Print-All Page: February 19, 2007

It’s only a matter of time before housing begins to recover from its first major downturn in about 15 years, industry economists said two weeks ago at the International Builders’ Show in Orlando, Fla., and fundamental improvements in the marketplace could already be taking hold by this year’s second quarter.

“We knew we were in a correction process a year ago, and it was an inevitable occurrence” following the unsustainable boom years of 2004 and 2005 when stimulative financing conditions and speculation from escalating home prices resulted in a “grossly overheating market,” said NAHB Chief Economist David Seiders. Indeed, “the downward movements in sales and starts were even deeper in 2006 than expected.”

Total housing starts dropped 12.3% last year, to 1.819 million units, and single-family production was down 14% to 1.478 million homes. Even though Seiders said that he expects starts to begin a “gradual recovery” following further erosion during this year’s first quarter, total housing production for 2007 is projected to slip a further 14.2% to 1.560 million and single-family starts for the year are expected to decline 15% to 1.256 million.

“We lopped the top off the mountain,” he said, and housing starts for 2007 will be back to the levels seen early this decade.

New single-family home sales were down 16.4% in 2006 but apparently stabilized by the end of the year. Sales are projected by NAHB to decline only 1.3% in 2007 as activity rises gradually during the year.

Supporting an upward turn in new home sales, Seiders said, is today’s “Goldilocks economy,” which appears poised to sustain healthy levels of growth in Gross Domestic Product, jobs and income while core inflation recedes from levels that have been worrisome for the Federal Reserve Board. “The interest rate structure should be supportive of housing throughout this year,” he said.

While housing should be moving up before long, Seiders cautioned that it will be a couple of years before the industry reaches the 2 million annual construction pace (including 150,000 manufactured homes) that is sustainable over the long haul, the result of serious overbuilding during 2004 to 2005.

Agreeing that the housing market probably has seen the worst of the current slump in starts and sales, David Berson, chief economist of Fannie Mae, and Frank Nothaft, chief economist of Freddie Mac, said that they don’t expect to see the beginning of an upturn materialize until a quarter or two behind Seiders’ forecast, with gradual improvement likely in this year’s second half.

The housing affordability woes that reduced housing demand last year now seem to be bottoming out as incomes rise, home prices moderate and mortgage interest rates remain at favorable levels, said Berson, and he further noted that housing demand won’t be a negative for the industry this year, and could be a small positive.

However, how quickly conditions stabilize will depend on how quickly investors pull out of the market, he said. Although investor demand for housing peaked in early 2006, “it didn’t fall that much last year and is still relatively high.” The housing decline will be centered on those areas where investor activity was high, he added.

Berson calculated that the market was overbuilt by 600,000 to 650,000 units over the three-year duration of the boom, and the current inventory overhang of unsold homes — higher than actually reported because cancelled sales are not included in those numbers — is causing price weakness.

Housing prices were down in last year’s fourth quarter, though still up for the entire year but not by the double digits that were typical during the boom, Berson said. Price declines have started showing up in a growing number of places, including Boston, California and Northern Virginia, he said, and he predicted that the OFHEO Home Price Index is likely to show a decline in housing prices in 2007 for the first time in its 32-year history. He said that a decline of about 1% for the year was possible.

When adjusted for inflation, housing price gains will likely be on the negative side for the next couple of years, he forecast.

“We have to run through the inventory for prices to stabilize,” he said. In December, “it was not good news that starts were up and we need a period of time of sales exceeding starts.”

“There is still a bit of a rocky road and bumps ahead of us,” said Nothaft, but builders “are seeing some light at the end of the tunnel.” High housing prices have become the decisive factor behind the slowdown, he said, and “it will take time for affordability to improve.”

Nothaft added that national data have obscured local trends and there are some markets where home sales and price appreciation are “holding up well,” particularly in much of the South. On the other hand, some markets — such as California, Florida and Massachusetts — have seen their business erode by 30%.

While single-family activity will improve as the year progresses and into 2008, “we won’t see a recovery in areas where the local economy is in recession,” Nothaft said, such as Detroit and parts of the Midwest.

In the multifamily sector, he said, condo sales are “way down,” but the apartment rental market is doing well, with rents on the rise and vacancy levels tightening.

One area to be watched, Nothaft indicated, is the rising number of mortgages entering foreclosure, driven largely by sub-prime loans. Half of the loans going into foreclosure in the fourth quarter of 2006 were sub-prime, which account for only 14% of all loans outstanding.

While sub-prime loans play a constructive role in “providing credit to consumers who wouldn’t be able to be home owners otherwise,” said Nothaft, the “underwriting of sub-prime loans may have deteriorated, raising concerns for the coming year.”

There were 200,000 loans entering foreclosure during the third quarter of 2006, he said, although research by Freddie Mac has shown that only 30% of their prime loans in foreclosure actually go all the way back to the bank.

Nothaft predicted that the 30-year, fixed-rate mortgage would average 6.4% for the year, and the housing analysts expect the Fed to hold its federal funds rate at the current 5.25% for some time, with the chance of a move to ease slightly toward year’s end.

For background materials on the presentations by the three housing economists, click here.

Grants Available to Local HBAs for ‘Buy-Now’ Campaigns

In an effort to bolster home sales in markets hit hard by the current housing downturn, NAHB has launched a multi-million dollar grant program to assist local home builders associations in conducting “buy now” advertising campaigns.

“This represents a major effort by NAHB to reach out and help our local HBAs that are struggling to rebuild consumer confidence in markets where home sales and production have dropped significantly over the past year,” said NAHB President Brian Catalde.

Approved during NAHB’s recent board of directors meeting in Orlando, Fla., the “buy now” ad assistance program will provide grants to qualifying HBAs in three different categories:

To qualify for grants, the ads must deliver a “buy now” message, be placed in 2007 and conducted in markets that have experienced a major decline in home sales and housing production.

A total of $3 million was approved by the NAHB board. NAHB will evaluate the effectiveness of the program after the first $1 million in grants is put to work by local associations. If it is determined that the local ad campaigns have been successful, then the remaining $2 million will be made available in grants to qualifying HBAs.

To learn more about the program and the ground-rules for applying for grants, click here (nahb.org/buynowapplication), or call Niki Clark at 800-368-5242 x806l.

Big Builders Prepare for an Acquisition ‘Feeding Frenzy’

The current housing slump has brought consolidation in the residential construction industry to a screeching halt, but the top 10 public builders in the nation are preparing themselves now for the next round of mergers and acquisitions, maybe even a “feeding frenzy,” when the markets return to normal over the next couple of years, according to housing analysts at the recent International Builders’ Show in Orlando, Fla.

“The buyers are looking at candidates this year,” said Jody Kahn Klein of Michael Kahn & Associates in Pointe Vedra Beach, Fla. At the present time, however, they are “putting out fires and liquidating so that they will be in a good position to get those companies and better-priced land.”

Buyers are going back to a popular paradigm of the mid-1990s to structure their deals, said Michael Kahn, recapitalizing the company and allowing the seller to grow the business over a typical five-year period.

The seller receives a share of the profits that drops each year, starting out at perhaps 20% to 25% in the first year and declining to 5% in the final year of the deal, he said, but the actual dollar amount of the compensation can be the highest towards the end if the business has grown substantially.

Companies that have been building in the range of 800 to 1,000 homes a year “will see a lot of suitors,” said Klein. And big builders will be “paying attention to markets that are somewhat hurting” in an attempt to find opportunities for “contrarian moves.” For example, “Lennar uses down cycles to buy up lots,” she said. “That’s how they entered Texas and California.”

Buyers don’t have much interest in builders below the 200 to 300 unit annual production range, she said, and are looking for companies with a three-year inventory of lots and land.

Klein suggested that there are a number of things builders can do to make themselves attractive candidates for acquisition:

Although the nation’s overall housing market will continue to be composed of a large number of small companies, “the market share of the top 10 builders will continue to grow,” said Gopal Ahluwalia, NAHB’s senior vice president for research.

In 2005, three big builders had at least a 3% share of the market in terms of closings, he said: D.R. Horton, Pulte Homes and Lennar Corporation. In 1992, the nation’s top builder produced only 1% of the nation’s homes.

The combined market share of the top 10 builders exceeded 20% in 2005, and the share of the top 100 builders was about 40%. From 1995 to 2005, the top 10 builders increased their closings by more than 333%.

A merger or two among the top five builders could even create a mega-builder with the capacity to build 100,000 units a year, he said.

However, growth prospects don’t look that favorable for the next tier of builders who are ranked from 21 to 100, he said. Their market share has not been growing.

Ahluwalila noted that the big builders are diversifying geographically to insulate themselves from regional industry declines and also diversifying their product, which originally was concentrated on the market for first-time buyers.

California has been the most profitable state for the big builders, said Ahluwalia, based on numbers from Credit Suisse showing a comparison of the percentage of units they delivered in that state with the state’s contribution to their after-tax profits. For example, D.R. Horton in 2005 delivered 16% of its homes in California, but sales on those homes accounted for 37% of the company’s profits. Texas, by comparison, accounted for only 9% of profits even though one-fourth of the company’s homes were built there.

With the exception of NVR Inc., which didn’t build in California and counted on Virginia for more than half of its profits on 30% of its deliveries, the ratio of units delivered to profits in the Golden State was similar for the rest of the top 10 builders: 13% vs. 26% for Pulte; 23% vs. 43% for Lennar; 14% vs. 35% at Centex; 21% vs. 48% for KB Home; 14% vs. 28% for Beazer Homes; 25% vs. 38% for Hovnanian; 10% vs. 22% for Ryland; and 14% vs. 22% for MDC Holdings.

The big builders are having an impact on the distribution of building materials, Ahluwalia added, as they increasingly buy directly from producers. Some are storing these materials in regional warehouses so that they can be supplied quickly, cutting their cycle time. Some are also assembling framing and components. “Their long-run objective is to buy in volume and warehouse it,” he said.

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Wanted: Home Builders for the Moon

Two months ago, NASA announced the broad outlines of its plan for an eventual lunar outpost on the moon built on the rim of a crater near one of the moon’s poles where there would be sunlight and Earth could be seen year-round. The outpost would serve as a base for lunar research and Mars exploration, and some envision an eventual platform for luxury hotels, astronomical observatories and helium-3 mining operations. NASA and its corporate partners are already building prototypes to test some unorthodox ideas, such as inflatable habitats. The metal-hulled modules used on the international space station typically weigh 30,000 pounds, which would be too heavy for moonships that are currently being planned to have a maximum payload capacity of only 13,000 pounds. Inflatable modules could get around that limitation. David Cadogan, research director at ILC Dover, said the modules would be compressed to fit a smaller space on NASA’s smaller spaceships, dropped off on the moon, and only then filled with air, equipment and all the comforts of a lunar home. Bigelow Aerospace already has lofted one inflatable test module into orbit and is gearing up to launch another one in April. Prototypes will be tested in Antarctica and other extreme environments on Earth. Twin giants of America’s space industry, The Boeing Co. and Lockheed Martin, are involved in planning efforts to start building a permanent moon base in 2010, but less conventional players include Illinois-based Caterpillar and allied companies that have been advising NASA on the dynamics of dirt and the challenges of moving heavy equipment over the lunar surface. (www.msnbc.com)
MSNBC.com (2/1/07); Alan Boyle

Beyond Moscow, Dachas Make Way for Suburbia

A wave of homesteaders is transforming the forested environs outside Moscow’s city limits into the beginnings of suburbia, with billboards across the city advertising developments with names such as Navaho, Monaco, Chelsea, Sherwood and Barvika Hills. The super-rich who trekked out of the city first are now being followed by members of a rising middle class seeking cheaper housing in a cleaner environment. Helping fuel the trend is a real-estate boom that is driving up prices in the city by about 30% a year. New but bare and unpainted apartments in Moscow now start at about $250 a square foot, compared to about $100 in the suburbs. Detached single-family homes outside Moscow range from $500,000 to the tens of millions of dollars in the most exclusive neighborhoods, but to cater to the middle class, more modest townhouse developments have begun to appear in the past couple of years, with starting prices of around $300,000. Mortgage lending has grown to $6 billion annually, up from about $1 billion when Russian banks first started offering mortgages three years ago, according to government figures. The government has been pushing banks to lower mortgage interest rates, which currently stand at 11%. (www.washingtonpost.com)
Washington Post (2/14/07); Peter Finn

The Incredible Shrinking Downpayment

From mid-2005 to mid-2006, according to a statistical sampling of a representative group of 7,548 home purchasers, nearly half of all first-time buyers financed the entire transaction, obtaining mortgages in the full amount of the home price. Another 30% put down 10% or less, and 20% put down 5% or less. The research was conducted by the National Association of Realtors®, using information on home transactions supplied by Experian, a major credit and realty data firm. The median downpayment of first-time buyers, according to the study, was just 2%. The highest loan-to-value ratios for first-time buyers were in the South, where the median mortgage amount was 100% of the sale price, followed by 99% in the West, 98% in the Midwest and 96% in the Northeast. A typical repeat home buyer nationwide invested a median 16% as a downpayment to purchase a replacement home, usually from the proceeds of a prior sale, and financed the remaining 84%. Besides high prices, a key reason for the relatively high levels of leverage being used by both first-time and repeat buyers has been the explosion of low-downpayment options by mortgage lenders and insurers in recent years. The unknown about minimal downpayment loans is how they perform in flat or depreciating market conditions. (www.washingtonpost.com)
Washington Post (2/10/07); Kenneth R. Harney

Home Shoppers Do Their Hunting Online

About 80% of home buyers use the Internet to find a home, according to the National Association of Realtors®, and unless the nation’s 900 regional multiple listing services become more open, unified and technologically sophisticated, they risk being replaced by a Web search engine. In just the past few months, the Internet has been leveling the playing field and prodding the industry to adapt faster. Zillow.com, which created a stir last year by posting its estimated values of millions of homes across the country, has started showing homes for sale. In the past two months, nearly 32,000 people have listed their homes for sale. Trulia.com is asking real estate agents to post homes for sale and has introduced “heat maps,” showing the price and popularity of sales by state, county and neighborhood. Google.com is trolling for real estate agent listings for its classified-ads system, Google Base, and the Houston Association of Realtors® announced in December it would put all of its listings on Google. By the end of the month, from the national database of apartments.com, customers with cellphones with GPS technology can see a list of the 70 closest apartments from where they are standing. (www.usatoday.com)
USA Today (2/9/07); Noelle Knox

Ten Home Products That Are Turning Heads in 2007

Advanced technology and everyday practicality played a role in many of the eye-catching home products on display in the exhibition halls at the International Builders’ Show in Orlando. A swipe of a finger opens the Kwikset biometric scanning deadbolt displayed at the show. The fingerprints of 50 users can be stored in the device that operates on four double-A batteries and will sell for about $200. TurboChef displayed a $7,495 Speedcook oven that will cook a 12-pound turkey in 42 minutes instead of four hours, and will shave an hour off the time it takes to bake an apple-cranberry pie. Taking instructions over the Internet, the Connect IO Intelligent Oven from TMIO is so smart it can keep your roast cool all morning and then cook it to perfection once you tell it to start from work or wherever. Kohler’s DTV Custom Showering Experience allows home owners to personalize their shower through a panel that resembles an iPod mounted on the bathroom wall. Home owners can angle numerous shower heads and adjust the temperature to their liking, and then save the scheme for future showers. Two new clothes washers from Amana feature antimicrobial component protection that resists mold, mildew and odor-causing bacteria. (www.downjones.com)
Dow Jones Business News (2/16/07); Amy Hoak

A Streamlined Approach: New Products Aim to Save Space, Sanity

Going beyond the closet organization systems popularized in recent years, the 2007 International Builders’ Show found some manufacturers reexamining the toilet, the microwave and even the fireplace for ways to make them less bulky, more hidden and more pleasing to the eye. Learning that 80% of people have no designated place to perform basic laundry tasks, Whirlpool has created the Laundry 123 tower, a vertical metal box that can be placed beside or between the washer and dryer. It contains two oversize drawers for detergent and bleach and a shallow supply tray for holding dryer sheets and other small items. In some models, a retractable 10-inch rod pops out above the tray for hanging clothes. Inspired by the plasma TV, the Radium by Lennox is a ventless gas fireplace enclosed in a floating glass surface that hangs against a wall. The unit protrudes roughly 7 inches from the wall and is about 35 inches wide and 27 inches tall. Instead of a chimney venting to the outside, it uses a catalytic converter to clean the hot air as it leaves the top of the fireplace from the combustion chamber. Kohler’s C3 (cleanliness, comfort and convenience) toilet seats are being offered with built-in bidets that pulsate water in three temperature and pressure settings. A soft blue light illuminates the bowl at night. In some models, the settings are chosen via remote control or a panel on the side of the seat. Kohler’s Transitions seat allows adults and toddlers to use the same toilet without the hassle of adding or removing a separate “child-friendly” insert with each use. The seat fits elongated bowls. The smaller children’s ring is nestled into the regular adult ring. An adult can just lift the children’s ring and the lid lifts with it. (www.washingtponpost.com)
Washington Post (2/17/07); Dina ElBoghdady

Dodd Supports Work Opportunity for Immigrants

Sen. Christopher Dodd (D-Conn.) told the NAHB leadership on Feb. 9 that he hopes the Senate will approve a comprehensive immigration package by the end of the summer.

Speaking before the NAHB Board of Directors at its winter meeting in Orlando, Fla., Dodd said that Congress needs to enact a strong immigration policy that will provide an opportunity for immigrants to legally enter the country to work and also institute border security reforms.

“This is a big issue that we need to address,” said Dodd, who recently announced that he is a Democratic candidate for the 2008 presidential election.

Stating that it is critically important for the nation to have a vibrant housing market and homeownership rate, Dodd outlined four areas he wants to focus on as chairman of the Senate Banking Committee.

First, the senator said he wants more Americans to have access to capital in order to help local communities to grow and thrive.

Providing an opportunity to bring more people into the mainstream to deal with their financial needs will help to plow money back into communities, he added.

“I want to provide incentives for those who wish to invest in local communities,” said Dodd. “Nothing does more for a family than providing a decent job.”

Predatory lending is another area that will draw the attention of the Senate Banking Committee during the 110th Congress.

“Sub-prime lending is a good thing and I don’t want to confuse that with predatory lending,” said Dodd. “There’s a big difference.”

Acknowledging that he has no quick answer to solve the problem, Dodd said that he is hopeful that federal regulators will set guidelines for brokers who market these financial products.

The senator also told board members that he will be seeking a renewed commitment for several housing programs, including Hope VI, elderly housing and community development block grants.

Finally, he said that he will seek to introduce legislation that will rebuild the nation’s infrastructure in order to help the economy to continue to grow.

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

Jackson Says President Committed to Increasing Homeownership

Declaring a positive outlook for the housing sector, HUD Secretary Alphonso Jackson on Feb. 8 told NAHB board members in Orlando, Fla. that the “housing market is undergoing a correction and will return to its healthy level.”

Jackson said that the housing sector is still fundamentally strong, noting that income levels are growing, job growth is solid and mortgage interest rates remain near historical lows.

Commenting on housing starts, sales and permits, Jackson said that 2006 still ranks among the six best years in the history of the nation.

Stating that the nation’s home builders have “the full support of President Bush and myself,” Jackson said that the $35.2 billion fiscal 2008 budget for HUD released by the Administration this month reaffirms the “President’s commitment to increase homeownership, particularly among minorities.”

The budget request represents a $1.6 billion, or 4.5% increase, over the Administration’s request for fiscal 2007.

Further elaborating, Jackson said that the FHA has helped more than 34 million Americans to buy a home since its inception in 1930. “Modernizing the FHA would give HUD the tools it needs to offer hard-working, credit-worthy borrowers the opportunity to obtain financing at a cost they can afford,” he said. “American home buyers need FHA. Legislation to modernize it is critical.”

Proclaiming that home builders help lift families into the middle class, Jackson concluded his remarks by saying that he “looks forward to continuing our partnership. You are the builders of the American dream. If you lose the dream you lose everything. Please help me keep the dream alive for all Americans.”

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

Builders Focusing on Energy Efficiency, Congress Told

Alaska home builder Jack Hebert told Congress on Feb. 13 that the housing industry is committed to implementing green building techniques that reduce energy consumption in both new and existing homes, improve indoor and outdoor air quality and conserve water and natural resources.

Hebert, who serves as an NAHB national representative, said that the nation’s home builders support green building and energy efficiency legislation that is voluntary, market-driven and cost-effective for builders and consumers.

Recognizing that approaches to green building need to distinguish among the regional differences around the U.S., NAHB in 2005 launched its Model Green Home Building Guidelines as an alternative to green building mandates. The guidelines were developed with input from more than 60 industry stakeholders — including builders, researchers, manufacturers, environmentalists and government agencies.

“The guidelines embody the flexibility that builders need to achieve efficiency and conservation goals without meeting costly national or statewide mandates,” said Hebert.

Local adoption of the guidelines allows builders to better address regional and local environmental concerns, to assess life-cycle costs based on local building codes and climate zones, and to encourage innovation to meet higher and broader energy efficiency objectives.

“Simply, there is no one size fits all green building standard,” said Hebert. “Alaska, North Dakota, Florida and Maine all have different efficiency needs and requirements based on their climate. Solar panels don’t work in Fairbanks like they do in Miami. Only flexible, locally grown green building programs can adequately take local issues, architecture, weather and geographic differences into account.”

Stating that the U.S. Green Building Council’s "Leadership in Energy Efficient Design" certification pilot program for single-family homes (LEED-H) would have a drastic effect on the affordability of housing, Hebert noted that this program is “costly, requires many unnecessary mandatory provisions, offers little flexibility and contains extensive implementation fees that could cost a builder, and ultimately the home buyer, from $12,000 to $15,000 extra per home.”

NAHB has submitted its guidelines to the American National Standards Institute's development process, with the goal of offering local jurisdictions an “off-the-shelf” green building program that is consensus-based and truly green, but flexible, he said.

Extending and expanding the tax incentives in the Energy Policy Act of 2005 would also help encourage energy efficiency in housing, he said.

“Unlike spending programs or one-size-fits-all rules, tax provisions allow market participants — builders, home owners and home buyers — to marry the energy incentives with market-determined supply and demand,” said Hebert.

For more information, e-mail Elizabeth Odina at NAHB, or call her at 800-368-5242 x8570.

With Unsold Homes to Sell, Builders Slow January Starts

Housing starts slipped 14.3% in January to a seasonally adjusted annual rate of 1.408 million units, the Commerce Department reported on Friday, which was 37.8% below the pace of a year earlier as builders continued to focus on working down their inventories of unsold homes.

"Builders are doing what they should be doing in the market today," said NAHB President Brian Catalde. "NAHB's surveys of single-family builders have been showing a steady increase in confidence regarding the demand side of the market since last fall, and with sales for new homes stabilizing, builders are working to control their inventories and position themselves for the upcoming spring buying season."

"Home sales apparently stabilized late last year, but the overhang of unsold housing inventory still is quite heavy," said NAHB Chief Economist David Seiders. "Builders have been cutting back on starts of new units to bring supply and demand back into balance."

"We expect housing starts to bottom out in the first quarter of this year before embarking on a gradual recovery path," Seiders said.

Single-family housing starts decreased 11.2% to a seasonally adjusted annual rate of 1.108 million units in January, 38.9% below their year-earlier rate.

Following a 34.4% surge in December, multifamily housing construction fell 24.1% in January to a seasonally adjusted annual rate of 300,000 units.

Permits slowed 2.8% in January to an annual rate of 1.568 million units, which was down 28.6% from a year earlier. Single-family permits were off by 4.0% at a yearly pace of 1.21 million, down 32.6% from January 2006; and multifamily permits were down 0.4% to a 447,000 annual rate, 15.8% below a year earlier.

January’s housing starts decreased 28.5% in the West, 15.2% in the Midwest and 11.8% in the South. They were up 9.9% in the Northeast, with a boost from unseasonably warm winter weather. All four regions, however, reported a construction pace well below a year earlier.

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

With the current cooling of the nation’s housing market expected to persist into the middle of the 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.

Builders Gain Confidence in Prospects for Home Sales

Builder confidence in the housing marketplace has continued to rise this month, according to the NAHB/Wells Fargo Housing Market Index (HMI), which registered 40 for February, up from 35 in January and a low of 30 last September. The index now stands at its highest level since June 2006.

"Builders are still cautious as they continue to manage their inventory, but their view of the demand side of the single-family market is improving," said NAHB President Brian Catalde. "Every component of the February HMI — present home sales, sales expectations for the next six months and buyer traffic — showed a significant positive uptick in February."

Lower energy prices, favorable mortgage rates and solid growth in employment and household income have all contributed to the recent stabilization of home buyer demand, Seiders added. "In addition, builders continue to offer substantial sales incentives to move their product and limit cancellations, which has helped to firm up buyer demand."

The HMI is derived from a monthly survey that NAHB has been conducting for 20 years. Any index number over 50 indicates that more builders view sales conditions as good than poor.

On this month’s HMI, the component gauging single-family home sales rose six points to 42; traffic of prospective buyers increased five points to 31; and sales expectations for the next six months climbed seven points to 55. This is the first time that sales expectations have gone beyond the 50 threshold since last June.

"Builders are becoming increasingly convinced that the abrupt downslide in home sales is in their rear view mirrors and they see better times as they look at the road ahead," said Seiders.

February’s HMI rose in all four regions of the country, with the Northeast gaining the most ground with an eight-point increase to 46. Five-point gains were registered in the Midwest and South, to 29 and 46, respectively, while the West moved up two points to 35.

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

Hard-Line Critics Would Damage GSEs, Says Freddie Mac CEO

Tighter oversight of the nation’s government-sponsored enterprises is needed, but critics of Fannie Mae and Freddie Mac are going too far in their proposals to increase the capital requirements of those institutions and limit their ability to respond to the growing need for financing residential mortgage debt, Richard Syron, chairman and chief executive officer of Freddie Mac, told NAHB leaders in remarks in Orlando, Fla. on Feb. 8.

With the amount of the nation’s outstanding residential debt expected to double over the next decade as an additional $13 trillion is needed to finance housing, the solutions proposed by some of the “most hard-line critics” of the GSEs would become “tomorrow’s problems,” Syron said.

“The loudest voices in the debate have been those demanding not only to tighten oversight of the GSEs — which we agree with — but to diminish our tools and shrink the box within which the GSEs can operate,” he told a joint meeting of NAHB’s Executive Board and Budget and Resolutions committees.

At the same time as the future demands on housing finance become “greater than ever,” Syron said that a number of private financial institutions will “face strong pressure to pull back from mortgages.”

“There is another big economic change underway that will make the GSEs all the more necessary,” he said. “For more than a decade, the private-label mortgage market has been a very attractive and relatively easy business to be in — partly because the risk premiums demanded by investors have been at historic lows,” he said. “Yet there are mouting concerns that this situation cannot last, and that when this change comes, it will not be pretty.”

“What all this means is that the GSEs will be more important than ever. For the mortgage business will become harder as investors become more wary of risk and pricing for perfection comes to an end. And this, in turn, will only increase the need for mission-responsive institutions in housing finance,” he said.

“Our charters specify that we must be a continual presence in the mortgage market, providing affordability, liquidity and stability,” he added. “All of which begs the question, Why overly hamper us just when you’re going to need us most?”

Discussing specific regulatory changes that would make the GSEs “less competitive, less profitable and less relevant,” Syron said:

Syron said that “appropriate” GSE legislation “strengthens our oversight but also enables us to meet our expanding mission. The truth is, we are talking about the fundamental shape of the housing finance system in this country. And that has implications for the health of the home builders, the entire housing sector and our nation’s economy.”

For more information, e-mail Chellie Hamecs at NAHB, or call her at 800-368-5242 x8425.

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

Eye on the Economy: The Inventory Overhang Is Heavier Than It Looks

Growth of U.S. economic output (real Gross Domestic Product) has slowed from the above-trend rates recorded earlier in the expansion, although overall GDP growth has held up reasonably well in recent quarters even as the housing production component (residential fixed investment) has contracted substantially.

Furthermore, the contraction in housing market activity and the slowdown in house price appreciation have not generated serious “spillover” effects in other sectors of the economy (including personal consumption expenditures), and strengthening activity in some sectors (including nonresidential construction) has helped offset the negatives from housing production.

As a result, the economy did not skate close to recession in 2006 and the probability of an economic downturn is not high during the 2007-2008 period.

Economic resilience also is evident in the labor market. The housing downswing caused job losses in residential construction during most of 2006 and into January of this year, and further losses in construction are inevitable during coming months.

However, overall job growth was reasonably well maintained in 2006 and we’re expecting a solid performance in 2007 as well. The unemployment rate ticked up in January to 4.6% and is likely to gravitate upward somewhat further. However, we do not expect the unemployment rate to rise above 5% during the 2007-2008 period.

Key measures of core consumer price inflation (excluding prices of food and energy) firmed up during much of 2006, moving well above the upper bounds of the Federal Reserve’s apparent “tolerance zones.”

This inflation pattern naturally raised concerns at our central bank about potential economic “overheating” and prompted many financial market participants to anticipate some tightening of monetary policy in the near term.

As 2006 drew to a close, core inflation rates began to recede, at least on a year-over-year basis. The core Consumer Price Index slowed systematically during the fourth quarter, receding to a pace only slightly above the upper bound of the Fed’s apparent tolerance zone for this measure. Even more important, the core price index for Personal Consumption Expenditures — the Fed’s favorite inflation gauge — displayed the same type of pattern.

The evolving slowdown in core inflation had been projected by the Federal Reserve, and this pattern is an integral part of NAHB’s forecast for 2007 and 2008. The recent and projected improvements on the inflation front reflect modest slowdowns in growth of real GDP and employment as well as dissipation of some special factors that elevated core inflation last year.

On the latter point, the “owners’ equivalent rent” component of the core price measures has slowed to some degree and figures to contribute to the projected slowdown in core inflation in 2007-2008.

The Federal Reserve held monetary policy steady at the Jan. 30-31 meeting of the Federal Open Market Committee (FOMC). Indeed, the Fed has held its target for the federal funds rate at 5.25% since mid-2006, a level that’s around a “neutral” monetary policy stance in the prevailing inflation environment.

We expect the Fed to maintain this funds rate target until the late-June FOMC meeting, and we still anticipate a quarter-point rate cut at that time — in order to keep the “real” funds rate from rising as core inflation recedes.

Long-term interest rates firmed up to some degree in late January and early February as incoming data on the economy were surprisingly strong, but long rates have receded more recently. The long-term home mortgage rate is hanging around 6.25%, the same as a year earlier and half a percentage point below the mid-2006 level.

The Treasury yield curve still is inverted across much of its range, a pattern that may not be sustainable for much longer. NAHB’s forecast shows an essentially flat Treasury yield curve by late this year, at least out to the 10-year mark, as short rates recede a bit and long rates move up modestly from current levels.

In this regard, we do not expect the long-term mortgage rate to move above 6.5% this year.

A healthy job market, good growth in household income, a favorable interest rate environment and receding energy costs provided support to housing demand in the latter part of 2006. Furthermore, widespread cuts in house prices and deepening nonprice sales incentives (documented by NAHB surveys) gave further support to demand as last year drew to a close and 2007 got underway.

Despite formidable seasonal adjustment issues, housing demand apparently stabilized in fundamental terms toward the end of 2006, and some improvement now seems to be underway.

Indeed, the Jan. 31 FOMC statement cited “some tentative signs of stabilization” in the housing market — in sharp contrast to the reference to “substantial cooling of the housing market” in the Dec. 12 FOMC statement — and Fed Chairman Ben Bernanke repeated that assessment in his Feb. 14-15 testimony that conveyed the central bank’s semiannual Monetary Policy Report to the Congress.

The fourth-quarter averages for sales of both new and existing single-family homes were up a bit from their third-quarter averages. Furthermore, NAHB’s single-family Housing Market Index (HMI) — incorporating survey readings for current and expected home sales as well as for traffic of prospective buyers has continued to move upward (the February HMI came to 40, up from a low of 30 last September).

The weekly series on applications for mortgages to buy homes by the Mortgage Bankers Association, available through early February, also supports the proposition that housing demand has stabilized, despite well-known seasonal adjustment issues with this series. And as Bernanke told Congress this week, measures of home buyer sentiment recently have been on the rise.

NAHB’s proprietary monthly survey of 30 large home builders — accounting for about one-fourth of the total for-sale new home market — also provides some reassuring signals on the demand side of the single-family market during the final months of 2006 and into January of this year. These data (seasonally adjusted by NAHB) show a distinct falloff in cancellations and stabilization of net sales since the middle of last year.

Stabilization of housing demand (net sales) is the essential first step toward completion of the dramatic housing “correction” that has followed the unsustainable housing boom of 2004 to 2005.

The second step is to work down an excessive inventory overhang in markets for both new and existing housing, and the final step is to bring housing starts and residential construction activity back up to sustainable trend levels.

The inventory overhang in the markets for new and existing single-family homes came down a bit in the final months of 2006, at least according to the standard measures. However, inclusion of homes left with builders through sales cancellations, along with consideration of an elevated level of vacant for-sale homes in the existing housing stock, show that the inventory overhang is heavier than it appears at first glance.

The current overhang of vacant homes for sale (new plus existing) may not be the end of that story. The single-family rental vacancy rate recently climbed to a record level, presumably reflecting difficulties being encountered by investors that are biding their time before putting single-family homes back on the market.

It’s hard to estimate the numbers of single-family rental units that will become for-sale units, or the time frames involved, but builders should listen for this shoe to drop. There’s also the issue of competition from the multifamily condo market, where the number of vacant for-sale units (new and existing) has climbed even more dramatically (in percentage terms) than in the single-family market.

The relaxation of mortgage lending standards that helped fuel the unsustainable housing boom of 2004 to 2005 has been coming home to roost in the form of rising delinquency and default rates, particularly in the subprime market.

So far, the reflow of foreclosed homes back onto the for-sale market has been quite limited in most areas, and we’re not expecting this factor to seriously aggravate the overall supply-demand balance in single-family or condo markets over the course of the next two years.

The well-publicized problems in the subprime mortgage market and related mortgage-backed securities markets, the supervisory guidance recently issued by federal and state regulators of depository institutions regarding “nontraditional” adjustable-rate mortgage products, and an expanding focus by the Congress on “predatory” lending practices and home foreclosures are combining to cause a swing back to firmer home mortgage lending standards than had prevailed during the boom period.

While significant, we do not expect this shift to forestall the improvements in home sales and housing starts shown in our forecasts for 2007-2008.

The Projected Upswing in Housing Production Is Fighting Some Strong Headwinds

NAHB’s baseline (most probable) forecast anticipates an upturn in national housing starts by the second quarter of this year and a turnaround in residential fixed investment (in the GDP accounts) by the third quarter.

The forecast also depicts a gradual recovery in national housing production through 2008 as housing starts approach our estimate of sustainable trend — about 1.85 million units per year.

NAHB’s baseline housing starts forecast stands somewhat above the February Blue Chip consensus forecast, particularly for 2008 — 1.71 million units vs. 1.60 million units — and it’s fair to say that there’s considerable downside risk to our forecast. Indeed, Bernanke just told the Congress that, from the Fed’s perspective, “the ultimate extent of the housing market correction is difficult to forecast and may prove greater than we anticipate.”

We’re all struggling to assess the aftermath of the unique investor-driven housing boom, the uncertain dimensions of the inventory overhang (including the vacant unit issue) and the degree of backlash in the housing finance system following the earlier relaxation of lending standards. We’ll be constantly reassessing the various “headwinds” encountered by the incipient housing recovery as we move ahead. Stay tuned.

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 Feb. 14 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.

Builders’ Tip: How to Make Invisible Drywall Butt Joints

During my 40 years in the trades, I’ve had a number of high-end drywall jobs that required dead-flat ceilings — no telltale bulges allowed where the ends of the drywall sheets abut one another.

I’ve inspected some jobs that we did 25 years ago using this method, and you still can’t see where the butt joints occur.

This drywall trick starts with a sheet of plywood. The plywood should be the same thickness as the drywall.

Incidentally, a 20-inch long piece of 1-1/2-inch aluminum angle is a handy tool for leveling the finish coats of joint compound over the butt ends.

Using this technique, we never had a joint show up on a punch list at the completion of a job.

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.

Smaller Homes, Outdoors Spaces: Hot Stuff in 2007

Smaller homes and the abundant use of outdoor rooms are among the hot design trends for 2007, according to architects and interior designers who judged the latest Best in American Living Awards (BALA).

Other hot trends, as seen in the BALA entries and outlined during a panel discussion at the recent International Builders’ Show in Orlando, include:

Participating panelists Victor Mirontschuck, of EDI Architecture, a global architecture, interior design and planning firm; Kathy Browning, of Design Consultants, a model home merchandising and interior design company in Virginia Beach, Va.; and Barry Glantz, of Glantz and Associates Architecture, a full service residential architectural and consulting firm based in St. Louis, discussed the “hot” design trends they see coming to the fore in 2007 during a recent press conference at the builders’ show.

All three panelists defined “hot trends” as those trends that were prominently featured in an abundance of the entries in this year’s BALA competition.

“Small doesn’t mean less appealing,” said Browning, while noting that the smaller homes entered in BALA featured high levels of quality and finish.

The smaller homes entered in BALA were as small as 1,500 square feet. A few of the smaller homes had as much as 3,500 or more square feet of living space, but were considered small because they “had a small feel to them,” Glantz said.

“There was a higher level of finishes in smaller homes in this year’s entries,” added Glantz. The homes featured interior items such as wrought iron, built-ins and furniture-grade cabinetry. “They were all cozy, warm and very, very livable."

Smaller homes are gaining appeal because of higher energy costs, Mirontschuck said.

Another reason, Browning added, is because more people are downsizing their lives and “shedding stuff.”

Browning said the use of outdoor rooms and spaces is no longer popular in just warm climates. She said they are being created in homes in more moderate climates for three-season use, and even in some colder climates.

All three panelists said that contemporary design was primarily appearing in interior design trends, rather than exterior designs.

Contemporary design was also making its way into homes through retail outlets like Target and home furnishing stores, Browning added. “Contemporary design is coming into homes little by little,” she said. “It can be found in second homes” where many people are simplifying their lifestyles. “It’s not all across the country. It’s almost like a lifestyle change.”

Glantz said the contemporary push in design is not universal. It is primarily popular among the younger market segment of young singles and couples and young executives.

“More interiors are featuring playful geometry, the strong ― bold ― use of color,” said EDI’s Mirontschuck. Contemporary design can also be found in the variety of materials used, such as concrete floors that are stained or polished, and exposed ductwork, he added. “The kitchen seems to be the pivot point for contemporary design.”

“Contemporary lines today are very simple,” said Browning. “They are clean lines, less bothersome. There is less of the Old World,” she added. “There is more of the modern feel from the 1970s, but not the hard feel from the ‘70s.”

Toilet Tank Aquarium Brings New Bathroom Twist

With the Fish-n-Flush aquarium toilet tank, home builders can bring a new decorative twist to the bathroom, turning it into one of the most talked about rooms in the house.

The Fish-n-Flush is a clear two-piece toilet tank that replaces a standard toilet tank and contains a fully functioning aquarium inside. The insert can be filled with water for fish or left dry and used as a terrarium for a pet reptile or plants.

“We wanted to develop a product that had a dual purpose — to serve as a proper, fully functional toilet and also as a source of entertainment and conversation,” said Richard Quintana, CEO of AquaOne Technologies, Inc., the toilet’s inventor. “Fish-n-Flush is definitely an attention-getter.”

The patented aquarium fits most toilets and operates as a conventional interior tank, which is manufactured of clear PETG to ensure a strong and durable reservoir. The aquarium will accept fresh water, as well as salt, warm and tropical water. In addition, the 2.2-gallon aquarium piece can be easily removed for cleaning without obstructing the toilet from working. The toilet tank itself holds 2.5 gallons, which provides sufficient head pressure for proper flushing.

AquaOne worked with a marine biologist to develop the technology and produce a certified working aquarium. Fish-n-Flush comes with gravel, two plastic nine-inch plants, a dual filter system, LED lighting, a built-in feeder, fill valve, overflow tube, flapper, suction pump and two screws. The power level is set at a safe 12 volts.

“One of the key attractions to Fish-n-Flush is that we see the toilet serving as a great way to help toilet train young children as well as a fashion statement for the home owner who wants to have something unique,” Quintana added.

Aiming for Satisfied Customers Is Not Good Enough

If the goal of every home builder company is to have satisfied customers, then they are aiming too low.

That blunt assessment was delivered by industry experts tasked with increasing customer satisfaction and loyalty for top national companies who shared their secrets during a Feb. 8 seminar at the International Builders’ Show in Orlando, Fla.

“Too many firms aim for satisfaction. Satisfaction better not be your goal. You have to get your customer to say ‘wow.’ This is what people are looking for,” said Paul Cardis, CEO of NRS Corporation in Madison, Wis.

Keeping customers happy adds to the bottom line by lowering the cost of sales by increasing referrals, improving margin potential through better relationships with home buyers and strengthening the builder’s brand, said Cardis.

Conversely, it only takes one disgruntled home owner to ruin a builder’s reputation.

Cardis cited a horror story in which one irate home owner dumped 10,000 lemons in his front yard, which drew the attention of the local media.

“If you are not focused on customer delight, you are missing the boat in the home building industry,” he said.

To keep their customers happy, Cardis said that builders need to set realistic expectations, show genuine caring and be honest.

For example, he said if builders find that there are any delays in the construction process, rather than attempting to hide or conceal it, they should immediately let the customer know what the problem is and what they are doing to correct the situation.

Joe Donahoe, quality assurance manager for the Illinois division of Centex Homes, says builders must always do what they say.

“If you don’t set expectations with your buyers, they will set their own. And that spells trouble,” he said.

To increase customer satisfaction, Centex employs a system known as the Buyer Education Seminar and Timeline, or B.E.S.T. seminars, for its workers.

Donahoe says the program is designed to align departments and employees to make sure everyone in the organization knows what the other person is doing.

The system is designed to exceed what the buyer expects, reduce buyer anxiety and ultimately to boost customer satisfaction, he said.

To deliver a complete house, defect-free, on-time and with all options installed, Pulte Homes has instituted a quality assurance program that tracks all the major items that go into a home.

“In effect, this program acts as a super punch list,” said Scott Himelhoch, director of customer relations for Pulte Homes Corp.

The home superintendent generates a punch list for the trades, which Himelhoch said helps the superintendent and trades see the house through the eyes of the customer.

Using an Excel spreadsheet, Himelhoch characterized the program as a “low-tech solution with high impact results. What you measure improves,” he said.

Prior to any home-closing, the superintendent checks off each component on the quality assurance tracker to make sure that all major parts and items are installed and working.

Based on more than 2,200 closings using this system in 2006, Himelhoch said that warranty costs were 12% under budget.

As for customer satisfaction, 91% rated the condition of their home at closing as outstanding, 90% said they would buy another home from Pulte and 91% would recommend a Pulte home to a friend or relative.

Builders Advised to Rev Up Competitiveness in Down Market

Convention-goers attending an International Builders’ Show seminar in Orlando, Fla. were told they need to take stock of their product and develop innovative marketing strategies in order to survive the current housing market slowdown and stand out from the competition.

“The first step is to conduct an internal review of your company’s product,” said John Schleimer, MIRM, president of Market Perspectives, a national real estate research and consulting firm based in Roseville, Calif. “Do you have the right standard features? What do your prospective buyers think? What is the curb appeal of your front elevations? What value-engineering changes can you make?”

The three key rooms to focus design dollars on are the kitchen, family room and master suite, said Schleimer. “The master bath is a sanctuary. You can never have enough closets in the master suite.”

“And don’t forget the Suburban in the garage,” he added. “Adding three feet to the depth of the garage will get an extra sale per month.”

Stating that it is absolutely vital to make a good first impression, Schleimer said that builders need to ensure they maintain a clean and appealing job site.

“Is your off-site and on-site signage effective? Do you control construction debris within your projects? Are your information centers appealing? Does your model merchandising ‘turn on’ your prospects? Are your spec homes clean?” These are all questions that need to be addressed, he said.

To further get a leg up on the competition, Schleimer suggested that builders see what their competitors are up to.

“Review the design quality of their plans compared to yours,” he said. “Compare their standard and option features to yours and their marketing and merchandising to yours and then make the necessary competitive adjustments.”

Observing that the Internet is a “great equalizer” in today’s marketplace, Richard Elkman, MIRM, president of Group Two Advertising in Philadelphia, said that it pays to invest in a good Web site.

“In 2006, 15% of all real estate spending was online. That figure will jump to 32% by 2010,” he said. “Most Web sites today are pathetic. You have to have a budget for Web site marketing.”

Noting that minorities prefer to buy new homes at twice the rate of white buyers, Elkman noted that blacks, Hispanics and Asians have distinct cultures and you have to learn how to reach them.”

When planning an ad campaign, Elkman said the goal is to “develop promotions that set you apart from the rest,” to create billboards and signage that “catch the eye” and to be innovative with media placement.

“Ads in the real estate section stink,” he said, noting that they tend to be crammed together and fail to stand out.

Though it may seem counterintuitive, Elkman also cautioned that cutting an ad budget in a down market is “almost always a bad decision.”

“You can’t keep your listing a secret and expect to sell,” he said. “And when the competition reduces its advertising, your strong marketing effort will make you more visible than ever.”

Declaring that a cooling market is a confused market, Bob Schultz, MIRM, CSP, and president of New Home Specialists, Inc., a management consulting and sales education and training firm based in Boca Raton, Fla., said that “perception is reality.”

“When you sell homes, it’s not about the house, it’s about the experience,” he said.

“You can’t control interest rates. You can’t control rising construction costs. You can’t control what the competition does. You can’t control what the articles in the newspaper say. You can’t control the weather outside of your office.

“However, you can control how you influence customers’ perception of interest rates. You can control how you influence customers’ perception of construction costs. You can control what you do — through attitude, appearance, your presentation and sales skills. You can control what you put in the newspaper and you can control the environment customers experience when they come into contact with you.”

This book provides powerful techniques for selling more homes and making more money in leaner times. "Sweet Success in New Home Sales" lays out the proven approaches for crafting and delivering sales excellence.

Best in Sales and Marketing Honored at The Nationals at IBS

"The Nationals are the most prestigious awards of their kind, setting the benchmark for innovations in new home design, marketing and sales," said Dan Levitan, chairman of the 2007 Nationals. "NAHB's commitment to recognizing originality, imagination and success has been exemplified by its award winners since the competition's inception."

A diverse panel of industry professionals from across the country selected gold, silver and regional award winners from nearly 1,400 entries.

Several top award winners are highlighted below. For a complete list of category winners and additional details about their entries and for a history of The Nationals, visit www.thenationals.com.

The Legends of Residential Marketing Award, begun in 1992, honors builders and consultants who stand apart as leaders in the new-home marketing field. Award winners are selected for their professional commitment to the industry and new home community marketing innovations.

Utah Developer Tippets Named 50+ Housing Council Chair


	Robert Tippets

Robert Tippets, a builder/developer of active adult communities from Midvale, Utah, was named chairman of the NAHB 50+ Housing Council Board of Trustees at the International Builders’ Show in Orlando, Fla. earlier this month.

The council provides resources, education, exclusive research and networking opportunities for its members and represents NAHB within the growing 50+ housing industry.

Tippets, an owner/partner of Village Carefree Communities, which builds active adult communities in northern Utah, has more than 34 years of experience in the industry. Village Communities was named Builder of the Year for the Greater Salt Lake Area in 2003 and was the recipient of a 2005 Best of 50+ Housing Gold Award for best small active adult community under 150 homes.

“Bob’s longtime dedication to NAHB and to the 50+ Housing Council, as well as his commitment to industry innovation and quality home building, make us very proud to have him as our chairman,” said Michael Copp, assistant staff vice president of the 50+ Housing Council at NAHB. “We’re very excited about the year ahead.”

Tippets holds an MBA from the University of Utah and a bachelor’s degree in Economics from Brigham Young University.

A member of NAHB for more than 10 years, Tippets serves on the NAHB Board of Directors and was the 2002 president of the Salt Lake Home Builders Association.

He is an active member of several committees and is a frequent speaker at the International Builders’ Show.

Seventeen Winners Fuel Up on Education at IBS

Seventeen lucky attendees of the recent 2007 International Builders’ Show in Orlando walked away winners in The NAHB University of Housing “Fuel Up on Education” giveaway contest.

Four $100 Visa gas cards were given away at NAHB’s education booth each day during the four days of the show. On the final day of the show, Sharon Capan of Shamot Construction in Coraopolis, Pa. won the grand prize giveaway — a $2,500 gas card.

The contest drew many attendees to the booth for a chance to win and to learn more about NAHB’s education programs.

“I hadn’t stopped by the booth before,” said Victoria Laney, of Ocoee, Fla., a $100 card winner. “But the contest got my attention. Once I got the literature, I realized what a wonderful education program NAHB offers. I’ve already recommended courses to several local contractors I know.”

Another $100 card winner, Lenny Tillery of Benson, Ariz., knows the education program inside and out. He is both a student and the chairperson of the National Designation and Training Committee.

Tillery has already completed two courses towards his Certified Graduate Associate (CGA) designation. His goal is to get more educational programs offered locally.

An NAHB education task force is currently exploring which programs local HBA members are most interested in seeing hosted. “I know we have a long way to go,” he said. “But we are on our way.”

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.

Green Building Standard to Be Based on NAHB Guidelines

In an effort to bring uniformity to sustainable building practices, the International Code Council and NAHB have announced an agreement to develop and publish a residential green building standard.

The announcement was made during a press conference at the International Builders’ Show in Orlando, Fla. with NAHB Green Building Subcommittee Chairman Ray Tonjes, ICC President Wally Bailey and Rick Weiland, the council’s CEO.

“Today, we are proud to declare that NAHB and the code council are collaborating to bring uniformity to sustainable building,” said Tonjes, a custom builder in Austin, Texas. “It’s time for a standard for green building. But it needs to reflect the architecture, the geography and the weather and temperature patterns of the place where the home will be built. It needs to recognize the wide divergence of consumer tastes, preferences and local conditions. And it needs to avoid costly mandated practices that can cause housing to fly out of the reach of potential home buyers.”

The collaboration is another example of ICC’s commitment to green building, said Bailey. “Strong, durable homes that are safe and affordable have a smaller impact on the world's limited resources,” he said. “ICC is committed to educating our members on green building and participating in activities with other organizations that will assure green building practices are sustainable, safe and affordable.”

NAHB’s Model Green Home Building Guidelines now form the basis of more than 15 state and local green building programs around the country, Tonjes said. “The guidelines create green building programs that work and that are truly green. We are confident that this standard will become common green building practice because of the success of the voluntary programs that have started all over the country.”

“NAHB members have proven that a voluntary, region-specific, flexible program can be both truly green and also allow for innovation,” Tonjes continued. “We believe in the Model Green Home Building Guidelines, we believe in the standards process and we believe that the end result will be a better document for the home building community.”

The NAHB Research Center, which oversaw the development of the guidelines as the American National Standards Institute-accredited standards developer, will serve as the secretariat for the new standard.

“I’m delighted to announce our commitment to work with the Code Council to help advance green building practices for our industry,” Tonjes said. “We surveyed our members a year ago and 92% of them said they would move to green building because ‘it’s the right thing to do.’ That’s true of the standards process as well. It’s the right thing to do.”

NAHB and the Code Council are now seeking applicants for membership in the consensus committee for the development of the ANSI green home building standard. Applications can be submitted at www.nahbrc.org/gbstandard and must be received by March 10, 2007 to be considered.

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

Participants Sought for Green Building Standard Committee

To support a new effort of NAHB and the International Code Council (ICC) to create a voluntary green building standard, the NAHB Research Center is seeking participants to join the ANSI consensus committee for the standard development process.

The Research Center is an ANSI-accredited Standards Developer for American National Standards (ANS) and will serve as secretariat for these development activities, which will follow rules and procedures in accordance with ANSI’s requirements for openness, balance, consensus and due process.

NAHB and ICC have announced their agreement to develop and publish a residential green building standard based on the NAHB Model Green Home Building Guidelines. This standard will provide a common benchmark for recognizing and rewarding green residential design, development and construction practices in a manner that is transparent, verifiable and meaningful to builders, product manufacturers and consumers.

Members of the consensus committee will play a pivotal role in the creation of this standard which, when completed, can be adopted by local green home builidng programs or local building departments as a conformance guide.

Applications for consensus committee membership are now being accepted by the NAHB Research Center, and must be received by Saturday, March 10 in order to be considered. The initial meeting of the consensus committee will tentatively take place in late April.

Visit www.nahbrc.org/GBStandard for information related to the development process or to download an application for committee membership. The entire process, from the formation of the consensus committee to public review and final ANSI approval, is expected to be completed by the end of 2008.

For more information on the standard development process or the NAHB Research Center’s other standards-related activities, call 800-638-8556, or e-mail standards@nahbrc.org.

“Stewardship: The NAHB Environmental Issues Committee at Work” is a free, new brochure available from NAHB that outlines the environmental issues the committee — working with NAHB’s environmental, regulatory and legal staff — has faced and what the committee did to help preserve needed environmental balance.

The committee’s work is central to the NAHB mission as federal, state and local agencies enact myriad rules and regulations that erode housing affordability while providing dubious benefit.

By developing, implementing and completing research strategies, NAHB has created and reinforced its role of advising and directing regulators’ activities and pursuing reform.

Bulk copies of the brochure are available free to environmental committees and others interested in learning more about the home building industry's environmental stewardship efforts.

Click here to view the brochure. To order free copies, e-mail Delecia Jenkins at NAHB, or call her at 800-368-5242 x8163.

Green Building Seminar Looks at ‘Building With Trees’

Editor's Note: The National Arbor Day Foundation has cancelled the “Building With Trees” pre-conference seminar that was planned for the NAHB National Green Building Conference in St. Louis on March 24. The seminar was cancelled after this issue of Nation's Building News was published and initially distributed.

Representatives from the foundation will attend the conference and be available to answer questions about their programs.

For information about future Building With Trees seminars, visit the conferences and seminars section of the National Arbor Day Foundation Web site by clicking here.

The seminar, offered by noted arborist Charles Stewart of Urban Forest Management Inc., teaches participants how to determine which trees to protect — and then how to make sure they remain healthy during each phase of the development and construction process.

The “Building With Trees” partnership between the foundation and NAHB also provides recognition of industry efforts to preserve trees. Since 1998, builders and developers have been honored for exemplary projects during the annual Awards of Excellence at the Lied Lodge & Conference Center in Nebraska City, near the foundation's headquarters in Lincoln, Neb. This year’s award winners will be recognized at the NAHB Green Building Conference at a special press event.

Last year, the Langston Development Company in Westfield, Ind. was honored for incorporating 900 mature trees into the design of its Brookside community. The Grande Dunes Development Company, LLC of Myrtle Beach, S.C. won for a transplantation and maintenance program developed for its new coastal community. And Woodlands Edge, developed by Rocket Properties, LLC of Little Rock, Ark., was honored for being able to keep 95% of its 460 acres forested.

The “Building With Trees” seminar also can be offered by home building associations for their members or by individual companies for their employees and subcontractors — a one-stop shopping educational opportunity for environmentally sensitive development.

The Arbor Day Foundation provides the instructor, a workbook and snacks — for a set per-person fee. The HBA provides the students, and can charge participants or get a sponsor to pay for the seminar.

The seminars and the awards program provide an excellent public relations tool for builders and HBAs because they demonstrate the industry's commitment to the community and environmental stewardship, says Debra Bassert, NAHB's assistant staff vice president for land use policy. "Builders want to protect existing trees during the construction process because they add value to the finished development. The ‘Building With Trees’ program provides both education and recognition when they accomplish that goal," she said.

The seminar also is a good forum to bring HBA members together with local building officials and elected leaders, Bassert said. "Good development takes good planning, and good planning takes a positive relationship between the public and private sectors. ‘Building With Trees’ helps promote that relationship."

The committee’s work is central to the NAHB mission as federal, state and local agencies enact myriad rules and regulations that erode housing affordability while providing dubious benefit.

By developing, implementing and completing research strategies, NAHB has created and reinforced its role of advising and directing regulators’ activities and pursuing reform.

Bulk copies of the brochure are available free to environmental committees and others interested in learning more about the home building industry's environmental stewardship efforts.

Click here to view the brochure. To order free copies, e-mail Delecia Jenkins at NAHB, or call her at 800-368-5242 x8163.

Weak Levees, Updated Flood Maps Bad News for Builders

An announcement by the U.S. Army Corps of Engineers earlier this month that 122 levees have unacceptable maintenance ratings is potentially bad news for developers working on projects in the areas that those levees were intended to protect, Michael DePue, an engineer at PBS&J in Little Rock, Ark., said at the International Builders’ Show earlier this month in Orlando, Fla.

The updates will make the maps easier to access and read, but they are also changing the size and location of designated flood plains and flood hazard areas, where development is restricted and flood insurance is mandatory. Adding the property that had been protected by the 122 levees in question — which FEMA requires — means that a significant amount of developable acreage is now subject to additional regulation and higher insurance fees.

“It’s going to mean big changes for many communities,” DePue said. “Flood zones may get bigger or they may get smaller,” but they usually get bigger, he said. And development increases the likelihood of changes. “If everything is built according to regulations, over time, the flood elevations can be expected to rise 1 foot,” DePue said.

Homes in flood hazard areas require special permits and must be built so that the lowest floor is at or above the identified flood elevation. In inland floodplains, developers have the option of raising the homes by filling in the land, but on coastal floodplains the homes must be built on stilts or pilings.

The rules also apply to homes in which more than 50% of the square footage is being remodeled. As a result, in the case of one community, tornado-ravaged homes were required to conform to more stringent floodplain construction standards when they were being rebuilt, he said, even though they were not damaged by flooding.

Instead of waiting for the additional expenses that can result from changing map elevations, and subjecting their customers to as much as a four-fold increase in flood insurance fees, there are steps that builders and developers can take, DePue said:

“You need to pay attention to changes because they are going to affect your day-to-day business,” he said.

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

With Wetlands Permits Expiring, Delays Expected

Builders can expect more wetlands permit delays because the U.S. Army Corps of Engineers has missed a deadline to publish proposed changes for the next five-year Nationwide Permit (NWP) cycle.

The federal Clean Water Act requires the Corps to reauthorize the NWPs every five years, and the current permits expire on March 19. The final NWP regulation must be published at least 60 days before its effective date so that Corps district offices have time to finalize so-called Regional Conditions, and states and tribes have time to issue local Water Quality Certifications and Conditions.

Because the Corps did not meet that Jan. 19 deadline, there will be a gap in permit coverage. Because the 60-day clock does not start until the Corps submits its proposal, no new NWPs can be issued after March 19, when they expire, until 60 days after the Corps does issue its proposal.

In addition to stalling new projects, the delay also may affect ongoing building and development projects if the Corps does not come up with interim guidance to cover the gap period. The expectation is that it will issue something, said NAHB staff vice president Susan Asmus.

The Corps proposed replacement permits in September 2006 that contained few significant changes from the existing NWP program, but the content may still change, Asmus said. Regulators still have not issued guidance on the “significant nexus” issue raised in the Rapanos and Carabel U.S. Supreme Court decisions last June, in which justices urged the federal Environmental Protection Agency and the Corps to come up with clearer rules on when wetlands are considered jurisdictional and permits are necessary under the Clean Water Act.

For example, the proposed permit limits impacts to no more than 300 linear feet of ephemeral streams, while the existing permit limits apply to only perennial streams. “More importantly, it is uncertain how — or even if — the Corps will grandfather ongoing projects that already have permits,” she said.

NAHB staff is closely monitoring the Corps’ actions, and will detail the new NWPs as soon as they are released, Asmus said.

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

Siding With Builders, District Court Rejects Wetlands Rule

In a major victory for builders battling against expensive, unnecessary regulation, the U.S. District Court for the District of Columbia has soundly rejected the so-called Tulloch II rule. Now, NAHB wants officials to stop enforcing it.

In National Association of Home Builders v. U.S. Army Corps of Engineers, the court decided on Jan. 30 that home builders and developers do not need a federal Clean Water Act permit to operate construction equipment in wetlands unless they are actually filling them in. Simply moving soil, clearing brush or extra vegetation — or even turning on the backhoe — should not require a permit, builders argued, and the court agreed.

“It’s very gratifying to see that our justice system is bringing to light what we have argued for years: No one is served by this rule, and home buyers end up paying the price in increased construction costs,” said 2006 NAHB President David Pressly.

“Our nation’s wetlands are an essential part of the ecosystem, but these expensive regulations do nothing to preserve their function. They only serve to make housing even less affordable,” he added.

The Corps’ Tulloch II rule was the answer to legal battles that resulted from the rejection of the first Tulloch rule, which was named after a North Carolina developer who was sued in a 1993 case filed by an environmental group. That complaint sought to have the Corps regulate “incidental fallback,” or dirt that falls from the blades or buckets of construction equipment, contending that the dirt represents an addition to the wetlands.

In 1998, NAHB and other trade groups won a case before the D.C. Circuit Court of Appeals, which ruled that the Corps and the Environmental Protection Agency had no authority to require permits for incidental soil fallback. At that time, the D.C. Circuit remanded the matter back to the agencies, directing them to come up with a regulation that would lawfully fit within the bounds of the Clean Water Act. Tulloch II was the agency's attempt — but the court ruled last month that this latest rule is illegal under the act.

“Home builders — in fact, all citizens — should feel vindicated after this 14-year battle,” Pressly said after the decision. “We look forward to working with the Corps and other agencies to craft sensible regulations that allow us to provide needed housing while we continue to protect the environment.”

In the wake of the court decision, the Corps issued interim guidance on the Tulloch decision on Feb. 6 but stopped short of telling regional district offices to stop enforcing it. On Feb. 13, attorneys for NAHB formally requested that the Corps "immediately correct its record to make clear that Tulloch II has been declared illegal and to advise the districts that they may no longer enforce or apply the rule."

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

OSHA Chief Says Builders Are Reaching Out and Saving Lives

During an address before the NAHB Executive Board in Orlando, Fla. on Feb. 4, Edwin Foulke, Jr., assistant secretary of labor for occupational safety and health, reaffirmed his commitment to work with the nation’s home builders to promote safety and health programs in the residential construction industry.

“We want to be perceived as the neighborhood policeman, where you can go and ask for directions and help,” he said. “There is no doubt in my mind that we can help you be safe and help you be successful.”

Foulke pointed out that businesses that implement quality safety programs are more productive, profitable and efficient.

“Statistics show that good safety and health programs mean fewer injuries, illnesses and fatalities,” he said.

Commenting on the partnership, Foulke told builders that through their efforts, they are “reaching out and savings lives. You are helping people to go home safe and sound. That’s a tremendous legacy to look back on.”

Noting that this was the first year in which OSHA had an exhibit booth at the International Builders’ Show, Foulke said “we have great materials that you have helped us to develop.”

Estimating that 65% to70% of builders are unaware of OSHA resources geared toward increasing safety on job sites, Foulke encouraged builders to log on to OSHA’s Web site (click here) to find data helping them to “become more profitable and more competitive and to reduce injuries on the job site.”

The Web site contains the latest information on guidance for small businesses, compliance standards, cooperative programs and much more, he added.

Foulke also met separately with NAHB Senior Officers and members of the NAHB Construction Safety and Health Committee, who urged the agency to take into account the differences between residential and commercial construction — and how the two should be regulated.

NAHB also believes that before instituting any new regulations, OSHA must clearly demonstrate their need, focus on real world solutions that target specific hazards, make sure that they are easily understandable for small businesses, provide the flexibility for employers and workers to determine effective solutions and have a significant impact on worker safety.

As an alternative to new regulations, NAHB believes OSHA should seek to educate and inform construction workers and employers about workplace hazards and how to minimize and eliminate them. This can be accomplished through cooperative initiatives, such as the NAHB-OSHA Alliance program, which Foulke noted is already having a positive impact on worker safety.

"It was a great opportunity to be able to welcome the assistant secretary at the International Builders' Show as an ally in our efforts to improve construction safety in the home building industry," said Andy Anderson, 2006 vice chairman of the NAHB Construction Safety and Health Committee. "He listened to our ideas, our issues and the concerns of our association and clearly demonstrated his commitment to working with us."

For more information on construction and safety resources available to home builders, e-mail Rob Matuga at NAHB, or call him at 800-368-5242 x8507.

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.

Safety Awards Recognize Housing Industry Job Safety Efforts

More than 150 safety officers, HBA officials and staff from state and local Occupational Safety and Health Administration offices honored home builders and safety experts from around the country at the first annual SAFE Awards.

The Safety Awards for Excellence commemorate NAHB members’ increased commitment to job safety. “Every company here is a winner when it adopts programs for job-site safety,” said 2006 NAHB President David Pressly, who welcomed attendees at the Feb. 9 awards luncheon. The event was held during the International Builders’ Show in Orlando, Fla.

Honorees were recognized for achieving excellent safety records, creating outstanding safety education programs and for continuing partnerships with state and local OSHA officials — all in the context of making work sites safer for home building industry employees.

Luncheon attendees watched a video presentation and listened to a keynote address from Daniel Fulton, president and chief executive officer of Weyerhaeuser Real Estate Company, the parent company for several U.S. home builders, including Pardee Homes in California and Nevada and Winchester Homes in the Washington, D.C. metropolitan area.

“Safety is a fundamental and enduring commitment,” Fulton said. “It’s not a checklist or a priority. It’s a value, and values stay constant. It’s the right thing to do.” A company’s leadership is crucial in creating “a culture of safety expectations,” he added. “We walk the talk.”

That means making sure that language barriers don’t prevent subcontractors from understanding safety requirements and that construction superintendents constantly pass out hard hats — and help contractors purchase scaffolding, he said.

It’s not a competitive advantage for one builder to be more responsible than the next, Fulton noted. “We can’t achieve success if the safety ends” at the property line. “We must cooperate. Don’t wait for somebody else to lead. Get specific and clear about safety.”

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

Cisneros Tells Builders to Prepare for Latino Surge

With recent U.S. Census Bureau statistics indicating that Hispanics are now the largest minority group in the country, with an additional 2.1 million Latino families expected to enter the housing market by 2010, Henry Cisneros, former secretary of the Department of Housing and Urban Development, told builders that they need to be prepared to meet the housing needs of this growing community.

“Eighty-eight percent of Latino families say that their definition of the American dream is owning their own home. This is the highest percentage of all minorities,” Cisneros, chairman of CityView, said at an International Builders’ Show seminar on Feb. 7 in Orlando, Fla.

Demographic data project that from 2000 to 2050, the U.S. population will rise from 281 million to 403 million. Over that period, Hispanic growth will register the greatest surge, from 35 million to 98 million, a net gain of 63 million. By contrast, white/non-Latino growth is expected to rise by just 17 million and the African-American population will increase by 25 million.

Cisneros said this presents a great opportunity for builders who learn to design homes and plan communities that attract and support the lifestyles of the swelling U.S. Latino population.

Latino families tend to be large and multi-generational, he said, with more workers per household than other demographic groups, presenting implications for home design.

For example, in building for a typical Latino family, Cisneros suggested that at least three to four bedrooms are needed. In accommodating a multi-generational floor plan, there should be one bedroom on the main level, and eliminating an enclosed garage can be the trade-off for an extra bedroom.

He suggested that kitchens should incorporate a deeper sink (for more dishes) and a gas range because many traditional Latino recipes require an open gas flame.

Tiles, decorative colors and the use of arches to add a “Mediterranean kind of feel” capture the Latino spirit in home design, he added.

As for the outside of the home, a long driveway is a plus because there are generally more workers per household. In addition, Cisneros said that “Latino families love to grow plants,” so a patio space is a major plus.

Ideally, apartments should also be located near public transportation lines, with schools and parks nearby.

Growing Latino markets encompass areas all across the country. Breaking them down by region, Cisneros listed the following markets:

"Casa y Comunidad: Latino Home and Neighborhood Design,” available through BuilderBooks.com, takes the first-ever look at the growing and increasingly prosperous U.S. Latino community and its housing needs and helps all segments of the housing industry to understand and prepare for this emerging market.

The publication was written by Henry G. Cisneros, former secretary of the U.S. Department of Housing and Urban Development and founder and chairman of CityView, which partners with home builders to provide workforce housing.

Tampa Builder William Paul to Chair Home Builders Institute

Florida builder and developer William Paul has been named 2007 chairman of the board of trustees of the Home Builders Institute (HBI), the workforce development arm of NAHB. Paul assumed his new role at the International Builders’ Show in Orlando, Fla., on Feb. 7, taking over from Michael Sivage, a builder and developer from Albuquerque, N.M.

Paul has worked as a developer, builder and consultant throughout Florida for more than a quarter century on projects ranging from single-family and town home communities to office and retail centers.

“I’m excited about becoming chairman of HBI. It is an exceptional organization, serving the residential construction industry while helping people in need” said Paul. “HBI has a strong foundation on which to grow as it serves our communities and our industry. I want to be a part of that and do what I can to make it happen.”

Paul has served on the board of trustees since 2003 and his access to policymakers has played a major role in the growth of HBI programs in the Sunshine State. During the 2006 legislative session, for example, he was instrumental in securing funding and support for Project CRAFT (Community, Restitution, and Apprenticeship-Focused Training), HBI’s congressionally-recognized training program for adjudicated youth.

Paul also chairs the Tampa Bay Builders Association's (TBBA) governmental affairs committee, working with community planning and regulatory offices to create a builder-friendly environment that also protects consumers.

Throughout his years in the industry Paul has remained active at every level of NAHB. Along with several committee responsibilities, he is past president of TBBA and serves on the board of directors of the Florida Home Builders Association and NAHB.

For more information, e-mail Maria McIntyre at NAHB, or call her at 800-795-7955 x8912.

Owens Corning Products Boost Sales in Down Market

Owens Corning is stepping up its efforts to provide products that help builders attract customers in today’s weaker housing market, according to Roy Dean, president of the company’s Insulating Systems Business. “It means continuing to find solutions and products that truly make the difference between just surviving and prospering,” he said.

At the core of Owens Corning’s business, green building and energy efficiency is one of four areas where the company is moving ahead.

“As a company, our products save the annual emissions of 200 million passenger cars or the use of 2 billion barrels of oil,” said Dean. “However, we know that’s not enough. With 71% of the total electricity in the U.S. used by homes and buildings alone, collectively, we have to take action.”

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 and 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.

Georgia Builder Earns Top Honor for Community Service

Star Home Builders of Winder, Ga. was awarded the 2006 Gold National Housing Endowment Builder Achievement Award for Outstanding Community Service during the recent International Builders’ Show in Orlando, Fla.

Thomas Gipson Homes, Inc. of Raleigh, N.C. was awarded the silver award, Veridian Homes of Madison, Wis. was awarded the bronze award, and nine other builders received honorable mentions for their community service.

When the death of a local homeless man exposed to the elements in Winder, Ga. showed that the town’s current homeless facilities were inadequate, Winder’s mayor made a personal appeal to the local HBA, the Barrow County Builders Association, for help. He asked the association to build a new homeless shelter.

Star Home Builders took the lead on the project, turning the shelter’s construction into a personal mission for the company. After more than a year-and-a-half of overcoming numerous obstacles, 12-hour work days with no weekend or holiday breaks, and the commitment of the entire HBA, Star Home Builders and the Barrow County Builders Association finished the $300,000, 40-bed, 5,000-square-foot Lighthouse Homeless Shelter.

For its philanthropic endeavor, a $10,000 donation will be directed to Star Home Builders’ charity of choice.

Thomas Gipson Homes received the silver award, along with a $5,000 donation to the charity of its choice, for its efforts to expand the building industry’s relationship with Habitat for Humanity and to increase Habitat’s building capacity.

Tom Gipson first began working closely with Habitat in 2002. His efforts, which included traveling to more than 40 cities, led to the 2006 Habitat Home Builders Blitz — the largest one-week blitz build in the 30-year history of Habitat, with 459 homes constructed.

The blitz was completed entirely by home builders and accounted for 8% of all Habitat homes built last year. The value of these homes, in essence a gift from the home builders to their communities, is in excess of $25 million.

Veridian Homes received $2,500 for the charity of its choice for winning the bronze award. In 2006, Veridian’s charitable arm, the Veridian Foundation, donated more than $250,000 to 59 philanthropic organizations, including the Ellen & Peter Johnson Hospice Care Residence, where a special grieving room was built, and the Gathering Waters Conservancy. Veridian partnered with the conservancy to protect Wisconsin’s land trusts.

In addition to the top three winners, NAHB honored nine builders with honorable mention awards. Two additional categories of honorable mention awards were added this year to reflect the huge amount of work done in the areas of Iraq Veterans and Hurricane Katrina Relief.

Each of these winners will receive $1,000 directed to the charity of their choice.

“Every year, in towns and cities both large and small, housing professionals are doing what they do best — building,” said Gary Garczynski, chairman of the National Housing Endowment, NAHB’s philanthropic arm. “But it’s not just houses and neighborhood developments that these professionals are constructing. They’re building communities, and these awards allow us to recognize the great contributions our members are making every day in their neighborhoods in which they live and work.”

Jacksonville HBA Honored for Building Needed Homeless Shelter

Gary Garczynski, chairman of the National Housing Endowment (left); Jerry Linder, immediate past president of the Northeast Florida Builders Associaton and president of The Vintage Group; Bill Cellar, current NEFBA president and president of Providence Homes; and Bob Mitchell, founder of the Home Builders Care program and past president of NAHB, during the Home Builders Care awards ceremony at the International Builders' Show.

The Northeast Florida Builders Association (NEFBA) of Jacksonville, Fla. was awarded the 2006 National Housing Endowment Home Builders Care Community Service Project of the Year Award — the second time the HBA has won this prestigious award — at the recent International Builders’ Show in Orlando, Fla.

The HBA received the award, which recognizes a home builders association for outstanding community service, for its support of Trinity Rescue Mission’s new Women and Children’s Center. The center, which opened on Aug. 16, 2006, houses about 1,200 women and children annually.

NEFBA previously won the award in 2002 for its work with the elderly in the Jacksonville area.

Before the new center was built, the Jacksonville area’s 18 shelters and transitional-housing agencies operated at full capacity almost every night of the year trying to house the nearly 6,000 homeless women and children in the city and surrounding area. Not everyone could find shelter, however, and every night, at least 130 women and children were left on the streets to fend for themselves.

NEFBA’s support for Trinity’s new center began with a challenge from NEFBA’s executive director, Daniel Davis, to the members. Raise $100,000 to built the shelter, he said, and he would match it by personally raising $100,000 more.

NEFBA’s members took up the challenge in a big way. Greg Matovina, past president of NEFBA, donated his company’s land development knowledge and resources and began a telephone blitz to gather needed materials and services.

NEFBA held an old fashioned “Raise the Roof” barn-raising that drew more than 200 volunteers to work feverishly on the project.

In all, more than 40 NEFBA member groups donated about 5,600 hours of labor, more than $600,000 worth of materials and $215,000 in cash to build the Women and Children’s Center.

“This is the kind of project that really makes you step back from the day-to-day reality of the job and realize what an amazing and charitable group of people make up the home builder community,” said Davis. “We had an incredible group of volunteers, many who shunned any sort of recognition, and there was a real spirit of neighbor helping neighbor. It’s an honor to be recognized publicly for something that was so gratifying personally.”

As winner of the National Housing Endowment Home Builders Care Project of the Year, NEFBA received a $5,000 donation to be given to the charity of its choice. NEFBA members chose the Trinity Rescue Mission.

“We are pleased to award this year’s honor to a project that had a huge impact on both the community and the dedicated volunteers that were the catalyst behind its construction,” said Gary Garczynski, chairman of the board of trustees of the National Housing Endowment, the philanthropic arm of NAHB.

“While it was difficult to choose only one community service project — since we reviewed so many that were worthwhile and generous — the Northeast Florida Builders Association united its members in an effort that demonstrated a passion to address the problem of homelessness,” Garczynski said. “It’s an exemplary effort showing how home builders across the nation are committed to making a difference in their communities.”

California Builder Brian Catalde Elected NAHB President

California home builder Brian Catalde was elected as the 2007 president of the 235,000-member NAHB during the association's 63rd annual International Builders’ Show in Orlando, Fla. on Feb. 9.

A driving force in the Southern California home building industry for more than 30 years, Catalde is president and chief operating officer of El Segundo-based Paragon Communities, a company he founded in the early 1980s. Paragon specializes in single-family homes ranging from entry level to luxury, and builds multifamily condominiums and commercial projects.

“This year will be a critical turning point for the nation’s housing industry,” said Catalde. “We expect the worst of the housing downturn is behind us and that we will see some gradual improvement in home sales over the months ahead. I look forward to leading this association forward as we navigate a course for success through these changing times.”

Many of the same issues that were priorities for NAHB in 2006 will continue to be pivotal for the association’s advocacy agenda this year, including efforts to reform oversight of the housing government sponsored enterprises, securing federal funding for key housing programs, expanding the availability of workforce housing and injecting greater fairness and certainty in federal regulations designed to protect the environment.

Through his state and local leadership capacities, Catalde quickly understood the value of participating in this national association, where he could “access resources and talk to other builders who offered incredible insight and knowledge” from across the country and where he could promote national housing priorities in the halls of Congress, in the federal regulatory arena and in the nation's courtrooms.

With a commitment to government affairs issues, Catalde became part of the NAHB Federal Government Affairs Committee, which paved the way for a position on the 2,000-member NAHB Board of Directors. He has also served as an NAHB national vice president and is a trustee of NAHB’s respected political action committee, BUILD-PAC.

As for his leadership style, Catalde says that he prefers to encourage a teamwork approach to solving issues as they evolve. “It’s not about me,” he says. “It’s about giving the team the right information and encouraging them to make the right decisions for NAHB’s future.”

In his home state, Catalde has been active in civic and local government endeavors, including serving as commissioner of the Los Angeles County Tax Board from 1996-2002. He is also the co-founder of the Gary Troy Foundation, which provides services to teenagers suffering from drug and alcohol abuse problems, and he is active in the Boys and Girls Club of Santa Clarita as well as in the YMCA of San Fernando Valley.

Also elected to top spots on the NAHB leadership roster during the International Builders’ Show in Orlando were 2007 First Vice President Sandy Dunn, from Point Pleasant, W. VA; Vice President/Treasurer Joe Robson from Tulsa, Okla.; and NAHB Vice President/Secretary Bob Jones from Bloomfield Hills, Mich.

2006 NAHB President David Pressly, from Statesville, N.C., remains on the leadership ladder as the immediate past president. Rounding out the association’s leadership is NAHB Executive Vice President/CEO Jerry Howard, from Washington, D.C.

Michigan Builder Robert Jones Elected NAHB Senior Officer

Robert R. Jones, a luxury home builder from Bloomfield Hills, Mich., was elected vice president/secretary of the 235,000-member NAHB during the association’s International Builders’ Show in Orlando, Fla. on Feb. 9.

“I’m proud to have the opportunity to serve this great industry that has been my livelihood for more than 25 years,” said Jones. “Many markets are starting to turn the corner following the recent downturn; others still have a ways to go. But the tide is definitely shifting in the right direction. Now is the time to make sure we provide the resources and help that our fellow builders need to get back on that path to success.”

Following certification of his eligibility to run for an NAHB office, Jones embarked on a year-long nationwide tour, visiting state and local home builders associations, attending regional builders conferences and meeting with past NAHB leaders as well as some of the best and brightest new talents in the industry.

“The common attribute among our members is their commitment,” Jones said. “They are involved, knowledgeable and definitely outspoken about the challenges that confront them. They shared with me their thoughts and concerns honestly and straightforwardly, providing me with a solid understanding of the issues that are on their minds. This campaign has been a fantastic educational experience.”

Bob Jones started his company, Robert R. Jones Homes, in Michigan in 1979 with his wife, Carole, and quickly developed a solid reputation as a quality small-volume, single-family home builder. Realizing the value of involvement in his local, state and national builder associations, he was elected Michigan’s national representative to NAHB in 1998-99 and was named “National Representative of the Year” for his efforts. Jones also led the 12,000-member Michigan Association of Home Builders as its president in 1999 and previously served as president of his local association, the Building Industry Association of Southeastern Michigan, as well. His local BIA inducted him into its hall of fame in 2000.

Since 2002, Jones has made an even greater commitment to helping lead his national association forward, serving as chairman of two major committees as well as a specially appointed working group; serving as vice chairman of the National Council of the Housing Industry in 2004; and participating as a member of five major committees and task forces, including two positions on NAHB’s powerful Budget and Finance Committee.

Jones’ election to NAHB vice president/secretary puts him on the ladder to become the association’s president in 2010.

Florida Builders Help Tornado Victims Rebound

The Florida Home Builders Association (FHBA) and the HBA of Lake County on Feb. 8 hosted a construction fair to help citizens devastated by recent tornadoes in the central part of the state with their construction repair and rebuilding needs.

Participating in “OPERATION REBUILD: Building Florida Back Better” were state and federal agencies, local building officials, and home hardening and disaster contractor organizations. Gathering in one large tent in the parking lot of the Home Depot of Lady Lake, they distributed “model” rebuilding contracts and important information on the state’s building code, building permits, licensed contractors and how to make homes stronger when they are reconstructed.

The effort provided home owners with all of the key information they need to begin rebuilding.

OPERATION REBUILD is a service that the FHBA provides to communities that have been hard-hit by natural disasters. “We’ve seen the benefits OPERATION REBUILD provided after the devastating hurricanes of 2004 and 2005 and we’re excited to be able to aid Central Floridians recently impacted by the tornadoes,” said John Wiseman, the association’s president and president of CORE Construction of Florida.

Instrumental in the success of the program were Jim Bible, president of the HBA of Lake County and vice president of Showcase Homes; Lake Past President and FHBA Life Director George Hansford; Lake Executive Officer Jean Kaminski; and Richard Vorchack of Showcase Homes.

Office Depot Deals: Music to Your Ears

Office Depot® is offering special savings for NAHB members, plus a free introductory gift*.

To learn more about Office Depot's special savings program and free introductory gift*, click here.

* Available for phone orders only. The cost of the free Slim CD Stereo CD Player does not contribute to your minimum purchase. Limit one offer per customer/business. Valid for in-stock items only. No rainchecks. Non-returnable. Available while supplies last. Office Depot®, at its discretion reserves, the right to make substitutions of equal or greater value. The offer expires Saturday, March 31.

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

GM Business Choice, Lowe’s Team Up to Reward NAHB Members

The GM Business Choice program is designed to help eligible business owners meet their specific business needs. By purchasing or leasing an eligible new GM vehicle, you can choose from one of five options, including up to $500 on a Lowe’s gift card (Option C) for your business or that next home project.

GM is the exclusive automotive manufacturer of the NAHB and currently extends a $500 private offer on most GM vehicles to members upon purchase or lease. NAHB members must present NAHB proof of membership form at time of delivery to take advantage of this offer.

In addition to these two great offers, there’s now even more. For a limited time only, NAHB members can receive an additional $200 Lowe’s gift card (after selecting Business Choice Option C — Lowes Gift Card) with their eligible purchase or lease, bringing the total possible offer amount up to $1,200.

The $200 Lowe’s gift card limited time offer is available through Saturday, March 31.

For more details on the GM Business Choice program, visit www.gmbusinesschoice.com, or visit your local Chevrolet and GMC dealership.

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

Lock in 2006 Visa/MC Processing Rates Before Increase

Year after year MasterCard and Visa have consistently announced nationwide interchange processing rate increases each April. If your HBA and members accept credit cards for payment, you know how much these changes impact your association's and your members' bottom lines.

NAHB has negotiated an exclusive deal for members to avoid this potential increase. Members who enroll in the NAHB Credit Card Processing Program through Solveras Payment Systems before Wednesday, Feb. 28 will lock in 2006 rates.

That means if MasterCard and Visa raise rates in April, your processing rates will not increase with the rest of the country, but instead remain at the same 2006 levels.

Add that to the program’s regular discounts on credit card processing, simplified monthly billing and an easy-to-read account statement, and you’ll find an excellent opportunity for you to keep more profit on every credit card sale.

Take advantage of the free savings analysis to see in writing how this program can cut your monthly costs and streamline your billing process. This tool consistently uncovers savings for two out of three businesses — finding average projected savings of 17%.

You and your members should take a moment to see how this program could impact your bottom line.

Simply fill out the form linked to the Solveras Payment Systems Web page (scroll down to the linked PDF) and fax the form to 800-297-3405 for your free analysis, or call 800-613-0148.

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

Calendar of Events

Nation's Building News Online: February 19, 2007

Housing Expected to Improve as the Year Progresses

Grants Available to Local HBAs for ‘Buy-Now’ Campaigns

Big Builders Prepare for an Acquisition ‘Feeding Frenzy’

Share Nation's Building News With Your Staff. It's Free.

Wanted: Home Builders for the Moon

Beyond Moscow, Dachas Make Way for Suburbia

The Incredible Shrinking Downpayment

Home Shoppers Do Their Hunting Online

Ten Home Products That Are Turning Heads in 2007

A Streamlined Approach: New Products Aim to Save Space, Sanity

Dodd Supports Work Opportunity for Immigrants

Jackson Says President Committed to Increasing Homeownership

Builders Focusing on Energy Efficiency, Congress Told

With Unsold Homes to Sell, Builders Slow January Starts

Builders Gain Confidence in Prospects for Home Sales

Hard-Line Critics Would Damage GSEs, Says Freddie Mac CEO

Eye on the Economy: The Inventory Overhang Is Heavier Than It Looks

Useful Links to Monitor Economic and Housing Trends

Builders’ Tip: How to Make Invisible Drywall Butt Joints

Smaller Homes, Outdoors Spaces: Hot Stuff in 2007

Toilet Tank Aquarium Brings New Bathroom Twist

Aiming for Satisfied Customers Is Not Good Enough

Builders Advised to Rev Up Competitiveness in Down Market

Best in Sales and Marketing Honored at The Nationals at IBS

Utah Developer Tippets Named 50+ Housing Council Chair

Seventeen Winners Fuel Up on Education at IBS

Education Calendar

Green Building Standard to Be Based on NAHB Guidelines

Participants Sought for Green Building Standard Committee

Green Building Seminar Looks at ‘Building With Trees’

Weak Levees, Updated Flood Maps Bad News for Builders

With Wetlands Permits Expiring, Delays Expected

Siding With Builders, District Court Rejects Wetlands Rule

OSHA Chief Says Builders Are Reaching Out and Saving Lives

Safety Awards Recognize Housing Industry Job Safety Efforts

Cisneros Tells Builders to Prepare for Latino Surge

Tampa Builder William Paul to Chair Home Builders Institute

Owens Corning Products Boost Sales in Down Market

NAHB-Produced Programs on HGTV and DIY This Week

Georgia Builder Earns Top Honor for Community Service

Jacksonville HBA Honored for Building Needed Homeless Shelter

California Builder Brian Catalde Elected NAHB President

Michigan Builder Robert Jones Elected NAHB Senior Officer

Florida Builders Help Tornado Victims Rebound

Office Depot Deals: Music to Your Ears

GM Business Choice, Lowe’s Team Up to Reward NAHB Members

Lock in 2006 Visa/MC Processing Rates Before Increase

Calendar of Events