Nation's Building News Online: June 20, 2005

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Court Upholds Streamlined Storm Water Permit

In a recent decision, the 7th U.S. Circuit Court of Appeals rejected a legal threat to the Construction General Permit, which regulates storm water discharges during the home building process. The permit is viewed by builders as the most efficient available option for complying with strict federal storm water requirements.

"This is a critical victory for home builders because lawsuits like these eat away at housing affordability," said NAHB President David Wilson. "Builders want to protect the environment, but we do not want more layers of regulation that cost time and money to fulfill and do little to protect the environment."

Compliance with existing storm water requirements already adds $1,400-$4,500 to the cost of a residential lot, he said.

The court ruled unanimously that the permit does not violate the Clean Water Act's public notice and hearing requirements. The court also held that the Environmental Protection Agency (EPA), which issues the permit, had complied with Endangered Species Act requirements, and the petitioner’s remaining challenges to the permit were dismissed.

The Construction General Permit is used by builders in five states and serves as a model for the majority of states that regulate storm water discharge. While it is the most streamlined permit available to builders, it still involves lengthy steps to ensure environmental protection, including filing a Notice of Intent, developing and implementing a Storm Water Pollution Prevention Plan, undergoing inspections and submitting a Notice of Termination.

The National Resources Defense Council (NRDC), one of the petitioners, requested public notice of the Notice of Intent and Storm Water Pollution Prevention Plan for each permit. Ruling on the side of the EPA, the court said that this would make the general permit "inconsistent” with congressional intent and "no different” from the more onerous process for obtaining individual permits.

A claim by NRDC that the permit violates a section of the Endangered Species Act was also rejected, in part because the Fish and Wildlife Service, which oversees that law, agreed that issuing the General Permit was not likely to adversely affect threatened and endangered species and their habitats.

EPA defended its permit before the court, and NAHB and several other building industry groups joined that effort.

"While we believe there is still room for improvement in the storm water permitting program, we are relieved that no additional permitting costs will be added to the cost of housing, which is already loaded down with fees," said Wilson.

For more information, e-mail Tom Ward at NAHB, or call him at 800-368-5242 x8230.

‘Storm Water Permitting: A Guide for Builders and Developers’ Available at BuilderBooks.com

“Storm Water Permitting: A Guide for Builders and Developers,” available through BuilderBooks.com, provides a starting point for builders and developers to use in locating and understanding storm water permitting requirements. To view or purchase this publication online, click here, or call 800-223-2665.

Floor Plans: Livable Density in the Pacific Northwest

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Builders Curbing Speculation in Housing

Home builders have been taking steps to curb speculative home buying by investors in the nation’s hottest housing markets, according to a series of surveys conducted by the NAHB.

“Builders — especially the largest builders — early on recognized the dangers of excessive speculative activity and took steps to discourage sales to investors who did not intend to occupy the new homes,” said NAHB Chief Economist David Seiders. “As a result of these proactive efforts, speculative activity in the national market for new single-family homes has been well contained.”

NAHB conducted a series of three surveys in March, April and June of this year to assess the degree of concern by home builders about speculative activity in local housing markets, to gauge the extent of speculative new-home buying and to determine how home builders are responding to the threat of speculative activity.

The research by NAHB uncovered a good bit of concern in the home building industry about speculative purchases by buyers who are solely interested in selling the property for short-term capital gains. The research also found that many builders are taking steps to discourage sales to buyers who do not intend to occupy the homes and that these efforts have helped contain speculative activity in the national new-home market.

Generating a ‘Hidden Supply’

Builders are concerned about speculative home buying primarily because this activity can generate a substantial “hidden supply” that could come back onto the market quickly if price appreciation should begin to falter. This would put additional downward pressure on market prices, and sales of new units coming onto the market would be severely disrupted. In addition to unloading units that they own, speculators could also decide not to close on units they have contracted to buy, which is a key risk in the new-home market because of typically long lags between sales contracts and closings.

Many builders also are concerned about investor-owned units standing empty in new communities they are developing. Large numbers of sold but vacant units can detract from the sense of community as well as the overall look and feel of an area under development.

Recent concerns about speculative buying appear to be concentrated among larger builders operating in markets where relatively rapid price appreciation has the potential to attract substantial speculator interest. Builders with large production pipelines naturally place heavy emphasis on the sustainability of market fundamentals going forward.

The concerns of home builders appear to be well founded. The Federal Deposit Insurance Corporation (FDIC) recently identified 55 metro areas where price appreciation had reached “boom” proportions by the end of 2004, and mortgage loan data files  (from LoanPerformance) show not only an upswing in investor activity nationally but also relatively high shares of investor purchases in many of the “boom” markets identified by the FDIC.

It also seems clear that investors often use “exotic” forms of adjustable-rate mortgages, which are financing vehicles that Federal Reserve Chairman Alan Greenspan in recent testimony before the Joint Economic Committee in Congress called “developments of particular concern." Greenspan also told Congress that “speculative activity may have had a greater role in generating the recent price increases than it has customarily had in the past,” and he cited a quickened pace of existing home turnover as symptomatic of speculative activity.

Price ‘Bubble’ Concerns

NAHB began surveying home builders about the investor phenomenon in March, gathering information from more than 500 companies throughout the country. At that time, a majority of single-family builders (60%) reported some speculator activity in their markets, and a majority of those companies felt that this activity was fueling house price appreciation to some degree.

Concerns about potential price “bubbles” ran relatively deep among larger companies, particularly in the Northeast and West.

Builders in the West also noted relatively heavy usage in their markets of adjustable-rate mortgages with deeply discounted (“teaser”) initial rates, with interest-only monthly payments and with the potential for negative amortization (rising principal balances).

Targeting the Investigation

In April, NAHB launched a targeted investigation of investor activity in the markets for new single-family homes and condo units, utilizing a panel of 12 large home builders operating nationally or regionally, as well as samples of builders of all sizes located in 30 sizeable “hot” metro markets with relatively rapid rates of home price appreciation through the first quarter of this year. The hot-market samples were selected by local home builders associations within the NAHB federation.

The panel of large builders reported that 93% of their single-family home sales during the previous six months were for primary residences, 4% were for vacation homes and 3% were for investment — including units bought as long-term rental properties.

Ten percent of the large builder sales of condo units in new multifamily buildings were for investment during that period. Some large companies provided mortgage financing to investors through their own finance subsidiaries, but in all cases these loans required higher interest rates, larger downpayments and/or stiffer underwriting standards than on loans to owner-occupants.

The April survey of builders located in hot metro markets found significantly larger proportions of investor purchases in both the single-family market (11%) and the condo market (15%). This group reported that most investor sales were to individuals from within the market area, although some investors were institutional buyers (6%) or foreigners (2%).

All members of the large-builder panel, and a large majority (89%) of the builders surveyed in the hot metro markets, said they were taking steps to reduce sales to investors. The panel of large builders described their efforts as follows (multiple responses were permitted):

• Eighty-two percent said they would sell only to buyers for owner occupancy.
• Sixty-four percent said the buyer cannot sell the home or “nominate” the contract before closing.
• Fifty-five percent said the buyer cannot sell during the first year after purchase.
• Thirty-six percent said the buyer must give the builder the first right to buy the home back if it is sold within the first year.
• Thirty-six percent said the home cannot be rented within the first year.
• Thirty-six percent said they were limiting the number of investor sales per lot release.
• Twenty-seven percent said they would not provide sales incentives to investors.
• Eighteen percent said they would not sell more than one home to buyers with the same last names.
• Eighteen percent used a variety of other measures, including charging a fee (often $50,000) if homes are resold within the first year.

Speculation Limited Nationally

From a national perspective, the amount of speculative buying in the market for new single-family homes appears to be quite limited at this time, thanks largely to the efforts of large national and regional builders and those companies in hot metro markets that recognize the dangers of speculative activity.

A comprehensive national survey of more than 500 home builders conducted by NAHB in June shows that only 4% of single-family homes sold in the first half of this year were to investors who were not buying the property as a primary residence or vacation home, compared with 13% of  the multifamily condo units sold during that same period.

Some of the units sold to investors, particularly condos, are bought as long-term rental investments, leaving even smaller shares for short-term speculative activity. Only 6% of respondents to NAHB’s June survey said they were actively marketing single-family homes or condos to investors.

The investor share of new single-family home sales identified in NAHB’s June survey of builders is well below the share computed from the LoanPerformance database for the entire single-family market of new and existing units combined. Those data show that the investor share of prime conventional conforming mortgage loans to buyers of both new and existing single-family homes (excluding purchases of primary residences and vacation homes) was 9.5% in December of 2004 and 9.9% in March of this year, which is the latest month for which statistics are available.

Neither LoanPerformance data nor the Home Mortgage Disclosure Act (HMDA) database distinguishes between new and existing homes. NAHB analysis of recently released data from the 2001 Survey of Residential Finance, conducted by the U.S. Census Bureau for the Department of Housing Development as a supplement to the 2000 Census, shows that the investor share of single-family homes purchased in 1999 was much lower in the new-home market than in the market for existing homes.

For more informatiion, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.

Con Artists Play Troubling Game: Grand Theft Home

The National Consumer Law Center — which recently issued a comprehensive report on “the rampant theft of Americans’ homes and equity” by con artists around the country who promise to save the home from foreclosure — advises home owners to ignore posters offering help that have been slapped on telephone poles and bus stops in working-class neighborhoods. The con artists essentially buy the property by paying off the amount that is overdue on the loan. They may promise to rent the house to the home owner, with the opportunity for the family to buy it back later, but they typically set the price higher than the owners can ever afford. Then they evict them when they fall short on the monthly rent payments. The underlying mortgage is often not paid off, so the home owners are not only evicted, but they also still owe on the original loan amount. Home owners in financial trouble need to talk to their lender or an attorney, the exact opposite of what the scam artists tell them to do, the report's co-author, Steve Tripoli, said. (www.washingtonpost.com)
Washington Post (6/4/05); Sandra Fleishman

The 50 Cleanest (and Dirtiest) Cities in America

Portland, Ore., is the cleanest big city in the country, according to a ranking by Reader’s Digest of the 50 largest metro areas that scores their air quality, water quality, industrial pollution, Superfund sites and sanitation. Among the many smart things the city has done to deal with its pollution problems, when it was looking into a green building ordinance, it met with 200 developers to find out exactly what regulatory or financial hurdles were preventing them from using sustainable practices, and then laid out a plan. The remaining four in the top five cleanest American cities were San Jose, Calif.; Buffalo, N.Y.; Columbus, Ohio; and San Francisco. The dirtiest cities, according to the report, were Chicago, New York, Pittsburgh, St. Louis and Birmingham, Ala. (www.rd.com)
Reader’s Digest (7/05); Derek Burnett

States’ Case Challenging Species Act Is Rebuffed

The Supreme Court has refused to hear an appeal in a case challenging the constitutionality of Congress’s power to regulate interstate commerce being extended to protecting animal or plant species that don’t have any commercial value and live in only one state. In the case of GDF Realty Investments v. Norton, concerns over six endangered small insect species living only in caves and sinkholes in two Texas counties stopped development of a tract west of Austin where new office, apartment and retail complexes, including a Wal-Mart, were planned. The developer lost the case in the Federal District Court in Austin and the U.S. Court of Appeals for the 5th Circuit in New Orleans. In the petition to the Supreme Court filed last May, the developer said that the appeals court had “seriously misunderstood” recent Supreme Court precedents that had limited congressional authority under the Constitution’s Commerce Clause to activities that substantially affect interstate commerce. The appeal was supported by NAHB, the National Farm Bureau Federation and the states of Texas, Alaska, Delaware and New Jersey. (www.nytimes.com)
New York Times (6/14/05); Linda Greenhouse

Ultra-High-End Homes, Built on Faith

While there are a lot more people these days who can afford to purchase very high-priced homes, homes selling in the U.S. for more than $1 million still represent less than 1% of the residential real estate market, according to Gopal Ahluwalia, NAHB’s staff vice president for research. National Census figures show that the average income for the top 0.1% of the population was $3 million in 2000, which is two and a half times higher than the number reported in 1980 after being adjusted for inflation. The major markets for superluxury homes are San Francisco, San Diego, New York, Washington, D.C. and some parts of Florida, Ahluwalia said. In Rye, N.Y., developer Gary Hirsch, chairman of Elk Homes, is building a $9 million, 11,000-square-foot house on speculation and isn’t worried about finding a buyer. Likely prospects include corporate executives locating from other parts of the country, Wall Street types from Manhattan or residents of surrounding suburbs who are looking to trade up. Customers in the market for houses priced at $3 million and up “like their houses to look old on the outside but to have all the modern conveniences inside,” said Westchester County, N.Y. developer Jeffrey Doynow. (www.nytimes.com)
New York Times (6/12/05); Elsa Brenner

Cost of Moving Up Keeps Many From Selling Homes

The inventory of single-family detached homes for sale in Southern California was at a near-record low of three months in May, according to RealData Strategies, a consulting firm based in Brea, Calif. Six months is considered normal. Home owners willing to leave the area or downsize to smaller, less expensive homes have probably already done so, according to Raphael Bostic, an associate professor at the University of Southern California’s School of Policy, Planning and Development. “Now, you are left with a set of people who are looking to sell but also have to live in the area and therefore have to buy in the same area where they’re selling,” Bostic said. “That’s a different market segment.” Higher taxes; higher prices; and brokers’ commissions, escrow fees and other closing costs based on a percentage of a home’s sale price are persuading many home owners to sit it out. Robert Lacarriere, who is looking to keep his existing home as income property while upgrading to a bigger residence, figures that just selling his home — purchased in 1997 for $260,000 and today worth $850,000-$900,000 — would cost him about $50,000. The total valuation of residential alterations and additions for which permits were issued in Southern California last year was $2.6 billion, according to the Construction Industry Research Board, a 16% increase over 2003. A large portion came from renovations by people who had owned their homes for some time. (www.latimes.com)
Los Angeles Times (6/13/05); Annette Haddad

Raptors Have Building Projects in Their Grip

Developers in Thousand Oaks, Calif. are waiting for four red-tailed hawk chicks to fly their nest in a eucalyptus tree before they can begin work on a $45 million college sports center and a 367-unit retirement community. To safeguard the chicks, biologists established a 500-foot zone around the nest within which no construction can occur until the birds are old enough to fly, feed on their own and become independent. “The good news is we have this big, beautiful site where 40% will remain open space,” said Warren E. Spieker, a vice president for Continuing Life Communities, the Carlsbad, Calif.-based partnership developing the senior homes. “But the bad news is all that space is also very attractive to birds.” Spieker sad that the hawks’ nesting has postponed by about six months the relocation of the company’s sales trailer, which will include a full-scale model of a two-bedroom, two-bath living unit when it opens in August. Supporting the hawk families has cost his corporation about $100,000, which represents a fraction of the project’s overall $175 million cost. (www.latimes.com)
Los Angeles Times (6/13/05); Gregory W. Griggs

Little Plastic Houses for You and Me

Out of the same clear plastic that is used in soda bottles, Philadelphia architects Stephen Kieran and James Timberlake have designed an exterior skin that would be stretched taut over an aluminum frame to create a substrate onto which micro-components for lighting, heating, energy storage and information can be printed. The resulting electronic walls would be inexpensive and could be customized at the manufacturing stage and at home so that an entire side of the house could be turned into a movie screen or a window at the flick of a switch. SmartWrap would consist of two layers of a polyester film called PET. The two-inch space between the layers would be quilted with a highly porous silica that’s 99.8% air; it was developed by NASA as insulation for the Mars Pathfinder Sojourner rover. The two-inch barrier has the same insulation factor as a 17-inch-thick concrete-and-brick wall filled with polystyrene insulation. Organic photovoltaic solar cells, or OPVs, would be printed on exterior sun-facing surfaces to harvest energy and power organic light-emitting diode displays and lighting patterns on the inside. The researchers are now looking for a way to increase the efficiency of the OPVs, which convert no more than 6% of available light into electricity compared to about 18% for silicon. (www.popsci.com)
Popular Science (6/05); Jessie Scanlon

Developers Rushing to Beat July Deadline

Worried about preserving their beach-front community as a tourist destination, city officials in Clearwater, Fla. have set a July 1 deadline when it will become tougher to level two-story shoebox motels so that they can be replaced by luxury high-rise condominiums. In a beach development boom that is well underway, it is thought that about 500 hotel rooms have already been lost to condominiums and perhaps a dozen more projects will beat the deadline. Lucca Development LLC plans to replace several of the city’s hotels, including the South Gulfview Boulevard Howard Johnson, with 102 condos in two buildings, one 148 feet tall. More than 100 hotel and motel rooms would disappear under this proposal. The British company Taylor Woodrow plans to replace a 217-unit Adam’s Mark Hotel with 113 condos and 78 hotel rooms. “When all the big projects were done and only the small ones were left to be developed, that’s when the government steps in, smiling in our face,” said Gunnar Hedqwist. He stands to lose $600,000 if redevelopment plans for his 22-unit motel aren’t submitted on time. Fewer condos could be built on his property under the new rules. (www.sptimes.com)
St. Petersburg Times (6/13/05); Aaron Sharockman

Housing Hotter Than Expected, But Prices Will Cool Down

In a teleconference sponsored by the Homeownership Alliance, the chief economists of several housing organizations last week conceded that they had underestimated the strength of housing activity this year, primarily because long-term mortgage interest rates have stayed lower than they expected in the face of an ongoing effort by the Federal Reserve Board to boost interest rates.

“Looking back it is fair to say that performance of housing has exceeded collective expectations,” said David Seiders of NAHB. Home sales, starts and price appreciation have all been galloping ahead of predictions made by the economists on a previous conference call in mid-January.

With the cost of mortgage financing remaining relatively low and the economy generating jobs and 3.5% growth in the Gross Domestic Product for the balance of this year, Seiders forecast 1.98 million housing starts in 2005, up 1% over 2004. New single-family production is headed for a record 1.61 million units in NAHB’s revised forecast for 2005 and new single-family home sales, excluding custom homes, are expected to hit a record 1.2 million.

The federal funds rate, now standing at 3%, will get notched up by the Federal Reserve to 4% by the end of this year, Seiders predicted, and will be pushed somewhat higher next year.

Froth in the Markets

On the issue of the recent double-digit housing price appreciation that has been sparking morbid speculation about prospects for a housing bust in the nation’s biggest boom markets, David Lereah, of the National Association of Realtors®, conceded that “there’s froth in the markets, but froth can be healthy. It’s not a bad word. The media have been carried away with the word,” which could suggest “effervescence rather than the popping of bubbles.”

“The housing sector is very, very healthy,” Lereah noted, and the double-digit jump in home prices that has occurred in 66 markets over the last year is not a sign of trouble, but an indication that demand has outstripped supply, with the unsold inventory of existing homes now running at a lean 4.2-month supply.

In addition to low mortgage rates, Lereah said that there is “a long and varied menu list of why there is strong demand” for housing today, including demographics and population growth and an active market for second homes. Second homes accounted for 36% of all existing home sales last year, he said: 23% for investment and 13% for vacation.

Agreeing with other economists that concerns over speculation in some especially torrid housing markets — which tend to be concentrated in California, South Florida and the Northeast corridor — are overshadowing the fundamental strength of the nation’s housing market, Lereah said that “the typical investor is still a typical investor, looking to purchase a house with a median price of about $150,000.” Most investors are still buying small, modest homes even though the spotlight is on people who are spending several hundreds of thousands of dollars in exceptionally hot areas, he said.

Lereah is forecasting a record 6.89 million existing home sales this year and expects housing production to exceed 2 million starts. He added that price appreciation will remain strong over the remaining months of the year, but “eventually that’s got to come down.” From the first quarter of 2004 to this year’s first quarter, prices increased 12.5%, according to the Home Price Index of the Office of Federal Housing Enterprise Oversight. Prices advanced at an annual rate of 8.8% during the first quarter.

In general, economists participating in the conference said they expect to see home prices increase in the range of 7%-8% this year.

Price Weakness

David Berson of Fannie Mae said that the growing number of investors in some markets does pose some risk because these buyers are more likely to pull out if housing weakens, but “we have never seen significant price weakness without a decline in job growth and a weakening economy.”

Berson said he expects to see no price weakness in hot housing markets if their economies remain strong.

As of now, there are “no signs of any slowing in the housing market at all,” he said, and housing should stay strong for the next several months. It would take a big decline in housing activity in the second half of this year to prevent single-family activity from hitting new records.

Freddie Mac's Frank Nothaft said that the pace of home price gains will continue to gradually moderate over the next couple of years. He also cited a one-in-three chance during that period that some region of the country will experience stagnant or declining home prices related to economic weakness.

Mortgage originations to purchase homes will hit a record this year, Nothaft said, but total originations will be down by almost 8% resulting from a decline in refinancings. Although they will account for 40% of the mortgage market this year, that will be the lowest share of refinancings since 2000, he said.

Bigger Initial Discount Rates

Adjustable rate mortgages (ARMs) will account for one-third of the mortgages originated this year, Nothaft said, and their volume will remain close to last year’s level because lenders are offering bigger initial rate discounts on them. A 2% discount is being offered today on one-year ARMs, he said, compared to two-years ago when the initial discount on those loans was close to zero.

Hybrid ARMs, which are carrying a rate of about 5% for an initial five-year period, are accounting for about 40% of conventional ARMs originations, Nothaft said.

Long-term mortgage interest rates, which just hit a 14-month low, are headed higher during the next six months, Nothaft predicted, and should be near 6% by the end of the year. Before summer is out, the Fed will increase the federal funds interest rate at lease two more times, bringing it to 3.5%, he said, and there is a possibility of a further increase in the fall.

Cautious Lending Practices

While commercial banks have earned record profits in seven of the past nine quarters, reaching a quarterly high of $35 billion, and have plenty of liquidity to meet the “strong and steady” demand for residential and commercial loans, they are “cautious in their lending practices and know that this has been a long housing boom and it is entering the mature part of the cycle,” said Paul Merski, of the Independent Community Bankers of America, which represents 5,000 bank members in 17,000 locations.

“Bankers do, in fact, worry about repayment despite what you have been reading in the national press,” Merski said.

Community bankers are big lenders to home builders, he said, and they have been watching their housing inventories closely and haven’t seen any problems there, with the supply remaining tight relative to demand.

Concerns about so-called “exotic” loans have been “well overblown in the media,” Merski said. “If you look at some of the discussions on ARMs, ARMs are a very successful  product, and most are hybrids with five years before the rate adjusts. It’s not like overnight people are going to be experiencing rapid increases in mortgage payments.”

“More troublesome,” he said, are zero downpayment loans, which have always had a higher default rate but account for only about a 5%-7% share of mortgage products.

“The interest-only loans that are being criticized are not that much different than 30-year fixed, when little of the principal is paid off in the early years anyway,” he added.

Bank regulators, the Fed and the Federal Deposit Insurance Corporation closely monitor banking lending practices, Merski said, and they have found that credit quality is good and improving.

“Bankers do anticipate a reasonable cooling off in prices, but no crash,” he said.

Payment Shock Risks

Mitigating some of the risk from interest-only and other creative loans compared to 10 years ago, said Nothaft, “most loan applications go through automated underwriting systems that balance various risk factors on the loan application.”

Berson said that interest-only mortgages do open up the risk of payment shock when the initial loan period ends if interest rates are rising, as they are expected to be later this year and next. However, the incomes of most households will have increased over the initial period, which is typically five years. Even if the value of the home declines and the buyer ends up owing more on the property than it is worth, “households tend not to default as long as they have jobs and can make the payment,” he said.

For Lereah, interest-only loans are a source of worry. Survey data such as findings from San Francisco-based LoanPerformance showing that 47% of buyers in San Diego and 45% in Atlanta are using the loans are “startling,” he said.

Interest-only loans “are becoming a bigger part of the home lending landscape,” Lereah said. On some of the loans, the initial periods last for only one or two years, he said, “so there is some interest rate shock.”

Also, “lenders have not been in a rising interest rate environment for 10 years or so, but many brokers selling to households are not delivering the true scenarios that could happen to an individual household. I do think it is a serious problem, and hope regulators and lenders step up to the plate and be very careful in how they are marketing these loans. Consumers need to better understand the implications of interest rate shock,” Lereah said.

Seiders said he shared that concern, but what’s even more worrisome is that “a lot of these exotic loans really are made or arranged by brokers and don’t go through the mainstream of the depositories or Fannie/Freddie underwriting.” They are being sold to investors, he said, who may not understand what’s in them.

On the supply and demand front and its implications for home prices, Seiders said that despite constraints such as land shortages and government regulation, builders will continue to increase the supply to help to bring things back into better balance. Average annual housing construction in the range of 2 million units is sustainable over the coming decade, he said, based on growth in population, households and immigration.

“Average annual house price appreciation is 4%-5% a year,” said Nothaft. That’s “a reasonable expectation for someone making an investment in housing. Don’t expect the high levels of the past few years to be sustained.”

To listen to a recording of the roughly hour-long call, click here.

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Home Starts Zooming and Booming in May

Robust demand fueled by low mortgage rates and favorable economic conditions kept new-home construction humming along at a fast pace in May, when starts edged up 0.2% to a seasonally adjusted annual rate of 2.009 million, according to U.S. Commerce Department figures released last week, which was 1.8% higher than the level of a year earlier.

Single-family housing production increased 4.7% in May to a yearly rate of 1.704 million units, which was 3.3% higher than the same month of last year.

“Builders are operating at full capacity,” said NAHB President Dave Wilson. “With mortgage rates and other market conditions still very favorable, they see no letup through the summer months ahead.”

“The overall housing market continues to exhibit ongoing strength,” said NAHB Chief Economist David Seiders. “Major forces driving the housing market ― very favorable mortgage rates as well as strong household income and job growth — continue to bolster housing demand. Housing production most likely will make another positive contribution to overall GDP growth for the second quarter as builders strive to meet the demand,” Seiders added.

Construction of new homes and apartments rose in three out of the four regions of the country last month. Housing starts were up 5.1% in the Northeast, 12.3% in the West and 18.7% in the Midwest. Starts declined by 12.1% in the South, following a 23.7% surge in new construction activity in April.

Multifamily housing starts sagged 19.3% in May to a seasonally adjusted rate of 305,000 units.

“The multifamily market is showing typical month-to-month volatility, but fundamental conditions in the condo and rental markets remain solid,” Seiders said.

Issuance of total building permits declined 4.6% from April’s upwardly revised level to a seasonally adjusted rate of 2.050 million units. Single-family permit issuance drooped 1.3% to a rate of 1.619 million units.

On a year-to-date basis, both housing starts and building permits are running significantly above last year’s levels.

“It is now highly likely that housing production in 2005 will surpass the robust performance of 2004, even if the interest rate structure moves up as projected,” Seiders said.

“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. Updated regularly, HousingEconomics Online combines scientific research with practical applications in order to provide housing-oriented insights for builders, manufacturers and housing finance professionals. 

Available at two levels — Pro and Executive — subscribers can choose the level that best meets their needs. To learn more or subscribe to “HousingEconomics Online,” visit www.housingeconomics.com.

Builder Confidence Hits Its Highest Level All Year

Encouraged by continuing low mortgage rates and robust demand for new homes, single-family home builders voiced more confidence this June than they have all year in the latest NAHB/Wells Fargo Housing Market Index (HMI). The index rose this month by one point to 71, its highest level since last December.

“The favorable financing climate for new homes is proving too attractive for many buyers to pass up, so builders are staying very busy this summer,” said NAHB President Dave Wilson.

“In the past four weeks, the average rate on a 30-year mortgage declined 21 basis points, ending at 5.56% as of June 9,” noted NAHB Chief Economist David Seiders. “Combined with the very solid appreciation rates we’ve seen, and the widespread expectation that mortgage rates will begin creeping up soon, that’s a powerful incentive to make a move,” he agreed.

Derived from a monthly survey that NAHB has been conducting for almost 20 years, the index gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers. Any score over 50 indicates that more builders view sales conditions as good than poor.

All three components of the index moved up this month: the current sales index climbing by one point to 77; sales expectations rising by two points to 79; and prospective traffic at 54, up one point.

Regionally, builders were most optimistic in the West, with an overall reading of 88, up by four points from May, far outpacing the scores from builders in other parts of the country. The confidence of builders in the South climbed by one point to 76; remained unchanged at a solid 70 in the Northeast; and rose two points to a positive reading of 52 in the Midwest.

“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. Updated regularly, HousingEconomics Online combines scientific research with practical applications in order to provide housing-oriented insights for builders, manufacturers and housing finance professionals. 

Available at two levels — Pro and Executive — subscribers can choose the level that best meets their needs. To learn more or subscribe to “HousingEconomics Online,” visit www.housingeconomics.com.

Eye on the Economy

By David F. Seiders, NAHB Chief Economist
The national economy is moving ahead nicely despite some uneven sectoral performances …

On June 9, Federal Reserve Chairman Alan Greenspan told the Joint Economic Committee of Congress that “the U.S. economy seems to be on reasonably firm footing,” while noting that: “Over the past year, the pace of economic activity in the United States has alternately paused and quickened.” He stressed that the soft readings on the economy observed in the early spring “were not presaging a more serious slowdown in the pace of activity.”

Growth of real Gross Domestic Product (GDP) for the first quarter now stands at 3.5%, and some further upward revision is likely. Available monthly data for the second quarter point to maintenance of GDP growth around 3.5%, and that’s enough to generate further improvements in the labor market.

The job market still is functioning well despite some disappointing signs …

Payroll employment increased by 78,000 in May, according to the preliminary report released by the Labor Department on June 3. This gain was smaller than generally expected (the consensus called for 175,000), but the result was not truly alarming. The large April increase (274,000) was left unrevised and the month-to-month pattern has shown a lot of volatility for some time. The average gain was 176,000 for the April-May period, 180,000 on a year-to-date basis and 165,000 over the past 12 months. From this point of view, the trend in payroll job growth looks intact and trend growth in aggregate hours worked is adequate to support our GDP estimate for the second quarter.

The portion of the May employment report that’s based on a survey of households (rather than business establishments) hardly showed weakness in May. Indeed, the gain in household employment was substantial (376,000) and the unemployment rate ticked down to 5.1% as the labor force rose by 360,000 and the labor force participation rate edged up for the second month in the row. The return of previously discouraged workers to the labor force is helping to maintain ample slack in the labor market, and we’re counting on this dynamic to support further above-trend growth in economic output.

Core inflation sags in May ― and that’s great news …

Global oil prices and the cost of gasoline at the pump have come off their April peaks, reducing threats to the ongoing economic expansion as well as threats to “core” inflation (excluding prices of food and energy) in the U.S. Inevitable “leakage” of oil and gas prices into core consumer prices has been on the minds of officials at our central bank, and the recent sag of energy prices certainly is welcome news. So is a recent retreat in non-oil commodity prices.

The news on producer and consumer price inflation for May was quite reassuring in its own right. The Producer Price Index (PPI) for finished goods fell sharply in May as energy costs plummeted and the core component of the PPI showed a year-over-year advance of 2.6% — the same as March and April and below the February pace. The Consumer Price Index (CPI) also fell in May, reflecting a sharp decline in energy prices, and the core CPI was up by only 2.2% on a year-over-year basis. The technically superior chain-core CPI showed only a 1.8% gain, the slowest since last October and within the Fed’s apparent “comfort zone.”

The Fed is poised to hike short-term rates again on June 30 …

Minutes from the May 3 meeting of the Federal Open Market Committee (FOMC) revealed ongoing preoccupation with upside risks to the inflation outlook as the economic expansion moves forward and slack in resource markets is reduced in the process. The minutes also make it perfectly clear that the Fed still views its monetary policy stance as too easy, despite the substantial two-percentage-point increase in the federal funds rate implemented since mid-2004.

The minutes say that all FOMC members “regarded the stance of monetary policy as accommodative and judged that the current level of short-term rates remained too low to be consistent with sustainable growth and stable prices in the long run.” Indeed, the real (inflation-adjusted) funds rate is only about 1%, and history shows that such a policy stance is not sustainable over time.

The evaporation of the early-year “soft spot” in the economic expansion gave the Fed some leeway to accelerate its march back to monetary “neutrality,” but positive news on core inflation has lessened the urgency of such a march ― keeping our central bank to a “measured pace” of adjustments.

Most recently, newfound signs of weakness in the manufacturing sector argue for a cautious monetary policy approach while the upswing in unit labor costs argues for ongoing diligence in the fight against inflation.

Again, the balance of forces suggests adherence to slow but steady removal of policy stimulus from the economy. A quarter-point increase in the federal funds rate is in the cards at the June 29-30 FOMC meeting.

We’re still in the middle innings of the Fed’s ball game …

The markets were thrown for a loop on June 2 when Richard Fisher, the new president of the Federal Reserve Bank of Dallas and a voting member of the FOMC, said on national television that the Fed is in the “eighth inning” of monetary tightening (having implemented eight consecutive quarter-point increases in the federal funds rate since mid-2004), and that the next FOMC meeting (June 29-30) will be the “ninth inning” in the central bank’s “contest against inflation.”

The markets bought into the idea that the Fed is quite close to the end of the tightening cycle, despite Fisher’s newness to the public relations game and recent statements by other Federal Reserve officials suggesting that the tightening cycle still has some time to run. Futures markets immediately marked down expectations for the federal funds rate later in the year and longer-term interest rates fell as well.

Fisher’s baseball analogy probably did not sit well with Greenspan and the majority of FOMC members, and the Fed chairman brushed off the notion in his June 9 testimony before the Joint Economic Committee. NAHB’s forecast still assumes the Fed will continue to move ahead at a determined but “measured” pace, taking the federal funds rate to 4% by year end (pegging the bank prime rate at 7%). Some further increase may very well occur in 2006 as long as the economic expansion continues to generate upward pressure on unit labor costs and core inflation.

Long-term interest rates are still below sustainable levels …

Long-term interest rates moved downward a good bit in recent weeks, pushing the 10-year Treasury yield below 4% and the fixed-rate home mortgage yield to about 5.6% in the early days of June. These rates have moved upward to some degree in recent days but remain well below the levels of mid-2004 when the Fed embarked on its determined march back to monetary neutrality.

While reasonably solid domestic and global fundamentals can pretty much account for the behavior of long-term rates since mid-2004, the bond market rally of late May and early June had weak underpinnings. The markets apparently bought into the flimsy notion that the economy is now flagging (because of manufacturing) and that the job market is now weakening (because of payroll employment in May), while ignoring the inflationary consequences of surging unit labor costs. And, for whatever reason, the markets seemed to accept Fisher’s colorful baseball remarks as an accurate picture of Federal Reserve plans and intentions. Extra icing on the cake was provided by an extra surge of investment capital into the Treasury market in the wake of the collapse of the constitutional initiative in the European Union when both France and the Netherlands voted against it during the week of May 29.

It’s possible that recent downward pressures on long-term interest rates will persist as the economic expansion moves forward. But it’s more likely that the expansion will generate stronger upward pressures on core inflation (primarily from rising unit labor costs) and that ongoing Fed tightening ultimately will push short- and long-term rates in the same direction.

NAHB’s forecast currently shows roughly half-point increases in long-term rates by late in the year, half the projected increase in the federal funds rate but enough to keep the Treasury yield curve from inverting.

The housing market still is in high gear …

The recent economic and financial market environment has been quite hospitable for the housing sector, and a spate of highly aggressive mortgage finance products has supported housing demand in markets where affordability has been strained by rapid increases in house prices. Indeed, the interest-sensitive housing sector has remained the hottest part of the U.S. economy despite the pattern of Fed tightening since mid-2004.

Upbeat news on housing for April includes record levels of single-family home sales, soaring condo/co-op sales, yet another housing starts number on the north side of 2 million units and another solid increase in residential construction put-in-place. Year-to-date readings are up substantially for sales, starts and construction activity.

NAHB’s first-quarter Multifamily and Remodeling Market Indexes (based on surveys of apartment producers and managers as well as professional remodelers) show that these housing components are moving ahead nicely as well, and patterns of construction spending through April show great strength in these areas. The manufactured home market is the only weak spot in the housing sector.

Surveys of builders and mortgage lenders show that robust housing market activity extended into June. NAHB’s Housing Market Index (based on surveys of single-family builders) edged up to 71 in June, at the top of the range that’s prevailed for more than a year. Furthermore, the index of applications for mortgages to buy homes (Mortgage Bankers Association series) moved up to a record level in the week ending June 10.

And we’re now headed for another record year …

It’s now highly likely that home sales and housing production in 2005 will surpass the records set last year, even if the interest rate structure moves up as in our forecast. Indeed, NAHB’s housing forecasts have just been revised upward, even though we’ve retained a modest fade in sales and starts in the second half of this year as well as in 2006. As a result, housing production remains historically high but moves out of the GDP growth-engine category after mid-2004, following a remarkably strong run that began at the end of 2001.

‘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.

"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. To order, visit the www.housingeconomicsonline.com detail page.

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
• 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.

Builders’ Tip: Protecting a Hardwood Floor

[Click for larger image]

I had a job finishing trim work in a room that had a brand-new hardwood floor.

My work required a nail gun and a couple of hoses to get the air from the compressor to the area that needed trim. But when I saw those pipe couplings joining the two hoses in the middle of that beautiful floor, I envisioned a tangle of potential scratches caused by their sliding around as I moved about the room.

To prevent that, I wrapped a short length of foam pipe insulation over the couplings and secured it with a couple of wraps of string (drawing right).

Result: No scratches.

—Tony Ferrito, Elmira, NY

Tips & Techniques provided by Fine Homebuilding.
©2005 The Taunton Press

To request a reprint of this feature, e-mail Mary Lou von der Lancken at Fine Homebuilding.

BuilderBooks.com Offers More Than 250 Books that Help You Build Your Business

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Wireless Works for the Home Building Industry — Really

By Tom Gebes, BuilderMT
The latest in a series of tech talks for builders.

No industry is better suited for wireless devices and applications than the home building industry. Workers’ locations constantly change, and the building process always involves multiple sites, roving teams of unaffiliated trade contractors and a highly fluid stream of ever-changing information.

Contrary to the notion that home builders are slow to adopt new technology, home builders were among the first to go wireless. Even 20 years ago, when it was uncommon to see anyone but a medical professional carrying a pager, Motorola pagers were popular with builders. The very first cellular phones started popping up in superintendents’ trucks not long after that.

Around 1990, lumberyard delivery managers started getting strange-sounding phone calls in the middle of the day from building sites. Superintendents screamed over the static that their orders were incomplete. A communications revolution was underway. Over the next decade, cellular phone service costs dropped, devices proliferated and cell towers popped up everywhere. The onslaught of wireless options now is in full swing.

Today, voice networks have matured into digital voice-data networks. Back-office project management software is being developed to integrate field data sent from mobile wireless devices. This combination can help squeeze the greatest inefficiencies out of the building process. It can help builders boost their margins — and keep enough control over their operations to maintain their sanity.

The convenience and acceptance of wireless technology has spawned a proliferation of devices. An Internet search for “wireless devices” yields tablet PCs, smart phones and personal digital assistants (PDAs), to name a few.

There are also lots of service plans to choose from. These range from “voice only” plans to combination packages for voice, short message service (SMS), e-mail, data, Web browsing and global positioning systems (GPS) tracking.

When reviewing wireless devices and what they do, consider two issues:

• What is the difference between “mobile” and “true wireless” technology?
• What wireless devices and features can improve the workflow processes that can enhance your profitability?

Mobile vs. True Wireless

When a technology provider claims its technology is “mobile,” it doesn’t necessarily mean “wireless.” Some mobile systems are PDAs that work in tandem with a desktop software application. For example, a crew member in the field enters data into his PDA. When that PDA is “cradle-synchronized” back at the office (by hooking it to a computer), the data in the PDA tells the desktop to automatically execute certain tasks (like printing reports or sending e-mails or faxes). Cradle-synchronized devices aren’t truly wireless, but they are “mobile.”

Beyond cell phone functionality, which nearly all wireless devices offer, true wireless devices access wireless fidelity (Wi-Fi) and/or wireless digital data networks to send data. Wi-Fi offers very short range broadband signals. Data networks vary in speed from standard cell phone signals to wireless broadband.

In addition to placing and receiving phone calls, true wireless devices should be able to access the Internet to send e-mail and browse the Web. Some wireless devices now allow users to view e-mail attachments and pictures.

However, simply making a phone call, sending an e-mail message or viewing a Web page does not dramatically advance your business capability. The recipient of that call or e-mail still must transcribe your data to the back-office software system to update schedules, approve invoices or log in materials delivery quantities for comparison with purchase orders, for instance.

Fully-Integrated Wireless Devices Improve Efficiency

A true wireless device is optimally effective when an authorized user can integrate data from the field directly into back-office software in real time (that is, immediately). With this capability, a superintendent can make changes, update schedules, update information and sign off on payment from the field.

If your wireless device can’t do that and you are still relying on phone calls and e-mails back to the main office to have someone else transfer your field data into back-office applications, then your wireless device hasn’t achieved optimum value.

In a sense, you are still in the old-fashioned era of pay phones and faxes. You’re just using fancier methods (cell phones and e-mail messages) to exchange information that has to be manually processed the old-fashioned way.

Which Wireless Device and Features Makes Sense?

With so many devices on the market, it’s easy to buy a cell phone and pick a plan. But if you are interested in using a true wireless mobile digital device that can integrate — and interact — with your back office software, your selection criteria will be affected by:

• The tasks you want your field workers to complete
•  What kind of wireless interaction your back-office software can accommodate

Most wireless digital devices with data screens (such as PDAs and smart phones) can handle simple yes/no binary functions (like “order received” or “order not received”). They can also handle functions that allow field workers to view simple data (for example, the paint color code for the front bedroom). But let’s move to the next level, where field workers want to:

• Schedule specific activities from the field.
• Log in completion of individual activities from the field.
• Trigger invoice payment approval to accounting.
• Set up reminders and notes on scheduling activities.
• Note variance assignments from the field.
• View supplier contact information from the field.
• View owner (buyer) information from the field.
• Complete quality control checklists assigned to scheduling activities.
• Generate updated projected completion dates for the project.
• Send updated project completion dates to accounting for liability tracking and project cash flow reports.
• Send text message e-mails from the field.

To perform these kinds of sophisticated business functions, your wireless device must integrate with your back-office software with built-in links provided by your back-office software provider. The provider will also furnish a list of appropriate wireless devices.

Don’t make the mistake of buying a device from a provider because it looked cool, got a good review on www.cnet.com and you can watch videos on it. It may be that your back-office software doesn’t work with the device.

Before examining wireless devices, it’s best to first consult with your back-office software provider. Use the above list to help determine what wireless field functionality you want, see what functionality is available and find out what devices the software provider recommends.

Use the following checklist to help narrow down wireless device options and to adopt a best practices approach for including wireless technology in your operations:

• Do you have an established management workflow in place that can be easily supported by field data exchange?
• What functionality do you need to support your management workflow?
• Are you considering mobile synchronization or a true wireless system?
• What types of wireless devices are supported by your back-office software?
• What types of devices would your crew be most comfortable working with?
• What type of training and support will your office staff require to ensure that data is exchanged and used properly in your back-office functions?

Tom Gebes is president of BuilderMT (Management Technology), which provides implementation, business and custom end-user training and consulting services to help builders recognize the benefits of organizing internal work processes and workflow as a means of increased productivity and profitability. Gebes has more than 25 years of experience serving home builders' workflow management needs. Best Software’s Timberline Office, which features integrated accounting, estimating and information management software, is designed to improve operations for all types of residential builders. For more information about Timberline Office, click here. For more information about BuilderMT, click here.

NAHB's Business Management Tools Offer Information About Using Technology in Your Business

For help using technology in your business, vist the Computer & Information Technology section of NAHB’s Business Management Tools (www.nahb.org/biztools) on the Members Only side of the NAHB Web site. Log on as a member for instant access to articles on building a Web site, using the Internet, automating your “paper” systems and much more.

NAHB Has More Than 170 Resources to Help You Run Your Business More Profitably

Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 170 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.

Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.

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NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.

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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 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

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Bald Eagle Recovery Poses Challenges for Builders

Ironically, removing bald eagles from protection under the Endangered Species Act (ESA) could bring residential development to a screeching halt if it is found to have a negative impact on their habitat because the emblematic bird is protected by two other federal laws that, unlike the ESA, don’t make provisions to accommodate home building and other activities.

Recovery of the bald eagle, which has been listed as endangered or threatened since 1967, is one of the Endangered Species Act’s great success stories. But the eagle’s wide distribution and broad habitat — it is currently listed as threatened in each of the lower 48 states — mean that builders and developers in virtually every state could be affected if its ESA protection comes to an end.

As a national symbol, the bald eagle has received special protections under the Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act. When builders and developers comply with ESA rules to protect the eagle, they can also satisfy the conditions of these two federal laws. Unfortunately, only the ESA and the U.S. Fish and Wildlife Service regulations that implement that law provide a mechanism for minimizing the impact of human activity on the eagle and its habitat.

Depending on the level and type of activities that the U.S. Fish and Wildlife Service determines disturb the eagle, delisting could result in regulations that are similar to those that currently exist under the ESA or even bring an improvement. However, new regulation has the potential to result in:

• “No-touch” zones extending for hundreds of feet around nest sites
• Seasonal work restrictions
• Best management practices
• Survey or monitoring requirements

These complex issues have arisen in the past.

Although the U.S. Fish and Wildlife Service first proposed delisting the eagle nearly six years ago, the agency’s current regulatory activity suggests that a delisting of the eagle may now be forthcoming.

The NAHB Environmental Issues Committee is an active participant in this debate and will be working to ensure that the bald eagle, the nation’s symbol and one of the great ESA success stories, continues to thrive through common-sense regulatory policy without placing unnecessary burdens on builders and developers.

For more information, e-mail Christopher Galik at NAHB, or call him at 800-368-5242 x8663.

Pulte Finds Outlying Metro Areas Prime for Active Adults

Residents root for the home team at Del Webb’s Sun City Lincoln Hills, located outside of Sacramento, Calif.

Baby boomers who are in the market for a new home as they settle into a new lifestyle that is halfway between retirement and the workaday grind may be prime candidates for communities on the outskirts of heavily developed areas, where land is still available at a reasonable price, seniors housing experts said at the Building for Boomers & Beyond Seniors Housing Symposium in Chantilly, Va. last month.

“Every major builder in the last 10 years has been getting into the active adult market,” said Dave Schreiner, who oversees Pulte Homes’ Active Adult Business Development in 46 markets.

“There are no rules and there’s no rulebook to this business,” said Margaret Wylde, president and CEO of ProMatura Group in Oxford, Miss., a company that provides consumer and market research for builders and developers. And there’s “no magic formula” that will lure 55+ prospects to the hinterlands because of the unique characteristics of every community and market segment. “Your customer is the real dictator of what they want,” she said.

Schreiner conceded that “it’s getting tougher and tougher to get property” and when a developable site is found “there’s almost always some negative. It’s next to an interstate, a ramshackle Motel 6, a pizza box manufacturing plant.” The trick, he advised, is to minimize the impact of the negatives on the site and get the right balance between the positives and the negatives.

For example, he said, Pulte fairly recently scored success with a community in Airmont, N.Y. with a big negative — an interstate — along one side of the property by building a “great product” at a “great price” and orienting the site plan so that “it lives inward.”

Wylde advocated a trade-off analysis for semi-remote locations to solicit information on the negatives that prospective buyers might be willing to make to obtain the housing they are looking for at a price point they can afford. “You can overcome the detractors and you can learn ahead of time what it will take to swing the pendulum,” she said.

Among the tips the two speakers provided on landing and developing successful sites for active adult housing:

• Look for population density, said Wylde, realizing that demand in the heart of that density will always be good but the land will often be scarce. And don’t just look at where 55+ buyers are moving, but also consider the areas that are popular among younger households.
  
  
• Most of these buyers don’t move, and of those that do, most will want to stay within 100 miles of their existing homes. Only 20%-30% are willing to consider moving outside that radius, which puts the market primarily within the big metro areas, with the exception of the large destination communities typically found in the Southwest.
  
  
• Look for job growth and sites that are within reasonable proximity of jobs, Wylde said, to accommodate adult customers who will be having a tough time making a clean break between working and retirement. It used to be that 80% of this age group retired, said Schreiner, and now it’s down to 50%.
  
  
• Be aware of the grandkids factor. Seventy percent of active adult residents want to be in the same general areas as their children, according to Wylde. Twenty percent actually move so that they can be closer to them.
  
  
• “Look at what’s over the next hill,” said Schreiner. “The farther you get from one thing, the closer you get to something else,” he said, and “you can go 100 miles from New York and there are towns out there.”
  
  
• Creating “wow” on the site is important for these buyers,” Wylde said. Capitalize on the topography, creating parks and water features. “What people look for the most is to have a view,” she said; 80% want one.
  
  
• Cost overruns kill projects, Schreiner warned, and they almost all happen in land development and are related to the topography. No traffic is also deadly to a project. Locations where there is drive-by traffic are favorable, Wylde said; 20%-25% of the prospects who visit the community say they found out about it by seeing it being built.
  
  
• Having restaurants, fitness centers and coffee shops nearby is important, said Wylde.
  
  
•  Walking trails are important  to accommodate the leading recreational activity of members of this age group, said Schreiner. More maintenance is required for hard surfaces than soft trails, but weather can be a factor. “If you have four miles of asphalt trails in a harsh climate, you’re going to be replacing those trails at some point.” He also noted that outdoor amenities are cheaper than those indoors, they look good and can be built earlier in the process.

Job flexibility for when and how long they work is a key factor for active adults, Wylde said, and many of them won’t be full-timers.

“People gravitate to what they were doing in their main career,” Schreiner said, “but they want more flexibility. A metal shop was set up in one of Pulte’s large, more self-contained senior developments to build mailboxes, he said, and the workers it attracted had all been in the metal-working business. “They didn’t dislike what they were doing” in their jobs, he said. “They just didn’t like the structure.”

The Cost of Living

Schreiner said that the cost of living is the single most important factor for senior households. “When an active adult retires, they don’t get a raise,” he said. “Their lifestyle can change substantially with an even modest difference in the cost of living.”

The $20 a month it will cost a buyer to pay for the guard at the gate, the clubhouse or the fitness center could be the reason they walk away from a community, the speakers cautioned, so the benefits of the amenities that are being planned and their costs need to be weighed carefully, especially in smaller projects.

“Business centers are no longer important because you can do everything in your home,” said Wylde. In her company’s research on fitness centers, she said that the older adult market is the fastest growing segment of the fitness industry, but less than 20% have memberships in health facilities. “Many communities are not large enough to support a fitness center,” and there is only so much that buyers will be willing to pay to have one.

Even so, Schreiner indicated that there is definitely momentum behind the health and fitness trend for active adults and “every facility for wellness we build is too small.”

Schreiner noted that the active adult market widely prefers single-family detached product, but a number of Pulte’s projects use a variety of housing types to get the density they need. “Single-level living is what you strive for,” meaning that two-story houses are pretty much out for this group of buyers.

To price the product, Wylde suggested looking at median home values and incomes in the area as a benchmark. “What people can get for their homes and how fast they can sell them” is a major factor, she said. However, to trade up baby boomers won’t be adverse to taking out mortgages. Even households that are in the 75+ age bracket are taking out mortgages in today’s marketplace, and that was previously unheard of, she said.

If home prices in the new community aim significantly higher than can be supported by the median-income in an area, marketing is critical, she said.

‘Seniors Housing Publication Set’ Available at BuilderBooks.com

Save 15% when you purchase “The Seniors Housing Publication Set,” through BuilderBooks.com. Receive one copy of “Boomers on the Horizon: Housing Preferences of the 55+ Market,” “Marketing Seniors Housing” and the “Best of Seniors’ Housing News.” This publication set is a must-have for anyone serving the active adult market. To view or purchase this publication set online, click here, or call 800-223-2665.

Technology: A Different Kind of Amenity

Although we tend to think of the last 50 years as the age of technology, that perspective ignores thousands of years of innovation. The Model T Ford, the ink pen, maps, clocks and pottery represented sweeping, life-changing advancements of their day.

The earliest vision for Park Springs, a Continuing Care Retirement Center (CCRC) in Stone Mountain, Ga., recognized that leading-edge technological applications would be vital to succeed.

Our aim was to “feature proof” our community. We did this by installing a state-of-the-art fiber-optic infrastructure that could accommodate virtually any feature or innovation that could be foreseen or imagined. Technology, we knew early on, would not only enhance our community’s operating efficiency, it would also be a high-value amenity we would market and promote.

Technology Should Save Time and Be Hassle-Free

My philosophy of technology is a simple one based on two core beliefs: Technology should be time-saving (think Model T and the Internet) and should not be a hassle to own or use (think pottery and the iPod).

An early survey of our Park Springs residents revealed that they shared our view. Specifically, we queried the following and received an overwhelmingly affirmative response:

• Would you prefer to establish an account directly with Park Springs or choose among local phone and cable providers?
• Would you like to receive phone service directly from Park Springs at 10% less than local providers?
• Would you consider it an advantage to receive one monthly bill from Park Springs for all billable utilities, rather than receive multiple bills?

The survey showed that time-savings and ease-of-use were on members’ minds as well.

Our goal was to become a premier CCRC in the Southeast and among the leading communities nationwide. That drive for quality influenced our technology choices. Among applications in place are the following:

Daily check motion sensor. Retirement communities commonly offer a means of conducting daily resident checks. Most typical is a two-part mechanical device that falls into place once the door has been opened. The device must be manually checked and reset daily. We opted for an electronic motion-sensing device featuring an “eye” that detects movement across a laser beam. The data flows over our computer network and can be read at the guard house, security center or health center.

This effective, non-invasive system easily passes the “time-savings, easy-to-use” test. It’s a perfect example of a technological innovation that creates efficiency for the developer and makes life easier for members.

One-card, one-key system. We developed a card key that looks much like a credit card and performs four key functions:

• As a proxy card to enter at the main gate
• A swipe card to permit entry into the building
• A key to enter members’ homes
• A credit card linked to the community’s point-of-sale system

This means that the card that provides access to one’s home can also be used to purchase a drink in the lounge. The same basic system provided us an efficient and easy-to-use method for controlling employee access (security is a much-touted amenity at Park Springs).

Infrared nurse call system. We use an industry-leading system that tracks nurse entries into a member’s room. The nurse wears an infrared-detecting badge that he or she can also use to signal for backup. The device serves to verify (for example to family members) that a nurse did in fact respond to a member’s request for help. It’s also a valuable management tool for supervisors to track nurse activity.

Exercise equipment memory chip. People who visit gyms know how frustrating it can be to forget from one time to the next which setting was last used. We selected top-end equipment by Keiser that solves the problem. During their workout, users carry a small key-like device and insert it into each piece of equipment. The device electronically reveals information including the past setting used, seat or bar height and the number of reps last performed. As the user leaves the gym, he or she holds the “key” up to a terminal that downloads data from that exercise session for future use. In addition to offering hassle-free time-savings, the system also makes it easy to track trends and benchmark progress.

Beyond these applications is a separate category of technological amenities we consider “utilities.” Examples are the service bundling and master bill options described above.

The Times, They Are a Changin’

Who might have guessed a decade ago that computer-driven technology would become as integrated into our culture as it has? Or that our target market — adults over 62 ― would have become one of the most computer-savvy segments of the population? (More than 70% of our members own their own PCs.) Providing technological amenities that respond to their image of a best-in-class community and that add efficiency and value is our continuing goal. Essential to every offering at Park Springs is the commitment of owners and management to support and maintain it at the highest possible level.

With the right-sized project and proper market research and system selection, such amenities can be profitable to the builder and save the customer time, hassle and money.

E. Andrew (Andy) Isakson is the founder of Isakson-Barnhart Properties, Inc. and managing partner of Isakson-Barnhart Development Co., LLC based in Atlanta. He has more than 25 years experience in commercial and residential real estate in Atlanta and throughout the Southeast. Isakson was a presenter on technology as an amenity at Building for Boomers and Beyond: the Seniors Housing Symposium 2005. For more information, e-mail Isakson, or call him at 770-559-4848.

Small and Balanced Is Best Path Into Light Commercial

Most home builders who have ventured to the commercial side of the construction business agree that having a two-sided portfolio of residential and commercial can strengthen a company’s bottom line.

As with investing, “it’s good to have balance,” explained Sam Manzitto, Jr., general manager of Manzitto Bros, a custom home and commercial builder based in Lincoln, Neb. “There have been times when the commercial end has carried us and there have been times when residential has.” 

For Manzitto Bros, the crossover into commercial began about a decade ago. Manzitto’s father started the company 30 years ago as a custom home builder, when a residential customer asked him to do a commercial project. Today, commercial makes up 30%-40% of the business, depending upon the season.

On the residential side, “We build higher-end homes in our market — many for professionals such as dentists and accountants. When they decide to build or remodel their offices, they come to us,” said Manzitto. He advises other residential builders who consider venturing into commercial building to “listen to your customers.”

“When you hear them say they have a need for a building of some kind, take the next step and say, ‘Hey, I can build that for you,’” Manzitto said.

He cautions that it is important to understand your market and your competition because, in most cases, with commercial business, there are going to be multiple bids. To succeed in getting a job, “You have to know how to price high enough to make the right amount of money but low enough to attract the client,” he said.

“The biggest mistake people make when they get into commercial is, they don’t do their homework,” said  Matt McCoy, president of South River Construction, a luxury home and commercial builder in Wimberley, Texas.

“There is a huge difference between commercial and residential, just as there is a huge difference between commercial work for the public and commercial work that involves public funds. “You have to understand what each requires,” he added.

South River Construction does much of its commercial work for the city of Wimberley and the local school system. McCoy said his company first ventured into commercial on a very small scale.

“The best advice I can give to companies trying to get into commercial is to look for jobs that are so small that other contractors will say they aren’t worth the headache,” said McCoy. “You need to go out and get those headaches.”

Small jobs require the same paperwork, filing requirements, payroll requirements and procurement procedures as the large projects, he said. “You have to make your mistakes to learn any business, so you want to make those mistakes on jobs that are small.”

Taking on small jobs also creates valuable relationships that will lead to long-term business. “People actually get excited when you show up and you’re interested in the job no one else wants,” McCoy said. South River Construction can often be found filling potholes, remodeling bathrooms or painting walls at local schools and at nearby Texas State University. Plus, those small jobs have led to large projects.

“You’re dealing with the same people, whether it’s a big job or a little job,” said McCoy.  “When a job comes up, these people become your advocates.” 

Considering making the move into light commercial construction? Tap into the resources available through NAHB’s Commercial Builders Council. For more information, e-mail Carmel Nayman, or call her at 800-368-5242 x8410.

MIRM-Aid Puts Case Study Panic in its Place

If there’s one thing MIRM (Member, Institute of Residential Marketing) candidates dread, it’s the long process of writing a case study. The case study is the final step candidates have to complete before obtaining their designation.

Candidates work from a detailed outline to create a finished study along with a professional profile. The process involves lots of research and, in many cases, plenty of panic.

So, to help others over this hurdle, Raleigh, N.C.-based, Gaye Burwell, of Coldwell Banker Neighborhood Builder Services, created MIRM-Aid ― an eight-week mentoring program.

“I created it for my local association here in Raleigh,” explained Burwell, “and because of its success, MIRM-Aid is now offered nationally. In fact, since we’ve been doing the calls, we’ve had more people inducted at the MIRM breakfast than in previous years.”

MIRM-Aid is designed to work like a study group in conference-call form. The entire case study writing process — from collecting data to submitting the study for review ― is scrutinized with each session or call broken down into defined, workable segments.

The program is structured into individual sessions that address outlining case studies, filling out the candidate’s professional profile, focusing on the participant’s subject community and gathering and researching information.

The teleconference is also a place where the host can answer a candidate’s general questions or concerns. More importantly, candidates learn the most common reasons case studies are turned down — so they can better prepare theirs appropriately.  

Rita Ralhan, the marketing director for D.R. Horton’s Continental Series in Denver, points to her MIRM designation as the main reason she was hired at DR Horton. And she credits MIRM-Aid for helping her complete the designation process.

“The MIRM-Aid program and Gaye Burwell really gave me the structure I needed to get through the whole case study process from start to finish,” Ralhan said. “Having the weekly calls and knowing what needed to be done each week really kept me from feeling overwhelmed and getting off track. I’d recommend MIRM-Aid to all designation candidates. I can’t imagine that I would have been able to get my MIRM designation without it.”

Jonathan Pink, of K. Hovnanian Companies, found MIRM-Aid invaluable when earning his MIRM designation last year. “It provides a source of support and encouragement from an emotional perspective in that you are among a group of applicants with the same needs and concerns as yourself,” said Pink. Not only that, all the assistance, expertise and functional advice he could glean from Burwell “was only a phone call away.”

Burwell conducted her first national MIRM-Aid last spring. A fall teleconference is being planned.

For more information about MIRM-Aid or the MIRM designation process, contact the MIRM Program Coordinator at 800-368-5242 x8154 or via e-mail at MIRMinfo@nahb.com.

To learn about the benefits of a MIRM designation, contact the National Sales and Marketing Council at 800-368-5242 x8192, or visit www.nahb.org/nsmc.

Learn More About the University of Housing

Whether you’re new to the industry, hope to make your next career move or want to improve your company’s bottom line, The University of Housing can assist you in your education pursuits.

Visit www.nahb.org/education for a comprehensive listing of courses throughout the country. Be sure to visit often in order to view the most up-to-date information in your area.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. 

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Education Calendar

June 26-28	Concrete Technologies Tour	Kansas City, Mo.
Aug. 9-13	2005 EOC Seminar	Big Sky, Mont.
Sept. 4-6	Certified New Home Sales Professional (CSP)	Reno, Nev.
Sept. 14-16	House Construction as a Selling Tool	Youngstown, Ohio
Nov. 11-13	3rd International Conference of the Americas	Mexico City
Nov. 6-9	2005 Building Systems Councils SHOWCASE	New Orleans, La.
Nov. 11-13	Custom Builder Symposium	New Orleans, La.
Nov. 13-14	National Conference on Membership	Spokane, Wash.
Nov. 17-19	2005 State and Local Government Affairs Conference	Phoenix, Ariz.
2006
Jan. 11-14	International Builders' Show	Orlando, Fla.
March 12-14	National Green Building Conference	Albuquerque, N.M.

Learn More About The NAHB University of Housing

Whether you’re new to the industry, hope to make your next career move or want to improve your company’s bottom line, The NAHB University of Housing can assist you in your education pursuits.

Visit www.nahb.org/education for a comprehensive listing of courses throughout the country. Be sure to visit often in order to view the most up-to-date information in your area.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. 

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Safety Handbooks Available in English and Spanish

June may be National Safety Month, but for Mike Thibodeaux, risk management director for Lennar Corporation based in Houston, every month is Safety Month. That is why Thibodeaux is a big fan of the safety publications from BuilderBooks.com, particularly the English-Spanish versions.

“The message is clear and concise, the pictures are great and it really does a good job of showing the safest way to do a particular job,” said Thibodeaux of the “NAHB-OSHA Jobsite Safety Handbook: English-Spanish Edition.” This pocket size manual covers the key safety issues residential builders need to focus on to reduce injuries and fatalities. Topics include employee and employer duties, orientation and training, personal protective equipment, housekeeping and stairs and ladders.

“With the large number of Spanish speakers within the workforce, this is really very important,” Thibodeaux continued.  “We give these out to each of our associates as well as our contractors.  Right now, we’re working together with other builders, OSHA and the Texas Workers’ Compensation Commission in Houston presenting a two-hour safety training class exclusively for Spanish-speakers. This is one of the major handouts we’ll be using."

“I haven’t seen anything like these,” Thibodeaux added. “I’m not aware of any other publication that is as concise, yet as complete. I know we’ve already ordered and distributed well over 5,000 copies of this job site safety handbook.  And we’ll be buying more.”

To view or order “NAHB-OSHA Jobsite Safety Handbook: English-Spanish Edition” online, click here. To view or purchase other safety publications available at BuilderBooks.com, visit www.builderbooks.com/Safety.

The Early Bird Catches the Hotel — IBS Registration Opens

Online registration and housing for the 2006 International Builders’ Show (IBS) are now open with the lowest available registration fees and best housing options for the show just a few clicks away. To register and make your hotel reservations online go to the IBS Web site: www.BuildersShow.com.

IBS will be held Jan. 11-14 at the Orange County Convention Center in Orlando, Fla. and feature more than 1,600 exhibitors with the latest, most innovative home building products and services. The show also offers more than 200 educational courses and workshops led by recognized experts in the industry.

Take Advantage of More Hotel Options by Registering Early

By registering and making your hotel reservations now, you will be able to find the hotel and block of rooms you want for your fellow members from your state.

 Who Should Attend?

Just about everyone involved in the industry will benefit by coming to IBS. “Our entire company, 10 people, came,” said Stacy Thomas, a designer with Environs Development, which specializes in the design and construction of classic single-family homes and townhomes in Chicago. The International Builders’ Show is the one place we can see everything — and get our hands on everything. We need that.”

More than 100,000 industry professionals — single-family home builders, multifamily builders and developers, commercial builders, remodelers, architects, engineers, Realtors®, subcontractors, land developers and more — attended IBS last year.

Discounted Registration Fees Available

First-time attendees who are NAHB members can register for the deeply discounted first-time attendee rate of $100.

Returning NAHB members who sign up for full registration before Oct. 14 ― which includes access to the educational sessions and exhibits for all four days of the show — will get a $25 early-bird discount.

And spouses have the best deal of all. Registration for them is free when traveling to IBS with their spouse.

Paul and Cynthia Peaveyhouse, of Peavyhouse Construction Services based in Erwin, Tenn., were first-time attendees at IBS last year and plan to go back again. “I understand why people say that this is the place to see all the new products, innovations and ideas,” Peavyhouse said. “After the show, we were eager to go back to our local distributors and tell them about what we’ve found that we think is really exciting. We’ll definitely be back again.”

 For more information or to register and secure your hotel rooms, go to www.BuildersShow.com.

BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665.

EnergyValue Awards Application Period Opens

Applications for the 2006 EnergyValue Housing Award (EVHA) program in honor of builders who voluntarily integrate energy efficiency into the design, construction and marketing of new homes are now being accepted by the NAHB Research Center, it was announced last week.

“The building industry’s efforts to incorporate energy efficiency and environmental consciousness are growing each year,” said Michael Luzier, president of the Research Center. “The 2006 EVHA presents an exciting new opportunity to share the best practices of some of the industry’s most innovative professionals.”

The awards will be presented at the 2006 International Builders’ Show in Orlando, Fla. in the affordable, custom/demonstration, factory-built, production and multifamily categories for hot-, moderate- and cold-climate regions.

A judging panel of experts on energy efficiency representing the engineering, construction, design and marketing fields will evaluate applicants based on their homes’ energy value, design, construction methods and processes, marketing and customer relations efforts, and participation in voluntary energy programs.

All applicants receive a detailed evaluation of their entries, complimentary passes to the awards dinner ceremony and a copy of the “EVHA Guide: How to Build and Profit With Energy Efficiency in New Home Construction.”

Winners of the competition will be featured on the Research Center Web site and in trade and mainstream publications. They will also have the opportunity to share their success stories at workshops, educational programs and conferences.

All professional U.S. home builders whose primary occupation is constructing homes, developing real estate, or both — including previous winners who are presenting new homes — are eligible to participate in the awards.

The homes offered for consideration must have been completed after January 2003 and before the awards application is submitted.

Entries must be postmarked by Aug. 8, and discounted application fees are available for entries that are submitted by July 11.

Companies are allowed to submit only one application per category, up to a maximum of five applications in the competition’s 15 categories.

The EVHA is coordinated by the NAHB Research Center in partnership with NAHB Energy Subcommittee and the U.S. Department of Energy's National Renewable Energy Laboratory.

For an application or more information, click here.

Insulated Concrete Forms Course Available for HBAs

The public debut of the Concrete Home Building Council's first NAHB JV Education Program, "Building With Insulating Concrete Forms" — an educational resource that is now available to all home builders associations for presentations to their members — drew 55 builders to Richmond, Va. last month.

Co-sponsored by the Home Building Association of Richmond and the Virginia Concrete Advisory Council, and taught by Portland Cement Association’s Jim Niehoff, the eight-hour course attracted experienced and novice ICF builders, as well as a few interested in experimenting with the building technique.

Attendees learned how to evaluate whether ICFs make sense for their particular business and how to become an ICF builder. The course also provided information delineating the advantages and costs of ICF construction, the components and materials used, design, and important business and marketing considerations.

Builders completing "Building with Insulating Concrete Forms" receive credits toward earning an NAHB University of Housing designation.

The next scheduled course presentation will be on Thursday, Nov. 10, following the Building Systems Councils SHOWCASE event and trade show.

For more information, e-mail Dawn Faull at NAHB, or call her at 800-368-5242 x8362.

To schedule a course, e-mail Tara Occhipinti at the University of Housing, or call her at 800-368-5242 x8153.

Get the Most Comprehensive Resources for Designing and Building Concrete Homes

“Insulating Concrete Forms for Residential Design and Construction,” available through BuilderBooks.com, focuses on the technical aspects of ICF home design, including design principles, details, formulas and performance data. It includes sections on architectural design, structural design and HVAC systems design. To view or purchase this publication online, click here, or call 800-223-2665.

“Insulating Concrete Forms Construction: Demand, Evaluation & Technical Practice,” available through BuilderBooks.com, walks contractors through both business and technical considerations in evaluating and adopting ICFs for both the residential and commercial markets. To view or purchase this publication online, click here, or call 800-223-2665.

Log Construction Standard Up For Public Review

The International Code Council (ICC) has released a draft of the much-anticipated Log Construction Standard for public review.

The public comment period began on June 3 and will end on July 18.

Once accepted by the ICC, the standard will become part of the International Residential Code and be enforced across the country.

Anyone involved with the log homes industry is encouraged to review the draft and consider its impact on their business.

NAHB’s Log Homes Council, which has played an active role in developing the standard, is urging all of its members to review the draft standard and reply with any comments within the 45-day public comment period.

For more information or to register any questions or comments with the Log Homes Council, e-mail Jeremy Bertrand or call him at 800-368-5242 x8353; or speak to someone on the Log Homes Council staff on x8576.

Real Pointers for Creating Effective Virtual Reality Tours

Virtual reality tours of communities and properties can give prospects a taste of what’s in store and, more importantly, boost sales before you build.

To get the most out of your virtual reality (VR) presentation, here are some top-line recommendations to consider when working with a VR solutions provider:

•  Concentrate on your best selling points.
•  Add details that will resonate with the right audience.
•  Use custom decors sparingly.
•  Make sure the VR accurately represents the look, feel and scale of your intended construction.
•  Discuss ways to multipurpose the content.
•  Stay on top of the production so your vision is reflected in the final product.

Let’s examine each point briefly:

Virtual reality is first a marketing tool that needs to be integrated in the overall marketing strategy. It is important that your VR firm is marketing-oriented and savvy and understands your target audience and what will turn them on. Therefore, it is important that you clearly communicate your marketing and sales strategy.

With this cool technology, the initial reaction is to be overly ambitious and want to “show everything!” To avoid this temptation, keep these two points in mind:

• Everything ― every piece of room, surface and tree — must be modeled in 3-D.
• Just as with a movie, the normal bits get boring (and expensive).

When storyboarding the VR tour, think of telling a story ― or selling a dream — and concentrate on the showstoppers.

For instance, if the entrance to a clubhouse has a spectacular three-tiered fountain, you’ll want the VR tour to begin with a “slow drive” up the circular driveway toward it. If the entrance is nothing special, start the tour in the lobby. Similarly, you don’t have to show every single room.

Again, stick to the features with the broadest mass appeal, such as the special grass tennis courts or outside pool deck.

Pay attention to the details, especially when you are projecting a desired lifestyle. For example, if you are creating a virtual lifestyle experience for an active adult community, you don’t want to use heavy metal as the soundtrack. Similarly, if live models are used in the production, they should be age appropriate.

People in their 60s will not emotionally connect to a scene of beautiful 20-somethings playing tennis and cavorting in the pool. The intended audience also will direct the VR content.

A residential development catering to young families should show what parents care about, such as backyards, public playgrounds and parks.

For an upscale housing development, you will want to signal affluence by putting BMWs, Volvos and Mercedes in the driveways.

Remember: psycho-demographic cues are powerful selling tools. If I can’t afford a Mercedes, I probably will shy away from a neighborhood — virtual or real ― where everybody else on the block is driving luxury automobiles.

It can take dozens of hours to build a realistic sofa, desk or table in 3-D. Therefore, unless you are working with a name designer who is creating a unique interior, let the VR producer furnish the rooms using existing stock material.

The architectural details and spatial arrangements should be true-to-life, but unless the furnishings will be standardized, they should not be built from scratch. VR production companies, especially those that specialize in real estate, should have large libraries of ready-made furniture and households accessories. You can explain the general look and feel you want — contemporary, upscale or traditional — but unless the furnishings are intrinsic to the space, don’t get hung up on the itty-bitty details.

Another important factor in selecting your VR vendor is their technical and industry expertise. Of course, they need computer graphic artists and animators who are versed in leading software programs like Maya, PhotoShop or 3-D STUDIO MAX.

But the VR solution provider also should understand your business. Today’s leading virtual models have now reached the level of merchandising comparable to a built model. Furniture should not be placed just to fill the rooms, but as part of the overall design and theme of the space ― props to help tell the “story.”

There should be professionals on staff who know how to interpret and work from interior decor plans, color boards and demographic information. Therefore, the VR production team should include interior designers and landscape designers as well as trained architects.

Remember, it is digital. Once a VR tour is made, it can be easily and inexpensively transferred onto different media, including “demo” CD-ROMs and DVDs, a Web site with streaming video capabilities, a salesperson’s laptop or a large plasma screen in the sales office. You also can choose frames from the VR to be made into print images. Once again, the idea is to give your sales force and partners great visuals in which to pre-sell the property.

Building 3-D models from scratch is an art. However, you should not defer all production decisions to the vendor. To the contrary, it is important that you and your key planners play an active role in the process. It is a lot easier (and cheaper) to fix a problem early in the design stage than when the VR is finished. Collaborative, Web-based systems now let people in different locations review work in-progress online — literally frame-by-frame.

Our final advice is to “Stay tuned!” The enabling technology keeps getting better and better.

This means faster rendering time, higher resolution and greater realism. Moreover, innovators in the field are transforming VR tours into mini-movies, with the addition of plot lines, characters and dialogue. The only caveat is that these virtual environments are becoming so appealing, people will want to live in them!

Marc Lamoureux is president and founder of Alpha Vision, which employs Hollywood-style special effects to create fully-furnished virtual model homes and Web-based selling tools that enable prospective home owners to design their "dream house" online and print a hard copy to take to the developer’s sales office. He has served as a collaborator for many of the nation’s top builders. For more information, visit the Alpha Vision Web site at  www.alpha-vision.com, or call him at 866-556-2574.

Originally published in NAHB’s Sales + Marketing Ideas magazine. ©2004. 

Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Info

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine. Call 800-368-5242 x8192 or visit www.smimagazine.com to subscribe or order a copy. Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

The Institute of Residential Marketing Offers Courses and Designation Programs for Sales & Marketing Professionals

The Institute of Residential Marketing (IRM) offers four designation programs for sales and marketing professionals:

• The CMP and MIRM designation programs for new home marketing professionals
• The CSP and MCSP designation programs for new home sales professionals

For more information on these designation programs, click here.

BuilderBooks.com Offers Sales and Marketing Publications Online

BuilderBooks.com offers a variety of sales and marketing publications online. To view or purchase these publications, click here.

Ask the Lawyer: About Estate Planning

Q:  What steps should I be taking to ensure the continuation of my custom home building company after I retire — and should I be concerned about the federal estate tax?

A:   Personal estate planning and a business continuation plan are measures that a responsible business owner should undertake for the sake of your family and your employees and their job security.

Get the Advice of an Estate Planner

Every person's financial profile is unique, so we recommend that you consult with an estate planning professional who will be able to provide advice on what best suits your interests and needs.

Enter Into a Buy-Sell Agreement

A buy-sell agreement is a contract to purchase and transfer a business if an owner or co-owner retires, dies or becomes disabled (specify what constitutes a "disability" in the agreement) and ensures the continuation of a business. The buy-sell agreement can be made with a co-owner, family member or members, key employees or other parties of interest.

A buy-sell agreement assures that your estate will be sold at a fair price. It also allows you to pick a successor who will be compatible with your family, your employees and your co-owners.

The agreement specifies how the sale of the business will be funded ― typically through life insurance, disability buy-out insurance or a secured loan payable to the estate. The terms of the agreement may be mandatory (upon the death of the owner). They may also give a prospective purchaser the right of first refusal (say, in the event of an owner's retirement).

You’ll also want language in the agreement determining how your business is to be valued. This is important, not only for tax purposes, but also to assure that the estate is receiving —and the purchaser is paying ― a fair price. The agreement should provide periodic price updates using recognized methods, such as book value, appraised value or formula valuation.

Don’t try an agreed fixed price if your buy-sell agreement is with family members. The IRS will probably disregard your stated fixed price and re-evaluate how much your business is worth for tax purposes.

Don’t Forget a Will

A will specifies who will receive what property from your estate. Should you die without one, intestate (without a will) succession will be determined by your state’s laws and regulations. This could lead to multiple ownership of your business and disputes between your heirs over how you property and business will be divided. Intestate succession may even require your business and other property to be sold piecemeal at auction ― unless an acquiring owner can be located in fairly short order. So a will is critical to the continuation of your business

The Federal Estate Tax Should Be of Lesser Concern in the Short Term, But …

Should you worry about the federal estate tax? It depends.

The federal estate tax is being gradually phased out over a 10-year period ending in 2010 when, by law, there will be no federal estate tax. However, unless Congress acts to either extend the phase-out period or to make the elimination of the tax permanent, the estate tax will automatically be revived in 2011 — at the 2001 tax rate and 2002 exemption level. See the chart below:

Year	Exemption	Maximum Rate
2001	$675,000	55%
2002	$1 million	50%
2003	$1 million	49%
2004	$1.5 million	48%
2005	$1.5 million	47%
2006	$2 million	46%
2007	$2 million	45%
2008	$2 million	45%
2009	$2 million	45%
2010	No federal estate tax	n/a
2011	$1 million	55%

So, for estate planning purposes, tax avoidance should be of a lesser concern for the next few years. But, be prepared to revisit your estate planning professional in 2010 if it appears that congressional inaction will allow the estate tax to re-emerge.

If you have questions for Ask the Lawyer, click here.

There is no guarantee that your question will be answered in this format, so if you have a particular legal concern that requires immediate attention, contact the NAHB Legal Research Service at 800-368-5242 x8491.

"Ask the Lawyer" is a service of the NAHB Legal Action Committee and NAHB Building Products Issues Committee (members-only links). The information provided is intended to familiarize you with the law in this area. It is not intended to be an exhaustive presentation of legal information on this particular subject, and in no way constitutes an opinion of law. Your own attorney must review this information to determine how it may apply to your particular situation.

Housing Career Opportunities Await Project CRAFT Grads

Students at June 10 graduation ceremonies for the Home Builders Institute's (HBI) Project CRAFT (Community, Restitution, Apprenticeship-Focused Training) program at the Avon Park Youth Academy in Avon Park, Fla., heard encouraging remarks by Tampa builder and developer Bill Paul about the vast opportunities awaiting them in the state’s residential construction industry.

“Project CRAFT has received many accolades for its unique ability to turn lives around,” said Paul. “Its graduates are prepared to work and contribute to the growth and prosperity of our great nation.”

Funding for the Avon Park facility and its operations, including Project CRAFT, are provided by Florida’s Department of Juvenile Justice (DJJ), which had a number of representatives attending the ceremonies, along with members of the state legislature.

In her commencement address, Highlands County Sheriff Susan Benton, the first elected female sheriff in Florida, challenged the graduates to “strive to leave behind a legacy, have a great impact on your school and community, promote excellence in all things and become a leader in society.”

Avon Park is HBI’s largest Project CRAFT program, training 160 students annually. Since 1997, it has helped more than 1,000 adjudicated youths start careers in residential construction, offering training in building and apartment maintenance, carpentry, landscaping, masonry and plumbing.

In addition to skills training, the students in the program receive their GEDs and work on other special diplomas. In keeping with the goal of Project CRAFT to improve the overall quality of life for its students, they also receive instruction in CPR, first aid, substance abuse, victim accountability, anger management and employability skills.

There are three other Project CRAFT sites in Florida at Pembroke Pines, Orlando and Tampa. The Florida legislature has provided funding for a fourth site in the Clearwater area, which should begin operating later this summer.

Students who complete the award-winning program have a recidivism rate of 15% or less, compared to a national average of more than 50%.

Recognizing the singular accomplishments of this skilled trades training program, DJJ has renewed its funding for Project CRAFT for another three years.

Project CRAFT training programs are also found in Mississippi, New Jersey, Tennessee and Texas.

For more information, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908.

Mexico May Attract Retirees From Around the World

U.S. companies are beginning to build active adult communities in Mexico because these communities can attract nearby Americans who are thinking about retiring in Mexico as well as retirees from Europe and other parts of the world.

Mexico is a great location to build a retirement community, said David Collins, president and founder of Active Living International and an NAHB member. “The weather is fantastic year round, prices are low, there is good health care and it’s a short plane ride from home,” he said.

Currently, the global population of people over the age of 60 is 629 million. That figure is expected to jump to 1.2 billion by 2025.

Collins said he has gained the confidence to invest and build in Mexico after attending NAHB’s 1st International Housing Conference of the Americas in Mexico City in 2003. 

Builders and building product suppliers looking to tap into the lucrative and growing Mexican housing market will gain practical advice and make valuable business connections at NAHB’s 3rd International Housing Conference of the Americas. The conference will be held at the Four Seasons Hotel in Mexico City, Nov. 3-5.

For more information about the upcoming conference, visit www.nahb.org/mexicoconference.

Outdoor Rooms Rank High on Consumer Lists

Consumers across the country are spending more time at home and more time living in outdoor “rooms,” fueling demand for outdoor appliances, according to a recent survey by the Propane Education & Research Council (PERC).

Based in Washington, D.C., the Propane Education & Research Council is a member of the National Council of the Housing Industry (NCHI) — the Supplier 100 of NAHB.

“Home improvement projects tend to be driven by an underlying emotional need,” said Martha Baker, best-selling author of “The Outdoor Living Room: Stylish Ideas for Porches, Patios and Pools.”

“Building or renovating outdoor rooms illustrates our need to relax and reconnect with family and friends,” she said. “Outdoor rooms increase our quality of life while also increasing a home’s value.

Among the PERC survey results:

• Half of all American home owners (50%) said that they are spending more time at home than they were five years ago.
  
• Eighty percent said it is important to have an outdoor living space where they can relax and entertain.
  
  
• Thirty-five percent said they had a finished outdoor room, and 34% said they were planning to design one in the next one to two years.
  
  
• Home owners identified as their most important reasons for adding or remodeling an outdoor room: creating a space to relax (89%); spending more time outside (87%); adding value to a home (79%); extending a home’s living space (78%); and creating a space to entertain (74%).
  
  
• In outfitting an outdoor room, most home owners said that they were likely to include: outdoor lighting units (94%); a gas grill (86%); mosquito eliminators (79%); an outdoor fireplace or pit (67%); and patio heaters (53%).

Of the roughly $200 billion U.S. home owners spent on remodeling and renovation in 2004, a third was allocated to outdoor amenities, according to the Hearth, Patio and Barbecue Association, which is also an NCHI member.

Citing findings that well-designed outdoor spaces return more than 100% of their cost when a home is sold, the association recommends these five products:

• Commercial-style grills. About 65% of grill owners use propane. The grills heat up and cool down quickly, making them safe and efficient, and there is no ash or dust.
  
  
• Gas hearths offer a cozy touch and are easy to install. They include a range of fireplaces, gas logs and gas campfires.
  
  
• Propane patio heaters extend the use of an outdoor room into the cooler months. Most models include adjustable temperature controls and safety features, and many are equipped with lights.
  
  
• Propane outdoor lighting fixtures and lamps are available in portable, wall-mounted and post-mounted styles, and are easy to use in remote locations such as outdoor rooms.
  
  
• Mosquito eliminators can protect up to an acre of land from these insects.

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

Obey Your Kitchen Pig

(Author’s note:  Part 2 of the Scott Wammack column is still in the works. Scott and I are working on it, but with vacation and work schedules, we’re still a few weeks out. Thanks for your patience.)

Two things happened today at work that reminded me of my kitchen pig. A little background...

My boys are nine and 11 years old. I’m told frequently how polite they are, which pleases me no end. However, were it not for a stern hand around our house, my two angels would be rolling disasters. They’re normal kids, predisposed to bad behavior, bickering and just plain meanness at times. It takes constant vigilance on Cindy’s and my part to keep them reined in.

One of our methods is the kitchen pig. It was a housewarming gift, intended, I think, to display a dinner menu when guests are expected. I’ve found a much better use for it. Every week or two I write a short sentence on the pig’s chalkboard reminding my kids of some virtue. This week’s is: “Bad attitudes are destructive always. Choose happy.”

A powerful fringe benefit is that it also reminds Cindy and me of the posted lesson several times each day. We’re human too, of course, predisposed to the same behavior as our children, only on an adult level (i.e., we tend to be sneakier about it).

I’ve found in business that it truly pays to be virtuous. Almost always, the nice guy comes out on top — particularly in the long haul. Here are the two examples I alluded to earlier.

One of the land development projects I’m involved with is in the process of a purchase and sale. An endangered species problem has cropped up that no one expected. This is a relatively small project, and the “problem” really isn’t a problem at all, unless someone with an agenda gets hold of it and blows it out of proportion. The local jurisdiction at first said it wouldn’t cause trouble, but this week it changed its tune and began to indicate that the problem might stop the sale.

Our attorney met with the subject planner and politely said that if they wanted to dig in on this issue, the sale would fall through, our team would be out and the jurisdiction would then be back dealing with “Ernie D. Tuff,” the original owner. Now the planner had a choice: create an issue, perhaps making himself look good in the eyes of his fellow bureaucrats; or interpret the rules differently and dispose of the “problem.”

The thing that swayed him in the end was the prospect of losing us (the “Nice Guy Developers”) and having to complete the project with Ernie. Had we been meanies, he likely would have dug in and we’d have lost the sale.

Example two involves two consultants competing for a long-term, lucrative government contract. Both have met with the local jurisdiction, which by law can show no preference. One team is headed by a guy so snide and condescending, no one can stand to be in the same room, let alone work with him. The other team is, again, the “Nice Guy Consultants.”

While it’s true that public jurisdictions cannot outwardly show preference, they can make favorable judgments, open certain doors and go above and beyond for the group they prefer working with. In this particular case we are amazed at the enthusiastic support that our team has garnered from everyone in the jurisdiction, from the clerk at the front desk all the way up to the board of commissioners. All other things being equal, the well-liked team will be the ones basking in the spoils of victory.  

How does the old saying go: “Nice guys finish last?” Maybe when it comes to scamming potential bedfellows. But in business, to paraphrase the kitchen pig: “Nice guys are the ones people of influence prefer working with.”

Tim Garrison of ConstructionCalc.com, is a professional engineer, author and software producer for the building industry. Send e-mail to 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.

NAHB-Produced Shows on HGTV & DIY — This Week

"I Want That!" on HGTV

Episode: "High-Tech Tile"

•  June 22, 8:30 p.m. ET/PT •  June 23, 12:30 a.m. ET/PT •  June 26, 9:00 p.m. ET/PT

Tile has moved far beyond basic ceramic. New products include a tile that reacts to motion and three-dimensional tile. New kitchen products are aimed at improving your diet. Innovations in drywall include a product that resists moisture build-up and sound-deadening drywall. Don't start a remodeling project until you check this out.

"Dream Builders" on HGTV

Episode: "Building With Steel"

•  June 26, 9:30 a.m. ET/PT

A Virginia couple creates a retreat in the rolling hills of the state's Shenandoah Valley. The big bad wolf will have no chance against a Nashville home framed in steel. A 1950s fieldstone colonial gains an addition that adds space without compromising the home's original beauty. Tour the Italianate Baltimore home of an early railroad magnate. Tube-type skylights solve tricky problems of getting light into rooms.

"Rock Solid" on DIY

Episode: "Cobble Pavers"

• June 22, 9:00 p.m. ET/PT • June 23, 12:00 a.m. ET/PT • June 26, 9:00 a.m. ET/PT

Dean and Derek work with Orlando, Fla.-based Cobble Systems to complete a driveway project using a system of cast cobblestones attached to a grid backing. The result is a distinctive driveway that's also durable and easy to install. They'll also show viewers how to level and prepare ground for driveways and patio installations and how to design creative and practical projects. In the end, will Dean and Derek find that these Cobble Systems are too good to be true?

Builders' Show Specials on HGTV

"International Builders' Show 2005" on HGTV

•  June 26, 10:00 p.m. ET/PT •  June 27, 2:00 a.m. ET/PT

Hundreds of exhibitors showcase the latest appliances, materials and technology for the home. Items featured include fabulous fireplaces, the latest home technology, innovative tools and materials, luxury windows and doors, elegant baths and deluxe appliances, and the latest products for the outdoors and for the good life.

The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use.

The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

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 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Endowment to Fund Minority Workforce Outreach

The National Housing Endowment, the philanthropic arm of NAHB, has awarded a $10,000 grant to fund an outreach program to establish and strengthen NAHB Student Chapters at Historically Black Colleges and Universities (HBCUs) and universities and colleges with traditionally large Hispanic populations.

The program will target minority students in support of the Home Builders Institute’s (HBI) charge of providing NAHB members with a talented and diverse workforce. A challenge to the industry at large, as well as for the student chapters program, is to overcome the lack of minority participation at the university and community college level.

Through the program, student leaders will be targeted and encouraged to start student chapters at their schools. HBI will provide them with information on scholarship and awards programs and encourage representatives from local home builders associations and member companies to visit their schools.

Information on best practices of successful student chapters will be made available to the new chapters. The student chapters will also be encouraged to attend the International Builders’ Show and participate in the student competitions that are held there.

This outreach to minority campuses nationwide will help NAHB diversify the housing industry workforce as well as its membership by starting with the industry’s future leaders — at the NAHB Student Chapter level.

For more information on the outreach program, e-mail Page Browning, director of academic services at HBI, the workforce development arm of NAHB, or call her at 800-368-5242 x8918.

Help Tsunami Survivors Rebuild Their Homes

NAHB and the National Housing Endowment have established the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund to raise desperately needed funds to build permanent shelter for the victims of the devastating earthquake and tsunami disaster in South Asia last year. The fund currently has $354,000. Members contributed more than $7,000 to the fund last week.

NAHB has designated Habitat for Humanity International and Shelter for Life International to be the recipients of the fund. Through NAHB donations, Habitat for Humanity will create a Disaster Response Technical Center in one of the affected countries it is serving. Shelter For Life will build a “Home Builders Care Village” of starter homes in Sri Lanka with NAHB funds.

Please Help

Please help by making a tax deductible donation to the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund.

Please direct your donation check to:

National Housing Endowment
1201 15th Street NW
Washington, D.C. 20005

Checks should be made payable to the National Housing Endowment and, in the memo section, please note the "Tsunami Shelter Fund."

The NAHB Senior Officers have selected Past President Bob Mitchell to oversee and guide this fundraising effort.

For more information, contact Troy Patterson at the National Housing Endowment at 800-368-5242 x8483 or Kym Kilbourne in NAHB Public Affairs, x8447.

North Carolina Vet Receives a Hero’s Welcome

By Katie Marcum
Last Nov. 15, the Iredell County Home Builders Association had no clue that an event halfway around the world would affect them so much in 2005. But it did, and it continues to serve as an inspiration for ICHBA and all of its members.

A graduate of West Iredell High School, Staff Sgt. Dale Beatty was in Iraq stationed at a base between Tikrit and Mosul. On Nov. 15, Beatty and fellow servicemen were riding in their armored Humvee when two anti-tank mines detonated and blew through the floor of the Humvee — right where Beatty was sitting. The Humvee was pushed more than 80 feet up the road.

Beatty’s next recollection was waking up alongside the vehicle, with his legs covered in debris and able to see out of only one eye.

”I asked God to let me see my boys again, and that’s all I wanted,” says Beatty. “For some reason I knew I was going to be OK.”

Were it not for the Humvee’s armored floor, Beatty believes he would have died there on the spot. An EMT within the unit managed to get to Beatty and stop his bleeding enough to transport him to an Iraqi hospital, where doctors amputated his right leg below the knee. Soon after, on Nov. 19, he was transferred to Walter Reed Medical Center in Washington D.C. where more disappointing news awaited. Doctors said that the long-term outlook for Beatty keeping the lower part of his left leg looked bleak. Beatty told them to take it off.

Beatty’s wife of three years, Belinda Summers, wondered if Beatty would take it hard and she didn’t know if she could handle the new situation. But her husband’s loving and generous spirit came through, and he was able to provide her the hope she needed.

“I’m awake, I’m still who I was before,” says Beatty. “I’m able to function in a fairly normal manner. I can dress myself. I can feed myself. I can bathe myself pretty much.”

One thing Beatty has been unable to do, however, is go home. When he was sent overseas, his wife and two small sons, Dustin and Lucas, moved out of their rented home and moved in with Belinda’s parents for some much-needed help with the boys. Now, Beatty is back stateside and working diligently to complete his rehab on his two new prosthetic legs.

His spirit is contagious. An overwhelming amount of support for Beatty has come in from all over the country, and especially from Statesville, his hometown. After Beatty’s local church, Monticello United Methodist, started collecting funds to help, ICHBA stepped in and approached the church to volunteer to build an accessible home for the family.

“We are thankful of the opportunity,” says Bunny Boyd, executive officer of the local association.

The response from ICHBA members has been generous. All labor is being completely donated. Statesville Brick has donated all of the brick of Beatty’s choice, 84 Lumber has donated $15,000 worth of materials, Great-Out-Doors Building Products Inc. has donated all of the windows and Professional Women in Building is decorating the house. Other building supplies and installation labor have also being donated, as well as monetary donations that keep coming in to both the church and the HBA.

Sam Parks of Parks Quality Heating & Air has spearheaded the building effort and met with Beatty on his visit home during the Easter holiday. Construction on the house began last month and the goal is to have it completed by October. Work continues on the basement, and the septic tank is the next item on the list. The more than 2,000-square-foot home is being built on a plot of family land given to Beatty by his father.

“How much good can come out of people is just amazing,” says Beatty.

Want to help? To contribute toward this effort, send an e-mail to Bunny Boyd at the Iredell County Home Builders Association, or call her at 704-881-0535.

Win Recognition for Your Community Service Work

State and local home builder associations that donate countless volunteer hours to Home Builders Care projects each year can receive recognition for their efforts through the Home Builders Care/National Housing Endowment Community Service Project of the Year Award.

To enter, submit an entry form, located on the NAHB Web site, accompanied by a two-page detailed description of the project. Press clippings, testimonials, pictures and other supporting materials may be submitted with your entry form.

Home builder associations are eligible to enter, and entries are due by Nov. 4.

The National Housing Endowment Board of Trustees will select the winner. Projects will be evaluated based on their benefit to the community, volunteer and member participation, and other criteria.

The winner will be recognized at the 2006 International Builders’ Show in Orlando, Fla., where the association will receive a $5,000 donation to a charity of its choice and a  recognition plaque

For more information, click here.

Send your entry to:

National Association of Home Builders
Attn: Niki M. Clark
1201 15th Street, N.W.
Washington, D.C. 20005
Fax number: 202-266-8131
E-mail: nclark@nahb.com

Put the NBN Hammer Cursor on Your Computer and Web Site

NBN Hammer

Show your pride in the home building industry by customizing your computer’s cursor with the “pounding hammer” cursor that is used in Nation’s Building News.

The customized cursor is available free from NAHB and Nation’s Building News and will work on Windows 95 or newer operating systems.

To begin customizing your computer’s cursor, first download the two hammer graphics needed to make the hammer move:

• Click the following link for the Hamone graphic and save it to your computer.
• Click the following link for the Hamoneover graphic and save it to your computer.
  
  

Once you have saved both hammer graphics to your computer, follow the steps below according to your Windows operating system. Customizing your computer with the new hammer cursor should take less than five minutes.

Windows XP:

1. Click on the Window's "START" button on the taskbar.
2. Select the "CONTROL PANEL" link.
3. Find the "MOUSE" icon and click it.
4. Select the "POINTERS" tab.
5. Highlight the old cursor you want to change and click "BROWSE." (To make the hammer your primary cursor, highlight “NORMAL SELECT.”)
6. Find the new “Hamone” cursor and double-click it.
7. Click "APPLY" or "OK."
8. To make the hammer cursor “move” when selecting a link or file, highlight a second old cursor you want to change (the suggested cursor is “LINK SELECT”) and click “BROWSE.”
9. Fine the new “Hamoneover” cursor and double-click it.
10. Click “APPLY” or “OK.”
    
    

Windows 95, 98, 98SE, ME, 2000 users

1. Click on the Window's "START" button on the taskbar.
2. Select "SETTINGS."
3. Select "CONTROL PANEL."
4. Find the "MOUSE" icon and click it.
5. Select the "POINTERS" tab.
6. Highlight the old cursor you want to change and click "BROWSE." (To make the hammer your primary cursor, highlight “NORMAL SELECT.”)
7. Find the new “Hamone” cursor and double-click it.
8. Click "APPLY" or "OK".
9. To make the hammer cursor “move” when selecting a link or file, highlight a second old cursor you want to change (the suggested cursor is “LINK SELECT”) and click “BROWSE.”
10. Fine the new “Hamoneover” cursor and double-click it.
11. Click “APPLY” or “OK.”
    
    

To change your settings back to your old settings:

1. Follow the steps above to get to the “POINTERS” tab of your “Mouse” configuration according to your Windows operating system.
2. Highlight the “Hamone” and “Hamoneover” cursor selections.
3. Click “Use Default.”
4. Click “Apply” or “OK.”

For Your Web Site, Too

To add the "hammering" NBN hammer cursor to your company's Web site, have your Web developer or IT department add the following codes for both hammers to your CSS style sheets (after the hammer images have been saved to your computer):

• body {font-family: Helvetica, Arial, sans-serif; font-size: 11px;
  cursor:url ("http://www.website_name/location_of_images/hamone.cur");}
• {cursor:url ("http://www.website_name/location_of_images/hamoneover.cur");}
  

NOTE: NAHB is NOT responsible for misuse or any errors and problems that may be caused by the reconfiguration of the users' pc files. The user understands that he is modifying his computer setup at his own risk.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

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 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Save on DELL™ Computer Products

Dell, the world's leading computer systems company, offers discounts to NAHB members on an  array of products designed to meet the technology needs of your company. Discounts are available on:

• Dell Dimension™ Desktops — Affordable computing with the latest processor and peripheral technology.
  
  
• Dell OptiPlex™ Desktops — Dependable, for network environments and easy manageability.
  
  
• Dell Precision™ Workstations — Powerful performance with high-end graphics, certified for workstation-class applications.
  
  
• Dell Inspiron™ Notebooks — Powerful affordable technology, ideal for personal or small business networks.
  
  
• Dell Latitude™ Notebooks — Performance and style, optimized for business networks.
  
  
• Dell PowerEdge™ SC Servers and PowerVault™ Storage — Affordable, high-performance technology solutions.
  
  
• Dell Printers™ — Crisp, professional document output at a great price.

To learn more, or to order, go to: www.dell.com/smb/NAHB.

Contact the Dell Association Sales Representative at 888-577-3355, Monday-Friday, 7 a.m.-8 p.m. (CT) and Saturday, 8 a.m.-5 p.m. (CT).

Other Member Advantage Discounts

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/ma.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

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 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Help Tsunami Survivors Rebuild Their Homes

NAHB and the National Housing Endowment have established the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund to raise desperately needed funds to build permanent shelter for the victims of the devastating earthquake and tsunami disaster in South Asia last year. The fund currently has raised more than $354,000.

NAHB has designated Habitat for Humanity® International and Shelter for Life International to be the recipients of the fund. Through NAHB donations, Habitat for Humanity will create a Disaster Response Technical Center in one of the affected countries it is serving. Shelter For Life will build a “Home Builders Care Village” of starter homes in Sri Lanka with NAHB funds.

Please Help

Please help by making a tax deductible donation to the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund.

Please direct your donation check to:

National Housing Endowment
1201 15th Street NW
Washington, D.C. 20005

Checks should be made payable to the National Housing Endowment and, in the memo section, please note the "Tsunami Shelter Fund."

The NAHB Senior Officers have selected Past President Bob Mitchell to oversee and guide this fundraising effort.

For more information, contact Troy Patterson at the National Housing Endowment at 800-368-5242 x8483 or Kym Kilbourne in NAHB Public Affairs, x8447.

Save More With BuilderBooks.com Rewards

BuilderBooks.com is offering it's first-ever Rewards program to provide privileges, savings and rewards to its loyal customers.

Launched at the 2005 International Builders’ Show, the program is available for a $9.95 annual fee.

Reap These Benefits 

• Reward Discounts: Receive a 5% discount at IBS and selected local and regional trade shows.

• Special Offers: Receive exclusive deals available only to Rewards program participants via e-mail.

• Free Rewards:  Show your Rewards card at the BuilderBooks.com store at the International Builders' Show and at selected local or regional tradeshows to receive free gifts. 

• Notification of New Products and Services: Stay up to date on new books and resources for the building industry.

• Quarterly Drawings: Every time you shop during the quarter, your name will be entered into a drawing to win valuable gifts.

• VIP Status: Your status is automatically upgraded to the Gold Level when you spend $2,500 annually. You and a guest will receive access to the BuilderBooks.com Rewards Lounge at the 2006 International Builders’ Show. Enjoy complimentary drinks and more.

Join the Rewards program today and save on the very books and services that build your business. Click here to start saving.

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. 

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.

Calendar of Events

July 29-31	2005 Summer Executive Board Meeting	Sun Valley, Idaho
Aug. 9-13	2005 EOC Seminar	Big Sky, Mont.
Sept. 7-11	Fall Board of Directors	Reno, Nev.
Oct. 12-15	Remodeling Show 2005	Baltimore, Md.
Oct. 13-15	Sunbelt Builders Show	Grapevine, Texas
Nov. 3-5	3rd International Conference of the Americas	Mexico City
Nov. 6-9	2005 Building Systems Councils SHOWCASE	New Orleans, La.
Nov. 11-13	2005 Custom Builder Symposium	New Orleans, La.
Nov. 13-14	National Conference on Membership	Spokane, Wash.
Nov. 17-19	State and Local Government Affairs Conference	Phoenix, Ariz.
2006
Jan. 11	Innovation in Workforce Housing Awards	N/A
Jan. 11-14	International Builders' Show	Orlando, Fla.
March 12-14	National Green Building Conference	Albuquerque, N.M.
May 10-14	Spring Board of Directors	Washington, D.C.

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

Subscribe Your Employees to Nation’s Building News — and Earn a Chance to Win Digital Camera

Subscribe your employees to Nation’s Building News Online. It’s free, easy and NAHB members who sign up three or more employees will be entered into the "Make Your Business Click" contest to win a digital camera. To learn more or sign up your employees, click here.

Make Your Connection With www.nahb.org

Make your connection to the latest housing industry news and information with www.nahb.org — the official public and members-only Web site of NAHB. 

Log in today to register for educational seminars, meetings and networking events; find important economic and housing data; and learn the latest developments in NAHB’s efforts to promote housing. It’s all available 24 hours a day at www.nahb.org. Just click the "Log In" button to get started.

Once you log in, personalize the site to reflect your interests. Simply go to the My NAHB>My Profile page and click the “Edit Content Preferences” link. To learn more about how you can customize My NAHB — including how to customize the links that appear on the Home page ― visit the How to Use www.nahb.org section.