Nation's Building News Online: February 5, 2008Print All Articles Text Version |
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Congress Gives Housing Some Stimulus, But More Is Needed
“While we didn’t get everything we wanted in this bill, it does include important provisions that will help our industry,” said NAHB President Brian Catalde. “Our board of directors will meet next week in Orlando to outline the next steps that Congress and the Administration should take to build on efforts already undertaken to stabilize housing and avert a recession.” Of note to the nation’s home builders, the stimulus package will allow the FHA to insure loans up to $729,750 for one year and provide a one-year increase in the cap on loans that Fannie Mae and Freddie can buy — also up to a maximum of $729,750. “This will help get money flowing again for housing in high-priced markets,” said Catalde. The stimulus package also contains provisions to spur business investments by providing a 50% bonus depreciation in 2008 and more generous expensing rules. As the stimulus bill moved its way through Congress, NAHB lobbied non-stop in support of the broader Senate plan, which contained provisions to expand the mortgage revenue bond program and allow businesses to write off more losses. Other Senate provisions would have extended unemployment benefits and made more money available for home heating assistance for low-income households. Ultimately, the final bill that cleared Congress omitted these provisions. The Senate stimulus package supported by the nation’s home builders fell a single vote short of the 60 needed for passage on Feb. 6. The Senate plan drew the support of all 49 Democrats and two Democratic-leaning Independents, as well as eight Republicans. Sen. John McCain (R-Ariz.) was the only senator who failed to show up for the vote. The final vote was 58 to 41 in favor of the bill. At the last moment, Senate Majority Leader Harry Reid (D-Nev.) changed his vote to a “no” in a procedural move that would let him bring up the measure again. When Reid concluded that he could not find one more Republican vote to move the expanded Senate bill forward, he approved a deal with Senate Republicans to vote on the narrower House version after adding a provision to provide tax rebates for senior citizens and disabled veterans. A Lobbying Blitz In the week leading up to the Feb. 6 vote, NAHB advocated aggressively for the Senate stimulus package. NAHB’s lobbying blitz on Capitol Hill included face-to-face meetings with wavering Senate Republicans and their staff members, as well as phone contacts and e-mail messages. The grassroots effort was mobilized through BuilderLink, with builders making thousands of contacts to their senators and urging them to support the stimulus package. On the day of the Senate vote, the headline that appeared in the issue of The Hill read: “Senate Dems hope homebuilders will win GOP stimulus support.” The article quoted Sen. Kent Conrad (D-N.D.), who said that home builders supporting the Senate Finance Committee package were helping with lobbying calls to Republicans. “They’re making calls for us. They’re energized,” said Conrad. “That’s how serious this situation is … We’re talking about survival here, for many of these companies.” As the stimulus plan went to the Senate floor, Jerry Howard, NAHB’s executive vice president and CEO, was interviewed by the Associated Press, Bloomberg and MarketWatch on the urgent need to pass the Senate package. “Our lobbyists are up there on Capitol Hill on a 24-hour basis right now, doing everything we can in our power to try and get senators to support this. We will be disappointed in folks who don’t get behind it,” the AP story quoted Howard as saying. To coincide with Senate consideration of its stimulus package, NAHB significantly ramped up its ad campaign, running ads for two weeks in USA Today, Roll Call, the Washington Post, the Washington Times, the Hill and the Politico. The full-page ads called on Congress to raise the Fannie Mae/Freddie Mac conforming loan limit in high-cost markets for two years; link this change to overall GSE reform; and enact FHA modernization. The ads also called on the Senate to adopt the Finance Committee’s stimulus package, including key measures to allow businesses to carry back net operating losses for five years and to expand the mortgage revenue bond program. While the stimulus package that was ultimately approved by Congress is an important first step, the NAHB Board of Directors will be considering a number of policy options next week at the International Builders’ Show in Orlando. These include further Fed interest rate cuts, a broad range of tax credits to stimulate home sales, GSE and FHA reform, expansion of the mortgage revenue bond program and allowing businesses to carry back net operating losses for five years. For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421. Builders Keep No-Growth Proposal Off Florida BallotCulminating a hard- and long-fought battle by NAHB, the High Production Home Builders Council, the Florida Home Builders Association and other coalition partners, the Florida Division of Elections on Feb. 1 announced that Florida Hometown Democracy — a potentially disastrous anti-growth initiative — failed to qualify for the November 2008 ballot. The proposed constitutional amendment would take the responsibility of planning away from planners and local elected officials and require the voters to decide on each and every amendment to comprehensive zoning plans. “Florida’s Hometown Democracy movement is an assault on housing and an assault on common sense,” said NAHB President-elect Sandy Dunn. “It is a threat to our industry not only in the state of Florida, but with reverberations that can be felt around the country. Fighting this challenge has been a rallying point for all of us who believe in advancing housing opportunity. That we have succeeded in turning this measure back is a tribute to the power of our confederation in defending our values when they come under attack.” “Ultimately, defeating Florida Hometown Democracy has long been a top priority for NAHB,” said Steve Gallagher, NAHB’s staff vice president for government affairs. “Our recent success shows the strength of our federation and the might of our state and local organizations in Florida.” Defeat of Hometown Democracy has been viewed as absolutely essential for the future of the business and home building communities in Florida. It would have devastating consequences for the state’s construction industry, which employs more than 470,000 workers and generates more than $62 billion in economic activity, making it the second largest growth engine in the state. The proposal would have costly consequences for general taxpayers in the state, as well, analysts said. For nearly five years, Florida Hometown Democracy (FHD) proponents have been attempting to collect enough citizen signatures to put the notorious initiative on the ballot, and throughout that period the NAHB alliance has been there to fight them every step of the way. This year, FHD no-growth advocates fell short by more than 65,000 valid signatures in their petition drive — or by more than 10% of those needed to qualify for a place on the November ballot. If the initiative had been successfully placed before Florida voters in the current presidential election year, it was conservatively estimated that campaign costs to defeat it on Election Day would have run as high as $50 million. And even then, given unfavorable polling data, there were no absolute guarantees of victory. Under FHD, cities and counties would be required to hold elections for each comprehensive plan amendment, including not only major changes but small technical details. The state of Florida estimated that the cost of these “elections” would run into the millions, while internal calculations derived figures approaching a staggering $1 billion. In the last four years alone, the amendment would have required an average of more than 10,599 additional local votes per year in Florida. Last year alone, in Carabelle, a small town in Franklin County, voters would have had to decide 840 separate ballot questions. Under FHD, every city and county in Florida would be burdened with the time and cost of holding additional elections to vote on proposed changes to comprehensive land use plans. With smarter growth stalled, analysts predict, Florida’s robust economy would taper off to a recession, while property taxes would skyrocket to pay the bills. While Florida Hometown Democracy has failed to make the ballot for the third consecutive try, it has a good chance of making it in 2010 because petitions in Florida stay valid for four years. With the presidential election out of the way, however, observers believe that it will now be significantly less costly to defeat this far-reaching, extremist-led petition drive. FHD opponents — led largely by NAHB and other building industry allies — are also much better positioned through their ground organization, Floridians for Smarter Growth (FSG). “The strong alliance that now makes up Floridians for Smarter Growth will continue to remain vigilant, and continue to fight through November 2010,” promised David Hart, vice president of governmental and legislative affairs for the Florida Home Builders Association. The FSG campaign is comprised of 27 local executive committees capable of reaching more than 80% of Florida’s voters. To supplement this extensive field operation, more than 100 state and local groups have joined to take formal positions against Hometown Democracy. Volunteers from these opposition groups have contributed to a 107-member speakers bureau and a 70-member “Visibility Team.” In turn, these teams have generated dozens of speaking opportunities, editorials and local policy forums. Over the past year, FSG has participated in more than 150 meetings across Florida to tell the state’s residents why Hometown Democracy would be so destructive to the state’s economy and its quality of life. Through this effort, more than 25,000 Floridians have joined the grassroots movement to defeat the amendment. For more information, e-mail Gideon Lett at NAHB, or call him at 800-368-5242 x8585. Members, Please Take the Online NAHB Branding SurveyNAHB members are encouraged to fill out a Web-based survey on NAHB branding that was sent via e-mail to members earlier this week and is also available through Nation’s Building News. Member feedback is crucial to the NAHB branding effort now underway. The survey should take 10 minutes or less to complete. All answers are confidential. To take the survey, click here. New NAHB TV Spots Help HBAs, Members Promote Home Buying
To view the ads, click here. The ads point out to consumers that ― with today's near-record low interest rates, plenty of homes on the market and readily available mortgage funds for borrowers with good credit — it is a good time for them to buy the home of their dreams. The ads were produced by the NAHB Production Group to help members and HBAs that want to promote home buying on local television but cannot afford the cost of producing an ad. Each ad is 30 seconds long, with time and space left at the end for HBAs to have their local station customize it with their logo, Web site address or other information either with a voice-over or on-screen graphics; many local stations will do small edits at no or a minimal cost). To Request Ads NAHB members and HBAs can request the ads in Beta SP or DVD formats by e-mailing David Falcone at NAHB. Requests are being fulfilled weekly. Tapes or DVDs are sent by U.S. mail. Please allow sufficient time to process your request. Other Resources Available Online NAHB has a wide selection of resources available online to help members and HBAs prepare for interviews and better communicate with consumers and stakeholders during the housing downturn. The Myth Buster Resources section of the NAHB Web site includes talking points, fact sheets, economic analyses and other critical material that is continuously updated. For more information, e-mail NAHB Public Affairs, or call 800-368-5242 x8254.
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. Nation's Building News Will Not Be Published Feb. 11 or Feb. 18Nation's Building News will not be published Feb. 11 or Feb. 18 while the NBN staff is attending the 2008 International Builders' Show. Regular weekly publication will resume Feb. 25 and include reports from the show. Home Builder Wieland Upbeat Amid Housing DownturnAfter suspending construction plans on his $350 million luxury condominium project in November and laying off 59 company employees in a streamlining move prompted by slow home sales, Atlanta home builder John Wieland said he’s more “upbeat” about his business now. “The end of last year was the most miserable time of my life,” Wieland said. But a new promotion offering price discounts up to $100,000 and a lifetime structural warranty on Wieland houses produced 80 sales for the company between Jan. 25 and Feb. 3, twice the number of homes the company sold in the same period last year, according to Wieland officials. That provided a welcome cash infusion of $50 million for the home builder, which is currently marketing 30 communities with more than 400 unsold homes around the metro area. And the surge in cash flow has recharged Wieland’s confidence that his company can withstand the anemic sales expected to continue through the rest of 2008. The company founder said the “Sale of a Lifetime” promotion was conceived to help coax reluctant buyers into making a purchase. “It takes more visits these days to get people to make a buying decision than it did a year ago,” he said. Currently, he said, Wieland buyers are averaging 71 days between first contact and purchase commitment, up 29% from the 55-day average a year ago. Over the past year, Wieland has trimmed its backlog of unsold homes and hired a new vice president for marketing to devise new strategies for attracting buyers in the city’s overbuilt market, which has an 11-month unsold inventory. (www.ajc.com)
Toll Founder Maintains Bleak Housing OutlookRobert Toll, outspoken founder of U.S. luxury builder Toll Brothers, said on Feb. 6 that “the housing market remains very weak in most areas. Based on current traffic and deposits, we are not yet seeing much light at the end of the tunnel.” He added: “Based on demographics, improved affordability and interest rates near historic lows, customers should be attracted to the abundance of standing inventory at the aggressively low prices being offered by builders. However, buyers seem to be hiding. We think that the market’s problem is a lack of confidence, not just regarding the direction of home prices, but, more broadly, in the direction of the overall economy and the state of the nation.” The average price of Toll homes for which a contract was signed in its first business quarter was down 13% to $634,000 as home buyers cancelled more expensive home purchases. Toll also said it had cut the number of lots which it either owned or optioned by 38% to 57,000. The company expects to take between $150 to $300 million in write-downs on landholdings in the quarter. (www.ft.com)
Area’s Hottest Zip Codes Defy Slumping MarketTucked within data showing that Ohio ranks sixth among all 50 states for foreclosure filings are indications that some hot neighborhoods are surviving the setbacks. In several local markets sellers are getting an average 95% to 97% of their asking price and homes are staying on the market between an average of 70 and 102 days. “With the rates dropping and the way the economy is right now, we thought we should start looking and see what’s affordable and where,” said new home buyer Jay Valadez. Jay and his family are moving into a brand new house in Amherst and are paying almost $145,000 for what would have cost $175,000 before the housing market bottomed out. Valadez said the schools are good, there’s a lake and a marina just five minutes up the road, there’s a pool and the price was hard to beat. Southeast in the city of Hudson, the houses in the $250,000 to $500,000 price range are still selling steadily. Hudson tops the price bracket with sellers getting almost 96% of their asking price, on average. (www.newsnet5.com)
What Housing Crisis? Why the Mortgage Mess Hasn’t Hit the Luxury Market, YetPrices on ultrahigh-end homes are still rising, with some reaching an astronomical $175 million. It’s simply a matter of supply and demand, according to brokers from hot markets like Manhattan, the Hamptons, Palm Beach and both ends of California. While there’s a national glut of McMansions in the $500,000 and up range, there’s a shortage of trophy properties on the market and an increasing number of wealthy foreign buyers from Asia and Europe looking to capitalize on the weak U.S. dollar. According to market data from DataQuick, sales for homes costing $5 million and above climbed 31% in the first quarter of 2007 compared to the same quarter of 2006. Sales of Manhattan apartments costing $10 million or more tripled in 2007, according to the real-estate company Prudential Douglas Elliman. “The rich are even richer than ever before and the very wealthy are pouring more money into residential real estate,” says Laurie Moore-Moore, the founder of the Dallas-based Institute for Luxury Home Marketing, a membership and training group for luxury-real-estate agents. While Europeans have always invested in American properties, Moore-Moore says new buyers are increasingly from Brazil, Russia, India and China. (www.newsweek.com)
From the Housing Market to the Maternity WardRecent data from the National Center for Health Statistics showing that for the first time in 35 years the number of children an American woman will have in her lifetime reached 2.1, the theoretical level required to maintain the country’s population, has raised discussion of the relationship between fertility and real estate. In the wide-open mortgage climate early this decade, creative loan products allowed more people than ever to buy homes, often a precursor to having children. In 2006, the babies arrived — a reminder, perhaps, that if you build it, they will toddle. Matthew E. Kahn, an economist at the Institute of the Environment at the University of California, Los Angeles, suggested a relationship between the increasing size of U.S. houses even as family size declined. Bigger homes mean incentives to stay home and fructify, Kahn said. “Those ARM-financed McMansions are in the middle of nowhere, where land is cheap,” he said. “That increases the time it takes to get to work, meaning it raises the cost for women to go to work. That should increase fertility.” The recent downturn in the economy and the housing market bodes poorly for a continued baby boomlet. Last year, NAHB reported that houses had stopped growing, and foreclosures discourage people from having children. “What could be happening now is that people will have wealth shock, and reduce their need for everything, including children,” said Seth Sanders, director of the Maryland Population Research Center at the University of Maryland. (www.nytimes.com)
Builders Cater to Larger Latino FamiliesWhile some home builders in California have marketed to Latinos for two decades, there is an increased emphasis now because of the housing market downturn and because Latinos continue to be underrepresented as home buyers despite making up a larger percentage of the population than they used to. California builders started studying the Latino market during economic and housing downturns in the early- to mid-1990s, said Steve Johnson, a director of MetroStudy, a national housing market research firm. It wasn’t until about 2000, when the economy and housing market started to rebound, that builders implemented changes to appeal to Latinos, Johnson said. These included adding more backyard gathering areas with pools and barbecues, and eliminating the formal living room in favor of a larger family room. Builders have also added more bedrooms and bathrooms and increased the size of garages in response to Census data showing that Latinos average nearly four people per household, compared to the national average of about three, he said. They hired more agents who speak both English and Spanish, started creating brochures and billboards in both languages and added photos of people that reflect diversity, Johnson said. (www.scrippsnews.com)
'No End in Sight’ to Battle With Growth Opponents“Not in My Backyard” (NIMBY) proponents are a growing challenge for the nation’s developers “with no end in sight,” according to the latest Saint Index© report from The Saint Consulting Group, a company that provides political campaign expertise on land use issues. The firm’s latest annual survey data found that 78% of Americans believe that new development should not occur in their hometowns — up five percentage points from the 2006 survey after holding steady for two years. “The most significant overall finding, however, was that Americans are far more willing to fight than support local development projects,” writes Patrick Fox, president of the company, in the current issue of NAHB’s Land Development magazine. The survey found that 24% of Americans say that they or a family member have actively opposed development and 30% belong to the most vocal group — individuals aged 56 to 65. In addition to being in this age group, the most active NIMBYs are home owners, college-educated or post-graduate-educated suburbanites with household incomes over $100,000, the survey shows. The most surprising thing about those opposing growth, says Fox, “is that they come from all walks of life; they are not the archetypical liberals many would assume.” Of those people who said they opposed a development project in their community, only 28% indicated that they were more liberal than moderates and conservatives (both at 22%), and they were more or less equally Democrat, Republican or “other.” Fox says the main reasons Americans give for opposing development are that they want to protect:
The most-welcomed type of new local development was single-family housing, the latest Saint Index study found, with 83% of those surveyed saying they supported single-family homes in their communities. However, this is also the type of development that Americans most frequently take a stand against. Fifty-three percent of adults who had actively opposed a real estate development project said they opposed a single-family or multifamily residential project. “Residents across the nation have united against development in their communities for the sake of protecting the environment, their neighborhoods and most importantly their property values,” Fox says. “Community members now realize how much of an impact they can have in their attacks against developers, recognizing that elected officials are unlikely to vote against the wishes of committed and organized constituents. With this power in hand, residents can now determine the fate of new developments.” Land Development magazine is celebrating its 20th anniversary this year. For more information on NAHB resources on land development issues, e-mail Jennifer Jones at NAHB, or call her at 800-368-5242 x8469. Austin Builders Defeat Fire Sprinkler MandateArmed with data from the NAHB Research Center, builders in Austin last month defeated a residential fire sprinkler mandate. The Home Builders Association of Greater Austin has traditionally sparred with city governmental agencies over the fire sprinkler issue, but the most recent mandate challenge arose over a proposed requirement from the Travis County Emergency Services District (ESD) #3 — a precedent. Supported by taxes and governed by a county-appointed commission, the 261 ESDs in Texas provide emergency services within their geographic areas. They were created to improve rural fire protection areas and to build a partnership with municipalities to ensure the adequate delivery of services. Responding to the information provided by the local association, the ESD board on Jan. 28 voted unanimously to adopt a “mandatory option” standard requiring fire sprinkler systems to be offered to home buyers as an option. At the time the building permit is obtained, owners who do not want the sprinkler system can submit a waiver to opt out and refuse it. If the home is a spec, the system can be accepted or waived by the builder. The district will provide potential buyers with material promoting a sprinkler system. The Austin HBA also recently succeeded in turning back mandated fire sprinkler systems in the City of Cedar Park. For more information, e-mail Harry Savio at the HBA of Greater Austin, or call him at 512-454-5588. Plan to Attend the 2008 NAHB Legislative ConferenceThe 2008 NAHB Legislative Conference provides a unique opportunity for builders to speak directly with their members of Congress and let them know that housing must remain a national priority. The conference is on Wednesday, April 30 and is a day-long event that coincides with the NAHB spring board meeting in Washington, D.C. Attending the 2008 legislative conference will give NAHB members an unparalleled opportunity to lobby members of Congress to protect their business and industry, establish lasting relationships with their elected federal officials, do their part to ensure that NAHB’s issues are heard by Washington policymakers and galvanize a united front on Capitol Hill A strong builder turnout on April 30 will send a powerful message to members of Congress. For more information, visit www.nahb.org/legcon, e-mail Molly Murray at NAHB, or call her 800-368-5242 x8282. Affordability Key for Selling to First-Time Home BuyersHome builders with an eye on the first-time buyer market may not want to design their product too much differently than the homes that are being built for move-up buyers, but they definitely will want to put the accent on affordability, according to an NAHB analysis of characteristics of first-time buyers from the 2005 American Housing Survey from the U.S. Census Bureau. The median price of the homes purchased by first-timers was $150,000 in 2005, compared to $230,000 for the trade-up market, according to NAHB economist Elliot Eisenberg, whose analysis of the survey data is published in the current issue of HousingEconomics.com.{{MORE}} And while the 2.4 million homes bought by first-timers in 2005 accounted for an impressive 43% share of the homes sold that year, the large majority of them — 86% — were found in the existing home market. “Given that new homes are usually more expensive than existing homes, these results ate not surprising,” the study says. A large majority of first-time buyers displayed a preference for single-family detached houses, although attached housing and condominiums were more popular among those buyers just entering the housing market than among more seasoned buyers, the NAHB analysis suggests, “because of their relative affordability.” Almost 79% of those entering the for-sale housing market for the first time purchased single-family homes, while almost 11% bought townhouses and another 11% bought condominiums. By comparison, about 88% of move-up purchases were single-family, 7% were townhouses and 6% were condos.
The study also suggests that a substantial number of first-timers have the financial wherewithal to purchase a home even in today’s market, where zero-downpayment mortgages have become difficult to obtain. Although about 30% of 2005’s first-time buyers who took out a mortgage borrowed 95% or more of the purchase price of the home, more than one-third of all first-timers obtaining a loan were able to make a downpayment of at least 20%. About 16% were able to buy the home without a mortgage, and among all other first-time buyers the loan-to-value ratio was 87%. By contrast, about 60% of buyers trading up and taking out a mortgage loan made a 20% downpayment and 22% of those moving up were able to make their purchase loan-free. However, first-time and trade-up buyers were surprisingly alike in their use of fixed-rate financing, which accounted for roughly an 80% share of the mortgages made to both groups. About 9% of first-time borrowers with loans took out adjustable rate loans, compared to 10% of move-up buyers. First-time buyers obtained their mortgages at an average interest rate of 5.85%, compared to 5.73% for repeat buyers. And 14% of the first-time borrowers paid an interest rate of 7% or higher for their loans, compared to about 9% of those trading up. Almost 56% of first-time buyers used personal savings to cover their downpayment, with no other single source of financing even remotely close, the study says. By contrast, money from the sale of the old home was the most important source of a downpayment for 53% of those moving up, followed by savings, cited by 25%. “When it comes to choosing a house and a neighborhood, both groups are quite similar,” the study says. “Both look at an equal number of units (an average of 12) and place emphasis on proximity to work and friends when choosing a neighborhood. However, first-time buyers are more sensitive to price while other buyers are more attuned to the design and feel of the area.” Among the household characteristics of the first-time buyers:
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 in Connecticut Accentuate Market PositivesWith their housing markets performing considerably better than those in many other parts of the country, builders in Connecticut report that they have been working with their local news media to ensure that prospective buyers aren’t scared off by the negative coverage that has proliferated on the national level. On job growth, a pivotal factor for housing demand, Connecticut has clearly been outperforming the nation as a whole, and despite some marginal slippage in December, there were 16,600 jobs gained since a year earlier, said economist Donald Klepper-Smith. Connecticut never soared to the lofty peaks seen by the top housing markets during the mid-decade housing boom and consequently hasn’t experienced the extreme lows now afflicting those areas. Well above the national average, the state’s housing sales last year held up to 87% of the 2006 level, according to the Home Builders Association of Connecticut, and there is still relatively healthy demand in many communities, especially for smaller and high-end custom homes. The members and staff of the Connecticut association have been in regular contact with local reporters, reminding them of the unique dynamics of the local market and supplying them with information from local builders. For instance, a story in the Jan. 29 Hartford Courant on a decline in housing permits in Connecticut last year, includes the perspectives of Bill Ferrigno, president of the Connecticut HBA and owner of Sunlight Construction in Avon; and Greg Ugalde, president of T&M Building Co. in Torrington, immediate past president of the builders association and a member of the NAHB Board of Directors. The article presents the construction permit slowdown as a good sign that builders have been able to keep their inventory of unsold homes under control so that they will be in a good position when the market returns to its cyclical growth phase. “We are building at a rate that is sustainable for the economy we’re in,” Ferrigno said. “In the old days, it was build, build, build. Now, a lot of us are responding as we should.” In the news story, Ferrigno says that he plans to build more this year, with two projects under construction — a modestly priced active-adult community in East Hartford and a 14-unit luxury development in Avon with homes priced between $1.5 and $2 million. “I think there’s pent-up demand,” Ferrigno said. “In the past two months, we’ve talked to more people than in the last four months before that. Are we more cautious? Yes. They are seeking more options. But we’re planning on 25% more homes this year than last.” "We're still signing contracts," Ugalde said, "but not at the pace of those record years in 2004 and 2005. We are better off than others parts of the country, without a doubt, but we are influenced by that." The association’s efforts to work with the media have resulted in papers adding local, more positive statistics to national stories and seeking out members’ perspectives on housing statistics, said Lisa Kidder, the HBA’s director of public relations and communications. The association has also been promoting good news about the industry, such as the involvement of its members in the community, green building and efforts to improve energy-efficiency during the winter months. The HBA has also assembled panels of its members — including builders, remodelers, bankers and real estate professionals — to provide business reporters with an overview of the local housing market. One local paper has already run a housing outlook article and another is preparing for the interviews. “In the last three months, we’ve had six local television news stories — two on a building project for an injured veteran, two on remodeling for energy efficiency, one on a green building project and one on January housing starts,” said Kidder. The headline for a Jan. 9 New Haven Register article on a 2% rise in the median price of single-family homes in the state in November, “Home Prices in State Buck Trend,” shows the kind of reporting the association is encouraging on a market that has its own story to tell. 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 Economy: Housing Will Improve Later This YearGrowth of U.S. economic output (real Gross Domestic Product) slowed to a meager 0.6% annual rate in the final quarter of 2007, according to the “advance” estimate released by the Commerce Department on Jan. 30. The weakest parts of the economy in the fourth quarter were sectors affected directly or indirectly by the housing downswing. Residential fixed investment (RFI) fell at an annual rate of 23.9%, the steepest decline yet in the two-year downslide, and growth of personal consumption expenditures (PCE) slowed to a 2% annual pace — presumably weighed down by loss of housing equity and by concerns about the course of house prices in some areas. The labor market also shows serious recent signs of weakness, largely because of job losses in residential construction and related areas (including housing finance). Total payroll employment actually fell slightly — by 17,000 — in January as private payrolls were essentially flat while government payrolls declined. Furthermore, average weekly hours worked in the private sector contracted a bit, and aggregate hours worked in the nonfarm business sector contracted significantly — with negative implications for GDP growth in the first quarter. Another shoe dropped on Feb. 5 when the Institute for Supply Management (ISM) released its index of activity in the nonmanufacturing sector for January — covering construction and private services (including finance). The index plummeted to a recession-like level (compared with 2001) and, although an upward revision is possible, fundamental weakness at the beginning of 2008 undoubtedly is being conveyed by the ISM measure. The recent weakness of GDP, the labor market and the nonmanufacturing sector, along with systematic decline in the Conference Board’s index of leading economic indicators since last fall, have stoked recession worries among financial market participants and policymakers in Washington. The probability of near-term recession certainly is elevated — close to 50% — and the actual outcome will depend on the true condition of various economic fundamentals, the performance of financial markets and the degree of near-term support provided by monetary and fiscal policy. Housing Data Still Are Downbeat Housing data received in recent weeks, pertaining primarily to conditions in late-2007, have yet to signal imminent stabilization of the housing market. Sales of existing homes fell by 2.2% in December, reflecting declines in both single-family and condo markets and median sales prices were down by 6.0% (6.5% for single-family) on a year-over-year basis. In the new-home market, sales were down by 4.7% in December and the median sales price was down by 10.4% year-over-year. Inventory levels declined modestly in December for both new and existing homes, although inventory/sales ratios showed little change due to the fall in sales volume. The Commerce Department’s quarterly measure of vacant year-round housing units for-sale (whether new or existing) still was hanging around a record level in the fourth quarter of last year as was the measure of vacant units for-rent. These inventory data, in conjunction with the weak pace of home sales, point toward further weakness in housing starts in coming months. The downtrend in housing starts through the end of last year naturally translated into further declines in measures of construction put-in-place. Single-family construction (in nominal terms) fell by 5.4% in December and was down by 31% on a year-over-year basis. Multifamily construction also has been falling systematically, contracting by 1.9% in December and 20.6% on a year-over-year basis. Spending on improvements to residential structures (additions and alterations) was essentially flat during 2007 and accounted for a lofty 37% of total residential construction at the end of the year. Financial Market Stress Refuses to Go Away The financial market turmoil that erupted last summer still is a major problem for the U.S. economy. The severe liquidity problems in short-term funding markets (including interbank markets here and abroad) have eased to some degree since late 2007, due partly to the Fed’s new auctions of discount-window credit ― the Term Auction Facility. The commercial paper market has improved in the process, particularly the beleagued asset-backed market, although this market still is not functioning normally. Despite some easing of short-term liquidity issues, the stock market is being battered and the markets for longer-term credit remain under considerable stress. Quality spreads in corporate bond and mortgage markets still are quite elevated, and some components are essentially shut down (including the subprime and Alt-A mortgage markets). In this regard, recent Federal Open Market Committee (FOMC) statements have stressed that “credit has tightened further for some businesses and households,” despite the Fed’s aggressive easing campaign since last fall. It’s clear that investors here and abroad have been traumatized by the realization of risks embedded in many of the securitized vehicles they hold, particularly those with U.S. subprime mortgage exposure. They have turned extremely risk-averse — forcing down risk-free (government) interest rates but widening out quality spreads dramatically in private markets and shutting some down entirely. It will take considerable time for Wall Street to develop (and rate) transparent securitized investments that investors will accept. In the meantime, the banking system will have to take up a good bit of the slack in the credit creation process. Lending Standards at Banks Still Are Tightening Mortgage interest rates are quite low at this time, at least on prime conventional conforming loans and FHA/VA mortgages. However, the Federal Reserve reports that bank lending standards are tightening in all major components of the conventional home mortgage market — prime, subprime and “nontraditional” including interest-only, payment-option, and Alt-A adjustable-rate loans. The Fed’s January Senior Loan Officer Opinion Survey on Bank Lending Practices shows that standards have been tightening substantially for nearly a year on subprime and “nontraditional” mortgages, and standards started to tighten last fall on prime mortgages as well. Indeed, a net 41% of banks said they had tightened standards for prime loans in the quarterly report released last October, and that proportion was up to 53% in the January survey. The Fed’s survey also documents major declines in demand for home mortgages at commercial banks, particularly for subprime and “nontraditional” loans. A net 60% of banks also reported considerable weakening in demand for prime mortgage loans in the January survey, following a large decline in the previous quarterly report last October. The Federal Reserve Pulls Out the Stops On Jan. 22, the Federal Reserve announced 75 basis point cuts to both the federal funds rate and the discount rate. These definitely were “emergency” cuts, enacted just eight days prior to the next regularly scheduled FOMC meeting. Indeed, this was the first intermeeting cut since September 2001 (in the wake of 9/11) and the single largest rate cut in 24 years. The Jan. 22 FOMC statement cited weakening of the economic outlook (including deepening of the housing contraction) and deterioration of financial market conditions (other than short-term funding markets). The statement noted that appreciable downside risks to growth remained — even after the emergency rate cut. The statement also moved earlier inflation concerns well off to the sidelines. The Fed cut short-term rates by an additional 50 basis points at the regularly scheduled FOMC meeting on Jan. 30, bringing the cumulative reduction in the funds rate so far this year to a whopping 125 basis points. The FOMC statement once again cited considerable stress in financial markets, deepening of the housing contraction and softening in labor markets. The statement also reiterated concern about remaining downside risks to growth and pushed inflation concerns further into the background — opening the door to further monetary ease down the line. We’re currently assuming an additional half-point cut at the March 18 FOMC meeting, followed by another quarter-point cut on April 30. These moves will push the nomnal funds rate down to 2.25% and the real (inflation adjusted) funds rate below 1%. The Fed could be even more aggressive if economic and financial market conditions demand even more monetary stimulus in the near term. Economic Stimulus The White House and Congress are firmly committed to a short-term economic stimulus package that will help the weakened economy avoid recession in 2008. Fed Chairman Ben Bernanke has endorsed the effort as a welcome complement to simulative monetary policy and the President apparently will sign legislation that comes out of Congress — hopefully soon. (To read a related story in in this issue of Nation's Building News, click here.) Timely passage of such a housing stimulus is a major factor behind NAHB’s housing and economic outlook for 2008. There Are a Few Encouraging Leading Indicators of Housing Demand There are some tentative signs that the dramatic downswing in home sales since late 2005 may soon be approaching a bottom. In this regard, measures of housing affordability have moved up significantly from their lows last summer — due to lower mortgage rates, lower house prices and higher levels of personal income. Furthermore, NAHB’s most recent survey of single-family builders in early February shows some pickup in builder assessments of traffic of prospective buyers, a critical first step in the eventual recovery process. Buyer traffic doesn’t ensure home sales, of course, but surveys of consumer sentiment conducted through January by the University of Michigan suggest modest improvement in consumer attitudes toward home buying since the lows of late 2007. Lower house prices are the key reason cited by consumers who now say buying conditions are “good.” The question is; when will conditions be good enough? Housing and the Economy Will Improve Later This Year NAHB’s forecast shows firming of overall economic activity and the beginnings of housing recovery during the second half of this year — with help from the Federal Reserve, Congress and the Administration. Our forecast also assumes that oil prices will recede over the course of the year and that the economy will not be shocked by unforeseen events, such as a global stock market crash. Our baseline (most probable) economic forecast shows GDP growth of less than 1% in the first half of this year, and a mild recession certainly is possible. Our projected GDP pattern generates only meager growth of payroll employment and involves further increases in the unemployment rate during the next few quarters. But we expect GDP growth to rise to about 2.8% by late in the year, strengthening the job market and paving the way for solid economic performance in 2009. We do not expect core inflation to be a serious problem at any time during the 2008-2009 period. Our housing forecast shows substantial reductions in home sales, housing starts and residential fixed investment for 2008 as a whole, but we’re looking for stabilization of all three measures (in that order) during the year. 2009 stacks up as a solid recovery year, and there will be plenty of room for growth of the housing sector in future years as well. NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Feb. 6 edition. To subscribe to “Eye on the Economy,” click here. Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 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. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 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. Special Builder Panel Looks at Weathering Economic SlumpConvention-goers at next week’s International Builders’ Show in Orlando will have the opportunity to attend a special session on “Weathering the Economic Downturn.” A panel of six builders from around the country will describe their businesses, make projections about where they expect to be this year compared to a couple of years ago and discuss key lessons they have learned from previous downturns. The session will be held on Thursday, Feb. 14, 9:30-11 a.m. in West 110, Orange County Convention Center. The panel will be moderated by Mike Sivage, a home builder from Albuquerque, N.M. Panelists include:
NAHB Board of Directors and Caucus Meeting ScheduleSunday, Feb. 10
Strategies for Survival and Success: Special Programs at IBSNAHB has created several brand new programs and revamped others to address the housing downturn and give attendees the best strategies for success in 2008 and beyond. The programs include daily speakers, an executive-level day-long conference and special education sessions addressing nearly all aspects of the building industry.
Feb. 14 ‘Green Day' Highlight of Builders’ ShowIn recognition of the phenomenal growth of green building, NAHB will celebrate "Green Day" on Thursday, Feb. 14, at the International Builders' Show in Orlando. On Green Day, the association will officially launch the NAHB National Green Building Program and will unveil the new Certified Green Professional educational designation for home builders, remodelers and other industry professionals. A dedicated green building display will allow participants to try out a new online scoring tool that is an important component of the NAHB National Green Building Program. The tool shows how green building techniques and materials will affect a new home and allows builders and consumers to select the measures and materials that are most cost-effective and best meet their needs. Builders can also test the tool at www.nahbgreen.org. Also on the docket:
NAHB volunteer leaders and staff members plan to join the celebration as well, donning green golf shirts provided by Green Day sponsors Marvin Windows and Doors, the Kitchen Cabinet Manufacturers Association, Whirlpool and Kohler. At last count, more than 170 companies will be exhibiting green products and services at the show. Last year, the International Builders' Show attracted more than 100,000 attendees during four days of seminars and other special presentations. They walked 11 miles of aisles through two million square feet of gross exhibit space, enough to cover 35 football fields. More than 1,900 exhibitors displayed the latest in housing products and services. "We're very proud that NAHB and the International Builders' Show have long been ahead of the curve in introducing innovative products and technologies to our members," said NAHB President Brian Catalde. "Our Green Day celebration honors these pioneering industry leaders as it launches the next steps for home builders in the United States." For registration information and more details, visit www.buildersshow.com. For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.
Take the Mystery Out of Green Building Register now for The 2008 National Green Building Conference, held May 11-13 in New Orleans. Get contacts, tools and ideas that are good for both the environment and your bottom line. The National Green Building Conference is the only national conference targeted to green building for the mainstream residential building industry. Network with designers and suppliers, attend exceptional education sessions and develop the skills you need for profitable green building. For information and to register, visit www.nahb.org/greenbuildingconference, call 800-368-5242 x8338, or e-mail registrar@nahb.com.
‘Profit from Green Building’ Available at BuilderBooks.com “Profit from Building Green — Award-Winning Tips to Build Energy Efficient Homes,” available through BuilderBooks.com, showcases what energy conscious award-winning builders are doing, provides innovative energy-efficient features and covers successful techniques for building this niche market. To view or purchase this publication online, click here, or call 800-223-2665. Think Radically About Industry Education at IBS and Win PrizesIndustry professionals are encouraged to “think radically” about building industry education ― and wear temporary tattoos attesting to their radical thinking — for a chance to win prizes from The NAHB University of Housing during daily drawings at the upcoming 2008 International Builders’ Show in Orlando. Four daily drawings to win a Garmin Nuvi 200 GPS will be held at the University of Housing booth in the West Building, Hall B Lobby, Level II in the Orange County Convention Center during the show. The University of Housing will also hold a grand prize drawing for a Dell Latitude D630 Notebook at its booth. Entry forms for the drawings will be available at the booth. While at the booth, attendees also can learn about the new University of Housing education programs for 2008 ― conferences, courses, designations and more, including the new Certified Green Professional (CGP) designation, the new Sales + Marketing Exchange conference and new National Leadership Training courses. In 2007, nearly 3,000 housing professionals earned designations from the NAHB University of Housing. In total, 1,205 classes were held with 15,566 students. For more about the NAHB University of Housing programs, visit the following sites:
IBS Workshops Ready Members for ‘National Designation Month’
The designation coursework enables members to hone their business skills and convey to their clients the superior training, practical experience and in-depth knowledge that come with earning an NAHB designation. NAHB offers more than 15 professional designations covering industry basics such as business management and marketing, as well as specialized classes including aging-in-place programs, green building, property management and more. In addition, designation holders can take advantage of valuable networking opportunities throughout their enrollment, working closely with expert instructors and other professionals both within their field and outside their specific areas of expertise. NAHB is stepping up efforts to educate the public about the value of selecting builders who earn a designation, build support for continuing education programs and increase recognition of the rigorous training required for an NAHB designation. ‘Blueprint for Success’ Workshop at IBS to Help HBAs Develop Education Programs The NAHB University of Housing will be holding a “Blueprint for Success” workshop at the International Builders’ Show for builders association Executive Officers and their staff on what they need to start and manage a successful education program, as well as ways to advance the association’s educational offerings. Three sessions will be held on Friday, Feb. 15:
BuilderBooks.com Has New Resources Available at IBSBuilderBooks.com will have several new titles available to help you improve your business and protect your workers — at the 2008 International Builders’ Show in Orlando. In addition, UPS will be at the BuilderBooks.com bookstore offering free shipping* from the store. (Complete details below.) New BuilderBooks.com titles for 2008 include:
Free Shipping Members who have a UPS account and are registered in the NAHB/UPS shipping discount program will receive one free shipment at the 2008 IBS BuilderBooks.com Book Store. Please be sure to enroll in the NAHB-sponsored UPS discount program prior to the show. Members who already have a UPS shipper number can simply include it on the enrollment form. UPS will assign one to members who enroll in this program. Visit www.savewithups.com/nahb/ibs to sign up. Also, visit the bookstore during the show to enter to win a Harley-Davidson motorcycle. *Restrictions apply. Visit the store at IBS for details.
*Some restrictions may apply. Visit the store at IBS for details. A Few Spots Still Available for 'Spokesperson Training' at IBSLeaders of local and state home builders associations and their members have an opportunity to learn the latest interviewing and public speaking techniques through NAHB’s “Spokesperson Training” program at the 2008 International Builders’ Show in Orlando. Time is running out, however, and with one day sold out and the other dates nearing capacity, members need to register quickly as spots are assigned on a first-come, first-served basis. With the major influx of stories in newspapers, television and radio focusing on the state of the housing industry, state and local industry professionals may find themselves on the receiving end of a call from the media, or they may be asked to formally address a group at their next meeting. Speaking to either the media or a group doesn’t have to be a terrifying experience. The program includes two different one-day seminars:
"Interview Skills" Monday, Feb. 11
"Presentation Skills" Wednesday, Feb. 13
Each seminar is led by professional communication consultants who have more than 30 years of experience training NAHB members on the critical issues they face every day. The fee to attend the Interview Skills or the Presentation Skills class is $495 per person for each one-day seminar. More than 15,000 NAHB leaders have taken Spokesperson Training since the program began in 1979. For more information or to register, e-mail Brooke Fishel in NAHB Public Affairs, or call her at 800-368-5242 x8061.
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: Getting Pinpoint Accuracy in Stair-Rail Joints
Here’s a tip to help keep those joints between handrail sections — such as the intersection between the easing and the rail — aligned properly:
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. Experts Say Sales Teams Must Learn to Overcome Objections
The third in an occassional series on how to ramp up sales and marketing in a changing market. To successfully sell new homes in today’s market, salespeople must know their surrounding community and their prospective buyers and be trained to use that knowledge to overcome objections, a panel of experts said during an NAHB “Back to Basics” teleconference earlier this year on how to ramp up sales and marketing. Homes no longer sell on their own merits, said Bonnie Alfriend, of Alfriend & Associates, a sales and marketing training, consulting company based in Pebble Beach, Calif. Sales teams must learn to overcome objections, she said. Sales teams should practice responding to different objections, Alfriend said. She recommended that sales teams discuss objections together and develop a list of their top-10 most common sales breakers and then discuss ways those deal breakers can be overcome. For every objection, she said, a good salesperson can offer a varying perspective to change the customer’s mind. If salespeople have practiced, they can turn an objection into a sale. (At no charge, NAHB members can access the audio conference, "Ramp Up Your Sales and Marketing in a Changing Market,” by clicking here.) Know the Community Salespeople who do not know their community limit their ability to sell a home. If they don’t know their community, Alfriend said, they won’t know what incentives to offer, what parts of the homes to highlight and what homes to show what customers. “Do your salespeople understand your customers ― where they shop, what they do, what their hobbies are?” Alfriend asked. “Have them investigate the community and learn who their buyers are,” she said. Alfriend told listeners not to overlook the Realtor® community. They have their hand on the pulse of the home buying market because they’re in the field every day hearing what buyers are saying. She suggested that builders get 10 of the “top selling agents in your marketplace, along with your buyers, when you’re doing market research and focus groups.” Make Your Sites Sizzle One of the best ways to overcome objections is to have sizzling sites, Alfriend said. Do “a little extra to make various parts of your properties pop out the customer’s eyes.” A good salesperson can use sizzling sites to overcome many objections, she said. “Landscaping is probably one of the most cost-effective attributes that you can add,” she pointed out. “Do anything that you can do to make your homes and entry statements better. Plant those petunias. Make sure your whole site comes alive.” Stunning sites make the sale that much easier, Alfriend said. Offer Innovative Incentives The point of incentives is to bring traffic through your homes, Alfriend said. Incentives that don’t accomplish that task are worthless. She suggested using creative incentives that potential home buyers can easily relate to and use, such as gasoline or grocery gift cards, a gift certificate to a local coffee shop or a raffle for season tickets to a local sports team. To bring traffic to a community and increase awareness, she also suggested hosting a book signing or food drive, or even having one of your community’s home owners host a cooking show on a local television station. The point is to be creative But Alfriend also warned listeners not to go overboard when developing creative incentives. “Be sure that your incentives have a purpose,” she said. A builder does not want to look desperate. As long as incentives are bringing in traffic, incentives have fulfilled their purpose. Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas Magazine (www.smimagazine.com). Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing. Reach New Heights at the Sales + Marketing Exchange Attend the first annual Sales + Marketing Exchange conference Oct. 5-7 at The Arizona Grand Resort in Phoenix. Presented by the award-winning Sales + Marketing Ideas magazine, the Sales + Marketing Exchange offers education sessions featuring nationally-acclaimed speakers, networking opportunities, pre-conference courses leading to one of the Institute of Residential Marketing designations and interactive discussions of current sales and marketing issues. For more information, visit www.nahb.org/Exchange. 'Sales and Marketing Checklists' Covers the Ins and Outs of New Home Sales “Sales and Marketing Checklists for Profit-Driven Home Builders,” available through BuilderBooks.com, covers the major steps involved in successful new home sales. Learn the ins and outs of the comprehensive contract, the move-in, warranty service, asking for referrals and a great close. This expanded second edition also includes a new chapter on utilizing technology in your marketing and a more extensive chapter on multicultural sales. To view or purchase this publication online, click here, or call 800-223-2665. NAHB Has Nearly 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 nearly 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. 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. Members, Submit Comments on ‘Performance Guidelines’
Builders and contractors are encouraged to submit comments for the fourth edition of the “Residential Construction Performance Guidelines” (RCPG) — the industry's most widely accepted reference on how homes should perform. The current RCPG, available through BuilderBooks.com, contains more than 300 guidelines in 12 major construction categories, including cabinets, cement board siding, concrete, countertops, drainage, driveways, drywall, landscaping, water infiltration and more. It was created for builders and remodelers to help them successfully manage customer expectations — and protect the bottom line — while delivering high-performance homes. It is also popular among consumers. The RCPG work group, part of the Business Management and Information Technology Committee, will begin overseeing the development of the new edition of the guidelines at its meeting at the 2008 International Builders’ Show in Orlando from 11:00 a.m.-2:00 p.m. Monday, Feb. 11. Representatives on the work group will be chosen from various NAHB committees and councils. To Submit Comments NAHB members can also submit comments for the updated guidelines through the NAHB Web site. A comment form is available at www.nahb.org/rcpgcomments. The new edition of the RCPG is slated for publication in 2010. For more information about the RCPG review process, e-mail Joshua Nester at NAHB, or call him at 800-368-5242 x8461.
NAHB Has Nearly 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 nearly 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.
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 Survey Reveals Housing Wants of 45+ Age GroupThe following is based upon Margart Wyle's book, “Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available from BuilderBooks.com. The 45+ age group is not monolithic. The group differs by generation, income, the homes and communities they want and the price they are willing to pay. People in this age group are single, married, first-time home buyers, second-home buyers, working, retired, gardeners and golfers. Many are beginning to start families. Others are rediscovering single life again after 60 years of marriage. Some are just reaching their stride in their careers. Still others are embarking on new careers. And, many simply are retiring and ending paid employment altogether. Some retirees have taken up globetrotting, others are immersing themselves in civic duties and still others are taking on familial roles. All these factors — stage of life, interests and passions — are determining when, where and what type of home and community these buyers want, or whether or not they will move at all. Life Stage Influences Buyer Behavior Admittedly, housing choices and preferences differ among age groups, but these differences are not as much a function of age as they are a result of a particular life stage — obligation, transition or discretion. Obligation Stage: During the obligation stage of life, work and family are the two primary drivers. These two demands govern daily schedules. Decisions about where to live revolve around being close to work, providing a high-quality living environment, having access to good schools and, if possible, living close to other family members who can share responsibilities. So, obligation stagers may not even consider moving until after children have left home for college, until responsibilities to elderly parents have been fulfilled or until they change jobs. Transition Stage: The transition stage may last a few months or several years. The time involved is dependent upon what type of transition individuals are undergoing. Major transitions can include: leaving or planning to leave employment; having children leave home (or, perhaps, return home); becoming single again because of a divorce or the death of a spouse; caring for or experiencing the death of a parent or both parents. People in transition often are in the throes of making decisions about where they want to live and what they want to do as a result of this change in their daily lives. Discretion Stage: Those in the discretion stage have moved beyond the obligation stage and have more freedom, flexibility and choice in how they spend their time and what they do with their lives. Some discretion stagers are adamant about doing what they want to do and when they want to do it. Others may have traded a life of paid employment and care for children for one full of voluntary commitments to churches, causes and grandchildren. Despite their full calendars, however, those in the discretion stage usually have greater control over what they do and when than their counterparts in the other two stages. Many heads of households in this group who have retired may be living on retirement savings and Social Security. However, although their incomes may be lower, their homes have appreciated significantly and they also may have investment assets in other real estate and retirement accounts. Income Alone Does Not Predict Movers As a rule, as income increases, so does the proportion of people who will move to a new home. Studies have found that only about 23% of respondents with incomes of less than $30,000 are likely to move in the future, compared with 37% of households with $100,000 or more in annual household income. Still, household income by itself is not necessarily a predictor of whether or not that household will move in the future, particularly within the 45-to-54 group. A recent study of 6,000 housing consumers aged 45 and older found that those with the lowest incomes were as likely to move in the future as those with higher incomes. Conversely, households in the high age range (75+) with the highest incomes were the least likely people to move of any group — by age or income. When home values are considered across all age-groups, those households with the lowest home values (less than $150,000) were the least likely to move. Still, a significantly greater proportion of 45-to-54-year-olds with the lowest home values were more likely to move than people 75 or older with the highest home values — more than $400,000. The region of the country where they live is a factor for determining whether or where they might move, according to the study. Active Participants in Recreation, Culture The proportion of households who plan to move to an active adult community or who would consider moving to an active adult community has increased significantly in the past few years. Within the 45+ age group, 22% of respondents said they were likely to move to an active adult community and 36% said they might move to an active adult community. About 42% indicated they were likely to move to an all-age community. Many studies compare and contrast those who prefer to move to an active adult community with those who prefer to move to an all-age community. These studies show that those who prefer to move to an active adult community are more active. Unlike their counterparts who prefer to move to all-age communities, those considering moving to an active adult community say they participate in more recreational, educational, cultural and sports activities ― and do so more frequently — than those considering all-age communities. Wanted: Bigger, Smaller or Just Better Homes Despite the common perception that everyone who is 55 or older wants to downsize, the recent 45+ survey results indicate that, as with other age-groups, 55+ buyers want maximum square footage for their money. The data show that even households planning to move to an active adult community aren’t necessarily looking to downsize. According to the study, among 55+ respondents, 34% of those considering only active adult communities, 36% of those considering all-age communities and 35% of those considering both strongly agreed that they wanted the maximum square footage their money could buy. Among middle-America households in the larger 45+ group, 72% indicated they wanted the largest basic home they could get for their money. At the same time, those who are willing to pay more for their homes also are more willing to compromise on size, according to the study. About 46% of those planning to spend less than $150,000 for their homes said they wanted as much space as their money could buy. In contrast, only 28% of respondents planning to spend $400,000 or more wanted as much space as their money could buy. Many boomers who are able to invest more in their homes want better, not necessarily bigger, homes. The study found that buyers will compromise on size if that means they can upgrade the quality of their homes. Of the middle-America households in the 45+ age group who were planning to move, 53% said they would prefer a top-quality smaller home to a regular larger home. Moreover, the percentage that preferred the quality of the home over its size increased with age. Alt | ||||||||||||||||||||||||||||||||||||