Nation's Building News Online: April 21, 2008Print All Articles Text Version |
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Credit Well Drying Up for Builders, Too, Congress ToldThe mortgage credit crunch has spilled over into land acquisition, land development and home construction (AD&C) lending, increasing the challenges faced by builders in the current housing downturn, NAHB told the Congress last week. “With private securities markets in disarray and banks retrenching, a bona fide credit crunch is underway,” Bob Mitchell, a home builder from Rockville, Md. and former president of NAHB, told the Senate Small Business Committee during a hearing on “The Impact of the Credit Crunch on Small Business.” “This credit crunch actually appears to be worsening despite the concerted efforts of central banks here and abroad,” he added. “Tighter mortgage lending terms have made it difficult for home buyers to obtain financing to purchase new homes. Likewise, there have been dramatic adverse swings in the cost and availability of AD&C loans for home builders.”
Presently, funding for viable residential development and construction projects has been severely limited or blocked entirely at federally insured depository institutions, which are the sole source of housing production credit for the small businesses that comprise most of the home building industry, Mitchell told lawmakers. “The current financing quagmire for home builders vividly illustrates the importance of developing additional sources of AD&C credit,” said Mitchell. “Furthermore, there is no secondary market for residential AD&C loans where community banks and thrifts could turn to help manage their balance sheets and obtain liquidity for additional lending.” He noted that a viable secondary market for AD&C loans would directly benefit builders and lenders by transferring risk away from lenders; increasing the availability of funds so that projects could be more reliably completed; and mitigating the devastating impact of equity calls on builders, or transfers of partially completed projects to banks under capital and/or regulatory pressure. To broaden sources of AD&C credit, Mitchell called for:
Meanwhile, stimulating demand for homes and stabilizing housing prices would do the most to relieve the financing and other business difficulties faced by home builders, he said. The housing stimulus legislation moving through Congress contains key provisions that would help ailing home owners, restore consumer confidence, jump-start housing, stabilize financial markets and save jobs. “Two causal factors in the current housing downturn and the related credit crunch are declining house prices and excess inventory,” said Mitchell. “A temporary home buyer tax credit, such as a provision in House bill H.R. 5720, could stimulate a wave of buying that could quickly reduce excess supply in housing markets and halt the dangerous erosion of house prices and mortgage credit quality.” Expanding the carryback of net operating losses beyond the current two years would help all businesses that have been hit hard in the current economic climate — including financial institutions and manufacturers — to weather the economic storm, make their payrolls and emerge from this downturn in a position to grow. It would also provide flexibility for home builders with large land holdings to reduce their inventories in an orderly fashion to stabilize home and land prices. “The NOL carryback in Senate bill H.R. 3221 simply allows businesses to accelerate their claim of NOL deductions that under present law would be claimed in the future,” said Mitchell. “The need for these deductions today is critical.” Finally, approving a temporary $10 billion expansion of the mortgage revenue bond program, which is included in both the Senate and House bills, would also help strapped borrowers seeking to refinance their own homes, he said. Expanding the reach of the program would allow it to have the largest effect, particularly in communities experiencing the possibility of a wave of foreclosures or an extreme excess of inventory. To read legislation, click here and enter the bill number in the box at the center of the page. For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252. Photos by Morris Semiatin States, Localities Have Options to Stimulate the EconomyNAHB has developed an online resource guide suggesting policies that state and local governments can pursue to stimulate investment and growth and boost the economy. “We tend to look to the federal government to take action when the economy slows considerably,” said NAHB President Sandy Dunn. “But state and local governments also have tools at their disposal to address the unique economic conditions in their communities. This resource guide explains some of the economic tools that have been tried and proven successful.” The resource guide includes an overview of each policy tool, talking points and case studies on how state and local governments have used these policies to encourage economic growth. The tools have been divided into several categories:
“The tools suggested in the resource guide are designed to encourage economic activity in the local economy by providing incentives to act now,” Dunn said. “The expectation is that these tools will spur economic activity, and that a virtuous circle of investment and job growth will restore consumer confidence in housing and in the local economy.” The most effective boosts are temporary, targeted and timely. A lengthy delay in adopting these measures could do more harm than good as prospective home buyers procrastinate further, Dunn said. “It is our hope that state and local policy makers, business leaders, builders and developers, community leaders and other stakeholders will work together to enact some of these proposals to help businesses and help families,” Dunn said. “It’s time for all of us to roll up our sleeves and get America’s economy back on the right track.” The economic stimulus proposals are available to NAHB members at www.NAHB.org/economicstimulus. For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583. Tidewater Builders Paint a Brighter Picture of Their Housing MarketThe Tidewater Builders Association recently discovered that a little face time with local news media executives was all it took to set the record straight about the state of the local housing market. Housing has been holding up fairly well in Virginia’s Tidewater area — the southeastern portion of the state, including Hampton Roads — due to a strong local economy and the continuous arrival of new residents to a region with the largest concentration of military bases and facilities anywhere in the world. The relatively good health of the local housing market, however, was obscured by the negative headlines in The Virginian-Pilot, the area’s primary newspaper. “The local newspaper was consistently running national housing headlines without putting the local market into perspective,” said Channing Pfeiffer, chief executive officer of the builders association. “When they did run anything about the local market, it was basically a comparison of sales volume from the overheated years to the current slower market.” An industry group — which included representatives from the Tidewater Builders Association, the Hampton Roads Realtors® Association, Rose & Womble Realty Co., William E. Woods and Associates Realtors® and the Real Estate Information Network (a local Multiple Listing Service) — was formed to set the record straight. Last fall, the group contacted the publisher of The Virginian-Pilot and asked him to discuss the concerns of the industry. He was open to the idea, and lined up all of the major editors of the paper for a meeting. The discussion focused on how Tidewater is stronger than the national housing market because of its diverse economy, low unemployment and limited land availability. Also stressed was the unrealistic comparison of current housing figures to unsustainable numbers recorded at the height of the housing boom. “Our builders are mostly small, family-owned companies that did not create the massive inventory of spec homes that are now flooding the markets in the harder-hit cities,” explained Ed Sadler, the association’s president. “Our new home sales are off some, but not that much compared to what people might conclude from reading the newspaper headlines. Some of our builders are having a good year.” Working the Local Angle While the newspaper staff said that their coverage was fair and accurate, they conceded that they could do more for their readers by adding local information to national housing news story coverage. “Although we had a good discussion at the initial meeting, we believe its real value was that it set the stage for ongoing regular follow-up communications between industry leaders and the editors of the newspaper that continues to this day,” said Sadler. As a result of the meeting, the newspaper agreed to provide free advertising space three times a week for the industry to provide facts and figures to make their case, as well as editorial space for industry leaders to submit columns to be featured prominently in the Sunday edition. When national articles are reported, they now include sidebars that show average local sales prices — which have increased in some of the communities — and quotes from local analysts that support the idea that the housing correction is not as dramatic for the region as it is nationally. A headline in March read, “Region spared a bit of pain during housing slowdown.” Just recently, the business section of The Virginian-Pilot invited industry leaders to a roundtable discussion of the local real estate market, which will be featured prominently in the April 27 Sunday edition. “As a result of our dialogue, there has been a visible effort on their part to accurately represent the local market,” said Sadler. “We also appreciate their taking the time and resources to bring together representatives from the new home, real estate and mortgage communities for the upcoming business feature. It shows they are serious about helping us get our message out.” NAHB provides information on 360 markets — including comprehensive home price, permit, population and employment figures — that can be used to combat unfair media headlines. Click here to find information on your area. To access Myth Buster Resources developed by NAHB to help members and local associations communicate accurate information about their local housing market and reassure hesitant consumers, click here. For more information on the Myth Buster Resources, e-mail Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447. Housing Crisis Takes Human TollLast fall, the Greater Atlanta Home Builders Association for the first time brought a psychologist to its October membership meeting, to discuss how to mentally cope with the stress of the housing collapse. The housing slump has pushed mental health issues to the forefront for companies, trade groups and individuals closely tied to an industry that, for years, only knew good times. Builders, brokers, bankers and lenders are just beginning to deal with the mental fallout from Atlanta’s first prolonged real estate slowdown in two decades. Sean Doughtie, president of Mayfield Homes LLC, has seen the impact of the housing downturn firsthand. Doughtie, 36, began working as an Atlanta home builder in the early 1990s. The son of a builder, he said his lowest point was last October. After paring his 22-person office staff down to five, and nearly a year after stopping his own paycheck, Doughtie let his remaining staff go, including the chief financial officer. “He sat in my office and I just broke down and cried,” Doughtie said. “I told him I was sorry to do it, and that I was truly scared what would happen to my business. It was my lowest moment.” Doughtie now runs bi-weekly support group meetings at the Atlanta HBA focusing on builders’ survival. (www.atlanta.bizjournals.com)
Putting a Squeeze on Condo LoansAs a result of underwriting changes by Fannie Mae and Freddie Mac, and severe new restrictions by private mortgage insurers, getting a loan on a condominium unit could be getting tougher. Starting May 1, AIG United Guaranty, a major private mortgage insurer, no longer will write coverage on condo purchases with less than 20% downpayments in hundreds of Zip codes across the country that it designates as having “declining” market conditions, including the Washington, D.C. area. Even in the healthiest real estate markets, the company will require buyers to make at least a 10% downpayment and will reject applications on units in condo projects where more than 30% of the owners are investors. Under changes at Fannie Mae, most of the due-diligence on the key characteristics of condo projects — their legal documentation, the adequacy of condo association operating budgets, percentage of space allocated to commercial use and percentage of units owned by investors — must now be performed upfront by loan officers. This in itself is time-consuming and costly. In addition, under the new procedures, Fannie Mae expects the lender to warrant the accuracy of its research. Some condo legal documents run into hundreds of pages, yet lenders are supposed to take legal and financial responsibility for their accuracy. (www.washingtonpost.com)
Sunny Side of the Street: America’s Wealthy See Buying OpportunitiesWhile many average Americans are skittish about the housing market, some of the country’s richest citizens see the current conditions as perfect for buying, according to the Annual Survey of Affluence and Wealth in America, released by the American Express Publishing Corp. and Harrison Group, a market research and consulting firm. Seventy-seven percent of the wealthiest people (those with annual discretionary household income of more than $500,000) think real estate presents a “real opportunity” right now. Forty percent of those high-income earners said that they are in the market to acquire real estate this year. Among “upper middle class” households with incomes between $100,000 and $149,000, 67% agreed that there are home buying opportunities, as did 72% of those with “affluent” incomes between $150,000 and $249,000 and “super affluent” between $250,000 and $499,000. Seventy-nine percent of the survey’s respondents said that the country is in a recession now, but 88% said they are confident that property values will eventually rebound. Still, 18% of respondents said that the equity in their home is worth less than what they owe. (www.marketwatch.com)
Even Renters Aren’t SafeMany renters may believe that they have avoided the chaos of the subprime loan crisis and the mortgage meltdown simply by renting and not buying, but they may not be as insulated as they think because buildings with tenants are going into foreclosure as well. “This is a growing problem nationwide,” said Mark Zandi, chief economist at Moody’s Economy.com. “Landlords of all stripes could potentially get caught up in this very severe downturn,” he said, although he suspects it’s going to be more of a problem for lower- to middle-income markets. New York City is particularly at risk because in 2006 an estimated 65.5% of its housing was renter-occupied, compared to 32.7% nationwide. In 1993, during the last big wave of foreclosures in the city, nearly 6,200 buildings (residential, commercial and mixed-use) began the foreclosure process. In 2007, the Furman Center for Real Estate and Urban Policy at New York University estimated that at least 38,000 people facing a foreclosure in the city were renters. The center counts a total of about 900,000 buildings with residential space in the five boroughs and some 3.2 million units of housing. Foreclosures present two sets of problems for renters, related to eviction and a loss of services. (www.nytimes.com)
U.S. Housing Bust Not So SpecialThe U.S. may be suffering its worst housing bust since the Great Depression, but by international standards it’s not so special. A new report by Goldman Sachs suggests that the U.S. is going through a garden variety downturn that will involve a sharp slowing in overall economic growth and a sluggish recovery that equity markets will nevertheless sniff out well ahead of time. As far as housing busts go, Canada’s December 1989 to September 1998 slow-motion housing crash was the fourth longest of 24 busts among OECD countries, Goldman said. In terms of price declines, Canada’s 1990s slump was the second smallest, at 16% in real prices. The biggest price decline was in the Netherlands, which posted a 50% drop in prices in the early 1980s, Finland at 49% and Japan at 44%. On average, real house prices tended to fall about 30% and only reached bottom after six years. (www.financialpost.com)
U.S. Metal Demand Battered by Housing, ConstructionDemand for base metals in the U.S. has been falling sharply on the back of the U.S. housing downturn, and the trend is likely to worsen with expected slowdowns in commercial and industrial building. With the construction of a typical house in the U.S. consuming 439 pounds of copper, it was inevitable that the collapse in housing would hurt demand for the industrial metal. “I expect copper demand in the U.S. to be weak, especially in this first half of the year and even in the second half,” said Catherine Virga, an analyst with GPM Group in New York. U.S. imports of refined copper were off almost 29% in the first two months of this year to 116,389 tons from 163,699 in the same period a year ago, according to the U.S. Commerce Department. Likewise, aluminum was off nearly 10% in the period and zinc imports were down 6%. Nickel, used in stainless steel, however, was up almost 27%. Housing accounts for about 40% of all domestic copper use in the U.S. (www.reuters.com)
Long Hearing Looks at ‘Drastic’ Clean Water Act ChangesThe House Transportation and Infrastructure Committee held a legislative hearing on April 16 on “H.R. 2421, the Clean Water Restoration Act of 2007.” The legislation was introduced by Chairman Jim Oberstar (D-Minn.) with a companion bill, S. 1870, unveiled in the Senate by Sen. Russ Feingold (D-Wis.). Over the past year, NAHB has worked against both of these bills, which would greatly broaden the scope of the Clean Water Act (CWA) by expanding the definition of “waters of the United States” and encompassing not just those that are “navigable.” Under the drastic changes proposed by the legislation, almost every wet area in the country would fall under federal jurisdiction. By bringing waters that are now designated as state-controlled under federal jurisdiction, the bills would result in an exponential permit increase for builders. The hearing — which consisted of five panels and lasted nearly 10 hours — included government officials, lawyers and county commissioners. Proponents and opponents of the bill were roughly split. Those in favor of H.R. 2421 said that the legislation was a simple clarification or restoration of the original intent of the CWA; opponents said it would expand the scope of current law and that it would be unconstitutional if it did not distinguish between state and federal waters. Although Oberstar said his bill was a work-in-progress and that he was willing to compromise, no specifics were decided. NAHB again submitted written testimony to the committee, and the association will continue to work with the House panel and its Senate counterpart during the coming months. To read the legislation, click here and type the bill number in the box at the center of the page. For more information, e-mail Anna Raymond at NAHB, or call her at 800-368-5242 x8307.
Mark Your Calendar for the 2008 NAHB Legislative Conference The 2008 NAHB Legislative Conference provides a unique opportunity for builders to meet with their members of Congress, discuss the issues that affect their business and bottom line and establish a lasting relationship with their elected federal officials. The day-long conference on Wednesday, April 30 coincides with the NAHB spring board meeting in Washington, D.C. Builders are encouraged to travel to the nation’s capital to urge their representatives and senators to support policies that stabilize housing, restore confidence in the credit markets and bolster the nation’s economy. Members of Congress are being urged to:
Attend Government Affairs Recognition Breakfast on May 1Public officials, home builders associations and home builders who have advanced the needs and principles of the building industry and created more opportunities for the industry will be honored at a Government Affairs Recognition Awards breakfast during NAHB’s spring board meetings in Washington, D.C. The program will recognize federal, state and local officials for their support of the industry, as well as members and HBAs involved in BUILD-PAC and grassroots advocacy. The awards breakfast will be from 8:00-9:30 a.m., Thursday, May 1 at the National Housing Center. To purchase tickets, click here. Some of the honorees include:
Mark Your Calendar for the 2008 NAHB Legislative Conference The 2008 NAHB Legislative Conference provides a unique opportunity for builders to meet with their members of Congress, discuss the issues that affect their business and bottom line and establish a lasting relationship with their elected federal officials. The day-long conference on Wednesday, April 30 coincides with the NAHB spring board meeting in Washington, D.C. Builders are encouraged to travel to the nation’s capital to urge their representatives and senators to support policies that stabilize housing, restore confidence in the credit markets and bolster the nation’s economy. Members of Congress are being urged to:
Plan to Attend the 2008 NAHB Legislative Conference on April 30
The day-long conference on Wednesday, April 30 coincides with the NAHB spring board meeting in Washington, D.C. Builders are encouraged to travel to the nation’s capital to urge their representatives and senators to support policies that stabilize housing, restore confidence in the credit markets and bolster the nation’s economy. Members of Congress are being urged to:
NAHB Chief Economist Says U.S. Has Slid Into RecessionThe deepening housing slump has seriously eroded consumer sentiment and pushed the economy into a mild recession, according to David Seiders, NAHB’s chief economist. "The worse-than-anticipated housing downturn — combined with systematic weakening of the labor market and rapidly rising energy and food prices — has taken a heavy toll on American consumers," said Seiders. "It's now clear that we have entered what we anticipate will be a mild recession, running through the first half of this year, and there are substantial downside risks to this economic scenario." To guard against a longer and deeper downturn, Seiders said that Congress should take immediate steps to stimulate the economy through actions specifically targeted at improving the ailing housing market — such as a temporary home buyer tax credit, modernization of the Federal Housing Administration and oversight reform for the housing-related government sponsored enterprises. "Stopping the downward trend in housing prices is key to bolstering consumer confidence as well as mortgage credit quality, and a temporary home buyer tax credit is the best way to do that," he noted. Given the ongoing erosion in housing finance markets and buyer demand, Seiders has adjusted NAHB's official housing forecast to indicate continuing downward movement in housing starts through the end of 2008, bringing the decline for the year to 30%. A month ago, Seiders expected housing starts to bottom out in the third quarter, with a 27% decline for 2008. "This change in our forecast indicates that, barring immediate action by Congress to stimulate housing and the economy, the housing sector will continue to be a serious drag on economic growth until the beginning of 2009," Seiders said. "Stimulus bills recently passed in the Senate and the House Ways and Means Committee are welcome steps in the right direction,” he said. “This is one instance where prompt and appropriate efforts by the nation's lawmakers could make a significant difference in limiting the depth and duration of the economic downturn."
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Housing Starts Lose Further Ground in MarchBuilders continued to slow the pace of new-home construction in March amidst ongoing erosion of the overall economy and credit markets, according to U.S. Commerce Department figures released on April 16. Total housing starts fell nearly 12% to a seasonally adjusted annual rate of 947,000 units in March, including a 5.7% drop in single-family to a rate of 680,000 units. The multifamily side continued to display extreme month-to-month volatility, skidding 24.6% to a yearly pace of 267,000 units. “Builders are dramatically limiting starts of new homes in an environment of weak sales and heavy supply, ratcheting down production of single-family units to its slowest pace in 17 years,” noted NAHB President Sandy Dunn. “We’re doing everything in our power to bring the supply and demand equation back into balance and restore housing to its rightful place as an engine of economic growth,” she said. “But now that we are in a genuine economic recession, there’s no question that more needs to be done at the federal level to support housing, shore up consumer confidence and limit the degree and duration of the economic contraction.” “The Senate has done a fine job already in moving forward with beneficial legislation, and we applaud its efforts to this point,” added Dunn. “We urge the House to do the same thing and advance a bill that can be reconciled with the Senate’s version and promptly sent to the President’s desk. Now is the time, during the spring home buying season, to implement measures that will have the greatest positive effect on housing and the economy.” “Builders in the field continue to report that prospective buyers are visiting their model homes, but most are either unwilling or unable to go forward with a purchase given the downward trends in employment and home values as well as the tightening of mortgage credit conditions,” said NAHB Chief Economist David Seiders. “It stands to reason that incentives such as a temporary home buyer tax credit and improvements to the housing finance system would help boost consumer confidence in the market and have a significant stimulative effect that could arrest housing’s heavy drag on economic growth,” he said. “Such measures, combined with the Federal Reserve’s aggressive moves to lower interest rates and improve the functioning of financial markets, definitely would have substantial beneficial effects on the overall economy.” Permits were down 5.7% in March for single-family construction and 5% for multifamily. Regionally, housing starts lost ground across the board in March, with declines of 5.7% in the West, 8.5% in the Northeast, 12.6% in the South and 21.4% in the Midwest. Permits were up 0.4% in the South and 3.8% in the Northeast, but down 10.6% in the Midwest and 20% in the West.
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. No Rally in Builder Confidence Seen in AprilBuilder confidence in the market for new single-family homes remained unchanged for a third consecutive month in April, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). The index held at 20 this month, up marginally from 18 in December, which was the record low for the series since its creation in January 1985. "With the traditional home buying season now well underway, we have not seen the bump in sales activity that we normally would this time of year," said NAHB President Sandy Dunn. "At this point, all eyes are on Congress and its efforts to craft meaningful legislation to help support the housing market and stabilize our nation's economy before it heads deeper into recession." "While builders continue to report improvements in traffic through their model homes compared with late last year, this activity has not translated to actual sales. That's where Congress can make a big difference," noted NAHB Chief Economist David Seiders. "Measures that stimulate consumer confidence in the housing market, push the fence-sitters into the ring and put a floor under house prices can successfully halt the drag that housing is exerting on the national economy, and help stabilize financial markets at the same time,” Seiders said. “But such measures need to be implemented as soon as possible in order to limit the severity of the economic recession that now is underway." The HMI gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. Current sales conditions declined two points to 18 in April, the lowest level since November; prospective-buyer traffic held even at 19 for the third straight month, up from a low of 13 in December; and sales expectations rose four points to 30, still remaining substantially down from a year earlier. Regionally, the HMI gained two points in the West, registering 17; and was up by one point, reaching 22, in the Northeast. The index fell one point to 15 in the Midwest and two points to 24 in the South.
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Surveys Find Consumers More Upbeat About Home BuyingU.S. consumers remain relatively gloomy in their assessment of the state of the nation’s economy, according to a poll released on April 16 by Reuters/Zogby, but by a small majority they agree that now is a good time to buy a new home. Compared to a baseline of 100 when the Reuters/Zogby Index was established last August, consumer confidence was measured at 95.5 this month, rebounding from 87.7 in March. Nearly three in four of those surveyed (71%) said they believed that the U.S. economy is currently in a recession, a slight decrease from 74% during the preceding month. Slightly more than half of those polled (54%) said that now is a good time to buy a new home, although 42% disagreed. “Americans are still experiencing the doldrums,” said John Zogby, president and CEO of Zogby International. Responses in April were slightly more upbeat than in March, but “the numbers are still very negative,” he noted. “In essence, Americans are telling us things are not worse than they were last month and they might be only slightly better than at their lowest point,” Zogby said. “It appears that in typical fashion, people have adjusted to bad news and are saying that things are just not getting worse.” Beazer Reports ‘Smart Time to Buy’ Trend A survey released at the end of last month by Beazer Homes found that more consumers are recognizing today’s home buying opportunities even in the face of skepticism over the nation’s economy. Seventy-seven percent of respondents said that with good credit and a downpayment, the time is right to buy a home, a 20% upswing from a similar survey in January. Nearly three out of four of those surveyed by Beazer (74%) agreed that the availability of homes for sale combined with special incentives make this a true “buyer’s market.” Sixteen percent of survey respondents reported that they planned to purchase a new home as their primary residence in the next 12 months — a 45% increase over the January survey results — and some 28% said they were currently saving for a downpayment. Of those seasoned buyers who had purchased one or more homes in their lifetime, three-quarters advised renters to buy a home as soon as they were financially able to do so, and 62% of them agreed that current mortgage interest rates make this a “favorable time to purchase” a home. By comparison, only 44% of prospective first-time buyers recognized the advantage of today’s lower rates. Seasoned buyers contemplating purchasing a new home said they were looking for a better location (28%), a bigger home (25%) and more modern features (18%), according to the Beazer survey results. First-time buyers ranked the need for a bigger home (28%), investment potential (27%) and the desire for a better location (23%) as their primary motivations for looking for a new home.
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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Freddie Mac Buying Jumbo Loans in High-Cost AreasFreddie Mac announced on April 17 that it has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in 224 high-cost markets designated in the economic stimulus bill signed by President Bush in February. The legislation through the end of this year has increased the Fannie Mae and Freddie Mac loan limit of $417,000 in markets where the median home price exceeds that amount. Qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high-cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90% of a property’s value. By working with the banks cited in its announcement and with other national lenders, Freddie Mac said it expects to finance between $10 and $15 billion in new jumbo mortgages in 2008. “Purchasing conforming jumbo mortgages for our portfolio shows how we can bring new liquidity to markets other investors have all but abandoned and make full use of the new tools Congress gave us to help restore stability during the current housing crisis,” said Freddie Mac Chairman and CEO Robert Syron. “We initially expect conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market in many of these high-cost markets.” While specific product availability may vary by lender, Freddie Mac has said that it will buy 15-, 20-, 30- and 40-year fixed-rate, fully amortizing conforming jumbo mortgages; 30-year fixed-rate mortgages with 10-year interest-only periods; fully amortizing 5/1 adjustable-rate mortgages; and 5/1 ARMs with 10-year interest-only periods. Qualified borrowers can also obtain cash-out refinance conforming jumbo mortgages that provide a maximum cash-out of $100,000. For more information, click here.
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Eye on the Economy: Housing Indicators Are Flashing RedNAHB’s baseline (most probable) forecast now includes a mild economic recession in the early part of 2008. We’re currently pegging the peak of the cycle in December 2007 and the trough in August 2008. We expect real gross domestic product (GDP) to contract modestly in the first half of this year and the labor market to deteriorate for a somewhat longer period ― a normal timing relationship. A flurry of recent negative economic news prompted us to move a recession into our baseline forecast. This news included soaring energy prices, deterioration of our trade balance, plummeting consumer sentiment, ongoing erosion of the labor market and more negative readings on the housing market. Downward revisions to the Federal Reserve’s economic forecasts from both the Federal Open Market Committee (FOMC) and Fed staff also encouraged us to make the recession call. The Labor Market Is Steadily Deteriorating Labor market conditions have been deteriorating for some time. Employment growth started to slow early last year and the unemployment rate has been trending upward since that time. Total payroll employment — from the establishment survey — started to fall this January, and the economy lost 232,000 jobs in the first quarter of the year. Private sector employment actually started down in December and the cumulative contraction was 300,000 through March of this year. The unemployment rate — from the household survey — was 5.1% in March, up from the cyclical low of 4.4% a year earlier. There’s little doubt that labor markets are deteriorating further in the second quarter. Weekly data on claims for unemployment insurance are trending upward, and surveys of consumers are showing deepening concerns about current employment conditions as well as job prospects down the road. NAHB’s forecast now shows a downward trend in payroll employment through the third quarter of the year, and we expect the unemployment rate to gravitate upward through the year — reaching 5.7% by early 2009. While this rate seems rather benign by historical standards, the increase from the cycle low ― 1.3 percentage points ― is consistent with a mild economic recession. Financial Markets Remain Under Stress A broad range of credit markets, including the home mortgage market, still are not functioning normally. Only the Treasury securities market, backed by the full faith and credit of the U.S. government, remains unscathed. Indeed, the frenzied flight to credit quality has put downward pressure on the entire Treasury yield curve. Some private securities markets, including those for subprime, Alt-A and jumbo home mortgages, have essentially shut down. Even the GSE securities markets, backed by “implicit” federal guarantees, have staggered, and spreads to Treasurys have widened substantially. As a result, spreads of prime conventional home mortgage rates over comparable maturity Treasurys remain extremely wide. So do spreads of prime jumbo mortgages over prime conforming rates, even for those that recently were made eligible for purchase by the GSEs. As securities markets have faltered, private credit demands naturally have shifted to depository institutions. Unfortunately, many large depositories have been compelled to take substantial writedowns on portfolios of securities — particularly those containing subprime mortgage paper — reducing capital available to support new lending. This, naturally, has contributed to the broad-scale flight to quality that now includes considerable tightening of lending standards at the depositories, particularly in mortgage markets and in the markets for residential construction and development loans. The Fed Is Fighting on Two Fronts The Federal Reserve is fighting desperate battles and expending a lot of ammunition on two fronts, and results to date have been limited. On one front, the Fed is aggressively easing monetary policy in order to support economic growth, and that’s a campaign that obviously is not going very well. In fact, the Fed’s job now is to limit the depth and duration of an economic recession that apparently is already underway. We expect the next Fed salvo to be half-point cuts in both the federal funds and discount rates at the conclusion of the upcoming meeting of the FOMC on April 30. On the second front, the Fed has come up with a series of innovations designed to improve financial market liquidity and market functioning, apparently with only limited success to date. Recent actions include lowering the cost and increasing the allowable term of discount-window credit to commercial banks; increasing the size of the Term Auction Facility, through which credit is auctioned to depository institutions; initiating a Term Securities Lending Facility, which allows primary securities dealers to swap illiquid mortgage-backed securities for highly liquid Treasury securities; and creating the Primary Dealer Credit Facility, which serves as a discount window for primary dealers. In its spare time, the Fed recently took unprecedented steps to forestall the bankruptcy of the large nonbank primary securities dealer, Bear Stearns. This action may very well have prevented a full-blown financial panic. Housing Market Indicators Are Flashing Red Housing data received in recent weeks unanimously display ongoing deterioration of the single-family housing market. According to National Association of Realtors®, pending sales of existing homes (based on contracts signed) fell back in February following apparent stabilization in January. For the new-home market, the Commerce Department reports that single-family starts and permits both fell by about 6% in March, closing out a very weak first quarter and pointing toward further deterioration in coming months. NAHB’s proprietary survey of large public and private single-family builders showed ongoing erosion of both gross and net home sales in March, and sales cancellation rates remained quite elevated. NAHB’s broad-based single-family Housing Market Index remained at a near-record low of 20 in April, based upon builders’ perceptions of buyer traffic and current sales volume as well as builders’ expectations of sales activity six months down the line. Finally, the Mortgage Bankers Association’s weekly survey of mortgage lenders shows a substantial fallback in applications for loans to buy homes since early this year, on a four-week moving average basis. Policy Help Hopefully Is Coming The Fed has been easing monetary policy aggressively since last fall and our central bank presumably can be counted on to deliver additional monetary stimulus in the months ahead. The fiscal stimulus package designed by Congress and the Administration and signed into law earlier this year should provide decent support to the economy, primarily through consumer spending, starting late in the second quarter and extending into the fourth quarter. Our assumptions on monetary policy and on the effectiveness of the stimulus package already on the books are key to the “mild” nature of the recession that’s now part of our baseline forecast. But there are considerable downside risks to this forecast, and the housing and mortgage markets are most vulnerable to downside influences. We haven’t dealt with broad-scale house price declines since the 1930s and the formidable problems in credit markets are dominated by steadily deteriorating mortgage credit quality. Indeed, we're facing a potentially disastrous feedback loop comprised of falling house prices, falling credit quality, tightening credit standards, falling house prices… The Federal Reserve now has full appreciation of these downside risks, the Congress apparently is learning fast and the Administration seems to be facing the growing realities. Maddening political differences may stand in the way of effective measures to spur home buying and stem the rising tide of foreclosures that dumps more inventory onto glutted markets, adding to downward pressure on house prices. Policy makers now are debating various tax credits for home buyers and various ways to contain mortgage foreclosures. Stay tuned. NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his April 15 edition. To subscribe to “Eye on the Economy,” click here.
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Attend or View the Construction Forecast Conference on April 24Plan to attend the NAHB Construction Forecast Conference — Spring 2008 on Thursday, April 24 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry. Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. For more information and to register, visit www.nahb.org/cfc. Can't Attend in Person? Webcast of Conference Also Available For webcast information, visit www.nahb.org/cfcwebcast. The webcast fee includes access to the webcast archive and electronic copies of the conference handout and presentation materials. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Attend the Spring Construction Forecast Conference in April 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. Can't attend? Watch the conference webcast live. For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Builders’ Tip: An Easy-to-Fabricate Lockset Drill Guide
Here is another version of a hole-saw guide for drilling lockset holes in a door stile. I think it is simpler and more versatile than other versions I’ve come across because the screw that holds it to the edge of the door also locates the center of the latch hole.
— Will Hesch, Atascadero, Calif. Tips & Techniques provided by Fine Homebuilding.
To contact Fine Homebuilding, e-mail Christina Glennon.
Set Yourself Apart With CGB Designation Join the ranks of the nation’s top building industry professionals with the Certified Graduate Builder (CGB) designation. The “Builder Assessment Review” (BAR) is your first step towards obtaining the CGB. This comprehensive assessment measures your expertise in the four key areas of the building industry: building technology, business and finance, project management and sales and marketing. Your results will show the areas where your knowledge is strongest and weakest and will help determine the courses required for you to obtain your CGB. To learn where the next BAR will be held, visit NAHB’s education listings, or call the Professional Designation Help Line at 800-368-5242 x8154.
BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Survey Finds Women Rising to Top Home Building RanksToday’s female members of NAHB are well-educated, accomplished and experienced in the building industry, according to a survey sponsored by the NAHB Women’s Council, and conducted in late 2007. “There are more women working in the home building industry than ever before,” said Pam Weaver, chair of the 2008 NAHB Women’s Council Board of Trustees and a builder from Carencro, La. “And a significant number of these women hold leadership positions in their companies.” The number of women who are members of NAHB has increased more than 300% over the past 12 years, from 4,800 to 20,000. “Ten years ago I could count on one hand the number of women at NAHB board meetings,” said Nicole Goolsby, 2006 president of the Women’s Council and owner of Rion Homes, Inc.in Huntersville, N.C. “Now, there are women at every table.” There are more than 2,800 directors on NAHB’s board. Thirty-four percent of survey respondents reported that they own their company. More than half hold executive positions, with 40% serving as president, 15% vice-president, 7% director and 3% CEO or controller. Twenty-eight percent of the 23 million companies in the U.S. are owned by women. NAHB President, Sandy Dunn, the second woman elected to the association’s top leadership position, owns and operates her own home building business, B.J. Builders, Inc., in Point Pleasant, W.Va. “I don’t feel that there is a glass ceiling in this industry,” said Goolsby. “A career in building offers more opportunities to be self-directed, as opposed to a more corporate structure such as banking.” Six-figure salaries are also more common among NAHB’s female members than in the general population. U.S. Census data show that slightly more than 4% of American women with full-time, year-round jobs earn $100,000 or more annually, compared to 35% of the women who are members of NAHB. NAHB’s female members are also more highly educated than their counterparts in the general population, according to the survey. Thirty-seven percent have completed college, and an additional 20% have started or completed graduate school, compared to Census figures showing that 26% of women in the U.S. have attained a bachelor’s degree or higher. Reaching Young Women Although the construction trades still do not attract young women in great numbers, there has been increased interest in the industry’s management ranks. “We have young women involved in all seven trades offered through training programs by the Home Builders Institute (HBI),” said John Moffitt, chairman of HBI’s Board of Trustees and president of Moffitt Development Co., Inc., in Overland Park, Kan. “The more popular ones tend to be electrical wiring, facilities maintenance, landscaping and painting.” HBI is the workforce development arm of the NAHB. The Women’s Council and the National Housing Endowment created the Strategies for Success Scholarship in 2001 to encourage young women to pursue careers in construction. The program gives preference to women applicants, and is open to high school seniors or students enrolled in building-related post-secondary programs. Obstacles Still Exist Two-thirds of the women in the survey reported involvement in the building industry for more than 10 years. While some respondents felt that entering the field was less challenging than in the past, they also said that they still had to work harder than men to develop credibility and demonstrate competency in their profession. Forty percent of the respondents reported pay inequality with their male counterparts. Twenty-eight percent said they had been harassed; 25% said they considered themselves at a disadvantage for promotion; and 19% felt that there were jobs for which they had not been hired because of their gender. For more information on the survey or NAHB’s Women’s Council, e-mail Carmel Nayman at NAHB, or call her at 800-368-5242 x8410. Home Technology Disconnect Could Mean Lost Revenues
However, the CEA research — the sixth annual State of the Builder Technology Market Study, a supplement to NAHB’s Annual Builder Practices Survey — also found that consumers are not buying the technology packages they want because builders are not marketing them or offering them during the construction process. CEA’s study concluded that what builders perceive as a lack of demand for their technology options may actually be more a matter of marketing, packaging and timing. Builder reluctance to fully embrace home technology may also be contributing to this disconnect, according to the Home Technology Alliance (HTA) ― an NAHB initiative with the Custom Electronic Design Installation Association (CEDIA) created to serve as an industry resource on electronic integration and home technology products and services. The HTA found that many builders are still wary of offering home technology options because of the changes they bring to their business operations, additional marketing costs and the learning curve needed to educate their sales staffs. They are also cautious because of the potential delays the options may have on their production schedules. Underscoring the disconnect is the fact that 89% of the builders surveyed in the CEA study agreed that it is important to advertise home technology options when marketing new homes and that nine in 10 builders said adding home technologies either increased or helped them maintain their revenues. Easton Park: A Case Study for Increased Revenues One possible way for builders to bridge this home technology gap is by incorporating technologies in their sales options that match the offerings to their target market. Production home builder M/I Homes Tampa teamed up with S&S Electric, an electronic systems contractor (ESC) based in Oldsmar, Fla., to create successful option packages ― from lighting controls to whole-house audio ― for Easton Park, its single-family home community in Tampa, Fla. One of the keys to the success of the program was “to only offer option packages that are easily repeatable and simultaneously meet the needs of a majority of the community’s home buyers,” said Shawn Smith, president of S&S Electric. “By not completely customizing each home, we were able to maintain strict production schedules and provide product options that were profitable for us and M/I Homes.” M/I Homes also knew that many of its potential customers were technically savvy, which added to the complexity of the solution. "Our customers are very diverse and require a wide variety of options," said Lisa Turbeville, vice president of sales and marketing for M/I Homes. "We needed a partner who could incorporate as many mainstream options as possible to enhance our model." For Easton Park, M/I Homes decided “to showcase the most up-to-date options available to set ourselves apart from the competition," said Larry Sekely, the division’s director of purchasing. Because of the home buyer profile, M/I Homes and S&S Electric also concluded that, to turn their prospects into buyers, visitors would have to be able to walk in, intuitively press a button and see something happen. Every upgrade option showcased in the community’s Bordeaux IV model — from lighting design and control, video security system, multi-room home audio to the built-in entertainment center — enhances a buyer's lifestyle and potentially meant the difference between making or not making a sale. In many instances, the options presentation helped close the sale. "M/I Homes embraced the increasing demand for home technology and chose to demonstrate upgrade options in their model homes that many other builders do not offer,” said Smith of S&S Electric. “This resulted in higher consumer satisfaction as well as increased revenue.” According to Turbeville, with the S&S Home System upgrade sales program, M/I generated close to $200,000 in additional revenues in Easton Park last year. “Structural product innovation alone is not enough to differentiate yourself from the competition these days,” said Theresa Lynn Collins, area president of M/I Homes. “Our partnership enables us to deliver the very best in consumer electronics and integration that fits the needs of today and will continue to fulfill this requirement into the future.” Information About Home Technology Available From HTA The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process. For more information, visit www.nahb.org/HTA. CEDIA: A Source for Experienced ESCs 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. Like Builders, ESCs Specialize in Different Market SegmentsBy Keith Davis, Residential Technologies Builders who are considering working with ESCs to bring home technology to their product offerings should determine what type of technology professional fits best with the homes they are building. The following lists ESCs by market segments ― and their specialties — in the home building industry today:
Keith Davis is president of Charlotte, N.C.-based Residential Technologies, Inc., an ESC with expertise in lighting control, renewable energy, specialty electrical systems and energy management and control. He is an NAHB member and a member of the Home Technology Alliance. For more information, e-mail Davis, call him at 704-944-3125 or visit www.rtinc.biz.
Information About Home Technology Available From HTA The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process. For more information, visit www.nahb.org/HTA.
CEDIA: A Source for Experienced ESCs 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. The Veranda at CollegeTown Is a Safe Haven for SeniorsRecognizing the development, construction and marketing of livable homes and communities that improve the daily comfort, ease of use and safety for residents, NAHB and AARP honored five builders, remodelers and developers with the 2007 Livable Communities Awards at the International Builders’ Show in Orlando, Fla. in February. CollegeTown at West End, a mixed-use, mixed-income community developed by the Integral Group in Atlanta, was one of the winners Guidelines and applications for the 2008 Livable Communities Awards are available online. The application deadline is June 6.
Today, the old complex is gone, replaced by CollegeTown at West End, a mixed-use, mixed-income development that has brought real energy to the University Center area of Atlanta. A vital part of that redevelopment is The Veranda at CollegeTown, a seniors housing community offering more than 20 floor plans ― some with balconies, bay windows, Juliet balconies and other elements ― and distinguished architecture that adds to West End’s urban fabric. CollegeTown at West End is one of five winners of the 2007 Livable Communities Awards, co-sponsored by AARP and NAHB. Developed by Atlanta-based, The Integral Group, CollegeTown at West End won in the category of best developer, more than 250 units.
A Pedestrian-Friendly Community CollegeTown at West EndCollegeTown at West End is pedestrian-friendly by design. The 10-foot-wide sidewalks encourage residents of the Veranda to take advantage of the amenities offered by the broader West End community and to be involved in the daily life of the neighborhood. The development is within walking distance of several of the nation’s top historically black colleges and universities, including Spelman College, Clark Atlanta University, Morehouse College and Morehouse School of Medicine. Students from these schools have served as volunteers at The Veranda and have gotten involved in the residents’ lives. The Veranda’s one- and two-bedroom apartments are designed with the needs and safety of senior residents in mind. In addition to common conveniences, each room has emergency pull-cords in strategic locations. The Veranda complex features hallways with handrails and elevators at each end and bathrooms with grab bars.
Amenities and Healthcare Services for 50+ Residents On The Veranda grounds are a large library with computers, a beauty salon that caters to 50+ residents, a multipurpose room for social events and two activity rooms that include large screen televisions and game tables. The Veranda also includes an exercise room, a worship center and a wellness center with access to the healthcare services offered through the West End Medical Center. The affordable apartments in the Veranda were filled within three months, and the property continues to maintain a waiting list of more than 100 seniors. Its popularity illustrates the integral role The Veranda plays in the revitalization of the area.
Apply for 2008 Livable Community Awards AARP and NAHB are now accepting applications for the 2008 awards program. Applications are due by June 6. For more information about the Livable Communities Award, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.
Find Out What the 45+ Housing Market Wants “Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help 50+ housing professionals determine the right design, home features and amenities to attract boomer home buyers in their market. 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. To view or purchase this publication online, click here, or call 800-223-2665. Harvard Sees Remodeling Slowing in Second Half of 2008Home owner spending for home improvement activity is expected to decline through the balance of this year, falling at an annual rate of 4.8%, according to the Leading Indicator for Remodeling Activity (LIRA), which was released on April 17 by Harvard’s Joint Center for Housing Studies. Remodeling activity is being inhibited by falling consumer confidence and a slumping economy, Harvard said. “Spending on home improvements continues to be sluggish, as home owners respond to falling home prices,” said Nicolas Retsinas, the center’s director. “The fall-off in pending home sales suggests a long and slow recovery,” he added. “It looks unlikely that we will see any improvement in the remodeling market until 2009,” said Kermit Baker, director of the center’s Remodeling Futures Program. “Currently, the second half of this year is shaping up to be weaker than the first half.” The LIRA is a new initiative from the Remodeling Futures Program that is designed to estimate future national remodeling activity with a horizon of three quarters. Increase Your Professional Credibility The Certified Graduate Remodeler (CGR) designation emphasizes business management skills as the key to a professional remodeling operation. Remodelers who earn the CGR become members of an exclusive national program and gain recognition as industry leaders. To learn more 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 "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.
Make the Next Bathroom Remodel a Water-Efficient OneBy Stephanie Thornton, EPA WaterSense Program Numbers are on their side, too. According to the 2007 Remodeling Cost vs. Value Report, the average nationwide return on investment for a bathroom remodel is 78%, one of the highest in the home. But, when talking to clients about a bathroom remodel, go one step further and sell them on a water-efficient bathroom. It makes sense for them, for you and the environment ― and WaterSense, EPA’s voluntary water-efficiency labeling program, can help close the deal. Toilets account for 27% of the water used indoors in the average home. Showers and faucets account for another 33%. Together, that’s nearly two-thirds of the water used in the house. Replacing outdated, water-guzzling plumbing fixtures with efficient products is a simple way to help home owners reduce water consumption. In fact, by offering a high-efficiency bathroom remodel with WaterSense-labeled fixtures, you can help a client save more than 11,000 gallons and about $70 on water bills annually. Saving Water Saves Energy Saving water also means saving energy. As energy costs continue to rise, home owners will appreciate knowing that retrofitting bathroom sink faucets with WaterSense-labeled faucets can cut their annual electrical use by 70 kilowatt-hours. That’s enough to power a hair dryer for eight minutes a day for a full year. The WaterSense label identifies products that not only save water and the energy used to heat it, but that offer superior performance as well. To earn the WaterSense label, products must undergo independent, third-party testing to ensure that they meet EPA’s criteria for efficiency and performance. More than 145 toilets and 50 bathroom sink faucets and accessories have earned the label to date. No Need to Flush Like It’s 1999 The high-efficiency WaterSense-labeled toilets of today are not the ill-performing low-flow toilets of the early 1990s. Double-flushing and clogging are no longer issues. New technology and design advancements, such as pressure-assisted flushers and modifications to bowl contours, enable today’s high-efficiency toilets to perform much better than their predecessors. Today’s WaterSense-labeled toilets meet stringent flushing standards and thoroughly satisfy drain line requirements. To find WaterSense-labeled plumbing fixtures, visit the WaterSense Web site. Also, search for WaterSense retailer and distributors on the Web site’s Meet Our Partners page. Many manufacturers also sell WaterSense-labeled products online. For more information about WaterSense and a full list of labeled products, visit www.epa.gov/watersense. Stephanie Thornton is the partner outreach coordinator for EPA’s WaterSense program. For more information, e-mail Thornton at the EPA (thornton.stephanie@epa.gov).
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. For more information, visit www.nahb.org/GreenBuildingConference.
Increase Your Professional Credibility The Certified Graduate Remodeler (CGR) designation emphasizes business management skills as the key to a professional remodeling operation. Remodelers who earn the CGR become members of an exclusive national program and gain recognition as industry leaders. To learn more 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 "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.
Remodelers’ Spring Board PreviewNAHB Remodelers’ committee meetings will be held on Thursday, May 1 during NAHB's spring board meeting at the Hilton Washington Hotel in Washington, D.C. The NAHB Remodelers Board of Trustees meetings and general sessions will be on Friday, May 2. To download the NAHB Remodelers schedule at the spring board meeting, click here. For information about the board of trustee meetings, click here. For more information, e-mail remodel@nahb.com, or call 800-268-8451 x8216. Join the Fun of Remodelers Night Out at Buffalo Billiards on May 1 Remodelers Night Out ― where remodelers can relax and network between meetings during NAHB’s upcoming spring board of directors meeting — will be 5:30-8:30 p.m. Thursday, May 1 at Buffalo Billiards in Washington, D.C. Buffalo Billiards features pool tables, shuffle board, darts and 26 televisions for watching sporting events. The fee for the evening is $40 per person and includes appetizers, beer, wine, soda and rail drinks. To register for Remodelers Night Out, visit www.nahb.org/RNO. Reservations must be received by April 24. Buffalo Billiards is at 1330 19th Street NW.
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 |