Nation's Building News Online: October 30, 2006Print All Articles Text Version |
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NAHB Launches 'It's a Great Time to Buy a Home' CampaignA package of ready-to-use resources just released by NAHB is geared to putting into the hands of association members the information they need to educate consumers on the low mortgage rates and competitive prices available in today’s buyer’s market. Available to NAHB members for free online, “It’s a Great Time to Buy” provides a starting point for public relations campaigns to galvanize prospective home buyers who have been discouraged by negative reports in the media to go out and see for themselves the range of opportunities that have opened up in today’s slower marketplace. Housing economists are predicting that the current adjustment period in housing from the unsustainably high levels of the past few years will be relatively short-lived, bottoming out by the middle of next year and leaving many markets with an insufficient supply of new homes to meet demand. Resources in the buy-now package include:
As part of the effort, resources have been included that are directly available to consumers at www.nahb.org/timetobuy. For more information, e-mail Niki Clark at NAHB, or call her at 800-368-5242 x8061. Worst of Housing Downturn to End by Mid-2007Although they disagreed somewhat on the outlook for interest rates and the extent to which markedly slower home price appreciation will affect consumer spending, economists at NAHB’s 2006 Fall Construction Forecast Conference in Washington, D.C. on Oct. 25 shared the view that the current housing downturn is unlikely to push the nation’s economy into a recession and will begin to dissipate fairly quickly, by the middle of 2007, with the balance between housing supply and demand considerably improved. A faster-than-anticipated decline in housing following its unsustainable boom during the past three years has become a major drag on U.S. economic growth, said David Seiders, NAHB’s chief economist, and it is likely to subtract about a full percentage point from the Gross Domestic Product during the second half of this year and half that amount during the opening quarter of 2007. Single-family housing starts are on the path to a 25% decline from their peak in the first quarter of 2006 to an expected trough in the second quarter of 2007, falling from an average seasonally adjusted annual rate of 1.747 million to 1.3 million. (An annual production rate of 1.5 million is sustainable, Seiders said.) Much of the contraction is “already under our belts,” he said, but with a sizable inventory of unsold homes remaining to be worked off, there is still downward momentum in the marketplace. The condominium market has been similarly afflicted, he said, with the rental component of multifamily construction picking up some of the slack as demand for rentals receives a boost from the high cost of homeownership in many parts of the country. The direction of residential remodeling, which ordinarily follows in the footsteps of the housing market, is expected to remain slightly positive, according to Seiders, because of the substantial amounts of equity accumulated by home owners during the boom. Single-Family Inventory the Big Issue “The single-family inventory is the big issue,” Seiders said. “Demand might stabilize before long, but there is a lot of inventory that needs to be worked down,” and the situation may be worse than portrayed by statistics from the Commerce Department, which don’t include homes that have been sold to a buyer who subsequently cancels the contract and hands the house back to the builder. An NAHB survey of 30 large builders found that their cancellations doubled in the three months through September from the same period a year earlier. Cancellations — stemming in part from speculators who are realizing that they are unlikely to be able to resell the home for the quick profit that might have been attainable at the height of the boom — are “a big deal to big companies,” Seiders said, “but not as much of an issue for smaller companies.” Seiders concluded that a reasonably healthy economy will be able to absorb the negative fallout from the housing slump and that consumer spending won’t falter as home prices stabilize and as borrowers of exotic mortgages find themselves with stiffer monthly payments after their loans are reset at a higher interest rate. Core inflation is also expected to recede, and all in all, housing should be “in pretty good balance” in 2008. “If it works out that way, it’s one heck of a success story,” he said. U.S. Economy Continues to Perform Well David Wyss, chief economist at Standard & Poor’s, concurred that the economy and financial markets are performing fairly well, with inflation at 2.5% and poised to move down, even as growth slows from an annual pace of 3.5% to 2.5% for the next year or two, and unemployment, at 4.7%, moves up some. At the Federal Reserve, where both he and Seiders used to work in the 1970s, “we would have killed for an economy like this,” he said. Among the plusses for the economy, oil prices have declined 25% from August, and while instability in the Middle East makes it hard to say they won’t go right back up again, oil companies are saying that they have a supply of oil they can bring in at $40 to $50 a barrel. He noted that while oil price hikes can still trigger a recession, energy efficiency has helped to blunt the impact of rising prices on the economy. In 1981, he said, American households spent an average of 8% of their incomes on energy, compared to 5.5% today, and where it used to take 4.2 tons of oil to produce $1,000 worth of GDP, today it takes half that amount, a trend that has occurred world-wide. Like Seiders, Wyss said he believes the Fed is done tightening after 17 consecutive quarter-point increases in the federal funds interest rate since mid-2004, and that the next trend will be down around the middle of 2007 when the Fed realizes that it has overreacted on inflation, which won’t be feeling the effects of its policies until 2008, in any event. However, Wyss does expect to see some upward movement in long-term interest rates, with some possible impact on mortgage rates, not from what the Fed does but from changes in the international financial markets. “Long-term interest rates have been thumbing their nose” at the Fed, he said, and the rate on a 10-year bond today is the same as it was before the Fed started raising short-term rates — 4.8%. International investors have been investing heavily in U.S. bonds because they are one full percentage point higher than what is available in Europe. There will be a net capital inflow of $800 billion into the U.S. this year, he said. But the situation is changing, with central banks in Europe and Japan responding to a shift to stronger growth and starting to raise their interest rates, reducing the one-percentage-point differential needed to maintain the current U.S. bond yield. On the consumer front, Wyss observed that while household debt has now risen to 134% of income, “all we really care about is how much we have to pay back each month.” Average household debt service is now running at a record 18.5% of income, he said, which is “bearable,” but as adjustable-rate mortgages are reset, that will move up to more than 20%, raising the expectation that some consumers will have to slow their spending to pay off some of their debt. Debt repayment of 16% to 20% of income is typical for all income groups, he said, with the exception of those in the top 20% income bracket, who spend half that on repaying debt. However, households in the bottom 60% of the income distribution are primarily repaying car installment loans and credit cards, while the top 40% of debt payment is for mortgages on homes that over time increase, rather than decline, in value. Bridging the Housing Affordability Gap Housing is roughly 20% overvalued across the country, he said, but there will be a 30% correction in the formerly hot markets on the East Coast and West Coast, compared to 10% for the rest of the country. In the most expensive cities, however, housing prices are way out of whack with incomes. At the top of the list is San Diego, where the median price of a new home is 14 times the median income. A 5% decline in home prices overall during the current adjustment period will help bridge the housing affordability gap, he said, as will rising incomes over time and market-driven changes in the physical components of new houses, including their size and amenities, that have helped increase their cost. Wyss said that corrections in home prices that have already occurred in Britain and Australia (where prices rose 150% and 120%, respectively, from 1997 to 2005, compared to 70% in the U.S.), have been “moderate” and “not as painful as they feared.” Looking at housing, “most of the country is not in bad shape,” Wyss said, and most residential mortgage pools are expected to hold up fairly well. Deserving closer scrutiny will be sub-prime loans and mortgages on second homes and investment properties, as well as a relatively few markets with weak local economies. A Sharper Turnaround in Fed Policy Maury Harris, chief economist for UBS Warburg Research, presented similar views as his colleagues on the outlooks for the U.S. economy and housing sector, although he said he anticipates a sharper turnaround in Fed policy next year and a more significant impact of the buyers’ market in housing on consumer spending. “Core inflation will slow down enough next year so the Fed can focus more on the economy,” he said, and in reaction to rising unemployment, the Fed will shift to stimulative policy, bringing the federal funds rate down to 4.25% by next fall. Although inflation this year has been running above the limits that the Fed wants to see, Harris said, the pick-up has been significantly influenced by “rents going up because fewer people can afford to buy,” and has not been broad-based. When the impact of rent is removed from measures of core inflation, prices have actually been rising at a rate of about 1.7%, within the Fed’s 1% to 2% tolerance range. Seiders said that the owners’ equivalent rent used to gauge housing inflation is “a statistician’s imputation” that “acts like every home owner is paying more for housing, which is nonsense.” NAHB has worked to bring this problem to the Fed’s attention, and Seiders suggested that it could be “one reason the Fed is not reacting to what looks like an out-of-bounds inflation rate.” Home equity extraction, which was in the 0% to 1% range 10 years ago and 6.5% recently, will be dropping off, affecting spending, Harris said, as home owners perceive that their wealth has stopped rising. Photos by Morris Semiatin Reader Survey: Tell Us What Housing News Is Important to YouBecause you regularly read Nation's Building News, we value your input and would like your help. Please tell us what information in Nation's Building News is important to you — what you read and what you might like us to add — by answering our short online reader survey. To take the survey, click here. (Please note: This survey was e-mailed to many of our regular readers on Oct. 26. If you have already answered the survey questions, thank you.) Play Builders' Free Online Pro Football. Don't Drop the Ball.Don't miss another weekend of NFL games — and your chance to win prizes from HGTVPro. Sign up and play in the Builders Football League (BFL) on HTGVpro.com — the free, online pro football "pick 'em" contest with a special league for NAHB members. Playing is free, fun and easy ― and participants have a chance to win weekly prizes or the grand prize — a Panasonic 61-inch high definition TV — at the end of the season. How to Join and Play
For more information, go to www.nahb.org/bfl. Share Nation's Building News With Your Staff. It's Free.Make your business click. Subscribe your employees and trade partners to Nation's Building News — the free, online e-newspaper of NAHB. Each issue is filled with valuable news and information on every aspect of the home building industry — business and builders tips; the latest materials prices and mortgage interest rates; new technologies; cutting-edge design; state and federal regulations and how they affect the industy; and more. Information your entire company needs to stay ahead of your competitors. Forward this issue to your employees and trade partners and ask them to subscribe. Nation's Building News, it's free to them — invaluable to you. Don't delay, have your employees subscribe today. To subscribe, go to www.nahb.org/nbn. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Remember This: In a Slowing Market, Lavish Features Help Builders Make a Strong ImpressionIn a market crowded with unsold homes, some developers and builders say that hard-to-forget elements such as outdoor kitchens and motion-activated entertainment centers can go a long way toward making a particular house or condo stand out from the rest. “People walk in to the master bath and they’re just wowed,” said Matt Lefler, director of operations for Bethesda, Md.-based Camberley Homes, which installed the ceiling faucet that fills an overflow tub underneath it in a model home in a Falls Church, Va. subdivision. Although none of the buyers in the 100-house Stockwell Manor community have asked for the $8,000 upgrade option, Lefler said the bathroom has been “absolutely effective” as a memory point. Mid-Atlantic builders in Rockville, Md. installed an oversize shower as a model-unit showpiece, featuring two entrances and shower heads, a bench, curved walls and recessed lighting enclosed in translucent glass blocks. But the showers proved so popular that they are now standard features in many of the houses the company sells, said John Lavery, its director of sales and marketing. “We were doing it more to be a memory point, thinking it would be probably a little price prohibitive for most of our purchasers,” he said, with the cost ranging from $8,900 to $28,750. Lavery thinks that more than two memory points in a home can overwhelm potential buyers. For Toll Brothers Inc., the number of memory points is less important than where they are, and it is important to catch buyers’ attention at the outset, according to Lee Golanoski, director of design for Toll Architecture. Shoppers in Toll houses are greeted with two-story foyers, with a curved staircase, and some houses have two staircases leading to the upper floor. (www.washingtonpost.com)
Baby Boomers Change Senior Housing TrendsThe 76 million baby boomers born between 1946 and 1964 are hardly contemplating entering old-age homes or assisted living facilities as they face retirement and empty-nesting, sending developers scrambling to find a housing type that fits the needs of this less than stereotypical graying market — from downtown condos to active adult communities to age-targeted apartments. Older buyers want a home with all the goodies but none of the maintenance, says Gopal Ahluwalia, NAHB’s staff vice president of research. They are looking for places with less lawn to mow and less floor space to carpet and clean. “The boomer — who can travel, see the world and play golf or tennis when he so chooses — is seeking to cut down on the amount of time and energy they have to expend on upkeep of their castles,” Ahluwalia says. “This is a step between single-family and senior housing.” Lifestyle changes are the main reasons people over 55 decide to move into a new home, says Norman Cohen, chairman of NAHB’s 50+ Housing Council. “Because they are choosing to move based on creature comforts or changing circumstances,” he says, “the older buyer is often less affected by the ups and downs of the housing market.” People aren’t waiting until retirement to acquire a second — or even a third — home, he adds. “Sometimes the additional home will be located in a favorite vacation spot; oftentimes the intention is to retire there eventually.” (www.sddt.com)
Nontraditional Mortgages Don’t Wane Under WarningsDespite concerns by federal regulators about the growth of nontraditional mortgages, about 26% of mortgage loan originations by dollar volume in the first six months of this year were interest-only loans, according to the Mortgage Bankers Association. Another 13% were “option” adjustable-rate loans that allow customers to pick their payment amount, including a low-cost choice that covers neither the full interest nor the principal. For the same period of last year, those shares stood at 25% and 8%, respectively. Until 2000, less than 2% of consumers had interest-only or similar loans. The regulators have said they worry that consumers don’t understand that payments on the loans can double or even triple, and that if they pay less than full payment toward principal and interest, they run the risk of seeing their mortgage balance rise, even after years of payments. Most home owners are making only the minimum payments, according to banking data. Doug Duncan, chief economist for the Mortgage Bankers Association, attributed the growth of the loans to consumer demand. “As expected,” he said, “consumers respond to changing opportunities in the marketplace, but it looks like these products serve an important need.” Last month, the banking regulators issued a warning to federally regulated lenders, including banks, thrifts and credit unions, that the loans could pose risks for lending institutions because consumers can be unprepared for the sudden jumps in payments, and the Mortgage Bankers called this “regulatory overreach.” Last week, the Federal Reserve Board took the warning to consumers by issuing a pamphlet about the dangers of nontraditional loans; it is available through their Web site. (www.washingtonpost.com)
Smelly Carpets, Meet Silver Ions; Products for an Odor-Free HomeTextile manufacturers lately have taken some of the home’s most odor-absorbent materials, re-engineered them and created a host of new products that promise to neutralize bad smells. In July, National Council of the Housing Industry member Home Depot introduced a new line of carpeting with salts chemically bonded to its fibers to trap and destroy odors. While the $4.4 billion air-care industry is languishing, with a less than 5% increase in sales last year, the use of so-called specialty biocides that promise to kill odor-causing microbes in the home is rising. The fastest growth segment is biocides that use electrically charged silver ions that interfere with a microbe’s respiration, destroy its cell wall and squelch the smell. Silver has been used as a bactericide for centuries; Egyptians threw silver coins into wooden water barrels to keep them clean. Getting into silver ions in a big way, Spartanburg, S.C.-based Milliken started 18 months ago putting a combination of its silver-ion biocide into everything it produces, including more than 50 lines of carpeting and 10 lines of fabric and upholstery. Although declining to give sales statistics, company director William Gregory says the company decided to go all out for the biocides when in-house customer research showed that getting rid of smells was a priority. (www.realestatejournal.com)
Tax Panel Backs More IRS CloutTwo proposals from the congressional Joint Committee on Taxation to increase tax collections from home owners are likely to surface next year in proposed tax legislation. The first is aimed at tightening up on home owners’ growing write-offs of local and state property taxes, which are about $20 billion a year. Although local real estate taxes on homes are generally deductible, tax payments covering commonplace special assessments designed to pay for improvements that directly benefit home owners’ real estate are not. Examples include local “user fees” for water mains, sewer lines, sidewalks, trees and trash collections. In a 1993 study by the General Accounting Office (now the Government Accountability Office), an estimated $400 million of that year’s $11 billion in property tax write-offs were improper, and with the deductions this year running nearly double that amount, wrongly claimed write-offs could be in the $700 million range or more. The committee would solve the problem by requiring local governments to provide copies of home owner tax statements to the IRS with breakouts distinguishing between regular and special-benefit assessments, or require mortgage lenders and loan servicers to report details of home owners’ property tax escrows with similar breakouts. The second target is non-deductible mortgage interest, such as points taken by owners in the year they refinance, which would be corrected by requiring notification of all home owner refinacings and whenever a refinancing leads to a new loan amount $100,000 larger than the previous balance. Though many taxpayers believe that all mortgage interest is deductible up to $1 million in mortgage debt and an additional $100,000 in home equity debt, that is not the law. For example, the interest on the $200,000 amount from a $700,000 “cash out” refinancing on a $500,000 mortgage might not be entirely tax-deductible if substantial sums were spent on new cars or vacations instead of capital improvements. (www.washingtonpost.com)
When Dream Kitchens Meet Real-World BudgetsThe average cost of a kitchen remodel has hit $20,000, according to NAHB, but many home owners spend far more once they’ve installed new cabinets, high-end appliances and multiple equipment such as two sinks or dishwashers, granite countertops, handcrafted tile backsplashes and a wine cooler. Designer Sarit Catz, founder of the design firm Refuge in Short Hills, N.J., has had clients who’ve spent as much as $250,000. To hold the line on the budget, Mick De Giulio, who has kitchen showrooms in Chicago and Wilmette, Ill., advises putting in the best quality equipment you can afford, but not necessarily a manufacturer’s top item. For example, a basic Miele dishwasher still sports a stainless steel front and has six wash programs. It isn’t as quiet as the top model, which makes no noise, but it costs only $1,199, significantly less than the top model’s $2,000 price. De Giulio also suggests buying “all-in-one” equipment such as a range with cook-top above and oven below rather than separate products, which add up. He also recommends a basic microwave rather than convection design. Catz doesn’t think that home owners need to invest in professional-grade appliances if they’re not super cooks or have limited budgets, and a stainless steel, high-end look can be achieved without them. Cabinets can gobble up as much as 40% of a remodeling budget, so cutting back here can make a project more affordable. De Giulio recommends a simple maple instead of unusual wood, such as a Honduras mahogany. He also advises against using particleboard. (www.oswegodailynews.com)
Builders Step Up Involvement as Races Enter Home StretchWith the Nov. 7 elections fast approaching, building industry professionals who want to become involved in the political process and help to elect pro-housing candidates in federal and state races are encouraged to log on to www.BuildilngTheVote.com, (click here) NAHB's political and grassroots action center. Through a partnership with the U.S. Chamber of Commerce, NAHB’s BuildingTheVote campaign is giving hundreds of thousands of pro-business Americans who contribute to the ongoing success of the home building industry the opportunity to become active participants in this year’s elections. “The past few elections have taught us an important lesson: elections can be won or lost by just a few votes,” said NAHB President David Pressly. “BuildingTheVote.com is an interactive Web site that will allow you to register to vote, apply for absentee or early voting, find out key election dates and deadlines, locate your polling place and learn more about the candidates running and the issues at stake.” Fully 80% of the states today allow voters to go to the polls before Election Day. BuildingTheVote.com provides information and assistance for voting early by mail or in-person. The Web site also contains important information on federal and state elections across the country. Registering with BuildingTheVote provides access to information on candidates running anywhere in the U.S. BuildingTheVote also enables voters to contact their elected officials about “hot-topic” issues that most affect their businesses — including immigration, property rights, storm water permitting and tax reform. The site also contains information on BUILD-PAC, NAHB’s political action committee, which is dedicated to helping elect pro-housing candidates to Congress. “Political participation is one of the most precious liberties we enjoy as citizens, and it begins with you and me,” said Pressly. “I urge all housing professionals to take a few minutes and visit BuildingTheVote.com. Together, we can make a contribution to our communities, our industry and our families, one vote at a time.” For more information, e-mail Molly Murray at NAHB, or call her at 800-368-5242 x8282. Unsold Home Inventory Falls for Second Month in a RowSales of new single-family homes rose 5.3% in September to a seasonally adjusted annual rate of 1.075 million units, according to figures released by the U.S. Commerce Department on Oct. 26, but the increase followed downward revisions to the sales rate for the previous three months, and the sales pace was down 14.2% from a year ago. “Recent declines in mortgage interest rates and energy prices also have buoyed consumer attitudes and home buyer demand,” said NAHB Chief Economist David Seiders. “Surveys of consumer sentiment show that increasing numbers of households view this as a good time to buy homes.” The Commerce Department reported that the median price of new homes sold in September was $217,000, 9.7% below a year earlier. Seiders noted, however, that the monthly price numbers are notoriously volatile. For the third quarter as a whole, the Commerce Department reported that the median sales price was down by 1.7% on a year-over-year basis. “This price adjustment is more reflective of what’s actually going on in the housing market,” Seiders said. The inventory of new homes for sale fell for the second consecutive month in September to 557,000 units, equivalent to a 6.4 months’ supply at the current sales pace. Completed homes for sale accounted for 28% of the inventory; units still under construction represented nearly 56%; and for-sale units with permits were 16% of the inventory. Completed homes for sale were on the market for a median 3.5 months, the same as in August and down from 3.8 months a year earlier. Regionally, sales were up 6.9% in the South and 23.9% in the West. They were down 6.3% in the Midwest and 34.5% in the Northeast. All four regions reported a substantially lower sales rate than a year earlier. Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Nontraditional Mortgages Seen as Playing a Vital RoleDebunking media reports warning of the dangers of non-traditional mortgages, Angelo Mozilo, chairman and CEO of Countrywide Financial Corp., told industry professionals attending the NAHB Fall Construction Forecast Conference in Washington on Oct. 25 that these instruments are playing a vital role in helping consumers take advantage of the financial benefits of homeownership. “Nontraditional mortgage products are important,” said Mozilo. “Today’s buyers are sophisticated. They know they won’t be living in a house for 30 years, so they figure why pay a premium on their mortgage. Borrowers are using these loans as a tool to save money for their next purchase. They pre-pay loans long before they reset. People are managing these loans quite well.” In recent years, consumers have been flocking to such non-traditional mortgage products as interest-only loans, where the borrower does not pay down the principal. Other popular home loans include payment-option adjustable-rate mortgages (ARMs) that allow buyers to decide how much to pay each month, including a low-cost choice that provides the option of paying neither the principal nor the full interest. These loans are designed to help prospective buyers become home owners, but critics charge they have raised the specter of widespread “payment shock” when the loans are reset and the borrowers are faced with hefty increase in their monthly costs. With the share of the overall ARM market now at a record 40%, Mozilo said lenders need to play a bigger role in educating the consumer on the advantages and risks of non-traditional loan products, while stressing that there is “no evidence to show these are unsound loans.” “These products are not for everyone,” he said. “They are for sophisticated buyers. The fear of 15% negative amortization or people shocked at a loan reset won’t happen. These loans are being paid off at a 30% rate and they are not going to reset or fully amortize. “But while the level of sophistication is as advanced as ever, consumers still need to be educated. As lenders focus on empowering borrowers to make better decisions to meet their financial goals, they should educate consumers on how to manage credit and understand the home buying process. This is absolutely essential to lower homeownership barriers to the American people.” In addition to calling for new initiatives to provide consumer financial education, Mozilo said federal and local policymakers should take the following steps to help more Americans become home owners:
Want to Know the Housing Starts Through 2015? 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 Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. To learn more, visit www.housingeconomics.com. Housing Slowdown Will Be Felt In Most States, Say ExpertsThe ongoing correction in the nation’s housing markets will continue for another six months, according to Mark Zandi, chief economist for Moody's Economy.com, and will be widespread, affecting most markets of the country. “Somewhere between 45% and 50% of the nation’s housing markets are overvalued” and can expect to see at least a moderate slowdown or decline in home price appreciation over the coming year, Zandi said at last week’s NAHB Construction Forecast Conference. Housing affordability problems, which initiated the current market correction, are most prevalent in California, Florida and the Northeast corridor, where, according to Zandi, the average median-income family could not afford a median-priced home in this year’s second quarter. The markets that stand to feel the housing slowdown most acutely are those previously super-hot locations favored by investors and speculators who are now pulling out, Zandi said. Even markets that weren’t invaded by speculators may be hampered by a significant imbalance between supply and demand, he said. For example, the woes of Detroit’s ailing auto industry and its poor job market do not bode well for the area’s housing market. Meanwhile, “areas that I think will hold up reasonably well include Texas, the Pacific Northwest and Gulf Coast markets where recovery efforts continue” following last season’s devastating hurricanes, Zandi said. Soft Landing a Little Bumpy The “soft landing” predicted for some major housing markets will now turn out to be “a little bumpy,” said Bernard Markstein, NAHB’s director of forecasting. And by the fourth quarter of this year, he said, all but a handful of states will be reporting significant declines in housing starts on a year-over-year basis. Markstein anticipates a drop in starts of 10% or more in Florida, Maryland, Virginia and North Dakota, as well as Michigan, Maine, Minnesota and Washington, D.C. between the fourth quarter of 2006 and the fourth quarter of 2007, and said that more than half of all states will report declines in building permits this year of 5% or more. By the time a full-fledged housing recovery gets underway in 2008, many metro markets will find that the demand for new homes exceeds the supply because of the sub-par production levels of 2007. Meanwhile, apartment vacancies are expected to continue heading downward, pushing up rental rates — particularly in markets that traditionally have high concentrations of multifamily units, such as Florida and New York. In all, the two economists agreed that the long-term outlook for housing activity is fairly good, assuming that the Federal Reserve refrains from further monetary tightening and that the fallout from the housing market’s correction has only a modest effect on the economy. “By all rights,” said Zandi, “if housing sticks to the script” and bottoms out next year with a moderate contraction in production and sales, “it will be quite therapeutic” in improving the balance between supply and demand and bringing house prices back into better alignment with incomes. Photos by Morris Semiatin Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Minorities Make No Gains in Closing Homeownership GapAt 69.0%, the nation’s near-record homeownership rate for this year’s third quarter was virtually unchanged from the same time last year, when it stood at 68.8%, the U.S. Census Bureau reported on Oct. 27, and minorities showed little progress in catching up with the percentage of white households owning homes. Regionally, the highest homeownership rate for the third quarter was recorded in the Midwest, at 72.8%, followed by the South, 70.6%; the Northeast, 65.5%; and the West 65.3%. The rate nudged up in the West from 64.2% for the same three months of 2005, but the other three regions of the country showed no statistical differences from a year earlier, the Census reported. The homeownership rate was highest for those age 55 to 64 (80.7%) and those age 65 and over (81.5%). That was followed by the 45 to 54 age category (76.4%), 35 to 44 years (68.8%), and under 35 (43.0%). With the exception of the 65 and up group, which posted a small gain over its 2005 third-quarter homeownership rate of 80.6%, there were no statistical differences for the age groups compared to last year’s third quarter. In this year’s third quarter, 76.0% of white households were home owners, followed by all other races (60.6%), Hispanics (49.7%) and Blacks (48.6%). By race and ethnicity, none of the categories tracked by the Census Bureau made any statistically meaningful headway over the course of the year ending in the third quarter. The homeownership rate for households with incomes greater than or equal to the median family income increased from 83.7% in the third quarter of 2005 to 84.4% in the third quarter of 2006. Those with family incomes less than the median stayed virtually the same at 53.0%. Home Owner Vacancy Rates on the Rise National vacancy rates in the third quarter were 9.9% for rental housing and 2.5% for home owner housing. The vacancy rate for home owners was significantly higher than the 1.9% rate that occurred during the third quarter of 2005, while the vacancy rate for rentals showed no significant difference. Rental vacancies were highest in the Midwest (12.6%), followed by the South (11.9%), the Northeast (7.7%) and the West (6.5%). Home owner vacancy rates were highest in the Midwest (2.7%) and the South (2.8%), followed by the West (2.3%) and the Northeast (1.7%). The Census reported that among the estimated 126.2 million housing units in the U.S. in this year’s third quarter, approximately 109.6 million were occupied: 75.6 million by owners and 34.0 million by renters. The number of owner-occupied units was higher than a year ago, while the number of renter-occupied units was about the same. Of the 16.6 million vacant housing units, 12.6 million were for year-round use. About 2.8 million of the year-round units were for rent, 1.9 million were for sale only and the remaining 6.9 million units were vacant for a variety of reasons. Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Builder’s Tip: A Simple Way to Close Off Window Openings
This tip helps a lot when winter winds are bearing down. As shown in the drawing:
— Jon Sherman, Steamboat Springs, Colo. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Christina Glennon at Fine Homebuilding. 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. To view these publications online, click here, or call 800-223-2665. Free NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Magleby Named NAHB Custom Home Builder of the Year
"It is truly an honor to be recognized by all of you," Magleby said when presented with the award. "I am so grateful to this profession. It is truly my passion." Magleby, the founder and president of Magleby Companies, Inc., has been in the construction business for 30 years. A graduate of Brigham Young University's construction management program, he has been a member of the Utah Valley Home Builders Association since 1978 and currently serves on the NAHB board of directors. "I am proud to be associated with NAHB for so long, and going to meetings and bringing back a little each time, " Magleby noted. "I know my staff always dreaded me coming back from the symposium because there would be a whole list of new things for them to do." Magleby counts among his clients the creators of WordPerfect as well as other prominent — and discerning — customers. Among the multimillion dollar projects his company has orchestrated during the past three decades is a hillside retreat at Sundance, Utah that required a helicopter to lift part of the home in place. Yet even in the face of these lofty challenges, Magleby’s feet are planted firmly in fine home building. “Paul is a guy who builds houses for billionaires, but he never forgets the guys who get it done,” said Al Trellis, the first chairman of the Custom Home Builders Committee. “He treats the guy who drives the truck with the same respect.” “I think the business is just a big extended family in his mind,” said Magleby’s son, Chad, a sentiment echoed by Todd Christensen, the vice president of production who has been with the company almost from the beginning. “He cares about his employees and their families,” Christensen said. “Paul epitomizes the word ‘mentor’,” added Brad Simon, of Cottage Homes in Draper, Utah. “It was Paul who approached me as a new member of the HBA, asked my opinions and then, unobtrusively, trained and encouraged me to be a better builder, to care more for my employees and to build a better product for my customers.” “He is the kind of building professional that others in the industry look up to,” said Deann Huish, executive vice president of the Utah Valley Home Builders Association. “His name and company lend themselves to quality, professionalism, honesty and integrity. These virtues cannot be purchased, but must be earned over decades.” Magleby supports the construction management programs at Brigham Young University and Utah Valley State College, is a board member of the Utah Valley HBA Foundation and serves on the regional council of the Division of Work Force Services. He also supports Boy Scouts of America and encourages and backs staff involvement in Habitat for Humanity projects. He also is a Gold Key contributor to Build-PAC. “Paul is one of the last true custom builders who still does a lot of the work himself or has people in his company to do it,” Trellis said. “He builds a lot of very large houses — more than 20,000 square feet,” while adding that the size of each home, or it’s “wow” factor, are not necessarily what Magleby is most proud of. “When he takes you to see these houses, he wants to show you every wire and pipe in the place. That’s his loyalty to the craft of custom home building.” “He’s a very good businessman and Paul would have been successful in any business, but he’s also a good builder,” Christensen says. “High quality work” and “a very professional approach to building” are what sold Ron Mika, a private equity fund manager. “He takes a very organized and businesslike approach to communication and hits the schedule completely,” Mika said. Magleby Companies built a vacation home, guest house, garage and barn for the fund manager. Magleby has also built an award-winning home for his cousin, Daril Magleby. The home earned the People’s Choice Award for Best Overall Home in the 2006 Parade of Homes for his HBA. “I was incredibly impressed with him and with his company. We worked together for a year and I had a very positive experience,” Daril said. “I’m very critical,” the cousin continued. “All of the Maglebys have an opinion and we are probably hardheaded. I expected a lot from my cousin. If he had a fault at all, it would probably be that he is too committed to his business.” Magleby and his wife Cathy have four children and five grandchildren.
New Designation Launched for Active Adult Housing ProsThe NAHB 50+ Housing Council launched a new educational tract and designation specifically for housing professionals in the active adult market ― Certified Active Adult Specialist in Housing (CAASH) — to provide the knowledge, tools and skills to help them succeed. The NAHB University of Housing is completing a series of initial courses for the designation that cover active adult research and trends, design, and sales and sales training. Additional courses are being developed. Candidates will be required to successfully complete the courses in order to apply for the designation. Grandfathered Status Available for a Limited Time For a limited time, the 50+ Housing Council will allow housing professionals who have a high level of experience and expertise in the active adult housing field to waive the educational requirements and be grandfathered as a CAASH designee. To be grandfathered, candidates must meet the following requirements:
For more information or to apply for grandfather status, visit www.nahb.org/CAASHinfo, call the Professional Designation Help Line at 800-368-5242 x8154, or e-mail CAASHinfo@nahb.com. The CAASH Grandfather program is available until Dec. 1, 2007. Save the Date for 2007 50+ Housing Symposium Mark May 30-June 1, 2007 on your calendars to attend the 50+ Housing Symposium. The seniors housing symposium is the premier educational and networking event for industry professionals who serve the burgeoning 50+ market. Visit www.nahb.org/build4boomers for more information. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. “Boomers on the Horizon: Housing Preferences of the 55+ Market,” available through BuilderBooks.com, can help you better build and market homes to this age group. Capitalize on the niches, needs and opportunities of this rapidly growing market by learning their preferences. To view or purchase this publication online, click here, or call 800-223-2665. Rentals on the Rise and Condos in DeclineThe condo and rental apartment markets are heading in opposite directions, according to a panel of experts at the NAHB Fall Construction Forecast Conference. “The rental market is strengthening, while the condo market is weakening,” said NAHB Chief Economist David Seiders. “The healthy rental demand in 2005 to 2006 has been gangbusters for leasing,” said RonWitten, president of Witten Advisors. “About 400,000 rental units have been absorbed. This is the best 12-month period for leasing we’ve had. Demand is back and supply hasn’t slowed.” As for condo sales, Witten added that they have “plummeted over the last two to three quarters. Inventories are rising and prices are softening.” With home prices moderating and even declining in some parts of the country, Seiders said that condo markets have been vulnerable to an influx of “hidden supply” currently held off the market by investors/speculators who bought during the boom of 2004-2005, when ongoing price appreciation seemed like a sure thing. Existing condo and co-op sales fell in September and remain on a downward trend, Seiders noted, and the inventory of existing condos has swelled to a 10-months’ supply. With the condo market in the doldrums, apartment occupancy and rental rates are trending upward, fueled by solid job growth and lower vacancy rates. “Rents are moving up after falling in 2001 to 2004, when everyone rushed into homeownership,” said Seiders. Further upward pressure on rents came during this period when many apartments were converted to condos, reducing the supply of rental units. Illustrating the diverging paths of the rental and condo markets, Seiders said overall multifamily starts should total 339,000 units this year, with rentals accounting for 52% of the total and condos 48%. While total multifamily starts are expected to be in a similar range in 2008 (331,000 units), Seiders said the rental share could rise above 70% of the multifamily market, while condos recede to their 2003 to 2004 level. Cities experiencing the largest rent increases from the second quarter of 2005 to the second quarter of 2006 were concentrated mainly in Florida, according to Witten. They include: Fort Lauderdale (9.5%), West Palm Beach (9.1%), Orlando (8.7%), Phoenix (8.2%), San Francisco (8.2%), Miami (7.5%), Los Angeles (7.4%) and Tampa (7.3%). “The Florida rent spike is the result of condo conversions taking out supply. This is not a sustainable pattern,” said Witten. Metro areas that posted the smallest rent increases during this period were situated primarily in the Midwest. They include: Cincinnati (0.4%), Detroit (0.8%), St. Louis (1%), San Antonio (1.2%) and Kansas City (1.2%). Save the Date for the Multifamily Pillars of the Industry Conference Attend the Multifamily Pillars of the Industry Conference, the premier industry event for the multifamily industry, on April 11-13 at the Westin Diplomat Resort and Spa in Hollywood, Fla. Visit www.nahb.org/pillars for more information. Enter Pillars to Be 'Best of the Best' in Multifamily
The application deadline for NAHB Multifamily’s 2007 Pillars of the Industry Awards program — which honors excellence in multifamily design, development, marketing and management — is Nov. 30. A showcase of innovation and future trends, Pillars is considered to be the most prestigious national awards competition in the multifamily housing industry. “The Pillars awards represent a perfect opportunity to promote the benefits of apartmetn and condo living, and for multifamily professionals to be recognized for their commitment to proving superior housing choices, both rental and for sale, for today's consumer," said Leonard Wood, director of Wood Partners, LLC and chairman of NAHB's Multifamily Leadership Board. The winners will be honored at a gala ceremony held in conjunction with NAHB Multifamily’s Pillars of the Industry Conference on April 11-13 at the Westin Diplomat Resort and Spa in Hollywood, Fla. For more information about the awards and to apply, visit www.nahb.org/pillarsawards, or e-mail Laura Zaner at NAHB, or call her at 800-368-5242 x8563. Save the Date for the Multifamily Pillars of the Industry Conference Attend the Multifamily Pillars of the Industry Conference, the premier industry event for the multifamily industry, on April 11-13 at the Westin Diplomat Resort and Spa in Hollywood, Fla. Visit www.nahb.org/pillars for more information. Builders Providing OSHA With Expertise on SafetyNAHB is bringing its expertise to the U.S. Department of Labor's 15-member Advisory Committee on Construction Safety and Health, which is responsible for advising the Occupational Safety and Health Administration's assistant secretary of labor on construction safety and health standards. Mike Thibodeaux of Lennar Corp. in Houston represents NAHB on the committee. “When OSHA is looking at a new regulation or revising an existing one, they look to this committee to review it, to ask questions, to determine what works and what may need to be modified,” he said. The committee includes representatives from labor unions, risk managers from commercial construction companies, insurance companies and state OSHA officials, as well as home builders, ensuring “an expertise that can assist OSHA and the committee in reaching a reasonable type of rule to make it safer on the job site, because that’s the bottom line,” Thibodeaux added. For instance, on proposed reporting and oversight requirements for cranes and derricks that would be particularly onerous for smaller builders, OSHA was under the impression that home builders don’t use cranes and wouldn’t be subject to the standard. The NAHB presence on the committee helped set the agency straight, Thibodeaux said. The committee has also discussed standards for respirators, confined spaces, fall protection and other issues. “We have an opportunity to go through proposals with an eye toward whether they affect, and how they affect, the way we do business. Most of our members are small businesses, and sometimes making changes can have a very big monetary effect,” he said. At the same time, committee members are all highly aware of OSHA’s mission to enhance safety on the job site. An important key to safety is appropriate training, an area where NAHB is becoming increasingly active. The association’s Jobsite Safety Video, available at www.builderbooks.com, and its training programs will soon be joined by new fall protection education products. “We want to continue to provide detailed, specialized training,” Thibodeaux said. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Protect Your Workers and Your Profits The “Jobsite Safety Video,” available through BuilderBooks.com, provides an overview of the key safety issues residential builders and workers need to focus on to reduce accidents and injuries. Based on the “NAHB-OSHA Jobsite Safety Handbook,” this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos. To view or purchase this DVD online, click here, or call 800-223-2665. Ahluwalia, Baker Named to Remodeling Hall of Fame
Ahluwalia, NAHB’s vice president of research, has pioneered studies of the remodeling market for more than 20 years. At one time, he was the only economist researching the remodeling industry and providing trends, forecasts and industry analysis to the public. Ahluwalia created numerous reports and studies that opened up new information on the industry for the public, suppliers and remodeling companies, including the Remodeling Market Index quarterly survey of market conditions. Baker, the director of the Remodeling Futures Program of the Joint Center, brought a scholarly approach to remodeling studies through more than a decade of work with the industry. Some of his groundbreaking research has included finding out why home owners remodel, which home owners remodel and who does the work; how remodeling has contributed to the rise in the quality of the U.S. housing stock; demographic and regional drivers of remodeling; and the Remodeling Activity Indicator quarterly report on remodeling spending. “The Hall of Fame represents individuals whose legacy will forever influence the industry,” said Vince Butler, CGR, CAPS, GMB, the Remodelors™ Council chairman and a remodeler from Clifton, Va. “Both of these men have pioneered research in remodeling that allows remodelers and manufacturers to better understand the industry's $200 billion market.” The induction ceremony for the two economists took place during the Remodelors™ Council gala earlier this month in Chicago. Design, Trends, Codes Are Hot Topics at BSC SHOWCASEBalancing modern, popular home designs with the structural properties necessary to meet state and local codes is a challenge for even the most experienced engineers and architects.
Breakout sessions at the Building Systems Councils' SHOWCASE conference and trade show in Miami, Fla. on Nov. 5-8 will highlight the dual sides of design — designing for codes and designing for consumers ― to help builders better achieve that balance. Onsite Registration Is Available Online registration is closed, but onsite registration is available at the show. Two SHOWCASE breakout sessions will give attendees a crash course on building code evolution and how products are tested to meet and exceed those codes, even in the most stringent jurisdictions:
Women’s Council Scholarship Winners AnnouncedThree women majoring in construction management are the recipients of the 2006-2007 NAHB Women’s Council/National Housing Endowment “Strategies for Success” Scholarship. The National Housing Endowment is the philanthropic arm of NAHB. The scholarship winners are:
The scholarship award's students up to $2,000, which can be used for tuition, fees and/or books. NAHB Women’s Council Past President Deborah Ferland and Austin Ferland initiated the fund in 2001. Day Spa, Restaurant Among Top Commercial Projects
A day spa in Houston and a restaurant in Honolulu were among 15 commercial construction projects recognized by NAHB’s National Commercial Builders Council (NCBC) recently as the best in commercial construction. The commercial projects won the 2007Awards of Excellence, which recognize achievements in the national commercial building industry for remodeling and new construction design, market appeal, energy efficiency, building challenges and overall project success. This year’s winners demonstrated inventive use of technology, ingenuity in overcoming design and construction challenges and innovative use of energy-efficient features. The winning projects will be on display at the NCBC headquarters during the 2007 International Builders’ Show in Orlando, Fla. in February. The top NCBC honorees were: Project of the Year
Grand Awards
Merit Awards
Honorable Mention
Want to Know More About Designations? Ask an ExpertThe NAHB University of Housing recently implemented “Ask an Expert,” a new service on the NAHB Web site for members seeking or earning designations. "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. 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 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.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Education Calendar
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 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. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Experts to Discuss How to Identify Significant WetlandsA distinguished group of engineers and environmentalists with experience in wetlands and in the determination of navigable waters will gather in Washington Nov. 27 to 28 to discuss the implications of the recent Rapanos and Carabell decisions by the U.S. Supreme Court. The goal of the discussions is to develop a scientifically valid checklist or set of criteria that landowners, developers and regulators can reference when trying to determine whether a wetland or a body of water has a “significant nexus” to jurisidictional, navigable waters of the United States and is thus subject to regulation under the Clean Water Act. The significant nexus test was articulated in Supreme Court Justice Anthony Kennedy’s opinion, which was issued last June. Currently, NAHB members are subject to conflicting, inconsistent rules and regulations, despite assurances from the U.S. Army Corps of Engineers that it would issue guidance to regional offices by the end of July. NAHB Executive Vice President and CEO Jerry Howard sent a letter to the Corps and the U.S. Environmental Protection Agency earlier this month protesting the delay. As of Oct. 30, the guidance had not been received, but the NAHB Wetlands Summit will proceed nevertheless. “While we have all heard reports that joint guidance from EPA and the Corps is imminent, even if it is released prior to our meeting, we do not expect it to bias the outcome,” said David C. Smith, vice chair of NAHB’s Environmental Issues Committee, in a letter to summit participants. The association’s Legal Action Committee has discussed the Rapanos decisions in detail, but not from the point of view of wetlands and environmental experts. “By design, this meeting will not be a ‘legal’ exercise,” Smith told participants. “Rather, we want to convene the best strategic thought of Clean Water Act Section 404 field consultants to vet Justice Kennedy’s new test.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. HBI, Youthbuild Prepare Youths for Housing CareersOver the past few months, Home Builders Institute (HBI), the workforce development arm of NAHB, and Youthbuild have celebrated student graduations in Washington, D.C. and Atlanta, attesting to the early success of their collaborative efforts to train young people and prepare them for careers in residential construction. HBI is providing technical support to Youthbuild through a grant from the Department of Housing and Urban Development. Last September, the Latin American Youth Center (LAYC) opened the Youthbuild Public Charter School (PCS) to help high school dropouts in the District of Columbia. The program’s educational curriculum combines academics with vocational training, employability skill-building and community service. This July, 34 students received their Pre-Apprenticeship Certificate Training (PACT) certificates from HBI at the program’s first commencement ceremonies. “Youthbuild really supports its students and helps them get their GED and work that pays good money,” said honors graduate Henry Buruca. “They helped me with my employment portfolio and prepared me to dress and act like a working professional.” On Oct. 19, 16 students at the Fulton Atlanta Youthbuild and Adult Basic Education were honored for completing the HBI/Youthbuild curriculum. HBI came on board last year to enhance the residential construction component of the program, which has been working to educate, train and rehabilitate students since 1993. Among the Fulton graduates was Nigel Farmer, who came to Youthbuild with a high school diploma but lacked the focus and training to gain meaningful employment. Farmer responded positively to the HBI/Youthbuild curriculum and soon became a leader among his peers. “I really enjoyed the building and designing aspects of my training,” said Farmer. “There were more difficult tasks, like measurement reading, but my instructors were very encouraging and patient and helped me to graduate.” After completing the program, Farmer found a temporary job that enabled him to rent an apartment, and he continues to look for permanent work in the building industry. For more information on the HBI/Youthbuild partnership, e-mail Steve Cousins at HBI, or call him at 800-795-7955 x8939. Free Software Helps Builders Use Energy Tax CreditsBy Jay Murdoch, Owens Corning Builders across the country are confused by the 2005 Energy Policy Act. While they know it offers some tax incentives, they’re not sure how to navigate its complicated guidelines. Lack of awareness and confusion is common with any new law or regulation, but once they are educated, builders can benefit from opportunities that the law’s rules provide. The new energy bill, passed last August, offers builders the opportunity to receive a $2,000 federal tax credit for every new home they construct that consumes 50% less energy than a home meeting the requirements of the 2004 International Energy Conservation Code. It also offers tax breaks to their customers. Soon after it was passed, many companies such as Owens Corning began asking builders what the act meant to them. We learned that builders were focused on the impact of the law’s provisions on simple pay-backs and monthly cash-flow savings. Builders said that the projected monthly utility savings for a home buyer could offset or pay entirely for the additional costs of the energy upgrades, and by focusing on that potential concluded that the credits offered substantial opportunities to increase profits. Keeping It Simple Once builders determined that the law offered legitimate savings, they began asking for a tool to help them build to its compliance standards. They asked for an integrated costing function with the ability to override default costs for materials and utility rates; the ability to run “what-if” scenarios and look at multiple compliance paths; a way to illustrate simple pay-back and monthly cash-flow results; and a guarantee that the tool would be recognized by the Department of Energy and the Internal Revenue Service. At Owens Corning, our solution was the Builder Energy Solutions Calculator, a free software tool that builders can use to leverage the law’s tax credits to benefit their business. Making It Green Builders nationwide are embracing the green and sustainable building incentives outlined in the energy bill because they know it will not only improve profit margins, but also improve their communities. Builders recognize that the homes they create have an impact on the environment and their community, and that the energy law and its compliance tools can help them build highly energy-efficient homes that will reduce the environmental and financial burden on today’s and future generations. We believe the energy bill can help builders deliver solutions that today’s home buyer is demanding; transform how homes will be built into the future; and enhance the lives of home owners by delivering highly energy-efficient homes. Decoding the new law is one way of doing that. Compliance tools like the Builder Energy Solutions Calculator will help builders get the most out of the Energy Policy Act of 2005 while improving homes and communities nationwide. For more information about the calculator, click here. Jay Murdoch is technical marketing manager for Owens Corning. Headquartered in Toledo, Ohio, Owens Corning is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. 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. NAHB-Produced Programs on HGTV & DIY This WeekThe NAHB Production Group produces three weekly television shows on HGTV and DIY for consumers. The following is the latest lineup: "I Want That" on HGTV
"Rock Solid" on DIY
"Assembly Required" on DIY
Episode: "Geodesic Dome Home"
HGTV Seeking ‘Dream Home’ Builder/Architect Teams HGTV is seeking developers, builders and architects to create the 2008 and 2009 dream homes for the network’s Dream Home Sweepstakes. To learn more, click here. 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. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar of the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. 'Make It Happen' Radio Spots to Attract Workers in 10 MarketsThe National Housing Endowment, the philanthropic arm of NAHB, is providing a $20,000 grant to the Home Builders Institute (HBI) to produce and air public service announcements in 10 markets around the country to help attract workers to careers in residential construction. The radio announcements are part of the next phase of HBI’s Make It Happen industry education program. HBI, the workforce development arm of NAHB, is working with the Scripps Networks to air the radio PSAs in Tulsa, Okla.; Lawrence, Kan.; Kansas City, Mo.; Tampa, Fla.; West Palm Beach, Fla.; Phoenix; Baltimore; Cleveland; Cincinnati; and Detroit. “The National Housing Endowment is working to build partnerships across a broad spectrum of industry players in response to the growing need for talented and well-trained trades people and management,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “Partnerships are the cornerstone of our efforts and we are proud of our strengthening relationship with HBI and our support of initiatives that increase the awareness of what a great industry this is.” HBI and the NAHB Production Team will create 10-, 30- and 60-second radio spots that promote the home building industry and encourage students, parents, teachers and guidance counselors to learn more about career opportunities in housing. The announcements will direct listeners to HBI’s Building Careers Web site at www.buildingcareers.org. The radio announcements will be developed to primarily target minority audiences. HBI also will be seeking support from the NAACP to assist with the development and distribution of the announcements. In addition, HBI will collaborate with the NAHB Executive Officers Council, local home builders associations and organizations such as Junior Achievement to develop classroom presentations that will reinforce and complement the radio announcements. “The National Housing Endowment is working aggressively to increase the number of individuals pursuing careers in residential construction,” Garczynski said. “Through programs like Make It Happen and our recently announced Homebuilding Education Leadership Program (HELP), which provides funding to two- and four-year institutions to create or expand residential construction management programs, we are making great strides to increase awareness of opportunities at the trades and management levels.” Enter Awards Programs for Community Contributions The National Housing Endowment, the philanthropic arm of NAHB, is seeking entries for two awards recognizing the charitable contributions and altruistic differences building professionals make in their communities. Entries for both awards are due Friday, Dec. 1. Each year, NAHB honors the generosity of housing professionals through the following awards programs:
For more information, e-mail Niki Clark at NAHB, or call her at 800-368-5242 x8061.
The National Housing Endowment, the philanthropic arm of NAHB, is seeking entries for two awards recognizing the charitable contributions and altruistic differences building professionals make in their communities. Entries for both awards are due Friday, Dec. 1. Each year, NAHB honors the generosity of housing professionals through the following awards programs:
For more information, e-mail Niki Clark at NAHB, or call her at 800-368-5242 x8061. Building Our Future One Math Class at a Time
Nationwide, Building Homes of Our Own, NAHB’s free, award-winning educational software, is turning middle and high school students onto home building. And educators like Steve Zollinger, a high school math teacher at Wasatch Academy in Mt. Pleasant, Utah, are seeing the benefits. Building Homes of Our Own walks students step by step through the entire home building process, from site selection and acquiring permits to building a home and selling it to the most qualified buyer. Zollinger, who first learned about the educational software from a fellow teacher, immediately saw how he could apply its lessons to his math classes ― and how much more his students could learn from the free program. Building Homes of Our Own does more than just teach students about the sticks and bricks of home building, he says, it teaches them about the entire building process and helps them gain a much better understanding of the financial aspects of buying and selling a house. “Not until after I began using Building Homes of Our Own myself did I realize the full spectrum of events that went into surveying, building and later selling a home,” Zollinger says. “And I’m an educator. Imagine what the kids are learning.” Not only does Building Homes of Our Own teach his students about what it takes to build a home, he says, the program also gives them some insight into buying a home. “As I walked my students through various stages of home building, many students commented that they will be much more comfortable when they need to buy or build a home now that they have had some first-hand experience,” Zollinger adds. “The situations are very realistic and are based on real-life data.” The Perfect Cross-Curriculum Tool Because Building Homes of Our Own ties so many subjects together, Zollinger calls it “the perfect cross-curriculum tool.” Mathematics, research, architecture, archeology and engineering are combined into one well-rounded simulation, he says. And because it is computer-based, it fits perfectly into “the technology age of education.” In particular, he points to the program's flexibility as a learning tool, something he believes is valuable to teachers and students alike. “It could be a one-day activity to give students a brief glimpse of the process, or it could be a two- to three-week unit that takes a more in-depth look into each stage of the home building process,” Zollinger says. “Students will love it as a challenging game and will learn a great deal while they're at it.” “I look forward to seeing Building Homes of Our Own incorporated in more classrooms,” he continues. “And I am anxious to see similar simulation emerge in its wake.” In the last four years, more than 42,000 CD-ROMs have been distributed, reaching an estimated audience of 3 million students, educators and parents. A free copy of Building Homes of Our Own is available to teachers and NAHB members by visiting www.homesofourown.com. For free promotional materials, available to NAHB members, e-mail Niki Clark at NAHB, or call her at 368-5242 x8061. Texas Builder Earns Top Honor for Community ServiceThe deadline for the Builder Achievement Award for Outstanding Service has been extended to Dec. 1. Following is a story about last year's gold winner, who won $10,000 for the charity of their choice. Silver, bronze and honorable mention award-winners will also be chosen for $5,000, $2,500 and $1,000 contributions, respectively. The award is open to all builder, remodeler and developer members of NAHB. To find out more about the award, and apply today, click here. Or e-mail Niki Clark at NAHB, or call her at 800-368-5242 x8061. Desert View Homes of El Paso, Texas, was awarded the 2005 Gold National Housing Endowment Builder Achievement Award for Outstanding Community Service during the 2006 International Builders’ Show in Orlando, Fla. Desert View Homes is |