Print-All Page: March 17, 2008

Even in the depths of the current cyclical housing downturn, consumers continue to be interested in housing and home builders can tap into that potential by paying careful attention to home buying preferences, according to two experts on market trends who presented their latest research findings at the International Builders’ Show in Orlando last month.

Emerging as a strong draw for consumers this year is anything “green,” a market force that has been gaining strength with the continuing rise of energy costs, according to Gopal Ahluwalia, NAHB’s vice president of research.

“New home buyers are most influenced by greener choices that include energy-efficient features and equipment-based energy saving features,” said Ahluwalia. “They are also very interested in exterior features, such as a front porch, deck or patio in the rear, and exterior lighting. In addition, laundry rooms and dining rooms are widely considered to be essential in new homes.”

Gayle Butler, editor-in-chief of Better Homes and Gardens, confirmed that eco-friendly building is also very much on the radar of a growing number of consumers.

In a research study conducted by the magazine in January surveying more than 2,000 home enthusiasts from across the country who bought a new home in the past 10 years or plan to build one in the next 10 years, more than half of the respondents said they wanted green building and remodeling options presented to them. This number jumps to more than two out of three in the millennial age group.

Nineteen percent said that it is the responsibility of builders to use eco-friendly materials and build highly energy-efficient homes, even if it adds to the cost of the home, said Butler.

Thirty-one percent said their neighbors would buy a green home “when the cost of such homes are within 3% to 5% of conventional homes.”

When asked the best way for a builder to spark a buyer’s interest in today’s market, the Better Homes and Gardens survey found that 44% of the respondents prefer bonus home amenities and upgrades; 42% would like a discount on the price of a new home; 37% want the builder to buy their old home at a fair price; and 31% desire free professional decorating and landscaping advice.

“What we’ve discovered is that home continues to be our emotional center and the sweet spot of everyday life,” said Butler. “Economic uncertainty aside, we won’t stop spending, improving and dreaming when it comes to home.”

Better Homes and Gardens found that its readers prefer a home that accommodates modern lifestyles, has the flexibility to be adapted for future needs, is special “for me” and provides greener choices.

More specifically, 71% identified an all-new kitchen that looks great and is a fun place in which to work as an exciting feature to look for when shopping for a newly built home. Forty-three percent rated sufficient storage as a top priority and 41% cited a master suite “that feels like a luxurious hotel room.”

In the next five to 10 years, Butler reported, 50% of those under age 43 expect to need a home office that functions as a full-time work space, 30% of baby boomers expect an aging parent to move in and 66% of boomers expect to need guest accommodations for grown children and grandchildren.

Today’s home buyer prefers designs tailor-made for their specific needs. “Sixty-nine percent said no more cookie-cutter houses,” she said. “They want a house that has character and charm.”

Although consumers generally prefer homes that are bigger and equipped with more amenities, said Ahluwalia, some features of new homes have now improved to the point where home buyers are relatively satisfied.

For example, while large kitchens are desirable, many consumers would be reluctant to see the kitchen expand further at the expense of other space, said Ahluwalia.

“Just over 37% of shoppers would sacrifice living space for a larger-than-average kitchen,” he said.

Home buyers are generally content with the number of bathrooms in typical new homes being built today, Ahluwalia said, and continuing a trend identified in earlier NAHB studies, more than one-third of home buyers do not think it is necessary to have a living room.

These conclusions come from a new NAHB survey of more than 2,300 recent and prospective home buyers that examined the features, amenities and layouts preferred in a new home.

Among the 10 features or designs most frequently rated as “essential/must have” before a consumer would consider buying a specific home, four were energy-related and two were exterior features.

A laundry room topped the list, rated essential by 55% of the survey respondents. Energy-related features in the top 10 included a high level of insulation (48%), exhaust fans (48%), Energy Star-rated windows (36%) and equipment-based energy saving measures (34%).

Exterior lighting (33%) and fenced yards (33%) were the two outdoor features that also made the top 10 list.

Of 21 different kitchen features, a walk-in pantry was rated as essential/must have or desirable by 86% of those surveyed, followed by an island work area (80%), built-in microwave (72%), drinking water filtration (69%) and special use storage (wine rack, spice drawer, pots and pans, cabinet, etc.) by 16%.

Granite/natural stone was the most popular kitchen counter material and a linen closet topped the list of bathroom features, with 89% of respondents categorizing it as essential/must have or desirable followed by an exhaust fan (88%), separate shower enclosure and water temperature control at 79% each.

The median home size of those surveyed was 1,835 square feet and the respondents said they wanted a median of 2,354 square feet in a new home. With the additional space, home shoppers expected to pay a median of $241,699, about 6% more than the $227,500 estimated median value of their current homes.

More than half (52%) of respondents prefer a master bedroom only on the second floor of a two-story home, while 16% prefer it on the first floor only and 22% would accept it on either floor.

More than two out of three respondents preferred nine-foot or higher ceilings on the first floor, and, continuing a popular trend of the last 20 years, more than 40% said they wanted the kitchen and family room to be adjacent and visually open, but with a half-wall separating the two rooms.

More than half of the respondents said they would like a minimum of four bedrooms, while 39% would accept three bedrooms.

Twenty-eight percent of those surveyed preferred at least three full bathrooms, one-third would like to have 2-1/2 bathrooms and 31% expressed satisfaction with only two bathrooms.

On the front exterior, brick was the most preferred, followed by stone, vinyl and stucco.

According to a recent Harvard University study, women control 91% of home buying or remodeling decisions. “Trillion Dollar Women” provides builders and other housing professionals with a detailed look at the motivations, objectives and viewpoints of female buyers.

Floor Plans: BALA Home — Actually, Cottage — of the Year

Nestled among southern pine and fronting a golf course, the home is also the 2007 Southern Living magazine “Idea House.” Though designed and built as a cottage, the 3,544-square-foot house also works just as easily as a family home — with clear differentiation of public and private spaces.

Homes often distinguish public spaces from private spaces by having the private spaces on the second floor and reserving the public spaces for the first floor.

Tucker Bayou draws more subtly on these distinctions, beginning with its two entrances to the home. While the front elevation faces the golf course, it is accessible only by a private pathway that connects to the other homes in the area. The home’s more public entrance, the one that most visitors use, is at the rear of the home where there is a car park area and an enclosed garden.

That entry through the garden area also helps define public and private spaces. From the garden, an entry hallway brings visitors through a gallery. There is also a private entry into the kitchen from a covered walkway and the rear porch.

Off the kitchen are a family work area that serves as a staging area for groceries and an adjacent utility area. Public spaces on the first floor include the kitchen, dining area and living room. Private spaces include the owner’s suite and an exercise or study area. The master bedroom has a private entrance.

The children’s bunkroom on the second floor offers a retreat for the children, giving the adults downstairs quiet time of their own. Two additional bedrooms and a media room upstairs also provide a guest getaway — when kids aren't occupying the bunks.

The public versus private aspects fit with the way empty nesters use this house, according to architect J. Carson Looney, of Looney Ricks Kiss Architects of Memphis.

“It’s a lot of what we see in the panhandle region,” he said. “Homes may blow you away by what’s inside. But there is an overwhelming desire to be understated from the street. Big developments (in the area) don’t sustain value or achieve the price point per foot.”

The cottage fits its environment with ease, both standing out from the forest setting and blending in comfortably. The roof’s shape, with its strong cross gable, accommodates a lot of space, said the architect, but the shape also enables the house to fit into its elegant location.

Nowhere is that understated nature of Tucker Bayou more obvious than the seeming contradiction of it being a 3,544 square-foot home and a cottage.

The home reads as an intimate space with human-scale rooms that allow people to feel relaxed and welcome in the environment. The architects achieved this by making the roof line seem smaller while delivering more space within the home.

The interior design elements also play to the feeling of the cottage. In particular, the palette reflects a quiet life and the bead-board walls, coffered ceilings and pine floor present a pastiche of cottage life that fits the empty nester vacation lifestyle.

“People from Chicago may live in a fine, stately home, but when they come here, they come for relaxation,” said Looney. They don’t want to give up niceties, but they don’t necessarily want to show off, either, he added.

The BALA awards, the nation’s foremost residential design competition, are co-sponsored by Professional Builder magazine and NAHB.

“Smaller, Smarter Home Plans,” available through BuilderBooks.com, showcases more than 300 favorite home plans — mostly 2,000 square feet — from top designers. The plans are presented in full-color photographs and artists' renderings.

Builders in Kansas City Bust Housing Myths in the News Media

In a housing market that has been down but clearly not out, prospective home buyers in Kansas City earlier this month found in-depth reporting in their local newspaper of real estate experts suggesting that now is an opportune time to find out what the market has to offer.

Behind the scenes, local home builders had a hand in the news story, which provides extensive information on the dynamics of the local market and helps dispel the public perception of doom and gloom that has been conveyed by national media reports of conditions that don’t pertain to Kansas City.

“This much is certain: It’s a buyers’ market,” wrote The Kansas City Star's business editor, Chris Lester, in his introduction to a transcript of the panel discussion. “But the panelists also took pains to delineate differences between the local market and the woes of California and Florida markets that dominate national headlines. Moreover, they see signs that the current buyers’ edge in Kansas City could be a memory within a year.”

The idea for the story, which appeared on the front page of the newspaper’s business section on March 9 and 11, started with media coverage of the annual housing forecast conference by the Home Builders Association of Greater Kansas City in January.

Following the forecast, Lester “approached us about putting together a roundtable of housing experts to discuss the market and where we are headed,” said Matt Derrick, the association's staff vice president of public affairs.

“The roundtable eventually consisted of seven industry professionals, including five HBA members and staff provided by the association, along with the CEO of the local Realtors® association and a local mortgage lender,” Derrick said.

Coverage of the panelists in the Star makes it clear that the Kansas City market has not hit the cyclical highs and lows experienced by some of the markets that have been making headlines in the national news. The market’s inventories of unsold homes also appear to be dropping fairly quickly, and with new construction significantly slower than it was a few years ago, panelists warned prospective buyers who are trying to time the market and make their move when prices are at their absolute bottom that the selection of homes available today might not be available for much longer.

“Because we’ve cut production (of new homes) so drastically the last few years, once the inventory moves, there’s not going to be a lot behind it….Once we hit the bottom (and) stuff starts clearing out, there’s not a lot left behind that’s going to be for sale,” said Tim Underwood, executive vice president of the HBA.

“The reaction to the articles has been overwhelmingly positive from our membership,” said Derrick. “The feedback from members has reflected their appreciation that the panel discussion supported the ‘buy now’ message and that we were able to have the Star run a story focusing solely on the local market and explaining why Kansas City is faring much better than the national average.”

The HBA has been using the forecasts and other resources from NAHB — available to members and affiliated associations in the Myth Buster section on nahb.org — to highlight the relative health of the Kansas City housing market and promote a ‘buy now’ message in a media campaign launched last summer.

“You can help reporters understand that all markets are local, and encourage a shell-shocked public back into the housing market,” according to NAHB. “Through a concerted effort to provide the media and the public with verifiable and relevant housing market statistics and information, it is possible to change attitudes and behaviors.”

The continuously-updated materials in the Myth Buster section contain housing market data and information to help members and HBAs provide accurate information and combat misleading media reports that often don’t reflect local market conditions. They include housing forecasts for the nation’s top 100 markets, background information on reports frequently cited by the media, questions and answers on housing myths and consumer concerns and consumer-targeted television spots, print ads and handouts that can be customized for a local audience.

For more information, e-mail Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447.

Case Says Housing Prices 'Flat' in Most Local Markets

PARK CITY, UTAH — The housing markets in the vast majority of the country have been largely unaffected by recent price declines, according to a partner in a popular index the media likes to use to show the enormity of the housing crisis, and an index housing trade groups say paints exactly the wrong picture.

Case's presentation reinforces protests by NAHB and the National Association of Realtors®, among others, which argue that there is no national housing market.

Robert Shiller, an economics professor at Yale, is generally the Case-Shiller Index's public persona.

The trade associations have complained bitterly that both the popular press and the trade media focus on the composite figures when the index is published each month instead of looking to see what is going on in each individual market. Even small-town newspapers and television stations point to the overall average rather than digging to determine the numbers for their particular burgs and hamlets, they grumble.

According to the latest index, the composite for the 20 major markets followed closely by Case-Shiller is down 10.5% from the peak in July 2006.

In addition, the average price in the 20 markets is down from each of their peaks.

Nevertheless, Case, who noted that "housing markets are very emotional," said that prices have remained relatively flat in most places.

The Wellesley College economics professor predicted that prices "are likely to correct further," though he stopped short of forecasting exactly when they will hit bottom.

"There's no way to tell when the downturn will run out of gas. You can tell when it's beginning, but not exactly when."

But he did point out that the current cycle is looking more and more like the last three downturns, which may mean the end is near.

In each of the three previous cycles — 1973-75, 1978-82 and 1986-91 — gross residential investment dropped more than 30% and housing starts tumbled 60% or so. This time around, residential investment is down 29% so far and housing starts are off 56%.

"It's got a little ways to go," he said of the current housing recession. "But we're getting close."

Case said his index is as precise a model as there is in determining the path house prices are taking. "It's based on every transaction we can get our hands on," he said.

Based on the index, the economist said the country's housing market falls into "three regimes," each of which will "unwind differently."

One is the group of states, mostly in the Midwest and South, where falling or rising incomes explain everything. Another is comprised of states like Massachusetts and California, where the limited supply of land drives prices. And the third includes the "Johnny Come Lately" states, places like Florida, Arizona and Nevada where greed and gluttony took hold.

Affluent Are Also Losing Homes

The number of home owners defaulting on their loans in the Baltimore metro area last year rose the fastest among highest-income counties with the most expensive housing — Howard, Anne Arundel and Carroll. Foreclosures were even higher in the wealthy Washington, D.C. suburbs, according to a Baltimore Sun analysis of court records statewide. All but two of Maryland’s 10 most affluent counties — those with median household incomes topping $70,000 — saw foreclosure rates rise by more than 50% in 2007. Montgomery County, where the typical household income is more than $87,000, saw its foreclosure cases rise nearly 130% — the biggest jump in the state. Housing experts blame the frenzy of easy mortgage money available during the housing boom and the beginning of the slump. The share of buyers opting for “piggyback loans” to cover the full cost of a home with no donwpayment tripled in Montgomery County between 2004 and 2006 to three out of every 10, according to a recent study by the Reinvestment Fund for the Baltimore Homeownership Preservation Coalition. “I realize I’m not the only one, but I didn’t realize how many people are being confronted…with this kind of situation,” said LuJuanda Dixon, who is working with counseling group HomeFree-USA to try to save the house in Bowie that she bought with her husband last year for $650,000. Before Danny Dixon lost his job in November, they were making $100,000 a year. (www.baltimoresun.com)
Baltimore Sun (3/16/08); Jamie Smith Hopkins

Swooping in From Overseas

With the U.S. dollar at its weakest level in decades, international buyers are chasing housing bargains here, eager to take advantage of their purchasing power and the declining prices in some of the best-known U.S. cities. Stephane Torriglia flew in from Spain about a month ago to check out a rowhouse for sale on Capitol Hill that belongs to a friend and former Marine who now lives in Spain. He estimates that it could be worth as much as $1 million and has offered $800,000. He plans to put 50% down if the offer is accepted. “The idea is we’ll convert our euros into dollars,” Torriglia said. “We can rent the place out. Maybe in five years or six, the dollar will be strong again and the real estate will gain value. It’s an opportunity.” A study by the National Association of Realtors® found that about 25% of the real estate agents surveyed last summer said they had more business from international clients than they did five years ago. The weak dollar was cited as one of the reasons for the uptick. More than a quarter of the foreign buyers bought their homes with cash, and when they took out loans, they put down more money than domestic buyers, the study found. About 26% of foreign buyers ended up in Florida and another 16% in California, with Texas in third place. (www.washingtonpost.com)
Washington Post (3/15/08); Dina ElBoghdady

Utah Seeing Less of Housing Slump

While its housing price appreciation dropped in the fourth quarter of 2007, Utah’s numbers for the entire year show a 9% increase, according to the Office of Federal Housing Enterprise Oversight’s fourth quarter national report of price appreciation rates. This was the highest of the 50 states, according to the report, which showed a national average increase of 0.8% last year. “Utah didn’t experience the type of price appreciation of other states in the bulk of the boom,” said Andrew Leventis, senior economist for OFHEO. “Utah did not have the affordability constraints that have really affected other places.” “You have to keep these things in perspective,” said Carol Sapp, executive officer for the Southern Utah Home Builders Association. She said that five-year appreciation rates give residents a better idea of their home’s value. Utah’s western neighbors didn’t fare so well. In all, Nevada had a 5.9% decrease in price appreciation. Arizona saw a 2.4% decrease and California a 6.7% decrease, according to the report. Other high appreciating states included Wyoming, 8.3%; North Dakota, 7.9%; Montana, 6.9%; and Alaska, 6%. (www.thespectrum.com)
Thespectrum.com (3/14/08); Alyson Van Deusen

Builders Stand Pat Here, Put Up Sticks Elsewhere

In response to a severe local housing recession, developers like Mick Pattinson, president of Carlsbad, Calif. home builder Barratt American, are sitting on land plots they have poured millions of dollars into and looking outside of the state to build. Because readying land for homes can take three years or longer, builders acquired and invested in land long before the start of the housing downturn. Now that the land is ready, Pattinson will wait until the market shows signs of recovery to build. In the meantime, he has started looking at projects in Idaho, Utah and Canada. “We’re all dressed up with nowhere to go,” said Pattinson, whose company sold 397 homes in Southern California in 2006 and 116 in 2007. Michael Crews, founder and president of Michael Crews Development in Escondido, said his company probably invests more money outside the state than within it. While waiting to develop 13 land plots in Fallbrook, Calif., his company is selling homes or developed land in Arizona, Idaho, Texas and Utah. His company sold 63 homes last year, down from 111 in 2006. Pattinson expects to be building in California again in about one year, with a seven-month housing inventory, down from 12 months currently. But some economists and academics have predicted it will take longer, maybe three or four years, because the median home price needs to be affordable for the median-income households. But some builders say it is impossible to build affordable housing in San Diego and turn a profit because of permitting fees, which have been ramped up in recent years. “You can’t have some of the regulations and priorities that we encumber housing with in California and then lament the lack of affordable housing in any genuine sense,” said Paul Tryon, chairman of San Diego’s Building Industry Association. “If you go back to 1977, housing in California was exactly as it was nationwide in average price….It was desirable in 1977. It didn’t get sunnier. The surf didn’t get bigger.” (www.nctimes.com)
North County Times (3/17/08); Zach Fox

Regulations Are at the Root of U.S. Housing Mess

A recent study by Cato Institute scholar Randal O’Toole draws on broad economic literature to conclude that recent price swings in housing are the result of out-of-control government regulation. For most of U.S. history, real estate prices have tended to rise with inflation. In periods when they increase faster than that, home building activity rises, driving prices back. Since the U.S. is flush with land, it has generally been easy for supply to respond to higher prices, and push them back down. But in the 1960s and 1970s, California and Hawaii began a movement that sought to limit this with growth management planning that effectively confined growth to within a line around the city. Over time, this regulation has spread dramatically. “In 2006,” O’Toole reports in his study, “the price of a median home in the 10 states that have passed laws requiring local governments to do growth-management planning was five times the median family income in those states. In contrast, a median home in the 22 states that have no growth-management laws or institutions cost only 2.7 times the median family income.” (www.bloomberg.com)
Bloomberg (3/17/08); Kevin Hassett

The House in a Box

Promoted by design magazines such as Dwell, kit homes sold as parts have attracted a near cult-like following among style-minded home shoppers and do-it-yourselfers. The factory-fabricated houses, often in modernist designs, can bring efficiencies to a process notorious for cost overruns and delays. And fans say they are greener because they create less waste than on-site construction. The kit house from designer Rocio Romero starts at $42,000, but Matthew and Allison Meeks spent nearly eight times that to have it assembled in Gallatin, N.Y. At 1,500 square feet, the house had three bedrooms and two baths. But buying the roofing, doors, windows and interiors, plus other charges, quickly blew their $260,000 budget. Mrs. Romero charged $8,400 in design fees to allow the owners to eliminate the basement, take out a wall to open up the kitchen and flip the floor plan. They swapped out the galvanized steel exterior for cedar, costing $4,500. The cost of floor-to-ceiling windows and doors containing argon gas between the double panes for energy efficiency was $32,500. The land was a bargain $42,000 for three acres, but it was sloped, requiring a $22,000 above-ground septic system, versus about $3,000 for a standard in-ground one. The Meeks paid their contractor a fixed price of $64,000 for what they thought would be four months of work. But site conditions such as hitting rock and delays from ordering custom materials not included in the kit stretched the project to a full year. All told, the house cost $250 a square foot, or $375,000. While local architects say custom building starts at about that price, it was 44% over the couple’s budget. Still, “it was worth it,” Mr. Meeks says. “I wound up with a home that was way cooler than I thought it would be.” (www.marketwatch.com)
MarketWatch (3/13/08); Sara Lin, Wall Street Journal

Congress, White House Step Up Efforts to Rescue Economy


	President George W. Bush delivers remarks on the economy to the Economic Club of New York on March 14. White House photo by Chris Greenberg

In the midst of more troubling news for the nation’s economy, members of Congress and the Administration worked steadily last week on measures to stabilize the housing market, restore confidence in the financial markets and avert a recession.

In a March 14 address to the Economic Club of New York, President Bush touched on the success of steps his Administration has taken to limit the number of households who will lose their homes to foreclosure and he called on Congress to do a number of things to address the current downturn in the housing market, which he called “a root cause of the economic slowdown.”

Members of Congress, the President said, “need to move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow state housing agencies to issue tax-free bonds to home owners to refinance their mortgages.”

Bush cited efforts by the Federal Reserve Board and the Treasury Department to help financial institutions make more credit available to businesses and home buyers, and he said that consumer spending will receive a boost in the second week of May when income tax rebates start going out to 130 million households.

“I’m coming to you as an optimistic fellow,” he said. “I’ve seen what happens when America deals with difficulty. I believe that we’re a resilient economy, and I believe that the ingenuity and resolve of the American people is what helps us deal with these issues.”

On March 13, the day prior to Bush’s trip to New York, the Treasury Department released a report by the President’s Working Group on Financial Markets on what went wrong leading up to the collapse of the subprime mortgage market last summer and what actions are needed to prevent a recurrence.

Commenting on the report, Treasury Secretary Henry Paulson signaled a need for greater transparency and other reforms to prevent the kind of sudden downturn that has struck credit markets in recent months. The changes include tougher disclosure requirements for banks and Wall Street firms, a nationwide licensing system for mortgage brokers and new rules for credit rating agencies.

On Capitol Hill last week, NAHB lobbyists held several meetings with key lawmakers and their staffs to help move Federal Housing Administration modernization forward. In addition, grassroots members of the association were actively involved, reaching out to members of Congress to urge them to get the job done.

While both Senate Banking Committee Chairman Chris Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.) reported progress, ultimately House and Senate negotiators failed to approve a final bill before Congress adjourned for a two-week recess. It appeared, however, that important groundwork had been laid to move this legislation forward upon Congress’s return.

In another development on the housing front being monitored closely by NAHB, Frank on March 13 announced a plan to let the FHA insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. Frank said he wanted the FHA to provide up to $300 billion in new guarantees to get borrowers into viable mortgages, which he predicted could help refinance between 1 and 2 million home loans and help these families stay in their homes. In exchange for accepting a writedown of principal, lenders or mortgage holders would receive a payment from the proceeds of a new FHA loan if the borrower "can reasonably be expected to pay" the restructured mortgage.

Dodd also unveiled his own legislative plan to help strapped home borrowers. Under the "HOPE for Homeowners Act of 2008," new mortgages that are offered by FHA-approved lenders will refinance abusive loans at a significant discount for home owners facing difficulty meeting their mortgage payments.

“This is the worst housing crisis of our lifetime, and we’re in a recession as a result of it,” said Dodd. “Property values decline sharply when a home in the neighborhood is foreclosed upon. In order to stabilize neighborhoods, we must take actions to prevent foreclosures. This proposal will help provide much-needed relief for people on the brink of foreclosure, keeping families in their houses and neighborhoods financially stable.”

Meet With Members of Congress While They’re Home

With Congress off for the Easter holiday, home builders are encouraged to set up meetings with their representatives and senators in their home districts and urge their lawmakers to take immediate action to shore up home prices, which will stabilize housing and the financial markets.

Specifically, builders should call on their federal lawmakers to create a temporary home buyer tax credit to boost sales, enact FHA and GSE reform, expand the mortgage revenue bond program and allow businesses to carry back net operating losses for five years.

For more information on these issues, and for help in setting up an appointment with your lawmaker in your home district, e-mail Molly Murray at NAHB, or call her at 800-368-5242 x8282.

NAHB Steps Up Call for GSE Reform After Syron Remarks

The nation’s home builders reacted swiftly last week to March 12 comments by Freddie Mac CEO Richard Syron indicating to investors and stock analysts in New York that his giant mortgage-funding company was disinclined to to raise more capital to help stabilize the troubled housing market.

Citing management’s fiduciary responsibilities, Syron suggested that Freddie Mac would put the interests of its shareholders first as the housing finance industry weathers the current “crisis,” which he described as a “100-year storm.”

"As a congressionally chartered enterprise, Freddie Mac has two significant and equal responsibilities — that of serving its housing mission and its shareholders. With the housing market in the midst of its worst downturn in decades and millions of Americans facing foreclosure or unable to obtain financing to buy a home, Freddie Mac CEO Richard Syron said yesterday that his chief interest is making money for his shareholders. It is now painfully obvious that the company has strayed light years away from its other vitally important congressionally mandated mission of ensuring an adequate flow of credit for housing and home buyers, said Jerry Howard, executive vice president and CEO of NAHB, in a statement issued on March 13.

"This underscores the need for Congress to act now to enact comprehensive reform of the GSEs and strengthen the regulatory oversight over these institutions so that they can return to an aggressive pursuit of their housing mission,” Howard said. “Today's mortgage credit crunch has profound implications not just for housing, but for the overall economy, which, at best, is teetering on the brink of recession.

"It is deeply discouraging that a company that should be doing everything within its power to restore liquidity to the marketplace has instead decided to neglect that responsibility," he said.

Fund Helps Builders Fight Battles in Arizona and Florida

Home builders associations received funding at last month’s International Builders’ Show in Orlando to battle a burdensome immigration law and a proposal for “ballot box zoning.”

The financial assistance was provided by NAHB's State & Local Issues Fund (SLIF), which helps state and local HBAs deal with legislative, regulatory and ballot issues that have national significance for the housing industry.

At the winter board of directors meeting, the Home Builders Association of Central Arizona was awarded funding to help amend HB 2779, which on a first offense suspends for 10 days all of the business licenses of an employer who has hired an illegal alien and revokes them entirely on a second offense. Passed by the Arizona legislature during its 2007 session, the measure is considered the most draconian immigration law in the country. A lawsuit against HB 2779 has been unsuccessful in lower federal court, but an appeal is expected to the Ninth Circuit.

An initiative filed by an anti-illegal immigration group would shut down a business on a first offense, and legislation has been introduced this year to make the bill’s provisions retroactive to “any” hire prior to Jan. 1, 2008, which is the law’s effective date. An initiative to amend the law has also been filed by the business community.

The Volusia Home Builders Association in Florida also received funding last month to support its campaign against a proposed charter amendment that would subject all future comprehensive plan changes to a public vote.

No-growth supporters have gained nearly 4,000 of the 6,770 signatures they need to place six charter amendments on the November 2008 City of Daytona Beach ballot. Of greatest concern is a “mini-hometown democracy” amendment that would require all future comprehensive plan changes needed for any development to be approved by the voters.

Proponents of the amendments were able to collect the signatures they now have in less than four months, and they are well financed. The other five amendments would lower water/sewer rates by 33%, outsource the city attorney’s office, prohibit corporate entities from donating to campaigns, require any expenditure exceeding $1,000 to be voted on individually by the city commission and terminate certain city employee positions.

The deadline for the next round of applications for the State & Local Issues Fund, which will be reviewed at NAHB’s upcoming spring board of directors meeting, is April 6.

For more information on the fund or to request an application, e-mail Alex Strong at NAHB, or call him at 800-368-5242 x8326.

Builder Confidence Unchanged in March

Builder confidence in the market for new single-family homes has remained unchanged this month, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), which was released on March 17. The HMI held firm at 20, which is near its historic low of 18 set in December. The series began in January of 1985.

"Our surveys confirm what I've been hearing personally from builders across the country, which is that interested buyers are out there, but they are either reluctant to go ahead with a home purchase or they are unable to find mortgage financing they can afford," said NAHB President Sandy Dunn.

"NAHB applauds the Federal Reserve's aggressive actions over the weekend in response to escalation of financial market pressures, and we strongly encourage the Fed to ease monetary policy substantially when the Federal Open Market Committee meets tomorrow," said NAHB Chief Economist David Seiders.

"With the deepening problems in today's economy and financial markets, Congress and the Administration should enact additional stimulative measures, and the next round should be directed squarely at the housing sector," he added. "A temporary home buyer tax credit, FHA modernization and GSE oversight reform are the three most important things that Congress can accomplish right now to help ensure that housing does not drag the economy into a full-blown recession. Provided that the necessary actions are taken promptly, a housing market recovery most likely would take shape by the second half of this year."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales, sales expectations for the next six months and traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three of the HMI component indexes were unchanged in March from the previous month. The index gauging current sales conditions for newly built single-family homes held firm at 20 and the index gauging traffic of prospective buyers stayed at 19 following a significant gain in February. The index gauging sales expectations for the next six months edged downward by a single point to 26.

Regionally, the HMI rose two points in the South to 26. It held even in the Midwest at 16 and declined one point to 15 in the West and two points to 21 in the Northeast.

Plan to attend NAHB's Spring Construction Forecast Conference on Thursday, April 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.

For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.

Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.

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.

Strong Growth Projected for Cement Demand Through 2030

Looking beyond the negative impact of the current downturn in housing production, Ed Sullivan, chief economist for the Portland Cement Association (PCA), is bullish about prospects for U.S. cement consumption through the year 2030.

In the residential sector, demographic factors and growing interest in green building are expected to help push cement consumption to 183 million metric tons by 2030, according to PCA, an increase of nearly 56 million tons over the period beginning in 2006 and representing a 1.5% compound annual growth rate. By comparison, during the 1980 to 2005 period, cement consumption grew by 57 million metric tons at a compound annual growth rate of 2.5%.

The PCA forecast is based upon the assumption that the housing stock will reach 155 million units by 2030 and that annual housing starts will average roughly 1.85 million throughout the 25-year period. “The anticipated increase in population of 63 million persons will result in more additional demand for housing, commercial buildings, public buildings and infrastructure — all boosting demand for cement consumption,” according to PCA.

Energy and environmental concerns will play a growing role in the construction materials used in home building, says PCA, which will be good for cement demand because of the superior energy performance of concrete wall systems.

According to a PCA study, houses built with insulating concrete form walls (ICFs) can require up to 44% less energy to heat and 32% less energy to cool than comparable frame homes. This translates into a savings of about 1.8 million metric tons of carbon dioxide emissions annually.

Assuming that the average life of a home is 50 years, this translates into a lifetime savings of 92 metric tons of carbon dioxide per home built with ICFs. Taking into account the addition carbon dioxide emitted due to higher volumes of cement associated with ICF home building, over its lifetime an ICF home saves a net 72 tons in emissions — nearly a five-time payoff over the increased emissions associated with increased cement production for the home.

Approximately 77 million BTUs of energy is used per home annually for heating and cooling, or four tons of carbon dioxide per home.

According to the Energy Information Administration (EIA), residential carbon dioxide emissions were an estimated 1.2 billion metric tons in 2005 — accounting for 21% of total emissions. Roughly 40% of residential energy consumption — or more than 500 million metric tons of emissions — was attributed to heating and cooling.

The cumulative carbon dioxide savings associated with heating and cooling resulting from ICF home construction will reach 15 million metric tons by 2030, PCA says, as the green properties of cement lead to greater use of ICFs in home building.

PCA expects the share of these wall systems used in home construction to eventually reach 30% of the market by 2030, compared to a 7% share in 2005.

NAHB’s 2008 Concrete Technologies Tour gives attendees an inside look at the residential concrete industry and a chance to see the latest production techniques and building trends up close.

Concrete is cost-effective and green and is becoming one of the fastest growing sectors of the residential building industry.

For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.

Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.

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.

NAHB Members Urged to Complete Economic Data Census Form

The U.S. Census Bureau is urging NAHB members who have recently received economic census forms to return them within 30 days.

The economic data, which is collected by the Census Bureau every five years, is used to support public policy and business decisions at the national and local level. The government also uses the data to help measure how the economy is performing.

“Economic indicators we use all the time ― like gross domestic product (GDP), monthly retail sales and the producer price index ― all depend on the economic census for continued accuracy,” the Census Bureau said.

This census is "indispensable to understanding America's economy," said Ben Benanke, chairman of the Federal Reserve.

More than 4 million Census forms were sent to businesses of all sizes late last year. Federal law — Title 13. U.S. Code — requires that the forms are completed and returned to the Census Bureau.

For more information or help completing the form, visit the Census Bureau help site at www.census.gov/econhelp, or call 800-233-6136.

For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.

Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.

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.

Useful Links to Monitor Economic and Housing Trends

The following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market.

For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.

Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.

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.

Builders' Tip: How to Cope-Cut Quarter-Round Trim



	Click for larger image.

I recently had to install a lot of 3⁄4-inch quarter-round trim.

I prefer coped corners to mitered corners, but given the amount of trim required by this job, I had to find an expedient way to cut it all.

As shown in the accompanying drawing, I devised a rig that yields accurate results with a minimum of effort.

For quarter-rounds of a different radius, simply cut a groove to fit the trim, and use a hole saw that is twice the radius of the trim.

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.

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.

Five Common Construction Mistakes Undermine Sales

Emphasizing practical, cost-effective building solutions that will help home builders sell more homes, the Partnership for Advancing Technology in Housing (PATH) has identified five common construction mistakes worth noting.

“The trim is on, the site cleaned up. The tools are packed away. Few feelings are more rewarding than stepping back and looking at a job well-done. But is that job really done well? Your crew may have fumbled some building basics along the way without even knowing it,” PATH writes in the current issue of Quality Matters, the e-newsletter of the NAHB Research Center's National Housing Quality Program.

Job well-done: Either run ducts in conditioned space or insulate them really well in unconditioned space.

According to the NAHB Research Center, placing ductwork in conditioned space can reduce heating and cooling loads by 20% to 35%. It also reduces overall ductwork length because supply register locations are more flexible. Wrap ductwork in conditioned spaces with R-4 insulation to prevent condensation.

Joe Gregory, purchasing manager for Bob Ward Companies, recently built the near zero energy Maximum Efficiency Home series in Baltimore. He ran a duct-blaster test to show his crew how leaky the ducts were. Now he says his subcontractors understand the level of work required to install ducts with 4% to 5% leakage rates, instead of the more typical 10%.

The conventional method: Design the floor plan with no concern for site orientation.

Job well-done: Orient the home to take advantage of natural day lighting — and some free solar heating in the winter.

The benefits of natural lighting have been well-documented: people work better, students learn better and people are healthier in general. And designing a day-lit home needn't add expense to the project.

In all but the hottest southern climates, orient the building so the long axis runs east to west. Place a row of windows along the south wall for winter gain. Size roof overhangs to block the summer sun, but let in light and warmth from the winter sun. Cluster the main living areas along the south wall and mechanical and storage areas to the north.

Skylights are energy hogs that can make a room uncomfortably hot. Try sun tubes, or tubular skylights, to bring light into dark corners, interior rooms or even the basement without as much energy loss.

The conventional method: Put building wrap up as quickly as possible, and don't worry about tape or careful installation.

Getting this wrong risks mold and mildew, rotting window jams and drafty walls and floors.

To get it right, overlap all seams at least 6 inches in shingle fashion so they shed water. Seal with code-approved contractor sheathing tape to make a weather-tight bond. Use proper fasteners (plastic cap nails are the best), and make inverted Y cuts (also called modified I cuts) to wrap window openings.

HVAC

The conventional method: Size HVAC with a rule-of-thumb calculation.

Job well-done: Use Manual J to properly size the HVAC system.

With today’s tighter building envelopes, following the rule of thumb often results in oversized systems that cost more upfront and cost more to operate over time. Oversized systems also don’t dehumidify as well as properly sized systems because the run time is shorter, so occupants are actually paying more for discomfort.

Manual J calculations from the Air Conditioning Contractors of America (ACCA) take construction methods into account to accurately size a system. Following Manual J will take one or two hours per house and less when working with several similar houses. This added expense is almost always recouped immediately because a smaller system can be purchased.

Insulation

The conventional method: Install the minimum required amount of insulation as quickly as possible.

Job well-done: Follow the U.S. Department of Energy's recommended insulation levels and installation guidelines.

Using DOE’s recommended insulation levels and installation guidelines at www.ornl.gov makes homes more comfortable, a little quieter and much less expensive to heat and cool.

How insulation is installed is just as important as how much is put in. Compression reduces insulation R-value. Research by the Oak Ridge National Laboratory shows that wall insulation that settles to create even a 5% gap reduces the effective R-value of that wall up to 50%.

Batt insulation needs to fit snugly into stud cavities and around mechanical and electrical boxes. In oddly shaped spaces or areas with notable obstructions, loose fill like blown-in cellulose may be most effective. But at least cut in the insulation to fit rather than skipping spaces or compressing it over or under boxes, piping and wiring. Spray foam costs more than most other insulations, but because it air seals while it insulates, the cost of air sealing can be eliminated and the nooks and crannies can be more easily insulated.

Insulate pipes to conserve water-heating energy, and insulate recessed can lights that penetrate the building envelope.

Deliver High-Performance Homes With ‘Residential Construction Performance Guidelines: Contractor's Reference, 3rd Edition’

The fully revised and updated reference was created specially for builders and remodelers to help successfully manage customer expectations — and protect the bottom line — while delivering high-performance homes.

The reference includes 300 guidelines in 12 major construction categories, new remodeling-specific content, guidance on how to take critical measurements and more.

KB Home First to Earn National Housing Quality Certification

The latest issue of Quality Matters reports that KB Home has been named the first builder to earn the prestigious National Housing Quality (NHQ) Certified Builder Program certification for all of its operations nationwide. Following a rigorous audit by the NAHB Research Center of the quality assurance systems of each division, KB Home was awarded this unique recognition for its company-wide commitment to quality and customer satisfaction.

KB Home was also the first major builder to participate in the program, with its Las Vegas division earning the certification during the program’s pilot phase in 2004. Since then, no other home builder has certified more divisions than KB Home, a landmark achievement that sets the bar for others in the industry.

Designed to foster consistency and quality in building practices, NHQ certification is presented to home builders and trade contractors who have documented and implemented quality management systems and participated in systematic reviews of the implementation of those systems. Today, 45 home building companies are certified under the program.

Certification requirements ensure that all elements of a company’s quality assurance systems are aligned to improve quality performance and provide greater customer satisfaction. To achieve certification, each of KB Home’s divisions also independently sponsored numerous training sessions for their trades.

“At KB Home, what’s important to the customer is at the heart of everything we do — and we know that quality is the number-one priority for our home buyers,” said Jeffrey Mezger, president and chief executive officer of KB Home. “That’s why we are so proud to be honored with the nationwide National Housing Quality certification. Our customers can have the home of their dreams built to order just the way they want it, backed up by the peace of mind that this unique national quality certification offers them.”

KB Home has long been a pioneer in quality assurance in the home building industry. The builder was the first to earn the NHQ designation in many regional markets and has encouraged its critical trades to become NHQ-certified. Since implementing the NHQ program, KB Home has seen its customer satisfaction rise to its highest levels ever.

“We are extremely pleased that KB Home has taken the lead in implementing this program on a national level, a major accomplishment that speaks volumes about their commitment to quality,” said Michael Luzier, president of the NAHB Research Center. “The program is a powerful management tool that will continue to play a vital role in changing the business of home building. It is definitely making a positive impact for builders, their trades and home buyers, and we hope to see more builders of all sizes take the position that KB Home has by achieving NHQ certification for all its operations.”

Seventeen builders, small and large, are currently involved in the program’s consultative phase and are working toward certification by 2009.

Frank Alexander, NHQ program director at the Research Center, credits the consistent growth of the program to the support of industry partners. And, in the current slow housing market an increasing number of builders are seeking higher customer satisfaction ratings and a competitive edge.

National Housing Quality Award Entries Due April 30

Entries for the National Housing Quality Awards (NHQA) are now being accepted, and award applications for 2009 are due by April 30.

Patterned after the Malcolm Baldrige National Quality Award, the NHQ Award recognizes home building and trade companies for excellence in residential construction and business management practices.

NHQ Award applicants are judged by a panel of experts who evaluate the role that customer-focused quality plays in the company’s construction, business management, sales, design and warranty service.

Applicants benefit from a comprehensive evaluative report from the judges that provides insightful feedback and suggestions for improving business processes. For 15 years, the awards have been important tools for hundreds of home builders and trade contractors to assess and improve performance on critical factors to business success.

These criteria can help companies align resources, improve communication, increase productivity, boost effectiveness and achieve strategic goals.

Award categories include Gold, Silver, and Honorable Mention for home builder and trade divisions. The home builder awards are open to all U.S. companies that build or remodel residential homes using light construction methods; the trade contractor awards are open to all U.S. independent contractors that provide construction services to home builders or remodeling companies.

Winners are featured in a series of Professional Builder magazine articles that highlight their quality management principles and best practices. They also participate in an NHQ Award panel discussion held annually at the NAHB International Builders' Show.

For more information on the awards program or to request an application, e-mail Rita Knab at the NAHB Research Center or call her at 800-638-8556 x6225; or click here.

Making Money Starts With a Good Business Plan

A thriving business starts with a sound business plan, Tim Davis, a builder and author of “How to Make Money in the Home Building Business Without Losing Your Mind,” told convention-goers at the International Builders’ Show in Orlando last month.

“A good business plan will transform your banking relationships, attract investors and kick your business into high gear,” said Davis.

When crafting a business plan, Davis said that more does not necessarily mean better.

A five-page plan should define who you are; your product, market niche and target market(s); who is going to buy your product; how you are going to make money; and your cash flow projections and projected profits and losses.

To make bank dealings run more smoothly, Davis said that builders should create relationships with bankers, and not banks, and they should ask for what they want and not be intimidated by the process.

“Terms are negotiable with banks,” he said. “Go in with the attitude, ‘what can my business do to help this bank?’ You answer that question, and you sell the bank on your terms.”

Every builder has a brand, Davis said. “This is the image that first comes to the mind of the general public when they hear or read your company’s name.”

To generate a positive impression with the public, builders need to maintain a clean job site and an uncluttered office and ensure that subcontractors act in a professional manner.

To “keep your business going forever,” Davis encouraged builders to maintain a formal referral program.

“It’s not enough just to ask for a referral,” said Davis, who added that builders should advertise the program with their current as well as prospective customers.

Noting that written testimonials are one of the most powerful marketing tools a builder can have, Davis said that builders should interview their customers soon after a home purchase, transcribe their comments and have the buyer sign them.

“Often a customer will say they will be happy to write a testimonial. But the fact is, they get busy and rarely follow through. If you take the notes and send it back to them to read and sign, they will often be happy to oblige.”

When working with outside Realtors®, Davis said that both parties should establish written guidelines on what they each expect from the relationship, maintain frequent communication and answer two important questions in advance: What happens to the commission if the builder has to lower the price in order to get it sold and who gets the commission if the builder sells the house on his own?

The only reason for a builder to establish a Web site is “to make more money,” Davis said. When designing a site, Davis said that builders should avoid flash introductions, flash animation and fancy graphics. The site should be easy to navigate and omit links to other sites.

“If you link to another site, the chance of the customer coming back is one in 10,” he said. “If it’s hard to navigate the site, people will just click right out.”

When drawing up contracts, builders should always include the following six clauses:

To help manage change orders and options, Davis offered the following suggestions:

When working with subcontractors, builders should include the following clauses:

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.

Creating positive partnerships with brokers can enhance business and boost sales. Builders can learn how to profit from alliances with brokers by taking the “Increased Profits Through Effective Builder-Broker Cooperation” course from The NAHB University of Housing.

The course shows how to use common interests to connect with brokers and how to choose compatible sales professionals.

Find out where upcoming courses are being held here, or call 800-368-5242 x8154 for more information.

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.

Generation Y Is Ready to Buy, Technology Will Help Sell Them

With Generation Y beginning to enter the home buying market, home builders must re-think how to market and sell to them or risk losing them to the competition.

Generation Y home buyers ― whose leading edge is turning 27 this year — generally have more spending power than preceding generations at this stage in their lives because they are well-educated and have higher starting salaries out of college.

Generation Y consumers understand that this is a prime time for them to buy because of market conditions and that, potentially, they can have a mortgage payment that is less than what they would pay in rent. In addition, research indicates that more single females of this generation are buying homes because of optimal market conditions and their improved financial situation.

When shopping for a new home, Generation Y consumers want to live close to where they work and socialize but also be near friends and family. Most prefer living in the city or at least in close proximity.

Research also indicates that this generation of home buyers is willing to spend more money on a new home in order to get exactly what they want.

If home builders want to reach out to these potential customers, they must realize how important a role technology plays in their lives. Generation Y grew up with technology and rely on it to stay informed, especially when they’re making serious purchasing decisions.

Generation Y relies on e-mail, the Internet, PDAs, BlackBerrys and other electronic devices and, for many, these technologies are their preferred method of communication. In addition, studies show that eight out of 10 Generation Y home buyers use the Internet to research their home choices.

Once they have narrowed their choices, they expect their requests for more information to be answered quickly and for those answers to be personalized ― they don’t want to wait a week or two for a generic response. According to the technology and market research firm Forrester Research, based in Cambridge, Mass., Generation Y consumers will lose interest quickly if those trying to reach them don’t value quick communication.

Home builders looking to sell to this generation should utilize a customer relationship management (CRM) system with a strong marketing automation suite that can deliver detailed, personalized information in a timely fashion, nurture prospects until they turn into hot leads and collect data to build customer profiles.

Using a CRM tool, home builders can have personalized information sent automatically to potential buyers based on the questions they answer in a survey, such as what they are looking for in a home, what is their timeframe for buying and what kind of amenities are most important to them.

Generation Y consumers will appreciate getting a tailored response to their inquiries. This will also make them more likely to provide additional information about their buying preferences.

Armed with this type of information — especially the buying timeframe — a home builder’s sales team can be instantly alerted to hot leads, allowing them to launch follow-up programs to get these prospects into the office.

Responding quickly can be an important differentiator when reaching out to buyers, especially those using Web sites like Move.com or NewHomeSource.com that feature multiple home builders.

Using marketing automation and collecting buyer data are effective ways to build rapport, but it doesn’t end there. Time is very valuable to Generation Y and they want to use technology to create wish lists for the communities they are interested in and also for the design of their dream home.

Builders can use the Web and surveying to educate buyers about communities and assist them in identifying a home that meets their needs. Providing a list of communities that fit their needs lets home buyers narrow down their wish list and spend more time checking out the communities that are right for them.

By the time they actually visit the community, they already have a good idea of what they want in their home. The sales associate also has a much better understanding of their customers’ needs because of the information gleaned online and is much better prepared to offer effective recommendations.

Home builders can also use Web-based technology to provide convenience and personalization in the design process via a virtual design center. The center is accessible via a Web browser so home buyers can actually start looking at the available options for their homes. Enabling them to start designing their dream home also gives them more ownership and a connection to the home, sometimes even before they walk into the community.

The virtual design center provides this generation with the ultimate in convenience because it can be accessed 24 hours a day, seven days a week, and enable them to store and update their preferences. In the end, they will be happier with their decisions because they’ve had more time to think them over, which, for the builder, can reduce cancellations.

After the house is sold, home builders can continue to communicate with customers via e-mail or a Web portal about things like warranty information, maintaining the connection with the home buyer and encouraging referrals.

Through a deeper knowledge and use of Web-based technology so central to this generation’s buying habits, home builders can provide a better, more personalized customer experience, achieve a faster sales cycle, gain a deeper understanding of customers’ needs, sell more options and build stronger, more profitable relationships.

Steve Lewkowitz is the home building and real estate professional services director for CDC Software’s Pivotal CRM, a leading line of customer relationship management solutions. For more information, e-mail Lewkowitz, or visit www.pivotal.com/homebuilders.

Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.

The course shows how to use common interests to connect with brokers and how to choose compatible sales professionals.

Find out where upcoming courses are being held here, or call 800-368-5242 x8154 for more information.

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.

Attend 50+ Symposium in New Orleans on May 19-21

Many builders in the 55+ market have reported little or no change in sales and traffic since the downturn, with 55+ households accounting for 21% of new home sales and 18% of the total new home buying market.

The symposium features more than 35 sessions on redefining lifestyle communities, design, development and operations, sales and marketing, technology and more.

Register online by April 30 and take advantage of the special 50+ Housing Council member rate. Join the council to take advantage of the members-only discount.

For more information, see the symposium brochure on the NAHB Web site, or e-mail The NAHB University of Housing’s Office of the Registrar at registrar@nahb.com, or call 800-368-5242 x8338.

The CAASH designation gives housing professionals serving this rapidly burgeoning market the essential knowledge, tools and skills that will help them succeed.

Margaret Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry.

Help Rebuild New Orleans at 50+ Housing Symposium

Two pre-conference days, Saturday and Sunday, May 17-18, have been reserved for the rebuilding project and symposium attendees are encouraged to volunteer.

Attendees participating in the rebuilding project will work on the NAHB house begun on May 10 by volunteers attending the Green Building Conference, also in New Orleans. The Green Building Conference will be held May 11-13.

Since Hurricane Katrina struck New Orleans in August 2005, more than 1,700 volunteers have worked with Rebuilding Together New Orleans to help more than 50 low-income, elderly and disabled residents return to their homes. The volunteers have provided more than 40,000 hours of labor worth nearly $1.3 million.

Symposium attendees, as well as others interested in participating, are encouraged to volunteer on one or both days. All skill levels are welcome.

Participants must be 18 or older. Transportation from the symposium at the Sheraton New Orleans Hotel to the building sites and all tools and building materials, lunch, water and T-shirts will be provided.

For more information about the symposium or how to volunteer or make a donation to Rebuilding Together New Orleans, visit www.nahb.org/build4boomers, e-mail Janice Coyle at NAHB, or call her at 800-368-5242 x8386.

To be a corporate sponsor for the project, e-mail Harris Floyd at NAHB, or call her at 800-368-5242 x8208.

The symposium will also feature the most innovative new community designs during the Best of 50+ Housing Awards gala.

The CAASH designation gives housing professionals serving this rapidly burgeoning market the essential knowledge, tools and skills that will help them succeed.

Margaret Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry.

Builder Confidence in Condo Market Erodes Further

Builder confidence in current condominium market conditions ended on a low note last year, according to NAHB’s Multifamily Condo Market Index (MCMI) for the fourth quarter of 2007, falling to 18.8, down nearly 11 points from the same period a year earlier.

"Given that the condo market became so overheated during the peak of the housing boom, it is not surprising that the market now continues to struggle, considering the difficulties in the mortgage sector and the fears about the economy in general," said David Seiders, NAHB's chief economist. "It is going to take time for the extra inventory to be absorbed."

The index is derived from a quarterly survey of multifamily builders and developers. On a scale of 0 to 100, a rating of 50 generally indicates an equal number of positive and negative responses.

The component of the index gauging current conditions in the condo market never rose above 25 last year.

Fourth-quarter builder expectations for the next six months were only slightly more optimistic, standing at 29.2 on the index, down from 49.1 at the end of 2006.

Responding to a series of special questions in the MCMI survey for the fourth quarter, 28% of survey respondents reported higher or somewhat higher sales cancellation rates compared to a year earlier. The average sales cancellation rate was 19% and the median was 12%.

About two-thirds of builders reported that they had lowered prices to bolster sales. The average price reduction was 11%. When asked about other marketing strategies they were using to shore up sales, more than 70% of the respondents said they were including optional items at no costs, paying closing costs or fees or absorbing financial points for their buyers.

For more information, e-mail Ann Marie Moriarty at NAHB, or call her at 800-368-5242 x8350.

The Housing Credit Certified Professional (HCCP) is a specialized designation for developers, property managers, asset managers and others working in the affordable housing industry.

It is the leading designation in the Low-Income Housing Tax Credit industry, representing the highest level of competency and knowledge, as well as a commitment to the highest ethical standards.

Remodelers Have a Passion for Community Service


	Remodelers with the Home Builders Association of Hartford County in Connecticut built an accessible ranch home for wounded Iraqi War veteran Marine Sergeant Jared Luce and his wife last year.

“Volunteering is the rent you pay for your time on earth,” says Alan Hanbury, CGR CAPS, of House of Hanbury Builders in Newington, Conn., and many of his fellow remodelers agree — in both words and deeds.

The Collier Building Industry Association (CBIA) Remodelers Council in Naples, Fla. earned the NAHB Remodelers’ 2007 CADRE award for community service by renovating the home of Dan Davison, a motivational speaker and quadruple amputee. The remodelers made Davison’s condominium more accessible and added modern and practical features to complement his active lifestyle and many interests.

The Davison condominium renovation is just the latest community service project tackled by the Collier remodelers.

“We are always looking to help someone who is giving back to the community who could use our services,” said Tom Lykos, CAPS, of The Lykos Group and a former chairman of the CBIA Remodelers. “It is our chance to give back to the community that supports our businesses, and it’s probably one of the most rewarding things we do.”

“For these projects to be successful, you have to get a small core group of committed individuals to divide the work and let them do what they do best,” Lykos said. His fellow remodelers were eager to volunteer for the Davison project and generously donated time, materials and money to the remodel.

Remodelers renovate the Naples, Fla. home of Dan Davison, a motivational speaker and quadruple amputee.
Two Homes for Wounded Iraqi War Veterans

Both projects were led by general contractors and completed last year. Members donated time, services, material and funding for the projects.

The Hartford County HBA’s remodeling council has been involved in annual community service projects for the last 17 years. According to Ann Beaudin, the council’s coordinator, in addition to Homes for Our Troops, remodelers supported projects for organizations such as Habitat for Humanity and Rebuilding Together to help families in need and were involved in many local community projects.

“As remodeling professionals, it’s a good way of giving back to the community,” said Beaudin. “It also helps to establish a positive image about the mission and work of the remodelers council and the HBA.”

“Our annual community service projects have all been well received,” added Russ Liljedahl, CGR, CGB, CAPS of Liljedahl Bros., Inc. in West Hartford and a former remodelers council chairman. “We have done improvements to local playgrounds, helped families in need and recently teamed with the West Hartford Exchange Club to provide repairs to a local youth shelter.”

Such projects, he said, are “a good time for remodelers to help the community and bond together with other professional contractors.”

Among recent projects, remodelers in the Greater Iowa City Area Home Builders Association have used universal design principles to remodel a home for a person with cerebral palsy, built an outdoor shelter at a camp for underprivileged children and created ramp kits that can be quickly assembled for people who need ramps to improve accessibility.

“The remodelers are awesome,” said Joan Tiemeyer, EO of the Iowa City HBA. “Their hearts are into everything they do. They want to give back to the community.”

Remodelers with the Home Builders Association of Northern Colorado created a wheelchair ramp program for community residents in need and now build ramps on a regular basis. The remodelers raised money through the HBA’s new home and remodeling show to establish a foundation to fund the ramp program. Last year, the remodelers built six ramps.

The remodelers are the “movers and shakers of the organization.” said Dottie Weber, EO of Northern Colorado HBA. “They are the best group of volunteers for absolutely everything.”

Like their counterparts in Iowa City and northern Colorado, remodeler members of the Master Builders Association of King and Snohomish Counties in Washington, created a Rampathon program for residents in need, according to Jay Schupack, executive director of the Master Builders Care foundation. The remodelers also volunteer to paint homeless shelters for the foundation’s Painting for Tomorrow project.

“As the committee chair for this project, I was fortunate to have a first-rate team that pulled together to complete the project in five days,” said Rob Hellyer, CGR, GMB, CAPS, of Premier Remodeling and Construction in Houston.

“Our home was perhaps the only one in which no materials or labor were paid for. Everything was 100% donated by suppliers and trade contractors of the remodeling companies involved,” he noted. “Everyone involved found it extremely gratifying on many levels.”

“Of course we were doing good for a deserving family, but we also were being a part of something much bigger, Hellyer continued. “For myself as the committee chair, I saw what was possible when a team of such highly motivated and skilled people pulled together for a common goal.”

“It’s really neat to put on the tools and work with fellow remodelers — even competitors — and help someone directly,” said Scott Sevon, CGR, GMB, CAPS, a remodeler from Palatine, Ill. “These opportunities have touched me in a powerful way and inspire me to be involved.”

“If we work in and claim to be a part of the community, we owe our support — in the measure available to each of us — to its well-being,” said Greg Miedema, CGR, CAPS, of Dakota Builders in Tucson, Ariz. “The sense of pride and satisfaction ought to be reward enough.”


	One of two ranch homes built last year for injured Iraqi veterans by remodelers and other members of Builders Association of Hartford County.

Earn NAHB’s New Green Designation at the National Green Building Conference

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Both required courses for the CGP will be held at the National Green Building Conference, May 11-13 in New Orleans.

The Certified Graduate Remodeler (CGR) designation emphasizes business management skills as the key to a professional remodeling operation.

Remodelers who earn the CGR become members of an exclusive national program and gain recognition as industry leaders.

To learn more about the CGR designation, visit www.nahb.org/CGRinfo, or call The Professional Designation Help Line at 800-368-5242 x8154.

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering valuable advice to your customers on the process of selecting a remodeler.

The brochure guides consumers from the dream to the reality of having their homes remodeled by skilled and trained professionals. Sections include what to look for in a professional remodeler and what questions to ask.

To view or puchase this publication online, click here, or call 800-223-2665 to order.

NAHB Remodeling Channel Provides Valuable Remodeling Info

The channel, which is update weekly, provides remodeling information about everything from legislative and regulatory news to tips on increasing profit and efficiency.

The channel contains the latest information on the remodeling market, legal issues, business management, consumer trends, green remodeling, lead paint, aging in place and more.

Patrick Mahoney, CAPS, of the John T. Mahoney Remodeling Co., based in Germantown, Tenn., said the channel helps him stay competitive and maintain a cutting edge.

“The Remodeling Channel is a great way to keep up with the remodeling industry and a good way to keep up with NAHB Remodelers, as well,” said Mahoney, a member of the Memphis Area Home Builders Association Remodelors Council.

Earn NAHB’s New Green Designation at the National Green Building Conference

Both required courses for the CGP will be held at the National Green Building Conference, May 11-13 in New Orleans.

The Certified Graduate Remodeler (CGR) designation emphasizes business management skills as the key to a professional remodeling operation.

Remodelers who earn the CGR become members of an exclusive national program and gain recognition as industry leaders.

To learn more about the CGR designation, visit www.nahb.org/CGRinfo, or call The Professional Designation Help Line at 800-368-5242 x8154.

To view or puchase this publication online, click here, or call 800-223-2665 to order.

Systems-Built Approach Reduces Wasted Materials

The guide's eight tech sets include information on resource and waste management and suggest several opportunities to reduce construction costs by taking a systems-built approach:

The PATH guide can help builders meet the requirements of green building rating systems, including NAHB’s Model Green Home Building Guidelines (GBG), and the soon-to-be-released ICC/NAHB National Green Building Standard, which will be the first ANSI-approved American National Standard for green building.

In a scoring tool based on the NAHB guidelines now available for the NAHB National Green Building Program, a home earning 237 total points receives a bronze rating, 311 a silver and 395 a gold.

Visit the Guide to Green Building to learn about PATH’s other recommended green practices: low-impact development, energy-efficient systems, resource-efficient plumbing, good indoor air quality and home owner education.

For information on building systems resources available from NAHB, e-mail Tony Gacek, or call him at 800-368-5242 x8357. For information on green building resources, e-mail Calli Schmidt, x8132.

Participants will tour several of the top modular factories, getting an insider’s look at the manufacturing process as well as an opportunity to make important contacts.

'Lean' Factory Home Building Boosts Market Share


	The Shelter Systems plant in Westminster, Md. uses just-in-time manufacturing.

By Susan Conbere, D&R International

Since 2005, Building Systems Councils member and Partnership for Advancing Technology in Housing (PATH) partner Shelter Systems has been using just-in-time manufacturing associated with Japanese car companies to streamline its production processes for engineered wood products and roof and floor trusses. The result has been flexible scheduling — the ability to deliver orders to customers when they need them, and not a day (or maybe even an hour) before.

The essence of lean manufacturing is eliminating all forms of waste — from materials to time. For Shelter Systems, the new approach has been highly cost-effective. Labor is used more efficiently, employees are more satisfied in their jobs and expensive inventory isn’t sitting around. Lean manufacturing also yields a higher-quality product, since lumber and other materials don’t sit out in the weather waiting to be used.

It takes a visionary company to commit to the painstaking process of designing a plant to handle materials so efficiently. Vice President Joe Hikel talked with PATH about the two-year process of building a plant in Westminster, Md.

Shelter Systems had been in business for 28 years when it decided to expand to accommodate growing demand. How to expand was the question. Hikel and his father, Dwight, observed operations in 25 other truss plants around the country and abroad. Although they gathered a lot of good ideas, they found that most growing companies simply build additions. But Hikel was studying Toyota’s use of lean manufacturing in an MBA program; he knew that just adding on wouldn’t yield the return on investment he wanted.

Having looked outside without finding a solution, Hikel turned inward, delegating a group of 15 of the company’s manufacturing team leaders to design a new process. Knowing intimately exactly how the plant worked, they began to develop plans for a more efficient facility.

As the deliberations proceeded, the company started to see a shift away from its top-down management structure. In addition to the 15 employees who were designing the plant, another 15 were asked to design the office, creating a new feeling of ownership and job satisfaction among them.

After two years of meetings, Hikel hired a design-build general contractor to put the plant together.

“Other plants are constrained by their buildings,” says Hikel. “We built the building around the process. The driver was reduction in cycle time: shorten the distance that material moves to make it move faster, which would help us respond to our customers more quickly.”

In the plant, lumber moves in only one direction, traveling in straight lines. Lumber from a specially designed storage system travels from saw to assembly, out the door and on to a delivery truck without ever crossing a different job. Since ceilings in the plant are 35 feet high, lumber can be stacked much higher, placing 80% of all the lumber no more than 25 feet from the saw that cuts it. This maximizes storage space and minimizes travel time — for people and wood. At its peak, the system has been able to attain through-put rates of more than 5,000 sticks of lumber per shift.

“In this business, cycle time is typically two to three days and the lead time is weeks,” says Hikel. “It only takes us five hours to build a truckload of trusses for a townhouse, house or apartment building.”

The system saves the company about 5% of sales in labor costs. “If your employees are picking up a piece of wood 15 times rather than three times, that’s waste,” he says.

Because products can be manufactured with such short turnaround, the company can respond unusually quickly to customers’ erratic schedules.

“Since job-site conditions are always changing, we wait until the client is ready. That means we wait until the last minute to build our trusses. We don’t have products lying around the plant or in the yard; once they’re finished, they’re delivered. We’re getting the product there within one day or even hours of the time it needs to be used. The builder also doesn’t have to have my products sitting out on the job site in the weather. He’s getting a hot-off-the-press product.”

The biggest challenge for Hikel was convincing customers that he could deliver products just in time.

“At first, people couldn’t believe it. But our market share has increased — even though the building industry is down — because we do what we say we can do.”

Hikel offers the following advice to other manufacturers who might be considering lean: “Take your time. Focus on the cycle time. Focus on the customer. Include your team.”

Manufacturers can learn more about lean manufacturing from a recent PATH report, “Applying Lean to Factory Home Building.” Although the topic is manufactured housing, the same principles apply to other kinds of manufacturing.

Susan Conbere is a writer/editor with D&R International, a contractor for PATH. D&R is based in Silver Spring, Md. She can be reached at 301-588-9387.

For more information about building systems resources from NAHB, e-mail Tony Gacek at NAHB, or call him at 800-368-5242 x8357.

Participants will tour several of the top modular factories, getting an insider’s look at the manufacturing process as well as an opportunity to make important contacts.

Five Things Builders Should Know About Home Technology

By Keith Davis, Residential Technologies, Inc.
To the unitiated or those considering adding home technology features and options to their new-home selections, home technology can seem rather daunting. But it need not be.

The following are five simple things builders should know about home technology to help ease them into this growing opportunity in housing:

The Home Technology Alliance is a partnership between NAHB and the Custom Electronic Design and Installation Association (CEDIA), an international trade association of companies that specialize in designing and installing electronic systems for the home, to meet the growing consumer demand for home technology — from home theaters and electronic gaming to home security and home health care.

The partnership taps CEDIA’s expertise in applications and NAHB members’ knowledge of the new-home and remodeling markets to offer consumers new choices in home automation that can improve their quality of life.Keith Davis is president of Charlotte, N.C.-based Residential Technologies, Inc., an electrical systems contractor with more than 25 years experience in the electrical, security and home technology industry. His firm is dedicated to lighting control, renewable energy, specialty electrical systems and energy management and control. He participates in the Home Technology Alliance and is an NAHB member.

The Custom Electronic Design Installation Association (CEDIA) is a founding sponsor in the Home Technology Alliance and an international trade association of companies that specialize in designing and installing electronic systems for the home.

CEDIA members are established and insured businesses with bona fide qualifications and experience in this field. CEDIA serves as a source for Electronic Systems Contractors (ESCs).

For more information on CEDIA, visit the association’s Web site at www.cedia.org. To find an ESC, click here.

Boost Business Skills During National Designation Month


	March is National Designation Month

NAHB members have an opportunity to jump-start or complete their designation this March during National Designation Month, now in its sixth year and sponsored by The NAHB University of Housing.

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 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.

For more information on National Designation Month in March, visit www.nahb.org/ndm, or call the Professional Designation Help Line at 800-368-5242 x8154.

Education Calendar

Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.

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.

S.C. Builders Buoyed by Liability Insurance Ruling

In a long awaited decision, on March 10 the South Carolina Supreme Court found that faulty workmanship by a subcontractor causing property damage to a home was covered by a builder's comprehensive general liability insurance policy.

Builders purchase comprehensive general liability insurance covering accidental on-the-job property damage to help manage the risk of construction defect claims by home owners.

The case — Auto Owners Insurance Company, Inc. v. Virginia T. Newman and Trinity Construction, Inc. — is significant because insurers across the country have been denying the claims of builders for construction defects arising from the work of their subcontractors. If the insurers prevail, this could create a coverage gap that would be difficult to fill.

NAHB joined the South Carolina Home Builders Association in filing a friend of the court brief in support of Newman in the South Carolina Supreme Court. To date, NAHB has filed similar amicus briefs in Arizona, Florida, Kansas, Michigan, Pennsylvania, Texas and several federal courts, arguing that that the insurers’ interpretation of coverage has been rigid, overly broad and not supported by the language in their policies.

Less than one year after moving into her new home in Mount Pleasant, S.C., Virginia Newman sued her builder, Trinity Construction, for breach of contract, negligence and breach of warranty. The suit said that construction deficiencies in the home, primarily related to the installation of stucco siding, had caused severe damage to the structure and substructure of the house. The parties agreed to arbitrate the dispute and the arbitrator issued an award in Newman’s favor.

After the decision, Trinity’s insurer, Auto-Owners, Inc., sought a declaratory judgment that the arbitrator’s award was not a covered loss under its insurance contract with Trinity. At trial, the parties stipulated that subcontractors performed all of the work on Newman’s home. The trial court, sitting without a jury, found that the damages to the home constituted an “occurrence” and were covered under the policy.

In affirming the trial court’s decision last week, the South Carolina Supreme Court noted that CGL policies in the home construction industry are designed to cover home builders against the risk of post-construction claims for damage to a home caused by alleged construction defects.

Significantly, the court said that the underlying moisture damage to Newman’s home could neither be assessed nor repaired without first removing the entire stucco exterior; as a result, the trial court correctly concluded that the arbitrator’s allowance for replacement of the defective stucco was covered by the CGL policy as a cost associated with remedying the other property damage that resulted from an “occurrence.”

The decision is particularly heartening for builders because the law in South Carolina on this issue has been in a state of flux following the state supreme court’s decision in L-J, Inc. v. Bituminous Fire and Marine Insurance Co. (S.C. 2005).

In that case, the court concluded that premature deterioration of a subdivision's roads was caused by various negligent acts of the contractor during the design, preparation and construction of the road system and that this faulty workmanship did not fall under the insurance policy’s contractual definition of “occurrence.” The opinion, however, did appear to leave open the possibility that in a different scenario, faulty work by a subcontractor resulting in other damage to a home might constitute an “occurrence.”

In the Newman case, NAHB and the South Carolina HBA urged the court to affirm the trial court’s order on the “occurrence” issue on the grounds that the trial court had correctly interpreted the L-J, Inc. decision as holding that property damage to another part of the structure caused by a subcontractor’s defective work can be caused by an “occurrence” within the meaning of the general contractor’s general liability insurance policy.

Last week’s decision is consistent with recent rulings by the highest courts in other states, most recently Florida, Tennessee and Texas. Those courts held that damage to a structure caused by the work of a subcontractor can constitute “property damage” caused by an “occurrence” within the meaning of the builder’s CGL policy.

For more information, e-mail David Jaffe at NAHB, or call him at 800-368-5242 x8317.

Team Builders Interns Expand Horizons at Builders’ Show

After completing their internships with Pulte Homes, the 2007 class of Team Builders students traveled to Orlando last month to attend the International Builders’ Show (IBS) and gain a wider understanding of the housing industry.

Students participating in the program are introduced to the home building industry and Pulte Homes and then placed at job sites and offices across the country, according to their area of study. The internships give them insights into how a major home building company conducts its day-to-day operations.

At the IBS, Team Builders students worked with Pulte staff members throughout the show to man its Building Careers Job Fair booth and talk to NAHB student members about their internship experience with the home builder.

The students also had time to observe the NAHB Student Chapters Residential Construction Competitions, walk the exhibit floor, attend educational seminars, participate in the Diversity and Inclusion in Construction Luncheon and spend time networking with industry leaders at the job fair.

“I especially enjoyed sharing my experiences with other LOFT interns, attending workshops, working the Pulte booth as well as seeing all the interesting new products available,” said Mitchel Allen-Rivera, who is studying communications and business at Arizona State University. ”It has provided me with a better understanding of the home building market and customer base.”

Lowe’s Home Improvement will join Pulte Homes in implementing Team Builders internships this summer.

For more information on NAHB Student Chapters, e-mail Page Browning at HBI, or call her at 800-795-7955 x8918.

Home Builders Institute Offers New Program to Teach Hispanic Adults English Sed de Saber™-Construction Edition is an easy-to-use, take-home learning tool created exclusively for the construction industry by the Home Builders Institute to improve communication, quality and safety on the job site.

The product, now available at www.seddesaberconstruction.com, uses proven LeapFrog technology to allow workers to listen, record and play back their pronunciation of more than 500 vocabulary words and 340 phrases. Participants who practice 30 minutes each day will complete the program in just four months. Learning at home, on their own time, also eliminates scheduling conflicts.

Sed de Saber™-Construction Edition was developed by a team of subject matter experts assembled through HBI — including superintendents, craft skills experts, remodelers and builders — to ensure that the information is relevant to today’s home building workforce. To address worker safety issues related to the language barrier, HBI created a seventh book based entirely on the NAHB-OSHA Job Site Safety Handbook.

NAHB members can purchase the learning system, all seven books and a skills assessment to chart employee progress for $395 per kit. The non-member price is $495. Order today and empower your workers to learn English at www.seddesaberconstruction.com.

Energy Star Honors Whirlpool for Energy-Saving Appliances

In honor of its outstanding contribution to providing innovative products that help consumers reduce their utility bills and contribute to a reduction in greenhouse gas emissions, Whirlpool Corporation has been recognized with its third consecutive Energy Star Sustained Excellence award from the Environmental Protection Agency and the Department of Energy.

Whirlpool will accept the award — its ninth from Energy Star — at ceremonies in Washington, D.C. on April 1.

Whirlpool has been a long-term partner with Energy Star and helped create guidelines that were the precursor of its program for appliances.

For more than 30 years, the company has been developing high-performance appliances that help conserve natural resources and allow home owners to use energy and water more efficiently. It is the only appliance manufacturer that focuses on energy and water conservation “across the board” — from design to manufacture and distribution, to the end of the product life-cycle.

Whirlpool Corporation offers consumers the largest breadth of Energy Star-rated qualified appliances. Its more than 700 innovative models include:

Whirlpool’s Inside Advantage program offers powerful brands, innovative products, targeted services and consumer insight to support building professionals. By staying closely involved with the building industry, the manufacturer has been able to help support sustainable construction.

"At Whirlpool, we believe that focusing on energy, water and the environment isn't about narrowing the field of choices, it's about broadening horizons,” said Mike Todman, president, Whirlpool North America. “We continually strive for efficiency improvements while always keeping in mind that exceeding the expectations of the consumer is our goal."

For more information on Whirlpool Corporation and its offerings for building professionals, click here or call 800-253-3977.

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

NAHB-Produced Programs on DIY, Fine Living and HGTV

The NAHB Production Group produces weekly television shows on DIY, Fine Living and HGTV for consumers. The following is the latest lineup:

HGTV is seeking developers, builders and architects to create dream homes for the network’s Dream Home Sweepstakes. To learn more, click here.

The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use.

The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.

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.

Willis Homes Honored for Rebuilding Homeless Shelter


	John Willis Homes and its trade partners donated 100% of the costs to renovate a townhouse for HomeStretch, a nonprofit human services organization that shelters homeless families in the Atlanta area.

John Willis Homes of Duluth, Ga. was awarded the Silver 2007 Builder Achievement Award for Outstanding Community Service from the National Housing Endowment at the International Builders’ Show last month for remodeling transitional housing for Atlanta-area homeless families.

Willis Homes remodeled a townhouse for HomeStretch, a nonprofit human services organization that provides temporary housing for homeless families with young children.

“We were able to get the total cost donated,” said John Willis, owner of Willis Homes. “It was basically a joint venture between our company and our suppliers.”

Willis Homes provided extensive rehabilitation to the townhouse — new floors, upgraded bathrooms, a renovated kitchen, improved wiring and plumbing, new closet doors, fresh paint and more — according to Ann Carey, executive director of HomeAid Atlanta, a local chapter of HomeAid America, which works in partnership with the Greater Atlanta Home Builders Association.

HomeAid Atlanta directed the renovation. Participating Willis staff and suppliers donated 100% of the costs.

The remodeled townhouse is one of 27 housing shelters operated by HomeStretch, according to Nancy Coveny, executive director of the Roswell, Ga.-based nonprofit. HomeStretch currently provides temporary housing for 21 families — 100 people, including children.

“We’re trying to lead the families back to self-sufficiency,” says Coveny.

In addition to temporary housing, HomeStretch provides its residents with counseling and skills to help then live independently — including basic family budgeting, proper nutrition, car maintenance, how to buy a home and more, Coveny says.

Families pay minimal rent and no utilities while living in HomeStretch homes, Coveny said, but they are required to pay down their outstanding debts, improve their credit rating and save money, some of which can be used as a downpayment for a Habitat for Humanity home.

According to Coveny, studies of HomeStretch's effectiveness indicate that families who have completed the program are living in “some sort of permanent housing” a year later, including homes that many of the families eventually own.

“It’s a great continuance of care,” said Carey of HomeAid Atlanta, while noting that Willis Homes renovated the townhouse just in time.

“Homelessness is growing, especially with the way the economy is now,” said Cary. “We’re seeing more and more families who are homeless, particularly women with children, and we’re seeing more women who are heads of households having a tough time finding housing in Atlanta.”

The renovation was a success in part because John Willis “has been phenomenal and has a great reputation,” Cary added. “His trade partners love him. When he asks for help, his trade partners always come through.”

The renovation was part of John Willis’s personal five-year commitment to HomeAid Atlanta. He was a founding board member, served as the organization’s president and continues to serve on its board.

Willis also recruited his staff to volunteer at and sell tickets for last year’s Project Playhouse, an annual fundraiser for HomeAid Atlanta. His staff sold $5,000 worth of tickets and he sold an additional $5,000 in sponsorships for the event.

Willis also led the organizing committee in 2004 that launched the annual event and in 2005 built a playhouse valued at $17,000.

In honor of winning the silver builder achievement award, John Willis Homes received a $5,000 donation from the endowment to give to the charity of its choice, HomeAid Atlanta.


	John Willis (far left), owner of John Willis Homes, led the organizing committee that launched Project Playhouse, HomeAid Atlanta’s signature fundraising event. The playhouse was built in 2005.

Seven other builders were honored with Builder Achievement awards during a presentation at the builders' show last month.

The awards were established through a grant to the endowment by Isaac Heimbinder, chairman of Rockville, Md.-based BuildTopia, a provider of Web-based construction management software for home builders, and his wife Sheila.

For more information about the awards, e-mail Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447.

Applications for Centex ‘Build Your Future’ Scholarships Due April 7

Applications for the Centex “Build Your Future” Scholarship fund for students pursuing careers in the residential construction industry for the 2008-2009 academic year are due Monday, April 7.

Last year, Centex awarded $51,000 in scholarships to 34 students through the National Housing Endowment, the philanthropic arm of NAHB

The Centex "Build Your Future" scholarship program encourages students to further their education in such industry-related fields as construction management, construction technology, civil engineering, architecture, design or any of the trade specialties at the college or university they are attending.

Preference is given to students who are active NAHB Student Chapter members at their university or college and who maintain a 2.5 GPA on a 4.0 scale in all course work and a 3.0 in their core curriculum courses.

Scholarship applications are reviewed and awarded by a small group of Centex employees.

Established in 2000 by Centex Homes with a $1 million pledge, this scholarship was created to help address the pressing need for educating and training managers. Since then, Centex has awarded more than $200,000 to students attending residential construction programs across the country. The scholarships provide students with tuition assistance.

Applicants interested in applying for the scholarship funds must be pursuing study in a housing-related program, be registered as a full-time student this coming fall, be a rising sophomore in a two- or four-year college or university and have at least one full academic year of course work remaining after the scholarship is received.

The endowment administers 12 scholarship programs and awards more than $400,000 each year to students pursuing careers in residential construction and related fields.

HBAs: Challenge/Build/Grow Proposals Due by March 28

The National Housing Endowment, the philanthropic arm of NAHB, is seeking proposals from state and local home builders associations through its Challenge/Build/Grow (CBG) matching funds initiative.

The endowment's board of trustees will award HBAs $25,000 through the grant initiative this year.

Through the program, state and local associations are eligible for matching challenge grants up to $5,000.

Since the program was launched in 2001, more than $150,000 has been awarded to associations to support local initiatives on education, land use, labor shortages/worker training and more, and to help build new partnerships at the state and local levels.

HBAs are encouraged to find opportunities for new partnerships in their communities to assist local programs targeting issues of importance to the industry — including job training, image building and educational and scholarship support.

“Building homes for the nation is too important a priority to neglect the education and training that will be needed to support the residential construction industry,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “Through the Challenge/Build/Grow Matching Grant Initiative as well as other grants, the endowment is answering the call by meeting the industry's long-term challenges with bold thinking and action.”

HBAs requesting grants are encouraged to seek advice on their proposals from the endowment staff well in advance of the deadline.

Renew, Join NAHB PRx by April 15 for Latest Industry PR Alerts

NAHB members and staff members of affiliated home builders associations who manage the public relations or public affairs for their company or association should sign up for or renew membership to NAHB’s Public Relations Exchange (PRx) by April 15 so they can receive the latest news and resources on building industry-related public relations.

PRx e-mails are sent out on an as-needed basis when there is breaking news or new resources are available that will help members or association staffs with their public relations strategies or campaigns.

More than 400 members have signed up to receive periodic PRx public relations-related news and resources that include:

NAHB is currently updating the list of recipients for PRx e-mails. New and current PRx recipients must click here by April 15 to receive future PRx e-mails.

Only NAHB members or staff members of NAHB-affiliated home builder associations may sign up to receive PRx e-mails.

For more information, e-mail Brooke Fishel at NAHB, or call her at 800-368-5242 x8061.

Drive Away With a Shiny New $500 GM Private Offer

NAHB members can receive $500 towards the purchase or lease of most new GM vehicles, whether for business or personal use.

Through Jan. 2, 2009, qualified members may purchase or lease a new 2007, 2008 or 2009 model year Chevrolet, Buick, Pontiac, GMC, Saturn, HUMMER, Saab or Cadillac passenger car, light-duty truck, van or SUV and use the NAHB private offer on most vehicles.

The offer does not include Cadillac CTS-V, XLR-V and STS-V, Chevrolet Corvette Z06, HUMMER H1, hybrid vehicles and medium-duty trucks.

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

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.

New: Register Online for Spokesperson Training

Online registration is now available for NAHB Spokesperson Training sessions at the upcoming NAHB spring board meeting in Washington D.C. in May.

With NAHB's new faster and more convenient registration process, members can now register securely with a credit card for one or both of the Spokesperson Training sessions — “Interview Skills” and “Presentation Skills.”

In the "Interview Skills" session of the Spokesperson Training program, NAHB members learn how to give clear, concise answers in a high-pressure, spur-of-the moment interview. It helps participants master strategies for broadcast and print interviews, including message development.

Members who attend the "Presentation Skills" session learn how to confidently prepare and deliver dynamic presentations to any audience. "Presentation Skills" focuses on how to organize and deliver a speech and presentation with accompanying question and answer sessions.

Both one-day sessions are from 9:00 a.m.-4:00 p.m. Registration is limited to 12 participants.

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.

More than 15,000 NAHB leaders have taken Spokesperson Training since the program began in 1979.

For more information, e-mail Brooke Fishel at NAHB, or call her at 800-368-5242 x8061.

UPS Offers Up to 30% Discount to NAHB Members on Shipping

NAHB and UPS, the world’s largest package delivery company, have joined forces to offer NAHB members discounts of up to 30% on shipping.

The NAHB shipping discounts include domestic air and ground, international export and international import.

Association members can also take advantage of hassle-free on-line shipping, 24/7 access and advanced package tracking at your fingertips.

NAHB members are eligible for discounts up to 30% to help manage costs with no catch — and no minimums.

The shipping discounts — which increase the more packages or letters the user sends — will be applied once enrollment is complete.

The enrollment process is fast and easy and is available to NAHB members through the Web site: www.savewithups.com/nahb.

For more information on UPS savings and the complete Member Advantage program, visit www.nahb.org/MA.

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.

Introducing the Hertz Green Collection. Reserve and Conserve.

Hertz offers fuel efficient, environmentally-friendly cars reservable by make and model.

Now you can reserve fuel efficient, environmentally-friendly cars that are both easy on the wallet and suitable for families and small groups traveling together.

Reservable by specific make and model, with an EPA highway fuel efficiency rating of 28 miles or more per gallon, the Hertz Green Collection features:

To check rates or make a reservation, visit hertz.com, call your travel agent or call Hertz at 800-654-2200. Be sure and mention the Discount CDP# 51046 to receive special NAHB Member Advantage discounts.

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

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.

Calendar of Events

Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.

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.

Nation's Building News Online: March 17, 2008

Research Weighs Consumer Preferences in Soft Market

Floor Plans: BALA Home — Actually, Cottage — of the Year

Builders in Kansas City Bust Housing Myths in the News Media

Case Says Housing Prices 'Flat' in Most Local Markets

Affluent Are Also Losing Homes

Swooping in From Overseas

Utah Seeing Less of Housing Slump

Builders Stand Pat Here, Put Up Sticks Elsewhere

Regulations Are at the Root of U.S. Housing Mess

The House in a Box

Congress, White House Step Up Efforts to Rescue Economy

NAHB Steps Up Call for GSE Reform After Syron Remarks

Fund Helps Builders Fight Battles in Arizona and Florida

Builder Confidence Unchanged in March

Strong Growth Projected for Cement Demand Through 2030

NAHB Members Urged to Complete Economic Data Census Form

Useful Links to Monitor Economic and Housing Trends

Builders' Tip: How to Cope-Cut Quarter-Round Trim

Five Common Construction Mistakes Undermine Sales

KB Home First to Earn National Housing Quality Certification

National Housing Quality Award Entries Due April 30

Making Money Starts With a Good Business Plan

Generation Y Is Ready to Buy, Technology Will Help Sell Them

Attend 50+ Symposium in New Orleans on May 19-21

Help Rebuild New Orleans at 50+ Housing Symposium

Builder Confidence in Condo Market Erodes Further

Remodelers Have a Passion for Community Service

NAHB Remodeling Channel Provides Valuable Remodeling Info

Systems-Built Approach Reduces Wasted Materials

'Lean' Factory Home Building Boosts Market Share

Five Things Builders Should Know About Home Technology

Boost Business Skills During National Designation Month

Education Calendar

S.C. Builders Buoyed by Liability Insurance Ruling

Team Builders Interns Expand Horizons at Builders’ Show

Energy Star Honors Whirlpool for Energy-Saving Appliances

NAHB-Produced Programs on DIY, Fine Living and HGTV

Willis Homes Honored for Rebuilding Homeless Shelter

Applications for Centex ‘Build Your Future’ Scholarships Due April 7

HBAs: Challenge/Build/Grow Proposals Due by March 28

Renew, Join NAHB PRx by April 15 for Latest Industry PR Alerts

Drive Away With a Shiny New $500 GM Private Offer

New: Register Online for Spokesperson Training

UPS Offers Up to 30% Discount to NAHB Members on Shipping

Introducing the Hertz Green Collection. Reserve and Conserve.

Calendar of Events