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Green Featured in Extreme Home Makeover in BillingsWith the help of a volunteer army of framers, electricians, masons, their subs, suppliers and business partners, Billings, Mont. builder and state home builders association president Jeff Junkert recently built a house for a deserving family as part of the ABC television series "Extreme Makeover: Home Edition." “It wasn’t about making money. It was about giving, and that was pretty cool,” Junkert said. The home was built and scored to the Silver level of the NAHB Model Green Home Building Guidelines, which will provide the basis for the National Green Building Program when it is unveiled at the International Builders’ Show in February. The project came about without much warning, Junkert said. Just before Memorial Day, show producers contacted Jeff Junkert Construction to see if the company would be willing to build a house for the Carters, a Billings family nominated for a new home. The five Carters were living in a refurbished chicken coop. Junkert, his wife Sue and company general manager Steve Baillie talked to the show representatives on a conference call. “They told us that we would have to build a home in one week. We would have to compress a process that takes five to six months,” Junkert recalled. Demolition of the Carter’s current house would have to take place on the 25th of June, and the new house would need to be ready for delivery to its occupants on June 30. 'Something We Needed to Do' “It took a while to process that” he said. “We had to make a fairly quick decision.” But the family’s compelling story of selfless volunteering in the face of debilitating illnesses and astronomical medical bills made up their minds. Julie Carter and her daughter Jade suffer from Chiari malformation, a condition that causes the brain to leak fluid into the spinal column. The Carters started a support group and publish a newsletter for Chiari victims and their families.
“I could tell before the conversation ended, that even though it was quite a project to tackle, it was really something we needed to do for the community and for the Carters — we didn’t have to call back. We made the decision right there,” Junkert said. Meanwhile, another project was beginning to take front and center for Junkert and his company. As the incoming president of the Montana Building Industry Association, he had an important agenda in mind: to help move the residential home building industry closer to green building. Working with architect Jeff Kanning of Collaborative Design Architects, Junkert reached a pivotal decision to incorporate green building into the extreme makeover. “We felt this was a prime opportunity and something I needed to do as a construction company,” Junkert said. The builder was already working with the architect on plans for a 350-unit development of multifamily and single-family homes, looking at choices for energy efficiency, indoor air quality, lot development and the other four categories to assemble enough points to achieve Silver ratings from the NAHB Model Green Home Building Guidelines. As the architect designed the Carters’ home, he took the same approach. “We came up with 55 items we wanted to achieve,” Kanning said. Rallying the Community And then they went to work, calling fellow BIA members, colleagues and competitors for volunteers and spreading the word about the enormous project that would take place in less than four weeks. “It’s incredible how our community rallied,” Junkert said. “We just built a pyramid of trades, and they would get three or four more subs — we ended up with subcontractors that would usually compete against each other now working side by side.” "We met with the trades hour by hour, talking about who was going to do what and how they were going to do it," all the while not having ever met the Carter family, who knew they were finalists for a new home, but were praying they would be selected. "It's very difficult in a community the size of Billings — you have to keep the project a secret yet create an underground network of volunteers and not have a leak," Junkert said. But the secret was kept until the TV talent knocked on the Carters’ front door and whisked them away in a limousine, leaving Jeff Junkert Construction and a building community full of volunteers to immediately start work. The pace was furious, but it was extremely organized chaos, just like you see on TV, Junkert said. “It was incredible. It was a 24-7 operation once we started demolition,” and no one gets much sleep. “The first night I took 45 minutes. That first 36 hours is the most intense, because you are doing all the excavation, but we had a completely framed home by 4:30 the next day and we were already roughing in the electrical and plumbing. We could have 100 people on the site at a time because they were 100 people that are very capable. Three Electricians in Every Room “We had 23 electricians, and if you put three in every room, they don’t have to rush. We had 40 masons in the house because they only had two hours to do their jobs. You didn’t give away quality for the time spent because the guys were qualified to do their piece and did it well.” Meanwhile, they kept the project green — and accumulated guidelines points. The home was oriented to take advantage of day lighting and guard against prevailing winds. It was constructed with advanced framing techniques, additional insulation, high-efficiency windows and HVAC system, low- and no-VOC paints, Energy Star® appliances and low-flow plumbing fixtures. During construction, “we plugged the heating registers in the floor to keep stuff from going into the furnace ducts, and we collected waste and recycled,” Kanning said, down to encouraging younger family members to collect scrap wood and empty plastic water bottles on the job site. “A lot of this stuff is a combination of good design and good construction practices — how you collect waste, how you handle your materials. Making a conscious choice doesn’t cost anything,” Kanning said. For example, said Kanning, “I walked around and made sure workers were putting caulking under the sill plates. It’s just doing the right thing.” Junkert estimates that the green changes added 2% to total construction costs, and most of that came from the high-efficiency appliances. And he is confident that no one cut corners to get the house delivered on time. “We put a warranty on it and we delivered it,” Junkert said. After all, “ABC left, but we were still here.” “This is a family that has real health concerns, so it feels good that we’re giving them a warm, well insulated, healthy home, and that their living quarters are no way going to contribute to their ongoing health problems. They have a green environment,” Kanning said. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Unsold Inventory Continues to Weigh on Florida BuildersTed C. Jones, a senior staff vice president and chief economist for Stewart Title Guaranty Company, told builders attending the Southeast Building Conference in Orlando, Fla. earlier this month that they are still building at a faster pace than the market can absorb despite a sizable slowdown in production and that deterioration of the subprime mortgage market has made it even more difficult to work down unsold inventory. “There is still overbuilding in Florida,” Jones said, and the industry is now paying the price for the real estate flipping that at the height of the housing boom became the nation’s latest get-rich-quick scheme and turned housing into the equivalent of a Yogi Berra baseball card. Jones said that both jobs and interest rates continue to be a plus for Florida’s housing industry, but supply and demand are seriously out of kilter. In the condo market alone, there are 50,000 units that have never been occupied, he said. “You guys have too much supply,” he said, “and working it out won’t happen in the next 12 months.” To illustrate the imbalance in the state, Jones said that new job creation is running at an annual pace of roughly 117,000 compared to almost 145,000 housing permits, and that about 1.25 new jobs are needed to create the demand for one new dwelling unit. “Most builders paid too much for dirt 24 months ago,” he said “and the only way they can keep in business is to keep on building.” Jones compared the typical prospective home buyer in Florida to “a circling buzzard looking on the highway for fresh road kill. They’re going to wait for it to rot.” Buyers who have been waiting for prices to go down still haven’t seen the bottom of the market, he conceded, but as interest rates rise even marginally they may start to realize that they should have bought at the higher price. Buyers are also starting to find financing more difficult to obtain as lenders turn to higher underwriting standards even for the prime borrower, he said. “People who could qualify for your home last year can’t this year,” he said. Jones advised builders in the audience to start cutting their costs and learn to make a living at the current sales pace, which has almost returned to normal following the unsustainable rate of two years ago. He also told builders to take a look at how they are spending their advertising dollars. “Tell me about your killer Web site,” he said. The latest research shows that 79% of home buyers are commencing their search for a property on the Web and that is where 29% first saw the home they eventually bought. Newspapers are generating only 5% of sales but on average are accounting for 39% of Realtor® ad budgets. “Your customer isn’t searching for a home in the conventional way, but you’re still selling your homes the old conventional way,” he said. At a special “Leadership Advantage” program sponsored by Countrywide Home Loans on July 11, one day prior to the opening of SEBC, economist Mark Zandi of Moody’s Economy.com delivered even more disheartening news. “The worst of the decline is over, but you’re a long way from recovery,” he said. Zandi said that the housing downturn is now two years old and the industry won’t return “to more normal activity” until 2010, according to a report in the SEBC Show Daily — the official publication of the conference. Despite his gloomy predictions, Zandi said that certain events could boost housing. “If the Fed lowered its interest rate, that would certainly help,” he said. “Loan modifications to help people stay in their homes would be a positive. The overall strength of the economy — not withstanding the problem in housing and autos — is certainly something to be thankful for.” ‘Buy Now’ Spotlight Shines on New York City BuildersLawrence Brinker, executive officer at the Building Industry Association of New York City, expected good things when he learned his HBA was a grant recipient of NAHB’s “Buy Now” Advertising Assistance Program — a program that provides advertising grants to qualifying HBAs hit hard by the housing downturn. But the results he and his 120 members saw were nothing less than great. The HBA’s advertising campaign featured an eight-week run of NAHB’s “Buy Now” print advertisements in the Staten Island Advance. The ads caught the eye of the newspaper’s real estate reporter. “The theme resonated with her and stimulated a Sunday front-page story,” said Brinker. “That’s not an easy thing to do in the New York City market. We couldn’t have done it without the NAHB grant money.” A concurrent radio campaign by the NYC Realtors® running the same messages also helped to more than double the HBA’s media exposure. And the media is not the only audience taking note of the campaign. Membership levels are growing as well. “The fact that NAHB has provided this grant to our HBA has impressed some of our former members so much, they’ve come back,” said Brinker. “Our members report an increase in activity that is attributable to the ads but also to the article,” said Brinker. “People are investigating the opportunity we say is there for them. And the ‘Buy Now’ ad on our Web site and the property listings of our members are all getting more play than before the advertising campaign began.” $2 Million Awarded to Date To date, 117 HBAs in 36 states have received or been approved to receive more than $2 million in NAHB advertising assistance. Including the matching funds that the HBAs contributed, the total value of their advertising campaigns is more than $6.1 million. $1 Million in Grants Still Available NAHB is encouraging HBAs that have not yet received or been approved to receive grant money to apply for NAHB “Buy Now” grants. The NAHB “Buy Now” Advertising Assistance Program provides grants to qualifying HBAs in three categories:
To Apply To learn more about the program, eligibility considerations and requirements, click here, or call Niki Clark at NAHB at 800-368-5242 x806l. To view a list of the HBAs that have received or been approved for grants, and their grant level categories, click here. First Rung on Property Ladder Gets Harder to ReachHeadlines about skidding home sales and prices portray a buyer’s market for real estate. But for first-time buyers, the market is more challenging now than at any time since the early 1990s. Rising mortgage rates have eroded almost all the financial relief that buyers might have derived from the slight decline in prices in most areas. On top of that, lenders are now demanding that customers produce larger downpayments, more cash reserves in the bank, higher credit scores and less debt — all of which many first-time buyers lack, especially in high-cost states such as California, New York and Florida. As lenders raise their standards for borrowers, the squeeze on first-time home buyers is constricting the broader real estate market and slowing the recovery because about one in three homes sold last year went to a first-time buyer. As these first-timers are shut out of the market, sellers ready to move up to bigger houses have a harder time selling their homes. In Miami, for example, where the median-price home has catapulted from $155,000 to $400,000 since the beginning of 2003, the demand for starter homes has largely dried up. Even though for-sale signs are sprouting on lawns like dandelions after a summer rain, sales of single-family homes priced below $250,000 tumbled from March to May, compared with the same period last year, says Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors. (www.usatoday.com)
In Parts of the West, Housing Is Still HotWhile demand for homes has nose-dived from Florida to California, some smaller metropolitan pockets such as Salem, Ore.; Wenatchee, Wash.; and Provo-Orem, Utah continue to thrive and are among the few places in the country where housing prices are growing at double-digit rates. Population growth and job growth are two reasons, and most of these small to midsize cities weren’t a part of the original housing boom and speculation that followed, so many of them are playing catch-up. “The Pacific Northwest was a little bit late coming to the party,” said Andrew Leventis, a federal housing economist. “The extreme appreciation over the past five or six years in the country only just began in the Northwest a few years ago. In Wenatchee, Wash., a 30,000-resident town east of the Cascade Mountains, homes appreciated an average of 25% from the first quarter of 2006 to the first quarter of 2007, according to the Office of Federal Housing Enterprise Oversight. Fifteen of 20 metro areas with the highest rates of home appreciation in the country for this year’s first quarter are in Washington, Idaho, Utah, Oregon, Colorado and New Mexico. (www.indystar.com)
Housing Trends: Riskiest U.S. Housing MarketsMiami ranks first on Forbes magazine’s list of the nation’s riskiest real estate markets. The publication compiled the list by looking at the nation’s 40 largest metros and assessing which of them had the most strained lending conditions and were the most overvalued and likely to face downward price pressures. Following Miami are Orlando, Fla.; Sacramento, Calif.; and San Francisco. Many of the cities on the list — like San Francisco and San Diego — are traditional high fliers where speculators can still make money if they pick the right neighborhood or hit the price trough. Others, like Chicago and Phoenix, are generally stable markets that are currently under significant strains. Finally, some, like Cincinnati or Kansas City, are precariously teetering and not well equipped to handle further downturn. High adjustable-rate mortgage shares generally indicate unaffordable markets. The metros with the highest shares of ARMs, according to the National Association of Realtors®, are San Francisco, San Diego and Los Angeles, respectively. Loan-to-value ratios over 90% mean that buyers have little equity in their homes and are more likely to default or walk away from a mortgage. With a 39% share of mortgages with LTV ratios above 90%, Kansas City is particularly vulnerable. (www.forbes.com)
Subprime Loans Kill Two Bear Stearns FundsA meltdown in the subprime mortgage market has made the assets of two of Bear Stearns’ flagship hedge funds almost worthless. Both funds were squeezed after Bear Stearns made wrong-way bets on the home mortgage market and was caught as loans to risky investors began to default. The assets in one of the funds, which was worth about $638 million, are essentially worthless, while another at the end of April was worth 9% of its $925 million value in March, according to a document obtained by The Associated Press. The problems began when the funds’ assets — mostly securities backed by risky mortgages to investors with less than prime credit — lost value amid rising defaults in a persistent housing slump. Defaults have been rising quickly, and a large volume of subprime loans with variable interest rates are slated to reset at higher levels in the next two years. (www.usatoday.com)
Making McMansion Owners PayAt a July 10 meeting, county commissioners in Boulder, Colo. approved a system of development rights transfers designed to discourage the construction of McMansions. Residents planning to build or expand homes larger than recommended thresholds — 7,000 square feet on the plains and 5,000 square feet in the mountains — would be required to purchase additional development rights at prices determined by the market, which might be in the hundreds of thousands of dollars per property. Critical, aesthetic and media sentiment around the country has been against giant homes. Last month, Minneapolis approved caps on home sizes limiting them to 50% of the lot. (www.time.com)
New Door Opens for ImmigrantsThe Hispanic National Mortgage Association is a major new funding channel connecting Hispanics and people from other communities with Wall Street and the global capital markets. Hispanic first-time buyers not only constitute a fast-growing segment of the market, but also can be among the most vulnerable to curveball pitches from subprime mortgage lenders and brokers. Many Hispanics, especially recent immigrants, have low credit scores — or not scores at all — and appear to be less creditworthy than they really are. They often don’t have credit cards or checking accounts. For many, their main credit-related activities — rent payments, utility payments, wire transfers to relatives in other countries — are never reported to the national credit bureaus. Loan officers often don’t look past the credit scores and tell applicants that the only way to buy a house is to sign up for a subprime mortgage with high fees, payment-shock rate resets and crushing prepayment penalties. The HNMA, which is based in San Diego and has joint venture-funding relationships with Deutsche Bank and Wells Fargo Home Mortgage, exists to change this pattern. It has funded about $300 million in new loans, and its target is $5 billion of nontraditional mortgages annually. (www.washingtonpost)
House Passes Reforms for Section 8 Voucher ProgramBy an overwhelming 383 to 83 margin, the House on July 12 approved H.R. 1851, the Section 8 Voucher Reform Act of 2007. The legislation would reform the Section 8 low-income housing voucher program by expanding rental assistance opportunities, streamlining program operations and providing a viable funding formula. The Section 8 Housing Choice Voucher program provides rental subsidies to approximately 2 million very-low income households who obtain housing in the private rental market. The basis of the program, which is to broaden the range of housing choices for families seeking affordable housing, has proven to be effective in helping low-income families find decent, safe and affordable housing. House Financial Services Chairman Barney Frank (D-Mass.) said the Congressional Budget Office estimates that the legislation would save the government $20 billion over five years. The bill addresses several issues of interest to multifamily builders. Specifically, the measure:
To read the legislation, click here and type H.R. 1851 in the box at the center of the page. For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144. House-Passed Labor Funding Bill Headed for a VetoThe House last week passed the fiscal 2008 Labor, Health and Human Services and Education Appropriations bill, H.R. 3043, by a vote of 276 to 140, moving activity on the labor bill to the Senate and clearing the way for House consideration of the HUD appropriations bill this week. The fiscal 2008 labor bill funds priorities such as Job Corps, the nation’s key vocational training program for disadvantaged youth, and Occupational Safety and Health Administration enforcement and compliance activities. Job Corps received a funding increase in the fiscal 2008 bill, and the OSHA provisions included $10 million in funding for the Susan Harwood Training Grant program. NAHB and the NAHB Research Center are frequent recipients of the Harwood grants, which are used to provide safety training programs to NAHB members. Ultimately, the President is expected to veto the Labor appropriations bill because it exceeds the spending levels he set out in his fiscal 2008 budget. Currently, the House legislation provides for $151.7 billion in discretionary spending, $7.1 billion above fiscal 2007 levels and $10.8 billion more than the White House requested in its budget. Ergonomics Guidelines a Concern Of concern in the committee report (H.Rpt. 110-231) accompanying H.R. 3043 was language inserted by Democrat appropriators that would require OSHA to develop ergonomic guidelines for several industries and expresses congressional dissatisfaction with OSHA’s failure to do more to address this issue. Additionally, the committee report included language urging OSHA to require employers to pay for all Personal Protective Equipment (PPE) in a final regulation that is expected to be published in November. NAHB sent a letter to all members of the House objecting to the ergonomics and PPE language in the report. On ergonomics, NAHB cited a long-standing argument over the scientific basis for determining work-related ergonomic injuries and how they should be addressed. NAHB also reiterated its objection to making employers pay for all PPE. The association has long argued that items such as work boots and hard hats should be paid for by the employee because they are personal in nature and are items that an employee will carry from one job site to another. The HUD appropriations bill is also expected to be vetoed by the President, setting the stage for an omnibus appropriations bill at the end of the year. Immigration Of note in several of the appropriations bills being considered in the House and Senate are provisions that would require all employers in the U.S. who are recipients of any federal contract to participate in the Department of Homeland Security’s Basic Pilot Employer Verification program. This program allows an employer to verify over the Internet that a new employee is legally authorized to work in the United States. This requirement would not go into effect until completion of the appropriations process at the end of the year. Under the requirements, employers would have to check all new employees through the system as they are hired. They would not be required to verify current employees. To view the Labor appropriations bill, click here and type H.R. 3043 in the box in the center screen. For more information, e-mail Jenna Hamilton at NAHB or call her at 800-368-5242 x8407. Single-Family Permits in June Down 43% From 2005 PeakIn the latest indication that the nation’s housing market remains in a correction phase, building permits, generally a harbinger of future building activity, were down sharply in June for both single-family and multifamily production, the Commerce Department reported on July 18. Actual housing starts rose 2.3% in June to a seasonally adjusted annual rate of 1.467 million, but that followed downward revisions for the previous two months and reflected gains solely in the multifamily sector. "Today's housing report is consistent with what builders have been telling us in our own surveys,” said NAHB President Brian Catalde. “They are dealing with challenging market realities by cutting back on new construction activity, and they are working down their inventories in the face of weak consumer demand by trimming prices and offering other types of incentives to boost sales and limit cancellations." "The small overall increase in total housing starts does not signal the end of the housing downswing," said NAHB Chief Economist David Seiders. "All of the gain occurred on the multifamily side, which is subject to sizable month-to-month volatility, and single-family starts actually registered a slight decline following downward revisions to both April and May. Looking toward future single-family production, permit authorizations fell to their lowest level since December of 1996 and now stand 43% below the recent peak in the fall of 2005. "In view of current market challenges, we expect to see further erosion in housing starts during the second half of this year,” Seiders said. “However, we expect to see signs of stabilization by the end of this year and we're projecting a gradual recovery process in 2008." Starts of new single-family homes slipped 0.2% in June to a seasonally adjusted annual rate of 1.151 million units, 21.6% below a year earlier. Multifamily housing starts for the month rose 12.5% to a seasonally adjusted annual rate of 316,000, which was 9.7% below their pace in June 2006. Total building permits fell 7.5% in June to a seasonally adjusted annual pace of 1.406 million units and were down 25.2% from a year earlier. Single-family permit issuance last month fell 4.1% to 1.019 million units, 27.5% below a year earlier, while multifamily permits declined 15.3% to 387,000 units, which was 18.4% below their year-earlier pace. Regionally, starts of new homes and apartments in June were up 9% in the West and 2.4% in the South, following sharp declines in May. Starts were down 3.7% in the Midwest and 2.4% in the Northeast. Construction was off substantially in all four regions from a year earlier.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Builder Confidence Loses More Ground in JulyA surplus of unsold homes on the market — along with ongoing concerns over subprime mortgage performance, more restrictive lending standards and higher interest rates — have taken a toll on builder confidence this month, with the NAHB/Wells Fargo Housing Market Index (HMI) dropping four points to a reading of 24, its lowest level since January 1991. "The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003 to 2005 period," said NAHB Chief Economist David Seiders. "Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers.” Despite these challenges, Seiders added that “we expect to see home sales get back on an upward path late this year and we expect housing starts to begin a gradual recovery process by early next year. At that point, this market will be operating well below its long-term potential, providing plenty of room to grow in 2008 and beyond." Derived from a monthly survey that NAHB has been conducting for more than 20 years, the HMI gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. All three component indexes declined in July. Current single-family sales and sales expectations each fell five points to 24 and 34, respectively, while prospective buyer traffic declined three points to 19. Likewise, all four regions of the country posted declines in the July HMI. The Northeast and South each experienced five-point declines, to 31 and 26, respectively, while the Midwest slipped a single point to 19 and the West declined three points to 25.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. ‘Small’ Impact Fees Taking a Big Toll on Housing AffordabilityEven as the housing market correction exerts downward pressure on new home prices, localities continue to push forward with new fees and regulations that will further erode housing affordability, according to a new study released by NAHB. The report on the impact of government regulation on housing shows that each $1,000 increase in the cost of a new median-priced home forces 217,000 prospective buyers out of the marketplace. Based on national mortgage underwriting standards and incorporating the latest data from the U.S. Census Bureau, the report contains detailed results for more than 300 metro areas. The analysis found that every $819 rise in fees paid at the beginning of the construction process — such as an increase in the price of a construction permit, a tap fee, a proffer or an impact fee — adds an additional $1,000 to the final price of the home. “The study shows that even modest impact fees can have a dramatic effect on housing affordability,” said Jerry Howard, executive vice president and CEO of NAHB. “Local governments need to understand that higher regulatory costs frequently push up the price of housing beyond the means of many teachers, firefighters, police officers and other moderate-income workers.” The number of households who would no longer be eligible to qualify for a mortgage following a $1,000 increase in the price of a median-priced home ranges from a low of 10 in both the La Crosse, Wis.-Minn. metropolitan statistical areas and the Ocean City, N.J. MSA, to a high of 4,193 in the Dallas-Fort Worth-Arlington, Texas area. The numbers vary significantly in each marketplace, and are largely a function of local income distribution, house prices and population. To view a detailed breakdown on how a $1,000 price increase on a median-priced home affects households in individual metro markets, click here (nahb.org/pricedoutcities). To download the full study, click here (nahb.org/pricedout).
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. The Good Life Starts With Housing Growth, Study FindsLocal housing growth helps buoy the quality of life of the area’s residents, according to a recent follow-up to a 2006 survey and analysis by NAHB economists of 260 metropolitan statistical areas across the U.S. “Although there is some indication that the correlation is not as strong with the updated data, there is still a clear positive relationship between the third-party qualify of life indices as presented and high housing growth,” the land development study says. The new analysis also finds that there can be some reduction in quality of life if housing growth is extremely high in an area experiencing accelerated growth, although this is the exception and not the rule. The NAHB study matched average housing starts per capita from the U.S. Census Bureau for the five-year period of 2002 to 2006 with a quality of life index created by Bert Sperling, who produced the second edition of the publication “Cities Ranked & Rated: Your Guide to the Best Places to Live in the U.S. & Canada.” Sperling also developed the very first “Best Places to Live” for Money magazine and he is a well-known researcher in the field. The primary intent of the study was to try to dispel the commonly held perception that additional growth in communities is detrimental to the qualify of life. “Many local decisions made by officials concerning growth and development are based on this perception,” said Edward Tombari, the originator of the study and a land use planner at NAHB. “Elaborate public policy initiatives — such as impact fees, urban service boundaries and mandatory land conservation — are developed and implemented in order to mitigate the ‘negative consequences of growth’ and to ‘preserve quality of life,’” Tombari said. “But all too often, the many benefits of growth — such as job creation, increased cultural and educational facilities, transportation improvements and improved health care facilities — are overlooked during the development approval process.” Sperling’s quality index includes hundreds of data sources grouped into “quality of life” indices such as education, health care, transportation, jobs and crime. While most of the data used is objective, the assessment of the quality of life in different locations also includes surveying the residents and their opinions.
To reach its conclusion, NAHB economists conducted a simple correlation analysis between Sperling’s quality index, represented by the x axis on a graph, and the growth index, represented by the y axis. Each of the 260 metro areas is represented on the graph by a single point, and the analysis clearly shows a positive correlation between growth and qualify of life. (The straight line on the graph shows the positive correlation, the bending line shows the atypical decline in the quality of life.) “While local governments have a responsibility to respond to the needs of their citizens by utilizing local land use tools such as zoning, they need to apply those tools with a better understanding that improvements to their community also occur through growth and development,” Tombari said. While there are some exceptions to the rule — places that either have a good quality of life but low growth and areas with a low quality of life and high growth — for the most part the areas plotted on the graph demonstrate a correlation between housing and growth and a favorable qualify of life. Looking at 373 areas, Sperling’s research found the following to be the top 20 areas for quality of life, which are also the places where growth is likely:
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242.
FHLBank Director Application Deadline August 15The deadline to apply for FHLBank director positions is looming, and members of NAHB who are interested should contact the association’s staff no later than Aug. 15. NAHB has established a process for assisting members who want to apply to serve as public interest directors on FHLBank boards, which can be viewed by clicking here. Under Finance Board rules, public interest director candidates are required to complete and submit a standard eligibility form, which can be found in the last portion of the document displayed at this link. Candidates may also attach a resume to the form to provide information on additional business, professional or educational achievements that are not otherwise reflected on the application. Each FHLBank board is responsible for conducting a preliminary assessment of candidates in its district and forwarding the most qualified candidates to the Finance Board for consideration. The deadline for these recommendations is Oct. 1. Interested parties such as NAHB are allowed to make recommendations to the FHLBank boards on behalf of individuals they believe are well-qualified for the position. However, candidates are still required to complete and submit their eligibility forms before those recommendations can be considered. For an earlier NBN story on this issue, click here. For assistance with the application, e-mail Donna Ely at NAHB, or call her at 800-368-5242 x8529 — no later than Aug. 15. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Housing Slowing Growth of U.S. Economy, Fed Chief SaysStill keeping an eye first and foremost on fighting inflation, Federal Reserve Board Chairman Ben Bernanke last week told the Congress that housing activity has been weaker than expected and, as a result, the Fed has lowered its forecast for this year’s performance of the nation’s economy. “Overall, the U.S. economy appears likely to expand at a moderate pace over the second half of 2007, with growth strengthening a bit in 2008 to a rate close to the economy’s underlying trend,” Bernanke testified before Senate and House committees on July 18 and 19. Bernanke said that “declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time.” The Fed is now forecasting that the real gross domestic product will expand 2.25% to 2.5% this year and 2.5% to 2.75% in 2008, which is about one-quarter of a percentage point lower than it had projected in February. “To a considerable degree, the slower pace of economic growth in recent quarters reflects the ongoing adjustment in the housing sector,” Bernanke said. “Over the past year, home sales and construction have slowed substantially and house prices have decelerated,” he said. “Although a leveling-off of home sales in the second half of 2006 suggested some tentative stabilization of housing demand, sales have softened further this year, leading the number of unsold new homes in builders’ inventories to rise further relative to the pace of new homes sales. Accordingly, construction of new homes has sunk further, with starts of new single-family houses thus far this year running 10% below the pace in the second half of last year.” Bernanke attributed the sluggishness of home sales, in part, to some tightening in lending standards as the result of mounting delinquency rates on adjustable-rate subprime mortgages and a recent increase in mortgage interest rates. Growth of jobs and income should eventually bolster the housing market, he indicated, and mortgage rates, despite being higher, will still remain relatively low. “However,” he said, “even if demand stabilizes as we expect, the pace of construction will probably fall somewhat further as builders work down stocks of unsold new homes. Thus, declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time.” On the inflation front, Bernanke noted that core inflation has moderated slightly over the past few months to a rate of about 2% for the year so far, but “with a sustained moderation in inflation pressures yet to be convincingly demonstrated,” the Fed’s predominant policy concern remains the upside risks to inflation. He also acknowledged that one risk to the Fed’s expectation’s for moderate growth in the U.S. economy “is that the ongoing housing correction might prove larger than anticipated, with possible spillovers onto consumer spending.” Responding to the rising delinquencies and foreclosures in the subprime market, Bernanke indicated that the Federal Reserve is conducting “a top-to-bottom review” of actions it might take to prevent a recurrence of today’s problems — including deterioration in underwriting standards, some abusive lending practices and outright fraud, and households taking on mortgage obligations they could not meet, perhaps in some cases because they did not fully understand the terms. “Promoting access to credit and homeownership are important objectives, and responsible subprime mortgage lending can help advance both goals,” he testified. “In designing regulations, policymakers should seek to preserve those benefits.” Eye on the Economy: Modest Housing Recovery Seen for 2008Growth of real GDP for the first quarter of the year now stands at an annual rate of 0.7%, according to the “final” estimate released by the Commerce Department on June 28. Residential fixed investment contracted at a 15.8% rate and subtracted 0.89 of a percentage point from GDP growth. Large negative contributions also came from net exports and business inventory investment. These drags held overall GDP growth to the slowest pace in more than four years and prompted a lot of speculation about a near-term recession in the U.S. economy. As we suspected, the first-quarter downshift in economic growth was a temporary phenomenon. Rebounds in net exports and business inventory investment, and a smaller drag from residential fixed investment, apparently helped raise GDP growth to about 3% in the second quarter (that’s our current estimate). Furthermore, we’re looking for near-trend growth performance over the balance of the 2007 to 2008 forecast horizon, and we place the probability of recession in a 20% to 25% range for this period — pretty normal for this stage of an economic expansion. The Labor Market Still Is Generating Good Job Growth and Low Unemployment The labor market performed well during the first half of the year despite the first-quarter downshift in GDP growth. Payroll job growth averaged 145,000 per month (with recent revisions) — below the average pace in 2006 (189,000) but still quite respectable. The unemployment rate averaged 4.5% in the first half of 2007, presumably the low range for this cycle. NAHB’s forecast shows a modest increase in the unemployment rate over the balance of the 2007 to 2008 forecast horizon, consistent with our projections for household employment and labor force growth. We’re also looking for average monthly payroll job gains of around 125,000, equivalent to employment growth of roughly 1% on an annualized basis — a sustainable pace at this stage of the economic expansion. Core Inflation Is Gradually Receding, Thanks Largely to Housing Persistently tight labor market conditions have been putting constant upward pressures on average hourly earnings, and a cyclical slowdown in productivity growth (output per hour) has contributed to upward pressures on unit labor costs. Despite these pressures, and despite renewed upward pressures on energy prices, measures of core consumer price inflation (excluding food and direct energy) have been remarkably well behaved in recent months. Indeed, the core PCE price index slipped to a year-over-year rate of 1.9% in May, and the core CPI showed an advance of 2.2% for that month — readings that are within the Fed’s apparent “comfort zones” for these measures. Furthermore, the core CPI posted another relatively benign year-over-year gain in June (2.2%), and the technically superior chain-core CPI trailed down to a 1.8% pace. The recent reductions in core consumer price inflation (both PCE and CPI versions) can be traced largely to slowdowns in growth of residential rents and the large imputed “owners’ equivalent rent” components. These slowdowns have been prompted by rising vacancy rates in rental housing, a pattern that’s been provoked partly by conversions of condominium developments to rental projects as home buying activity has weakened substantially. The Fed Holds Steady and Fusses About Inflation Pressures As expected, the Federal Reserve held monetary policy steady at the June 28 Federal Open Market Committee (FOMC) meeting, maintaining the 5.25% federal funds rate target. The FOMC statement referred to “moderate” economic growth in the first half and noted that core inflation had been improving “modestly.” However, the Fed did not declare victory over inflation, pointing out that the high level of resource utilization (i.e., the low unemployment rate) has the potential to sustain inflationary pressures down the line.
Fed Chairman Ben Bernanke’s testimony in connection with the Fed’s Semiannual Monetary Policy Report to the Congress — delivered July 18 and 19 in the House and Senate — reinforces our expectations regarding our central bank’s preoccupation with upside risks to inflation and the prospects for monetary policy management over the short term. Long-Term Rates Firm Up, But Fixed-Rate Mortgages Regain Dominance Long-term interest rates have been fluctuating a good bit in recent times, primarily in response to shifting market attitudes regarding U.S. economic growth, inflation and monetary policy management. Furthermore, rather persistent upward pressures on rates have been coming from abroad, reflecting upward inflation pressures in some key foreign economies and efforts by foreign central banks to control those pressures. NAHB’s forecast assumes that long-term rates will remain close to current levels during the second half of this year, with the 10-year Treasury yield hanging around 5.1% and the prime fixed-rate home mortgage hovering around 6.65%, and we anticipate only slight upward movements in 2008.
Shrinkage of the ARM share has occurred as both financial regulators and market forces have imposed greater discipline on lending standards in ARM markets — particularly in the subprime and Alt-A components. The Housing Downswing Still Is Underway The dramatic downward correction in U.S. housing markets has been underway for nearly two years. Single-family building permits topped out in the fall of 2005 and have declined by 43% through June. Furthermore, NAHB’s single-family Housing Market Index hit a current-cycle low of 24 in early July, down from a peak of 72 in mid-2005. The HMI now is down by more than 50% in all four regions of the country, and all three component measures — current and expected sales as well as traffic of prospective buyers — now have values less than half their respective 2005 peaks.
Despite these improvements, net sales in June were down by 43% from their mid-2005 peak and most of the big companies continue to talk about difficult market conditions — including subprime-related tightening of mortgage lending standards and recent increases in prime mortgage rates.
First, affordability remains historically low, a problem that’s been aggravated by tighter lending standards in connection with the subprime mortgage debacle and the recent firming-up of prime mortgage rates. Second, inventories of vacant homes for sale (new and existing) have climbed to record highs, boosted by homes put back on the market by investors/speculators who had gobbled them up during the 2003 to 2005 buying frenzy. The Housing Market May Bottom-Out by Year-End A nationwide survey of more than 400 single-family builders, conducted by NAHB in June, sought to gauge market momentum at mid-year and to identify builders’ production plans for the second half of 2007. The survey highlighted the adverse impacts of the subprime-related mortgage crisis on sales and cancellations as well as builders’ efforts to adjust to a deteriorating market environment.
NAHB’s current forecast for the second half shows a 5% decline in single-family starts from the first-half pace, bottoming out in the fourth quarter at an annual rate of 1.1 million units — 37% below the quarterly peak for this housing cycle. We expect multifamily starts to be down by about 6% in the second half, bottoming out at 270,000 units in the fourth quarter — 28% below the recent peak early last year. 2008 Stacks Up as a Year of Modest Recovery Although we expect most housing aggregates to bottom out by the end of this year, the projected recoveries in 2008 produce only modest year-over-year gains. In this regard, NAHB’s forecasts for 2007 to 2008 show the following broad patterns for the key components of housing production:
It must be recognized that NAHB’s baseline (most probable) housing forecasts for the second half of 2007 and 2008 are surrounded by sizable risk bands associated with unique features of the frenetic housing boom of 2003 to 2005 and the dramatic aftermath that’s still unfolding. At this point, major uncertainties surround the true dimensions of the current and prospective overhang of vacant (new and existing) housing units on the market, the degree to which mortgage lending standards will tighten as that pendulum continues to swing back, and the effects of declining home prices on the behavior of prospective home buyers.
“On the downside, the fall in housing construction could intensify or last longer than expected. In addition, persistent weakness in the housing sector could spill over to other sectors, especially consumption.” We certainly share those concerns. 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 July 19 edition. To subscribe to “Eye on the Economy,” click here.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Builders’ Tip: Calculating the Radius of an Arch
I have found that the following formula provides precise dimensions and takes advantage of the simple calculators on the market today. Even calculators without a square-root function can handle this one:
For instance, let’s assume that an arched opening leading from a dining room to the great room has 84-inch tall sides, the span is 96 inches and the center of the arch is to be 96 inches above the floor. The rise is then 12 inches, as shown in the drawing. When you substitute the numbers and calculate the formula you get:
The radius is 102 inches — with no errors resulting from inadvertent stretching of chalklines or other mechanical limitations, such as trying to lay out a curve with a 102-inch radius on a piece of plywood that’s only 96 inches long. — Charles W. Davis, Watsonville, Calif. 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 next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar on the NAHB Web site. For assistance, call the NAHB Member Service Center at 800-368-5242. Product Manufacturers Should Provide Quality Control ToolsThe ultimate test of the quality of a building material is how it performs in the home, not in the factory, and the installation of the product by the trade contractor is of key importance in determining the outcome, according to a recent article in Quality Matters, the e-newsletter of the NAHB Research Center’s National Housing Quality Program. Manufacturers can help ensure correct installation by providing builders and contractors with quality-control tools on the job site. Among them:
For more information on effective ways to enhance partnerships on the job site, click here to visit the National Housing Quality program Web pages (www.nahbrc.org/quality); or call Don Carr, NHQ Builder program manager, at 941-907-8755. Photo Gallery: Outdoor SpacesPhoto Gallery, which follows, is a regular feature of NAHB HouseKeys, the consumer-oriented e-newsletter from NAHB for home owners and prospective home owners. Photo Gallery showcases a portfolio of homes, with each feature focusing on a different theme. The feature that follows, which was originally published in NAHB HouseKeys on July 19, showcases outdoor spaces — ingeniously designed areas that allow home owners to enjoy the best of the indoors in the beauty of the outdoors.
This outdoor kitchen and entertaining space, as seen in the 2006 New American Home in Orlando, Fla., was built by Hannigan Homes, Inc. The space features retractable screens and walls of doors that slide into hidden pockets so the outside can flow easily into inside of the home.
At the 2007 Renewed American Home overlooking Lake Eola in downtown Orlando, remodelers PSG Construction, Inc. added this outdoor area next to a garage/mother-in-law suite to increase living space and provide a conversation area.
For those seeking creative ideas, the following images from the "Backyard Idea Book, by Lee Ann White (Taunton Press, 2004), show just how different and unique outdoor living can be. Here, the home owners have taken full advantage of their water views by creating a lush garden wonderland. Photo by Steve Silk, Taunton Press.
The creation of this space shows how dining outdoors can be elegant — with absolutely no need for a picnic basket or blanket, of course. Photo by Anne Gummerson.
Even small spaces can become personal retreats when designed appropriately. Plants and flowers add to this courtyard's serenity. Photo by Lee Ann White.
Personal touches, such as sculptures and a porch swing, transforms this patio into a unique — and artful — gathering area. Photo by Dency Kane. The next Photo Gallery will showcase kitchens. To submit homes for consideration, e-mail Niki Clark at NAHB. Put "Photo Gallery: Kitchens" in the subject line of the e-mail. For more information about NAHB HouseKeys, or to subscribe, visit www.nahb.org/HouseKeys. HouseKeys Articles Available to NAHB Members NAHB member companies are invited to use non-bylined articles in NAHB HouseKeys for their consumer outreach, including Web sites, newsletters or magazines. NAHB will provide a graphic that can be posted on your own Web site or in print products to promote NAHB HouseKeys to home buyers and prospects. For more information, visit www.nahb.org/HouseKeys, or e-mail Niki Clark at NAHB. 2007 Best in American Living Entry Notebooks Due July 31Entry notebooks for the 2007 Best in American Living Awards (BALA) competition — open to builders, interior designers, architects, developers and marketing and real estate professionals — are due Tuesday, July 31. The entry notebook deadline for the U.S. Department of Housing and Urban Development’s HUD Secretary's Award for Excellence is also Tuesday, July 31. Winners of both awards will be announced at the 2008 International Builders’ Show, Feb. 13-16, in Orlando, Fla. Co-sponsored by Professional Builder magazine and NAHB, BALA is the foremost residential design competition in the country. The awards program includes 36 categories — from single-family attached and detached in a variety of sizes to rental developments and custom homes plus categories for interior design, communities and neighborhoods, affordable housing and smart growth. Only homes built for sale are eligible to enter categories 1 to 16 and 25 to 34. For information, visit the BALA category details. Homes that have been completed or for which the first model has opened between May 1, 2006 and July 16, 2007 are eligible for this year’s competition. Homes will be judged on design appearance/curb appeal, floor plans, how the project relates to its local market, and construction techniques and materials used. Winning entries will be posted on the Professional Builder Web site, HousingZone.com, for up to one year after the announcement at IBS. For additional information and to download a BALA entry form, click here, or contact Judy Brociek, Professional Builder, at 630-288-8184, or Jennifer Jones, NAHB, at 800-368-5242 x8469. The Big Easy Casts Its Spell on Students’ Rebuilding Effort
Cate Holdren, foreground, and Robin Berry were two construction students from Seattle Central Community College's Wood Construction Center who recently volunteered to help rebuild homes in St. Bernard Parish near New Orleans. By Julia Cordero, Seattle Central Community College Wood Construction Center In the wake of the devastation caused by Hurricane Katrina, many of us wanted to reach out to New Orleans. But sometimes The Big Easy reaches out to us. I am a student at the Seattle Central Community College Wood Construction Center. In March, I was asked to organize a week-long volunteer rebuilding effort in New Orleans. An anonymous donor wanted to send a group of students from our school to help with the rebuilding process. She had offered to fund transportation, room and board, but needed someone at the school to organize and facilitate the trip. I volunteered without hesitation. I had recently returned to Seattle from a six-month stint working with Habitat for Humanity in hurricane-ravaged Slidell, La. The desire to return was strong. I lived in the New Orleans area for six years, and I love the uniqueness of the place and its people. Sharing the experience with a group of fellow students and Seattle-ites was a dream come true.
Emerson Peek, left, and Justin Ansley work on the roof of one of the homes still standing in this parish neighborhood following Hurricane Katrina. Planning the logistics of the trip was easy because of my frequent visits to New Orleans since the hurricane struck. The challenge was in selecting a team of 20 volunteers. Nearly one-third of the student body filled out the seven-page application to be considered for the trip. The final team chosen came from all three divisions of study at the Wood Construction Center — carpentry, cabinetmaking and boat building. Seven women and 13 men, ranging in age from 20 to 49, were chosen. We also added three more students who were so willing to help that they paid their own way. On Sunday, May 13, the group of volunteers left Seattle for St. Bernard Parish, southeast of downtown New Orleans, for a week-long rebuilding effort. Pre-Katrina, the parish had a population of 65,000. Eighteen months after the storm, barely 8,000 have returned — with most living in FEMA trailers or with relatives while they try to rebuild their homes. In St. Bernard Parish, we were housed in Camp Hope, a storm-damaged elementary school that has been transformed into a rustic, but functional home-away-from-home for volunteers.
My Third Trip Was a Charm This was my third visit to New Orleans since Katrina struck. When I first saw the parish six months after Katrina, there was an eerie silence. No birds chirped, no dogs barked, no human voices carried in the heavy air. This time, I awoke to a bird’s song our first morning there, and I smiled. Life seemed to be returning. The larger picture is not so comforting, however. There are still blocks and blocks of uninhabited houses in the parish, as well as in other hard-hit areas throughout the city. Some homes are gutted, empty carcasses of wooden studs and bricks. Some are still filled with the rot and the sorrow of soaked and destroyed possessions.
Bree Bonfoey hangs drywall that will cover the studs that many volunteers have used to leave messages and encouraging notes about their experiences helping rebuild New Orleans. Many volunteers believe the messages serve as a kind of prayer to protect the homes they work on and their occupants. Our Task: Rebuilding Stripped Shells Because of the tremendous volunteer and philanthropic effort in St. Bernard Parish last year, most of the homes have been gutted and stripped to their frames, and the focus now is on rebuilding the stripped shells. Our work week began with an orientation at the headquarters of The St. Bernard Project, a grassroots organization founded by several volunteers who came to help and decided to stay. The project provides direct rebuilding, financial and community support to families in the parish who were displaced by the hurricanes. Our group was assigned 13 houses. We did everything from drywall to cabinet installation, plumbing and roofing. Many of the home owners visited with the crews while they worked on the homes — an intimate experience for workers and often a cathartic one for residents. There is no shortage of tragic and heroic stories within the parish. Visitors need only be willing to lend an ear in order to hear them.
‘Lagniappe’ for Everyone Gratitude floods St. Bernard Parish as deeply as the storm waters that destroyed it. Volunteers are cherished, appreciated and treated to random acts of kindness that are best embodied in the popular New Orleans term “lagniappe,” which means “a little something extra.” Our group experienced lagniappe from the moment we arrived and throughout our week there. During a late stop at the local Walgreens on our first night, for instance, the store manager urged us to call her if we couldn’t get to the store before closing while we were in town — she would keep it open just for us so we could get what we needed. Another time, a local restaurant owner, after talking with several of the students, donated lunch for the entire group. One of the home owners, known as a local historian and storyteller, led our group on an evening tour of the ravaged fishing villages in the parish. Several home owners made a special New Orleans-style lunch for volunteers. It is hard to imagine that the people of this parish have suffered so much and yet continue to welcome strangers with warmth and humor. By the time we gathered at the airport to head back to Seattle, everyone had been charmed by New Orleans and it people. And, now that we are back in Seattle, there is plenty of talk of future trips back, both school-related and private endeavors. Rebuilding New Orleans will take years, but the city’s spell worked just as well on its volunteers as it always has on its visitors. You cannot come to New Orleans and remain untouched by its magic and its people. And you will leave with an inexplicable longing to return. Julia Cordero is a student at Seattle Central Community College’s nationally-recognized Wood Construction Center. Remodelers Channel Provides Valuable Remodeling InfoThe NAHB Remodelers recently revamped and updated the Remodeling Industry Channel, the online service developed to provide NAHB Remodelers with easy access to remodeling-related information. The channel, which is free to NAHB Remodelers members and $45 for NAHB members who are not NAHB Remodelers, provides remodeling information about everything from legislative and regulatory news to tips on increasing profit and efficiency. “The work our members do requires them to have greater access to more information,” said Gabrielle Taylor, of NAHB. “The channels are the framework we are building to give them the news, links, articles, reviews and connections today’s business environment requires.” “Our goal is to serve up the solutions that help them be the most professional, best-connected remodelers in the industry,” Taylor added. The new and improved channel, a part of NAHB Select Online Content, is easy to read and use, and helps make complicated subject matter simpler. The channel also serves as an excellent source for all of today’s remodeling news needs, providing links to NAHB Remodelers e-newsletters, Nation’s Building News and other valuable industry news sources, such as Professional Remodeler magazine. The Remodeling Industry Channel is constantly being improved as new information and information-sharing features are developed. Future features will enable members to share information and access their peer network virtually through listservs, blogs and online forums. To visit the Remodeling Industry Channel, go to www.nahb.org/remodelingchannel, or find the channel on the NAHB Web site (www.nahb.org) under Online Subscriptions.
Apply for This Year's NAHB Remodelers' AwardsThe following awards are available to NAHB Remodelers throughout the year.
For More Information For more information about the NAHB Remodelers awards, visit the NAHB Remodelers awards section on the NAHB Web site, call the NAHB Remodelers at 800-368-5242 x8216, or e-mail remodel@nahb.com. Enter the 2007 Brick in Home Building Competition by July 31Enter the Brick in Home Building Awards, which showcase the finest work in clay face and paving brick from residential builders and architects around the country. Conducted by the Brick Industry Association, entries are due by Tuesday, July 31. Entries can be submitted in one or more of the following categories:
For more information about the award, including eligibility, submission requirements and judging, visit www.gobrick.com/HomeBuildingAwards. To enter, click here.
Take PCA Builders Survey by Aug. 3, Be in Drawing for Free iPodThe Concrete Home Builders Council (CBHC) and the Portland Cement Association (PCA) are conducting a home builder survey to determine what types of products and systems are being used in homes currently being built so that they can develop targeted, focused programs that better serve the residential building community. The online survey will track changing attitudes, perceptions and trends in the industry and takes about 10 minutes to complete. To Take the Survey To take the survey, click here. Free Survey Results and iPod Drawing Respondents will be entered into a drawing for one of three 4GB iPod nanos, valued at more than $189 each. Respondents will also be given a free copy of the results once they are compiled. Respondents will be asked to fill out contact information at the end of the survey to be entered into the drawing for the iPod nano and to receive the survey results. The contact information will be used for drawing and copy-of-the-results purposes only. The deadline for survey submissions is Friday, Aug. 3. For more inforation about the Portland Cement Association, visit www.cement.org. Software Solutions Manage Time and Budget EffectivelyBy Joel Hoffman, Maxwell Systems For light commercial builders, time and budget are especially crucial. Profit margins for smaller projects tend to be lower, so every job must hit the deadline and generate revenue — or else the business takes a hit. Yet many contractors still rely on inefficient operating methods, including paper reports or outdated technology, to manage project timelines and budgets. These inefficient methods require much manual work, slow down the approval processes and leave too much room for data error. As a result, it’s more difficult to identify workflow snags, and contractors too often end up playing catch-up to get projects back on track. However, contractors can prevent slowdowns and take a more proactive approach to project management by using the new generation of business management software. When the process is done right, contractors know exactly what’s going on at all project phases and can identify problems sooner rather than later. When it fails, contractors can be subject to increased liability and exposure on a project. Owner Challenges Owners know the real work on a project begins the moment they win a bid. They must begin to order needed materials, coordinate the labor line-up and review their insurance limits. Every project has nuances and different tasks, but all involve a few core business challenges, including:
The Software Solution: Tracking Project Stages, Increasing Profitability Fortunately, many contractors have turned to systems that are run with business management software. When those systems are robust, they allow contractors to track all tasks, employees, costs and deadlines. Software today can be used throughout every stage of a project, and it can benefit contractors in several ways. First, it can increase profitability by giving contractors more insight into their own business processes — from the moment they win a bid to the last punch list item, they can see what’s working and why. Such a system lets contractors see the origin of costs and investigate what doesn’t add up right away. In many systems, this is done through alerts — contractors can easily configure software to warn them when the project reaches certain points, such as halfway completion. Contractors can look at their expenses to date and see if a project is still on budget. If it is, they are assured their workflow methods are working efficiently and cost-effectively. Proven workflow methods can then be repeated on future projects. On the other hand, if a project is exceeding the budget, contractors can find out why by clicking on phases and tasks. They can check the status of each phase, see what materials have been used and see which workers are involved in which task or phase. Let’s use as an example a building in the first-floor construction phase whose total cost is above the allotted budget amount. An owner looking at the expenses involved would be able to see that the high cost is due to inflated HVAC expenses. Contractors can then send in a change order before the cost reaches unwieldy proportions. And the project manager could very well decide not to use that HVAC subcontractor again. Tracking Progress and Performance, Meeting Deadlines Business management software also helps contractors to meet deadlines. They can look at the workflow spreadsheet to see which tasks are completed, which are in progress and which need to be tackled next. By monitoring the progress of the project, contractors can identify slow spots and take action to get the project back on track. Today’s software also helps track material shipments and labor scheduling so contractors don’t send workers or new materials to a site before requisite phases or tasks are completed. Software solutions also can help contractors monitor the progress, performance and payment of subcontractors. For example, a contractor’s software solution may highlight a change-order request. Once alerted to the need, the contractor can use the software to expedite routing and approval of the change-order request. When the change is approved, costs and bid item budgets are automatically updated by the software. Tracking Documentation, Speeding Approval Processes In addition, business management software can index and store files electronically to help track documentation. Today’s software allows an owner to link scanned paper or e-mailed invoices to the appropriate tasks as they come in. This builds an organized electronic filing cabinet through which project managers can easily search for and access needed documents in seconds. Maintaining electronic versions of documents and field information also speeds up approval processes, which allows owners to make quick, well-informed decisions. In addition, they can now quickly e-mail documents to vendors and subcontractors for approvals. Business Management Software A Benefit to Businesses of All Sizes Finally, light commercial contractors who think they’re too small to need or afford a full-service software application are mistaken given what’s offered today. Many software packages are scalable to a business’s size, and some can be tailored to grow and take on more tasks as the business grows. Contractors don’t have to be tech-savvy to use well-designed business management software. Intuitive setup and processing functionality can take much of the legwork out of managing projects. Above all, business management software gives contractors total control over their projects and insight into their businesses. Contractors are no longer simply reactive in solving problems, but can be proactive to prevent them — which is just the solution for bringing every project in on time and on budget. Joel Hoffman is the product manager of Maxwell Systems, a supplier of fully-integrated business management software to the construction and commercial property management industries and headquartered in King of Prussia, Pa. For more information, visit the company’s Web site at www.maxwellsystems.com, or call 800-688-8226. VirtualBoss Scheduling Software Available Through BuilderBooks VirtualBoss, available through BuilderBooks.com, is an easy-to-use job scheduling and task management software package. With VirtualBoss, you can track your service and punch list items and e-mail, fax and mail work orders to an unlimited number of subcontractors, suppliers or employees. To view or purchase this software online, click here, or call 800-223-2665.
Apply for 2008 Commerical Building Awards by Aug. 1
The National Commercial Builders Council (NCBC) is accepting applications for its 2008 Awards of Excellence program, which recognizes achievements in the national commercial building industry for design (remodeling and new construction), market appeal, energy efficiency, challenges faced during building and overall success of projects that are either built or renovated. The deadline for entries is Wednesday, Aug. 1. The National Commercial Builders Council sponsors the Awards of Excellence program to bring recognition to commercial building projects that range from less than 5,000 to more than 100,000 square feet. Projects must have been completed after Dec. 31, 2004 and may be entered in commercial, industrial, institutional, medical, mixed-use commercial/retail, recreational, retail and new for 2008 — green building. One or several projects can be entered in this competition. Projects may be submitted by the builder, developer, architect or contractor of the project. The six divisions in which a project can be entered include:
Winners will be notified by mail no later than Nov. 1. A public announcement will follow at NAHB’s International Builders’ Show, Feb. 13-16, 2008, in Orlando, Fla. Recognition includes a desk obelisk; a photo of your project on display with the other winners at the International Builders’ Show; acknowledgment in Commercial Builder magazine; and the opportunity to participate in educational sessions at the Builders Show. In addition, some winners may be featured in future issues of Commercial Builder magazine. For more details on eligibility and entrance requirements, click here, e-mail Nick Lashinsky at NAHB, or call him at 800-368-5242 x8455.
Apply for NAHB Custom Home Builder of the Year AwardNominations are being accepted for the NAHB Custom Home Builder of the Year Award. This award, sponsored by Dryvit Systems, Inc., recognizes a custom builder for outstanding leadership and business practices, as well as craftsmanship in building one-of-a-kind custom homes. Applicants must be a custom home builder, demonstrate proficient leadership qualities in their business, be active in their state and local building industry and be involved in their local community. For more information about the award and submission process, visit the Custom Home Builder of the Year Award. Nominations will be accepted until Friday, Aug. 17. A dinner ceremony honoring the winner of the NAHB Custom Home Builder of the Year Award, sponsored by Dryvit Systems, Inc., will be held at the 2007 Custom Builder Symposium, Oct. 27 at the Naples Grande Resort & Club in Naples, Fla. Education Calendar
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