Print-All Page: November 6, 2006

Los Angeles can become a national model for providing quality housing that is affordable to low- and moderate-income families, according to leaders of the Los Angeles Chapter of the NAACP and the Building Industry Association of Greater Los Angeles/Ventura Chapter. Both organizations have endorsed Prop H on the Nov. 7 ballot, which would provide bond financing for affordable housing.

The two organizations co-hosted a town-hall meeting at Los Angeles’ Holman United Methodist Church last week to discuss the state of housing in the city and to envision how the city might use the $1 billion for housing if the proposition passes.

“It’s no exaggeration to say that Los Angeles has the nation’s most serious housing crisis,” said Brian Catalde, NAHB’s president-elect and a builder in the Los Angeles area. “Proposition H has the potential to enable homeownership, promote construction of affordable rental housing and support housing for the homeless on an unprecedented scale. It would also create jobs, encourage additional investment in the city and enlarge the tax base.”

“Housing and homeownership are important issues for families and communities,” said Raphael Bostic, a University of Southern California economics professor who outlined the severe housing affordability problem in Los Angeles. “The home is important for families in terms of building wealth. It’s also important in providing a sense of self direction and self control.”

Hundreds of thousands of families in Los Angeles are struggling to find housing that meets their needs at a price they can afford. The statistics are telling:

“There is no other city, no other state, that has tried a solution like Prop H,” Catalde said. “If Los Angeles can do this, then I can go to Florida, New York and other places that have housing affordability problems, and say ‘look what we have done in California.’ This measure starts with transition housing. Then it moves to rental housing and finally to homeownership. It’s a three-part program to address housing affordability.”

The town hall meeting builds on a partnership of the NAACP and NAHB. The two national organizations recently released a joint housing report entitled, “Building on a Dream,” that provides a comprehensive view of the state of minority housing opportunity, identifies the barriers to affordable housing and suggests nine policy recommendations to expand housing opportunities.

“Just like you, the NAACP and NAHB are deeply committed to housing affordability issues,” said Christine Bischoff, NAACP’s national economic empowerment policy manager. “We plan to conduct several joint town hall meetings in order to encourage discussion, foster cooperation and work together to find solutions to housing problems of real people.”

“It’s time to break ground on a new era of housing opportunity for Los Angeles, and Prop H is the tool that can make that happen,” Catalde said. “I’m excited about the partnership between the home builders and the NAACP, I’m excited about the many things we can achieve when Proposition H is passed, and I’m excited about the prospect of a better, more affordable Los Angeles.”

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

Mortgage Rate Dip Gives Home Buyers More Good News

Mortgage interest rates receded again last week, providing more good news for families who are pursuing home buying opportunities in today’s buyers market.

Materials put at the disposal of NAHB members last week, “It’s a Great Time to Buy,” emphasize that home buyers have greater opportunities today than they have had for several years, with prices leveling off, mortgage interest rates remaining near their historic lows and a relatively strong economy continuing to create job and income growth.

According to Freddie Mac's Primary Mortgage Survey, mortgage rates for the week ending on Thursday, Nov. 2 reversed a short-lived upward turn. The 30-year fixed-rate mortgage averaged 6.31%, down from an average of 6.40% during the previous week, bringing them to the same level they were exactly a year earlier.

One-year Treasury-indexed ARMs averaged 5.53% for the week, down from 5.60%. They were 5.09% a year earlier.

Freddie Mac Chief Economist Frank Nothaft attributed the week’s decline to lower than expected third quarter figures for the Gross Domestic Product. He said that lower rates could produce “a spurt of refinancing by those who want to get out of ARMs that are scheduled to reset in the next year while interest rates are comparatively low.”

Potential buyers who sit on the fence in the hopes of “timing the market” and making their purchase at the exact time when the downturn hits bottom could miss out, according to NAHB, because the peaks and valleys of the housing cycle are just as difficult to predict with pin-point precision as the stock market, and conditions will vary by location.

Those who purchased homes during the previous housing downturn in the early 1990s came out big winners. The median price of a new home in 1991 was $120,000. In 2005, it was $240,900 — just over double in price.

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.

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Slowdown Hits Banks

The cooling housing market remains a major challenge to growth, particularly for banks that are heavy on construction lending. “Construction loans have driven between 25% to 30% of loan growth during the last two years,” said James Abbott, a research analyst with Arlington, Va.-based investment bank Friedman Billings Ramsey, which covers community banks and thrifts in the Southwest and West Coast. Historically, he said, such loans have accounted for about 5% to 10% of annual loan growth. Nevertheless, Jeff Davis, an analyst at Cleveland-based institutional equity research firm Midwest Securities, said that “banks will have a few issues” but he isn’t expecting any dramatic increase in loan loss rates. “You’ve also got to think about the tenor of the times and that is, the economy is incredibly robust,” he said. “It’s been in overdrive, and it’s shifted down to third gear. So at the margin, it feels like things have really slowed down, but unemployment is low, incomes are up.” “It really is more of a return to normal,” added Ryan Beck analyst Megan Malanga, who says that the slowdown is being exacerbated by “buyers who know they have the power right now and are waiting on the sidelines for price to come down, which may or may not happen, but there is demand out there. People aren’t stepping up to the plate and buying houses because they think they can get it for a lower price, and that compounds the problem, so I think it just feels worse than it really is.” In an Oct. 3 research report on construction lending, Abbott wrote that “bankers and builders generally believe a long-term inventory glut is unlikely,” because builders are responding to current market conditions by cutting production, lowering prices and increasing incentives.(www.leesburg2day.com)
Leesburg Today (11/1/06); Therese Howe

Builders Give Buyers a Break

A recent survey by NAHB confirms that 28% of the builders nationwide are offering optional items at no cost, up from 12% a year earlier, and that the number of builders offering special financing has gone from 27% to 33%. Since mid-September, Heritage Homes Group of Jamison, Pa., has been offering “employee pricing plus,” which entitles home buyers to the same discounts its employees would get if they were to buy a home in one of its developments: $25,000 worth of options for free if they buy a single-family home and $10,000 in options if they buy a town house. Heritage will also offer its buyers any new incentives that arise while their house is being built so they don’t need to fear missing out on anything, and it offers 100% financing deals to buyers who can make the monthly payments but don’t have any money to put down. All of the incentives, says Greg Lentine, the company’s director of sales, were designed to meet the concerns it was hearing from its potential buyers as interest rates and home prices increased. “We’re just trying to get more people into our homes.” Chuck Hamilton, executive officer of the Lehigh Valley Builders Association, says that the larger, national builders are more likely to offer incentives than the smaller, local builders. “The national builders buy land and build on speculation,” he says. “Hence, they end up with unusually large inventories when a market slows down. Rather than merely sitting on large inventory, incentives are often used to move the homes. This is a phenomenon that you rarely see happen with local builders who have always built to local market needs.” (www.mcall.com)
Morning Call (10/29/06); Beth W. Orenstein

For Sale, By the Owner’s Ego

Evidence is mounting that people set prices, particularly for housing, as much on ego and self-image as on an objective view of the market. This is one of the reasons that home sellers won’t cut their demands enough to make a deal and helps explain why the unsold inventory of homes has risen so high in many markets. A body of research developed over the past two decades, known as neuroeconomics or behavioral economics, has illuminated a few key concepts. Applied to housing, people will cling to prices they recall from a brighter day, even when market conditions have changed; they will walk away from a sale if they feel the buyer is getting too good a deal at their expense; and they are terrified that if they sell now, the market will rebound and they will feel like fools. But some sellers are able to be more dispassionate. Six months ago, mortgage broker Steven Waller bought three dilapidated townhouses in Front Royal, Va. for about $100,000 each and spent about $20,000 refurbishing each. He is flipping the properties by selling them for $149,000 each even though they have been appraised at about $180,000 and similar units are being sold by their owners for $165,000 to $200,000. “I’m making a profit, that’s all that matters,” Waller said. “I have no emotional attachment to it. You can stay ahead of the game if you price at where they will sell rather than sit on them for a year.” (www.washingtonpost.com)
Washington Post (11/4/06); Kirstin Downey

Forecasting Changes on the Housing Front

Looking at housing data going back 25 years, Wharton real estate professor Todd Sinai and his colleagues found that recent growth in housing prices was largely explained not by a bubble but by basic economic fundamentals such as low interest rates, strong income growth among high-income Americans and unusually low housing prices in the mid-1990s. Their research also found no evidence that most buyers were bidding up housing prices based on unrealistic expectations of future price increases, and that the conventional metrics for assessing the housing market — such as price-to-rent and price-to-income ratios — ignored the effects of lower real, long-term interest rates, thus failing to accurately reflect the state of housing costs. He and his co-author Chris Mayer didn’t begin their research thinking they would prove or disprove the widespread media reports of a real estate bubble. Instead, they simply hoped to create a measure that could be used down the road to gauge whether real estate markets were overheated. “We didn’t have an agenda or any idea really how things would look when we started this research,” he says. “I’ve been studying housing markets for a long time, and while I’ve learned to be skeptical of media reports, house price bubbles do happen.” (www.wharton.upenn.edu/alum_mag/)
Wharton Alumni Magazine (11/06); Nancy Moffitt

Mayor Breaks Tie Over Inclusionary Zoning; Measure Fails

Oakland, Calif. Mayor Jerry Brown last week dramatically cast a tie-breaking vote against a proposal by the city council that would have required developments of 20 or more apartments or homes to set aside 15% of the rental units for households earning 60% of the area’s median income, or about $50,000 for a family of four. The measure would also have required 15% of for-sale homes to be affordable for households that earn the area’s median income, or about $84,000 for a family of four. Brown, who acknowledged his long opposition to inclusionary zoning measures, called for a blue-ribbon commission to study the measure and said that it would do little to help the 30,000 families living below the poverty line in Oakland, while driving developers — and private investment — out of the city and perhaps even reducing property values. Brown said the measure, if it were implemented, would create what he called a “lottery” for the 100 affordable homes and apartments he estimated would be built in a single year, while taxing market-rate homes. “There is no Santa Claus,” he said. “Someone has to pay.” The mayor suggested that city funds would be better spent improving the thousands of run-down apartments throughout Oakland. (www.insidebayarea.com)
Inside Bay Area (10/31/06); Heather MacDonald

Conservation Efforts That Pay Off

According to the Residential Green Building SmartMarket Report by NAHB and McGraw-Hill Construction, home owners increasingly are more interested in making improvements that will help them conserve and increase the energy efficiency of their homes. Outside the home, deciduous trees provide cooling shade in the summer and allow sunlight in to warm during the winter. In addition, one tree can filter up to 60 pounds of pollutants from the air each year, according to NAHB. According to the U.S. Department of Energy, home owners can save as much as 10% to 50% in energy costs by going green, and one of the most important steps is to increase thermal insulation in both existing and new homes. Heating water accounts for about 15% of the average household’s energy use. “The easiest way to improve efficiency is to cut back the water heater thermostat to 120 F and wrap the unit and hot water pipes with insulation,” said Ronnie Kweller, deputy director of communications for the Alliance to Save Energy. To save water, a new clothes washer with the Energy Star label will use half as much energy and water as one that’s 10 years old, and front-loaders use about 40% less water than top-loading models. Savings are similar with new dishwashers. Low-flow shower heads and faucet aerators are inexpensive, easy to install and will immediately reduce your water consumption and water-heating costs by as much as 50%, according to NAHB. (www.insidebayarea.com/oaklandtribune)
Oakland Tribune (10/31/06); Nancy Moffett

Millions of Pricey Homes Could Trigger Estate Taxes in 2011

Millions of home owners could face the prospect of higher taxes in 2011, unless Congress acts to repeal or reform the estate tax, according to a new NAHB study.

“Today, the estate tax is clearly an issue for family-owned businesses,” said NAHB President David Pressly. “Unless Congress acts quickly to permanently repeal this onerous tax, it could also ensnare millions of home owners starting in 2011.”

Signed into law five years ago by President Bush, the “Economic Growth and Tax Relief Reconciliation Act of 2001” is gradually phasing out the estate tax, until it is fully repealed in 2010. However, without a permanent repeal or some type of reform, the tax comes roaring back in 2011 to its pre-2001 level — a 55% tax rate on amounts exceeding a $1 million exemption.

Under current law, this year there is a tax rate of 46% on the amount that exceeds a $2 million exemption.

Employing a conservative forecast of housing prices, the NAHB report, entitled “The Estate Tax and Housing,” shows that nearly 3.5 million homes will exceed $1 million in market value in 2011, guaranteeing that those who inherit them will be liable for estate taxes.

Using mortality rate projections from the Centers for Disease Control, NAHB estimates that more than 50,000 of these households would be subject to the estate tax in 2011, a substantial increase from current figures.

While the Joint Committee on Taxation estimates that there will be approximately 110,000 estate taxpayers in 2011, the NAHB report finds that 46% of them will be paying the tax solely because the net worth of their house tops the $1 million threshold.

The analysis does not consider other household wealth in determining the number of affected estates. Taking into account wealth from sources such as business assets, financial holdings and other asset categories increases the estimates substantially. Millions of additional families who today own homes valued between $450,000 and $550,000 will exceed $1 million in total assets in 2011, making them eligible for estate tax liability as well.

“The NAHB report shows that unless something is done, millions of additional families will one day face this burdensome tax, forcing them to engage in costly estate planning so that they can protect their homes for their heirs,” said Pressly. “This tax is a ticking time bomb and Congress must act now to defuse it.”

More information on this report as well as more in-depth analysis, key data and housing forecasts is available by subscribing to HousingEconomics.com, NAHB’s economics publication for America’s housing industry. Annual subscription prices for NAHB members start at $195. For subscription questions, NAHB members can e-mail Karel Leon, or call him at 800-368-5242 x8476. Non-members should click here to subscribe.

States Bring Property Tax Relief in Recent Sessions

Following a three-year period of unusually rapid increases in home prices, many of the 44 state legislatures that held sessions earlier this year successfully put through property tax relief, according to Stateline.org's “2006 Legislative Year in Review.”

Budget surpluses provided state legislators a welcome reprieve from budget cutting and squeezing, and for the first time since the 2001 national economic downturn, all but 10 of the 50 states were awash in revenue, Stateline reported.

Setting a precedent, Massachusetts became the first state to pass a law requiring people to buy health insurance and it vowed to fine companies $295 for each worker not offered coverage. Vermont followed suit with a plan requiring private insurers to offer health coverage for primary and preventive care, with a state commission overseeing the program.

Over the veto of Republican Gov. Robert Ehrlich, the Maryland General Assembly also ventured into new territory when it passed the nation’s first law to require large employers to pay more employee health benefits. The so-called “Wal-Mart law” was overturned in federal court.

With the federal minimum wage stuck at $5.15 an hour for nearly a decade, and polls showing widespread popularity for proposals to raise the rate, 11 states (Arkansas, California, Delaware, Maine, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Rhode Island and West Virginia) passed laws providing a boost for the lowest-paid wage earners.

Washington state currently has the highest hourly rate at $7.63. New laws in California and Massachusetts will increase their minimum wage rates to $8 an hour in 2008, the highest in the country, although states with inflation-adjusted wage rates, such as Washington and Oregon, may surpass it, the report by Stateline.org. said.

Legislation cracking down on illegal immigration was passed in Colorado and Georgia.

The Democratic-controlled Colorado General Assembly, working with Republican Gov. Bill Owens, agreed on a package of new laws called the strongest sanctions in the nation against undocumented residents and businesses that employ them. The lawmakers also voted to put initiatives on the November ballot that would bar employers from deducting the wages of illegal aliens as an expense on state tax forms and give the state the green light to sue the federal government for failing to enforce federal immigration laws.

Georgia’s legislature passed a new law attempting to lower the boom on illegal immigration by requiring the state and local government to verify the residency of any adult applying for public assistance and removing tax breaks for businesses caught employing undocumented workers.

Arizona, New York, Pennsylvania, Rhode Island and South Carolina were among the states to pass property tax-cutting laws in response to high property taxes. Among the property tax initiatives:

For more information, e-mail Alex Strong at NAHB, or call him at 800-368-5242 x8279.

Builders Pursue Opening Up U.S. Lumber Market

Recent visits by NAHB Senior Officers to Sweden and Russia geared toward increasing exports of duty-free softwood lumber to the U.S. makes good business sense, according to an expert forestry policy analyst.

The NAHB initiative, coming just as Canada and the U.S. enter into a new, seven-year trade pact that creates a series of complex border taxes and quotas that will artificially raise lumber prices during periods of normal or slow demand, shows that home builders are serious about opening up competition in the U.S. lumber market, said Bruce McIntyre, a partner in the Vancouver office of PricewaterhouseCoopers LLP.

“I think the NAHB mission was a good idea,” said McIntyre. “It sends a signal and reminder to Canadian producers that there are alternative sources of supply. It’s difficult to manage trade. This shows that the potential for increased lumber imports from offshore is an unintended consequence of the U.S.-Canadian agreement.”

NAHB Executive Vice President and CEO Jerry Howard in early October traveled to Stockholm and held two days of talks with Swedish trade and industry officials. The following week, Howard and NAHB Immediate Past President David Wilson ventured to Russia. The purpose of the visits was to seek to increase exports of softwood lumber and other wood products to America.

In working to ensure that the nation’s home builders have access to an adequate supply of lumber, NAHB’s top priority is to exhaust all domestic opportunities. This includes seeking higher targets for timber sales from publicly-owned lands and urging the U.S. government to open up additional forest lands for logging.

However, as a result of environmental and regulatory policies that have greatly reduced timber harvests from public lands, America today does not have the domestic capacity to meet its demand for lumber.

More than 38% of the lumber used in the U.S. in 2005 was imported. The bulk of that — roughly 33% — came from Canada.

While the association remains firmly committed to seeking ways to increase domestic resources, the NAHB Board of Directors recently approved updated policy on trade stemming from the restrictive U.S.-Canada trade agreement and the fact that America is overly reliant on Canadian lumber imports.

The board called on NAHB to work with governments and industry of other nations to facilitate increased imports and to promote the use of steel and other alternative building materials wherever practical.

Given that U.S. consumers and Canadian producers are “stuck” with the trade agreement, McIntyre said that looking to other markets could be a shrewd move for both sides.

The question for Canadian lumber firms is whether to invest in improving facilities in Canada under the context of the agreement, or to move that capital offshore to other markets such as Russia or Eastern Europe, he said. “Canadians haven’t invested to any significant degree in Russia. At a minimum, current events indicate it’s worth at least looking at the Russian market as an opportunity to set up alternative production facilities to ship lumber duty-free into other markets, including the U.S.”

By visiting Russia, McIntyre said that U.S. home builders are expressing a vote of confidence in the Russian marketplace.

“The capacity to significantly expand lumber shipments to the U.S. is not a near-term reality until there is further investment in infrastructure and equipment,” he said. “Certainly the potential is there, but it will take time to develop.”

Citing how Russia is becoming a more viable place to do business, McIntyre noted a recent announcement that International Paper has entered into a 50-50 venture with Ilim Pulp, the largest pulp and paper company in Russia.

“That deal is another vote of confidence that investment opportunities are better in Russia than in the recent past,” he said.

McIntyre also acknowledged the prospect of increasing lumber shipments from Sweden.

“Clearly, the opportunity is there. Sweden is a very sophisticated lumber producer and lumber from Western Europe is already flowing into the U.S.,” he said.

For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.

HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.

Poor People in Wealthy Areas Die at Higher Rate, Study Finds

Poor people who live in well-to-do neighborhoods were found to have higher death rates than their counterparts who live in poorer neighborhoods, according to a new study by Stanford University School of Medicine researchers that will be published in the December issue of the American Journal of Public Health.

“We tend to assume that people living in a high socioeconomic status neighborhood are well off,” said Marilyn Winkleby, PhD, an associate professor of medicine at the Stanford Prevention Research Center and the lead author of the study.

To their surprise, that’s not what the researchers found. After 17 years, 19 out of every 1,000 women of low socioeconomic status who lived in wealthier neighborhoods had died, compared with 11 out of every 1,000 from poorer neighborhoods. The trend was similar in men, but less dramatic.

Looking for what is causing the difference, researchers were able to discount risk factors such as obesity, hypertension and smoking; and access to neighborhood goods and services, such as health care, grocery stores, parks and gyms. There were also no significant differences in the causes of death, which were largely from chronic diseases, the researchers said.

Winkleby suggested two explanations for the discrepancy. First, the cost of living in an affluent neighborhood could leave poor people with little disposable income to spend on essential goods and services, such as health care and healthy food, and less time to take advantage of the social services and health care often concentrated in low-income neighborhoods.

Second is the possibility that poorer people in higher-income neighborhoods fare worse for psychological and social reasons.

A discrepancy in a person’s social position relative to others may have an effect on a person’s health, said Winkleby. “You look out every day and you’re at the bottom of the social ladder,” she said.

The researchers caution that their study should not be interpreted as meaning that poor people are necessarily better off living in low-income neighborhoods. “There could be other benefits” from living in a wealthier neighborhood, said co-author Catherine Cubbin, PhD. “We don’t want to imply that poor people should move to poor neighborhoods, where there continues to be great need.”

Also, the study highlights the needs of a population that may be overlooked and underserved by government agencies and health workers.

“There’s a group of people really at risk that we’re not even thinking about,” said Cubbin.

Eye on the Economy: Housing Demand May Be Stabilizing

As expected, growth of real gross domestic product (GDP) slowed further in the third quarter, according to the “advance” estimate released by the Commerce Department on Oct. 27. Third-quarter growth slipped to an annual rate of 1.6%, marking the second consecutive quarter of below-trend economic performance.

The housing production component of GDP (Residential Fixed Investment) was the weakest component of the third-quarter report, contracting at a 17.9% rate and subtracting 1.12 percentage points from the overall GDP growth rate. That weak performance followed an 11.1% contraction and a 0.72-point decline from GDP growth in the second quarter. These results, of course, stand in sharp contrast to the very large positive contributions delivered by RFI during most of the 2003-2005 period.

It’s likely that GDP growth will remain somewhat below trend in the final quarter of this year (we’re projecting 2.7%), and RFI will once again exert a significant drag on economic growth.

However, the worst of the housing contraction now appears to be behind us, and the overall economy should strengthen in 2007 — steering clear of recession and carrying the expansion forward for years to come.

Key measures of core consumer price inflation (excluding prices of food and energy) remained on the high side in September. However, much of the upward pressure stemmed from the imputed “owner’ equivalent rent” component, and the evolving economic slowdown is likely to relieve more fundamental inflation pressures before long.

The core component of the Consumer Price Index (CPI) increased at an annualized rate of 2.9% in September and the year-over-year gain also came to 2.9% — the highest rates of the current economic expansion and well above the upper end of the Fed’s apparent “tolerance range” for this measure (2.5%).

However, the technically superior chain-core measure (allowing for substitution within the market basket) stabilized at a year-over-year pace of 2.7%, and the imputed “owners’ equivalent rent” component added half a percentage point to core CPI inflation in September. Thus, a credible estimate of “true” core CPI inflation in September comes to a relatively benign 2.2%, presumably within the Fed’s tolerance range.

The Federal Reserve’s preferred measure of core inflation, the core price index for personal consumption expenditures (PCE), receded a bit to a 2.1% annual rate in September. The year-over-year gain also receded — to a 2.4% pace ― although this reading remained well above the implicit upper bound of the Fed’s tolerance range for this measure (2.0%).

“Owners’ equivalent rent” is a smaller component of the core PCE price index than the core CPI, but removal of that element leaves year-over-year core PCE inflation at a more tolerable 2.15%.

As expected, the Federal Reserve kept monetary policy steady at the Oct. 24-25 meeting of the Federal Open Market Committee (FOMC), maintaining the 5.25% federal funds rate target that’s been in place since June 29. This policy position has held the bank prime rate at 8.25% since mid-year, up from a cyclical low of 4% at mid-2004.

The Oct. 25 FOMC statement stressed that economic growth has slowed over the course of the year, and the statement once again singled out a “cooling” of the housing market as a key factor in the slowdown.

The FOMC statement also noted that readings on core inflation have been “elevated” but that inflation pressures seem likely to moderate over time. Thus, the Fed’s inflation expectations, along with the judgment that “going forward, the economy seems likely to expand at a moderate pace,” gave our central bank the leeway to hold policy steady on Oct. 25.

The FOMC statement stressed that any future adjustments to monetary policy will depend on the evolution of the outlook for both inflation and economic growth.

We continue to believe that incoming information will keep the Fed on hold well into 2007 and that the next rate adjustment may very well be downward — as core PCE inflation recedes and the unemployment rate gravitates upward due to the run of below-trend GDP growth.

Fed Positioning and Growth/Inflation Patterns Provoke Declines in Long-Term Rates

The recent stability of monetary policy, the pronounced slowdown in economic growth and the credible prospects for slowing of core inflation have combined to provoke a series of bond market rallies that have, on balance, moved long-term interest rates down significantly from their recent highs in July.

Our forecasts for economic growth, core inflation, Fed policy and the foreign exchange value of the dollar argue for reasonable stability of long-term rates over the balance of this year and in 2007.

We are projecting slight increases in the structure of long rates next year, partly because of pressures from abroad, but the projected yield structure should provide a friendly environment for the interest-sensitive sectors of the U.S. economy — particularly housing.

The Housing Downswing Still Is Underway, But Housing Demand May Be Stabilizing

Home sales and house price appreciation still appear to be trending downward, despite the government’s report of an increase in new-home sales for September. However, it appears that fundamental stabilization of home buyer demand will occur in short order.

A number of key economic developments are underpinning housing demand. These include the recent declines in mortgage interest rates, the recent declines in energy costs, maintenance of low unemployment and healthy growth in household income.

The dramatic falloff in house price appreciation during the past year, including some dips into the negative range, also are helping to revive housing demand. And home sellers (particularly home builders) have been offering a plethora of non-price sales incentives to bolster home sales and limit sales cancellations.

The adjustments to mortgage rates, house prices and household income have combined to halt the dramatic decline of housing affordability, and the composite Housing Affordability Index by the National Association of Realtors® (NAR) actually perked up in both August and September from a 20-year low. Furthermore, the expectations components of key measures of consumer confidence/sentiment picked up in October and consumers’ assessments of home buying conditions improved as well.

The NAR’s series on “pending” sales of existing homes, NAHB’s single-family Housing Market Index and the Mortgage Bankers Association’s series on applications for mortgages to buy homes all suggest that the sharp falloff in buyer demand that began in the second half of 2005 now is losing momentum, although the trend still appears to be modestly downward.

NAHB’s forecast anticipates modest further declines in sales of new and existing homes in the fourth quarter of this year, but we expect sales to bottom out in the first quarter of 2007 before embarking on an extended recovery process.

Inventory Overhangs Should Delay the Revival of Housing Production and House Price Appreciation

Unsold inventories of new and existing single-family homes moved down a bit in August and September, and the inventory of existing condo units came down a bit in September from its record high. However, inventories still are historically high and the official government numbers exclude the impact of sales cancellations in the market for new single-family homes. Furthermore, there is no measure of the unsold inventory of new condo units, and that overhang presumably is quite heavy.

We expect total housing starts to bottom out in the second quarter of 2007, somewhat beyond the projected trough in home sales, as builders continue to work down their inventory positions.

The forecast depicts a five-quarter fall in housing starts, with a peak-to-trough decline of 25% between the first quarter of this year and mid-2007. This housing correction, if realized, will be roughly half as serious as the downswing that occurred in connection with the 1990-1991 economic recession — in terms of both the depth and duration of the decline.

House price appreciation has contracted dramatically during the past year, and median sales prices for both new and existing homes now are in the negative range on a year-over-year basis.

Some of this contraction reflects compositional shifts as sales of high-priced homes have fallen more than lower-priced homes, and it’s likely that repeat-sales price measures (following the same houses through time) still are in the positive range.

NAHB’s forecast of OFHEO’s quarterly repeat-sales House Price Index shows an orderly deceleration through mid-2007 followed by a few negative quarters on a national basis.

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 Nov. 1 edition. To subscribe to “Eye on the Economy,” click here.

HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.

Useful Links to Monitor Economic and Housing Trends

The following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market.

HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.

Remodeling Market Could Top $359 Billion a Year by 2015

The remodeling market, coming off the strongest five years in its history, will keep up its momentum for the long term, with a growth rate of 5% a year over the next 10 years, the nation’s two leading remodeling economists reported at the Remodeling Show in Chicago last month.

For the near term, however, remodelers can expect to see slower-than-expected growth in 2007 as home owners adjust to changing market conditions.

“The last five years were probably the best five years in remodeling history,” said Kermit Baker, the director of the Remodeling Futures Program of Harvard’s Joint Center for Housing Studies. “There was growing equity, low interest rates. All the forces came together. It was the perfect storm for remodeling. But we are seeing the tide turning a little.”

A slowdown in home construction usually means less spending on additions and alterations. However, maintenance and repairs help buoy the remodeling market. “Remodeling is less cyclical than new construction,” Baker noted.

“When someone has a leaky roof, they have no choice but to fix it,” added Gopal Ahluwalia, NAHB’s vice president of research, who has pioneered studies of the remodeling market for the past 20 years. “Maintenance and repairs will not be affected.”

Home owners tend to customize their homes several years after they purchase, and more than 30 million homes sold in the past five years should continue to feed the remodeling market for several more years — “unless interest rates rise above 7.5%,” Ahluwalia said.

Residential Remodeling Expenditures
(Billions of Dollars)

Source: NAHB Economics — Remodeling Forecast (Preliminary)

For the long term, Ahluwalia projected that the remodeling market would grow from $215 billion in 2005, as reported by the U.S. Census Bureau, to a projected $359.1 billion in 2015.

The growing volume of housing stock across the nation, the rising age of existing homes and the increased wealth of a new generation of home owners and renters will be major factors driving the remodeling market during the next 10 years, Ahluwalia said. Total housing stock surpassed 124 million homes in 2005. The median age of those homes is 32.

As housing continues to age, maintenance and energy savings-related remodeling will continue to be in demand, said Ahluwalia.

Of the energy-related materials and products installed in remodeling projects during the past three months, low-e windows topped the list with 86%, followed by insulated exterior doors, 69%; upgraded insulation, 65%; ceiling fans, 59%; argon gas windows, 56%; and high-efficiency HVAC systems, 49%. Other energy-saving products included programmable thermostats, water-saving faucets and fixtures and insulated foundation.

The more affluent will continue to command a larger share of the market and spend more on remodeling over the long term, Ahluwalia said, a trend that has been growing since the early 1990s. Currently, households making $75,000 or more represent 60% of the remodeling market, almost double their impact in 1993.

In addition, 64% of remodeling projects in 2005 were on homes valued at $250,000 or more, compared to only 22% in 1993.

Baby boomers, the wealthiest generation to date, are responsible for a majority of the remodeling projects in the market today, but the post-baby boomer generation influence on the market is growing quickly.

Baby boomers represented 52% of remodeling expenditures in 2005, Ahluwalia said. Those 35-54 spent 22% of the remodeling dollars last year, the second-highest spending age group.

“Generation X and Generation Y will spend more in their lifetime on remodeling than their predecessors,” Ahluwalia said. “They will be wealthier than their parents, and wealth will drive the market.”

Regionally, the strongest markets today are the ones with older housing stock. According to the Joint Center’s Baker, these areas typically include the Northeast and Midwest, yet he believes that a long-term shift towards the Sunbelt should arise in the near future.

Kitchen and bathroom remodeling were the top two types of projects in 2005, followed by room additions, whole house remodeling and window and door replacements.

In the near term, remodeling contractors may face competition from home builders, yet just how many builders will come into the industry remains unclear.

“It always happens when there is a slowdown,” said Ahluwalia. Many builders have relatively few employees of their own and rely on subcontractors. The smaller staffs enable many builders to sit on the remodeling sidelines during a slowdown.

Some near-term competition could also come from home improvement big box stores like Lowe’s or Home Depot. Baker, however, believes that this competition will be limited. These stores, he said, are successful with single-product installations, but as general contractors, they have shown little success.

The rental market, which accounts for approximately one-third of remodeling expenditures, could be a growth area for remodelers. Rental remodeling ebbed as homeownership increased during the last five years or so, but as the rental market continues to strengthen, multifamily remodeling is expected to increase.

“Multifamily remodeling should grow because so little was spent in the last five to 10 years,” said Baker.

Baker said remodelers were the most fragmented of the residential industry players, and he did not foresee major consolidation of the industry in the future.

According to his findings, the number of self-employed contractors, both general contractors and special trade contractors, increased faster between 1997 and 2002 than larger firms with payrolls and employees.

During those five years, the number of remodeling firms grew from a little more than 400,000 firms to 520,000 firms. He said that industry consolidation is not as feasible because remodeling requires customer-specific custom work that cannot be duplicated on a large scale.

Who Will Build It When They Come?

They are coming, you know. People arriving and moving into luxury homes, workforce development housing, apartments, condos, second homes, vacation homes, you name it.

And there are others who are staying. Living longer, healthier, more active lives. People who are staying in their homes and remodeling them to fit their needs. And people who are moving into new (or new for them) homes.

So, to play a bit on the “Field of Dreams” adage — who will build it when they come?

In other words, it is time to start thinking about workforce development and figure out what we can do to identify and encourage the next generation of construction workers.

One of the things I believe we need to think about is how to elevate and recognize the trades as a truly honorable, gratifying, satisfying, positive, productive and fulfilling career path. That’s right, I said career path — not just a job.

For years, we’ve gutted our high school vocational education programs — and now we’re crying that there’s no one around to pick up the tools and build.

For years, we’ve pounded into our young adults that they cannot expect to be achievers or productive members of society without a college degree.

Let’s hope that we can finally lay those thoughts to rest. Not everyone wants to be in college. Not everyone should be. And not everyone needs to be.

Historically, the trades have been some of the most highly-respected and honorable fields to work in. It’s about time they were again.

It is also about time that we recognize and acknowledge that some careers can’t and won’t be outsourced to overseas workers. Repairing, remodeling and building homes cannot be done through Malaysian call centers.

With all the safety and technological advances that have taken place and continue to take place in our industry, the trades are no longer just a stopover for teenagers working their way from high school through college.

No, today the trades are a legitimate career path that offers a comfortable livelihood ― and a solid sense of accomplishment. The skills and many life experiences learned in the trades are learned for a lifetime. And it’s not unthinkable to be making upwards of $40,000 a year after just a little on-the-job experience.

But to get young people interested takes an attitude shift. The trades are not for flunkies who can’t hack school. They are not for everyone but my children. They are not strictly for those people who live in that neighborhood or who come from that country.

It’s time that we take a fresh look at what the trades have to offer our young people. It’s time we recognize the value that this segment of our workforce adds to society, the rewards the trades have to offer ― and the values this work teaches those who take it on.

It’s time we recognized and promoted the trades for what they truly are — a viable, positive, productive, well-paying and real career path.

This needed attitude shift starts with me, you, public officials, high school administrators and faculty and parents.

Greg Miedema, CGR, CAPS, is president of Dakota Builders in Tucson, Ariz. He is the founder of his local Remodelors™ Council, a member of the NAHB Remodelors™ Council Board of Trustees and currently serves as the chairman of the Southern Arizona Home Builders Association (SAHBA). The SAHBA also named Dakota Builders, Inc. the Remodelor™ of the Year in 1998, 1999, 2000 and 2003. For more information, send him Miedema an e-mail.

"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.

The NAHB University of Housing offers CAPS, CGR, CGB and a variety of other professional designation programs and business management courses that set builders and remodelers apart from the competition.

To learn more about NAHB’s designation programs, visit www.nahb.org/designations.

For a complete list of all current education offerings, click here.

Builder’s Tip: A Simple Way to Close Off Window Openings

When the painters came to finish the windows in a huge house I was working on, one of them, Jon, used a clever method for closing off the window openings when the sashes were out.

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.

L.A. Trolley Station Becomes Award-Winning Apartments

Metro 417, the 2006 Pillars of the Industry Award winner for historic preservation/adaptive reuse. Photo by Eric Figge Photography.

Metro 417, one of the largest historic preservation/adaptive reuse projects in the history of Los Angeles County, carried off top honors in its category at NAHB Multifamily’s 2006 Pillars of the Industry Awards. The building, erected in 1925, once served as a station for the city’s fabled Red Car trolley system, and now contains 277 luxury rental apartments, averaging 763 square feet.

A block-long corridor connects Metro 417’s five towers, which cover more than 2.8 acres. While many of the historic aspects of the building were preserved and renewed, some features that had to be removed were reused elsewhere. The marble from the former public restrooms, for instance, became counter and vanity tops for the apartments. Office doors were used as doors for bedrooms. Fortunately, many of the features that couldn’t be changed also ended up being big attractions: 10-foot ceilings, 4-foot x 7-foot windows and open, spacious rooms.

The former trolley station lobby is now the building’s main lobby, complete with the marble columns and mosaic tile that convey the style and craftsmanship of the 1920s.

The application process for next year’s Pillars of the Industry Awards has begun. The deadline to apply is Dec.18.

For more information on how your project can get nationwide attention as a Pillars finalist — or even a winner — click here.

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.

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.

Early registration will also enable NAHB members to request a room in their state hotel room block. Last year, more than 105,000 housing professionals attended the builders’ show.

IBS, from Feb. 7-10 in Orlando, Fla., will feature two showcase homes for the first time ― one “new” and one “remodeled” — that reflect the challenges and advantages of the “re-gentrification” movement with in-city housing.

In addition, Ted Koppel, former anchor of ABC’s “Nightline” and a 42-year veteran of ABC News, will be the keynote speaker.

IBS also will feature more than 1,800 exhibitors, 450 of them on exhibit for the first time, and more than 200 education sessions covering every facet of the home building industry.

OSHA Inspectors See Safety Through the Eyes of a Builder

A special all-day training class recently hosted by the North Coast Building Industry Association and Ryan Homes provided OSHA inspectors in Ohio with a better idea of how home builders conduct their business.

The event is one of a series of seminars that home builders associations are conducting with the help of NAHB to keep the lines of communication open between home builders and the federal agency, which recently announced it is placing special emphasis on fall protection measures in residential construction.

The seminar gave inspectors a crash course in home building, including a field trip to a Ryan Homes job site where the inspectors saw five homes in various stages of construction.

The event took a lot of coordination and preparation, but at the end of the day, everyone went away happy — and with a lot more information about how home builders really work, said North Coast BIA Executive Officer Rocco Fana.

“We have a partnership with OSHA in our region and this looked like it would be a great opportunity to enhance that partnership,” Fana said.

Working with other Ohio HBAs to promote the seminar, Fana ended up with 18 OSHA compliance officers for eight hours of training — four in the classroom and four at the job site.

The inspectors heard an earful about the complexities of the home building process, including “the full engagement of what goes into a house being built,” Fana said, from the purchase and acquisition of the land and the development and regulatory permitting process to the steps involved in zoning, obtaining a building permit and completing the paperwork through each stage of the process. It became clearer to OSHA how confusing regulations are likely to get lost in the shuffle, Fana said, especially when the same person isn’t in charge of each process.

At the job site, the OSHA officers “were able to see a freshly dug foundation, then after the concrete was poured, then the rough-in framing, then a house that was almost complete, and then a completed home — and they were able to apply what they had heard about in the classroom to an actual site,” Fana said.

The training was also a good opportunity for Ryan Homes, which flew in staffers from its Virginia headquarters to meet with the OSHA officials. The home builders discussed recent research and development efforts and testing on safety equipment with the federal representatives. “They were able to ask particularly in-depth questions that you can’t always ask on site,” Fana said.

As OSHA increases its emphasis on fall protection, NAHB is increasing its efforts to educate the agency about the differences between residential and commercial construction. NAHB’s participation in OSHA commissions and regular meeting with headquarters staff are two examples.

NAHB expects to have a new video and training program on fall protection available in time for the International Builders’ Show.

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

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.

Indoor/Outdoor Chores Prepare Home for Winter Cold

With cold autumnal air moving in fast, the Partnership for Advancing Technology in Housing (PATH) is providing some basic suggestions for home owners to make their homes cozier and more energy-efficient this winter.

Some of the chores can be undertaken by home owners over the weekend, while others may take some outside help from a remodeler or other professionals.

Cranberry Bog Ruling Adds to Wetlands Jurisdiction Debate

The case of a Massachusetts farmer who filled 50 acres of wetlands to build a cranberry bog has been sent back to a U.S. trial court in Massachusetts, further muddying the waters for home builders after the U.S. Supreme Court’s June decision in the Rapanos and Carabell cases.

In light of the decision on the two high-profile cases, the 1st U.S. Circuit Court of Appeals ruled on Oct. 31 that the district court needs to reconsider its decision that the farmer violated the Clean Water Act when he developed land without an appropriate wetlands permit.

In United States v Johnson, the federal government sued the farmer, contending that the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency (EPA) had jurisdiction over his land because it abuts a stream that eventually flows into navigable waters of the U.S. Previously, the circuit court found that the land was under federal jurisdiction.

Last week, mirroring an argument made by NAHB in an amicus brief, the court vacated that earlier decision and ruled that more facts are needed to determine if federal jurisdiction is appropriate because questions of whether the land was next to a permanent body of continuously flowing water — Supreme Court Justice Antonin Scalia’s test for jurisdiction — or whether the stream had a “significant nexus” to navigable waters — Justice Anthony Kennedy’s test — had not been answered.

The court also agreed with NAHB that just because two bodies of water are somehow connected does not make that connection a significant nexus.

However, this latest ruling continues to leave jurisdictional questions swirling, said Duane Desiderio, NAHB’s staff vice president for legal affairs, and in the meantime, the EPA continues to drag its feet on clarifying where it has wetlands jurisdiction, leaving many builders and developers in limbo as local regulators await word from the federal regulators.

“There is now a very clear split in the circuit courts on which test governs,” Desiderio said. “The 1st Court now says that both Scalia and Kennedy’s opinions must be considered. The 7th and 9th Circuits have ruled that Kennedy’s ‘significant nexus’ case controls, while a trial court in Texas has ruled that Scalia controls.”

Even in the Johnson case, the three-member circuit court was not unanimous, with a dissenting opinion from Judge Juan Torruella “throwing another potential monkey wrench into the pot,” Desiderio said. Scalia’s narrow test of what is covered under the Clean Water Act — wetlands next to a relatively permanent body of water and that is also continuously connected to navigable waters — “strikes a constitutional balance between federal and state regulatory interests, and our nation’s interest in clean water and the individual land owner’s right to manage their property in accordance with their dreams and aspirations, whether economic or otherwise,” Torruella said.

The good news is that the accumulating judicial opinions are moving the regulators away from the old, widely-accepted “hydrological connection test” they used as a basis for asserting jurisdiction over a piece of land.

“To most builders, this must seem like a painfully slow process, with a lot of wrangling over obscure wording and definitions,” Desiderio said. “But what our members need to take away from this series of cases is that the test for determining what makes a piece of land jurisdictional under the Clean Water Act is eventually going to become clearer. That’s what we’re working toward. Builders want to know what the rules are and they want to see them consistently applied. It’s hard to see right now, but this case moves the ball that much forward.”

Vincent Mosca, a senior ecologist with Hey and Associates Inc. in Volo, Ill., said that he is looking forward to clearer direction from regulators. His firm was involved in one exceptional case where wetlands on one side of a fence row were considered jurisdictional under the Clean Water Act and the land on the other side was not.

“Rapanos, Scalia, Kennedy — these aren’t daily words in our mouths. We’re looking at what the maps show, what the U.S. [Geological Survey] says, we look at the way things have been done and that generally guides what happens around here, but there’s uncertainty on all sides, and that makes it ripe for indecision,” Mosca said. “We are curious as to what kind of guidance will come down from on high,” he said, but “as long as it’s consistent and verifiable, we don’t care.”

“My clients are trying to get us to tell us what to do and what the rules are — I would be glad to see some resolution of these matters coming down,” said James A. Schmid of Schmidt & Co., consulting ecologists in Media, Pa. “There is uncertainty given the Supreme Court’s ruling,” because it is hard to decide on what constitutes a significant nexus, he said. “Once there are enough cases that establish this, and the rules are clear, then everybody will proceed accordingly.”

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

Settlement Proposed for Steel Tubing Lawsuit

Builders may receive questions from home owners about a proposed settlement of a class action lawsuit involving corrugated stainless steel tubing (CSST) that has been used in residential, commercial and industrial buildings after Sept. 5, 2006. The tubing is used to transmit gas.

According to the plaintiffs in the case, tubing manufactured by Titeflex, Ward, OmegaFlex or Parker Hannifin poses an unreasonable risk of fire from lightning strikes. The tubing in question is stamped with one of the manufacturers’ marks.

CSST is a continuous, flexible, stainless steel pipe that typically is covered with a yellow plastic coating. It is usually installed along floor joists, above basements, in attic spaces or connected to exposed appliances such as water heaters.

The suit alleges that the tubing is not thick enough to prevent damage in the event of a lightning strike and that the manufacturers have failed to warn consumers about this alleged danger.

Under the proposed settlement, those who qualify ― which includes home owners ― will receive payment vouchers of between $200 and $2,000 to defray the cost of buying and installing a lightning protection system, or between $75 and $160 to install a bonding and grounding system.

Participants who plan to make a claim must submit a claim form to the CSST Settlement Administrator by Sept. 5, 2007.

A hearing to determine whether the proposed settlement is fair, reasonable and adequate will be held in the Circuit Court of Clark County, Ark. on Feb. 1.

For more information, visit www.csstsettlement.com, call the CSST Settlement Administrator at 800-420-2916, or write the administrator at P.O. Box 4349; Portland, Ore. 97208-4349.

Apply for 2006 Workforce Housing Awards by Nov. 17

NAHB is accepting entries for the Innovations in Workforce Housing Awards (IWHA), which recognize outstanding examples of communities across the nation that provide decent and affordable homes for nurses, police officers, schoolteachers, retail workers and others near areas in which they work.

The awards serve to increase awareness of the workforce housing challenge and the ground-breaking solutions implemented by the housing industry, while encouraging builders, developers and related professionals to incorporate such innovative solutions into their own projects.

“These awards bring national attention to the workforce housing problem and to the creative ways in which builders and developers are increasing the supply of housing that is affordable to working families,” said NAHB President David Pressly.

IWHA is open to builders, architects, designers, developers and land planners nationwide. Communities that have been completed, or in which the first model has been opened or the first unit has been occupied between Jan. 1, 2004 and Oct. 27, 2006, are eligible to enter.

Winning entries will be selected by a panel of builders, multifamily and land development experts and other industry professionals. Winners will be announced at the 2007 International Builders’ Show in Orlando, Fla. in February.

Winners will receive a glass award and award logo to use in marketing materials. They also will be featured in a press release and in articles in Nation's Building News Online and other NAHB member publications.

For more information on the awards, click here; or e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.

HBI, Louisiana Tech Schools Help to Rebuild New Orleans

Despite large-scale Hurricane Katrina rebuilding efforts in New Orleans, led by countless organizations and people donating time and resources, the city faces major obstacles in restoring its housing and employment base, largely because of shortages of skilled labor.

Training began last month at the Louisiana Technical College’s Hammond Area campus, using the industry-sponsored curriculum provided by HBI’s Residential Construction Academy (RCA) Series. With funding from the Department of Labor’s Pathways to Construction Employment program, LTC — Hammond will train 240 skilled workers by the end of June.

Three area home builders associations — the Louisiana HBA, the HBA of Greater New Orleans and the Tangipahoa HBA — have partnered with the college system and HBI to offer their expertise and resources to the training program.

With assistance from its partners, LTC – Hammond has adapted its established curriculum to focus on the area’s growing need for residential construction skills. Volunteers of America, along with several other local social service agencies, is working hard to identify people who are looking for this specialized training.

The first group of 34 students is spending 30 hours a week in the classroom. As the training progresses, they will apply their skills outside the classroom through participation in community service projects.

“Hammond is excited to be credentialed by HBI and NAHB as a residential construction training institution,” said John Flood, head of the Building Trades Department at LTC – Hammond. “The need for skilled workers in the home building sector has become extremely high and we’ve attracted a great mix of students. The students here range from 18 to 49, high school grads to displaced workers. We are just trying to build or rebuild careers and help the people of Louisiana.”

Another school in the LCTCS system — the River Parishes campus in Reserve — will also be training students to assist in the Katrina rebuilding efforts. Its program is funded by a $60,000 donation from the NAHB Home Building Industry Disaster Relief Fund and a Pathways to Construction Employment grant.

Thomson Delmar Learning, publisher of the RCA Series, created a customized curriculum that is tailored to the needs of the Greater New Orleans area.

Opening its doors in January, the River Parishes program will provide intensive training over a four-week period in three critical elements of residential construction: framing, roofing and drywall.

“For the past several years, high schools had gone away from directing students toward skilled trades, but now the demand is so huge that the New Orleans Chamber of Commerce is encouraging schools to retool their curriculum to teach students the home building skills,” said Randy Noel, NAHB's state representative for Louisiana. “The career possibilities for students in the New Orleans area are amazing; many entry-level workers are earning $20 an hour and have the opportunity to someday own their own business.”

For more information on HBI’s programs with LCTCS, e-mail Steve Kramer or call him at 800-795-7955 x8925. Click here to visit HBI’s Katrina relief Web page.

Viking Microwaves Now Come in a Rainbow of Colors

With consumer trends pointing in the direction of wider and brighter color palettes in the kitchen, Viking Range Corporation is now offering its microwave and convection microwaves in the 14 color finishes available in its Professional Series product line.

Viking says that it is the only manufacturer to offer such color options for its microwave oven line.

“By adding so many color options to our microwave line, Viking enables home owners to incorporate a microwave oven into their kitchen seamlessly, regardless of appliance color choice,” said Sue Bailey, the company’s manager of product development, major appliances.

Professional Series color choices include stainless steel, black, white, almond, biscuit, stone gray, graphite gray, burgundy, lemonade, mint julep, forest green, Viking blue, cobalt blue and eggplant. The Designer Series color choice is stainless steel.

From the design front, Nancy Kebschull, a member of the Color Marketing Group and visuals coordinator for Reico Kitchen & Bath, advises choosing three colors for a room: a dominant color for walls, floor covering and fabric background; a secondary color in fabrics and accessories; and an accent color that’s used sparingly.

The latest design information from Viking is available from the manufacturer’s quarterly publication, “The Edge.”

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 Week

The NAHB Production Group produces three weekly television shows on HGTV and DIY for consumers. The following is the latest lineup:

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.

Webcast Seminar Featuring Centex CEO Draws 4,000


	Timothy Eller, chairman and CEO at Centex Corporation, participated in the first of a series of construction management Webcasts.

A construction management Webcast last month featuring Timothy Eller, chairman and CEO of Centex Corporation, drew almost 4,000 students, faculty and industry representatives from across the country, including many construction management faculty who used the 50-minute seminar in their classrooms.

The Webcast was the first in the "The Building Communities Webcast Seminar Series on Residential Construction Management." The series is sponsored by the National Housing Endowment, the philanthropic arm of NAHB, in partnership with East Carolina University (ECU).

Participants submitted more than 350 questions on topics ranging from current housing market conditions and market competition hiring to innovation in the building industry, green building, affordable housing, general career advice and more.

“This Webcast seminar was a real coup for the National Housing Endowment,” said Webcast moderator Mark Tipton, an endowment trustee and the 1991 NAHB president. “My fellow trustees and I are excited about the impact the Webcast will have on students considering a career in residential construction and know that the impact will extend beyond this one event because the Webcast will be available in the seminar series archive.”

The seminar series targets future leaders of the home building industry and is open to students and professors in construction management, science and technology programs as well as NAHB Student Chapter members and NAHB members.

“We are especially thankful to Tim Eller for taking time out of his schedule to participate in this event,” Tipton said. “It was a once-in-a- lifetime opportunity for the students to ask questions from a housing leader and hear about the future of this industry.”

The endowment is providing a $20,000 grant to fund the production and promotion costs for two seminars.

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.

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.

Winchester Homes Honored for '25 Acts of Charity'

Employees, contractors and suppliers at Winchester Homes in Maryand renovated two Baltimore row houses for Martha's Place, a women's drug rehabilitation program. The renovation was part of the builder's "25 Acts of Charity" program.

The deadline for the Builder Achievement Award for Outstanding Service has been extended to Dec. 1. Following is a story about last year's silver 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.

Winchester Homes, a medium-sized builder based in Bethesda, Md., was honored by the National Housing Endowment — the philanthropic arm of NAHB — for its “25 Acts of Charity” program that encourages employees to donate their time and labor to selected charitable activities.

Winchester Homes was awarded the 2005 Silver National Housing Endowment Builder Achievement Award for Outstanding Community Service Award — which includes a $5,000 donation to be directed to the charity of its choice — during the International Builders’ Show in Orlando, Fla. in January.

Winchester Homes directed its award donation to Martha’s Place, an all-women drug rehabilitation wellness program in Baltimore.

“Professionally, working on this project has been one of the proudest moments in my career,” said Vince Mendel, division sales manager for the builder and co-chairman of its 25 Acts of Charity program. “It was an awesome example of how a few people working together and pooling their resources can really make a significant difference. Being honored for this work is just the icing on the cake.”

Winchester Homes started the charitable program last year in celebration of the company's 25 years in business. Under the program, Winchester Homes employees and their contractors and suppliers are encouraged to help and participate in at least one of 25 selected charitable activities. More than 55 Winchester employees and more than 100 of the company’s subcontractors and suppliers participated in the program.

At the heart of 25 Acts of Charity program was Winchester’s support of Martha’s Place. Initially, the builder provided the organization with meals and guest speakers who provided encouragement and life skills coaching to Martha’s Place clients — including checkbook balancing, what to wear on a job interview and other tasks that would help the women in their daily lives.

That commitment grew to include the renovation of two dilapidated row houses that Martha’s Place had acquired with hopes to eventually convert then into long-term rental space for its clients. Upon learning of this need, a team of Winchester employees led the fundraising and renovation efforts and donated more than 800 hours to the effort. Martha’s Place opened its new facilities on Nov. 18.

“The National Housing Endowment is proud to honor the tremendous charity of Winchester Homes,” said Gary Garczynski, chairman of the endowment. “Their 25 Acts of Charity Program serves as a source of inspiration to our members and our industry. With the new Builder Achievement Award, we can highlight the often overlooked support and leadership home builders such as Winchester contribute to community service endeavors.”

The National Housing Endowment Builder Achievement Award for Outstanding Community Service program was begun last year to honor NAHB builders, developers and remodelers for their philanthropic programs. Winners were chosen in the gold, silver, bronze and honorable mention categories.

Seven other builders were honored with Builder Achievement awards during the presentation at the builders' show.

The awards were established through a grant to the endowment by Isaac Heimbinder, vice chairman, president and COO of Kimball Hill Homes, based in Houston.

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