Nation's Building News Online: January 10, 2005

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Housing Activity Expected to Stay Robust in 2005 Despite Rising Mortgage Rates

Housing activity is expected to decline only marginally in 2005 despite gradually climbing mortgage interest rates as jobs and household incomes grow more decisively than they did last year, according to housing economists participating in an NAHB news teleconference on Jan. 6.

“We are telling builders that this year will probably pose some stiffer challenges than 2004, and they should be careful about inventories and vacancy rates,” said NAHB Chief Economist David Sediers.

Overall, he is expecting a 3.5% decline in home sales and starts this year — with single-family production off a bit less than 3%, multifamily starts down 4% and remodeling activity up 5% — but coming out even with 2004’s stellar performance “would not be out of the question.”

“On the interest rate front, the Federal Reserve is clearly on the move,” and that should push up the federal funds rate to 3.75% and 30-year mortgages to 6.75% by year’s end, he predicted.

Home Price Appreciation Headed for a Slowdown

David Berson, chief economist for Fannie Mae, said that home sales will drop 7%-8% this year for several reasons: price increases have made affordability a concern in many markets despite low mortgage rates; a significant number of households who would have purchased homes this year did so instead in the past couple of years when rates were at or near record lows; and with prices slowing, investors may decide it is time to abandon the housing market.

Housing prices overall will grow by about 3% this year, compared to 10% in 2004, he said. Most places will see price gains in the 4%-4.5% range, Berson said, although prices will probably go down in some markets.

Berson said he couldn’t predict which markets are headed for a real price decline, but most at risk are those that have had high price gains relative to income along with other risk factors such as a high level of adjustable rate financing, relatively weak job growth and low household formations.

Berson said that the investor share of home purchases has doubled over the past year — from 4.5% to the 9%-10% range — and is as high as 25%-30% in some markets. “Investors go in and out of markets all the time,” he said. “They have gone in because of the high returns they can get. If prices begin to slow this year, investors will start to slow their purchases, reducing demand for housing and increasing the supply of homes on the market, slowing price gains some more.”

Refinancing Activity Continues to Slide

Rising mortgage interest rates will slow the refinance share of single-family mortgage originations substantially this year, according to Freddie Mac Chief Economist Frank Nothaft. In dollar volume, originations declined 30% last year and they should be down another 10% this year, he said, falling to $2.42 trillion from $2.75 trillion in 2004, entirely because of less refinancing activity.

Although only about one in eight home mortgages are 7% or higher, refinancing will still account for about one-third of all originations by the fourth quarter of this year, fueled by families who took out Adjustable Rate Mortgages (ARMs) and are coming up to their first adjustment date and households who are using cash-out refinancing to tap into their home equity.

The ARMs share of mortgages to buy homes will decline from the upper 30% range currently to about 28% by this year’s fourth quarter as the spread between initial ARMs interest rates and long-term mortgage rates continues to narrow, he said.

Home price appreciation is headed into the 5%-7% range for 2005, Nothaft forecasted, the slowest pace in about six years. “It is unrealistic to expect recent high levels of home value appreciation to be maintained going forward,” he said.

A Good Year for Consumers

The prognosis for the overall economy looks more favorable for consumers this year than last, said James Glassman, senior economist for JP Morgan Chase, and increases in income and job growth could counterbalance slowly rising interest rates. He predicted that housing activity will ease a little bit this year, but could hold at current levels “and the big surprise would be if housing did even better.”

“Interest rates are up,” he said, “but the Fed is taking its foot off the gas, not stepping on the brakes, so it shouldn’t be damaging to housing.”

Glassman forecasted that the economic drag of rising oil prices last year would be reversed in 2005, and he noted that about one-third of the run-up has already been reversed, helped along by a relatively mild winter in the U.S.

Mortgage debt growth will start to slow down significantly, he said. For some time, households have been able to take on more debt without increasing their monthly payments because inflation and interest rates have been falling. Now that interest rates are moving up, debt will have to grow more in line with increases in income, which is reminiscent of the 1980s, Glassman noted.

Building News Coast To Coast

Dow Chemical Is Told to Curtail Pesticide Sales

At the end of last year, under an agreement reached with the Environmental Protection Agency in 2000, Dow Chemical stopped producing chlorphyrifos, sold under the trade name Dursban, for the home building industry, although it can ship existing stocks of the pesticide to builders through the end of this year. Builders have applied hundreds of millions of gallons of Dursban annually before laying foundations to protect their homes against termites. Some studies have linked Dursban to neurological and developmental damage in animals and young children, but those experiments are flawed, according to Dow. The pesticide will still be applied to crops and golf courses and used to control mosquitoes.
Washington Post (12/29/04) P. A2; Juliet Eilperin: www.washingtonpost.com

Houses Built by Robot? If Scientist Gets His Way

A systems and industrial engineering professor at the University of Southern California hopes to build a 500-square-foot house with a machine that is guided by an architect’s computerized drawings and then squirts layers of concrete on top of each other to build vertical walls and domed roofs. A computer-guided nozzle squeezes out wet concrete like toothpaste onto a toothbrush. German building materials manufacturer Degussa AG is collaborating on the project to find the material that will work the best. The machine has been tested with cement, but the professor believes that a mixture of sun-dried mud and straw might work. If the experiment succeeds, the next step is to “print out” a complete one-story, 2,000-square-foot home in a single day with little on-site assistance from humans.
Los Angeles Times (1/2/2005); Lew Sichelman: www.latimes.com

All the Comforts of a Spa

A $5.5 million, nine-bathroom home being built by Steve Rohrer near the Phipps Mansion in southeast Denver epitomizes the growing popularity of luxurious spas in new homes and remodels. The master bath features a jetted tub, a 10-jet shower system that includes a lighted waterfall and variable water flow control, a mosaic tile “rug” built into the floor, a television concealed behind the mirror and heated towel bars and toilet seats. Slate, stone and pebble-like shower floors are hot items, according to Christine Shaw, of Denver’s Limited Edition Designs. Some other master baths are being built with meditation rooms created with Feng Shui placement patterns; are being wired for phone, television and stereo; are outfitted with a laundry room and a coffee bar with refrigerated drawers; and have baths with a “chromatherapy” feature that allows the user to select different colors to illuminate the water. “The bathroom is an excellent place to invest money on a remodel, because your return can be as high as 90%,” said Remodelors™ Council Chairman Douglas Sutton, Sr.
Denver Post (1/2/2005) P. K6; Chryss Cada: www.denverpost.com

Closets of a King

The days of two-by-six-foot closets with a single shelf and a metal rod are long gone, and home owners are demanding large, walk-in closets and are spending more on getting them organized. Closets magazine, which was launched in November of 2003, estimates that Americans will spend $2 billion outfitting and remodeling closets this year. Consumers are opting for closets with crown molding and glass fronts, and they want dark woods, granite countertops, track lighting and brushed-aluminum pulls. The typical cost of customizing a walk-in is $1,500-$3,000, but high-end home owners can spend significantly more — as much as $50,000 or higher. “Everyone wants more and more closets,” says Gopal Ahluwalia, director of research at NAHB.
Allentown Morning Call (1/2/2005) P. G1; Beth W. Orenstein: www.mcall.com

Warm Hearth: Playing With Fire

The old-fashioned fireplace is one of the most popular features of new homes in the Southern Nevada market, and that mirrors a trend that is being seen nationwide. A collaborative survey between the Hearth, Patio and Barbecue Association and NAHB identified the fireplace as one of the top three features requested by consumers who are looking for a new home. The Hearth Association reports that shipments of fireplace “appliances” increased 5% in 2003 over the previous year and were up 108% over 1992. Even with gas prices increasing, 2003 figures also showed a 10% increase in gas fireplaces and a 6% drop in wood burners. Wood-burning fireplaces are banned in Southern Nevada because of air-quality issues, but Leslie Wheeler, communications director for the association, says the reason that gas has captured 65%-75% of the market is their convenience. Also, she says, “the technology has come so far. The logs look like real logs. You can walk by a gas fireplace and you’re going to think it’s a wood-burning fireplace.”
Las Vegas Review-Journal (1/3/2005) P. E1; Heidi Knapp Rinella: www.reviewjournal.com

Developers Target ‘Creative’ Class With Infill Projects

Matt Mathias and Gary Krieg have teamed up to form Interurban Development LLC, a company in Austin, TX, that is focusing on infill and niche residential condos, cottages and townhomes ranging from 800 to 1,300 square-feet and priced at $125,000-$300,000. The homes are being located in Austin’s urban core and they are targeted to people “who are looking for cutting-edge innovation and design” but finding “the current luxury loft offerings are beyond their financial reach,” says Krieg. “These individuals will find the excitement of urban living in each of our developments at reasonable price points.”
Austin Business Journal (1/3/2005); Mary Alice Kaspar: www.bizjournals.com/austin

Call for Adjustable Mortgages Jumps

The market share of home purchase loans with adjustable rates increased to 34% last year, up from 19% in 2003, Freddie Mac reported. This was the highest annual ARMs share since 1994, when it was 39%. Fannie Mae is projecting that the average rate for a one-year ARM will climb to 4.65% this year from 3.9% in 2004. The average fixed-rate for this year is expected to be 6.01%, compared with 5.85% last year, the second lowest rate in 38 years. Two out of five ARMs originated last year were 5/1 hybrids, according to Frank Nothaft, Freddie Mac’s chief economist. These loans have a fixed rate for five years and then turn into a traditional one-year adjustable mortgage. Because of their popularity, Freddie Mac is now reporting interest rates for these loans in its weekly mortgage survey. The highest ARM share on record was 62% in 1984, when they were first surveyed, Nothaft said.
Los Angeles Times (1/6/2005); Bloomberg News: www.latimes.com

Strategies for Rural Housing

Russell Davis, the top official at the U.S. Department of Agriculture’s Rural Housing Service, says that he is on a mission to create efficiencies in the agency’s operations and to find the cheapest way to provide affordable housing, not necessarily to provide the deepest subsidies for a particular construction project. He reports that engineers and inspectors have been hired to study what it will cost to preserve the Sec. 515 Rural Rental Housing stock for the next 20 years; many of these units are now at the 20- and 25-year mark. A new regulation this year will make the Sec. 538 program more flexible so that it can help finance the repair and rehab of existing 515 properties. Asked about the reallocation of the service’s resources, Davis said he is committed to protecting current tenants but shares the Bush Administration’s enthusiasm for opening up homeownership opportunities. “Our single-family direct loan program gives people loans written down to as low as a 1% interest rate,” he said.
Affordable Housing Finance (January, 2005); Marcie Geffner: www.housingfinance.com

California Home Builders Applaud Governor

Following remarks by California Governor Arnold Schwarzenegger in his state of the state address that the state must take action this year to deal with its housing crisis, California Building Industry Association President Steve Doyle noted that builders support common-sense solutions to address the problem. Reforms include: ensuring an adequate supply of land for high-density condominiums and single-family homes in the state’s job centers; legislation eliminating regulatory and legal hurdles that delay construction and increase housing costs; and streamlining the permitting process for new housing; an average California subdivision takes a decade to be approved.
California Building Industry Association (1/5/2005); John Frith: www.cbia.org

Smoking Affects Property Values

Smokers may not realize the negative impact that smoking can have on the resale value of their home, and one mortgage bank survey reports that 28% of prospective buyers were turned off from purchasing a home in which the owner smoked. “The worst thing that smokers can do is to try and mask the odors with fragrances,” says Emo Moschini, a cleaning expert with Tornado Industries. “As soon as buyers detect a cover-up, they think even more might be wrong with the house.” Moschini suggests paying particular attention to the ceiling, since smoke rises, and cleaning painted walls and woodwork and applying a fresh coat of paint afterwards. Draperies and carpets should be thoroughly cleaned or even replaced, and the ventilation system should be professionally cleaned, he said.
JansanNewswire (Dec. 16, 2004); Dawn Shoemaker: www.jansannewswire@rcn.com

Good News on Storm Water Regulation Rings in the New Year

Changes sought by NAHB in litigation settlement negotiations with the Environmental Protection Agency (EPA) were finalized last month and will eliminate a range of storm water violations for construction site operators who are not covered, or not yet covered, by construction general permits (CGPs).

NAHB contended that site operators should not be considered to be in violation of the permit before they have submitted a notice of intent (NOI) to obtain one, and EPA has addressed that concern by removing the words, “permit noncompliance,” from its CGP language.

In areas where the EPA has permitting authority, the CGPs set allowable storm water and non-storm water discharges for operators of both large and small construction activities.

“The fact that an operator fails to make itself eligible for CGP coverage should not make it subject to potential enforcement action for noncompliance with a permit to which it was never subject,” the agency said in the Dec. 22 Federal Register.

The EPA’s final notice of the modifications notes that operators are not prohibited from submitting NOIs after initiating clearing, grading, excavation activities or other construction activities, but the agency “reserves the right to take enforcement action for any unpermitted discharges that occur between the commencement of construction and discharge authorization.”

The agency added that the latest modifications “represent an important step in reducing EPA’s concern that retaining the current ‘permit noncompliance’ language would potentially make the CGP option more unpalatable to late filing operators than necessary, thus, driving late filing operators towards either individual permits or attempts to evade regulation altogether by declining to notify EPA of their construction activities.”

By pushing late filers towards seeking coverage under individual permits rather than the CGP, the EPA said it was also concerned about “further delays in permit coverage and the environmental benefits associated with implementation of the best management practices.”

On modifications initially proposed in September, the EPA received responses from NAHB, The Associated General Contractors of America, Centex Homes, Lennar Corporation, Pulte Homes, Richmond American Homes of Colorado and the New York State Department of Environmental Conservation. All of the comments, except for those from New York, supported the changes.

The permit modification goes into effect on Jan. 21.

For further information, email Jon Luther at NAHB or call him at 800-368-5242 x8329; or contact Amy Ericksen, x8662.

Housing Snapshot

Mortgage interest rates declined last week and remained safely below the 6% threshold. "Economic news seems to reflect steady growth and low inflation, placing little upward pressure on interst rates," said Amy Crews Cutts, Freddie Mac's deputy chief economist. "Although we expect mortgage rates will start to trend gently upward over the year, 30-year fixed-rate mortgage rates should stay under 6%, at least through the first quarter." The Labor Department announced on Friday that 157,000 new jobs were created in December, bringing the total for the year to 2.2 million, the highest number since 1999. Holiday sales were weaker than expected, according to the International Council of Shopping Centers, which reported that business at chain stores was up 2.3% in the November-December period, below projections for a 4% increase. Reversing a recent trend, the dollar moved up last week against the euro. Random Lengths reported that the cost of framing lumber was up last week, reaching $383 per 1,000 board feet, up from $380 during the previous week.

Mortgage Interest Rates

30 Year Fixed Rate: 5.77\%
15 Year Fixed Rate: 5.21\%
1 Year ARM: 4.1\%

Housing Starts: Nov. 2004

Total: 1.77 million\%
Single Family: 1.448 million\%
Multi Family: 323,000\%

New Home Sales: Nov. 2004 *

1.125 million

Existing Home Sales: Nov. 2004 *

6.94 million

* Seasonally Adjusted Annual Rate

Building a Foundation for Workforce Housing

When I took over the reins of the 220,000-member National Association of Home Builders almost one year ago, I promised that I would dedicate my efforts and the resources of our organization to finding a solution for the growing shortage of affordably priced housing for the heroes in our workforce who make a vital contribution to our communities. Generation after generation, we have come a long way in America, steadily expanding housing opportunity for our families. There have always been challenges standing in the way of that progress, and we have always worked hard and succeeded in overcoming them, building a stronger, more efficient housing delivery system in the process. There is no reason that we cannot overcome the obstacles that are increasingly preventing the workers we value the most from living in the same neighborhoods they serve, and I am confident that we are well on our way to implementing strategies that will make this happen.

Housing affordability has always been a challenge for our industry. In fact, affordability has always been a primary goal of our housing finance system. The creation of the low-downpayment, 30-year mortgage opened the door for housing opportunity for typical working households across this country. When our soldiers returned from World War II, we saw production builders move into high gear. By building an affordable, entry-level product that could be financed with an affordable mortgage, our industry provided millions of Americans with access to the American dream. In the years that followed, as those families moved forward in their careers, we saw them trading up to bigger, more expensive houses. We called it the housing ladder, and most of the time — when mortgage rates were at affordable levels — it worked well as a conduit for the accumulation of family wealth.

I started in the building business in the 1970s, so I was around for the devastatingly high interest rates of the early 1980s. It was obvious even before then that passbook savings accounts were not enough to provide our industry with the capital it needed. So we hitched our wagon to the secondary mortgage market, and we solved the problem. In more recent times, we have seen incredible innovation in housing finance that has further expanded housing opportunity in this country. On top of that, for the past few years American home buyers have enjoyed the lowest mortgage interest rates since the 1960s. You’ve seen the results in the headlines. Our national homeownership rate has risen to an all-time high. People have been buying homes at a record pace. And home builders have been building as fast as they can to keep up with the demand.

From reading those headlines, you might not know that America today has a serious housing problem. It is a sobering fact that working families — the teachers, firefighters, nurses and other workers who are the heart and soul of any community — cannot find affordably priced housing in the communities they serve. Many of those communities have failed in their commitment to provide affordable housing. Many of those communities are actually responsible for sky-high land prices and housing prices because they have embraced zoning and other regulations that are designed to stop residential growth. There are many causes of today’s workforce housing problem, but the bottom line is that in recent years, the disparity between housing prices and the incomes of these workers has only grown worse.

I am a home builder, and that means that I share in the optimism that is almost a prerequisite for success in an industry where we face challenges at every turn and must always keep a steady focus on our mission to build the housing that our growing population needs. NAHB’s Workforce Housing Symposium has increased my confidence that we will turn the tide in communities across this country. We have delineated the problem and its root causes and we have identified initiatives that are beginning to answer the need for workforce housing. We have heard from the Secretary of Housing and Urban Development his assurance that a top priority for the President is pursuing policies that will address this problem, and rightfully so because it also a top concern of the American people. We have heard from the CEO of Freddie Mac about new programs in the secondary market to further its mission to expand housing for our workers. And we have heard from home builders, employers and representatives from the public sector, who have shared their experiences and expertise about how we are going to get the job done.

We have built a solid foundation from which we can address our workforce housing needs. It’s time for housing to give a hero’s welcome to the dedicated men and women who work on our behalf, and there is no better way of showing our appreciation for their vast contribution than to bring them the housing that will ensure they remain an essential and enduring force in our communities.

For Housing Affordability, You’d Rather Be in Lima, Ohio, Than Santa Barbara, California

Lima, OH, was the nation’s most affordable housing market in the third quarter of 2004, according to the newly revised NAHB/Wells Fargo Housing Opportunity Index (HOI). The index also reveals a big decline in housing affordability nationwide since the start of the year.

“Despite some of the best financing conditions in decades, housing affordability at the national level has fallen to the point that only a little more than half (50.4%) of all homes sold in this country during the third quarter of 2004 were affordable to families earning the median U.S. household income,” said NAHB President Bobby Rayburn. “This compares to about 61% of homes sold that were affordable to median income earners in the year’s first quarter.”

Strong home-price appreciation, which outpaced income growth in many areas, was the main factor for affordability slipping.

“In many markets, working families are finding it considerably more difficult to afford homes today than they did at the start of 2004,” Rayburn noted. “Ultimately, higher home prices are a matter of strong buyer demand. But a big contributor has been a shortage of land available for development due to growth controls, and the high cost of regulations in general. This includes everything from excessive impact and utility hookup fees to the price of long delays for subdivision approvals. Local jurisdictions that have curtailed production of affordable and workforce housing through excessive regulations should consider this a wakeup call.”

In Lima, OH, 90.5% of homes sold during the third quarter were affordable under current mortgage financing conditions to families earning the area’s median income of $52,500. But affordability was down even in that small market of fewer than 250,000 residents, with the median price of a home climbing to $82,000 in the year’s third quarter, up from $78,000 in the first, when 92.4% of Lima’s homes were affordable.

Ranked just after Lima for affordability in the small cities category were Cumberland, MD, and Mansfield, OH. Among mid-sized cities (with 250,000 to one million people), Saginaw-Bay City-Midland, MI, was the most affordable housing market and the second-most affordable overall. It was followed by the mid-sized markets of Lansing-East Lansing, MI, and Canton-Massillon, OH. Among major metros with populations over one million, Grand Rapids-Muskegon-Holland, MI, was tops for affordability, followed by St. Louis.

Earning the dubious honor of least affordable housing market in the third quarter was the metro area encompassing Santa Barbara, Santa Maria and Lompoc, CA, where less than 5% of homes sold were affordable to families earning the median household income of $64,700 and the median sales price was $447,000. This marks a substantial drop in affordability for that area since 2004’s first quarter, when the median price was $380,000 and nearly 11% of homes sold were affordable to median-income earners.

In San Francisco, which previously held the title of least affordable housing market, the median sales price remained the highest of the 163 metro areas that were ranked. However, the city’s high median household income of $95,000 kept it slightly lower on the list, as the nation’s 11th least affordable housing market.

“All of the 10 least affordable housing markets — and 19 of the 25 least affordable — are in California, which is one of the most highly regulated areas in the country,” Rayburn said.

The most affordable housing markets by region were: Lima in the Midwest; Cumberland in the South; Pueblo, CO, in the West; and Harrisburg-Lebanon-Carlisle, PA, in the Northeast. The least affordable regionally were: Chicago in the Midwest; Naples, FL, in the South; Santa Barbara in the West; and Nassau-Suffolk, NY in the Northeast.

New Home Sales Slow in November From Record Pace

Sales of new single-family homes fell 12% in November from October’s record pace to a seasonally adjusted annual rate of 1.125 million units, the Commerce Department reported last month. But sales for the month were still 3.6% above the pace a year earlier, and new homes in October and November sold at a faster clip than in the first three quarters of 2004.

“Builders across the country remain very upbeat about the single-family housing market,” said NAHB President Bobby Rayburn. “The NAHB/Wells Fargo Housing Market Index, which is based on our monthly surveys of single-family builders, indicated that all the fundamentals are in place for strong months ahead.”

“The government’s home sales series has been showing a lot of month-to-month volatility, and revisions to preliminary estimates can be quite large,” said NAHB Chief Economist David Seiders. He added that the report on new home sales in November should be viewed in the context of positive signals on housing demand from surveys of both home builders and mortgage lenders.

“The fundamentals supporting housing demand still are quite solid. Mortgage rates are historically low, job growth is moving ahead and household income is rising,” Seiders continued. “Sales of new single-family homes will hit a record in 2004 despite the surprising decline reported for November.”

Led entirely by new homes that have been permitted but not yet started, the inventory of new homes for sale climbed 2.2% to 418,000 units in November, representing a 4.5-month supply at the current sales rate, the highest since early 2003.

“The current inventory situation is not worrisome, but builders obviously should be keeping the numbers of units that are under construction or completed under close control as we move into 2005, particularly as the Federal Reserve continues its steadfast campaign of monetary tightening,” Seiders said.

November sales dropped 39.4% in the Midwest, 27.9% in the West and 7.1% in the Northeast and increased 13.6% in the South.

Existing-Home Sales Rise to Record Pace in November

Buoyed by low mortgage interest rates, existing single-family home sales climbed 2.7% to a seasonally adjusted annual rate of 6.94 million in November, up from an upwardly revised pace of 6.76 million in October, toppling the previous record, which was set in June, the National Association of Realtors® announced last month.

“Mortgage interest rates dropped a quarter of a percentage point in late summer and then stabilized,” said David Lereah, the association’s chief economist. “Coupled with a growing labor market and a rising economy, this created optimal conditions for the housing sector.”

Lereah said that home sales should remain strong this year, although activity will be down some from the record-setting pace of 2004, and that’s a good thing. “We think slower sales will help to create a better balance between home buyers and sellers, but with tight inventories of homes available for sale, price appreciation hasn’t slowed yet.”

Housing inventories at the end of November were, however, up 2.1% to a total of 2.48 million homes for sale, a 4.3-month supply at the current sales pace.

By region, resales were up 6.5% in the West, 1.8% in the South and 0.7% in the Midwest. Sales were down 1.3% in the Northeast.

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
The U.S. economy is closing out a very good year …

Growth of U.S. economic output (real Gross Domestic Product) has been revised up to an annual rate of 4.0% for the third quarter, and available monthly data suggest growth close to that pace for the final quarter of the year.

We’re estimating 4.4% for 2004 as a whole, easily the strongest year of the three-year economic recovery/expansion period. NAHB’s forecast shows GDP growth of 3.7% for 2005, not as exuberant as this year but still quite good.

The job market is now in gear …

Growth of labor productivity (output per hour) slowed to some degree in 2004 but still remained strong by historical standards. Even so, the strength of GDP growth generated substantial improvements in the labor market as the year progressed, in sharp contrast to the earlier years of the recovery/expansion period.

The unemployment rate gravitated downward during the year and we’re estimating an increase in payroll employment of 2.24 million over the course of 2004 (December to December). Further above-trend growth in real GDP should maintain positive labor market developments going ahead.

Inflation is firming up as the economic expansion proceeds …

Price inflation picked up in 2004 on the heels of a deflation scare in the latter part of 2003, but inflation fundamentals remained reasonably good as the year drew to a close.

“Core” inflation, as measured by both the chain-core Consumer Price Index and the core market-based price index for Personal Consumption Expenditures, approached 2% late in the year (measured on a year-over-year basis). While still historically low, the upward gravitation of core inflation (excluding prices of food and energy) certainly did not escape the attention of the central bank in 2004.

The Fed is in the midst of an extended process of rate hikes …

The Federal Reserve held the federal funds rate at 1% during the first half of 2004 in order to help solidify the economic expansion and insure against a deflation problem in the U.S. The Fed began to move off this extraordinarily stimulative monetary policy stance on June 30, and the funds rate now stands at 2.25%.

Although the real (inflation adjusted) federal funds rate now is positive, the current monetary policy stance still is stimulating the U.S. economy. The Fed wants to get back to a more “neutral” stance as long as economic growth continues to sop up slack in resource markets (labor and capital) and continues to generate inflationary pressures.

NAHB’s forecast shows a federal funds rate of 3.75% by the end of 2005. We’re expecting quarter-point rate hikes at the February, March, May and June meetings of the Federal Open Market Committee, with a less aggressive process during the second half of 2005.

Bond prices continue to defy gravity but long-term interest rates should firm up soon …

Long-term rates held in a narrow range in 2004, closing out the year at about the same levels that prevailed when the year began. Indeed, long rates gravitated downward during the second half despite the series of hikes in short rates kicked off by the Fed on June 30.

The stock market enjoyed a late-year surge and an accompanying bond sell-off moved long-term rates up to some degree in the waning days of 2004. NAHB’s forecast shows a percentage-point increase in long-term rates over the course of 2005, a move that takes the long-term home mortgage rate to 6.75%. The factors behind this move include the projected pattern of Fed policy, a falling dollar and further upward pressure on core inflation — partly from the labor market.

The housing picture remains bright despite mixed signals in late 2004 …

The housing sector turned in a great performance in 2004, thanks largely to the behavior of long-term interest rates. New records were set for single-family home sales and housing starts as well as for condo units in multifamily housing. Low interest rates also buoyed the rental housing market, in the face of record-high vacancy rates.

Key data on housing for November presented quite a mixed picture. On the negative side, housing starts fell by 13%, sales of new homes fell by 12% and issuance of building permits fell by 1.5%.

On the positive side, sales of existing homes climbed by 3% in November to a new monthly record, NAHB’s Housing Market Index edged up in November (and in December), and the Mortgage Bankers Association’s index of applications for mortgages to buy homes showed strong readings for both November and December.

Everything considered (including weather effects), it appears that the housing market remains fundamentally sound and is poised to turn in an excellent performance next year. NAHB’s forecast shows some modest slippage in market activity for 2005, with home sales and single-family starts receding to the second highest levels on record. It’s probably time to count our blessings.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Dec. 29 edition. To subcribe to “Eye on the Economy,” click here.

‘HousingEconomics Online’ Provides In-Depth Analysis of Housing Market

"HousingEconomics Online" is a new online publication from the NAHB Economics Group that provides the latest housing economic data, trends and key events shaping the economy. NAHB’s leading economists analyze and synthesize the housing and economic information to provide in-depth analysis of the niches and nuances of the home building market.

Available at BuilderBooks.com, "HousingEconomics Online" combines unique scientific research with practical applications providing insights that are original, useful and written in terms that builders, manufacturers and housing finance professionals can understand and apply to their own businesses.

This interactive Web site at the executive level provides critical data and information quickly, easily and frequently and includes the following features:

• Home Builders Forecast
• The Desktop Analyst
• Access to NAHB’s Staff of Economists
• Seiders' Report
• NAHB’s Economic & Housing Forecast
• Housing Activity
• Housing Policy Focus
• Multifamily Housing Quarterly
• State & Metro Focus
• Housing Market Statistics

For more details, go to www.housingeconomics.com.

Index Shows Favorable Six-Month Outlook for Apartments and Condos

Apartment and condo builders are optimistic that the multifamily housing market will continue to strengthen over the next six months, according to the latest Multifamily Market Index (MMI) released last week by NAHB.

Condos continued to lead the multifamily market in the third quarter of 2004, with the for-sale supply index up almost four points from the same quarter a year earlier, rising 53.5 to 56.9 on the index. Builders participating in the MMI survey said they expect that number to stay above 50 for at least the next six months.

The MMI is based on a quarterly, nationwide survey of multifamily builders and property owners who are asked a series of questions about current market conditions as well as their expectations for the next six months. Survey answers are assigned numerical values to calculate two separate indexes, one tracking demand and the other tracking supply. The scale is from one to 100, with a rating of 50 generally indicating that the number of positive responses is about the same as the number of negative responses.

All classes of rental apartments showed gains on the demand index in the third quarter, with the biggest increase reported for low-rent Class C apartments, which jumped 10 points above their year-earlier rating to 53.8. Demand for luxury units rose 3.3 points from last year’s third quarter, while demand for average market-rate communities rose about nine points.

“This quarter’s MMI results confirm that the turnaround we saw beginning during the first part of 2004 has solidified,” said NAHB President Bobby Rayburn. “With the economy generating additional jobs, new households are forming, and that means that there’s a greater demand for rental housing.”

The index tracking the number of rental apartments available for rent continued its downward trend, registering a six-point drop from 63.7 to 57.7 from the third quarter of 2003 to the third quarter of 2004. At the same time, the volume of calls from prospective renters saw a healthy increase, rising nearly 15 points on the index to 52.9, up from 38.2 a year earlier.

Condos are still the major story in the multifamily housing market, according to the latest MMI. Even with the current supply index up, survey respondents said they expect even higher production six months from now.

“Condos have great appeal to those who want the benefits of apartment living but who also want to buy a home during this time of low interest rates,” said NAHB Chief Economist David Seiders. “But, with interest rates starting to move back up, we are also starting to see stabilization in the rental apartment market.”

Valuable Tips on How to Market on a Dime

With all the tasks that owners of small home building companies juggle, it can be hard to find time for marketing. But it pays to squeeze it in anyway.

“When you are the busiest, that’s when you should do most of your marketing,” says Deborah Malone, of JP Malone Construction in Scottsdale, AZ. “That way, you can pick and choose the projects you want to do.”

Malone’s strategy keeps her custom home building and remodeling company from having to take on troublesome projects and clients no builder wants — but some are forced to accept — if things slow down. At the resent Custom Builder Symposium in California, she shared her secrets for getting plenty of mileage from a thrifty marketing plan, what she calls “Marketing on a Dime.”

Here are some innovative tips she recommends:

Make the Most of Signage

Since job site signage is your calling card, make sure you have a well-built, well-designed sign that makes your company stand out. Be sure your company name, phone number and web site address are readable from the curb.

Malone also cautioned that builders and remodelers should pay attention to where the sign is placed. “If there’s an information box attached to the sign and the sign is right next to the Port-A-John, people won’t want to pick up your flyers,” she said.

Malone stocks her information boxes on her job site signs with reprints of articles about her company and makes sure her project managers keep the boxes full. She tapes one of the reprints inside the box and checks the boxes during her regular visits to the job sites. “If I drive by a site and the box isn’t empty, the project manager gets a bonus,” Malone said.

Rethink Your Business Card

Malone’s business cards are actually postcards containing article reprints and photos of the company’s projects. She’s found that the postcards have a shelf life of about three years.

“If you give people a pretty picture, they will tape it up and keep it longer. If you give them an ordinary business card, they might throw it away,” she explained.

Malone hands out her postcard “business cards” to neighbors near her job sites. It puts the company’s name in front of them and gives them a place to send complaints. “Better they should complain to you than to the home owners association,” Malone said.

Get Free Reprints of Magazine and Newspaper Articles

It can be extremely expensive for a small company to buy reprints of a magazine or newspaper article that features its projects. However, if you place an ad in the publication, you may get the reprints for free. Just ask. “All reprinting is negotiable,” Malone said.

Don’t Overload Prospects With Marketing Material

JP Malone contacts prospects three times with direct mailings:

• The first mailing is a letter that congratulates them for buying a lot in the area.
• The second mailing contains a packet of information about JP Malone and a photo of one of its custom homes.
• The third mailing is a letter that states the company’s commitment to following through on what it promises.

“Trickle your information to prospects and target clients a little at a time,” Malone advised. “Don’t bombard them with it all at once.”

Streamline Your Web Site

Not getting much traffic on your web site? Your web site may be too complex.

Prospects find it hard to wade through sites that contain too much text or lack navigation bars. They also will pass up web sites that take too long to load due to large, high-resolution photos.

Malone recommended the “six-year-old” test for home builders’ web sites. “If a six-year-old can use your web site, then a client can,” she reasoned. To make your site more user-friendly, try adding these options:

• A navigation bar or simple menu that appears on each page of your web site. This “road map” prevents people from getting lost on your site and keeps the link to your contact information readily available.

• A button or form that encourages prospects to ask questions about something they’ve read or seen on your site. “Be sure to answer their questions,” Malone said. “Designate a person or two to do that.”

• A section for the press. The “photo galleries” portion of JP Malone’s web site (www.jpmalone.com) includes a “media access” link. “Magazine editors can view professional photos of our projects. If they want to use them, they contact us and get a password that lets them download high-resolution images,” Malone said. “Instant artwork is a boon for magazine editors.”

Work Smart With Realtors®

“Realtors® are a great marketing source, but you have to call the shots,” Malone said. Do that by asking for — and writing down — specifics about their clients: the client’s name, age, family size, children’s ages, what they are looking for, budget, etc.

To convince Realtors® to send business your way, go into subdivisions they control. Find out their commission percentage point and offer them a half to full point more to work with you. “You can take business away from the competition that way,” said Malone.

Pay Realtors® on the first draw so they are no longer part of the process and you can do your job effectively. “If you pay them only 50% of their commission on the first draw, then they think they own 50% of the project. Do you really need another expert in your business? Don’t let them become part of the building process.”

Plant Seeds for Referrals

Malone sends out questionnaires to clients asking for the dates of their anniversary, kids’ birthdays, etc. She downloads the information into Microsoft Outlook™, which pops up reminders to send birthday cards and call clients on their anniversaries. She does this for past clients, too — and they notice.

JP Malone’s reference list includes current clients as well as clients from seven and 10 years ago. She updates her reference list every year, but she asks each client for their permission before putting them back on the list.

If she shows a client’s home to a prospect, she brings a bottle of wine or a small gift for the client. If clients refer someone to her, she gives them a tree for their yard. “It’s something else to remember our company by,” Malone said.

It takes some effort to enter award competitions, but it pays off in the long run. Whenever JP Malone wins an award for one of its projects, the client “wins” too. Malone gives them a reprint of the award in a leather-bound photo album. “They proudly display the award on their mantle and show it off to all of their friends,” she said.

Farm Out Referrals to Other Builders

If you are too busy or the job is too large for your company, don’t hesitate to refer the prospect to other builders who do the type of work the prospect wants. Tell the prospect, “We don’t do jobs of that size but I know a builder who does. May I give that builder your contact information?” This turns a negative into a positive and the other builder may give you a referral fee, Malone reasoned.

Mark Your Calendar for the 2005 Custom Builder Symposium

The 2005 Custom Builder Symposium 2005 is scheduled for Nov. 11-13 in New Orleans. Mark your calendars. For more information, email the NAHB Business Management Department, or call 800-368-5242 x8388.

SBA Study Determines Why Customers Leave

When it comes to the question of why businesses lose customers, the perception that members of the sales staff don’t care ranks as the leading factor, according to a study of all types of small businesses by the Small Business Administration (SBA).

Nearly 70% of those polled in the SBA study indicated that the perception of a non-caring staffer led customers to leave and buy from other businesses — by far the strongest response of six factors.

Product dissatisfaction ranked second, with 14% of those polled. Price ranked third and was the reason that 9% of customers changed businesses. Recommendations of friends ranked fourth, ahead of moving away and death.

The SBA study reinforces the need to pay attention to your customers. Paying attention is more than courtesy and common sense — it also contributes to keeping customers from leaving and taking their business to your competitors.

Why Customers Leave

Builders Night Out at the Magic Kingdom and Pleasure Island

Walt Disney World® Resort has arranged for a special evening with extended park hours for attendees of the 2005 International Builders’ Show in Orlando, FL.

The magic begins anytime after 4:00 p.m. at the Magic Kingdom® Park, where you will step into a world of fantasy and timeless fun. The night doesn’t have to end there. Builders Night Out continues with non-stop club hopping privileges to all of the high energy nightclubs at Downtown Disney® Pleasure Island.

Attendees participating in the IBS Housing Block will be the first to have access to purchase this specially priced event combination ticket. Tickets are $34 each for adults and children. To purchase tickets, visit www.BuildersShow.com/Disney or call 407-827-5905.

HUMMER Sweepstakes at Builders’ Show

Syngenta, manufacturer of IMPASSE® Termite Blocker, will be conducting a sweepstakes to win a two-year lease to a 2005 HUMMER H2 at the International Builders’ Show in Orlando, FL.

The HUMMER sweepstakes is open only to registered attendees at IBS. The sweepstakes will be conducted at the IMPASSE Termite Blocker booth in the North/South Hall — booth #S11451.

One winner will be chosen at the conclusion of the trade show on Sunday, Jan. 16. The winner will be announced the following day and does not need to be present at the time of the drawing.

The HUMMER H2 will be leased from a dealership near the winner’s hometown. After the lease is completed, the winner will have the option to purchase the HUMMER or return it to the dealer.

Official sweepstakes rules are available at the IMPASSE Termite Blocker Booth #S11451. For more information, visit www.impasse.com.

Five Tips About How to Create Lifestyle for Active Adults

David Jensen, a member of the NAHB Seniors Housing Council, will be conducting architectural plan reviews at the 2005 International Builders' Show in Orlando, FL.

The sheer volume of 55+ buyers is awe-inspiring. Forecasters place their numbers in the tens of millions by 2010. They are the largest group of home buyers today. They have enormous purchasing power.

So, you want a piece of this action?

First, keep in mind that when targeting active adults, lifestyle often outweighs the house itself. For many, retirement may be several years away, but they are not only looking to purchase their retirement homes now at today’s prices, they also seek a lifestyle that will reflect their future way of life.

With that as the context, here are five tips on how to package lifestyle into your communities so you stand out among the competition:

More Than a House on a Lot

Designing communities for the active adult lifestyle requires a more comprehensive approach than simply plunking houses down on lots. You can virtually guarantee sales success if you begin the planning process with a consumer-oriented approach. This requires a thorough understanding of the home buying process.

For example, potential buyers in a master-planned community may travel around half the development site looking at your community’s structure, safety features, recreation offerings, amenities, lot layout and more before walking into any of the models or homes to examine the architecture or floor plans.

Because active adults purchase community lifestyle more than any other age group, community designers should treat each step of the community plan as another opportunity to positively shape the buyer’s first impression. Blending planning concepts and sales and marketing techniques is a fundamental element of community design.

On the Left We Have…Lifestyle

I firmly believe that the community sale actually is made at the community’s primary lifestyle focal point — the one grand view where the community’s lifestyle is on full display.

Many communities designed by my firm lead buyers down a transitional road from the entry gate to a T-intersection. There, potential buyers are encouraged to stop and take in the surroundings where they’ll see many amenities strategically placed to wow them and paint a picture of the community’s ultimate lifestyle. After they get the big picture, they can explore the community and see the other amenities or neighborhoods.

Lifestyle impressions can be crafted through extravagant architecture or simply rely on the site’s natural topography to impress. Lake Las Vegas — a $4 billion, 5,000-acre residential and resort development surrounding a 320-acre lake — features a magnificent town center reminiscent of an Italian piazza with walkways, cafes, outdoor seating areas and fountains. It sparks the imagination and communicates a fun, outdoor social lifestyle.

The Vineyards at Westchase, an 18-acre infill community in Hillsborough County, FL, projects a vastly different lifestyle. Environmental preservation was an important element of the community’s development, so the lifestyle focus shifted to the site’s natural features. The project team nestled variegated foliage among towering cypress trees and along the large lake. The design team also constructed a gazebo and boardwalk to provide easy access to the natural surroundings and provide leisure spots for bird watching.

Reveling in Success

A community’s lifestyle will reflect the buyers’ self images. Remember, active adults look for a home or community that showcases their success. To capture and keep their interest, plan a community that reflects that success through images, character and lifestyle and is readily identifiable from the moment they arrive at the entrance. Emphasize social and recreational opportunities (not mowing the lawn) and a low-maintenance lifestyle that reduces the hassles of homeownership.

Ooh, the Nostalgia

Nostalgia is important to many active adults, so homes and communities should take prospects back to a place they might have visited — or wanted to visit — in the past. Lake Las Vegas has a Tuscan theme because Tuscany is a popular vacation spot for many of the community’s residents. Tuscan and other Italian elements were delicately woven throughout the entire community — from the village town center to the tile roofing of the guardhouse and the streetlamp design.

Good for the Heart

As you probably know, active adults’ favorite form of exercise is walking. Don’t forget this when designing your community. Provide walking trails to connect your buyers to specialty retail, wellness centers, libraries and hobby shops. Central trail systems link the amenities and promote walking, biking and alternative modes of transportation.

To achieve maximum walk-ability, I suggest reversing the typical design process. Break from juxtaposing houses with roads and then filling in the blanks with sidewalks. Instead, first draw the open space, trails and walkways after all the environmental set-asides are made. Then refine the remaining development space with roads positioned to conform to that space. That way, curvilinear streets will replace monotonous grid streets, slow traffic, display elegant community landscape focals and encourage a walkable lifestyle.

Creating communities for active adults is a sophisticated process. Learn the sales and marketing elements, revisit your plan and tweak it so that the community’s fabric has an appealing function, lifestyle and image. Recognize active adults’ hobbies and desires and pepper images of a rewarding lifestyle throughout the community. Your attention to detail will pay off.

David Jensen is president of the Denver-based David Jensen Associates, Inc., which specializes in active adult and mixed-use master-planned communities. The company's award-winning communities rely on parks, open space and trail systems to create structure and a sense of place. For more information, e-mail Jensen, or call him at 303-369-7369.

Attend the 2005 Seniors Housing Symposium in Metro Washington, D.C. Area

Learn more about the fastest-growing segment of the housing market. Plan to attend Building for Boomers & Beyond: Seniors Housing Symposium 2005, the premier educational and networking event for industry professionals serving the burgeoning 50+ market. For more information, click here.

'Boomers on the Horizon' Available at BuilderBooks.com

Capitalize on the niches, needs and opportunities of the rapidly growing 55+ market by learning their preferences in "Boomers on the Horizon: Housing Preferences of the 55+ Market", available at BuilderBooks.com. To view or purchase this publication online, click here, or call 800-223-2665 to order.

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.

Integrated Communications Gives Edge to Pre-Sell Programs

Today’s active adult market is large, has considerable buying power and represents substantial opportunities for builders and developers.

Reaching this market effectively requires a comprehensive marketing effort in which every element is carefully designed to support your community’s overall marketing positioning.

Active adult buyers are experienced, knowledgeable ― and wary. They are very aware of any inconsistencies in a marketing program, especially a presales program ― and inconsistencies can mean the difference between profitable success and costly failure.

An integrated communication program that continually and consistently reinforces the community’s selling propositions will eliminate inconsistencies — and is a critical component of a successful marketing effort.

My community, The Palace at Weston, a high-end active adult community in South Florida, was positioned and actively marketed featuring an upscale luxury resort lifestyle. We offered 382 one- and two-bedroom residences averaging 1,000 to 1,950 square feet priced from $220,000 and had exceptional success implementing our integrated marketing communication presales program.

The community pre-sold almost 85% of its residences before ground was broken.

Here are six principles that guided our successful presales efforts:

• Hire consultants who understand the buyer’s age group. This sometimes means looking outside the industry to complementary resources for planning and design.

The first issue facing The Palace was to assemble a development team that understood both the market profile and the luxury resort lifestyle. We believed that the people who could afford our product were likely to have experienced and appreciated the amenities and style found in today’s luxury resorts, so we looked for expertise outside mainstream residential construction. The developers themselves included design professionals who specialized in luxury resort properties and had previously worked together. This added tremendous synergy to the team.

We also capitalized on this team’s successful reputations by highlighting them in the marketing materials. This gave the community increased credibility.

• Create a sales environment that is comfortable and inviting and that reflects the overall decor and ambiance of the community through the sales environment.

The Palace developers created a sales environment that truly allowed residents to experience the convenience and friendliness of the community’s lifestyle by locating the sales center in an upscale shopping center with excellent foot traffic.

• The investment in a retail space lease afforded excellent parking, lighting, convenient restaurants and coffee shops that were far superior to an on-site location.
• Office hours were geared to attract the interest of passers-by to the restaurants.
• The sales staff stressed European hospitality by encouraging prospects to stop in for coffee, refreshments, a glass of wine and even appetizers, reinforcing the luxury resort theme.
  
  
• Look for unique amenities that appeal to the market and give your community a distinctive advantage.

Proving they understand their market, The Palace takes a unique position on pets. While most condominium communities limit or prohibit pets, The Palace embraces them because we understand the close affinity people have to their beloved pets.

We created special amenities and services for pets so empty nesters with pets would feel welcome. This removed a major obstacle of moving.

• Take advantage of publicity with reprints.

The Palace uses reprints of publicity extensively. When coverage appears in local magazines, we reprint it and merchandise it as direct-mail pieces and as handouts. We emphasize pictures with people because people like to see their faces.

We held special events to create controlled publicity opportunities. They also provided “Meet Your Neighbor” opportunities that helped develop a real sense of community among potential buyers.

• Create direct-mail pieces that are memorable and interesting to prospects.

Following the groundbreaking, The Palace created a CD with photos of the event that was sent to buyers. The mailing included pictures in cardboard picture frames, a newsletter and publicity reprints. The Palace wanted to make sure that even those who were unable to attend received information.

• Use a groundbreaking to solidify contracts and sell hot prospects.

Knowing that active adults want to show their friends and family that they’ve made a good decision, include them in community events to help reinforce their decision to buy.

The Palace groundbreaking was a bit different. Rather than have a few dignitaries pose with shovels and champagne, the developers invited all those on contract and the hot list and encouraged them to bring family and friends to the event.

No expense was spared to create a memorable event for about 500 people. A ballroom-sized tent was erected on site complete with misting fans to combat the June heat. They wanted an event that would create buzz long after the gold shovels hit the ground. And they wanted an event that would provide ample publicity, reprint and direct-mail opportunities as well.

Memorable marketing and strong communications can not only help convert prospects into buyers, it can help your buyers feel good about their decision to move to your community. It worked in our community and it can work in yours.

Adam Rosenblum is the vice president of sales and marketing for The Palace Management Group, one of South Florida’s top companies specializing in seniors housing and care. Based in Miami, The Palace’s continuum of care includes The Palace at Kendall campus, an independent living community with two assisted living residences and a nursing and rehabilitation center. The company also operates The Palace Gardens Assisted Living Community in Homestead, FL, Homestead Manor Nursing Home and The Palace at Home, a Medicare certified home health agency. The Palace at Weston, a luxury 55-plus age-qualified apartment community, and The Palace Tel-Aviv, a continuing care retirement community in Israel, are under construction. For more information, email Rosenblum, or call him at 305-270-7000.

20 Club Helps Virginia Builder Spread the Load

Like many builders, Vincent Napolitano and his two brothers, Fred II and John, of Napolitano Homes based in Virginia Beach, VA, had their hands more than full before they joined NAHB’s 20 Club program about six years ago.

Yes, the three had split company responsibilities among themselves — Fred concentrated on accounting and purchasing, John oversaw construction and customer service operations and Napolitano managed land acquisition, human resources and sales and marketing. But even so, the company was not as efficient or productive as it could have been because it had outgrown its basic management structure. “It was us trying to do it all,” Napolitano says — and their all was a lot.

Napolitano and his father, Fred Sr., founded Napolitano Homes in 1977. But by the time Napolitano helped found his 20 Club more than two decades later, the company had grown to the point where it had 50 employees and was building about 250 homes a year in southeastern Virginia. Napolitano Homes now builds as many as 350 homes a year, primarily single-family homes and condominiums, and Napolitano expects to expand into Richmond in central Virginia later this year.

If doing it all wasn’t enough of a challenge, Napolitano says that, before joining the 20 Club, he and his brothers were trying to think it all, too.

“The 20 Club was the best thing that ever happened to our company,” Napolitano says. “When you’re running your own business, you’re in a kind of vacuum. You only have yourself and your partners to bounce ideas off of.”

That changed when a fellow founding 20 Club member, a builder from Atlanta, explained the corporate structure and procedures of his company’s operations to Napolitano. The Atlanta builder had created several departments within his company, each with its own manager to oversee daily operations.

“I liked his whole structure,” Napolitano says, so he applied it to his own company. Napolitano Homes now has seven departments, each with its own manager. Napolitano and his brothers still oversee their basic areas of responsibility, but now they rely on their department managers to manage daily operations. “Our company is run so much better than before,” Napolitano says.

NAHB’s 20 Clubs provide networking and educational opportunity for builders or remodelers from non-competing markets. Individual club members act almost as “boards of directors” as the clubs meet several times a year to share and compare financial information, look for trouble spots and offer each other advice about how to increase profit ratios and improve performance.

Napolitano says his club meets once a year to discuss financial operations ― members bring their company’s chief financial officer or key financial staff to those meetings. Members then host the other meetings on a rotating basis. Those meetings generally include a tour of one or more of the host member’s homes or communities under construction.

Napolitano has gained other valuable tips through his 20 Club, some small, some major. For example, Napolitano never scheduled walk-throughs until the day of closing, but other club members recommended that he schedule at least two walk-throughs for his home buyers ― one at least three days before closing and the other at closing — so closing wasn’t the first time they saw their homes. By scheduling walk-throughs this way, Napolitano was told, he would have time to correct any problems before closing rather than after the new home owners had moved in.

This lengthened his home building process and added a few days of interest payments, he said, but it increased customer satisfaction and referrals, a tradeoff he was more than willing to make.

Napolitano was also interested in starting his own mortgage company. Before he did so, he asked fellow club members who founded and operated their own mortgage companies. “The other guys told us the pitfalls to avoid,” he said.

Sharing ideas is a two-way street in the 20 Club program. Napolitano said club members interested in improving their customer service programs have come to him for help. Several have even used his company’s program as their model. “Basically, we hold a two-hour seminar for all our buyers who are getting close to closing on their homes,” he said. “We take them step by step through what they can expect so they have a better understanding of the process. The process goes much smoother this way.”

“Out of all of the services that NAHB has provided to its members, and I go way back with NAHB, this is by far the best service they’ve ever provided,” Napolitano offers. “The benefits of being in a 20 Club go right to the bottom line. Our bottom line has increased substantially as we have learned how to market homes and build homes better and operate our business more effectively.”

To learn more about NAHB’s 20 Club programs, click here, or e-mail Jeff Lambert, or call him at 800-368-5242 x8609.

New Labor Rules Prohibit Youths Under 18 From Working on Roofs

In final regulations on employment rules for youth that were published by the Department of Labor in the Federal Register last month, employees under the age of 18 are prohibited from working on or in close proximity to a roof unless they are participating in an apprenticeship or student-learner program.

Roofers are in one of the occupations at highest risk for fatal work-related injuries, according to the National Institute for Occupational Safety and Health. And available data indicate that working at heights is a major contributor to injuries and deaths of young workers.

Activities included in the ban on roof-related work are: installation, repair and maintenance of gutters and downspouts; and installation of sheathing, roof trusses or roof bases, television antennas, air conditioners, exhaust and ventilating equipment, heating equipment and similar appliances attached to roofs.

The prohibition extends to standing or working on a ladder or scaffold at or near the roof, working on the installation of roof trusses or joists that support the roof or working from or being transported to or from the roof in mechanical devices such as a hoist. Minors are also prohibited from working on a scaffold, or the roof itself, to install roof flashing or gutters.

Banned roof work for youths includes carpentry and metal work; alterations; additions; maintenance and repair, including painting and coating existing roofs; the construction of the sheathing or the base of roofs, including roof trusses or joists; gutter and downspout work; the installation and servicing of television and communication equipment; the installation and servicing of heating, ventilation and air conditioning equipment or similar appliances attached to roofs; and any similar work that is required to be performed on or about roofs.

Banned roofing operations are defined as “all work performed in connection with the installation of roofs, including related metal work such as flashing, and applying weatherproofing materials and substances such as waterproof membranes, tar, slag or pitch, asphalt prepared paper, tile, composite roofing materials, slate, metal, translucent materials, and shingles of asbestos, asphalt, wood or other materials to roofs of buildings or other structures.”

The proscription against under-18 roofing work also extends to “all jobs on the ground related to roofing operations such as roofing laborer, roofing helper, materials handler and tending a tar heater.”

At the age of 14, the rules specify that youths cannot work on construction or repair jobs.

At age 16, youths are precluded from working in any job or occupation that has been declared hazardous by the Secretary of Labor. In general, this means that 16-year-olds cannot drive a motor vehicle, work on a power-driven hoisting apparatus, use a power-driven circular saw or engage in roofing or excavation operations.

Federal child labor rules no longer apply once a worker reaches the age of 18.

For a press release from the Department of Labor, including information on how to link to the complete text of the final rules, click here.

For further information, email Rob Matuga at NAHB, or call him at 800-368-5242 x8507.

Selling Homes Is a Learned Skill

What measures can you take to gain the buyer's confidence?

Start by learning every detail about the product that you are selling.

Salespersons think often that they only need to know the purpose of the product they are selling. But if that’s all they know, their sales results will not be as strong as those of a salesperson who takes time to learn everything about the home and what it will mean to buyers, especially how they will use it.

Selling homes is a learned skill. To effectively sell homes you have to understand:

• Construction techniques and product specifications
• Financing
• Demographics
• Human nature

Construction Techniques and Product Specifications

Every aspect of building technology has improved — from aesthetics to energy conservation to water conservation and everything in between. Today’s homes are far superior to the homes built five and 10 years ago, primarily because construction techniques have changed and improved and new materials are being developed and used. Tell home buyers about the construction techniques and products used in their homes. They are fascinated by these types of details.

To become familiar with the techniques and specifications that will interest your prospects:

• Make time in your weekly schedule to meet with manufacturer sales representatives to learn about their products.
• Learn why your builder has chosen products over the competition.
• Obtain specification sheets and study them so that you’ll be able to answer your buyers’ general questions.
• Use the specification sheets as handouts to your buyers. They will appreciate having more information to study. They also will have greater confidence in you as a knowledgeable salesperson.
• Most importantly, you should meet with your construction superintendent regularly to learn about:
  • Construction techniques so that you can speak knowledgeably about the quality of your homes
  • How your homes are built so that you know if a home can be changed to suit a buyer’s request
  • Product changes
  • Delivery schedules

Always keep in mind that a home is built with care and precision, that it contains more than 200,000 parts and that as many as 50 different subcontractors are involved in its construction.

Financing

Financing is an integral part of any business, especially the home building industry. In Colorado, for example, there are more than 60 mortgage instruments being used to finance homes. As a salesperson you have to be knowledgeable about all of the different financing methods to best suit your buyers’ needs.

How do you keep abreast of all of the new financing tools? The answer is simple:

• Meet with mortgage representatives on a regular basis to learn about their programs.
• Attend financing seminars.
• Role-play sales “pitches” with your fellow sales associates.
• Review financing programs with Realtors® from other offices to obtain their feedback and support for the programs you have chosen to use.

Don’t review mortgage programs with potential buyers until after they’ve become enamored with a home. Mortgage programs can be complicated and premature discussions potentially could scare buyers away.

However, after a buyer selects a home style, you should feel confident enough to begin the formal introduction of a financing program. Remember to apply the “KISS Formula” in your discussions — Keep It Simple, Salesperson.

Make sure that you explain everything about the financing package to the purchaser. Don’t leave anything to the unknown. Too often, I’ve heard stories from purchasers who have said that their salesperson referred them to other salespeople or mortgage representatives and, “We really don’t understand the explanation from one person to the next. We lost confidence in the salesperson and the home building company and decided to look elsewhere for our home.”

Don’t let this happen. Simplify your financing program by having forms prepared in advance and then tailor them with information about your buyer so that everyone is aware of which items are being reviewed.

• Review the information several times and explain the principal, interest, taxes, insurance and the monthly payment and amortization schedule. Emphasize the monthly payment. This is the most important factor for the buyer. Buyers want and need to know if they can afford your home so that it can become their home.
  
  
• Review qualification ratios per the lender’s requirements. Take time to review your customers’ financial status:
  • Salary
  • Bonuses
  • Commissions
  • Scheduled raises
  • Pension plans
  • Stock option plans
  • Equity in present real estate holdings
  • Securities
  • Savings and checking deposits
  • Art
  • Jewelry
  • Personal property
  • Other investments
    
    
• Explain the closing costs so that all parties — the buyer and seller — are aware of their responsibilities.
  
  
• Prepare your buyers for the mortgage application with a list of items similar to the above list and, in addition, account numbers and names of previous and present credit holders that will be necessary for the mortgage company to verify through a standard credit check. The more prepared you and the buyers are for the mortgage company, the faster a permanent mortgage will be approved — and the faster you will all get to the “closing table.”
  
  
• Be the liaison between the mortgage company and your buyers. Be in control. Fewer problems will occur if you are directly involved.
  
  
• Attend your home buyer's mortgage application meeting. You will be able to help them with their questions. Your presence will also reinforce the “sale” and fortify their confidence in you.
  
  
• Arrange the closing so that it is convenient to your buyers.
  
  
• Attend the closing and collect the money.

Demographics

Personally collect demographic information about the area in which you are selling. Knowing your product is not enough. You have to take the initiative to meet the community in order to understand it and sell the lifestyle.

• Meet the superintendent of schools. Visit the elementary, junior and senior high schools. Just reading about the school system is not enough. Walk through the schools and learn about the academic, athletic and extracurricular activities. You will have more credibility with your prospective buyers.
  
  
• Learn all about nearby shopping. Meet the merchants. You can refer business to one another. You will also learn about the products and services offered so that you can better “sell” your neighborhood.
  
  
• Medical facilities are important to everyone, but especially to the elderly and parents of young children. Tour these facilities and meet the personnel. Keep in mind that they also buy homes and can be an excellent referral source for you.
  
  
• Learn about the area highways and local roadways. Don’t just know where they are, drive them. Also, find out about local bus routes and their schedules (school bus schedules, too). The more you know about public transportation, the more sales you can make.
  
  
• Learn about the recreational and exercise opportunities available. Buyers want to know not only about the amenities offered in your community, they want to know about what’s available in the neighborhood, city or county, too. Obtain lists of activities, schedules, fees and times of operation for both the public and private facilities. Also, keep abreast of activities and amenities within driving distance from your community such as lakes, parks and hiking and biking trails.

You also need to keep up with the businesses in your area. There may be job opportunities for your residents. Or, a new company may be moving into your area and bringing with it employees and prospective buyers.

To keep abreast of the business community, join and be active in your local chamber of commerce.

Finally, be aware of your competition and make lists of their strengths and weaknesses, including sales personnel, product, location, financing and inventory.

Read your local newspapers and make a scrapbook of items that interest you and your buyers. You never know when a piece of information will help you create another sale.

Human Nature

The bottom line is people buy people first, then they buy product. Essentially, you have to sell yourself if you want to sell a home. When prospects are working with you, they are seeking interest, loyalty, consideration, honesty, courtesy, kindness, respect, product knowledge and empathy.

Above all, sell your buyers what they want — not what you want to sell — and sell them what they can afford. By selling yourself as well as your product, you not only have a better chance of making the sale, you’ll increase your referrals.

As the salesperson, you are the advertiser, the public relations consultant and the promoter. Remember, your positive disposition, knowledge and enthusiasm are the real keys to the success of marketing and selling your homes. Be well-prepared and you will create more sales.

Tool Kit Helps Builders Address Potentially Devastating Storm Water Requirements

In response to storm water requirements of the Clean Water Act’s Total Maximum Daily Load (TMDL) program that could make residential construction permits more expensive or even impossible to get, NAHB has published “The TMDL Tool Kit,” which is available online.

Over the past few years, it has become clear that the TMDL program can affect home builders in several ways — beginning with restrictions on activities covered by revised state water quality standards and ending with potential scenarios in which no building is allowed.

The states are being required to develop TMDLs for 48,000 “impaired” waters across the country. If a construction site is located in a watershed associated with these waters, a TMDL can require pollution reduction for construction site storm water discharges, making a National Pollutant Discharge Elimination System (NPDES) permit significantly more difficult to obtain.

The NAHB tool kit is designed to provide home building advocates — including state or local association executive officers, government relations staff and interested members — with information on how the TMDL can affect the industry and what they can do about it.

“The TMDL program has teeth and, if builders aren’t careful, it can take a bite out of the home building industry,” say the authors of the primer. “Luckily, builders have a well-earned seat at the TMDL table as important stakeholders in this publicly driven process. Unfortunately, too often the first time builders learn of costly TMDL-based requirements is when they are already finalized and being implemented.”

The NAHB kit provides a general overview of water quality standards, the 303(d) impaired waters listing process, basics of the TMDL development process and opportunities for the public to participate.

A second section of the NAHB resource describes the process and the elements that should be included when TMDLs for sediment are developed by the states or the Environmental Protection Agency to ensure that they are scientifically defensible and take a practical approach.

“For NAHB members, it is not a matter of ‘if,' but ‘when’ the TMDL process will have an impact on how and where land is developed for residential construction,” the authors say. “So, ‘when’ the time comes for involvement to be necessary, ‘The TMDL Tool Kit’ is ready and available to meet the needs of the advocates of the home building industry and their technical experts.

For more information, email Chandler Morse at NAHB, or call him at 800-368-5242 8327.

February Is National Designation Month — Look for Discounted Class Fees

February is National Designation Month, and to celebrate the month and promote ongoing education in the housing industry, the NAHB University of Housing is offering licensed associations a special 50% discount on student fees for all classes held during February.

The NAHB University of Housing offers more than a dozen professional designations covering industry basics such as business management and marketing techniques, along with specialized courses including aging-in-place programs, property management and more.

Earning a designation allows NAHB members to hone their business skills and convey to their clients that they have superior training, practical experience and in-depth knowledge. Additionally, designation holders can take advantage of valuable networking opportunities throughout their enrollment by working closely with expert instructors and other professionals both within their field and outside their specific areas of expertise.

‘Vacation-a-Day’ Drawings at IBS

The NAHB University of Housing will conduct daily “Vacation-a-Day” drawings at their booth in NAHB’s Member Advantage Headquarters at the International Builders’ Show (IBS) in Orlando, FL, to kick off National Designation Month. A grand prize drawing will be held on the last day of IBS.

The daily prizes are a weekend stay at the Marriott Hotel of your choice. The grand prize is a seven-night stay at the Marriott Hotel of your choice, plus $1,000 toward airfare.

NAHB members who have an NAHB designation noted on their business card will receive a special prize for stopping by the University of Housing booth — as well as an extra chance to win the Vacation-a-Day Give-Away.

For more information, visit NAHB’s Member Advantage Headquarters in the D Hall lobby of the Orange County Convention Center during IBS, or online at www.nahb.org/designations.

Awards Recognize Achievements of Home Builders Institute Job Corps Graduates

The first NAHB President’s Award will be presented to Fabian Liera, 28, a graduate from the Home Builders Institute’s plumbing program at the Fred G. Acosta Job Corps Center who today is owner and general manager of Ironwood/Winnelson Plumbing Supply in Tucson, AZ.

Liera began his career in 1993, worked in the trade and later joined a plumbing supplier pulling orders and packing trucks.

Liera’s sister met her husband at the Fred G. Acosta Job Corps campus, and he is also a graduate of HBI’s plumbing program and works for his brother-in-law as the manager of sister company, Tucson/Winnelson.

Liera has nine employees, two of them graduates from HBI’s program at the Acosta center, and he has established an internship program for HBI plumbing students, “because I wanted to give back to a program that’s done so much for me.” He estimates that his company cleared $4.2 million last year.

The award will be presented annually by the president of NAHB to an HBI graduate who has overcome adversity and succeeded in the building industry. NAHB President Bobby Rayburn will be making this year’s presentation during the NAHB Board of Directors meeting on Friday, Jan. 14, at the International Builders’ Show in Orlando.

Success and Courage: Trademarks for Winner of Shirley Wiseman Lach Award for Exceptional Promise

This year’s winner of the Shirley Wiseman Lach Award for Exceptional Promise, Candace Ellisor, 36, is a graduate of HBI’s carpentry program at the Sacramento Job Corps Center. She is a petty officer third class in the U.S. Navy and stationed in San Diego.

While in Job Corps, Ellisor served on the student government, counseled fellow students, founded a video library and worked in a maintenance job at the center after classes. Following graduation, she devoted 10 years to the trade, securing her journey level certification. She returned to the campus many times as a motivational speaker, talking with other young women facing the stereotypical challenges posed by the construction trades.

Ellisor joined the Navy in 2002, has completed three tours of duty in Iraq and is soon to become a mother.

In a letter to the winner, Lach wrote, ”Candace, three years ago you joined the U.S. Navy and put your talents to work at the service of our great nation. I want to take this opportunity to thank you for serving our country. I admire your courage and the choice you made to apply and grow the skills you learned in Job Corps. You have shown exemplary promise and I am proud that you are the recipient of this award.”

The award will be presented to Ellisor by her HBI carpentry instructor Mike Kohlbaker, Sacramento Job Corps Center Director Peter Gregerson and HBI Regional Program Manager Jesse Constancio at a ceremony at the San Diego Job Corps Center.

For more information, email Maria McIntyre at HBI, or call her at 800-795-7955 x8912.

Workshop on Building Science Offered by CertainTeed

CertainTeed Corporation’s Insulation Group is offering a new traveling building science workshop for architects, builders, building owners, engineers, developers and local government and code officials. The workshop comes to you and is presented by local CertainTeed territory managers free of charge.

Headquartered in Valley Forge, PA, CertainTeed is a member of the National Council of the Housing Industry — the Supplier 100 of NAHB.

The CertainTeed workshop includes a PowerPoint presentation on the “Art of Building Science,” a VHS tape on scientific principles, binders on building science for all participants, and test questions and answers. A $399 DVD presentation is also available for more individual study and one-on-one presentations.

The workshop covers the following information:

• An introduction to building science
• Heat flow in structures
• Air flow in structures
• Moisture flow and management in structures
• Indoor air quality
• Evaluating HVAC and the building envelope
• Sound control

“As a manufacturer, most people think all we do is produce building materials, but our focus is also on customer solutions — offering tools and education programs to assist builders and architects in designing and building more energy-efficient, safe, durable and comfortable structures,” says Glenn Singer, manager of building science at CertainTeed.

To arrange a workshop at your office, contact your local CertainTeed territory manager or call 1-800-233-8990.

Boundary Disputes and Old Fences

I got a call the other day from Stan Taughl, a very good client, concerning a land development joint venture he and I are involved with. Stan owns 140 acres we’re subdividing. The project is still in the planning phase, i.e., no construction has started yet.

“Tim,” he said, not bothering to mask the irritation in his voice, “you know that guy who just purchased the 10 acres south of us? Well, he’s been over there all week with an excavator clearing and logging; which wouldn’t concern me except he’s torn down several sections of the old fence between our properties.”

Warning flags sprang up in my head. Old fences often play an important role in determining true boundaries, especially where records are old and sketchy. I knew Stan’s fence was a likely candidate.

“What’s worse,” Stan continued, “is there are new boundary stakes 10 feet on my side of where the fence was. It looks like my neighbor is staking a claim for a 1,320- by 10-foot strip of my land, and erasing the true boundary in the process. And what really gets my goat is he didn’t even have the decency to call! I’ve never met him, but you have. Why don’t you give him a ring and find out what he’s up to?”

“I’ll be happy to,” I said.

I immediately called. The fellow’s name was Pewter Mugg, and though I didn’t know him well, we had recently met to discuss sharing infrastructure costs for our two projects.

“Pewter,” I said, “Stan Taughl just phoned and said you’re doing some clearing, which is fine, but he thought your excavator operator may have torn up some old fence on the boundary. Anything to it?”

“Uh, yeah… yeah, that could be,” he stammered, as if he half expected the question but hoped it wouldn’t be asked. “But you know how it is, Tim,” he continued, “the fence was so overgrown with berry vines, the operator couldn’t see it until it was too late. He nipped it in a couple of places. Real sorry.”

“Hmmm,” I grumbled, “Did he just nip it, or did he rip it?”

“Yeah, well, he did do some damage to a few sections.”

“Okay…,” I replied, hesitating. I knew any decent operator would have little trouble avoiding a fence after he’d hit it once and could see its direction. I continued, “Stan also said he saw new survey stakes on his side of the fence. Have your surveyors found some sort of discrepancy?”

“Um, yes… well, my surveyors tell me there is a minor discrepancy in several old records, so they made their best estimate at where the line should be, and darned if it didn’t wind up 10 feet on Stan’s side. But I looked at the fence myself and there are metal posts in it, which tell me it’s fairly new and not reliable for historic boundary purposes. You know, Tim, I tried several times to call Stan, but he never called back.”

Now the hairs on the back of my neck stood up. I’ve known Stan for years and know him to be as reliable as a rooster bugling at daybreak; he always calls back. I also happen to know the fence was at least 50 years old, as old as Stan’s family had owned the property. It was true there were newish metal posts, but only because Stan had used them to repair the original wood fence. There was little doubt the fence would play a key role if a dispute went to court. A foul odor was emanating from this conversation.

“Okay…,” I replied. “Well, Pewter, I’ll pass that along to Stan. You know, it looks like this boundary issue could be headed toward a quarrel, which is the last thing anyone wants. I know I’m speaking for Stan when I say we want to be good neighbors. How about we meet at my office next week: you, your surveyor, Stan and myself. I’m sure if we lay everything on the table, a sensible solution will come of it.

“Yeah, sure. Good idea,” he said with a measure of relief, like a guilty schoolboy who had just narrowly avoided the rod. “I don’t want a tussle with Stan, or you, or anyone else. I’m just trying to turn a buck.”

So I set up the meeting, and it went marvelously. It turns out, after more research, the surveyors determined that the old fence was indeed the proper boundary, and they were able to relocate it. Pewter actually seemed just as relieved as we were; he truly did not want a hassle. It always amazes me how sensible people, when sitting face to face, are so much nicer and more willing to cooperate than when dealing through intermediaries, or on the phone, or in writing.

So the two morals of this story are:

• First, don’t ever tear out or alter a fence near a property line unless both parties agree beforehand.
• Second (and I think more important), do whatever it takes to make personal contact in any potentially contentious matter. “He didn’t return my phone call” or “I’ve been really busy” are feeble excuses just begging for trouble.

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.

Candidates for NAHB Vice President/Secretary Give Final Campaign Messages

Following are the final messages to the NAHB membership and the board of directors from the two candidates for 2005 vice president and secretary.

What an exciting, fast paced year this has been. I have enjoyed the campaign and the opportunity to talk with so many of you. We have discussed many issues and problems you are facing every day in your business and what NAHB can do to help improve your bottom line.

I have told you about my political background and my NAHB experiences during my 28 years as a national director. My lifetime of political involvement and my many years in a leadership role at NAHB qualify me to serve as your next vice president/secretary.

As one of your senior officers I will increase the level of grassroots participation and get more of our younger members involved on the national level, while maintaining the involvement of our experienced members. I will expand our advocacy program and make it even stronger than it is today.

During this past year, I have called on more than 1,500 NAHB members across the country, and the major problems I find facing our members are: increased cost and availability of insurance, rising cost and availability of building materials and land, tort reform, storm water runoff and impact fees. We can have a positive effect on these issues through concerned leadership and a politically involved membership at the local, state and national levels.

We must become more aggressive with our legal action committee, being more proactive and protecting and defending our members from detrimental government laws and regulations.

We must continue to monitor our budget, being frugal with the resources of NAHB, saving money where we can while still offering our members the tools they need to improve their bottom line.

I am running for vice president/secretary of NAHB because I want to make a difference. I want to reach out to each of you and let you know that my door will always be open; I will be accessible and approachable. I will listen to your concerns and problems, and together we will find the solutions necessary to help solve the problems facing our industry. I would like for my effectiveness as an officer of NAHB to be measured by how well I increase the level of grassroots participation. Only through a strong, cohesive association will we be able to effect change.

Today, I’m asking for your input, your support and your vote on Jan. 15, 2005 at 8:30 a.m. for my election to the office of vice president/secretary of NAHB.

Thank you for being a part of NAHB, the greatest champion for housing in the world.

At the start of the New Year and after our recent national elections, there are many unknowns on the horizon for our industry: interest rates climbing, sporadic job growth, housing’s Government Sponsored Enterprises facing new regulations, inflation, etc. These unknowns require strong and experienced leadership at the senior officer level. I believe that this separates me from my opponent because of my experience in this industry as a builder and as a leader both nationally and locally.

I have had great success in protecting our industry with local and state regulators. I’ve brought both government and environmentalists together to achieve mutually productive housing goals. Except for my military service, I have always been, and will continue to be, an active home builder. Located in a large metro area, I have had to deal with problems I hope never come to your doorstep. However, because of my experience, I know where the pitfalls are and how to attack these problems, and I have the ability to share solutions.

On the morning of Jan. 15, we will elect the next vice president/secretary. I believe very sincerely that I can work with the existing senior officers to reform NAHB in a meaningful, “service-first” way, and use my experience and leadership in a positive team effort to help the senior officers achieve association goals.

Serving you for the next five years is my goal. I have the best experience, the best ability to fight and win on local and national issues and the courage to make the right decisions to assure we are prepared to go forward in a positive, confident manner as we face our future. I believe we should build on past successes, learn from our mistakes and “build from the ground up.”

I want your vote to become the next NAHB vice president/secretary. I ask that you search your conscience as an individual voting director with a private ballot and vote for me to serve you.

I look forward to seeing you at our convention in Orlando.

Log In to NAHB Web Site for Chance to Win Digital Camera

NAHB is starting the new year with a "Log In to Win" contest and a chance for NAHB members to win a Sony Cyber-shot® 7.2 Megapixel Digital Camera.

To enter, simply go to www.nahb.org/logintowin on the NAHB web site during the month of January for your chance to win. If you don’t have a user name and password, click the "Create Your Login" link and set up your account today.

You can also log in to win at the 2005 International Builders' Show in Orlando, FL. Go to the www.nahb.org booth, where NAHB staff will be on hand to help you create your login and show you all the new and exciting tools available at www.nahb.org.

The contest ends Jan. 31. Don't miss out on your change to win — and to access the exclusive industry resources found on www.nahb.org.

All active NAHB members, HBA staff and executive officers are eligible. Prize details, terms and conditions can be found at www.nahb.org/contestrules.

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.

Awards Programs Deadlines

Awards Program	Entries Due
National Wetlands Awards	Jan. 15

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.