier. “The growth in home prices hasn’t slowed yet, but in the second half of the year we’re expecting an ease in sales to take some of the pressure off of appreciation rates resulting from lean inventories of homes available for sale,” said Walt McDonald, the association’s president. “This will be a healthy change for the housing market because slower appreciation will help to preserve favorable housing affordability conditions in the future.” The inventory of unsold homes rose 0.8% in May, reaching a 4.2-month supply at the current sales pace. May sales were up 5.5% in the West and 3.8% in the South; they declined 0.7% in the Midwest and 1.4% in the Northeast. Show Me the Money: New Overtime Pay RulesIf you’ve heard about the new overtime pay rules issued by the U.S. Department of Labor (DOL), you’re probably wondering how they affect your business. The regulations were issued this April under the Fair Labor Standards Act and will go into effect on Aug. 23. Here’s a summary of the most significant changes:
What Doesn’t Change “Outside sales” employees are not affected by the revised minimum salary requirements. They can still be paid on commission without a guaranteed salary as long as their duties and work location meet the revised outside sales exemption test requirements found on the DOL’s Web site. Non-management employees in production, construction and similar occupations like carpenters, electricians, plumbers and laborers are classified as blue-collar workers and are entitled to overtime pay. They are not exempt under the new regulations no matter how skilled they are or how much they earn. “They could possibly qualify for the highly compensated employee exemption,” says David Crump, director of NAHB’s Legal Research Program, “but that’s not very likely.” Crump offers some tips for classifying superintendents and project managers, who seem to straddle the blue-collar/white-collar line:
What Does This Mean for Your Business? “I don’t think [the new overtime pay regulations] will have much impact on the average home builder,” says Bob Whitten, vice president of SMA Consulting in Colton, CA, and a member of NAHB’s Single Family Small Volume Builder Committee. “Administrative staff earning less than $23,660 a year are usually paid by the hour and rarely get more than 40 hours per week. Most field labor is contracted, so there is minimal impact there.” Whitten is right that the regulations probably won’t result in a sea change in home builders’ and remodelers’ operations. However, you should take the following steps recommended by CCH, Inc.’s Health and Human Resources Group to manage payroll costs and make sure you’re in compliance with the new overtime pay regulations:
Crump points out that the definitions for administrative employee exemption have changed to “more of a position of responsibility.” It’s important to familiarize yourself with the duties tests and, if necessary, ask your lawyer for help in interpreting them. You can also call the DOL’s toll-free Wage and Hour help line Monday through Friday 8 a.m.-5 p.m. at 866-487-9243, or use the online form to ask questions. “Employers have to be careful of classifications, which they did under the old rules,” says Lucy Katz, vice president of customer service and client development for Austin, TX-based Katz Builders, and a member of NAHB’s Single Family Small Volume Builders Committee. ‘You need to make sure the classification meets the job description. That’s why it’s so important to have written job descriptions.”
One More Thing…
Whether you’re writing job descriptions for the first time or are revising your current ones, get a copy of "Job Descriptions for the Home Building Industry, Third Edition." It contains 40 job descriptions for home building industry employees, plus sample company organization charts, job description forms, electronic documents on CD and other tools. Order it from BuilderBooks.com by calling 800-223-2665 or click here to order it online.
Run your business better and more profitably! Just click www.nahb.org/biztools to access hundreds of timesaving, moneymaking and cost-cutting resources. You’ll find guidance in a concise, easy-to-read format on topics like financial management, production, sales and marketing, customer service and human resources … to name just a few! Plus, get answers to your tough questions about how to use software to improve your bottom line in the Talk About Business & IT section. The NAHB University of Housing Offers Courses on Business Management The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Home Builders Endorse Strengthening Housing Goals of Fannie Mae, Freddie MacNAHB has endorsed strengthening HUD’s affordable housing goals for Fannie Mae and Freddie Mac to ensure that the two secondary market institutions diligently pursue their mission to house America’s working families and other underserved communities. “NAHB commends HUD for its efforts to increase mortgage financing for home purchasers and rental housing, and we are working with Secretary Alphonso Jackson to enact housing goals that are challenging, yet do not jeopardize or impede the ability of Fannie Mae and Freddie Mac to provide liquidity to the broader housing finance market,” said NAHB President Bobby Rayburn The comment deadline to weigh in on HUD’s proposed affordable housing goals for Fannie Mae and Freddie Mac was extended to July 16 after NAHB and other housing groups urged the cabinet agency to grant an extension."We commend Secretary Jackson's decision to extend the comment period, which will give NAHB and other housing organizations the ability to work with the Bush Administration to establish more meaningful goals," Rayburn said. NAHB will use the additional time to analyze the data and assumptions that underlie HUD's proposed goals and to formulate recommendations that would make the goals more effective in addressing unmet housing needs. Stating that there are still too many underserved areas with critical housing needs, Rayburn highlighted key market segments where the two institutions should be encouraged to increase their lending activities. “NAHB is asking HUD to reinstate the goals’ bonus point system,” said Rayburn. “The bonus point system is a targeted approach which proved to be effective in encouraging Fannie Mae and Freddie Mac to assist with small multifamily projects. To ensure that HUD continues to utilize this targeted approach, we will ask HUD to reinstate the bonus points for specific housing segments that require added attention, such as rural areas and other underserved borrowers.” “Boosting the homeownership rate among previously underserved populations should be an essential focus for the two housing enterprises,” Rayburn added. While many policy makers have suggested “reform” measures to curb the growth of Fannie Mae and Freddie Mac or even remove their status as housing government-sponsored enterprises (GSEs), the nation’s home builders believe these steps would have harmful effects and would prevent the GSEs from fulfilling their mission to finance affordable housing at the lowest possible cost to America’s households. “A better approach would be for HUD to establish a more challenging goal system for the GSEs while enabling them to carry out their job of providing liquidity to the housing finance system,” said Rayburn. “We look forward to working with the Administration and others in the housing community on this important issue.” Job Safety Training for Latino Workers Needs Special FocusBy Julie A. Pace Providing all job safety materials in Spanish is the obvious place to begin this effort. This should include videos, safety manuals and other training materials such as weekly toolbox safety talks. Using diagrams and drawings and designating foremen or safety monitors with colored hard hats or safety vests are also effective approaches. But language alone does not account for the unique challenges of training the Spanish-speaking workforce. To maximize the effectiveness of a job safety training program for Latino workers, employers need to understand that there are unique cultural differences and that their workers may very well be coming from countries with lower standards of job safety. In addition, there is a high illiteracy rate among Spanish-speaking workers, so it should not be assumed that written safety policies have been read and understood even when they have been translated into Spanish. Training and monitoring are needed to develop work habits that minimize risks of injury, and some companies are training English-speaking supervisors, superintendents, foremen and safety directors to learn Spanish so that they can communicate effectively with workers. When trying to create a culture of safety, employers and their safety directors and supervisors should understand that Spanish-speaking workers tend to comply with safety policies and procedures when they are given an explanation for a rule, but are not as likely to follow orders merely because the supervisor tells them to do something. For this reason, additional time may be necessary to complete safety training. Companies also need to understand that Spanish-speaking workers can be uncomfortable with interviews by OSHA and others in any litigation or administrative process. Workers need to be adequately prepared to participate in the process to ensure that they provide accurate and complete information. Otherwise, they may have a tendency to give the answers that they believe the person asking the questions wants to hear, and that can create some complications for the employer. For example, Spanish-speaking workers often will deny to OSHA that they have received training, even when they have attended numerous training sessions. When confronted with documentation showing their attendance, they will respond that they were nervous or didn’t understand the question. In investigations of a fatality on the job, Spanish-speaking workers may be reluctant to tell the truth because they do not understand the no-fault foundation of the U.S. workers' compensation laws and believe that what they say may result in the denial of benefits to the family of the individual who passed away. Sometimes an explanation about workers' compensation benefits can lead to the truth. Companies may want to consider submitting affidavits in Spanish and English and using translators at important interviews or hearings. It is always a good idea for a company to have its own translator at these proceedings to ensure that the official court translation is correct; often, it is not. Companies also need to make a special effort of teaching employees to report unsafe situations or hazards to their supervisors. As Spanish-speaking workers become an increasing presence on home building sites around the country, providing the knowledge, the tools and the resources for job safety needs to be a top priority of their employers. By finding the right expertise to open up good channels of communication, establishing an effective job safety program for Hispanic workers is a goal that can and must be achieved. To read more in this issue about OSHA and NAHB resources for Hispanic worker safety programs, click here. Julie A. Pace is a partner with Stinson Morrison Hecker LLP and regularly defends companies in cases involving employment and OSHA. She has represented the Home Builders Association of Central Arizona for more than a decade and is active in the residential construction community. OSHA and NAHB Provide Resources for Hispanic Worker Safety ProgramsWith evidence showing rising numbers of job-site fatalities and injuries among Latino workers at a time when the trend has been moving in the opposite direction for the U.S. workforce overall, focusing on improving the safety of Spanish-speaking employees should be a major concern of home building companies, according to experts in occupational safety, and there are a number of resources available to assist in this undertaking:
To read more in this issue about the focus on job safety training for Latino workers, click here. For more information on this issue, e-mail Rob Matuga at NAHB or call him at 800-368-5242 x8507. Active Adult Communities Don't Need AdvertisingWhat the heck do I mean; active adult communities don’t need advertising? Sacrilege! Sacre bleu! Say it isn’t so! It is so. Basically. And that is a pretty big statement when you consider that the person doing the stating, yours truly, has been the head of a real estate-specialist advertising agency for decades. But remember that advertising takes many forms. And the form most people assume to be “real” advertising can best be described as “media advertising.” Newspaper and magazine ads, radio and TV commercials are most often cited when the question of “what is advertising?” gets asked. So then, my statement is essentially true. Active adult communities, if marketed properly, should not rely on media advertising to a very large degree, if at all. The real workhorses — direct-mail letters, postcards, on-site events, phone calls, press releases (news articles) and signage — do most of the “advertising” heavy lifting for active adult lifestyle communities. And they do it more effectively, in a more targeted fashion and at a much greater degree of cost efficiency than expensive mass media. Build a Database When an adult community is about to open with or without model homes and any recreation facilities in place, the first critical task is to build a database. In my experience, this is best accomplished not by ads in the newspaper, but by database marketing. This takes the form of direct response/direct mailings to:
Merchandise So Your Homes Will ‘Sell’ Themselves Since “merchandising” also is a form of advertising, the sales/information center and properly merchandised model homes become a critical part of your so-called advertising efforts. How they look, how they make prospective buyers feel, and what they say about the living experience to be enjoyed at the community will affect the pace of sales, and the level of sale prices, as much or more than anything. Anyone who has ever visited a Ralph Lauren store, strolled through F.A.O. Schwartz or shopped for food at Zabar’s or Dean & Deluca knows that merchandising is an invaluable form of “advertising” for any retailer. And make no mistake, real estate developers and home builders are “retailers” in every sense of the word. The theme, décor, color scheme, furnishings, accessories and overall “feel” of your sales and information center will either help you sell homes, or hinder you. Your model home showcase also is a crucial merchandising opportunity. Furnished and decorated model homes outsell unfurnished models more than 2˝ to 1. And model homes that show customers how that home “lives” command higher prices than models that fail to adequately showcase their design and lifestyle attributes. In a well-merchandised model home, small rooms look bigger, big rooms look warmer and more inviting and highlighted features will stand out and “sell” themselves. This is particularly true if you merchandise special sexy features such as outdoor kitchen/barbeques, media rooms, spas, wine cellars, writing lofts, art studios and other amenities that are aimed at the “hot buttons” of today’s young-at-heart 55-and-older folks. Themed communities generally outsell communities without a themed focus. Communities that clearly portray a distinct “personality,” as you would probably expect, outsell developments that don’t. Lighting, landscaping, waterscaping and accessorizing (exterior accessories include foot bridges over artificial ponds or lakes; fitness trail workout stations; gazebos; band shells and the like) give a sense of life to new adult communities and help create the perception that this is indeed a great place to live and play. The Community’s Entry Will Make or Break You I always have believed that a beautiful, welcoming entry creates a sense of arrival that influences every other aspect of a customer’s visit to a new housing development. If the entry wows, then the customers will be more inclined to like the models, buy a home and feel good about living in this new place. So, if you do a stellar job of researching, merchandising, decorating, direct marketing, creating signage as well as promoting an impressive sense of arrival, you may not need any so-called “advertising” (i.e., newspaper ads, radio spots and TV commercials). Certainly, you will not need as many of them. I have told many clients to take money from media budget and put it into more landscaping, a better entry and a more appealing sales center. Why do I advise builders to spend less on ads (which certainly doesn’t add profits to our ad agency’s bottom line)? Because for active adults, this is what works best. Rick Nulman is the CEO and chief marketing strategist for Pace Communications, a full-service advertising, marketing and public relations company with offices in New York City, and Orlando and Boca Raton, FL. Nulman is the winner of three grand National MIRM Awards for advertising and has written for numerous publications and been a featured speaker at conferences, including the NAHB International Builders’ Show. Nulman is a member of the NAHB Seniors Housing Council. He can be reached by e-mail or at 212-818-0100.
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. Learn More About Seniors Housing Through the Seniors Housing Council To learn more about seniors housing, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292. 'Analyzing Seniors' Housing Markets' Available at BuilderBooks.com "Analyzing Seniors' Housing Markets," available at BuilderBooks.com, 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. Design Trends: There's a Lot More Going On OutsideThe final in a three-part series about design trends — this focuses on exterior design. NAHB’s Design Committee members and other NAHB design professionals gather annually for a roundtable discussion about upcoming trends in architectural design, community design, interior design and general housing. The following are some of their observations about exterior designs: Wanted: More Creativity Builders should incorporate as much creativity in the design of their exterior elevations as they do in their floor plans. This includes understanding and incorporating regional and local design elements specific to the area where you are building.
Windows Are Taller, Ceilings Are Lower (Relatively Speaking) Windows are taller, and more nine-, 10- and 12-foot ceiling heights are evident as compared to the up-to-20-foot ceilings of the recent past. Exterior Accents Are Moving Inside Exterior accents and materials are now appearing inside the home.
In the East, buyers are seeking less volume but asking for more skylights.
The sides and rear of the house are becoming more important to the overall design of a house. The entire community benefits when attention is paid to the design of these areas.
Here’s a tip from the New Urbanists: when deciding what to offer in a new community, try offering six to eight different architectural styles that “fit” your region rather than one design or one style of home. By offering multiple designs, you will reach and satisfy a wider variety of home buyers and avoid creating a “cookie-cutter” community. This approach may be difficult to achieve, however. Making a floor plan fit different architectural styles and exteriors is hard to apply. So builders should use authentic design elements.
Regional designs are breaking out of their regions. Designs from the South are making their way to the North and vice versa. This works well if the designs incorporate solid materials and are true to form.
Multifamily design is moving away from “one big building” approach. Instead, garden-style designs and contemporary exteriors are becoming more evident, especially in East Coast multifamily residential projects.
Drywall niches for televisions and entertainment centers are still in demand, but the trend now is to make them “disappear” and have them look more like furniture, i.e., built-ins and cabinet systems. These systems are also being offered in garages.
Don’t take destination spaces for granted. Buyers want more attention paid to those special/intimate spaces such as sunrooms located off of master suites, library spaces around a corner, hobby rooms, Internet niches and commercial style kitchens.
Big or Small? It Depends on Where You Build Homes are getting bigger in North Carolina, Louisiana, New Jersey, Texas and Colorado. They’re getting smaller in Ohio and the Southwest.
From a design and building standpoint, one solution is to use better, less expensive and more aesthetically pleasing materials, as well as include affordable details and add custom touches to production cabinetry. In addition, price adjustments can be made with upgrades and options. Builders, even in a slower market, should offer new designs even though they may have to scale down their overall budgets. Sound design can be simple and attractive and can and should be incorporated into all price points, especially since buyers are more knowledgeable about good design and expect it in their homes.
Builders should focus on emerging markets, including the hot buyer segment called “cultural creatives.” This segment wants more compact spaces and natural materials both within and outside of the home. What’s more, these spaces must be functional. Design is more natural, so use indigenous materials and weave a thread through the entire house…quality, character, patina, etc.
For more information about the NAHB Design Committee, click here, or e-mail Michelle Persinger Matuga. Best in American Living Awards Entries Due in JulyEntry applications and fees for the 2004 Best in American Living Awards (BALA), the most prestigious new home design competition in the home building industry, are due in July.
Co-sponsored by Professional Builder magazine and NAHB, BALA is open to builders, architects, designers, developers, land planners and interior designers. Now in its 21st year, BALA has grown to 41 categories, ranging from single-family attached and detached homes in a variety of sizes, to custom homes, rental developments, best community and one-of-a-kind spec homes. The competition also includes the Best Affordable Home category, the U.S. Department of Housing and Urban Development Secretary’s Award for Excellence and the Best Smart Growth Community award. Additional design categories include best kitchen, best bath, best specialty room and best detail. Entries are judged on: exterior design/curb appeal, interior architecture and interior design, sales success of the product, construction quality and cost efficiency, and the site plan. Entrants are advised to submit good photographs along with their entry notebook so that the judges can evaluate architectural elements of the project. Floor plans are evaluated for their livability; considered are such elements as accessibility of the kitchen from the garage, traffic flow through the home, the relationship of formal to informal space and how adult areas relate to those for guests or children. Entrants are also asked to identify their market; judges consider the plan within the context of the identified market to ensure it makes sense for the region and has market acceptance. Winners will be announced at the International Builders' Show in Orlando, FL. Winning entries will also be displayed on the Professional Builder Web site, HousingZone.com, for up to one year. For information, eligibility requirements and application forms, click here, or contact Professional Builders' Judy Brociek (630-288-8184) or Colleen Paez (630-288-8168) or Michelle Persinger of NAHB at 800-368-5242 x 8343. Three Critical Tips to Making Your First Sales Call a SuccessI don’t care how long you have been selling or whether or not you have taken formal sales training. If you have been in this business for any length of time, you can relate to the following do's and don’ts of making a positive first impression. Don’t bad mouth the competition; it just might be you! That’s right. How many times did mom tell us, “If you can’t say something nice about somebody, then don’t say anything at all”? While pointing out the differences between you and your competition is fine, don’t reach too far beyond that. Learn from the following faux pas: A few years back, I was walking through the home of a past client (unbeknownst to me) pointing out the less than perfect craftsmanship. It turned out to be work our firm had done years earlier when we were just getting started in the business. Well, the client quickly reminded me of that point before I made a complete idiot of myself, and while we still got her next project, it was not until after I spent a great deal goodwill and time prying both feet out of my mouth. It's better to overdress than to underdress. Why do so many builders and remodelers feel like they should dress like the workers who build their homes? I guess if I spent the day framing houses and came straight from the job site, then blue jeans and a flannel shirt would be fine. But I spend my time in and out of the office, sometimes on a work site, but always ready to meet a client (or prospective client) in the supermarket, our office or any of the countless places we happen to run into each other. Naturally, I have another embarrassing example to prove my point: Many years ago my partner and I went to a conference in Washington, D.C. where we were to receive our first national award. We arrived the evening before the conference began so we could enjoy the casual cocktail hour that served as the kick-off. My partner’s years in the business world prepared him to dress appropriately. My years in college didn’t. As we got off the elevator, which opened up to directly to the event, I remember hearing someone in the crowd of suits, ties and sport coats exclaim, “Looks like another one from Texas” as I quickly jabbed the down button to escape in my blue jeans as fast as I could. ATF (Alcohol, Tobacco & Firearms). You don’t allow them on your job site, so don’t bring them with you on a sales call. Now, while I’ve never seen a contractor packing a pistol or drinking a beer on a sales call, I have seen way too many of them toss their cigarette butts on the curb, sidewalk or driveway when getting out of their trucks (and I have seen my share of empty beer cans in truck beds). We can do better than this! Have you heard of the modified “New York Times Rule?” Don’t do something during a sales call you wouldn’t want printed on the front page of The New York Times. At the end of the day, imagine having a daughter and what it’s like just before her first date. She’s nervously waiting with you in the kitchen for her date to arrive and the doorbell to ring. You, on the other hand, are ready to pounce on the prospective beau, to question him mercilessly, threaten him if necessary and inspect his car and clothing. You’ll warn him about drinking while trying to smell if he’s been smoking. In other words, you’re ready to turn this chap inside out in order to make sure your daughter comes home safe. Well, when selling your building services, consider yourself that chap walking up to the front door. You had better be prepared to pass the same type of scrutiny. After all, people are about to trust you with their homes and money. Michael Strong, CGR, is vice president of Brothers Strong, Inc. in Houston. The company was voted as the 2003 Houston and Texas Remodeler of the Year. For more information, contact Strong via e-mail.
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 www.nahb.org/remodelors 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:
For information, e-mail the Remodelors™ Council or call 800-368-5242 x8216. Who Will Be Inducted to National Remodeling Hall of Fame? The Remodelors™ Council is searching for the best of the best for induction into America’s Best National Remodeling Hall of Fame. This award honors those individuals who have made a significant and lasting impact on the remodeling industry on a state or national basis. Induction into America’s Best National Remodeling Hall of Fame is open to individuals in any public or private sector entity or institution. Areas of contribution may include industry image, governmental affairs, education, business management or any other effort that has helped advance the remodeling profession. Please nominate individuals who have made a positive impact on the remodeling industry. Self nominations are not permitted. Completed applications must be received by Monday, July 12. The induction ceremony will take place at the Remodelors™ Council Gala during the 2004 Remodeling Show in Chicago (Oct. 8). Click here to download an application or contact Barbara Drobins at 800-368-5242 x8217 for more information. University of Housing Offers Courses on Customer Service and Business Management The NAHB University of Housing offers a “Sales & Marketing for Remodelers” course. To search for current offerings of this course, click here. The NAHB University of Housing also offers courses on business management and customer service designed to help builders and remodelers improve their business and profitability. To search for current offerings, click here. Brochure Helps Consumers Find Professional RemodelersA new brochure from the NAHB Remodelors™ Council is available to remodelers who want to provide consumers with information on the process of hiring a professional, reputable contractor. To download “How to Find a Professional Remodeler” for free, click here. Packs of 25 can be purchased from BuilderBooks.com for $28 for NAHB members and $32 for non-members. “We always remind consumers that when they hire a remodeler, they are buying a service rather than a product,” said 2004 NAHB Remodelors™ Council Chairman Doug Sutton, Sr., CGR, CAPS, of Sutton Siding & Remodeling in Springfield, IL. “The quality of the service the remodeler provides will determine the quality of work of the finished product and the home owner’s satisfaction with the result.” The brochure suggests that home owners should look for the following in their search for prospective contractors:
The NAHB University of Housing Offers CGR Designation The NAHB University of Housing offers the Certified Graduate Remodelor™ (CGR) designation program, which is designed to emphasize business management skills as the key to a professional remodeling operation. For more information on the CGR designation program, click here. Rabbitt Honored for Support of Breast Cancer CoalitionThe National Breast Cancer Coalition (NBCC) honored Linda Rabbitt, owner and chief executive officer of the Washington, D.C.-based Rand Construction Corporation, for her generous support of the coalition. Rabbitt, a breast cancer survivor, donated a substantial portion of the construction services that went into the buildout of NBCC’s new office space. Rabbitt was honored at a June 15 open house at NBCC’s new headquarters in Washington, D.C. “We are thrilled with our new offices, and everyone at the National Breast Cancer Coalition knows that Linda’s tremendous support and the many talents of her crew at Rand Construction helped make it all possible,” said NBCC President Fran Visco. “We are extremely grateful for everything Linda and her entire team contributed to help NBCC continue in its mission to end breast cancer.” Volunteering to help with worthy causes is nothing new for Rabbitt, who was named as one of Washingtonian magazine’s 2003 People of the Year. As CEO of the Washington area’s third-largest female-owned business and a leader of the Washington Building Congress and Commercial Real Estate Women, Rabbitt has encouraged women to build careers in construction and commercial real estate. As president of the International Women’s Forum, she helped create a Leadership Foundation to fund a fellows program for women moving up the corporate ladder. In addition, Rabbitt has helped raise funds for the Susan G. Komen Race for the Cure and for My Sister’s Place, a program for battered women. The National Breast Cancer Coalition is a grassroots organization dedicated to ending breast cancer through the power of action and advocacy. For more information, go to: www.stopbreastcancer.org. Builders Advised to Advertise in Spanish to Target Hispanic Home BuyersHome builders who want to hit the Hispanic marketplace should probably be advertising in Spanish, according to research from the Cheskin/Yankelovich Hispanic Monitor distributed at this month’s PCBC in San Francisco. Fully 69% of Hispanics who were surveyed by Yankelovich in 2002 reported that they derived more information about a product from advertising in Spanish. The 2000 U.S. Census found that the Hispanic population had grown by 58% in the previous decade, overtaking African-Americans as the largest minority population in the country, and accounting for 40% of total population growth during that 10-year period. Surveyors found that 49% of the Hispanic population valued homeownership as a sign of personal achievement and 76% preferred products made by companies that sponsor activities within their communities. Three ideas were offered for builders who want to target this fast-emerging market:
The city of Greenacres in Palm Beach County, FL, was cited as one community that has successfully reached the Hispanic population by doing such things as offering neighborhood activities like Salsa bands and soccer events and communicating in Spanish. HBI’s Job Corps Programs Adopting New Industry Training StandardsAn initial effort by the Home Builders Institute (HBI), the workforce development arm of NAHB, to streamline and modernize its Job Corps training classes by applying new standards developed by association members has yielded favorable results. The pilot project was conducted at five HBI Job Corps carpentry programs for a one-year trial period. On average, participants graduated to industry jobs paying about 36 cents more per hour than positions found by their classmates. Two students have gone on to higher education at technical schools, and two others were accepted into carpentry apprenticeship programs. Based on the expertise of NAHB members, the training standards were incorporated into a new Training Achievement Record (TAR) for carpentry. TARs provide a course outline and are also used to track and measure student skill proficiency. The innovative program also utilized instructional materials from the standard-based Residential Construction Academy (RCA). Instructors and students participating in the pilot program provided valuable input and feedback to help evaluate its effectiveness. Based on the success of the pilot project, the new TAR and RCA materials will soon be adopted by all HBI Job Corps carpentry programs. And plans are underway to develop similar standard-based TARs in electrical, plumbing and facilities maintenance training. "We couldn't be happier with the success of the carpentry programs using our Residential Construction Academy materials," said HBI Vice Chairman Patsy Smith, a builder and developer from Ft. Worth, TX. "It's exciting to know our Job Corps students will be trained based on standards we, as an industry, developed," Smith said. "This is giving them a clear advantage out in the field, and I look forward to seeing this same success repeated in other trades." All HBI Job Corps programs utilizing the new skills standards and training materials will be credentialed through the RCA. Students successfully participating in these programs will receive program and completion certificates and access to the National Registry, a recruitment tool connecting employers with prospective employees who have received RCA Series instruction. The registry is tied directly to the Building Careers Job Bank, the residential construction industry's online resource for technical, professional and craft trade jobs. This year, HBI is celebrating 30 years of collaboration with the Department of Labor’s Job Corps, helping thousands of disadvantaged youths become members of the nation’s residential construction workforce. The institute focuses on ensuring that its Job Corps training is geared to meeting the workforce needs of the NAHB membership and helping to alleviate an annual shortfall of 60,000-80,000 workers in the home building industry. HBI is the largest vocational trainer in Job Corps, which is the nation’s largest federally funded residential job training and education program for at-risk youths ages 16-24. For information on HBI programs and resources, e-mail Maria McIntyre or call her at 800-795-7955 x8912. Dish-Washing Sink and Refrigerating Oven Among Top 20 Cool Products at PCBCRepresented among the “Top 20 Cool Products” selected for special recognition at this year’s PCBC, which was held on June 15-18 in San Francisco’s Moscone Center, were several manufacturers who are members of the National Council of the Housing Industry — the Supplier 100 of NAHB. The products were chosen by a panel of builders, architects, real estate professionals, marketing experts and other building industry leaders from the more than 600 exhibitors at PCBC 2004. Products of interest to both builders and consumers manufactured by NCHI members were:
For a complete list of the top 20 cool products at PCBC, click here. Sears Acquires Premium Appliance Contract Dealer in San Diego CountySears, Roebuck and Co., through FBA Holdings, Inc., a direct wholly-owned subsidiary, has agreed to acquire Standards of Excellence, a San Diego-based supplier of premium appliances, designer fixtures and decorative hardware. "This acquisition underscores our commitment to maintaining a leadership position in the appliance business and to serving the luxury home building market," said Beryl J. Buley, senior vice president/general manager of home stores for Sears. The acquisition of Standards of Excellence will enable Sears to enter the San Diego market as an appliance contract dealer committed to customer service and innovative premium products, Buley said. Roger Kuske, former owner of Standards of Excellence, will serve as president and general manager. FBA Holdings Inc. also operates McPhail's, with five showrooms serving Northern California, and Florida Builders, with six showrooms located in Southern Florida. Standards of Excellence — San Diego's largest contract supplier of designer fixtures and appliances — has served the area for more than 25 years. Founded in 1976 with its first showroom in El Cajon, CA, the company also operates under the name Central Wholesale Appliance Inc. and has showrooms in San Diego, Huntington Beach, Murrieta, Palm Desert and San Marcos, CA. Grout — Evil Menace Takes Its TollStick (ahem) with what you’re good at. Sound advice that has been passed along to me more than once, and yet at times still eludes me. What could I have possibly been thinking when I volunteered to grout the saw cuts in my new stained concrete floor? That I would save a little money? Yes, but what flawed logic that was. Here is the grisly tale. The new main floor in my house has about 1,200 square feet of stained concrete. I hired subcontractors to place, finish, saw cut, stain and seal the concrete. For some bizarre reason, I thought it would be troublesome and expensive to have a subcontractor grout the sawcuts. But heck, I thought, I’m handy with tools, no sweat — I’ll do it myself. Day 1. I made four trips into town (11 miles each way) trying to find the right color in a non-sanded, calking tube-type applicator. Finally I gave up and bought sanded grout from a box. Zero grout installed and one day lost. Day 2, a.m. Whistling, I mixed up my grout, grabbed my trusty putty knife (an heirloom passed down from my long-deceased grandfather-in-law) and began pressing the sticky goo into a saw cut. Being an old grease monkey, I knew I had to really press hard to force the grout all the way to the bottom of the saw cut — kind of like packing wheel bearings. Of course as much squished out the sides as stayed, so I meticulously cleaned and washed after myself. After a couple hours I had maybe 10 linear feet done. Wow, only 740 linear feet to go! No problem, I figured, just need to get the hang of it, then, boy, would I fly. Day 2, p.m. Groaning, I scraped the last crusts of semi-hardened grout from the sides of my Tupperware grout bowl and pressed it in. A muscle in my upper shoulder screamed out in agony with each press of the putty knife. Then it screamed again with each swipe of my cleaning sponge. Fifty linear feet down, 700 to go. Day 3. Sensing the enormity of my task, I enlisted the help of my wife to clean grout film. After a couple batches, both our knees were bruised and sore. My shoulder muscle now was an inflamed knot. At 4:00, I took a break to coach my 10-year-old son’s little league team. Throwing batting practice, my throbbing shoulder involuntarily spasmed and I beaned two kids. They both cried. Day 4-Day 6. I woke up on Day 4 and couldn’t move my Grouting Arm. It was abused beyond repair and had died in the night. This meant I would have to finish the job with my other arm — the one with no coordination or fine motor skills. Although my progress was excruciatingly slow, my dead arm flickered back to life, apparently because now its misery had company. When I finally finished, both arms were lifeless chubs of salami hanging at my sides, and my knees were blue-green baseballs that had been slugged too many times. My wife had stopped speaking to me during Day 5. Looking back, had I been smart, I would have hired someone to do the grouting, and done an extra engineering job or two to pay for it. I would have been ahead in terms of both time and money. It is now three weeks later, and finally, I can lift my Grouting Arm enough to shave. Yes, stick with what you’re good at — sound advice indeed. Tim K. Garrison P.E. of ConstructionCalc.com has authored books and short courses and lectures on topics relevant to builders. Got a technical or management issue? E-mail buildersengineer@constructioncalc.com. Tim reads every one. This column cannot be reprinted without permission from the author. The views expressed in this article represent the personal views, statements and opinions of the author and do not necessarily represent the views, statements, opinions or policies of the National Association of Home Builders. NAHB does not necessarily endorse any of the views expressed by the author and NAHB is not responsible for any direct or indirect consequences arising out of the views expressed in this article. Nine Home Builders Associations Receive Matching Funds From Housing EndowmentThe National Housing Endowment, the philanthropic arm of NAHB, has awarded a total of $20,000 to nine state and local home builders associations across the nation through the Challenge/Build/Grow Grant Initiative. Open to organizations within the NAHB federation, the Challenge/Build/Grow program offers up to $5,000 in matching funds for projects targeting issues of importance to the housing industry. Since the program was launched in 2001, more than $45,000 has been awarded to HBAs to support local initiatives ranging from job training and image building efforts to educational and scholarship programs. “Through the Challenge/Build/Grow initiative, the National Housing Endowment encourages the building industry to develop new partnerships and opportunities at the state and local level,” said Dale Stuard, chairman of the National Housing Endowment and 1988 NAHB president. “We are confident that each of the programs selected to receive matching funds will successfully address some of the major challenges facing our industry today, such as land use issues and workforce development.” Following are the recipients of the Challenge/Build/Grow awards:
For further information about the National Housing Endowment, e-mail Julie Wheeler or call her at 800-368-5242 x8483. Sign Up for 2005 Committees and Councils by July 9NAHB is looking for members who would like to serve on any of the association’s various committees and councils for the 2005 term. Members will be able to provide leadership, expertise and experience on the issues and challenges facing the industry. The term begins immediately following the 2005 International Builders’ Show (IBS) in Orlando, FL and continues through the completion of the 2006 IBS. The deadline for applying for an appointment is July 9. Members are limited to serving on no more than two standing committees or councils. Members can apply online by filling out the 2005 appointment sign-up form, indicating their interests. The form can be accessed on the NAHB Web site by clicking www.nahb.org/2005appointmentform, then return the completed form by e-mail, fax or mail to NAHB as indicated. Forms also can be found within the individual sections for the various committees and councils on the “members only" side of the NAHB Web site. Final appointments will be made following the fall NAHB board of directors meeting and members will be notified by mail. For more information, e-mail Cynthia McKinley or call her at 800-368-5242 x8346. Awards Programs Deadlines
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts. Calendar of Events
To view more meetings & events information on the NAHB Web site, click here.
Make Your Connection With www.nahb.org Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available to you 24 hours a day at www.nahb.org. Just click the "Member Log In" button to get started. If you are a member and need information about NAHB products and services, use the NAHB Staff Contact Directory to look up the direct telephone extensions for NAHB staff experts. |