Nation's Building News Online: December 3, 2007Print All Articles Text Version |
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Turning Housing Around Top Priority For Treasury SecretaryCalling the current housing market downturn “the biggest challenge to our economy,” Treasury Secretary Henry Paulson told the Office of Thrift Supervision's National Housing Forum on Dec. 3 that the Administration is moving quickly to limit foreclosures and looking to Congress to assist in that effort and expand home financing opportunities through modernization of the Federal Housing Administration. “NAHB applauds the federal government and the banking industry for coming together on an issue that is important to the American people and the economy,” said Jerry Howard, the association’s executive vice president and CEO, in commenting on the Treasury Department's efforts on foreclosure prevention with key mortgage lending and investment interests. “We encourage all parties to work out the details on this complex process as quickly as possible, and NAHB is committed to helping in any way.” Panelists participating in the day-long discussions in Washington, D.C. — including lenders, builders, investors, consumer activists, housing economists and regulators — added that the Federal Reserve has no choice but to act aggressively to reduce interest rates in order to avert a full-scale economic recession, and they identified Fannie Mae and Freddie Mac as the best hope for quickly ending further erosion of battered housing markets in California and other high-priced parts of the country. Speakers at the forum warned that the next several months will be especially tough on the industry, but they voiced optimism that housing can find its way to recovery next year. Accent on the Positive “I think the market can turn around quicker and faster than anyone thinks it can,” said builder Robert Toll, chairman and CEO of Toll Brothers, Inc., as builders respond to the need for working down the inventory of unsold homes by scaling back their construction activity. “Builders are building to sales, not to speculation,” Toll said. “The inventory will shrink because builders aren’t adding to it.” In the meantime, he said that the focus needs to shift back to the positive effects of housing and he suggested the presidential elections would be a means to do this. “Debate needs to turn from how bad things are to how good,” he added. “We have to talk about the future of the country. That bully pulpit has to be used to turn our country around.” Higher Loan Limits Allowing Fannie Mae and Freddie Mac to purchase loans higher than their current $417,000 limit would provide a major boost to housing in states like California, said Angelo Mozilo, chairman and CEO of Countrywide Financial Corporation. Eighty-five percent of the home mortgages in the state exceed that amount, and with private investors gone because of losses in the subprime market, there is a liquidity crisis. “Going forward, we need a viable secondary market and to restore confidence in mortgage-backed securities,” Mozilo said. “The jump start is going to have to be through government agencies as it was during the Depression.” Countrywide recently announced a $16 billion effort to allow borrowers who can’t afford the monthly payments when their loans are reset at a higher interest rate to keep their existing interest rate for a period of three to five years, and the program is expected to benefit 75,000 borrowers this year, he said. Mortgage Refinancing and Modifications With the number of home owners struggling with their resetting subprime mortgage expected to increase throughout next year, Paulson said that the Treasury is now working with lenders, loan servicers and investors on “an aggressive, systematic approach to fast-track able borrowers into a refinance or mortgage modification.” The focus of this effort will be home owners with steady incomes and relatively clean payment histories who could afford the lower introductory mortgage rate but cannot afford the higher adjusted rate, he said. “Given the diffuse nature of today’s motgage market, the steps toward refinancing and modification can be more difficult than it would seem,” Paulson said. “The company collecting your mortgage payment every month is most often doing that on behalf of those who own the mortgage, and they are limited in the decisions they can make on behalf of those ultimate owners, who are spread all over the world,” he said. “We are determined to bring this diverse group together, to develop a set of standards that will be implemented across the industry, from the largest mortgage servicers to the smaller specialty servicers. An industry-wide approach is critical to the effectiveness of this effort,” he said. Paulson indicated that the standards should be finalized soon, and they will “define categories of borrowers for streamlined refinance and modification where that is in the best interest of both the borrower and the mortgage investor.” The Treasury Secretary also highlighted state and local efforts to increase the availability of affordable mortgage solutions. In particular, he noted that several state housing finance agencies have initiated pilot programs backed by taxable bonds to help subprime borrowers refinance. He announced that the Administration is proposing to allow state HFAs to broaden their tax-exempt programs — which can only be used for first-time home buyers — to include mortgage refinancings. Paulson said that Congress also needs to act on a number of key initiatives:
Home Price Changes Vary Among Top 20 MarketsHome appreciation rates vary significantly among the nation’s top markets, according to the latest monthly S&P/Case-Shiller home price statistics tracking the 20 largest metro areas in the U.S. “We need to put these numbers in proper historical context by analyzing them over the long term, rather than in one-year increments,” said NAHB President Brian Catalde. “These statistics also reaffirm that all housing markets are local, and conditions in them are dictated by the local economy and job market.” Among the top 20 markets surveyed by S&P/Case-Shiller, which represent more than 40% of the U.S. population, five showed positive home price appreciation rates over the past year, seven posted declines of less than 5% and eight registered losses of between 5% and 10%. With the exception of Detroit, which has suffered significant job losses in manufacturing during the past several years, markets that posted the largest average decline in home prices during the past year — Las Vegas, Los Angeles, Miami, Phoenix, San Diego, Tampa and Washington, D.C. — have seen their home prices appreciate by more than 100% since January 2000. “It makes sense that the most super-heated housing markets in California, Nevada, Arizona and Florida are now experiencing the most serious market corrections,” said Catalde. “Though housing is a cyclical business, experience shows that over time, home prices will stabilize and then move upward with the next recovery.” While the home price statistics for the 20 metro areas showed a 4.9% year-over-year decline, those same markets have appreciated in value by more than 95% since January 2000. On a national level, home prices fell 4.5% between September 2006 and September 2007. However, since January of 2000, home prices have increased by more than 80%, indicating that housing remains a solid long-term investment. These Relics Could Sink a SaleUnless owners periodically invest in repairs and upgrades, their homes will fall so far below the standards of current buyers that they become obsolete, and then property value can lie almost entirely with the land. Among relics that could sink a potential sale: only one bathroom, no air conditioning, electrical systems protected by a fuse box instead of a circuit breaker, spiral staircases and basements with only an outside entrance. “Ceilings that look like they’ve been stuccoed” are obsolete, according to Nick Kuhn, an associate broker with McEnearney Associates’ office in Arlington, Va. Most, but not all, date back to the 1960s and 1970s. “Some people are still doing it because it covers up a bunch of cracks,” he said. Also decidedly on his “out” list: dropped ceilings with fluorescent lights and dark beams cutting across the ceiling. On the endangered species list, judging from their absence in current design, are living rooms, formal dining rooms, trash compacters, standard 7-by-9-foot garage doors, wall-to-wall carpet in the main living areas and split-level floor plans. While the split-level isn’t obsolete because large numbers of people are happily living in them today, there aren’t many new ones being built because buyers don’t like the chopped up spaces. Among “pocket watch” features that have been replaced by better technology but remain popular among aficionados, clotheslines are today’s leaders. Neighbors and home owners associations may balk at the look, but the humble clothesline is making a comeback among the environmentally conscious and can’t be beat for making bed sheets crisp and fresh-smelling. (www.washingtonpost.com)
City’s Housing Market Gets Good NewsHousing prices in Oklahoma City increased 2.39% in the third quarter, according to the Office of Federal Housing Enterprise Oversight (OFHEO), which was a present surprise for local builders because prices seemed to be trending down at the end of the second quarter and were virtually flat. “Oil is still propping up our economy. Less than a generation ago, but oil is still propping up our economy,” said David Feisal, senior vice president of Tulsa-based SpiritBank and immediate past president of the Oklahoma Mortgage Bankers Association. “The public thinks we’re going to hell in a handbasket. There’s a lot of states that aren’t going to hell in a handbasket,” he said. “I don’t think there’s any question that our house prices are outpacing the country,” he said. The home construction slowdown is partly to thank, said Caleb McCaleb, president of the Central Oklahoma Home Builders Association. “The builders I know have really cut back on starts,” he said. “It’s a supply-and-demand market. A lot of our bankers are saying, ‘Guys, get out there and sell presolds and don’t do so many speculatives.” (www.newsok.com)
Housing Bubble Hasn’t Burst for Valley Just YetHome prices in Pennsylvania’s Lehigh Valley continued to rise over the summer and early fall even as many cities in the country saw declines in the cost of houses, according to statistics from OFHEO. Home prices in the area rose 4.4% in the third quarter, which was higher than for the state or the nation, but still marks the Valley’s lowest year-over-year gain in seven years. Over the past five years, homes in the Lehigh Valley have risen in value 63%, according to federal statistics. Low interest rates for mortgages brought many first-time buyers into the housing market, while affluent newcomers fleeing high prices in New York and New Jersey pushed up the average cost of a home in the area. For people who own a home here, the price increases have been good news. What may be their largest asset went up, with prices for an existing home rising 10% or more for the past three blockbuster years. But people who want to buy their first home or trade up to a bigger house are finding that their dollars don’t go as far. A report issued by Lehigh and Northampton counties this year found teachers, policemen and other essential workers are struggling to afford homes in the area. The clearest indication that the Valley’s boom is finished is the 15% drop in the number of homes sold so far this year. That’s compared with last year, when home sales in the area declined for the first time in at least 10 years. (www.mcall.com)
Housing Prices Up Across State; Region Does Not Follow TrendA recently released report from the Wisconsin Realtors® Association found that in the third quarter the state’s housing market was stronger than most other states. “We’re not in the same kind of trouble you read about in other markets around the country,” said Michael Spranger, the association’s chairman. “The fundamental elements of a stable real estate market remain strong in Wisconsin.” While home sales fell in the state by 9.8% in the third quarter over the same period in 2006, median prices rose by 2.4%. “The Wisconsin housing market is far less impacted by the subprime mess than places like California, Nevada, Arizona and Florida, as indicated by foreclosure figures,” said association president William Malkasian. One of the reasons for this, he said, is that fewer Wisconsinites used subprime loans. “Wisconsin has a smaller fraction of its mortgage loans that are subprime than is the case elsewhere, and our foreclosure rate is only about one-third the rate of the nation and far lower than the rate of these problem states,” he said. Spranger noted that the softer housing market might benefit someone looking to buy because of increased inventories of available homes and current low interest rates. “Many communities are seeing increasing inventories which, when combined with the current low interest rate environment, affords many creditworthy first-time buyers the opportunity to get into homes that would otherwise be out of reach,” he said. (www.piercecountyherald.com)
U.S. Lumber 2008 Outlook Dim as Housing Woes PersistThe deepening crisis in the U.S. housing market and a credit crunch will keep lumber prices in the U.S. under pressure well into 2008, with values already near the lowest levels in 15 years. “You’ve got very weak demand and just a pile of inventory (of homes on the market) to get through before you can get demand for the underlying lumber to pick up down the road,” said Paul Quinn, a paper and forest products analyst at Vancouver-based Salman Partners. “That’s why 2008 is going to be very similar to 2007.” Spot lumber futures at the Chicago Mercantile Exchange tumbled nearly 30% from July to October, but have since recovered somewhat. The closely watched western-pine-fir cash price fell to around $220 per 1,000 board feet in late October which, when adjusted for inflation, was the lowest price on record. U.S. housing starts as of October were running at a 1.229 million-unit annual pace. Meanwhile, sawmills continue to churn out enough wood for starts “somewhere between 1.3 and 1.4 million,” Quinn said. Lumber industry analysts expect the tough market conditions to force more and more mills to pare production or shut down completely, especially at Canadian mills where losses have been more pronounced due to a historically weak U.S. dollar. “The size of the Canadian forest products industry is going to shrink measurably as long as the Canadian dollar stays above par. It just cannot handle that,” he said. “The long-term fundamentals of the industry are good, it’s just that this next year or year-and-a-half is going to be particularly traumatic for the industry.” (www.reuters.com)
Housing Slump Hurts City BudgetsThe housing slowdown is taking a toll on cities across Middle Tennessee, including Spring Hill, which once thrived off money from development but now has to sell off investments to make ends meet. Aldermen voted this week to cash out almost $900,000 in certificates of deposit to help pay the bills, and state auditors are reviewing the Spring Hill’s financial books looking for places to save money as the town grapples with declining revenue from new construction on top of a $3 million budget shortfall from last year. “Probably the biggest worry is that” city officials “will step in and increase taxes to play catch-up, to get us back to where we need to be,” said Spring Hill resident Rufus Wiggins, who runs a local barbershop. Growth allowed Spring Hill to do away with its property tax, with some fanfare, in 2005. Since then, the city has relied almost entirely on government fees and taxes associated with growth. (www.ashlandcitytimes.com)
New Single-Family Home Sales Edge Up in OctoberNew single-family home sales edged up 1.7% in October following a dramatic downward revision to the preliminary estimate of sales for September, the U.S. Commerce Department reported on Nov. 29. October’s seasonally adjusted annual sales rate of 728,000 units was 23.5% below a year earlier. “The progressive tightening of mortgage lending conditions during 2007 has been the major factor behind the setback in home sales this year,” said NAHB Chief Economist David Seiders. “NAHB expects home sales to begin a gradual recovery in the early part of 2008.” “For this pattern to materialize, the U.S. economy must avoid recession and conditions in the mortgage finance system must improve. We are looking to the Federal Reserve to implement at least two more cuts in short-term interest rates to ensure that those conditions are met,” Seiders said. The regional patterns of new-home sales in October were mixed, with sales up 14.2% in the Midwest, 6.8% in the South and 1.8% in the Northeast, but down 15.7% in the West. All regions but the Northeast were down substantially on a year-over-year basis. The inventory of new homes for sale in October was down 2.3% to 516,000 units as builders continued to work down their inventory. The equivalent months’ supply at the October sales pace edged down to 8.5 months from 9.0 months in September. Completed homes for sale comprised about 37% of the inventory, units still under construction represented almost 49% and units for-sale that were permitted but not yet started accounted for more than 14% of the inventory level. The median length of time that completed homes were on the market was 5.9 months in October, up slightly from 5.8 months in September.
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. Single-Family Loan Limit to Remain at $417,000 in 2008The Office of Federal Housing Enterprise Oversight (OFHEO) on Nov. 27 announced that the 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac will remain at $417,000, unchanged for the third straight year. The announcement is consistent with guidance proposed by OFHEO to handle future conforming loan limit adjustments. Conforming loan limit calculations establish the maximum for loans that Fannie Mae and Freddie Mac are allowed to purchase and they are also used to set limits for FHA and VA loans. These limits are determined annually based on year-over-year changes to the existing level of home prices based on data from the Federal Housing Finance Board's Monthly Interest Rate Survey. The FHFB reported that the average home declined in price by 3.49% between October 2006 and October 2007. Proposed Changes to Allow Lowering Limits Opposed On Oct. 22, OFHEO published in the Federal Register a revised Examination Guidance proposal that would allow the agency to establish new guidelines that could result in future declines in the conforming loan limit. Under OFHEO’s proposal, any decreases in the conforming loan limit would be deferred one year. Decreases would have to total cumulatively more than 3% before a decrease would be implemented, a change from the 1% amount in an earlier proposal. The notice also clarifies that if a loan is conforming at the time of origination, it will remain conforming regardless of whether the loan limit declines after the origination date. Changes in the limit would be rounded down to the nearest $100. NAHB policy specifically calls for “OFHEO to withdraw proposed guidance that would permit a decline in the conforming loan limit.” Consistent with this policy, NAHB submitted comments opposing OFHEO’s proposal in letters dated July 19 and Nov. 21. NAHB’s comments stressed that not only is it bad public policy in the midst of the ongoing housing correction and mortgage market turmoil, it is not allowed under current law, which provides for the conforming loan limit only to be adjusted based on an increase in the statutory house price index. NAHB also faulted OFHEO for not following the Administrative Procedures Act (APA) in issuing the original proposal, including a full notice and comment request in the Federal Register. NAHB also raised this concern in separate correspondence with the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) in a letter dated Aug. 2. While OFHEO acceded to NAHB's request to obtain broad public input on the proposed changes through a notice in the Federal Register, the association continues to oppose the proposed procedures because they could result in future declines in the conforming loan limit. The proposed calculation procedure is also unnecessarily complicated and increases the risk to housing market participants. For example, with the FHFB index declining by 0.16% in October 2006, the cumulative two-year decline is now 3.65%. Under the OFHEO proposal, the 2009 loan limit could be adjusted downward by that amount, although the actual adjustment will not be known until next November. In anticipation of the lower limit, lenders might reduce their conforming loan threshold to $401,700, reflecting the 3.65% decline. However, if the October 2008 index were to increase by more than 0.65%, the loan limit would again remain unchanged since the cumulative decline would fall below the 3% trigger. Lenders who had reduced their conforming loan threshold would have unnecessarily restricted access to GSE financing. Such a premature financing constraint would be particularly onerous for purchasers of newly built homes who typically lock in their financing up to a year prior to closing. To prevent such potentially negative impacts from a decline in the conforming loan limit, NAHB recommended to OFHEO the continuation of the current practice of netting out declines in the Federal Housing Finance Board index from future increases, so that decreases are incorporated into the calculations but in a manner that would prevent the limit from ever declining from its present level. NAHB maintains that the current practice achieves the same objective as OFHEO’s proposal without the potential for confusing and disrupting the market. Although there is also a level of uncertainty about the level of the limit under the current procedures, at least there is certainty that it will not decline, consistent with the existing statute. For more information, e-mail Michelle Hamecs at NAHB, or call her at 800-368-5242 x8425. 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. Economy’s Fate in Fed’s Hands, PCA Economist WarnsFurther interest rate cuts by the Federal Reserve Board are needed to avert a full-fledged economic recession as the subprime mortgage crisis continues to raise doubts about U.S. levels of consumption and investment next year, according to Ed Sullivan, chief economist for the Portland Cement Association (PCA). Even without an economic downturn, Sullivan told PCA board members in late October that the cement industry is facing further declines this year and next, largely because of adverse conditions in the housing industry but also on account of growing weakness in nonresidential construction, which is expected to decline in 2008. “From a planning perspective, it seems that with this amount of risk out there right now, it is prudent to take a very conservative approach to near-term strategic planning,” Sullivan said. PCA’s current baseline forecast is calling for a 7% decline in cement consumption this year, he said, followed by a 2.5% drop in 2008, a return to 2007 levels in 2009 and stronger growth in 2010 and 2011. The housing market, according to the PCA forecast, is not expected to rebound until mid-2009 as it struggles to work down excessive inventories, an effort made more difficult by tighter mortgage lending standards and high levels of foreclosures through 2008 but helped by improved affordability in high-cost markets where prices are moderating and mortgage rates are remaining at favorable levels. Adding to the housing inventory, foreclosures are expected to total 1.2 million this year, he said, up from 400,000 in 2006. Although nonresidential construction has risen by 17% this year, partially offsetting the decline in demand for cement from home builders, that sector is now expected to experience a “modest” 2.5% decline in 2008, he said, as the tighter credit conditions dampening residential mortgages expand to commercial markets and risk premiums are increased. “The subprime issue has bled through to other sectors of the economy and will have a long period of adjustment,” Sullivan said. If job growth weakens substantially, he added, states could begin to see declining tax revenues, which in turn could lead to a serious slowdown in public construction projects in 2009. The PCA forecast projects an average of 50,000 new jobs per month next year, down from 100,000 in its previous forecast. Sullivan acknowledged that the fundamentals for the U.S. economy remain strong even as it becomes apparent that growth will be slowing substantially, and he pegged the chances of a 2008 recession in the 35% to 40% range. Under the most likely scenario for the economy, growth of the gross domestic product will slip to a 1% rate by the first quarter of next year but average 1.8% for the entire year, a tad below the 2% rate projected for all of 2007. “This assumes that the Federal Reserve can correctly assess issues that lie ahead for the economy,” Sullivan said, with further cuts in interest rates through early 2008. “We don’t believe that a recession can occur unless the Federal Reserve miscalculates,” he said. If the Fed is hesitant or becomes distracted by energy costs, inflationary pressures or a flurry of consumer spending, it could find itself having to act belatedly next year, when it will be “too late” to save the economy, Sullivan warned. 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. November Sees No Rebound in Builder ConfidenceBuilders polled in November about their assessment of the single-family housing market remained in the doldrums, according to the NAHB/Wells Fargo Housing Market Index (HMI), which remained unchanged from an upwardly revised reading of 19 in October, the lowest point since the series began in January 1985. Continuing mortgage market problems, a substantial inventory overhang and negative media coverage all contributed to last month’s low level of builder confidence. "Consistent with what builders said in last month's survey, many are reporting that their special sales incentives are having limited success in terms of getting buyers in the door," said NAHB President Brian Catalde. Of particular concern, he noted, is that negative media reports are dissuading buyers and fueling unrealistic expectations about home price discounts. "To be more specific," Catalde said, "builders are worried that the national media has tended to report negative housing stories as if there is one real estate market, when, in fact, there is no such thing — all housing markets are local. As a result, some healthy markets are being unfairly impacted by this negative media coverage." "The message from today's report is that builders do not see any significant change in housing market conditions as compared to last month," said NAHB Chief Economist David Seiders. "While they continue to work down inventories of unsold homes and reposition themselves for the market's eventual recovery, they realize it will be some time before market conditions support an upswing in building activity — most likely by the second half of 2008." 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. Any number over 50 indicates that more builders view sales conditions as good than poor. In November, the index gauging current sales conditions for single-family homes remained flat at 18, while the index gauging sales expectations for the next six months declined a single point to 25. The index gauging traffic of prospective buyers rose two points to 17. Regionally, the HMI results were mixed, with two regions reporting modest gains and two reporting slight declines. The Northeast climbed one point to 27 and the West moved up three points to 18. Meanwhile, the Midwest declined one point to 13 and the South stumbled by two points to 19.
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. Indianapolis Shines As Most Affordable Housing MarketIndianapolis retained its standing as the most affordable major U.S. housing market for a ninth consecutive quarter in the latest NAHB/Wells Fargo Housing Opportunity Index (HOI). Meanwhile, nationwide housing affordability during this year’s third quarter rose on a year-over-year basis but was down slightly for the quarter due to higher mortgage rates. "The third-quarter HOI reading indicates that 42% of all new and existing homes that were sold during the third quarter were affordable to families earning the national median income of $59,000," said NAHB President Brian Catalde. "This reflects a slight improvement in affordability from a year ago, when only 40.4% of homes were within reach of median income-earners, but is just below the 43.1% of homes that were affordable to median income-earners in this year's second quarter." The HOI indicates that the national weighted interest rate on fixed and adjustable-rate mortgages — a key component in calculating the HOI — was 6.73% in the third quarter, compared to 6.44% in the second quarter. In the nation's most affordable major housing market of Indianapolis, 87.5% of homes sold in the third quarter were affordable to families earning the area's median household income of $63,800. Also near the top of the list for affordable major metros were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; Scranton-Wilkes-Barre, Pa.; and Grand Rapids-Wyoming, Mich., in that order. Among smaller metro markets with fewer than 500,000 people, Kokomo, Ind. outranked all others in terms of housing affordability during the third quarter — with 90.5% of all homes sold affordable to families earning that area's median household income of $59,700. Also maintaining its long-held standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which has now been the nation's least-affordable major housing market for a dozen consecutive quarters. There, just 3.7% of new and existing homes sold during the third quarter were affordable to those earning the area's median family income of $61,700. Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Francisco-San Mateo-Redwood City, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Nassau-Suffolk, N.Y., in that order. Among metro areas smaller than 500,000 people, every entry at the bottom of the affordability chart was located in California, starting with Napa as the least affordable and followed by Salinas, San Luis Obispo-Paso Robles, Santa Cruz-Watsonville, and Merced, Calif., respectively.
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. October Starts Up But Single-Family Stays on Downward SlopeA rebound in the volatile multifamily market lifted total housing starts 3.0% in October to a seasonally adjusted annual rate of 1.229 million units even as the downswing in the single-family housing market continued, according to figures released by the Commerce Department on Nov. 20. Total starts were down 16.4% from a year earlier. Single-family housing starts dropped 7.3% for the month to a seasonally adjusted annual rate of 884,000 units, their lowest monthly production rate since October 1991 and 25.1% below October 2006. "Builders continue to do what they absolutely have to do in this market downturn. They are repositioning themselves for the market's eventual recovery by cutting back on production and working down their inventories," said NAHB President Brian Catalde. "The large October bounce-back in multifamily starts reflected typical month-to-month volatility, while the pattern of multifamily permits shows that this sector is gradually losing momentum," said NAHB Chief Economist David Seiders. "The large declines in single-family starts and permits clearly show that this component of the housing market still is weakening seriously." Multifamily housing starts rose 44.4% to a seasonally adjusted annual rate of 345,000 units in October after dropping 35.9% to a 239,000-unit pace the month before. The pace of multifamily construction was 19.4% above its year-earlier pace. In another indication that builders are repositioning themselves, total building permits were down 6.6% in October to a seasonally adjusted annual pace of 1.178 million units, leaving total permits down 24.5% from a year earlier. Single-family permit issuance was down 8.0% to a pace of 807,000 units for the month, the slowest since November 1991 and 31.0% below October 2006. Multifamily permits declined 3.4% to 371,000 units for the month, setting a pace 4.9% below the rate of a year earlier. Regionally, starts of new homes and apartments climbed 21.1% in the economically battered Midwest, 8.5% in the Northeast and 5.8% in the West. Starts receded 4.6% in the South.
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. New Guide Shows Best Practices in Tax Increment FinancingTo help local governments understand and appropriately implement Tax Increment Financing (TIF) to finance diverse infrastructure projects for their communities, the Council of Development Finance Agencies (CDFA) and the International Council of Shopping Centers (ICSC) has published the “Tax Increment Finance Best Practices Reference Guide.”
The new guide — the first of its kind — provides a reference manual for public officials, financiers and real estate developers looking to fully understand this powerful financing tool. The new publication’s “guiding principles and case studies will help local communities and developers better understand this important yet complicated redevelopment tool," said ICSC President Michael P. Kercheval. TIF can be used as a transformational tool that resurrects blighted and abandoned communities and encourages new private sector investment, said CDFA Executive Director Toby Rittner.
The “Tax Increment Finance Best Practices Reference Guide,” available on CDFA and ICSC Web sites at www.cdfa.net and www.icsc.org, is free to CDFA and ICSC members and $25 for non-members. For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583. Sales Offices Can Be Financed With SBA-Guaranteed LoansWhile the U.S. Small Business Administration (SBA) does not have a program specifically focused on providing financing for constructing model homes, home builders can obtain guaranteed loans under the SBA’s 7(a) program. Home builders are considered small businesses if their annual revenues do not exceed $31 million. The SBA-guaranteed loans can be secured by real estate, which could include a home builder’s office or other facility that would be used to conduct business. The SBA does not guarantee speculative building; however, a model home often serves as a sales and administrative office until the time it is sold. The SBA also guarantees short-term lines of credit, but these are typically intended to fund a contractor’s temporary working capital needs. The maximum term for an SBA-guaranteed real estate loan is 25 years, far exceeding the financing term needed for a model home. The length of the desired loan should be discussed with the lender because SBA-guaranteed loans can carry significant prepayment penalties. SBA charges the lender a fee in exchange for guaranteeing 75% of the outstanding loan balance. This fee is passed along to the borrower in addition to the interest on the loan, which can be either fixed or floating. To offset the costs of its loan programs, the SBA charges lenders a guaranty fee for each loan that is approved and disbursed. After paying the fee to the SBA and making the first disbursement of the loan, the lender may charge the borrower for the fee. The following fee structure applies to the loans:
Most banks are qualified to make SBA-guaranteed loans, and builders interested in exploring the possibility of participating in this program should contact a bank in their area. For more information, e-mail William Renner at NAHB, or call him at 800-368-5242 x8597.
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.
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. Builders’ Tip: Vacuum Dust From Anchor-Bolt Retrofits
I frequently drill holes in concrete foundations for seismic anchors, such as all-thread bolts. The bolts are bonded to the concrete with epoxy, which means the holes that I drill have to be thoroughly cleaned for the epoxy to get a proper grip. I used to blow the dust out of the holes with compressed air. But that technique makes a mess and could cause damange to my lungs and eyes. So I switched to a better method:
— Randi Dickson, Oakland, Calif. 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.
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. Finalists Selected for EnergyValue Housing AwardsThirteen builders have been selected as finalists for the NAHB Research Center's 2008 EnergyValue Housing Awards (EVHA). The EVHA are presented each year to home builders across the country who incorporate energy efficiency and environmental stewardship into the design, construction and marketing of their new homes. Now in its 13th year, the EVHA program aims at educating builders, trades and consumers about successful approaches to green and resource-efficient home building. EVHA winners will be announced on Feb. 13 during the International Builders’ Show (IBS) in Orlando. Award categories include affordable, custom, factory-built, production and multifamily housing in hot-, moderate- and cold-climate regions. Each finalist will be presented with a silver or gold award, and one will be named the “Builder of the Year.” Finalists for the 2008 awards are:
Online voting is now underway for the popular “People’s Choice” award category, which allows members of the public to select their favorite home design from among this year’s finalists. A voting ballot is available at www.nahbrc.org/evha/voting.aspx until Feb. 12. According to the judges, EVHA applicants have raised the bar each year in proving that energy-efficient homes can offer both higher performance and the popular aesthetic features sought by home buyers. Among the finalists’ entries, judges found exemplary practices related to climate-specific selection of equipment and systems, advanced air sealing and ductwork, high-efficiency equipment, innovative construction techniques and consumer education. The EVHA is coordinated by the NAHB Research Center in partnership with the U.S. Department of Energy through the National Renewable Energy Laboratory, and NAHB. For more information, to purchase ceremony tickets or to vote for the “People’s Choice” award, visit www.nahbrc.org/evha or contact Dr. Kevin Mo, EVHA program manager, at 301-430-6210. Builders Invited to Focus Groups on Products and MaterialsThe NAHB Research Center is seeking feedback and opinions from the nation’s builders to help improve the affordability, performance and quality of U.S. homes. During the 2008 International Builders' Show in Orlando, Fla., the Research Center will be hosting focus group sessions to draw on the experience of builders and other residential construction professionals to provide key information to help shape manufacturers' products. Remodelers and trade contractors are also encouraged to participate and voice opinions on new and existing building materials. The IBS focus groups will provide participants an opportunity to preview new products before they are made available to the public, modify prototypes to meet specific needs, influence those who can affect change and benefit from a unique networking and educational forum. Feedback from participants is evaluated to help manufacturers shape the design, development and marketing of new and existing products and materials upon which building professionals rely daily in the field. Focus groups will be held Feb. 13-15 at the Rosen Plaza Hotel, which is adjacent to the Orange County Convention Center. Participants will receive a cash incentive in exchange for their time. Sessions are filling quickly and registration is required to participate. Interested builders and trades should contact Ronda Oglesby at 800-638-8556 x6262 by Feb. 1. Mandatory Fire Sprinkler Proposal Rejected in New YorkCiting unresolved technical issues and its negative impact on housing affordability, the New York State Residential Code Technical Subcommittee has rejected a proposal that would have recommended to the full New York State Uniform Fire and Building Code Council that residential fire sprinklers be required in all new one- and two-family dwellings in the 2009 state residential code. Appendix P of the International Residential Code (IRC) includes requirements for the installation of residential fire sprinkler systems in one- and two-family homes that comply with NFPA13D, a standard issued by the National Fire Protection Association. Appendices of model codes, such as the IRC, contain optional requirements and must be specifically adopted by a jurisdiction before becoming mandatory components of the code. Lew Dubuque, director of communications and government relations for the New York State Builders Association, praised the technical subcommittee’s decision and the efforts of association members Richard Schunk and John Hofelich to educate the subcommittee members. Philip LaRocque, the HBA’s executive vice president, and Steve Orlowski of the NAHB Construction Codes and Standards staff, were also integral to the efforts, he said. NYSBA also successfully used a study showing that the average house in New York with a fire fatality was built in 1940. “The subcommittee had the wisdom to continue to allow fire sprinklers as an option for those home owners who want them,” LaRocque said. NAHB has long opposed mandates for residential fire sprinkler systems in one- and two-family homes for the same reasons that the New York technical subcommittee members rejected the measure in their meeting on Oct. 25 in Albany. For example, installation costs can be high as $5 to $7 per square foot; homes in rural areas without municipal water connections may require extra pumps, a generator and water storage tank for the fire sprinklers to work effectively; and maintenance requirements can be onerous for many home owners. “Our members will install residential fire sprinklers when customers ask for them, but there are still so many questions that need to be resolved before fire sprinklers are mandated in every new home constructed,” said Eric Borsting, chair of the NAHB Construction Codes and Standards Committee. “For that reason, we will continue to work with all parties: code officials, fire officials and fire sprinkler manufacturers and installers, to address these issues and seek alternatives,” he said. “And we encourage all home owners to install and also to maintain their smoke alarm systems — so if a fire does occur, occupants will be warned so that they can get out of the house and escape injury.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. AARP and NAHB Name Livable Communities Award WinnersAARP and NAHB have announced that two builders, two developers and one remodeler will receive the groups' co-sponsored 2007 Livable Communities Award for forward thinking in the field of home and community design. The Livable Communities Award honors builders, developers and remodelers who create attractive, well-designed homes and communities that are safe, comfortable and accessible for people of all ages and abilities. The winning projects include an affordable co-housing complex that preserves open space and community gardens; a mixed-use, pedestrian-friendly college town community in an evolving urban setting; an "Easy Living" home featuring built-in user-friendly design elements; a state-of-the-art energy-efficient home designed for all ages with the architectural details of its adjoining historic neighborhood; and a house remodeled to function as a "home for a lifetime." "These winners have done outstanding work that recognizes the need for quality housing and community design to ensure people can enjoy their homes in comfort and safety and get maximum enjoyment and benefits from their neighborhood," said Elinor Ginzler, AARP's director of livable communities. "This award celebrates the ingenuity of the winners in meeting the growing need and demand for user-friendly homes and communities designed to meet the needs and abilities of all residents." "These builders, remodelers and developers are being recognized as leaders in the effort to meet the needs of the nation's 50-plus consumers and their families," said NAHB President Brian Catalde. "This fast-growing market is very important to our industry, and these award-winning projects provide great examples of design innovations that promote safer and more comfortable living." The 2007 AARP and NAHB Livable Communities awards recognize five companies in five categories:
For more information, photos and video clips on the winning projects, click here.
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.
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.
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. Enter the 2008 50+ Housing Design, Marketing Competition
Enter the 2008 Best of 50+ Housing Awards, the premier design and marketing competition for the 50+ housing industry. Entries are due by Feb. 29. Sponsored by the 50+ Housing Council, the award program honors the best in more than 50 categories covering all aspects of the 50+ housing industry. “With the boomers leading the way, today’s 50+ consumers are different than the mainstream and demand cutting-edge community and home designs as well as innovative marketing approaches,” said Doug Van Lerberghe, 2008 chairman of the Best of 50+ Housing Awards committee and an architect with Denver-based KEPHART Community Planning Architecture. “The Best of 50+ Housing Awards rewards builders, architects and other industry professionals who step outside the box to meet the unique needs of this evolving market.” Active Adult Some of the active adult categories include overall community, clubhouse design, condominium unit design, model home merchandising and more. Design Several of the design categories include aging-in-place, assisted living, congregate-living community, continuing care retirement communities, mixed-use, multifamily housing, renovated housing and special-needs housing. Marketing Marketing categories include logo, community brochure, direct mail piece/campaign, Web site, black-and-white and color print advertisement, radio and television commercial, sales center and special promotion. Winners will be announced at the Best of 50+ Housing Awards gala on May 20 during the Building for Boomers & Beyond: 50+ Housing Symposium 2008 in New Orleans from May 19-21. The call for entries, contest rules and list of categories are available online at www.nahb.org/50plusawards, or by calling 800-368-5242 x8220. 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. 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. 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. Maximize Referrals With Well-Planned Customer NetworkDuring a slowdown when leads become scarce, well-networked businesses can help sniff out new business and maximize referral opportunities. “Fantastic customer service is a must to score referrals,” said Victoria Downing, president of Remodelers Advantage, a remodeling consulting firm based in Laurel, Md. that provides coaching, consulting and online resources. According to a recent survey from Sun Trust bank, 51% of new business growth comes from referrals and 55% of businesses view word-of-mouth as the most effective marketing investment. Skillful management of a strong referral network supports a thriving remodeling business, Downing said. With a little thoughtful planning, remodelers can develop many effective referrals, she added. Downing offered six methods for building referrals:
A committed and thoughtful approach will yield results. Be sure to track any progress and start with the fundamentals of excellent customer service. Deliver Exceptional Customer Service Take the “Profitable Business Through Quality Practices” course from The NAHB University of Housing and learn key strategies for providing a quality building/remodeling experience for your home owners. Topics include meeting the quality challenge with customers, with competitors, and within your company. This is a “must” for builders and remodelers who are ready to take their companies to the next level. Find out where upcoming courses are being held by clicking here, or call 800-368-5242 x8154 for more information. Get your Professional Designation at IBS Earning the CAPS, CGR, CGB or GMB designation demonstrates a commitment to excellence and keeps builders and remodelers on top of industry innovation. A number of International Builders’ Show pre-show courses qualify for these builder and remodeler professional designations, or for continuing education needed for other NAHB designations. For more information, visit www.buildersshow.com/PreShowEducation. Three Builders Say Prefab Costs Less, Delivers MoreGrandma’s old doublewide; cheap trailer-shaped boxes shipped from the factory to the site and bolted to a foundation; a home ready to blow away with the next storm — this has been the image of modular construction for a long time, and helps explain why the building industry has been slow to accept modular homes. In fact, most of today’s modular construction is highly durable, energy-efficient and storm-resistant. “Built in the factory” now means lower-cost and higher-quality building components that many savvy builders swear by. The Partnership for Advancing Technology in Housing (PATH) recently interviewed three leaders of the modular construction industry to get their insights on why builders choose modular and the challenges they face. Julius Poston, president of StalwartBuilt Homes in Panama City, Fla., builds energy-efficient, durable homes throughout the Southeast using modular components supplied by Nationwide Custom Homes. StalwartBuilt Homes are certified green by a third party. PATH: Why did you choose modular for your homes? Poston: I built in Atlanta for a number of years. It had plenty of labor and was the hub of distribution for building materials. But as you come down the coast, shipping is an issue and labor is an even larger issue. We also live in a hot, humid climate, which complicates building a home correctly. I worked in Europe and Asia for a number of years and saw systems-built homes. When I returned to the U.S., I figured I’d better use systems-built or I’ll die down here. In Calloway Corners, we’re building workforce housing to prove that the average home owner that works for a living can own green. The house will cost about $240,000 and include modular construction, solar power and a geothermal desuperheater. Our business model is to offer a net zero-energy house that could take high-force winds. And we have been able to do it working with Nationwide. PATH: How do you sell modular to your customers? Poston: One of the larger obstacles was the perception of modular homes in the South. Up North, it’s well accepted, but in the South, the terminology was a problem. Modular? If there are wheels, it must be a trailer. That’s the reason we branded our product as Stalwart and designated it a systems-built home in an effort to change the market perception. We felt it would be easy to market the energy efficiency, improved air quality, high wind load, shorter construction time and availability of materials under the umbrella of a manufacturer.
PATH: Why do you think builders should choose modular? Marro: Most builders come to us because they’re looking for a better way to control their costs, timelines, quality and overhead. Modular building, depending on the kind of structure, isn’t necessarily cheaper than site-built. The real savings is in time. It’s not unusual for us to build a 6,000-square-foot home in 10 to 12 days in a plant, compared to a site-built home, where you’re looking at six months-plus, on average. The home that we do is essentially 80% to 85% complete when it’s delivered to the site. The builder just has to do the finish work, utilities and foundation. PATH: Quality is a big concern when it comes to public perceptions of modular. Why do you think today’s modular homes are better? Marro: Everything is built in a controlled environment in a closed factory. Materials never touch the outside other than when they come in by truck or rail, and they’re never exposed to weather. In the typical job site, trusses and wood are exposed outside, sometimes for months. With modular homes, each individual component is basically constructed by the same people day in and day out, meaning there’s continuity and very little downtime. Typically, on a site-built home, it’s done in stages, but there’s a lot of wasted time waiting for one contractor to get done. In modular, it’s like an assembly line, just like in an automobile factory. Our homes are subject to more than 300 quality control checks in addition to a third-party inspector who represents each state we ship to. In Florida, the state has a third-party engineering firm that makes inspections in the factory as the house is being built. These inspections are a cost savings for the builder, because it cuts down on the on-site inspections. PATH: What are the components made of? Marro: Our construction is all wood frame. It’s typically kiln-dried lumber. No mold, no mildew. Structurally, about 30% more lumber goes into a modular home, although it would be less with a smaller home. The house has to be picked up and transported 100 to 600 miles from the factory, then hoisted by a crane 30 to 50 feet in the air at the building site, so it better hold up. That’s the reason most of the drywall and flooring is glued, nailed and screwed on. This means the house is really durable. We had minimal, if any, damage on about 400 homes throughout the state during the last two hurricanes in Florida. A study done by FEMA found that when Hurricane Andrew came through in the ’90s, modular construction held up much better than site-built construction because of the engineering and the flexibility, particularly in the roof sections. James Seekford is vice president of the Builder Division of Nationwide Custom Homes. He is located in Martinsville, Va.
PATH: Are there cases when it wouldn’t be to a builder’s advantage to use modular?
Seekford: Homes have to be designed within the building system process we use. That does at times create some design limitations. There’s opportunity for creativity, certainly, but not quite as great as with stick-built homes.
PATH: Is anything new coming for modular — codes, regulations, technologies, designs?
Seekford: We’re looking more toward green building. This is one of the biggest pushes in the industry today. We’re looking to see what we can do to comply with green standards to make it easier for the builder.
We are extremely waste conscious. The components are precut to order in the factory. We have ways of recycling the smallest pieces of wood back into the home that the average site builder does not. Everything that’s left over that is recyclable, we recycle, and we are able to recycle material at a much higher level than the average builder can even think about. We shift very little waste to the builder onsite, which reduces the amount of waste in the local landfills, and you don’t have all that waste lying around on the job site.
Also, we are able to source out better products that meet green building guidelines. This takes a lot of legwork off the builder. See the Modular Homes Big Picture NAHB’s 2008 Building Systems Councils Modular and Panel Plant Tour in Harrisburg, Pa. on May 18-20 shows attendees the smartest advances in facility operations, efficiencies and practices. This event for modular and panelized manufacturers and suppliers offers exclusive access to the industry’s best facilities. Visit www.nahb.org/PlantTour for more information. Awards Recognize Systems-Built Marketing and DesignThe Building Systems Councils (BSC) announced the winners of its annual Excellence in Marketing & Home Design Awards competition during the Building Systems Councils’ SHOWCASE held in Hilton Head, S.C. recently. The awards honor the builders and manufacturers responsible for the finest marketing materials and home designs in the concrete, log, modular and panelized home building industry. This year, the BSC honored 34 winning entries and nine honorable mentions in 25 marketing and design categories. Companies were also honored for their involvement in the annual BSC Habitat for Humanity home constructed this year in central Pennsylvania. “The Excellence in Marketing and Home Design Awards recognize the best and most creative work in systems-built housing,” said Rob Cantrell, of Stone Mill Log Homes in Knoxville, Tenn. and BSC chairman. “We are thrilled to honor the achievements of those professionals that have gone above and beyond in their efforts and can truly be considered industry leaders for their work.” The following are the winners of the 2007 marketing and design awards: Marketing Awards ― Manufacturers
See the Modular Homes Big Picture NAHB’s 2008 Building Systems Councils Modular and Panel Plant Tour in Harrisburg, Pa. on May 18-20 shows attendees the smartest advances in facility operations, efficiencies and practices. This event for modular and panelized manufacturers and suppliers offers exclusive access to the industry’s best facilities. Visit www.nahb.org/PlantTour for more information. Five Critical Stages to Effective Customer RelationsHome builders large and small often struggle when it comes to selecting the most effective way to manage their home buyers through the entire sales and construction process. In stronger markets, many develop and rely on VIP and “grand opening/new release” lists for their customer contact and relationship building. Their goal is to generate quick sales at the time of lot release, so they use the lists to generate constant and repetitive communication with their prospects throughout the pre-sales, sales and production processes. In weaker markets, successful builders often use specific follow-up communication strategies that keep prospects interested and their pipeline full. Customer relationship management (CRM) is often used to describe the products, services and technology that help automate these vital communication processes. But CRM conjures up different meanings to different people in different industries. To me, CRM is much more than simply having a Web site, e-mailing information to prospects and trying to get the customer to the point where they write a contract. That may suffice in retail sales, but writing a contract is only the beginning of the process of customer relationship building in new home sales. Think about it, to effectively manage your relationship with your customers ― and your customers’ expectations ― can you really stop communicating with them at the time of contract? You need to maintain an effective relationship for each customer from lead generation and prospect management, through the contract and selection process and past closing and the warranty period. There are five critical stages in an effective CRM strategy for home builders ― a strategy that defines and develops each and every customer-facing process. Each stage must contain both business processes and software applications that are designed to work together toward a common goal.
Internal communication throughout these five stages, combined with external interaction with other transaction participants, such as a design center and mortgage and title professionals, help reduce operational redundancy and mistakes, increase customer satisfaction and directly impact the bottom line. The five critical stages include:
Insider Sales, Marketing Info Available on Sales and Marketing Channel Visit the NAHB Sales and Marketing Channel, an online new home sales and reference center to help home building sales and marketing professionals expand their knowledge and build their skills. The reference center, from NAHB’s National Sales and Marketing Council (NSMC), features articles and information from leading professionals on topics ranging from sales, marketing, advertising and branding to merchandising, public relations and sales training. Access to the channel is free to NSMC members. Visit www.nahb.org/smchannel to access the Channel. If you are having trouble accessing the channel, e-mail nsmc@nahb.com. Plan ahead and take advantage of the pre-show courses offered Feb. 9-12 at the 2008 International Builders’ Show. Pre-show courses are intensive day-long or multiple day programs designed to provide in-depth knowledge of a particular topic. Some of the courses may count towards an NAHB designation. Courses for 2008 include “Lifestyle Merchandising, Advertising and Promotion Strategies (IRM III)” and “ |