Nation's Building News Online: February 26, 2007Print All Articles Text Version |
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Rapid Changes Foreseen for Home of the FutureThe pace of change in the American home is expected to accelerate dramatically in the next several years, according to 60 NAHB interviews with some 500 architects, designers, manufacturers and marketing experts asking them about what they expect to be prevalent in average and upscale homes in 2015. The big news is that single-family homes are expected to end the growth spurt that has persisted, with some cyclical interruptions, since 1973. “We don’t think the size will rise anymore,” Gopal Ahluwalia, NAHB’s vice president for research, told an audience at the International Builders’ Show in Orlando, Fla. earlier this month. The high cost of housing has forced consumers to start making trade-offs, and higher quality is trumping additional space, Ahluwalia said. The new single-family homes that were completed during the first three quarters of last year had floor areas averaging 2,459 square-feet, he said, up from about 1,500 square feet in 1973. The consensus of the professionals who were polled by NAHB was that home size would slip into the 2,300 to 2,500-square-foot range by 2015. However, compounding the picture are projected changes in the composition of the U.S. population that favor ethnic groups who tend to have larger households. Compared to a 2.8% increase in the white population between 2000 and 2010 and a 2.4% increase by that group from 2010 to 2020, Hispanics are poised to grow by 34.1% and 25.1%, respectively, during those periods, and Asians by 33.3% and 26.3%. In 2015, Census Bureau projections show an average 2.46 persons per white household, compared to 3.36-person Hispanic homes and 3.45 in Asian domiciles. What they have been losing in square footage, however, home buyers have been getting back in volume, and higher ceilings are here to stay, according to the survey findings. Forty percent of those participating in the research said they expected changes in homes to be more significant or greater in the next decade than they were in the past 10 years and 41% indicated that they would be about the same. Among the issues they said would bring these changes were accessibility for the aging baby-boom population, technological advancement, green construction materials and environmental concerns. The Demise of the Living Room The experts said that 65% of average homes and 56% of upscale homes (defined as those with at least 4,000 square feet) would be two stories or more. According to Census data, 55% of the homes built in 2005 had two or more stories. Noting that two-story construction is less expensive than one-story on a square-foot basis, Ahluwalia observed that “as housing prices go up, the share of two-story homes goes up.” Ahluwalia, who has been predicting the demise of the formal living room for the past several years, said that “living rooms are on the chopping block, and 40% of homes built last year didn’t have one.” Sixty-eight percent of those surveyed said that the living room would shrink as a share of total floor area in the average home over the next 10 years, a trend that is not as clear in upscale homes. In further research on the fate of the living room, 55% said it would vanish in the average home and 31% said it would evolve into a parlor/retreat/library or music room. Only 13% expected it to stay the same. However, only 4% said that the living room would disappear entirely from the upscale home, 67% said that it would be put to other uses and 28% said it would stay just as it is. The room in the average house most likely to gain in its share of square footage is the family room, according to 67%. In the upscale home, 72% said the family room was on the rise, and 68% identified the kitchen. Among other findings of the "Home of the Future" study:
For a corresponding story in this issue of NBN on trends in housing by the editor-in-chief of Better Homes and Gardens, click here. Apply for ‘Buy Now’ Advertising Assistance Grants From NAHBIf your local association is currently engaged in an ongoing advertising campaign in print, radio or television outlets, or if you are planning such a campaign, have your association apply for a “Buy Now” advertising assistance grant from NAHB. To date, 12 local associations have already applied. NAHB launched the multi-million dollar grant program last week to assist local home builders associations in an effort to bolster home sales in markets hit hard by the current housing downturn and help offset the cost of local ad campaigns. The NAHB “buy now” ad assistance program will provide grants to qualifying HBAs in three different categories:
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, eligibility considerations and requirements, click here (www.nahb.org/buynowapplication), or call Niki Clark at 800-368-5242 x806l. Learning Program Knocks Down Language Barrier for HispanicsA new self-paced learning program is now available to help the home building industry’s 2.5 million Hispanic workers learn to speak English. Sed de Saber™-Construction Edition, sponsored by Lowe’s, was created by the Home Builders Institute (HBI), the workforce development arm of NAHB, to address job site communication and safety challenges presented by the language barrier. Sed de Saber™-Construction Edition uses the Quantum LeapPad™ plus a microphone and seven interactive books to teach Spanish-speaking workers more than 500 words and 340 phrases, providing a functional level of English language conversation and comprehension in an average of four months. The system enables users to record, play back and compare their pronunciation to the correct pronunciation of the words and phrases they are learning. The curriculum teaches sentence structure and covers workplace scenarios such as communicating with customers, co-workers and supervisors, as well as life skills, such as visiting the doctor, filling a prescription or participating in a parent-teacher conference. To address safety-related issues, the seventh book in the program focuses entirely on safety practices, following "NAHB/Occupational Safety and Health Administration Job Site Safety Handbook" protocols. “Sed de Saber™-Construction Edition is an opportunity for builders to take a leadership role in a critical workforce issue for our industry,” said Mike Sivage, HBI’s immediate past chairman and a leading force behind the effort. “Empowering workers to learn English can impact safety, communication and quality, as well as boost loyalty, recruitment and morale.” The program allows workers to practice at their own pace, on their own time (off the clock) and in the privacy of their home, which boosts English language proficiency for the entire family. Each learning system comes with a skills assessment that enables builders to evaluate their employees’ progress. “What’s so unique about this program is that it helps us give back to builders in a way that can positively affect the way they do business,” said Mike Horn, vice president of commercial sales at Lowe’s. “Yes, it’s about overcoming language barriers — but for Lowe’s, it’s also about enhancing our commitment to our customers and becoming the valued partner we know they deserve.” In December 2006, HBI and Retention Education initiated a five-week test of Sed de Saber™-Construction Edition in Washington, D.C., Seattle, Indianapolis and Las Vegas. Eighty two participants completed the first book in the program with an average English language proficiency score improvement of 40%. “Using the program on job sites resulted in an increase in productivity and efficiency," said Oliver Prock of Rehabitat Northwest, a Seattle-based home builder. “Our employees were able to work better as a team due to the decreased language barrier.” Developed by a group of superintendents, trade skills experts, builders and remodelers, Sed de Saber™-Construction Edition meets standards of adult assessment systems approved and validated by the Department of Education and the Department of Labor. In addition to the Quantum LeapPad™, microphone, books and cartridges, the kit includes a headset, power adapter, carrying case and first-user skills assessments. Sed de Saber™-Construction Edition will be available for delivery beginning March 1 and orders may be placed by clicking here (www.seddesaberconstruction.com). The system retails for $395 for NAHB members and $495 for non-members. Additional skills assessment packages can be purchased for $75 each. For more information e-mail Ashley Mills at HBI, or call her at 800-795-7955 x8926; or contact Maria McIntyre, x8912. Share Nation's Building News With Your Staff. It's Free.Make your business click. Subscribe your employees and trade partners to Nation's Building News — the free, online e-newspaper of NAHB. Each issue is filled with valuable news and information on every aspect of the home building industry — business and builders tips; the latest materials prices and mortgage interest rates; new technologies; cutting-edge design; state and federal regulations and how they affect the industy; and more. Information your entire company needs to stay ahead of your competitors. Forward this issue to your employees and trade partners and ask them to subscribe. Nation's Building News, it's free to them — invaluable to you. Don't delay, have your employees subscribe today. To subscribe, go to www.nahb.org/nbn. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Housing Remains Steady Amid the GloomA recent run of bad news from home builders — including a downbeat outlook on sales and earnings from Toll Brothers, the troubles of sub-prime mortgage lenders and weak housing starts in February — led economists at MSNBC.com to take a look at major housing sector indicators to see where the ongoing housing market correction currently stands. The compilation of those indicators found a bounce in real estate activity since last year’s big downsizing from June through August, but more weakness in the pipeline, with high inventory levels likely continuing to put downward pressure on prices, starts, construction and completions through the middle of the year. “As such, housing should continue to weigh on GDP growth through midyear. With all that, we are about 20 months into the housing correction, and we have yet to see any meaningful net wealth or industry contagion effects of the real estate market adjustment. If the seasonally important spring real estate market shows stable conditions, the risks that the Federal Reserve will have to move on interest rates as a result of volatility in this sector will diminish considerably.” (www.NSNBC.com)
This Year Could Be the Calm Before the Housing BoomCarey Rosenblum, a broker and owner of Rosenblum Realty who sells for several builders in the Huntsville, Ala. market, says that buyers may want to make their move soon to take advantage of current interest rates, which have been hovering around 6%. Rates are expected to rise to around 6.5% to 6.75% this year, he said, which can add another $30 to $50 to a monthly payment. While Hunter Homes President Shawn Fairburn says he doesn’t anticipate market saturation slowing sales for another 18 to 24 months, his company is already offering a “$100 gets you into a house” deal, which will continue throughout the year. Huntsville, so far, has been largely immune to the declines being experienced in major U.S. cities, Fairburn indicated. “I think the market is here right now and, unless there’s a major change in consumer confidence where we may have to pare down a few projects in the future, we’re staying the course,” he said. With a good credit rating and $100 in earnest money, a first-time or mid-market buyer can get into a new house, Fairburn says. Additional costs for title insurance, mortgage insurance and mortgage costs may apply depending on the lender. In the past years, he says they’ve offered similar deals with $500 down. “The consumers just don’t have the money to buy a brand new home, but it gets them started in the process and in procuring financing,” he says of first-time buyers. “By focusing on that market, we knew they needed access to 100% financing on homes in the affordable range. We also knew we had to educate these buyers, so we do home buyer seminars to show them they can own a home and afford to do it.” The marketing strategy has proven successful, he says, adding, “We’re enjoying a very good, robust sales season. January has been record-breaking in sales.” (www.al.com)
Housing Decline Hits Area UnevenlyThe Baltimore metro market has weathered the soft housing market fairly unscathed, with only one out of six areas experiencing price declines and some posting hefty gains. The striking split seemed to be related less to location, location, location than to price, price, price. Areas with declines were generally expensive, with homes costing $500,000 on average, while many of the fastest-appreciating communities were more affordable. Half of the region’s 10 most costly ZIP codes in 2005 saw a drop in their average home price last year. Prices in half of the city’s neighborhoods jumped at least 20%, although some of these neighborhoods previously saw no real price appreciation for two decades. “It was the collapse in affordability that was the catalyst for the housing correction,” said Mark Zandi, chief economist at Moody’s Economy. Com. “Those areas where prices are high and affordability low were the areas that got hit the hardest.” Zandi expects to see price decreases in the region this year of about 5% to 10%, but John McClain, a senior fellow at George Mason University’s Center for Regional Analysis, says that the area has probably seen the worst of it and will show about a 5% gain in prices this year. (www.baltimoresun.com)
A Tale of Two Housing MarketsThe supply of houses in North New Jersey with an asking price of $2.5 million or more is so high that it would take about 2-1/2 years to sell them at the current sales pace, said Jeffrey Otteau, an East Brunswick real estate appraiser who analyzes the Garden State’s housing market. By contrast, the supply of houses selling for less than $600,000 ranges from about five to eight months, depending on the county. The market for high-priced houses is always going to be smaller than the market for starter homes, he says because there are more middle-class people than rich people. But that trend may accelerate in future years because the state has been slow to create high-paying jobs and recent job growth has been in low-wage, low-skill industries such as restaurants. And the glut of high-priced houses will increase over the next decade as baby boomers retire and unload their six-bedroom empty nests, Otteau said. “Essentially, there are a lot more buyers in lower price ranges,” said Adam DeFino of DeFino Realtors in Wyckoff. “The higher you go, the less of a buyer pool you have. If you put a house on the market in the right town, under $500,000, it’s going to go pretty quickly.” Luxury homes, however, are a discretionary purchase, said Eric Belsky, an economist with the Joint Center for Housing Studies at Harvard. Prospective buyers of those homes already own houses and can hold off on trading up if they think the cost is too high. (www.northjersey.com)
Las Vegas Casinos Help Make Housing AffordableThe gaming industry in Las Vegas is looking for solutions to the area’s rising home prices at the same time as it contemplates hiring tens of thousands of housekeepers and their bosses over the next few years in a low unemployment market. This month, MGM Mirage Inc., one of the two biggest casino companies off and on the Strip, announced a program with two real estate developers to build more affordably priced housing for casino workers as part of a master-planned commercial and retail development about 25 miles away from their jobs. The company is studying new forms of high-density housing that could significantly reduce home prices, while using low-cost financing to help developers make a profit, said Jim Murren, the company’s president and chief financial officer. “People we care about want a sense of ownership,” Murren said. “We don’t have all the answers, but we hope this is something others will emulate.” Alan Schlottmann, a University of Nevada Las Vegas economics professor and executive director of the Theodore Roosevelt Institute, a national think tank that studies public policy issues, said companies that help their workers on such a primary level can better fend off pressure to increase salaries from unions while building loyalty among workers struggling with a higher cost of living. (www.jacksonholestartrib.com)
Social Security Number as Mortgage PrerequisiteA new legislative proposal in the U.S. House of Representatives with uncertain prospects for moving forward would curb an increasingly popular mortgage practice of allowing potential home buyers to use Individual Taxpayer Identification Numbers (ITINs) to apply for a mortgage loan instead of Social Security numbers. ITINs are issued by the Internal Revenue Service to immigrant workers who don’t quality for Social Security numbers so that they can report their income and pay federal taxes. Bank of America earlier this month announced a pilot program in Los Angeles to provide credit cards to resident immigrants with ITINs, and that prompted some critics to charge that the bank was seeking to profit by helping illegal immigrants. But Timothy Sandos, president and chief executive of the National Association of Hispanic Real Estate Professionals, said that the bill would be “extremely disruptive” and affect far more people than the illegal immigrants being targeted. Sandos estimated that as many as 8 million resident aliens in the U.S. do not have Social Security cards but are in some phase of the immigration process leading to citizenship. That process can take more than eight years and “meanwhile these individuals are working here, earning incomes, paying taxes, contributing to the economy.” A study by Sandos’ group concluded that if mortgage companies made more use of ITINs to extend home loans to qualified buyers, $44 billion in new mortgages — primarily to first-time buyers — could be originated. (www.washingtonpost.com)
Letter to the Editor: Bringing a New Dimension to ToiletsDear Editor: As one of the strongest proponents of High-Efficiency Toilet technology and as a representative of U.S. water utilities that promote these new products, I must respond to (and maybe even expand upon) your Jan. 29 story, “New EPA-Certified Toilets Address Water Shortages.” A few points to note:
WaterSense for HETs is ONLY possible because the plumbing industry undertook in the late 1990s to re-engineer their products, improve performance and incorporate water efficiency as an important element of design. Both the EPA and the manufacturers are to be commended for their bold steps forward. I urge subscribers to Nations Building News to view and bookmark the Web sites shown above as the best resources for the latest information on toilets. John Koeller
Indianapolis Remains Most Affordable Housing MarketIndianapolis has remained the most affordable major U.S. housing market for a solid year and a half, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI), with the release last week of results for the final quarter of 2006. Nationwide, housing affordability edged slightly upward during the quarter due to a noticeable decline in the average mortgage rate and a marginal downshift in the median price of all homes sold. “The latest HOI reading indicates that 41.6% of new and existing homes that were sold during the fourth quarter of 2006 were affordable to families earning the national median income of $59,600,” said NAHB President Brian Catalde. “This is slightly better than the 40.4% of homes that were affordable to median-income earners in the third quarter and mostly due to more favorable mortgage rates near the end of the year.” The HOI showed a national weighted interest rate on fixed- and adjustable-rate mortgages of 6.52% in the fourth quarter, compared to 6.77% in the third quarter. In the nation’s most affordable major housing market of Indianapolis, 89% of homes sold in the fourth quarter were affordable to families earning the area’s median household income of $65,100. The median sales price of all homes sold in Indianapolis during that time was $113,000, which is down from the $122,000 median sales price in the previous quarter. Also near the top of the list for affordable major metros this time around were Youngstown-Warren-Boardman, Ohio-Pa.; Detroit-Livonia-Dearborn, Mich.; Toledo, Ohio; and Buffalo-Niagara Falls, N.Y., in that order. Four smaller metro markets outranked all others in terms of housing affordability during the fourth quarter: Springfield, Ohio was followed by Davenport-Moline-Rock Island, Iowa.-Ill.; Bay City, Mich.; and Mansfield, Ohio, respectively. Also, the small housing market of Canton-Massillon, Ohio, tied with Indianapolis on the affordability scale. Also maintaining its previous standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which was the nation’s least-affordable major housing market for a ninth consecutive quarter. There, just 2% of new and existing homes sold during the fourth quarter were affordable to those earning the area’s median family income of $56,200. The median sales price of all homes sold in the area during the period was $525,000. Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Diego-Carlsbad-San Marcos, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Modesto, Calif., in that order. Among metro areas smaller than 500,000 people, every entry at the bottom of the affordability chart was located in California, starting with Salinas as the least affordable and followed by Napa, Merced, Santa Cruz-Watsonville and Santa Barbara-Santa Maria, Calif., respectively. Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. U.S. Shenanigans Threaten to Unravel Canada Timber PactIn a development that could hold negative repercussions for housing affordability, the U.S. government may be attempting to squeeze even more concessions from Ottawa less than four months after a trade pact governing softwood lumber imports from Canada took effect, according to NAHB. “In what appears to be a bid to put new pressure on the Canadian government to consider even more onerous concessions that would further harm its lumber industry and hurt American consumers in order to make a handful of major U.S. lumber producers happy, Washington seems to be alleging that Ottawa is trying to subsidize its lumber industry through lower utility rates,” said Jerry Howard, executive vice president and CEO of NAHB. The two nations concluded a seven-year deal last fall that imposes an export tax of 15% on lumber at current prices, which essentially helps domestic producers at the expense of U.S. consumers by artificially boosting lumber prices during periods of normal or slow demand. U.S. Trade Representative Susan Schwab on Feb. 15 cast doubt on the viability of the long-term treaty, testifying before the Senate Finance Committee that the “deal with Canada is threatened by provincial governments.” A published report said that Washington is apparently alleging that reduced electricity rates in Ontario is providing an unfair trading advantage for Canadian lumber producers. “If it is true that the U.S. is willing to go out on a limb to say that lower utility rates in Ontario pose an unfair advantage to Canadian lumber producers, then the Canadian government ought to reasonably conclude that the U.S. is not committed to honoring this agreement and is looking for any excuse to re-open the accord to achieve even more favorable terms for domestic lumber producers,” said Howard. Such a development would almost surely bode poorly for the Canadian industry and American consumers alike, he noted. “The current agreement is bad for American home builders and consumers because it will increase volatility in supply and prices," said Howard. “Further attempts at tampering will only exacerbate this situation. If the U.S. is seeking any pretext to charge that Canada is cheating, perhaps it is in the best interests of Ottawa to look at exercising its options to withdraw from this agreement.” For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Want to Know the Housing Starts Through 2015? Find out in HousingEconomics.com’s Long-Term Forecast. HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more. To learn more, visit www.housingeconomics.com. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. 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. The method shown in the accompanying drawing is my solution to the problem. 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.
Using this technique, we never had a joint show up on a punch list at the completion of a job. — Tim Hanson, Indianapolis, Ind. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Christina Glennon at Fine Homebuilding. BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665. Free NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Real Living Needs Shape Dream Home Buyers WantBased on constant feedback from her readers and from reviewing thousands of new and remodeled homes each year, Gayle Butler, editor-in-chief of Better Homes and Gardens, says that consumers these days are putting their dollars in dream homes that accommodate the needs of real living. “Today’s dream is a home that fits their personal reality,” Butler told an audience at the International Builders’ Show in Orlando, Fla. earlier this month. “There is a heightened interest in the design of homes to meet needs in a real way,” she added. Butler described six attributes that are driving home buyers and owners today and creating trends with implications for housing in the future:
Must-Have Tech Trends Setting Homes ApartThe simple fact that technology can make new homes stand apart from the competition drew hundreds of builders to a packed seminar on the “Top 10 Must-Have Technology Trends” at the International Builders’ Show in Orlando, Fla. earlier this month. Home theatre, home health care, automated lighting, security systems and gaming rooms are among the “must have” technologies that builders need to be incorporating into their new homes, said Utz Baldwin, vice president of the Custom Electronic Design and Installation Association. Baldwin’s top-10 list includes the following:
Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com). Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.
Earn Valuable Sales and Marketing Designations Through IRM Programs The Institute of Residential Marketing (IRM) offers four designation programs for sales and marketing professionals:
Want to Know More? Ask an Expert You also can ask designation holders questions about obtaining a designation, specific courses, case studies and more. "Ask An Expert" is available on the NAHB Web site by clicking here.
'Sales and Marketing Checklists' Covers the Ins and Outs of New Home Sales “Sales and Marketing Checklists for Profit-Driven Home Builders,” available through BuilderBooks.com, covers the major steps involved in successful new home sales. Learn the ins and outs of the comprehensive contract, the move-in, warranty service, asking for referrals and a great close. This expanded second edition also includes a new chapter on utilizing technology in your marketing and a more extensive chapter on multicultural sales. To view or purchase this publication online, click here, or call 800-223-2665. 20 Ways to Cut Construction Costs and Improve ProfitabilityDiscounting home prices and reducing profit margins are not the way to weather the current downturn in the housing market, according to Charles Shinn, Jr., president of the Lee Evans Group and Shinn Consulting based in Littleton, Colo. Instead, what builders should do is control and cut their construction costs, Shinn said at the recent International Builders’ Show in Orlando, Fla. Cutting these costs would lead to improved profitability — even during the downturn — and enable builders to put their companies in the position to fully take advantage of the market’s eventual upswing when it comes. “Direct construction costs are the only variable builders have to work with,” said Shinn. Most other costs, he noted, are dictated by factors outside a builder’s control. The market sets the sales price; land costs and operating costs are fixed; and “builders should not negotiate their targeted profits,” he said. “You have the most control over direct construction costs, and you need to attack them on all fronts.” Shinn offered builders at least 20 different — and relatively simple — ways to cut constructions cost. They ranged from systematic changes, such as improving all working drawings so they include the details and have the accuracy and uniformity to improve the building process, to simple procedures such as having the plumber cover installed tubs with a protective platform to keep trades working in the bathroom after the plumber is finished from damaging the tub or filling it with trash. “Just covering the tub could save you $400 a home,” Shinn said. Other simple changes that Shinn offered included re-engineering and reducing the HVAC system so it is smaller, but no less efficient; changing to a 40-gallon water heater; standardizing window sizes for all plans; lowering ceiling heights from 10 feet to an accepted 9 feet; eliminating crown molding in coffered ceilings; using half walls, which are less expensive, instead of handrails and pickets where applicable; and more. The cost savings of these types of small changes can add up, Shinn said. Shinn also offered builders 20 systematic changes to the production process, though often just as simple, that can significantly cut construction costs without reducing their profitability. These include:
NAHB Has More Than 300 Resources to Help You Run Your Business More Profitablytrong Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
Implement Procedures and Standards to Increase Quality Standardize each step of the construction process by implementing the tools and procedures in “The Scopes of Work Program: Procedures and Standards to Increase Quality,” available through BuilderBooks.com. Field tested by builders concerned with quality issues, this program has proven to significantly reduce warranty work. "The Scopes of Work Program" will help you:
To view or purchase this publication online, click here, or call 800- 223-2665 to order.
How Does Your Business Measure Up? Find out how your home building business measures up against the competition with NAHB's "Cost of Doing Business Study," available from BuilderBooks.com. This resource gives home builders the ability to compare profitability, cost of sales and expenses with hundreds of home builders across the country. This study analyzes several categories, including volume, type of operation, and land costs, to help builders fine-tune comparisons between study results and their companies and provides an opportunity to see how your financial performance stacks up against the industry as a whole — and against your goals for your business. To view or purchase this publication online, click here, or call 800-223-2665. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Survey Finds Price and Location Drive Condo SalesNearly half of all condo buyers choose their new homes without considering any other style of housing, according to a new survey by NAHB examining the preferences of condo buyers. Based on responses in September from more than 1,000 condominium residents who bought within the past two years, the survey also found that price and location were the two most important factors determining condo buying decisions. Each was cited by 70% of the respondents. Condos accounted for nearly half of all multifamily starts in 2005 but have since run into some oversupply problems in many of the industry’s leading markets. As conditions improve, condo building activity is expected to stabilize at a healthy and sustainable 30% share of the approximately 350,000 multifamily units expected to be produced annually during the period ahead. According to the survey, two groups of condo buyers are driving the condo market: young, well-paid professional singles or couples who want to own their first home close to urban amenities; and older households who want to remain in the suburbs but shed the maintenance burden of a house. Both groups also clearly indicated that they expect their condos to appreciate in value. “The core buyers for our product are single, without children, who want a lifestyle that allows them to enjoy the amenities inherent in a downtown environment,” said Judd Bobilin, executive vice president and chief development officer of the Atlanta-based Novare Group, which currently has more than 5,000 condo units in development. Bobilin noted that buyer traffic at his properties is comparable to the traffic the company saw in 2004, with sales continuing to average about five units per month. He also said that the number of out-of-state purchasers at his properties has dropped to about 20% or less, an indication that buyers — not speculators — are currently driving sales. Bobilin’s customers, like the participants in the NAHB survey, identified price and location as the top two factors determining their decision to buy a particular property, followed by size, desirable neighborhood and investment potential. “This is the first research study that probes the question of where condo buyers buy, why they buy there, and what amenities they look for to complement their new lifestyle choice,” says Gopal Ahluwalia, NAHB’s staff vice president for research. Survey respondents came from all four geographical regions of the country and represented the low, middle and high ends of the market. Included in the survey findings:
Remodelors Council Changes Name to 'NAHB Remodelers'The NAHB Remodelors™ Council has changed its name to the NAHB Remodelers in order to broaden industry and consumer recognition of the services its membership provides. The name change took effect at the 2007 NAHB Winter Board of Directors Meeting in Orlando, Fla. “NAHB is already the leading trade association for remodeling firms whether it’s membership, services or awareness, but we found that many inside and out of the industry were still confused as to what exactly is a council,” said Mike Nagel, CGR, CAPS, a remodeler from Chicago and the chairman of the 2007 NAHB Remodelers. “The change to NAHB Remodelers ensures that consumers and the broader industry associates NAHB with remodeling as well as new home construction.” The name change is also expected to spur more remodelers to join NAHB and local HBAs. Though there are roughly equal numbers of home building and remodeling firms in the country, at 80,000 each, according to the home building industry’s latest Census figures, NAHB represents a smaller percentage of remodeling firms than home builders. “I believe once the broader industry realizes what NAHB provides remodeling firms we’ll see that number jump dramatically,” said Nagel. “I can’t even begin to count the NAHB benefits that have bolstered my ability to run a competitive business.” “No one advocates more effectively, offers the top-notch educational opportunities or provides any other service to the remodeling industry better than NAHB,” Nagel added. The name change does not automatically affect state and local Remodelors™ councils across the county. The councils have the option individually to keep their current name or more closely align their name with the new NAHB Remodelers name. For more information, visit the NAHB Remodelers pages on the NAHB Web site. Chicago Remodeler Mike Nagel Named Chair of NAHB Remodelers
As chairman of the leading professional organization for residential remodeling, Nagel represents more than 14,000 remodeling industry members of NAHB. “Whether it’s amplifying our consumer awareness, building legislative influence or increasing professionalism, I plan to raise the bar in this critical year for the remodeling industry,” said Nagel. “Continuing the work of my predecessors, it’s time to take our industry to the next level.” Nagel is president of the design/build remodeling firm Remodel One, which he founded in 1985 and is headquartered in Roselle, Ill. He holds a variety of leadership positions within the remodeling industry and serves on industry trade show and publication advisory boards. Nagel also is an NAHB national life director, Build-PAC trustee and life director of his local home builders association. In addition, he teaches a consumer awareness course in the Chicago area designed to educate the general public on the remodeling process and how to hire a remodeling contractor. Minnesota Builder Willenbring Is New Women's Council Chair
Willenbring, who has been vice president of Willenbring Construction, based in St. Cloud, Minn., for the past 30 years, has been a member-at-large on the NAHB Women’s Council since the early 1980s. Additionally, she has served on the NAHB Women’s Council Board of Trustees as a regional trustee and has served as the public relations chair (2005-2006) for her local HBA, the Central Minnesota Builders Association. “The NAHB’s Women’s Council is an outstanding support network for professional women in the home building industry,” said Willenbring. “I am looking forward to building upon the past success of the council and expanding our impact in the market by helping women learn to be first-rate building professionals and industry leaders,” she said. As chairman, Willenbring will represent the interests of Women’s Council members throughout the NAHB federation, as well as manage the business of the council. Education Calendar
Learn More About The NAHB University of Housing Whether you’re new to the industry, hope to make your next career move or want to improve your company’s bottom line, The NAHB University of Housing can assist you in your educational pursuits. Visit www.nahb.org/education for a comprehensive listing of courses throughout the country. Be sure to visit often in order to view the most up-to-date information in your area. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. NAHB Submits Brief in Clean Water Supreme Court CaseNAHB has submitted its opening brief to the U.S. Supreme Court in NAHB v. Defenders of Wildlife. The Court plans to hear oral arguments in April. The case centers on the transfer of Clean Water Act permitting authority from federal regulators to the state of Arizona. The Defenders of Wildlife say that the U.S. Environmental Protection Agency, which administers the act, did not consider the needs of endangered species before it decided to transfer authority for the National Pollutant Discharge Elimination System (NPDES) permitting program to the state. EPA and NAHB both agree that the federal agency didn’t consider endangered species — because under the law it isn’t supposed to. “The plain language of CWA Section 402(b) requires EPA to approve state NPDES programs if nine specific criteria are met. None of those criteria mentions protection of listed species or the ESA,” said the NAHB brief. As a lower court judge pointed out in denying a rehearing of the case, “courts cannot add conditions to the list” of criteria. Congress created the act to “prevent, reduce and eliminate pollution” and called for states, not the federal government, to manage the permit program, NAHB’s brief said. EPA, the Home Builders Association of Central Arizona and the Southern Arizona Home Builders Association also are parties to the lawsuit. Forcing EPA once again to issue discharge permits in Arizona will cost builders more time and money, making homes less affordable in affected areas. According to the U.S. Fish and Wildlife Service, the time delays from consultations in the case of one protected species in Arizona ranged from five to 18 months; when added to the cost of onsite mitigation and project modifications, that costs a typical development between $1.7 million and $2.7 million. “We all share a big responsibility to protect our endangered and threatened species. That’s why NAHB is working hard with Congress to reform the Endangered Species Act,” said NAHB President Brian Catalde. Adding additional criteria to a wetlands permit adds expense that is passed on to home buyers, Catalde pointed out. “Furthermore, there is no logic to twisting a program designed to protect the waters of the United States to give special considerations to the pima pineapple cactus, a desert plant, and the pygmy owl, which is no longer listed as an endangered species. As Justice Antonin Scalia said about using the Clean Water Act to protect drainage ditches,’ this extends the reach of the act beyond parody.’" For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. AARP-NAHB Awards Honor ‘Livable’ Community DesignCo-sponsored by AARP and NAHB, the new Livable Communities Awards have been created to shine a spotlight on builders, remodelers and developers who build homes and communities with features that improve everyday comfort, safety and personal independence for those who live in them. The award program was announced Feb. 9 by AARP CEO Bill Novelli during an address to NAHB’s Board of Directors in Orlando, Fla. Novelli celebrated the multi-generational benefits of a design-for-all approach to home and community development. “Whether you’re a toddler, a teen with a backpack, a dad cooking dinner or a great grandparent using a walker, insightful home and community design can greatly improve your day. We hope this award will give building professionals an incentive to explore and employ new design approaches.” The award will be presented annually for projects that incorporate such aspects as:
The Livable Communities Awards will honor winners in each of the three industry sectors — builders, developers and remodelers — for small and large projects. Sponsors are seeking applicants that reflect the full diversity of the home building industry: single- and multifamily builders and remodelers, developers of large and small communities, for-profit and nonprofit, and family-run and corporate entities. Winning projects must have been completed and opened or eligible for occupancy between Jan. 1, 2005 and June 1, 2007. A panel of expert judges appointed by NAHB and AARP will review the applications and select the finalists. Judging criteria vary from category to category, but points will be awarded based on: universal design features, ease of maintenance and energy efficiency, exterior design and landscaping/site design, incorporation of livable community design features, and stakeholder involvement. Winners will be reviewed to determine that they are good corporate citizens and in full compliance with all applicable laws and regulations at the federal, state and local level. Applications for the first Livable Communities Awards are due by June 1. Winners will be announced in the 2008 January-February issue of AARP The Magazine, the largest circulation magazine in America. For more information, e-mail Blake Smith, or call him at 800-368-5242 x8583; or click here (nahb.org/livablecommunities). Information Sought on Affordable Housing DevelopersAffordable housing owners and developers have until this Thursday, March 1, to download and complete a survey that will give them an opportunity to be included in the May and July issues of Affordable Housing Finance magazine. The survey will be used to compile a list of the top developers and owners, as well as possible short profiles of the firms, for the magazine’s May issue. The July issue will feature a special section called “Developers Talk Back.” To download the survey, click here (find the link at housingfinance.com). Fax completed surveys to 415-315-1248. Best Affordable Housing Developments The publication is also in the process of looking for information on the best affordable housing projects in the nation in 2006 and 2007. The finalists will be published in the August issue, and the magazine’s readers will then vote for the winner in each category. The final winners will be published in November and will receive awards at AHF Live: The Tax Credit Developers Summit, Oct. 24-26 in Chicago. To download the nomination form as a PDF or Word document, click here (housingfinance.com). The deadline for entries is Monday, April 30. For more information, e-mail Donna Kimura, deputy editor at Affordable Housing Finance, or call her at 800-989-7255 x309. Freddie Mac Joins HBI for Gulf Coast Construction Training
Freddie Mac has joined Home Builders Institute (HBI) to establish a training program for Mississippi residents who want to become skilled members of the home building industry and help rebuild and revitalize communities hardest hit by Hurricanes Katrina and Rita. Through a $225,000 donation to HBI, the workforce development arm of NAHB, displaced workers will learn innovative concrete building technologies that are critical to the construction of hurricane-resistant homes. This new program will build on “Operation Reconstruct,” the skills training and college curriculum effort that HBI, NAHB’s Home Building Industry Disaster Relief Fund (HBIDR) and several other organizations created to meet the specific needs of the New Orleans area following the 2005 hurricanes. Mississippi resident and former NAHB President Bobby Rayburn, aware of HBI’s “Operation Reconstruct” in New Orleans and Freddie Mac’s commitment to bring about large scale rebuilding efforts to the region, facilitated the connection. Since Hurricane Katrina struck, Freddie Mac has financed more than $1 billion in low-cost mortgages and modified its policies to help thousands of storm victims avoid foreclosure. “It just made sense,” said Rayburn, who serves as president of the HBIDR. “Freddie Mac had the resources to bring this model program to Mississippi and HBI was just as eager to offer its expertise to help address the immense need for new homes and new jobs for skilled construction labor created by the storms. In addition to leaving many families homeless, Katrina and Rita caused Mississippi’s unemployment to skyrocket.” “I applaud Bobby Rayburn for bringing Freddie Mac together with home builders.” said Richard Syron, chairman and chief executive officer of Freddie Mac. “By learning concrete building technologies, workers will not only gain vital job skills, they’ll be rebuilding a Gulf region that is stronger than ever.” The training will focus on three trades extremely important to the rebuilding efforts — electrical wiring, carpentry and concrete technologies. Students will be involved with actual home construction as part of their training, receiving hands-on field experience while contributing to their community’s building effort. Partners, including three local home builders associations and their members, a local community college and community groups, will work together to ensure students receive the highest quality training and education in preparation for joining the area’s workforce. Separately, HBIDR has continued its support of HBI’s Katrina Relief programs, donating $100,000 for skilled training in Mississippi. That contribution will be added to the $225,000 from Freddie Mac and support from other project sponsors to make the new relief program as inclusive and efficient as possible. For more information on HBI’s Katrina relief efforts, e-mail Dennis Torbett at HBI, or call him at 800-795-7955; or contact Maria McIntyre, x8912. Owens Corning Shingles Fast to Install, Reduce CallbacksAiming at providing builders with products that will give their business a boost in today’s weaker housing market, Owens Corning has announced the introduction of its Duration™ Series Shingles with SureNail® technology. On the performance front, Owens Corning has continued to focus on providing products with fast, easy installation that maximizes productivity while at the same time delivering product performance that keeps customers satisfied long after the sale to reduce callbacks. Duration Series Shingles:
With world headquarters in Toledo, Ohio, Owens Corning is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page. Stud University Provides Steel Framing TrainingParticipants at this year’s leading steel framing industry forum — the Pacific Rim Framing Conference — will have the opportunity to participate in a hands-on training program on the construction workforce skills and techniques required for framing with cold-formed steel in both residential and commercial applications. “In North America, over the last decade the use of steel framing in home building has continued to grow, particularly in markets like California, Florida, Louisiana and Hawaii,” said Larry Williams, president of the Steel Framing Alliance. “There has been a significant amount of interest expressed by builders and home owners who are looking for strong and durable construction solutions,” he said. “This training program is designed to meet that need and provide a trained workforce that can build homes using steel framing.” Sponsored by the Hawaii Pacific Steel Framing Alliance and the Steel Framing Alliance, the Stud University will focus on the differences between working with steel and with conventional framing materials. Held on March 14 and 15 at the Hilton Waikiki Prince Kuhio hotel in Honolulu, the course covers a wide range of topics, including design and standardization, tools, fasteners, bearing and non-bearing walls, roof trusses, floor joists, ordering and delivering. The 16-hour training program covers all the basics of framing with steel and includes six hours of professional development for engineers. For more information about the Pacific Rim Framing Conference and to register, click here (hawaiisteel.com), or call 808-485-1400. The Steel Framing Alliance is a member of the National Council of the Housing Industry — The Supplier 100 of NAHB. This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page. NAHB-Produced Programs on HGTV and DIY This WeekThe NAHB Production Group produces three weekly television shows on HGTV and DIY for consumers. The following is the latest lineup: "Rock Solid" on DIY
"Assembly Required" on DIY
HGTV Seeking ‘Dream Home’ Builder/Architect Teams HGTV is seeking developers, builders and architects to create the 2008 and 2009 dream homes for the network’s Dream Home Sweepstakes. To learn more, click here. About the NAHB Production Group The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use. The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television. NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market With the current cooling of the nation’s housing market expected to persist into the middle of 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. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar of the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Apply for Herman J. Smith Scholarships by May 3
The Herman J. Smith Scholarship Fund, honoring 1981 NAHB President Herman J. Smith, provides assistance to graduate and undergraduate students studying construction management, mortgage finance and related fields. “We are so proud to work with the National Housing Endowment to provide educational opportunities for worthy students,” said Patsy Smith. “Herman’s favorite motto was ‘always leave the woodpile higher than you found it.’ I believe this scholarship is a testament to his philanthropic work and to his great love of this industry.” Patsy Smith currently serves as a trustee of the endowment. Since its inception, the Smith scholarship has awarded more than $145,000 to exemplary students. Applicants interested in applying for the scholarship funds must be pursuing study in a housing-related program such as construction management, construction technology, civil engineering, architecture, design or any of the trade specialties at a college or university. Preference is given to students who are residents of Texas or who are attending a Texas College or university, and who are active members in the NAHB Student Chapter at their college. To Apply Scholarship applications can be downloaded from the scholarship page of the National Housing Endowment Web site |