Print-All Page: April 24, 2006

New flood elevation guidelines for New Orleans from the Federal Emergency Management Agency (FEMA) are burdensome and could make it prohibitively expensive for many families seeking to repair their substantially damaged homes, according to home builders in the area.

"The new FEMA Base Flood Elevations (BFEs) are too generalized and need to be based on more thorough research," said Toni Wendel, president of the Home Builders Association of Greater New Orleans and owner of Olde World Builders & Remodelers, L.L.C. "This one-size-fits-all approach arbitrarily raises the flood elevations in areas that are already well above flood levels. It may also unnecessarily increase the costs of rebuilding homes that may not need to be elevated to the levels suuggested by the maps."

The guidelines “recommend,” for a large part of the city, that “new construction and substantially damaged homes and businesses within a designated FEMA floodplain should be elevated to either the Base Flood Elevation (BFE) shown on the current effective Flood Insurance Rate Map (FIRM) or at least 3 feet above the highest adjacent existing ground elevation (HAEGE), whichever is higher.”

“Where did they get this 3-foot rule?” asked Jon Luther, executive vice president of the home builders association. “We have not been given any sensible answer. We very much want to rebuild New Orleans and make it the great city it used to be. We recognize that it is appropriate to have consistent codes and standards that will enable homes to withstand a significant flood event. But the FEMA guidelines are excessive and inflexible.”

“A lot of people will be swept up in these guidelines,” he added. “And a lot of the affected people cannot afford the kind of elevation requirements FEMA has imposed.”

It can cost from $50,000 to $100,000 to raise a home enough to meet the FEMA flood requirements.

“If you apply this rule universally, then a lot of people will be affected by it who otherwise could have afforded to repair their homes,” Luther said. “If this advisory precludes people who were already at BFE [Base Flood Elevation] from being able to rebuild, then we feel that is bad policy.”

“We’re putting a task force together within the New Orleans HBA and we plan to further assess the guidelines and to explore pragmatic alternatives to the FEMA guidance that will help solve the problem,” he said.

FEMA’s guidance is an advisory and it still needs to be adopted by local parishes to have any real effect. But it is the position of the Louisiana Recovery Authority that if home owners are not building to these standards in the advisory, then they are less likely to be eligible for insurance or for state or federal financial assistance, Luther said.

Builders are troubled that the 3-foot rule applies to all substantially damaged homes, regardless of the home’s location or its height relative to the base flood elevation.

“Look at the three-foot above ground requirement,” said Randy Noel, president of Reve, Inc., a custom home builder in the New Orleans area. “What is the highest existing adjacent ground? This is kind of nebulous, and you don’t know if you have met their standard, even with three different surveyors going to the site. And it’s 3 feet everywhere, regardless of the elevation.”

The home builders said that they would like to see FEMA take a more systematic approach to determining flood elevation requirements.

“It appears that there is a disconnect between the Army Corps of Engineers and FEMA,” said Noel, who is the NAHB state representative for Louisiana. “The Army Corps maps are slower to put together because the Corps bases its decisions on scientific data. FEMA doesn’t necessarily have that same criterion.”

“If they derived these elevation guidelines from the ruptured levies, then that is a problem,” Luther said. “The BFEs are supposed to be based on a 100-year storm occurrence. Assuming the levees are repaired and will function properly in the future, then we should be building to a 100-year flood situation, not to a failed levee situation.”

For more information on this issue, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.

Strides in Green Building Noted on Eve of Earth Day

Home building is at the brink of a new era in which the line between traditional and green building is starting to fade, NAHB leaders said at a press teleconference on April 19, just days before Earth Day.

“Since the 1990s, we have been preparing our members for the time when green building goes mainstream,” NAHB Executive Vice President Jerry Howard said during the teleconference. On Earth Day 2006, I think the goal is in sight. We are that close.”

According to a recent survey conducted by NAHB and McGraw Hill Construction, there has been a 20% increase since last year in builders dedicated to green building issues. The number is expected to rise by another 30% in 2007 to 64% of builders either heavily or moderately involved in green building projects, the survey said.

Howard and NAHB Green Building Subcommittee Chair Ray Tonjes, a custom builder in Austin, Texas, attributed the soaring numbers to the increased availability of energy-efficient materials and to education — both for builders and for home buyers.

“Green homes are equipped with more efficient heating and cooling systems and energy-efficient appliances and lighting, and they use less water, all resulting in lower monthly utility bills. Their use of recycled materials will further help to conserve natural resources,” Tonjes said.

Tom Kenney, vice president of contract research for the NAHB Research Center, agreed: “Over the past decade, material suppliers have developed alternatives to lumber, since old-growth solid lumber is such a highly valued and increasingly scarce resource,” he told callers. “These engineered materials are resource-efficient and are currently used throughout the country.”

“We can call green building mainstream when it doesn’t look or feel significantly different from the kinds of homes that buyers are used to — and when we know that consumers are ready to buy them,” Howard said.

“When the survey asked home builders why they are building green, 92% said it was ‘because it’s the right thing to do.’ I am certainly not surprised. Home builders want to do the right thing in the communities where they live and where they do business. They always have done that,” Howard said.

Craig Havenner, a builder and developer at The Christopher Companies in Northern Virginia, is dealing with a mandate to build green in Arlington County, where it’s required for multifamily construction like the project he’s beginning.

And where it’s not mandated, he’s hoping that the economics of a free market will enable more single-family builders and remodelers to choose from a wealth of green products at a competitive price.

“When you hear a term like smart growth or green building, consumers say, ‘Hey, that sounds cool.’ But the devil is in the details,” Havenner said. “Philosophically, green building is a good thing. Of course it makes sense to us. But at the same time, we are dealing with an affordable housing crisis. As more and more people get involved in green building, as it goes mainstream, suppliers will become more adept and the prices will go down.”

Doug Smith, of Miller and Smith, compared green building with special wiring packages — an option that has turned into a standard feature. As green building practices such as panelized construction become more commonplace, "I think we are 24 months away from green building becoming the standard way to build," Smith said, "especially in the major metropolitan markets, and absolutely if energy prices continue to go up, it will expedite it." Miller and Smith builds homes in the Washington, D.C. area and on the Delaware shore.

Complete survey results will be available from McGraw Hill Construction in May. For additional information about NAHB green building programs, click here.

For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.

Housing Prices Put Americans on the Move

Housing prices are driving a continuing trend of the movement of the American population from the North to the South, with a net out-migration of residents from high-priced Northeastern and West Coast cities to more affordable housing markets in the Sun Belt, according to Marc Perry, a demographer for the Census Bureau. On the losing side are metro areas like New York, Los Angeles and Chicago, with big gains coming to Dallas, Atlanta and Phoenix. Of the nation’s 25 largest metro areas, the New York region, with a median house price in 2005 of $427,600, twice the national median, lost the most people, with an average annual outflow of 211,014 residents from 2000 to 2004; this was an average loss of 11.4 people per 1,000 per year. In California, San Francisco, with an average house price of $718,700, had a net domestic outflow of 60,984 over the five-year period, averaging 14.7 per 1,000 per year; and Los Angeles, averaging $568,400, lost 117,780 of its population, or 9.3 per 1,000 annually. “Florida has been a sponge for migrants,” says Perry. It has attracted more residents than any other state, a net gain of 190,894, including many retiring or relocating New Yorkers, but Nevada had the highest average annual increase per 1,000, of 23.3. (www.cnnmoney.com)
CNNMoney.com (4/20/06); Les Christie

Foreclosures Soar 63 Percent Over Last Year

RealtyTrac reported that 101,597 properties across the country entered some state of foreclose in March, a 13% decrease from February but a 63% increase from the same month a year earlier. “After rising more than 20% during each of the first two months of the year, foreclosure numbers experienced a fairly sharp correction in March,” said James Saccacio, chief executive officer of RealtyTrac. “We saw a similar drop in March of ’05 followed by four consecutive months of increases. Many buyers and investors typically start looking for properties in the spring, and that could have provided distressed home owners a better chance of selling their properties to avoid default or foreclosure. Colorado had the highest foreclosure rate last month, followed by Georgia, Indiana, Utah and Michigan. Texas had the most new foreclosures of any state for the fourth month in a row even though foreclosures there were on the decline for the second consecutive month. (www.rismedia.com)
RisMedia (4/18/06); Beth Bresnahan

Lawsuit Boosts Pressure on Corps to Issue Rule on Water Act Scope

A lawsuit from NAHB, the latest in a series of legal challenges, is putting growing pressure on the U.S. Army Corps of Engineers to issue a rule clarifying the scope of waters protected under the Clean Water Act. In its recently filed suit, NAHB is challenging a policy by the Corps’ Philadelphia district of regulating ditches that eventually connect to navigable water on the grounds that the Corps’ 1986 rules defining “waters of the United States” do not include ditches. The case, NAHB v. U.S. Army Corps of Engineers, could have broad implications if the industry is successful because numerous federal courts have allowed Clean Water Act jurisdiction over wetlands based on their proximity to ditches that eventually connect to navigable waters, say NAHB representatives. If the D.C. federal district court rules in NAHB’s favor, other courts could be forced to re-examine the issue in future cases. (www.iwpnews.com)
Inside EPA Weekly Report (4/21/06)

Brownfield Lending Perks Up as Developers Eye Sites

Scrambling to invest more money in real estate, pension funds, insurance companies and hedge funds are lending more frequently to projects developed on brownfields, and even banks are stepping up to lend to experienced brownfield developers. The U.S. has $2 trillion of contaminated real estate that investors could buy if it were cleaned up. Although developers are being attracted to these sites as available land grows increasingly scarce in hot markets, financing for brownfield projects has lagged behind because many traditional lenders fear liability for health or other problems that may crop up. “When we first got into this business, no bank really wanted to do this product,” says Mike O’Neill, chief executive of Preferred Real Estate Investments of Conshohocken, Pa., which has redeveloped about three dozen brownfield sites in the past 15 years. Banks that once lent him 40% of the cost of a project now offer to finance 80% of the cost, he says. “I did not think that there would come a time that people would bang down our doors.” Even so, brownfield developers still pay significantly more for financing. (www.realestatejournal.com)
RealEstateJournal.com (4/18/06); Christine Haughney, the Wall Street Journal Online

The Next Martha?

Connecting celebrity brands to new homes is an emerging phenomenon, which started late last year with an announcement by KB Home that it would offer its first Martha Stewart community in North Carolina. Also late last year, Mitchell Homes, based in Alabama, announced it would build the first Kathy Ireland community in Florida. Ireland — one of Sports Illustrated magazine’s most popular swimsuit models of the late ‘80s and early ‘90s but also an actress in family-friendly movies made for television — creates specific style guides that allow her manufacturing partners to create product lines that can be coordinated with design themes such as “Americana,” “Aloha” and “European Country.” Central Indiana home builder Estridge Companies has announced a partnership with Ireland that is starting with coordinated home interiors but is expected to lead eventually to Kathy Ireland-designed homes in a Kathy Ireland-designed community built by Estridge. Charlie Scott, executive vice president for Estridge, says Ireland’s team brings a proven ability to connect to female customers, who influence about 80% of home-purchasing decisions. “The home building industry has a lot of male influence,” he said. “But her brand is highly recognized by the female demographic.” (www.indystar.com)
Indianapolis Star (4/18/06); Ellen Miller

Smart Money — the Comfort Craze

During a slowdown for remodeling in general, home owners are turning to projects that are focused on “remodeling for me,” with plush gathering places full of creature comforts for themselves and their families. There’s “a desire to have something no one else has, to customize, to make the home their own,” says Vince Butler, chairman of the NAHB Remodelors™ Council. For example, although there are still a lot of bathroom makeovers under way, overall spending has bogged down. At the same time, spending on outdoor projects has soared, rising by 47% in 2004 to $21 billion, according to the Census Bureau. Home Depot saw double-digit earnings and revenue growth last year and the year before, and some of its biggest sales surges are in high-end product lines that help home owners pamper themselves. Elaborate barbecue grills and restaurant-quality kitchen appliances are claiming more and more shelf space. Last fall, the home-improvement chain launched 10 Crescent Lane, a spinoff retailer that sells plush furnishings like wicker armchairs and $1,500 outdoor loveseats. (www.smartmoney.com)
Smart Money Magazine (4/17/06); Jim Rendon

Dressed-Up Closets; Expanded Spaces Have Mini-Fridges, Sound Systems and Dressing Islands

It used to be that the master bedroom closet was simply a place to hang clothes and stow stuff, but more home owners are demanding bigger closet spaces and are commandeering space from elsewhere in the house to accommodate dressing islands, rich cabinetry, minibars and other amenities. Even lesser-priced homes are getting in on the trend. Closet space in new homes increased roughly 40% from 1978 to 2005, according to Steve Melman, director of economic services at NAHB. “A high-end closet used to be $10,000. Now they’re $60,000,” says Kristina Ferrigan, director of marketing for Elmhurst, Ill.-based Closet Works. She says that closet companies have seen 15%-20% annual sales growth for the past several years. Although closets can run anywhere from 36 square feet to as much as 600 square feet, 100 square feet is the norm in the Chicago area. (www.chicagotribune.com)
Chicago Tribune (4/21/06); Elizabeth Brewster

Let's Find a Solution to the Immigration Problem

The latest employment projections from NAHB indicate that our industry will need to build 18 million new homes over the next decade. This will generate more than one million new jobs for the residential home building industry.

Because our nation’s population is “graying,” every year we come to depend more and more on foreign-born workers. In fact, NAHB estimates that 23% of our current residential construction workforce is foreign-born. With California birthrates accounting for 70% of our population growth and more baby boomers heading for retirement every day, the home building industry will be looking more and more towards a foreign-born labor pool to build homes for this growing population.

This is why NAHB invests considerable time and resources into training and recruiting the growing number of workers needed to build homes today and tomorrow. From developing the Home Builders Institute — NAHB’s education and workforce subsidiary and the largest private partner in Jobs Corps — to our most recent efforts supporting comprehensive immigration reform bills in Congress earlier this spring, NAHB is striving to find viable solutions to our immigration problem

In September, the NAHB Board of Directors passed Resolution 4A. It found that sustaining our economy while meeting the nation’s housing needs requires a substantial immigrant workforce. NAHB called upon Congress to make comprehensive reforms to the nation’s immigration laws including:

Under the current system, the estimated backlog for visa applications for workers hoping to enter the U.S. legally is up to seven years and caps are in place for the number of visas issued each year for employment-based entry. Immigration law currently allots only 140,000 employment-based visas to immigrants each year, with only 40,000 of those visas targeted for skilled and unskilled workers. This is why NAHB supports the creation of a guest worker program to allow foreign-born individuals to apply for the right to work legally in this country for a set time and possibly pursue opportunities for permanent residency or citizenship. Of course, no “solution” is acceptable unless it requires participants to be held to the same standards as U.S. workers.

Where we are being particularly vigilant is in making sure reforms don’t force private businesses to enforce immigration policies. While business owners clearly have a responsibility to ensure that employees are eligible to work here, forcing employers to shoulder the burden of policing citizenship documentation will simply sabotage the economic growth and freedom that attracts immigrants in the first place.

Homeland Security Targets Illegal Immigrant Employers

While the Senate Judiciary Committee is expected to renew debate on comprehensive immigration reform this week that would call for strict border security and interior enforcement coupled with a guest worker program, the Administration is already taking action to beef up enforcement strategy and to crack down on the hiring of illegal immigrants.

Homeland Security Secretary Michael Chertoff on April 20 announced the results of the “largest single work site enforcement operation against a company in American history.” In a raid that spanned 26 states, federal officials arrested seven managers and nearly 1,200 illegal employees of IFCO Systems, a major provider of pallet services in the U.S.

At a news conference detailing the unprecedented sting operation, Chertoff unveiled a comprehensive immigration enforcement strategy that he said would expand existing efforts to target employers of illegal aliens and immigration violators inside the U.S.

A press release issued by Homeland Security said that the primary objectives are to “reverse the tolerance of illegal employment and illegal immigration in the United States.”

As part of its enforcement efforts, Chertoff said that the Department of Homeland Security will urge the Congress for legal authority to obtain routine access to Social Security data in order to detect workers who attempt to supply employers with false Social Security numbers. The agency will also seek to develop an administrative regulatory program to provide clearer guidance to employers.

With lawmakers back in Washington following their two-week spring recess, NAHB continues to work with members of the Senate to craft a meaningful reform bill that would:

The House on Dec. 16 passed a strict immigration bill (H.R. 4437, the "Border Protection, Antiterrorism and Illegal Immigration Control Act") that is opposed by NAHB and would focus on border security and punitive enforcement penalties for employers. It does not include a guest worker program that would help meet the workforce needs of NAHB members nationwide.

To read legislation, click here and enter the bill number in the box at the center of the page.

For more information, e-mail Jenna Morgan Hamilton at NAHB, or call her at 800-368-5242 x8407.

Help Take Industry Concerns to Lawmakers on May 10

With just over two weeks to go before the association’s most important legislative lobbying event of the year, there is still time for builders to sign up for the NAHB Legislative Conference on May 10 and join more than 1,100 of their colleagues on Capitol Hill as they call on their members of Congress to increase housing opportunities for all Americans.

“A record number of builders will be in Washington on May 10 for this special day-long event that will coincide with our spring board meeting,” said NAHB President David Pressly. “The Legislative Conference provides builders a unique opportunity to speak directly with their federal representatives on Capitol Hill and convey to them the challenges their businesses face every day. We encourage all industry professionals to participate.”

To keep housing a national priority, builders will be calling on their lawmakers to:

A strong builder turnout is important because decisions that affect the housing sector are being made every day in the halls of Congress. Environmental regulations, tax policy, soaring health care costs and many other issues can add thousands of dollars to a builder’s annual operating budget, and Congress weighs in on each and every one of them.

Sharon Larson, executive officer of Brookings Regional Builders Association in South Dakota, said that meetings with her state’s congressional delegation during last year’s Legislative Conference proved to be an invaluable experience.

"A person can receive all of the e-mails and legislative alerts that come from NAHB, but not really 'get it' until they have heard first-hand how builders and home owners are affected on a daily basis,” she says. “Hopefully, we were able to make a difference that day, but in addition to that, I think having the ability to reference that meeting in my correspondence has been very useful."

Attending the 2006 Legislative Conference offers an unparalleled opportunity to:

Your participation can make a difference. On May 10, the nation’s home builders will send a powerful message to members of Congress: Housing must remain a national priority.

Come to Washington and show your members of Congress the great work you do back home in building your communities. Urge your lawmakers to adopt sensible policies to enable your business to thrive and allow the nation’s home builders to fulfill their mission of providing safe, decent, affordable housing to all Americans.

“For any builder who is concerned about their bottom line, attending the Legislative Conference could be the best decision that they make this year,” said Pressly.

For more information and to register for NAHB’s 2006 Legislative Conference, click here; or e-mail Jessica Boyce at NAHB, or call her at 800-368-5242 x8334.

Home Starts Slow to More Sustainable Pace in March

New-home construction cooled in March, dipping 7.8% to a seasonally adjusted annual rate of 1.960 million, the Commerce Department reported on April 18.

Unseasonably good winter weather helped spur housing starts earlier this year, with production rising to a yearly rate of 2.131 million units in the first quarter, the strongest quarter yet in the current expansion and most likely its peak.

Single-family housing starts declined 12.0% last month to a pace of 1.591 million units, with an average for the first quarter of 1.749 million units, also a cyclical high. Multifamily construction, on the other hand, climbed 15.7% to a rate of 369,000 units, and the first-quarter average was a robust 382,000 units.

“Builders are seeing a softening in demand because of rising interest rates, affordability issues and a reduced presence of investors/speculators in the housing market,” said NAHB President David Pressly. “Builders understand that the market is cooling off from the frenetic pace of the last several years and are adjusting accordingly.”

“The sizeable declines in housing starts for March partly reflected a return to more normal weather patterns, but it’s clear that builders are adjusting their production levels to the lower levels of demand evident in the market,” said NAHB Chief Economist David Seiders.

“We should see some further declines in starts as the year progresses, but we’re expecting an orderly transition to more sustainable levels rather than an abrupt housing contraction,” Seiders added. “NAHB expects housing starts to decline by about 6% for 2006 as a whole, mainly because of a reduced role for investors/speculators.”

All four regions reported decreases in housing starts in March, with construction of new homes and apartments down 0.5% in the Northeast, 4.8% in the South, 8.2% in the Midwest, and 15.5% in the West.

The number of building permits issued in March fell 5.5% to a seasonably adjusted rate of 2.059 million, with single-family permits down 6.9% to an annual rate of 1.542 million and multifamily permits down 0.1% to 517,000 units.

Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.

NAHB Chief Economist David Seiders says a "soft landing for housing is still in the cards" on NAHB's economics blog, “Seiders on Housing” — an informal Internet-based forum dealing with economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.

Log onto the blog at http://nahbblog.blogs.com and get direct access to Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective.

Hovnanian Expands Along South Carolina, Georgia Coasts

In its fiscal year 2005, CraftBuilt Homes delivered 220 homes with revenue of approximately $42 million, Hovnanian reported in its April 17 announcement of the purchase. The company currently has approximately 100 homes in contract backlog, with a sales value of $22 million, and owns or controls some 2,800 lots throughout its markets.

With a close proximity to Hilton Head, CraftBuild sells single-family detached homes to first-time, move-up, empty-nester and retiree home buyers.

“CraftBuilt Homes has an excellent reputation of building high-quality homes in traditional neighborhood settings and has a strong track record of financial performance,” said Ava Hovnanian, president and CEO of Hovnanian Enterprises. “John Cardamone and his team maintain a focus on return on capital and have built reliable homes for more than 20 years and we look forward to building many more homes with them over the next 20 years.”

Eye on the Economy: Fed Is Near End of Its Rate-Hike Process

The U.S. economy still is on a solid growth path and has been running somewhat above the sustainable trend pace for the past few years ― based on our estimates of trend growth in the labor force and labor productivity.

Growth of real Gross Domestic Product (GDP) will be around 5% in the first quarter of this year, following temporary hurricane-related weakness in the final quarter of 2005, and we expect second-quarter growth to hold in the above-trend range.

An extended period of above-trend GDP growth reduces slack in labor markets and generally results in rising rates of capacity utilization in the industrial sector. Both developments have been evident during the past year.

At some point, tightening resource markets generate inflationary pressures, and GDP growth must fall to (or below) trend if a reasonably balanced economic expansion is to carry forward for some time. Our forecast shows slightly below-trend GDP growth in the second half of this year and in 2007, and that should be viewed as a healthy development.

Above-trend GDP growth has generated solid growth in employment and systematic reductions in the unemployment rate since the summer of 2003, despite maintenance of healthy gains in labor productivity (output per hour). Earlier in the expansion, tepid GDP growth combined with an early-cycle surge in productivity left us with a job-losing economic “recovery,” but all that has changed (at least nationally).

The employment report for March was another healthy one, showing a 211,000 increase in payroll employment and a downtick in the unemployment rate to 4.7% — the lowest for the expansion to date. That’s certainly good news, but the gradual reduction of slack in the labor market has been putting systematic upward pressure on average hourly earnings, and unit labor costs have been on the rise as growth of labor productivity has slowed from that early-cycle surge.

One of the culprits in this plot is a low and stagnant labor force participation rate (around 66%), a factor that contributes to labor market tightness as the economy expands.

Dramatic shifts in energy prices have been pushing headline inflation numbers all over the place, but it’s “core” inflation (excluding food and energy prices) that really matters when the future of the economic expansion is at stake. Our central bank is preoccupied with core inflation, and it appears that the Fed has established “tolerance ranges” to guide the management of monetary policy.

The core Producer Price Index (PPI) is down the list in order of importance, since the Fed is not preoccupied with inflation at this level, but it’s hardly irrelevant to the inflation process. The core PPI for finished goods was up by only 1.7% on a year-over-year basis in March, the same as in February and well below rates recorded during most of last year.

Core inflation at earlier stages of production (intermediate and crude goods) is running a good bit higher, but that’s a long distance from the inflation rates the Fed worries about.

The core Consumer Price Index (CPI) is more prominent on the Fed’s radar screen, and it appears that the Fed’s tolerance range for the core CPI is between 1.5% and 2.5% (year-over-year basis). This measure showed a 2.1% gain in March, the same as in January and February and still well within the Fed’s range.

However, the technically superior chain-core CPI (allowing for substitution among goods and services in the market basket) showed a year-over-year gain of 2.0%, up from 1.8% in the previous three months. The upper end of the Fed’s tolerance range for the chain-core CPI presumably is around 2.2%, so we’re getting pretty close on that front.

The Federal Reserve has hiked the federal funds rate by 25 basis points at each of the 15 Federal Open Market Committee (FOMC) meetings held since mid-2004, and the funds rate now stands at 4.75%. The Fed’s expressed objective has been to remove the massive monetary policy “accommodation” poured into the economy between mid-2003 and mid-2004 and get policy back to “neutral” before the economy generates serious inflation pressures.

The public statement issued at the conclusion of the last FOMC meeting on March 28 hinted at an additional quarter-point rate hike at the next policy meeting on May 10, and financial markets have been speculating about even more tightening down the line. But the minutes from the March 28 meeting released last week suggested that some FOMC members are not actually preoccupied with inflation dangers, and some expressed concerns that monetary tightening could go too far — particularly in view of well-documented lagged effects of monetary tightening on the economy.

We’ve been assuming just one more Fed tightening move (on May 10), and the FOMC minutes reinforce our judgment on that point.

The apparent preoccupation with potential inflation pressures in the March 28 FOMC statement put some upward pressure on longer-term rates, and upward rate adjustments by some foreign central banks added to these pressures as questions were raised about the durability of huge inflows of foreign capital into U.S. fixed-income markets.

As a result, the entire Treasury yield curve has moved upward, and the 10-year Treasury yield is now hanging around 5% — the highest since mid-2002 and right on NAHB’s current forecast for the second quarter of the year.

Looking forward, we expect the yield curve to move up a bit further and retain a slight positive slope, diffusing concerns by anybody inclined to fret about the economic implications of an inverted yield structure.

Interest rates on home mortgages have continued to move upward with Treasury rates. The average rate on the 30-year, fixed-rate conventional mortgage (FRM) climbed to 6.49% in the second week of April, and the going rate on Treasury indexed one-year, adjustable-rate mortgages (ARMs) climbed to 5.61% despite sizeable initial rate discounts by lenders.

NAHB’s forecast shows further modest increases in the mortgage rate structure over the balance of 2006. We’re also likely to see less favorable rates and terms on various “exotic” forms of ARMs — such as interest-only and payment-option structures ― that soon will be subject to supervisory guidance from federal regulators.

Housing Market Indicators Illustrate the ‘Cooling Down’ Process We’ve Been Projecting

NAHB’s single-family Housing Market Index showed another decline in April, falling to the lowest level since a temporary plunge in the wake of the terrorist attacks on 9/11. The HMI now is at 50, the balance point between positive and negative builder perspectives regarding the demand for single-family homes.

The index of applications for mortgages to buy homes (Mortgage Bankers Association series) also continues to illustrate the downshift in demand. In the second week of April, this measure was down by 17% from the cyclical peak at mid-2005 (four-week moving average basis) despite a modest rise since mid-March as committed buyers apparently moved to lock in mortgage rates in a rising rate environment.

Housing starts were quite strong in the January-February period despite an obvious downtrend in housing demand as well as NAHB builder surveys that illustrated builder recognition of that downtrend. But total starts were down by nearly 8% in March and the single-family component retreated by 12%.

Even so, the first-quarter averages for total, single-family and multifamily starts all hit cyclical highs. Positive weather effects appear to be largely responsible for that conundrum — weakening demand but strengthening supply.

Unsold inventories of new homes definitely are elevated at this time. Many builders are reporting an upshift in cancellations of sales contracts signed earlier, and many companies, particularly larger ones, are telling us that investors/speculators are not only cancelling sales contracts but also reselling homes they had closed on earlier. And it’s obvious that home purchases by investors/speculators are well down from this time last year.

In view of these evolving developments, we’re still projecting downward adjustments to home sales and housing starts over the balance of this year and in 2007.

The anticipated degree of decline in starts for 2006 (6%-7%) still qualifies as a “soft landing” for the housing market following unsustainable exuberance in 2005. We expect much of the decline to reflect withdrawal of investors/speculators from housing markets as the change in supply-demand balance takes a toll on price appreciation and price expectations in single-family and condo markets.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his April 19 edition. To subcribe to “Eye on the Economy,” click here.

Want to Know Your State and Metro Forecasts for 2006?

Anticipate the trends, make better decisions and improve your bottom line. HousingEconomics.com, the online publication from NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis and detailed Excel tables and overviews are available for all the state and metro forecasts.

HousingEconomics.com combines unique scientific research with practical applications providing insights that are original and useful. This interactive Web site at the executive level provides critical data and information quickly, easily and frequently, and includes the following features:

Plan to attend NAHB's Construction Forecast Conference on April 27 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.

Log onto the blog at http://nahbblog.blogs.com and get direct access to Seiders' expert opinions, projections and responses. Then let Seiders know what you think by giving your perspective.

Builder’s Tip: Creating an Effective Caulk-Tube Extension

On a recent job, I had a problem with a stainless-steel kitchen countertop and its integral sinks. They had come unstuck from their countertop substrate and needed to be re-glued with silicone caulk — in a hard-to-reach location, of course.

Putting off the task until the next day seemed like a good idea, so I headed out to the backyard to hook up the drip-irrigation system.

I started cutting tubing and slipping it into the fittings, marveling that water pressure didn’t push the tubing right back out.

Then the old light bulb went off: Why not use drip-irrigation fittings to fashion a caulk-delivery system for hard-to-reach locations?

Using this rig, I was able to snake the nozzle extension through a couple of carefully drilled holes in the substrate into the gap beneath the stainless-steel counter. I squeezed caulk as I retracted the nozzle and weighted the top for a day to let the caulk set up. It worked great.

Since then, I’ve used these cheap, disposable extensions to seal leaks in windows and doors by working from inside, and regluing large panels without having to remove them. The fittings come in both 45° and 90° versions.

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

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.

Explore the latest housing industry news and information on www.nahb.org — the official public and members-only Web site of NAHB.

With an expansive "For Consumers" section, www.nahb.org provides a credible source of information on home building and remodeling for your customers. The Web site also provides a wealth of member discount programs and business resources developed for you.

Plus, to make it easy to get what you need, the Web site has built in time-saving features like My NAHB to customize the site to your interests, My Favorites so you can select specific links to appear on your www.nahb.org Home page and online Staff Directories so you can find NAHB housing industry experts quickly and easily.

Use www.nahb.org to stay on top of the latest housing industry news, access your council and committee materials, register for courses and events and stay abreast of NAHB’s efforts to promote housing.

Keep an Open Mind When Sizing Up Land Options

Is land acquisition squeezing your home building business expansion? Keep an open mind when sizing up your options, say experts in land development.

Even a “gray field” like an underutilized parking garage can be an opportunity in a market where long commutes and gas prices are giving way to so-called new urbanist thinking.

“There are a lot of opportunities that might not look like opportunities to you,” says Ed Hord, FAIA, of Hord Coplan Macht, Inc., an architecture and landscape architecture firm based in Baltimore.

Hord designed 40 loft units (with 68 parking spaces) in Baltimore. The lofts are sited in the middle of busy section of Baltimore nestled between an interstate highway (I-83) and AMTRAK rail lines. The building is adjacent to the city’s Penn Station, which has commuter rail service to Washington, D.C. where many would-be buyers have been priced out of the market.

Hord says that budget-minded consumers are doing the math and finding they can live without the suburban dream and an estimated premium in household costs — including home heating, landscape maintenance and extra gas for commuting and errands — that has added more than $300 per month to their household expenses in the last year.

Nonetheless some consumers still will pay that extra green to have, well, extra green (space, that is). And there are still large parcels of land to be had, so you don’t have to limit yourself to infill development.

John McDonald of McDonald, Head & Associates, a Salt Lake City-based consulting firm that has worked with investors, developers and builders since the 1980s, says a quick survey of public records in the hot (Clark County) Las Vegas market recently found 438 parcels of between five and 10 acres; 98 parcels of 10-15 acres; 917 parcels of two to three acres; and more than 2,000 parcels of one to five acres.

NAHB Has More Than 250 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 250 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.

Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.

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.

NAHB’s Technology Solutions Directory — an easy-to-use directory that enables builders, remodelers, contractors and other industry professionals to find information on software and IT solutions and services for their businesses — is now online. The directory is sponsored by the Business Management & Information Technology Committee.

Software and technology solutions providers interested in being listed can sign up for:

The Technology Solutions Directory is solely for educational and informational purposes. Nothing in the directory should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the listed software, IT service or the software/IT vendor. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained in this directory.

“Land Development,” available through BuilderBooks.com, provides readers with the knowledge of the interrelated factors that contribute to a successful land development project, including market study and analysis, financing, site selection, residential streets and more. Clearly written, logically organized and illustrated, this is an indispensable resource for any developer or builder. To view or purchase this publication online, click here, or call 800-223-2665.

Learn About Information Integration With NAHB's Biztools

Compiling, accessing and transferring data so it becomes useful information that adds to your bottom line is a challenge, yet it is essential to being able complete projects on time and on budget.

For decades, hardware and software have offered data management solutions for distinct functions such as accounting, estimating, production management and procurement. But increasingly, integration — the automatic sharing of data across categorical business functions — has become vital to making these solutions work more effectively and efficiently.

NAHB has developed a two-part series — “Drilling Down Into Integration” — of "Business Management Resources" in the Biztools section of the NAHB Web site to help you understand software integration and how it has evolved, and offers some pointers to help you sort out some options. (This series is available to NAHB members only.)

The Biztools series on information integration is by Mark Reich, an industry sales manager for Sage Software’s Sage Timberline Office specializing in residential business management solutions, and Tom Gebes, president of BuilderMT and who has 25 years experience serving home builders’ work flow management needs.

NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably

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

To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.

Software and technology solutions providers interested in being listed can sign up for:

Complete and Accurate Estimates Increase Profits

Estimating is an essential and critical step in home building — the step that directly determines your bottom line. Builders keep profit at the top of the priority list by learning to create complete and accurate estimates.

The revised edition of “Estimating Home Construction Costs,” available through BuilderBooks.com, is perfect for those who want to improve their estimating abilities and discover better ways to do a quantity takeoff and for those new to home building.

“Estimating Home Construction Costs” reviews types of estimates, when to use them, how to integrate estimating into other management functions and the benefits of computer estimating.

Custom Builder Jerry Householder teams up with builder Emile Marchive III to show builders:

To order “Estimating Home Construction Costs” online, click here, or call 800-223-2665.

NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably

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

To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.

Software and technology solutions providers interested in being listed can sign up for:

Free Conference on Contracting Opportunities at HUD

The conference, sponsored by HUD’s Office of Small and Disadvantaged Utilization, includes sessions on current contracting opportunities, a matchmaking forum with HUD prime contractors, displays and information about various HUD programs and offices, networking opportunities with public- and private-sector decision-makers and sessions with leading industry and government experts.

Last year, HUD awarded 67% of its contracts ― more than $946 million — to business owned by women, disadvantaged, minority, disabled and veteran entrepreneurs.

Recruit New Members in May, Win Prizes

The NAHB 50+ Housing Council is joining NAHB for National Membership Day in a month-long recruitment and retention promotion for local home builders’ associations and their councils, culminating on May 23. NAHB 50+ Housing Council members and members of 13 local, state and regional 50+ housing councils are encouraged to participate in the Council’s 2006 Membership Day to increase awareness, reinforce benefits and help recruit new members.

It’s not too early to start promoting benefits and organizing your recruitment campaign for May. Then on Tuesday, May 23, call in your new member totals for the month.

If you sign up three or more new members during the month, you will receive a $25 American Express gift card.

The top recruiter also gets a free registration to next year’s symposium in Denver.

The top local 50+ Housing Councils also are eligible for prizes and recognition. The top recruiters will be listed this summer in 50+ Housing e/Source.

“National Membership Day is one of the 50+ Housing Council’s most important recruitment events of the year,” said Polly Webb of Trace Marketing, Inc., in Sarasota, Fla., 2006 chair of the NAHB 50+ Housing Council’s Membership and Marketing Committee. “It’s an opportunity to grow our membership and to remind members why they joined by reinforcing member benefits. We’re counting on all 50+ Housing Council members and local councils to participate on National Membership Day.”

Discover how to prepare for design considerations for single-family and multifamily housing for active adults. Register for "Designing for the Active Adult," to be held Tuesday, May 9 in Washington, D.C prior to the NAHB Spring Board of Directors meeting.

This course counts towards Continuing Education Credit for: CAPS, CGA, CGB, CGR, GMB, Master CSP, CSP, CMP and MIRM. To register online, click here.

The Magic — and Truth — Behind ‘Extreme Makeover’

Question: How can a 4,500-square-foot custom home be designed, engineered and built in a mere seven days?

If you don’t want to know how this magic trick on ABC’s “Extreme Makeover – Home Edition” really works, read no further. But if your curiosity as a builder or remodeler is piqued, read on.

I recently had the opportunity to work on one of those television homes and found it to be a fascinating experience. It was cool to see what goes on behind the scenes. It was also somewhat emlightening to discover that some of my preconceived notions about the quality of the workmanship, materials and other issues about the show were wrong.

My wife, Konne, and I were invited by one of our vendors, Weyerhaeuser Corporation, to participate in the build for the Kubena family in East Bernard, Texas, near Houston. Construction began on Tuesday, Jan. 10. The house was duly delivered (with all the hoopla that you see on TV) two weeks later on Jan. 24.

Hopefully, this story will give you some insights into the ‘Extreme Makeover’ construction process. Keep in mind, however, that these are only my personal impressions and observations.

If you haven’t seen the show, families in difficult circumstances send in videos asking for housing-related help. In the case of the Kubenas, the family had twin daughters, both battling leukemia. The family faced lengthy hospital stays, mounting medical bills and a lack of space when they moved into a two-bedroom trailer to be closer to the hospital.

As part of each episode of “Extreme Makeover,” the selected applicants are interviewed and a home design is drawn up. Early in the process, a home builder in the area is contacted to see if they want to do the build.

The author and his wife, Konne, on the job site early in the project.

In this case, Royce Builders volunteered to take on the project. What happens from there will make every home builder proud.

For each of these makeovers, the home builder in charge has full control and coordination of the project — and uses his own people. In my neck of the woods, that means mostly subcontractors, which is how I got involved in the project, as there are very few builders here who have carpenters, painters and other trades on staff.

The show relies heavily on the talents and resources of the home builder to pull together all of the materials and labor to build a complex home very quickly.

With the Kubena home, one obstacle the build team faced was the daughters’ need for a whole-house air purification system. As part of the project, two very large hospital-quality HEPA filter units were installed in the attic. They were so large, they had to be lifted by cranes and placed through the roof trusses.

Royce Builders kept track of this and every other step of the project on a scheduling board — a scheduling scroll, actually — set up in a separate planning tent. The three-foot-wide scroll/board listed every event; the staging of materials, starting times and estimated completion times for every step. It was there for everyone on the job to see, and every time a milestone was accomplished, it was scrolled forward.

I skeptically assumed that these houses were thrown up as fast as possible by ducking the inspection process and cutting corners in the interest of saving time. Not so.

In our project, there were four inspectors assigned to the job site throughout construction (in our case, from Dale Phillips Inspection Service) so that the job could be inspected around the clock. This was a surprise to me given the pace of the project.

The author and his wife, Konne, at the job site with the Kubena home under roof.

I also learned that, unlike the impression given on TV (which shows the design team creating plans on the spot), there is plenty of prep work done off-camera beforehand. The families are contacted and design details are drawn months ahead of time. For the Kubena family, the plans were done and submitted for engineering four months before the project began.

The framing package for the project included a lot of top of the line I-joists, trusses, shear wall panels and other products that require significant pre-engineering. For most of the houses that require this, Weyerhaeuser Corporation donates much or all of the materials, at significant expense.

One of the impressions that does hold true is the upbeat and excited mood among all the volunteers — whether they are trades, supervisors, unskilled laborers, drink and food servers — everyone.

During a break in the action, I talked to Mike Manners, the president of Royce Homes, about the volunteers and he told me a touching story about their dedication and sacrifice.

The landscaping crew, about 90 people, had been gathered together before the project and asked if they would want to volunteer. If so, they would have to give two days labor to the project ― without pay — during the week. Most of the laborers could scarcely afford to lose a day’s wages, but when Manners explained the Kubena family’s plight, they all agreed to help.

On the morning that the landscaping work was to start, 79 workers showed up. (The others called and apologized, explaining that they had prior commitments.) The army of blue shirted landscapers stormed into the backyard, dug a good sized pond — with shovels flying — in about 15 minutes and had both the front and back yards totally landscaped and sodded on schedule. The Kubena’s yard went from a mud hole after the rains to a verdant wonderland.

My wife, Konne, and I were there on the final day when the Kubenas were brought to the job site in the limo.

Just like on TV, we saw them park behind the big bus and yell — along with the rest of us in the jubilant crowd — “Bus driver, move that bus!”

The emotion of that family, including the four children, was very touching. All of us volunteers could see it. All of us knew that our efforts were well worth our time.

I must admit that I cried a little when I saw the finished product on TV, but that’s not surprising.

Like you, I am proud to be part of making the American Dream of homeownership come true for people. And it won’t be the last time I shed a tear of pride.

Dan Bawden, CAPS, CGR, GMB , is president of Legal Eagle Contractors in Houston, and the winner of the "Texas Remodeler of the Year" three times, the Houston Remodeler of the Year twice, Big 50 winner and National Remodeler of the Month, among others. Bawden teaches other builders and remodelers Certified Graduate Remodeler/Graduate Builder Institute classes at the "CGR College" he began in Houston while he was the Remodelors™ Council president. For more information, contact Bawden via e-mail or through his company’s Web site.

Testing Continues on Lead-Safe Work Practices

With only a month remaining until the Environmental Protection Agency deadline for comments on its proposed lead-based paint rulemaking, NAHB volunteers continue to test lead-safe work practices so the association can tell the federal government whether the proposed methods will really work.

NAHB’s concern that additional testing was necessary helped convince EPA to extend the cutoff date to May 25. However, staffers coordinating the NAHB response are still looking to association members for houses in which additional testing can be conducted.

To see if their project might be suitable for testing, builders or remodelers who are about to commence a tear-down can e-mail Gary Suskauer at NAHB, or call him at 800-368-5242 x8327.

The bottom line is that the rules would not effectively prevent lead poisoning in children, according to NAHB leaders, because they apply only to remodelers or other professionals who work on renovation jobs for compensation. The rules would not pertain to home owners, who do the work themselves more than half the time, according to a study by the Joint Center for Housing Studies at Harvard University.

The costs of training, materials and other expenses associated with complying with the proposed rule will only lead to higher remodeling costs, and that worries Vince Butler, CGR, CAPS, chair of the NAHB Remodelors™ Council, because then fewer home owners will be able to afford the services of a qualified remodeler.

Home owners are more likely to be inexperienced in typical renovation and remodeling jobs and will tend to work on them in their free time, increasing and prolonging potential exposure to lead dust, he said. “The unintended consequence of making it more difficult to hire a remodeler is that it will actually increase the chance that children can be exposed,” he said.

NAHB supports and continues to work on developing a voluntary set of lead-safe work practices.

“By eliminating mandated work practices, no matter what the job, there is a greater likelihood that a home owner needing a lead-safe contractor can afford one,” Butler said. “There’s also less incentive for a home owner to find an alternate, and potentially less safe, way to get remodeling work done.”

“A focused attempt to improve the housing conditions of affected families is more likely to reduce lead exposure problems than targeting an industry that serves less than 50% of home owners,” he said.

Home Owners Dragging Their Feet on Remodeling Jobs

In tandem with the nation’s housing market, remodeling activity may be in the process of slowing down to a more moderate pace, according to first quarter results for the Remodeling Activity Indicator (RAI) from Harvard’s Joint Center for Housing Studies.

Remodeling by home owners on home improvements and repairs were increasing at an annual rate of about 4.5% during the first three months of this year, about the same as the closing quarter of last year, but significantly slower than the preceding quarters of 2005, when the growth rate was in the 18%-20% range.

Over the past four quarters, home owners spent $155 billion on remodeling, which has been growing over the long term at an annual pace of roughly 5%.

“Rising interest rates and a cooling housing market have started to impact spending on home improvements,” said Nicolas Retsinas, director of the Joint Center. “Delays in initiating major improvement projects are likely to moderate spending over the next year.”

“Remodeling contractors recently have reported a slight decline in hours worked by their employees, and more modest growth of their payrolls,” added Kermit Baker, director of the Remodeling Futures Program of the Joint Center. “This points to remodeling following home building into a period of slower growth in the months ahead.”

NAHB Has ‘Remodeling Month’ Materials for You

This ad, produced by the NAHB Remodelors™ Council, is one of the many resources available to members to help promote themselves and the industry during National Home Remodeling Month throughout May.

May is “National Home Remodeling Month,” and if you or your local Remodelors™ Council are looking for new marketing ideas or ways to increase remodeling awareness, take advantage of the NAHB Remodelors™ Council’s nationwide campaign blitz to promote it.

The council has developed a National Remodeling Month Kit that includes easily customizable press releases and articles and offer plenty of marketing ideas to help promote remodeling throughout May.

In addition, the kit includes at step-by-step guide to lead you through the campaign.

For more information, or for ideas to promote and plan events for “Remodeling Month” in May, e-mail Jim Lapides at NAHB, or call him at 800-368-5242 x8451.

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering valuable advice to your customers on the process of selecting a remodeler. The brochure guides consumers from the dream to the reality of having their homes remodeled by skilled and trained professionals. Sections include what to look for in a professional remodeler, what questions to ask and signs of a professional remodeler. To view or puchase this publication online, click here, or call 800-223-2665 to order.

Six Manufacturing Facilities on Wisconsin Tour

Builders, manufacturers and other real estate professionals will receive a crash course in the growing modular and panelized home building industries and a behind-the-scenes look at some of the nation’s leading home manufacturers at the upcoming Building Systems Councils 2006 Modular & Panel Plant Tour.

The May 21-23 tour will visit six manufacturing facilities in the Appleton, Wis. area, prime territory for systems-built housing. Wisconsin has a rich manufacturing history, and modular and panelized technologies allow its builders to extend their building seasons during inclement weather.

For the most up-to-date schedule, click here to visit the official Plant Tour Web site.

Registration for the 2006 BSC Modular & Panel Plant Tour is open until Friday, May 5. To register online, click here.

A new NAHB publication, “Modular Homes: The New Face of Home Building,” is available to builders, real estate professionals and consumers interested in learning more about modular home construction. The brochure highlights the history, construction, financing, advantages and beauty of modular homes across the country.

For more information, contact the Building Systems Councils at 800-368-5242 x8576.

Contest Showcases Beauty, Quality of Masonry

A competition for architects and mason contractors in Phoenix last month provided a showcase for the beauty and quality of masonry construction.

The fifth annual design/build competition, “Masonry: It Makes a Village,” pitted eight teams of Arizona architects and contractors against each other to produce the most creative “village” structures with the use of brick, block, natural and manufactured stone, glass block and architectural precast.

The winning projects were judged by industry experts and were chosen for creativity of design and use of materials, teamwork, craftsmanship and overall quality.

The local event is sponsored by the Arizona Masonry Guild, which plays a significant role in economic development, new product and construction standards, enhanced safety policies and increased energy efficiency of masonry products.

The 2006 Concrete Technologies Tour will be held June 11-13 in Phoenix. Learn about and profit from one of the fastest-growing segments of the construction industr — concrete building systems and cement-based products.

The registration deadline is May 26. To register and for more information, visit www.nahb.org/concretetour.

Education Calendar

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 educational 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.

At the NAHB/BALA Design Institute for Builders, you'll learn the latest in residential housing design trends from the industry's top professionals, tour beautiful award-winning homes and communities that display the best in cutting-edge architectural design, and learn how to profitably apply these design ideas to the homes you build.

The NAHB Web site, www.nahb.org, gives you access to nearly 5,000 pages of housing industry information and exclusive members-only resources 24 hours a day, seven days a week. Access is fast, easy and free to NAHB members.

To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in.

By logging onto the NAHB Web site, you will have access to twice as much information as non-members — information that will help you stay ahead of your competition.

You will be able to view and read entire sections of content developed just for members, and you will be able to personalize the site to your specific interests.

To learn more, log in and visit the "How to Use" www.nahb.org section in My NAHB.

For questions or help logging in, call 800-368-5242 x0; or e-mail your name, company name, state and phone number to login@nahb.org.

Want to Know More About Designations? Ask an Expert

"Ask an Expert" allows members to e-mail designation program graduates with questions that will help then earn their CSP, Master CSP, CMP or MIRM designations.

The graduates will field questions and concerns ranging from course content, to the designation process, to how the designation has benefited them.

So, if you're thinking about enrolling in the CSP, Master CSP, CMP or MIRM designation programs or have already started the necessary course work and have questions or concerns, visit “Ask an Expert” on the NAHB Web site.

A variety of designation holders will provide you with guidance and help you navigate the ins and outs of the program.

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 educational 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.

To take full advantage of the exclusive NAHB members-only resources on www.nahb.org, however, you must log in.

By logging onto the NAHB Web site, you will have access to twice as much information as non-members — information that will help you stay ahead of your competition.

You will be able to view and read entire sections of content developed just for members, and you will be able to personalize the site to your specific interests.

To learn more, log in and visit the "How to Use" www.nahb.org section in My NAHB.

For questions or help logging in, call 800-368-5242 x0; or e-mail your name, company name, state and phone number to login@nahb.org.

The Race Is On … National Membership Day Is May 23

The race is on toward National Membership Day. This year’s membership campaign is “NAHB Members — Driven to Be the Best.” Can your local Sales and Marketing Council (SMC) say that?

Join dozens of local SMCs by supporting National Membership Day 2006. Hold your SMC’s membership campaign in conjunction with National Membership Day on Tuesday, May 23. Start planning your membership push for the month of May by participating in NSMC’s National Membership Day activities.

Hold a membership drive, an individual recruiter contest and stage a phone-a-thon to recruit new members for your sales and marketing council. Sell the many benefits of membership — including national-level benefits such as Sales + Marketing Ideas magazine. Also, promote the many benefits your SMC provides members, including networking events, education programs and recognition opportunities.

Individual recruiters who sign up five or more new members win a $25 American Express gift card. The SMC member who recruits the most new members wins a free pass to the 2007 International Builders’ Show in Orlando, Fla.

“National Membership Day is one of NSMC’s most important recruitment events of the year,” said Peggy Brassfield of the Home Builders Association of Lexington in Lexington, Ky. and 2006 vice chair of NSMC’s Membership and Local Councils Committee. “It’s an opportunity to grow our membership, remind members why they joined by reinforcing member benefits and promote the value of local Sales and Marketing Councils. We’re counting on all NSMC members and local SMCs to support National Membership Day by calling in new members.”

Visit the Resources for SMC section of the NAHB Web site for more details, e-mail Jeff Jenkins at NAHB, or call him at 800-368-5242 x8292.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas Magazine (www.smimagazine.com).

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 (IRM) offers four designation programs for sales and marketing professionals:

You also can ask designation holders questions about obtaining a designation, specific courses, case studies and more. "Ask An Expert" is available on the NAHB Web site by clicking here.

“Sales and Marketing Checklists for Profit-Driven Home Builders,” available through BuilderBooks.com, covers the major steps involved in successful new home sales. Learn the ins and outs of the comprehensive contract, the move-in, warranty service, asking for referrals and a great close. This expanded second edition includes a new chapter on utilizing technology in your marketing and a more extensive chapter on mulitcultural sales.

New Directory of Certified Home Sales Professionals Debuts

The new, online Certified New Home Sales Professional Directory has recently debuted on the NAHB Web site so others in the home building industry can easily and quickly find experts in new home sales who have the CSP designation in their area.

The directory was created by NAHB’s Institute of Residential Marketing (IRM), which offers four professional designations in sales and marketing.

The Certified New Home Sales Professional (CSP) designation is an industry-recognized designation program available through The NAHB University of Housing. CSP was designed for specialists in new home sales to enhance their professional image, increase their marketability in the home building industry and sell more homes.

To learn more about becoming a CSP, click here, or contact a CSP online for first-hand knowledge at “Ask a CSP.”

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas Magazine (www.smimagazine.com).

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 (IRM) offers four designation programs for sales and marketing professionals:

You also can ask designation holders questions about obtaining a designation, specific courses, case studies and more. "Ask An Expert" is available on the NAHB Web site by clicking here.

Putting Sex Into Energy Efficiency Sells Green Homes

—Green home builders need to do a better job of marketing, find more direct ways to connect with their prospective customers and “make green sexy,” Sara Lamia, president of Home Building Coach in Fort Collins, Colo., told the NAHB Green Building Conference in Albuquerque, N.M. last month.

“You need to create demand at the mainstream level,” Lamia said. “The mainstream buyer — whether from a production, custom or semi-custom builder — is pretty much asleep in terms of how to buy a house, and buyers won’t fall in love with anything they don’t understand.”

In making a purchase, a key issue for consumers is how it makes them feel, she said. And making them feel stupid, or ashamed that they aren’t buying a product that is good for the environment, is not going to sell them on high-performance features that many in the industry even don’t entirely understand.

“Buyers don’t get excited about energy savings,” Lamia said. “We get excited about something we acquire, something we get.” So she advised translating the savings on utility costs into something tangible that the buyer can obtain with the money they save — a chandelier or hiking equipment, for example.

The green builder needs to be able to go down the list of special features in the home and translate them into the benefits they will provide, she said. “Improved indoor air quality means that the home owner will have a happy family. Our quiet home let’s us sleep and relax as never before. Low maintenance equals more time to play. Comfort means our baby’s room is warm in the winter and cool in the summer.”

Lamia said that the builder has about five seconds to provide their customers with a message they can understand. Builders also need to encourage prospects to ask questions about anything they don’t understand.

Consumers also need to be provided with specific information on the product and why it is the one to buy. Most of the time, she warned, that information is too technical and doesn’t tell the customer the right things.

“Tell the manufacturers, ‘I need to be able to sell this to my client,'” Lamia said. “You need them working with you on everything you are trying to sell.” Or “go to the product company and have them do the work — how am I going to sell this? Not with a brochure that puts me to sleep.”

Lamia also recommended working with Realtors® so that they appreciate the features in a green-built house that differentiate it from the competition.

And when it comes to green building, labels can be just as powerful as they are for a pair of Calvin Klein jeans. “Make green homes sexy with a label and stress the benefits of owning a designer home — popularity and self esteem, pride, durability, increased resale value — because it’s worth more, but needs a label to let people know how wonderful the house is,” she said.

A label showing green building program certification or an Energy Star® rating is a status symbol, she said, that should be visible for everyone who comes to visit the house.

“Make sure the label connects with the buyer,” she said. “Your houses are not only beautiful on the outside; they’re quality to the core. You are promising a dream, and delivering on it.”

For information on green building resources available from NAHB, e-mail Calli Schmidt, or call her at 800-368-5242 x8132.

Nation's Building News Online: April 24, 2006

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