Nation's Building News Online: November 12, 2007Print All Articles Text Version |
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Heading Off Home Foreclosure Damage on Fed’s Radar ScreenIn testimony before the Joint Economic Committee of the U.S. Congress, Federal Reserve Chairman Ben Bernanke last week indicated that the nation’s central bank continues to watch the fallout of problems with the subprime mortgage market on the financial markets and economic growth and is also focusing its efforts on reducing foreclosures on homes. Echoing comments made earlier in the week by Fed Governor Randall S. Kroszner at NAHB’s Symposium on Housing Affordability (click here for NBN story in this issue), Bernanke in his Nov. 8 remarks noted that rising foreclosures could further threaten the U.S. economy as it is expected to move into a slower phase. With 450,000 subprime mortgages per quarter scheduled to undergo their first interest rate reset from now until the end of next year, more borrowers will likely experience payment shock and become delinquent in making their monthly loan payments, he noted. “Should the rate of foreclosure rise proportionately, communities as well as individual borrowers would be hurt because concentrations of foreclosures tend to reduce property values in surrounding areas,” he said. “A sharp increase in foreclosed properties for sale could also weaken the already struggling housing market and thus, potentially, the broader economy.” In recent months, Bernanke noted, the Fed and other banking agencies have been attempting to limit the damage of foreclosures by calling on mortgage lenders and services to pursue prudent loan workouts. “Our contacts with the mortgage industry suggest that servicers recently have stepped up their efforts to work with borrowers facing financial difficulties or an imminent rate reset,” Bernanke said. “Some servicers have been proactive about contacting borrowers who have missed payments or face resets, as experience shows that addressing the problem early increases the odds of a successful outcome.” FHA Modernization in the Hands of Congress Congress also has an opportunity to reduce home owners’ risk of foreclosure by modernizing programs administered by the Federal Housing Administration, he said. “The FHA has considerable experience helping low- and moderate-income households obtain home financing, but it has lost market share in recent years, partly because borrowers have moved toward nontraditional products with more-flexible and quicker underwriting and processing and partly because of a cap on the maximum loan value that can be insured,” he said. “In modernizing the FHA, the Congress might encourage joint efforts with the private sector that expedite the refinancing of subprime loans held by creditworthy borrowers facing resets. It might also consider granting the agency the flexibility to design products that improve affordability through such features as variable maturities or shared appreciation. Also, the FHA could provide more refinancing options for riskier households if it could tailor the premiums it charges to mortgage insurance to the risk profile of the borrower.” On the overall health of the economy, despite subtracting about one full percentage point from overall growth in this year’s third quarter, the decline in residential construction failed to significantly slow consumer spending, which was supported by gains in employment and income, or reduce growth in capital spending by businesses, Bernanke said, and growth for the period was a “solid” 3.9%. Slower Economic Growth Ahead However, looking ahead, the Federal Market Open Committee (FOMC) saw signs that the economy would be slowing in the final months of the year. “Indicators of overall consumer sentiment suggested that household spending would grow more slowly, a reading consistent with the expected effects of higher energy prices, tighter credit and continuing weakness in housing,” he said. “Most businesses appeared to enjoy relatively good access to credit, but heightened uncertainty about economic prospects could lead business spending to decelerate as well.” The Fed is now expecting sluggish growth during the first half of 2008, “then strengthening as the effects of tighter credit and the housing correction begin to wane.” In his Nov. 7 “Eye on the Economy,” NAHB Chief Economist David Seiders forecast that overall GDP growth would slip to about 1.5% in the fourth quarter, “but we also expect growth to pick up early next year and we believe recession will be avoided during the 2008 to 2009 forecast period.” Following the FOMC’s half-point reduction in the federal funds rate target on Sept. 18 and an additional one-quarter point cut at the conclusion of its Oct. 30-31 meeting, another one-quarter point cut is likely at the Dec. 11 FOMC meeting, followed by stability in 2008, Seiders predicted. “The Oct. 31 FOMC statement noted that ‘the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction’ — a judgment consistent with our economic and housing forecast,” Seiders said. “Despite this outlook on housing and the economy, the FOMC statement expressed the judgment that ‘the upside risks to inflation roughly balance the downside risk to growth.’ “We view this balanced risk assessment as a strategy by the Fed to give themselves maximum flexibility in altering short-term rates and to control speculation about future policy adjustments,” Seiders said. ARMs Rates Decline Released on Thursday, Freddie Mac's weekly Primary Mortgage Market Survey showed that the latest interest-rate cut by the Fed helped reduce rates on adjustable-rate mortgages as long-term mortgage rates eased slightly over signs of a weaker economy. Thirty-year fixed-rate mortgages averaged 6.24% last week, down from 6.26% the previous week and 6.33% last year at the same time. One-year Treasury-indexed ARMs averaged 5.50% last week, down from 5.57% during the previous week and 5.55% a year earlier. This was their lowest level since the week ending May 17. Floor Plans: A Desert Oasis Made in the Shade
The Arizona desert is home to saguaro, scorpions, bobcats and Gila monsters. Now, with the new Shade at Desert Ridge luxury apartments developed by Geneva Holdings of Phoenix. renting at near capacity, at least one of the tamer segments of the desert is also home to many young professionals. Everything about the Shade apartments — part of the new, higher-density Desert Ridge master-planned community in northwest Phoenix — is geared to young professionals and projects a young and hip image.
Designed in “desert deco”-style architecture, the apartments are finished in a striking color palette of terra cotta, sage, tan and ochre to provide the right balance of cool and warm desert vibes in a residential resort setting with resort-style amenities.
Swimming Pools, Yoga Rooms, Roman Tubs and Wake-up Calls Nothing says resort in a desert setting more than water. The Shade apartments feature two community swimming pools, one lap pool and two Jacuzzi spas in its two recreation areas. The apartments feature Roman tubs or showers and, in some floor plans, master baths with double sinks.
Other community amenities include a clubhouse with a living room, lounge and kitchen, an open 24-hours-a-day, fully-equipped fitness center, yoga room, barbeque plazas and available concierge services that include everything from car rental and taxi service to errand running, business and conference services, golf tee times, floral services, spa and salon treatments, pet sitting, air travel, child care and wake-up calls.
Forty Floor Plans, Sushi and Starbucks Shade offers more than 40 different floor plans that range in size from 762-square-foot, one-bedroom, one-bath units renting for $915 a month to 1,510-square-foot, three-bedroom, two-bath units that rent for $1,745. Some town home apartments feature two-story ceilings.
All have “tuck-under” parking, and the community design gives each apartment an identifiable “front door” along the community’s main circulation route. Shade at Desert Ridge was designed as a walkable community with pedestrian paths around a “spine” that connects with the adjacent Desert Ridge Marketplace featuring enough restaurants, including sushi, for residents to dine out every night of the week — plus a neighborhood Starbucks and convenient shopping. Shade at Desert Ridge is the winner of a 2007 NAHB Multifamily Pillars of the Industry award for Best Rental Apartment Community of five stories or less in the non-garden category. The 342-unit community is 92% occupied.
Fed Governor Lists Steps to Remedy Subprime DistressWith subprime mortgage delinquencies and foreclosures possibly getting worse before they get better, “a high degree of collaboration and innovation to identify solutions” is needed to help borrowers keep their homes, Federal Reserve Governor Randall S. Kroszner told NAHB’s Symposium on Housing Affordability on Nov. 5 in Washington, D.C. “It is imperative that we work together as a financial services community to look for ways to help borrowers address their mortgage challenges, particularly those who may have fewer alternatives, such as lower-income families,” Kroszner said. Distress among subprime borrowers has been concentrated in the variable-rate mortgages that constitute two-thirds of that market, he said, and more than 17% of those loans are now more than 90 days in arrears, a tripling of the share since mid-2005. Contributing greatly to the problem are resets after the initial two- or three-year phase of the mortgage that are significantly increasing interest rates and monthly payments. “In early 2007, the typical subprime mortgage experiencing a first reset had its rate increase from 7% to 9.5%, producing an increase of 25% to 30% in the monthly payment,” Kroszner told the symposium. “This increase translates into an additional monthly debt obligation of $350 per month for the average subprime variable-rate mortgage." With the appreciation of home values slowing to a virtual crawl from the rapid escalation of the housing boom years, or even declining in some markets, subprime borrowers, many of whom purchased their homes with little or no money down, don’t have enough equity to avoid payment increases by refinancing. About two-thirds of subprime borrowers who in 2003 and 2004 took out adjustable rate loans that are reset after two years were able to avoid higher payments by refinancing or selling their home before the first scheduled reset, he said. “Prepayments on subprime variable-rate loans originated in late 2005 and 2006,” the tail end of the boom, “have occurred at a slower pace,” he said. “The bulk of resets is yet to come,” Kroszner warned. “On average, in each quarter from now until the end of next year, monthly payments for more than 400,000 subprime mortgages are scheduled to undergo their first rate reset. That number is up from roughly 200,000 per quarter during the first half of 2007. Delinquencies and foreclosures are therefore likely to continue to rise for a number of quarters.” Kroszner said that the Federal Reserve’s Community Affairs Offices have been convening lenders, community leaders and government officials around the country over the past two years to help identify strategies to provide resources to assist borrowers confronting foreclosure. The Fed, he said, has also been urging mortgage lenders and servicers to look for ways to work with borrowers who are having difficulty in paying their loans — including loan modifications, deferral of payments, extension of loan maturities, capitalization of delinquent amounts and conversion of adjustable-rate mortgages into fixed-rate mortgages or fully indexed, fully amortizing adjustable-rate mortgages. Among initiatives recommended by participants at the symposium to address current affordable housing needs would be allowing state housing finance agencies to provide refinancing for strapped subprime borrowers. While there is no comprehensive data available, Kroszner said reports suggest that the number of loan workouts and modifications that have actually occurred “may be limited thus far.” “One possible contributing factor is that many borrowers are not seeking help or advice from their lenders because they believe that lenders cannot or are not willing to help them. Industry and consumer advocates who testified at our hearings on the home equity lending market last year told us that the greatest barrier to working with troubled borrowers is in simply making contact with them.” Among national organizations and initiatives that are making headway in helping to resolve problems with troubled loans, he cited:
Reader Survey: Tell Us What Housing News Is Important to YouBecause you regularly read Nation's Building News, we value your ideas and would like your help. Please tell us what information in Nation's Building News is important to you — what you read and what you might like us to add — by answering our short online reader survey. To take the survey, click here. (Please note: If you have already answered the survey questions, thank you.) Good Time to Buy, Housing Expert SaysWhile he expects the housing slump in Colorado to drag on, Re/Max International cofounder Dave Liniger believes that it’s a great time to buy a house. “Nobody’s ever been able to time the stock market,” he told the Colorado Springs Chamber of Commerce. “Nobody can time the real estate market. The truth of the matter is, if you are a buyer, we still have historically low interest rates. We have the biggest inventory of properties in Colorado that we’ve had since 1985 or 1986. The selection is out there. And so if you’re a buyer, this is the perfect time to be buying.” Many economists are blaming the housing downturn on the collapse of the subprime lending industry, but Liniger called the subprime problem “overblown.” Subprime loans account for about $150 billion of the $9.9 trillion worth of outstanding mortgages in the nation, he said. Of the $150 billion worth of subprime mortgages, half are in foreclosure, but only about 20% of those loans reflect homes being lost by owners, he said. Instead, Liniger blames housing woes on too many adjustable rate mortgages that are having their rates adjusted upward by hundreds of dollars a month. “The market is going to stay relatively flat, for, nobody can predict, six months, a year, 18 months,” Liniger said. “But you can’t time the market. If you want to buy a house to live in, now’s the time to buy. If you want to buy a house to flip, make an investment, make a quick profit, it’s not possible in this market.” (www.gazette.com)
Housing Counselors Feeling Market CrunchOfficials worry that housing counselors may quit over burnout or for better jobs as demand for their services from rising delinquencies and foreclosures is soaring, said Meg Burns, director of the single-family program development office for the Department of Housing and Urban Development. “I don’t think people fully appreciate the pressure that’s being put on those counselor organizations today,” she said. “Everybody’s pointing to counseling as… (an) end-all be-all solution to this crisis and here we have all these nonprofit organizations struggling to provide services without adequate funding.” HUD has certified about 2,300 nonprofit agencies to offer financial housing counseling, a number that has remained fairly stable in recent years, which is attributed primarily to funding constraints. However, the number of counselors seeking foreclosure prevention training has jumped, according to NeighborWorks, a leading housing finance training organization. It trained 143 counselors in fiscal year 2004 compared with 1,678 in fiscal 2007 and is adding more classes to help ease the burden. Counselors must be advocates, negotiators and good listeners to cope with consumers who are angry, ashamed or confused, not knowing where to turn or what to do when they fall behind on mortgage payments. “We have folks that come in here who have stacks of unopened correspondence from the mortgage company who’s been sending them letters saying, ‘You know, you’re behind,’” said NeighborWorks counselor Chad Klawetter of Waco, Texas. (www.mercurynews.com)
Seattle’s Housing SqueezeSeattle has lost more than half of its children — almost 90,000 — since 1960, and between 2000 and 2005, its population grew by 10,000 but the growth of those under 18 rose only by slightly more than 200, according to Charles Royer, a former mayor of the city. “So today, among the 100 largest cities in America, only San Francisco has a smaller per capita percentage of kids. We could soon be No. 1,” he said. “The other day, a Seattle firefighter told a city council hearing on housing, ‘It is very hard to qualify to be a firefighter in Seattle. But I can tell you, it is a lot harder to qualify to be a home owner in Seattle.’” Fewer than 40% of Seattle firefighters now live in the city, many of them because they cannot afford it, he said. In 1980, the median value of a house in Seattle was about $65,000. The entry-level firefighter qualified for a house valued at about $75,000, some 15% more than needed to buy the “average” house. In 2006, the median home value in the city was about $449,000. That year, the entry-level firefighter could qualify for a house valued at about $228,000, some 95% less than needed to buy the “average” Seattle house. Only two Seattle houses listed in the Multiple Listing Service for August of 2007 were priced at or below $250,000, he said. “The numbers — this escalating affordability gap in homeownership — track about the same for the police officer and the nurse. Good incomes, but much less purchasing power in the housing market than they had 25 years ago.” (www.seattletimes.com)
Contractors Surface as Housing Market SlowsThe Home Improvement Research Institute — an organization backed by manufacturers, retailers and wholesalers — projects that total home improvement product sales will decline this year by 1.3%. The reason is simple, said Gopal Ahluwalia, staff vice president for research at NAHB. “When prices are declining, the home owners don’t want to spend a whole lot of money on their homes,” Ahluwalia said. “When prices are rising, they tend to take care of their investment.” With home prices falling in many parts of the country, people who bought in recent years won’t be able to take out home-equity lines of credit, which many home owners use for renovations. “If you try to take out a home-equity line of credit, they’re going to be more skeptical about what your home is worth,” said Kermit Baker, director of the Remodeling Futures Program at Harvard University’s Joint Center for Housing Studies. There are no data yet on whether the remodeling slowdown will translate into lower prices for consumers. But Ahluwalia predicts that home owners will start getting better deals, even though the cost of construction materials has remained high. “By how much, we don’t know,” he said. “It’s an issue of economics and demand. There will be some impact on prices, the same thing that is happening with the new-housing market.” (www.seattletimes.com)
Home Green HomePeople planning to build a green home or embark on eco-friendly remodeling should keep five essential things in mind, according to Sara Lamia, author of “Housebirth: Your Guide to Buying an Energy-Efficient, Healthy New Home That Pays You Back.” “Aim for a tight thermal envelop,” she advised. “Getting the outside tight so there is no leakage of conditioned air. Thinking solar doesn’t just involve solar panels. Pay attention to where the sun streams into your house. Controlling the amount of light coming in can drastically affect your heating or cooling bills. Consider your home’s circulatory system. Evaluate the heating, ventilating and air-conditioning systems and make sure they are running at peak efficiency. Factor in fluids. If it’s time to upgrade your washing machine, consider water-saving and energy-efficient front loaders. For the yard, think about sprinkler systems that automatically respond to weather conditions. Power-up. Always consider Energy Star appliances, compact fluorescent light bulbs and flooring and paints with low-volatility organic compounds.” (www.newsweek.com)
Smoke-Filled Environment Raises Ire Among RentersThis year, two California cities passed laws restricting smoking inside multi-unit residential buildings. In the last 14 months, two large residential real estate companies with apartment complexes in several states banned smoking inside units. Thousands of smaller apartment complexes across the country have taken similar steps, said Jim Bergman, founder of the Smoke-Free Environments Law Project, which is based in Michigan. And about 60 public housing authorities across the country have smoke-free policies, compared with less than 10 three years ago, Bergman said. Edward Sweda Jr., senior lawyer at the Tobacco Control Resource Center of the Northeastern University School of Law in Boston, said he has studied the legal issues of secondhand smoke for 28 years and knows of no law in the U.S. prohibiting residential property owners from banning smoking. At least 27 lawsuits have been filed since 1991 over smoking in multiunit housing, and judges have often sided with the non-smoker, Sweda said. (www.chicagotribune.com)
Tax Hike on ‘Carried Interest’ Would Disrupt Real EstateWhile legislation approved by the House on Nov. 9 would provide temporary relief from the Alternative Minimum Tax, contains mortgage debt forgiveness provisions and extends dozens of expiring tax provisions, NAHB opposes the measure because a plan to tax "carried interest" to pay for the bill would impose a multi-billion dollar tax increase on real estate at a time when the industry is already experiencing a downswing. “The nation’s home builders share the goals embodied in H.R. 3996 to halt the reach of the AMT for another year and help struggling American families keep their homes,” said NAHB President Brian Catalde. “However, the carried interest proposal to offset the cost of this relief is the most significant and potentially most disruptive tax on real estate since the 1986 Tax Reform Act and would result in higher prices for multifamily housing, less job creation and lower community development, especially in underserved areas.” This is the message that NAHB sent to lawmakers in a letter before they voted on the bill. The potential impact of the carried interest provision on real estate development is of such concern to the home building industry that NAHB designated a "no" vote on passage of H.R. 3996, the Temporary Tax Relief Act of 2007, as a key vote. In addition, NAHB joined more than a dozen like-minded industry groups in signing a letter voicing strong opposition to the bill. The legislation, which narrowly passed the House by a vote of 216 to 193, would tax the return on all carried interest allocable to a partnership as ordinary income rather than capital gains. Because this includes the carried interest held by general partners in real estate investment partnerships, the legislation would have a significant negative impact on the multifamily housing industry and on the bottom lines of companies that use these partnerships. Under present law, capital gains income generated by carried interest in a partnership is subject to a tax rate of 15%. If the House bill were to be enacted into law, such carried interest would be characterized as ordinary income subject to tax rates up to 35%. This massive tax increase on real estate would disrupt the investment relationship between developers and investors, said Catalde. “First, this would make borderline development transactions, such as those in underserved communities that typically carry higher risks, significantly less attractive,” he said. “Second, treatment of carried interest would affect the pricing of development transactions which, in turn, would have negative implications for capital flowing into real estate development.” The bottom line, Catalde said, is that a tax increase on real estate entrepreneurs across the country of more than 133% would have a pervasively damaging impact on jobs, economic growth and the tax base. Though the bill was approved by the House, it is unlikely to be enacted into law as written. The carried interest provision faces long odds in the Senate, where Finance Committee Chairman Max Baucus (D-Mont.) and several other Democratic members of the committee have expressed discomfort with the carried interest proposal. Further, the White House has threatened to veto the proposed patch of the AMT, which would prevent an additional 20 million Americans from being captured under the tax, because it objects to the tax increases in the carried interest and other provisions to offset the cost of the bill. NAHB continues to urge Congress to enact swift passage of AMT relief and mortgage debt forgiveness legislation and to oppose the carried interest proposal because of its damaging impact on real estate development. To view the bill, click here and type H.R. 3996 in the box in the upper center screen. For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421. Toughest U.S. Immigration Law Takes Effect in OklahomaOklahoma House Bill 1804, known as the Oklahoma Taxpayer and Citizen Protection Act of 2007, went into effect Thursday, Nov. 1, after a U.S. District Court judge denied an 11th-hour request to block it. The law bans illegal immigrants from obtaining official state government identification, including driver’s licenses; terminates most public assistance for illegal immigrants; grants state and local law enforcement officials the authority to enforce federal immigration law; and enacts employer penalties for knowingly hiring illegal immigrants While Oklahoma's new law is widely seen as the toughest in the U.S., other states are turning up the heat on the nation’s 12 million undocumented immigrants. In Utah , Republican State Sen. Bill Hickman has plans to introduce legislation similar to the Oklahoma law. In Missouri, Gov. Matt Blunt announced an effort to deputize some of his state’s law enforcement officers to enforce federal immigration laws. Anti-immigration advocates have begun to push for similar laws in neighboring Arkansas. In the state's northwest, where most of Arkansas' Latinos live, four police agencies have signed up with the customs and immigration agency to enforce immigration law more efficiently. Mike Beebe, the Democratic governor, wants state troopers to get tougher too. It is estimated that immigrants in Arkansas contribute $2.9 billion directly or indirectly to the state's economy each year, which has prompted one pro-business group to form. Executives from some of Arkansas's principal companies — Tyson Foods, the world's largest meat processor, and Alltel, a wireless company — joined ministers, civic leaders and the local American Civil Liberties Union to form the Arkansas Friendship Coalition. The group stresses that states should abide by federal immigration laws rather than try to make their own. Though punitive or restrictive measures have received the most attention, there has also been a substantial push to integrate. Over the last 18 months, about a third of the some 130 immigration-related ordinances introduced around the country have been geared toward providing more English-language courses and other immigrant-friendly initiatives, according to the Migration Policy Institute. One state, Illinois, has responded specifically to the polarizing debate over immigration by working to find ways to bring immigrants into the mainstream more quickly through local language classes and assimilation training. For more information, e-mail Carlos Gutierrez at NAHB, or call him at 800-368-5242 x8279. Home on Break, Montana Legislators Visit Building SitesMirroring goals of NAHB’s grassroots BuilderLink program to build and maintain relationships with members of Congress at the local level, the Montana Building Industry Association took advantage of a congressional break in August to conduct home construction site visits with Sen. Max Baucus, chairman of the Senate Finance Committee, and Rep. Dennis Rehberg, (R-at-large), a member of the House Appropriations Committee. The Montana association regulary invites each member of its congressional delegation to job sites in various communities across the state. This year, BuildLink has looked for opportunities to partner with state and local HBAs to hold visits with federal lawmakers in the districts they serve. As part of the new approach to organizing these visits, NAHB has instituted a targeting process at the beginning of each legislative session that identifies key members of Congress for in-district outreach based on the leadership role they play in Congress and their oversight of housing issues. Efforts are then made to work directly with the executive officers and elected leaders of associations to take advantage of congressional recesses throughout the year to meet personally with elected officials while they are at home. For more information, e-mail Molly Murray at NAHB, or call her at 800-368-5242. Recent Home Price Dip Pale Compared to Five-Year RiseWhile the latest S&P/Case-Shiller home price statistics for 20 of the nation’s largest metro markets showed a 4.4% year-over-year decline, a closer examination of the data reveals that, on average, these same markets appreciated in value by more than 50% over the past five years. “It’s important to keep things in perspective,” said NAHB President Brian Catalde. “The current housing price correction is most pronounced in the once super-heated markets in California, Nevada, Florida and Arizona. In most other markets, price declines have been pretty modest.” For example, in Chicago, home prices declined 1.3% between August 2006 and August 2007, but they posted a 34.2% gain for the five-year period between August 2002 and August 2007. Among the 20 markets surveyed by S&P/Case-Shiller, which represent more than 40% of the U.S. population, four posted home price appreciation rates of more than 80% over the past five years and 11 registered gains exceeding 45%. Home values in Los Angeles fell 5.7% in the year running from August 2006 to August 2007 — but including this loss, prices in L.A. were still up 88.9% since 2002. In Miami, home prices dropped 7.8% between August 2006 and August 2007 but price appreciation was still up 89.2% for the past five years. The same pattern holds true in Phoenix and Las Vegas, which posted yearly declines of 8% and 7.6%, respectively, and where home values were up 80.2% and 83.2% for the five-year period. While housing is a cyclical business, experience shows that over time, home values will stabilize and then move upward with the next recovery, said Catalde. “To argue that home values will continue to decline and never recover, somebody has to make a convincing case that it will cost less to build a new home five years from now than it does today — and that’s just not going to happen,” said Catalde. “Despite today’s housing slowdown, the cost of land, labor and materials required to build new homes continues to go up.” Furthermore, Catalde noted that the rapid appreciation rates in 2003 to 2005 were clearly unsustainable over the long-term, and that housing typically increases in value slightly above the overall inflation rate. Homeownership as a long-term investment has a track record that is virtually unmatched by any other purchase in terms of its real benefits, he added. Home owners today have a combined $11 trillion in equity in their homes, against which they can borrow to help pay for college tuition, medical expenses and other needs. And housing offers important tax incentives to make owning a home more affordable. To see tables comparing recent falling home prices with their five-year rise, click here. For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. Webcast of NAHB Fall Construction Forecast Available Till Feb. 5 The webcast of the NAHB Fall Construction Forecast Conference held in Washington, D.C. on Oct. 24. is available for purchase through Feb. 5. The conference webcast includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the webcast archive though Feb. 5, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the webcast, visit www.nahb.org/cfcwebcast. For more information, contact Kate Carrigan at NAHB, or call her at 800-369-5242 x8244.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. 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. Eye on the Ecomony: Housing Vacancies Still Riding HighThe U.S. Economy is showing remarkable resilience in the face of the stunning housing downswing that’s taking a heavy direct toll on economic growth and job formation while disrupting financial markets — via the abrupt decline in mortgage credit quality — in the process. So far, the much feared “spillover” effects on other key sectors of the economy have not been serious enough to threaten the overall economic expansion. Real gross domestic product (GDP) grew at a robust 3.9% annual rate in the third quarter — according to the “advance” report from the Commerce Department — following 3.8% growth in the second quarter of the year. The third-quarter gain occurred in the face of a 20% contraction in residential fixed investment (RFI) that lopped more than a percentage point off the GDP growth rate. RFI promises to put an even heavier hit on GDP growth in the final quarter of this year, and several other sectors are likely to lose some growth momentum — including personal consumption expenditures and exports. We expect overall GDP growth to slip to about 1.5% in the fourth quarter, but we also expect growth to pick up early next year and we believe recession will be avoided during the 2008 to 2009 forecast period. The Fed Eases Monetary Policy Again The Federal Reserve enacted quarter-point cuts in short-term interest rates (both the federal funds rate target and the discount rate) at the conclusion of the Oct. 30-31 meeting of the Federal Open Market Committee (FOMC). These cuts follow half-point reductions that were enacted at the Sept. 18 FOMC meeting, positioning the funds rate at 4.50% and the discount rate at 5.00%. The bank prime rate now stands at 7.50%. The Oct. 31 FOMC statement noted that “the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction” — a judgment consistent with our economic and housing forecast. Despite this outlook on housing and the economy, the FOMC statement expressed the judgment that “the upside risks to inflation roughly balance the downside risks to growth.” We view this balanced risk assessment as a strategy by the Fed to give themselves maximum flexibility in altering short-term rates and to control speculation about future policy adjustments. NAHB’s forecast contains another quarter-point rate cut at the Dec. 11 FOMC followed by stability in 2008. Mortgage Lending Standards Tighten Substantially The Federal Reserve’s October Senior Loan Officer Opinion Survey (SLOOS) documented systematic tightening of home mortgage lending standards at commercial banks during the August to October period. This round of tightening was on top of earlier rounds that had started in the first quarter of the year when the subprime market began to melt down. In recent quarters, the Fed’s SLOOS has asked separate questions about bank lending standards in three components of the home mortgage market: prime, “nontraditional” (including payment-option and interest-only ARMs as well as Alt-A loans) and subprime. In the October survey, about 40% of banks making prime loans had tightening standards (on top of 15% in the July survey), 60% of those making “nontraditional” loans had tightened (on top of 40% in July) and 55% had tightened standards on subprime mortgages (on top of a similar percentage in July). The substantial tightening of home mortgage lending standards this year, of course, follows a substantial cumulative easing of standards during the 2004 to 2006 period. That easing process provided fuel to the unsustainable housing boom that now has come home to roost. Prime ‘Jumbo’ Mortgage Market Tightens as Well The Fed’s October SLOOS included, for the first time, special questions about the market for prime jumbo home mortgages — those above the $417,000 conforming loan limit. This market had been seriously disrupted during the summer as the securities market outlet for loan originations essentially shut down and depository institutions became less willing to originate and hold jumbo mortgages in portfolio. In the Fed’s October survey, nearly half the respondent banks said their originations of jumbo mortgages had declined over the three-month survey period and about 35% of respondents said the share of jumbo mortgage originations that was securitized had declined relative to the prior survey period. Banks tightened lending standards in various ways in the jumbo mortgage market during the August to October reporting period. Significant fractions of respondents increased loan fees and spreads of mortgage rates over their cost of funds while also requiring higher credit scores, more stringent documentation of borrower income and assets and higher minimum downpayments. Mortgage Credit Tightening Takes a Toll on Homeownership The turmoil in mortgage credit markets put a heavy hit on sales of new and previously owned homes in August and September, and sales cancellations moved up aggressively during those months as well. Builders report that the virtual shutdown of the subprime and Alt-A mortgage sectors disrupted sales and closings not only in the entry-level market but also up the ladder in trade-up segments. They also report that the freeze in the jumbo mortgage securities market seriously damaged the high end of the housing market. The U.S. homeownership rate had been gravitating downward from the record high posted in 2004 as the housing downswing deepened, and the abrupt third-quarter downshift in net home sales provoked yet another downward adjustment. The homeownership rate now stands at 68.1% (seasonally adjusted), down from the record high of 69.3% in the second quarter of 2004 and the lowest level since the second quarter of 2003 — just prior to the explosive and unsustainable housing boom. Recent erosion of the homeownership rate has reflected absolute declines in the number of home owners, an unusual occurrence that has been accompanied by sizeable increases in the number of renter households in the U.S. But overall household formation, whether home owners or renters, has been weak for more than a year, reflecting deteriorating economic and financial market conditions as well as outsized household formation rates during the previous housing boom. Housing Vacancies Still Are Riding High Home builders reacted quickly to the third-quarter downshift in home sales, cutting back total housing starts to less than 1.3 million units (seasonally adjusted annual rate) and reducing single-family starts to 1 million — the slowest pace since the early 1990s. However, this adjustment hardly put a dent in the inventory of homes for sale in the hands of builders, particularly when the impact of rising cancellations is factored into the analysis. Vacancies in the stock of new and previously owned homes on the market actually moved up in the third quarter. Indeed, we’re approaching year-end with a near-record supply overhang in both for-sale and for-rent components of U.S. housing markets. The runup in recent years has been most striking in the for-sale components of single-family and multifamily housing sectors. Commerce Department reports show nearly 6 million vacant year-round housing units on the markets at the end of the third quarter, second only to the record high in the first quarter of this year. NAHB estimates that more than a million of these vacant units represent excess supply. That’s a heavy weight that must be whittled down substantially before housing production can return to healthy levels and house prices can resume a persistent upward trend. NAHB Housing Forecast Trimmed Again Incoming data on home sales and housing starts, combined with the stubbornly heavy supply overhang, have prompted yet another trim to NAHB’s housing forecasts for the final quarter of this year as well as in 2008 and 2009. We’re still projecting troughs for home sales, housing starts and residential fixed investment during 2008, but the bottoms have been lowered a bit and the subsequent upswings have been weakened a bit. With respect to total housing starts, the annual totals for 2007 to 2009 string out as follows — 1.36, 1.18 and 1.32 million units. NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Nov. 7 edition. To subscribe to “Eye on the Economy,” click here. Webcast of NAHB Fall Construction Forecast Available Till Feb. 5 The webcast of the NAHB Fall Construction Forecast Conference held in Washington, D.C. on Oct. 24. is available for purchase through Feb. 5. The conference webcast includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the webcast archive though Feb. 5, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the webcast, visit www.nahb.org/cfcwebcast. For more information, contact Kate Carrigan at NAHB, or call her at 800-369-5242 x8244. Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com. Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. 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.
Webcast of NAHB Fall Construction Forecast Available Till Feb. 5 The webcast of the NAHB Fall Construction Forecast Conference held in Washington, D.C. on Oct. 24. is available for purchase through Feb. 5. The conference webcast includes panels of nationally recognized experts discussing economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. Purchasers will receive unlimited access to the webcast archive though Feb. 5, as well as electronic copies of the conference handouts and presentation material. Purchasers can watch at their own pace, rewind, fast forward and review important sections. To Purchase the Webcast To purchase the webcast, visit www.nahb.org/cfcwebcast. For more information, contact Kate Carrigan at NAHB, or call her at 800-369-5242 x8244.
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com. Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. 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: Create Clean Edges With Painter's Tape Plus
Easy-release painter's tape alone won’t keep the paint off the unpainted surface, not completely. The paint will flow into the minute irregularities beneath the tape’s edge — leaving a fuzzy line when the tape is peeled away. Yes, some painters have a steady hand and are skilled enough to do this job freehand, but for most of us, the task is rarely successful. We recently solved this problem in an entertainment-center project that my company built. As shown in the accompanying illustration, the cabinetry has painted uprights and lacquered shelves. To get the clean line we were looking for, we first applied a strip of easy-release painters tape to the shelf. Then we ran a thin bead of latex painter’s caulk to the intersection and wiped it with a moistened finger a couple of times to remove virtually all the caulk. We weren’t concerned about leaving a bit of caulk on the parts to be painted, only on sealing the edge of the tape. After we were done painting the uprights, we carefully removed the tape while the caulk and paint were still wet. The result ― A clean paint line without a master’s hand. One word of caution, however: If the caulk and the paint are dry by the time you remove the masking tape, run a sharp utility knife down the intersection first. — Chuck Green, Ashland, Mass. Tips & Techniques provided by Fine Homebuilding.
To request a reprint of this feature, e-mail Christina Glennon at Fine Homebuilding.
Set Yourself Apart With CGB Designation Join the ranks of the nation’s top building industry professionals with the Certified Graduate Builder (CGB) designation. The “Builder Assessment Review” (BAR) is your first step towards obtaining the CGB. This comprehensive assessment measures your expertise in the four key areas of the building industry: building technology, business and finance, project management and sales and marketing. Your results will show the areas where your knowledge is strongest and weakest and will help determine the courses required for you to obtain your CGB. To learn where the next BAR will be held, visit NAHB’s education listings, or call the Professional Designation Help Line at 800-368-5242 x8154.
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.
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. 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. Make Your Web Site Work Harder and Smarter for You
By Steve Lewkowitz, Pivotal CRM While many builders’ Web sites may look great and help sell homes, they are missing out on the full potential of the Web. Used strategically, your Web site can become a workhorse — accelerating sales, saving labor, gathering intelligence and creating happy, loyal customers. The following are a few ways to take your Web site to the next level. Use Your Web Site as a Hub The first step to leveraging your Web site more effectively is to stop seeing it as a standalone tool and to start understanding it as a unifying hub. Your Web site should be the front door to your organization — all paths should lead to it and it should be the main entry point to access everything your firm has to offer. Most builders see their Web site as part of their marketing toolkit, but it can be much more than that. Your Web site can act as center point for all of your marketing activity, tying together online and offline channels. Most builders’ online marketing is not limited to their own Web site. Many promote their homes on third-party Web sites and online listings services, and they may also use banner ads or pay-per-click advertising. These online programs can be excellent lead generators, but builders need to make sure that leads from disparate online channels don’t fall through the cracks and receive equally rapid follow-up as direct leads. By funneling leads brought in by other online, lead-generating sources through the builder’s Web site and using simple tracking mechanisms, builders can ensure that all leads enter the same pipeline and are promptly and consistently followed up ― while still gathering source data. Although many builders are investing more and more of their efforts in online marketing, most continue to use traditional marketing channels such as direct mail, print advertising and billboards. Unfortunately, the effectiveness of these offline channels can be hard to measure. But by directing interest generated by these media to specialized Web pages that capture leads and record the source, builders can track the returns on these marketing efforts as effectively as they can their online activities. Using your Web site as a hub goes beyond channeling visitors from different sources to a single location. It’s also about what links into your Web site from the back end. Many builders have invested in their IT infrastructure, implementing applications and systems that help streamline their processes and organize their data. By tying some of these systems into their Web sites, builders can extend the value of these IT investments and make their Web site a critical front end for their marketing, sales and customer care processes. Use Your Web Site to Build Relationships The Web can’t compete with face-to-face interactions for relationship-building — or can it? While online tools won’t replace the human touch altogether, they can go a long way toward building customer relationships when properly applied and, in many cases, can be more effective and methodical in gathering and applying customer and prospect data — at least up to the appropriate point for handoff to a live sales agent. By tying marketing automation and customer relationship management (CRM) systems to your Web site, you can use the site as a systematic intelligence gatherer and relationship-builder. Rather than generating a one-time lead, you can create a prospect profile that can be built out over time. When prospects visit your Web site, encourage them to register to receive value-added information, such as in-depth PDF brochures or community updates, by simply entering their name and e-mail address. Enroll the prospects in an automated, lead-nurturing e-mail stream that asks them a few key questions at each interaction. This enables you to collect information cumulatively as the relationship develops, avoiding long, imposing online registration forms that act as barriers to lead generation. The more sophisticated marketing automation programs will automatically increase the depth of personalization with each communication, building upon the latest information gathered to continually increase relevance. For example, if the prospect indicates that their primary hobby is golf, the system can automatically send a golf-oriented communication, or, if the prospect has children, a profile of area schools. Each step builds prospect intelligence, while also pre-qualifying contacts. The system also can route leads immediately to the appropriate salesperson when the prospect is at the right stage for live follow-up. The salesperson delivered not just a lead, but in-depth information about a pre-qualified contact who is ready to make a purchase. In this way, your Web site can take on much of the pre-sales lead generation, nurturing and qualification duties that would normally require significantly more effort, time and overhead, while also gathering richer information and delivering a more consistent customer experience. Use Your Web Site to Streamline Customer Care Your Web site can play an important role in the marketing and sales process, but its usefulness need not end there. Post-sales customer care is critical to keeping customers satisfied, maintaining a strong brand reputation and generating high-quality lead flow as customer referrals. Delivering great customer care can be costly. However, using your Web site for customer care can bring down the cost while increasing customer satisfaction — an ideal combination. Again, the secret is to integrate customer care tools directly into your Web site. Allow home owners to log in to a secure online customer care center and access their profile, which is fed by the rich customer data you have accrued in your CRM system throughout the marketing and sales process. Enable home owners to easily refer to data relevant to their home — such as warranty information ― update their profile to keep your data clean and up to date, search knowledge-bases for helpful pointers and answers to common questions and log issues for service-agent follow-up. Using your Web site this way enables you to provide 24/7 support and service very cost-effectively and give customers ample resources for self-service. Many of your home owners will be able to answer their own questions without ever contacting a service agent. For those issues that do require follow-up, logging issues electronically allows them to be quickly and easily routed to the appropriate customer care agent or sub-contractor for follow-up, escalated when needed and tracked through to resolution. Web-based customer surveys can also be integrated into the service process to ensure issues are being resolved to customers’ satisfaction and identify areas for improvement. Similarly, marketing automation systems tied into the Web site can continue to nurture relationships well after home purchase, promoting second-home or holiday-home sales and offering Web-based referral programs and incentives. Take Your Web Site Beyond ‘Brochureware’ Don’t be afraid to ask your Web site to work a little harder for you. By tying your Web site more closely to your online and offline marketing activities and back-end IT infrastructure, you can get more value not only from your Web site, but from your existing technology and marketing investments, while also increasing customer satisfaction and lowering costs — a winning combination by any builder’s standards. Steve Lewkowitz is the home building and real estate professional services director for CDC Software’s Pivotal CRM, a leading line of customer relationship management solutions. For more information, e-mail Lewkowitz, or visit www.pivotal.com/homebuilders.
NAHB Has More Than 300 Resources to Help You Run Your Business More Profitably 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. Gain 50+ Know-How With CAASH DesignationThe CAASH designation gives housing professionals serving the rapidly growing 50+ housing market the essential knowledge, tools and skills that will help them succeed — from conducting initial research to design considerations and features to closing the sale and serving the customer. To apply for the CAASH designation applicants must:
Grandfathered CAASH Industry veterans with extensive experience in the active adult field may also be grandfathered into the program (this option expires Dec. 1). Applicants should:
For more information about the CAASH designation, the grandfather program and the required courses, contact: the Professional Designation Help Line at 800-368-5242 x8154, e-mail CAASHinfo@nahb.com or visit www.nahb.org/CAASHinfo. Earn CAASH Credits at Building for Boomers & Beyond
The three required courses for the Certified Active Adult Specialist in Housing (CAASH) designation will be held Saturday, May 17 and Sunday, May 18 at the 2008 Building for Boomers & Beyond: 50+ Housing Symposium in New Orleans. The CAASH designation gives housing professionals serving this rapidly burgeoning market the essential knowledge, tools and skills that will help them succeed. To learn more about CAASH, visit www.nahb.org/CAASHinfo. Tour Top 50+ Communities in New Orleans Sign up for the active adult housing tour at the 2008 Boomers and Beyond: 50+ Housing Symposium in New Orleans, May 19-21. The symposium will also feature the most innovative new community designs during the Best of 50+ Housing Awards gala. Click here to be notified when registration opens. Help Rebuild New Orleans at 50+ Housing Symposium Building for Boomers & Beyond: 50+ Housing Symposium is partnering with Rebuilding Together New Orleans on a special two-day community service project so symposium attendees can help rehabilitate homes in New Orleans that were severely damaged by Hurricane Katrina. Two pre-conference days have been reserved for this event. Attendees are encouraged to volunteer for this special rebuilding project. Find Out What the 55+ Market Wants “Boomers on the Horizon: Housing Preferences of the 55+ Market,” available through BuilderBooks.com, can help you better build and market homes to this age group. Capitalize on the niches, needs and opportunities of this rapidly growing market by learning their preferences. To view or purchase this publication online, click here, or call 800-223-2665. Pillars Awards Entry Applications Due Nov. 16
Entries are open for the 2008 Pillars of the Industry Awards competition honoring excellence in apartment and condominium design and development — including the best mixed-use community — as well as leadership in marketing and property management. Apartment owners and developers, property managers, architects, interior designers and others involved in the multifamily housing industry are invited to enter. The application deadline is Nov. 16. Entry notebooks are due Dec. 14. The Pillars of the Industry Awards program is the largest and most prestigious of its kind, and both housing professionals and the media look to the awards as a showcase of future trends and innovation. The awards recognize superior achievement in three areas: building, marketing and individual excellence, including “Multifamily Development Firm of the Year” and “Best Multifamily Community of the Year.”
For complete details, including eligibility requirements and application forms, go to www.nahb.org/pillarsawards, e-mail multifamily@nahb.com, or call 800-368-5242 x8215. To see a list of last year's winners, available on the NAHB Web site, click here.
Get Informed, Make Connections at Pillars Conference Attend the 2008 Multifamily Pillars of the Industry Conference & Awards Gala, April 1-3, and find out what’s next in the rapidly changing multifamily market from top economists and multifamily market experts. Network with the top professionals in the field and find out how they’re navigating the current market. Walk away with new contacts and fresh perspectives. For more information, visit www.nahb.org/pillarsconference. Remodelers Put on Thinking CAPS With Revised CoursesThe newsly-revised Certified Aging in Place Specialist (CAPS) courses — “Communications Strategies for Aging and Accessibility (CAPS I)” and “Design/Build Solutions for Aging and Accessibility (CAPS II)” — debuted at the Remodeling Show in Las Vegas last month. Bindley Byrd, CGR, CAPS, of QX2 Contracting in Lansing, Mich., discussed the seven principles of universal design — equitable use, flexibility of use, simple and intuitive operation, perceptible information, tolerance for error, low physical effort, and size and space for approach — as part of the CAPS I course. CAPS students learned about the physical, cognitive and emotional changes seniors encounter as they age, including decreased mobility and sensory input and learning difficulties, and how these changes may be mediated by aging in place remodeling works. Byrd also said remodelers can broaden their client list by forming strategic partnerships with AARP representatives, architects and interior designers, occupational therapist and social workers. Mike Weiss, CGR, CGB, GMB, CAPS, from Weiss RCMI in Carmel, Ind., analyzed plans and reviewed completed remodeling projects as part of the CAPS II course.
Increase Your Professional Credibility The Certified Graduate Remodeler (CGR) designation emphasizes business management skills as the key to a professional remodeling operation. Remodelers who earn the CGR become members of an exclusive national program and gain recognition as industry leaders. To learn more, visit www.nahb.org/CGRinfo, or call The Professional Designation Help Line at 800-368-5242 x8154. Differentiate or Die: How to Stay Alive in Today's MarketBy Richard Elkman, MIRM, Group Two Advertising To stay alive during this very different housing downturn ― different because it has nothing to do with high interest rates or high unemployment — you need to dramatically cut overhead and land positions while increasing operational efficiencies. The next most important step to take is to "differentiate" your company and product from the competition. To achieve this, you must zero in on what makes your company special and focus everyone's attention — consumers' and employees' — on that distinction.
Look how these companies have used “positioning” to stand out from their competition, and how familiar that positioning is to you. Nike says, “Just Do It.” Greyhound recommends that travelers “Leave the Driving to Us.” Burger King tells customers to “Have It Your Way.” And BMW calls its cars, “The Ultimate Driving Machine.” Many BMW owners agree. To position your company, first follow these five steps to evaluate your company and position. Be sure to be brutally honest.
Once you have thoroughly and honestly evaluated your positioning, commit your resources to strengthen your positioning. Positioning is not the "magic bullet" for success, but it just may help you stay in business until your market improves. You don't have to outspend the competition — you just have to outsmart them. Richard Elkman, MIRM, is president of Group Two Advertising, one of the country’s largest real estate marketing companies. He regularly appears as a moderator or speaker at the International Builders’ Show and major housing conventions. He is a past president of the Institute of Residential Marketing and publishes the free, bi-monthly marketing and advertising e-newsletter, Challenges & Solutions. For more information, e-mail Elkman, or call him at 215-561-2200. Get the Marketing Edge With IRM Meet the current market’s sales and marketing challenges with Institute of Residential Marketing (IRM) classes. Courses include “The Challenge of New Home Sales Management,” “Understanding Housing Markets and Consumers,” “Marketing Strategies, Plans and Budgets” and more. The courses are part of the credits needed to earn the MIRM designation, the top-level achievement for professionals in new home marketing. Find upcoming IRM classes by clicking here. Bill Webb, MIRM, shows you how in “Sweet Success in New Home Sales,” available through BuilderBooks.com. This book provides powerful techniques for selling more homes and making more money in leaner times. "Sweet Success in New Home Sales" lays out the proven approaches for crafting and delivering sales excellence. To view or purchase this publication online, click here, or call 800-223-2665. Register for Free Sales and Marketing Audio ConferenceIndustry veterans who have been through market shifts in their careers will discuss what sales and marketing changes should be made in order to thrive in today’s market during an upcoming audio conference that is free to NAHB members. The hour-long teleconference, “Ramp Up Your Sales & Marketing in a Changing Market,” will begin at 2 p.m. Wednesday, Dec. 12. A panel of sales and marketing experts will discuss successful techniques that are working for them. The teleconference will include a 40-minute presentation by the panel, followed by a 20-minute question-and-answer session. Members are encouraged to e-mail questions to the panel in advance to Michael Copp at NAHB. Teleconference topics include the following:
To Register Free online registration is available by clicking here. For more information, read the teleconference flyer by clicking here. HBAs and local sales and marketing councils are encouraged to host the audio conference call at their HBA. For more information, e-mail Michael Copp at NAHB, or call him at 800-368-5242 x8340. The conference is co-hosted by the National Sales and Marketing Council and Biztools™, NAHB's business management comprehensive resource on the NAHB Web site.
Bill Webb, MIRM, shows you how in “Sweet Success in New Home Sales,” available through BuilderBooks.com. This book provides powerful techniques for selling more homes and making more money in leaner times. "Sweet Success in New Home Sales" lays out the proven approaches for crafting and delivering sales excellence. To view or purchase this publication online, click here, or call 800-223-2665.
Meet the current market’s sales and marketing challenges with Institute of Residential Marketing (IRM) classes. Courses include “The Challenge of New Home Sales Management,” “Understanding Housing Markets and Consumers,” “Marketing Strategies, Plans and Budgets” and more. The courses are part of the credits needed to earn the MIRM designation, the top-level achievement for professionals in new home marketing. Find upcoming IRM classes by clicking here. Tickets Now Available for The Nationals 2008 Gala at IBSTickets are available for The Nationals 2008 gala, the housing industry’s largest and most prestigious competition honoring new-home sales and marketing professionals and communities. Hosted by the National Sales and Marketing Council (NSMC), the gala will be held at the Rosen Shingle Creek Resort in Orlando on Feb. 13 during the 2008 International Builders’ Show. "The Nationals celebrates innovation, creativity and drive," said Ross Robbins, MIRM, CMP, a Colorado-based consultant and chairman of The Nationals 2008. "NAHB's dedication to honoring the achievements of new home sales and marketing professionals has created a legacy of excellence that we can be proud of.” Begun in 1982 as the Institute of Residential Marketing (MIRM) Awards, this year The Nationals will honor excellence in 57 categories of residential design, marketing, interior merchandising, advertising, Web site design and individual and team sales achievement. In addition, The Nationals honor the top local sales and marketing councils across the country. More than 1,300 entries are being considered for this year’s competition. Gold Award winners in each category will be announced at the gala, which is expected to have more than 1,000 attendees. To Purchase Tickets Individual tickets are $175 each for NSMC members and $195 for non-members. Tables of 10 also are available for $1,750 and $1,950, respectively. Individual and group tickets may be purchased online by clicking here; e-mailing Lisa Parrish or calling her at 800-658-2751; or by visiting The Nationals Web site at www.thenationals.com.
Earning the Certified New Home Sales Professional (CSP) designation can give you the edge you need in today’s market. Ask current CSPs how the designation has benefited their careers on the "Ask a CSP" page. These graduates have volunteered to answer questions, provide guidance and help navigate the CSP program. For more information about NAHB designations, visit www.nahb.org/designations. Banks, Churches Among Best in Commercial Building
Several banks, churches, a marina, a multiplex movie theater and the 160-acre Wells Fargo Home Mortgage campus in West Des Moines, Iowa were among the winners of the National Commercial Builders Council (NCBC) 2008 Awards of Excellence competition. The awards recognize achievements in commercial building for remodeling and new construction design, market appeal, energy efficiency, overcoming challenges faced during construction and overall project success. The winners exhibited inventive use of technology, ingenuity in overcoming design and construction challenges and innovative use of energy-efficient features. Project of the Year The Wells Fargo Home Mortgage campus — a suburban development encompassing more than one million square feet in a multi-year, multi-phased design and construction plan — was named project of the year. Developed by the Des Moines-based general contractor, Weitz-JE Dunn, A Joint Venture, the project includes three four-story buildings, a central plant and a centralized commons building that features dining services and a fitness center. Some of the features on the project that provide its winning edge include standard and high-end finishes, hard ceilings painted blue with mirroring carpet that imitates a meandering river coursing through the open-air office spaces, and site work that incorporates typical landscapes of Iowa's upland prairie. The dining room features a stone fireplace that is open on two sides. Grand Awards
Industry Speakers Available Through NAHB Online DirectoryHiring a speaker is an effective way to promote attendance and bring energy to annual meetings and networking events. NAHB’s new Online Speaker Directory gives local home builders associations, NAHB members and organizations direct access to members who can speak on a number of housing industry topics, including:
How to Use the Directory Users can search the directory by topic, state, last name or keyword. Each listing gives the speaker's areas of expertise, contact information and how far they are willing to travel. NAHB members can add themselves to the directory free of charge for one year and then enhance their existing directory listing for a small fee. Non-members can add themselves by purchasing a non-member listing online from the NAHB Web site. Listings include basic information, in-depth topic specialties, photograph, Web site address and more. They are self-managed, can be changed at any time, and are good for one year once approved by NAHB staff. For more information, e-mail Maria Nande at NAHB, or call her at 800-368-5242 x8435.
Education Calendar
Learn More About Upcoming Conferences and Designations Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. 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. Drought Prompts Tips to Cut Residential Water UseWith the National Climate Data Center reporting that about 43% of the contiguous U.S. is now experiencing a moderate to extreme drought, the Partnership for Advancing Housing Technology (PATH) has recently put together information on simple and inexpensive ways to conserve water in and around the house. As examples of how drought is appearing in different parts of the country, Lake Huron and Lake Michigan are currently about two feet below their long-term levels, PATH says, and Georgia, Florida and Alabama are fighting over water in a river basin that feeds all three states. Even in areas where drought has not appeared, PATH recommends water conservation because “using water wisely gives us more flexibility in future water shortages and reduces long-term maintenance costs.” To start conserving residential water use, low-flow fixtures and Energy Star appliances should be installed wherever possible, PATH says. For consumers who don’t like the feel of aerated water that reduces water flow or complain that it splashes, laminar flow fixtures are available that significantly reduce water usage but still feel like a higher water flow. Fixing leaky faucets and plumbing joints is another area where home owners can cut their water consumption significantly. Just one leak can waste as much as 20 gallons per day, enough to do a load of laundry in an Energy Star washer. The American Water Works Association's Water Wiser® Drip Calculator can be used to determine exactly how much water is being lost through a leak. Ways in which water consumption can be reduced in the kitchen include:
Poll Finds Strong Support for Voluntary Green ProgramThe vast majority of resident |