Nation's Building News Online: May 19, 2008Print All Articles Text Version |
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Green Building a Plus for Builders in Tough MarketHome builders attending the May 11-13 NAHB National Green Building Show in New Orleans were told by market analysts that they have a long way to go to sell the benefits of sustainable construction technologies to their prospective customers.
Builders polled in the latest survey by McGraw Hill Construction on the evolving trends and opportunities in the green residential marketplace cited demand from this quarter of the industry for keeping their businesses alive during hard times. “We have hit the tipping point for builders going green,” said Harvey M. Bernstein, McGraw Hill’s vice president of industry analytics, alliance and strategic initiatives. “This year, the number of builders who are moderately green — those with 30% green projects — has surpassed those with a low share of green — those who are green in less than 15% of their projects,” Bernstein said. “Next year,” he predicted, “we will see even greater growth, with highly green builders — those with 60% green projects — surpassing those with a low share of green. This year has seen an 8% jump over last year, and we expect another 10% increase next year.” “It’s official. Green has gone mainstream,” said Ray Tonjes, chair of the NAHB Green Building Subcommittee. “And now, the NAHB National Green Building Program is making it easier for home builders to provide sustainable, environmentally friendly homes for their customers. We’re ready for the market transformation that McGraw-Hill Construction estimates.” “Green is driving a lot of what really is happening in this marketplace,” said Bernstein. Green home building is poised to generate between $12 billion and $20 billion in sales this year, accounting for a 6% to 10% share of the housing market, according to the McGraw Hill report, up from $7 billion in home sales and a 2% share in 2005. This year’s green building is projected to double over the next five years, reaching a 12% to 20% share of the U.S. housing market with $40 billion to $70 billion in sales in 2012. Green homes are defined by McGraw Hill as those containing energy-efficient, indoor air quality, water-efficient, resource-efficient and site management features. Forty percent of those surveyed by McGraw Hill said that the down market has made it easier to market green homes, and 16% said that the housing slump has made it much easier. The higher quality associated with green building appears to be the key factor driving demand going forward at a time when homes need to stand out in a market with a glut of inventory, Bernstein said. Acknowledging that current adverse economic conditions are imposing an obstacle, he said that rising energy costs are influencing customers and increasing their willingness to pay a premium for green housing. Experiencing the strongest growth in green building this year are the Pacific, South Atlantic and Mountain regions, in that order, the survey showed. From consumer surveying, the states with the highest percent of green home purchases from 2004 to 2006 were Washington, Nevada, Colorado, Texas and Florida. Texas was the one state where builders seemed to be less bullish on prospects for green building than their customers, he said. Among other survey findings:
For information on green building resources from NAHB, click here; or e-mail Calli Schmidt, or call her at 800-368-5242 x8132. Take Aim on Membership During ‘The Big Hunt,’ Tuesday, May 20NAHB members and membership chairmen are invited to join ”The Big Hunt” — the National Membership Day free webcast on Tuesday, May 20 — to learn how to grow and retain membership for their local home builders associations. Tips on how to help members survive the housing downturn will also be presented during the webcast. “The Big Hunt” webcast will be from 2:00 to 5:00 p.m. EST. Visit www.nahb.com to watch it. During the webcast, members and HBAs will learn how to:
Viewers will have a chance to win NASCAR tickets at 2:55 p.m., a Bose sound system at 3:35 p.m. and a $500 Lowe’s gift certificate at 4:15 p.m. Note all times are Eastern Standard Time. To link to the webcast, log on to NAHB’s home page at www.nahb.org beginning at 2:00 p.m. EST, Tuesday, May 20. The webcast will be broadcast with RealAudio sound, available free online. To download it, visit www.real.com. For more information For more information, visit www.nahb.org/membershipday, or call the NAHB Membership Team at 800-368-5242 x8440. Home Buyers Finding Out They Have It Good in Oklahoma CityStrong job growth, a strong local economy, a low cost of living and mortgage rates near all-time lows are providing an unbeatable combination for prospective home buyers in Oklahoma City, according to the Central Oklahoma Home Builders Association. Just because optimal home buying conditions can be hard to find under the lackluster conditions that prevail in many parts of the nation today, consumers in Oklahoma City shouldn’t allow their confidence to be rattled by what they are seeing in the news, the association says. In a multi-faceted campaign combining a state-of-the art Web site (DefyTheTrends.com) with more traditional marketing strategies, the local association is carrying a positive message to a larger and more diverse audience and dispelling some of the information that may apply to other places but can only be considered myths closer to home. “While we did do some print advertising, we did not make this a major component of the campaign. We concluded that we could more effectively get the attention of our buying market through other, more affordable and wide-reaching media, particularly the Internet,” said Jeff Click, first vice president of the HBA and owner of Jeff Click Homes. “As a result,” said Click, “we allocated nearly 40% of our entire budget towards the online component of the campaign. Additionally, we worked every opportunity to get press coverage from local papers, news stations and talk shows.” Innovative Online Marketing The Web site provides a focal point for the myth-busting effort. It features five short video messages from builder members of the Central Oklahoma association, breaking news stories emphasizing what’s positive about the local housing market and a blog where officers and members can post messages. The Oklahoma City myth-busters have also branched out to online networks, creating an association page on YouTube and a cause page on Facebook. Extensive online advertising has been facilitated by Google and Yahoo and numerous high-volume local sites, including the site of The Oklahoman, the local newspaper. The HBA has also relied on its members and real estate professionals to publicize the campaign on their blogs and place campaign graphics on their Web sites. Tried and True Traditional Marketing The Oklahoma City builders have supplemented their online information with more traditional marketing, including three months of revolving billboards in key locations, a seven-page open house insert in the real estate section of the The Oklahoman and television commercials on several local affiliate stations and real-estate focused cable channels like HGTV and TLC. Radio spots will soon complete the campaign, with 30-second ads running on local radio stations whose listeners comprise the target market. “We feel that the campaign has made a significant impact in our area,” said Jim McWhirter, president of the local home builders and Gemini Builders. “Three weeks after the campaign began we had our first big test with our East Area Festival of Homes. Three of my model homes listed in the festival had double the traffic from the previous two years. We also sold two lots, a spec home and a custom home,” he said. “Feedback from other builders in the festival was also positive,” McWhiter said. “They reported that visitors to their model homes were much higher quality leads than in previous festivals. I attribute the positive results to the strong campaign.” Sixty percent of the $50,000 cost of the effort has been paid out of the association’s “rainy day” account and the remaining 40% has been defrayed by member donations. Costs have been kept down through services donated by a local advertising agency, Mason & Moon Advertising, Inc. To access the Myth Buster Resources, which have been 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. Spring a Bust for Housing MarketLuxury-home builder Toll Brothers reported dismal sales figures for the quarter ended in April, with its chief executive, Robert Toll, describing traffic levels at its communities as “the worst that we have ever seen.” Another home building giant, D.R. Horton said earlier this month that it lost more than $1 billion in the latest quarter and cut its dividend in half. “It appears the spring selling season was a bust for Toll, just like all the other builders,” commented Morningstar analyst Eric Landry. Despite the gloom, there are a few encouraging signs emanating from the U.S. housing market. Falling housing starts mean home builders have been scaling back construction, which is gradually reducing their backlogs and the supply glut. This will help the market work off inventory. Also, builders are steadily scaling back their book of “speculative” homes, or those without a buyer due to a cancellation. Some of the hardest-hit markets are finally starting to show a pulse. For example, Toll Brothers recently said that it raised prices in Naples, Fla. — one of the epicenters of the housing bust. Also, builders are attracting traffic and sales when they run promotions featuring price reductions, incentives or other concessions. (www.marketwatch.com)
Real Estate’s Next EvolutionAlthough at some point housing prices will start to come back, the real estate market will not go back to the way it was before the bubble. The current credit crisis will transform how homes are sold and financed and who bears the risk. Soaring fuel costs, environmental concerns and the movement of the baby-boom generation into the ranks of the elderly will certainly alter what Americans want in a home. Online technology could democratize how buyers shop for property and finance it. And new investment vehicles could help cut — or increase — their risks. “All of these things will force us to reinvent how we think, build and purchase housing,” says futurist Glen Heimstra. Eventually, mortgage pricing may come to resemble pricing for home owner insurance, which takes into account dozens of factors, including the neighborhood, whether the house is brick or wood, its replacement cost, its proximity to a fire hydrant, the buyer’s credit score and past insurance claims for the house before it was purchased. Mortgage bankers may want to include in their assessment of the buyer’s riskiness the size of the downpayment, employment history, the house’s history and anything else that might affect repayment of the loan. The good news is that this new wrinkle could help borrowers with pristine credit records and conventional tastes get lower than average interest rates and better terms on a mortgage than they did previously. For now, credit scores matter the most, and the higher the score is, the lower the rate and fees will be. (www.money.cnn.com)
At FHA, a Surprising Result Underpins a Big ChangeInside the Federal Housing Administration home-mortgage program, which is the fastest growing in the country, people with lower incomes have slightly higher credit scores in an analysis of all approved mortgages insured by the FHA during fiscal 2007. This is buttressing a forthcoming major policy switch that could affect thousands of buyers and refinancers. The FHA, which for decades has used a one-size-fits-all approach to price its insurance on home loans, plans to shift to a “risk-based” system keyed to FICO scores and downpayments, beginning as early as mid-July. Under the new system, according to the FHA’s outline of its plan, “a larger number of low-income borrowers [will] benefit from premium reductions than…moderate-, middle- and upper-income borrowers combined.” On 30-year loans with downpayments of 10% or more, applicants with FICO scores above 680 will qualify for the lowest premiums — 1.25% of the loan amount upfront and annual renewal premium payments of 0.5%. Borrowers with downpayments under 5% and poor credit scores from 500 to 559 will be charged premiums of 2.25% upfront and 0.55% annually. All borrowers will continue to receive the same market-based interest rate. Under the current system, borrowers pay uniform 1.5% premiums upfront and 0.5% annually. (www.washingtonpost.com)
New Analysis Shows Outlying Suburbs Hardest Hit With Devalued Real EstateIn a new report released by CEOs for Cities entitled “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs,” economist Joseph Cortright says that rising fuel costs have played a significant role in the collapse of America’s housing bubble. “The popular narrative on the collapse of housing prices has only blamed exotic lending practices,” said Cortright, “but the much more important story is about how higher gas prices have redrawn the map of urban real estate values. Vibrant central cities just got a whole lot more valuable.” The study looked at housing values in five cities in both close-in and distant neighborhoods and found that in each case, housing prices fared worse in the more distant neighborhood. For example, the average house in a Chicago zip code 5.6 miles from the downtown loop appreciated from $374,000 to $410,000 — an increase of $36,000 — between the fourth quarter of 2006 and the fourth quarter of 2007. A house in suburban Buffalo Grove that sold for the same price in 2006, declined by $30,000 over the course of the year. (www.newsrx.com)
Slumping Economy: It’s a Guy ThingFrom last November through April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics. At the same time, American men lost nearly 700,000 jobs. The share of all men aged 20 and over with jobs has fallen since last November, when private-sector employment peaked, going from 72.9% to 72.2% in April. For women, the ratio rose, from 58.1% to 58.3%. The adult male unemployment rate has risen twice as fast as the female jobless rate since November. The manufacturing sector, which is in a long-term decline, is over 70% male and construction, which is in a cyclical decline, is about 88% male. Meanwhile, the growing education and health services sector is 77% female. The government sector, which has remained strong, is 57% female. The securities business, which is filled with high-paying jobs, is likely to be the next sector to get whacked — and more than 60% of its workers are men. While women are getting more jobs, their pay is stagnant. Also, most share households — and bills — with the men who are losing jobs. And the “female” economy can’t stay strong for long if the “male” economy weakens too much. (www.msnbc.msn.com)
Sewer to Spigot: Recyled WaterIn an effort to replenish its groundwater supply, Los Angeles is slated to announce a plan that will recycle 4.9 billion gallons of treated water to drinking standards by 2019. In San Diego, the city council voted in favor of a pilot project that would pump recycled sewage water into a drinking-water reservoir, despite a veto from the mayor over the system’s cost. Miami-Dade County, Fla. is planning a system that would pump 23 million gallons a day of purified wastewater into the ground; the water will eventually travel to a supply well that can be reclaimed for drinking use. But cities considering large-scale systems to recycle wastewater to drinking standards may face an uphill battle. Such initiatives — dubbed “toilet to tap” proposals by critics — have encountered resistance in the past as a result of cost and the overall yuck factor. San Diego gets more of its water supply from the Colorado River than anywhere else. The river gets 400 million gallons of treated wastewater discharged into it each day. That means residents are already drinking treated wastewater. “It tastes like distilled water,” says California State Assemblyman Michael Duvall of water from a new groundwater replenishment system in Orange County. Duvall has sampled the water on more than one occasion and has brought family and fellow lawmakers to the plant. “It’s about as pure as it can possibly be.” (www.marketwatch.com)
Builders Urged to Meet With Their Members of CongressBuilders are being urged to contact their senators and representatives while they are in their home districts for the Memorial Day recess between May 23 and June 2 and urge them to enact stimulus legislation to jump-start housing and boost the overall economy. The Senate Banking Committee is expected this week to pass legislation that would provide comprehensive reform for housing government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and allow the Federal Housing Administration to help borrowers at risk of losing their homes refinance into more viable mortgages. The Senate panel’s bill is one part of the overall housing package in play and is limited to FHA rescue and GSE reform provisions. The full Senate last month passed a housing stimulus tax package and FHA modernization. All of these elements are included in legislation approved by the House on May 8. At this point, it remains uncertain whether House and Senate negotiators will ultimately consider one giant housing package or choose to move forward with smaller bills. With the House and Senate still faced with the task of reconciling their bills and sending a final package to the President’s desk, NAHB members next week should contact their federal lawmakers in their local district offices and set up an appointment to discuss the pending housing legislation. Specifically, builders should urge their members of Congress to include the following provisions in any final housing stimulus bill:
Senate Votes to Renew Flood Insurance ProgramThe Senate last week voted 92 to 6 to revamp and extend the National Flood Insurance Program (NFIP) through 2013. With the beginning of the hurricane season just weeks away, the Senate action is a positive development; the 40-year-old flood program is set to expire on Sept. 30 unless Congress reauthorizes it. The Senate bill differs significantly from House legislation approved last September and the two chambers must now reconcile their differences. Of note, the Senate bill would forgive a $17.5 billion debt the program incurred during the 2005 hurricane season and fails to add wind damage coverage to the program. Conversely, the House measure has included wind coverage but refuses to forgive the debt. Unlike the House legislation, the Senate bill also includes mandatory purchase requirements for properties sited behind flood protection structures. Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage. More than 20,000 communities nationwide participate in the insurance program, which currently covers about 5.5 million policyholders. As the legislation moves to a House-Senate conference, NAHB will work with lawmakers to ensure that federally-backed flood insurance remains available and affordable and that the program is financially healthy. Specifically, NAHB will urge conferees to craft a final bill that:
Anaheim Stimulus Plan Aims at Reviving Home BuildingThe city of Anaheim, Calif. recently enacted a comprehensive economic stimulus package aimed at reviving residential construction — including provisions on impact fee payments, first-time home buyer assistance, green building assistance, the development of affordable housing units and a directional sign program for new home developments. The Building Industry Association of Southern California, Orange County Chapter (BIA/OC) supported the effort, which was led by Anaheim Mayor Curt Pringle and the city council. “Given the tremendous amount of progress that the city of Anaheim has been able to accomplish over the last several years, many of the largest private investors in the city are residential and commercial developers,” said Kristine Thalman, CEO of the association. “BIA/OC is proud to partner with progressive city leaders that understand the broader economic picture to find common-sense solutions to some of the pressures that our industry is facing,” she said. Mayor Pringle championed the proposal as an example for other cities; it is the most comprehensive stimulus package approved so far in Southern California, and perhaps, statewide. “This economic stimulus plan is going to allow Anaheim to get moving, to create many new neighborhoods and continue with the redevelopment of the Platinum Triangle,” he said. Especially important is the timing of the stimulus proposal. Because of the downturn, new construction in Anaheim has slowed considerably, which has had a ripple effect on everything from the furniture industry to the auto industry and countless local small businesses. For his role in championing the stimulus package, Pringle was honored as the 2008 local government official of the year at NAHB’s Government Affairs Recognition Awards breakfast during the spring board meeting in Washington, D.C. last week. For more information, e-maily Elizabeth Ambrose at NAHB, or call her at 800-368-5242 x8253. Single-Family Home Starts Lose More Ground in AprilThe downswing in the single-family housing market deepened in April while a surge in the extremely volatile multifamily market lifted total housing starts 8.2% to a seasonally adjusted annual rate of 1.032 million units, according to figures released by the Commerce Department on May 16. Total starts were down 30.6% from a year earlier. Single-family housing starts dropped 1.7% for the month to a seasonally adjusted annual rate of 692,000 units, the lowest monthly production rate since January 1991 and 42.2% below April 2007. “It’s no surprise that the single-family housing market continues to deteriorate since our surveys of builder confidence and market expectations have been hovering in a historically low range for the past nine months,” said NAHB President Sandy Dunn. “Congress and the Administration must act now to kick-start housing and lift the overall economy.” “The demand for new homes still is quite weak, the overhang of vacant housing units on the market is at record proportions, consumer sentiment continues to fall and the economy has been losing jobs since the end of last year,” said NAHB Chief Economist David Seiders. “The fundamentals point to further deterioration of single-family housing production over the balance of this year, and the condo component of the multifamily sector also is destined to lose more ground.” Multifamily housing starts rose 36.0% to a seasonally adjusted annual rate of 340,000 units in April after dropping 35.1% to a 250,000-unit pace the month before. The pace of multifamily construction was 17.6% above April 2007. Total building permits rose 4.9% in April to a seasonally adjusted annual pace of 978,000 units, down 34.3% from a year earlier. Single-family permit issuance rose 4.0% to a pace of 646,000 units for the month. This was marginally lower than the first quarter average of 647,000 this year and 40.1% below April 2007. April’s rate of multifamily permit issuance was up 6.8% to 332,000 units, which was 19.2% below a year earlier. Regionally, starts of new homes and apartments were up in the Midwest, West and South by 24.4%, 18.5% and 3.6%, respectively. Housing starts dropped by 12.7% in the Northeast. A pace of construction substantially lower than a year earlier was reported for all four regions. Builder Confidence Edges Down in MayHome builders remained considerably downbeat as market conditions continued to erode in May. The NAHB/Wells Fargo Housing Market Index (HMI), released last week, fell a point to 19 ― bringing it within one point of the record low 18 set in December 2007. “With the HMI hovering in the historically low two-point range that’s prevailed over the past nine months, the message is very clear: The single-family housing market is still deteriorating and Congress and the Administration must move immediately to enact legislation that will help reverse the trend,” said NAHB President Sandy Dunn. “A temporary home-buyer tax credit is just the incentive that many prospective home buyers need to go forward with a purchase and help kick-start a housing and economic recovery.” Both the House and Senate have approved bills creating a temporary home buyer tax credit of up to $7,500 for qualified buyers, but the legislation has yet to be crafted into a comprehensive bill that can be sent to President Bush for his signature. “Despite the Federal Reserve’s concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far. In fact, conditions have continued to deteriorate in recent times,” said NAHB Chief Economist David Seiders. “The latest HMI shows that even fewer builders now foresee market conditions improving over the next six months compared with our April survey, and builder ratings of buyer traffic through model homes also have dropped off over the past month on a seasonally adjusted basis. This certainly adds fuel to the argument that targeted policy stimulus, in the form of a temporary tax credit for home buyers, is essential to halt the housing downswing and remove the heavy drag being exerted by housing on overall economic growth,” Seiders said. 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 prospective buyer traffic. 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. The HMI’s component index gauging current sales conditions declined one point to 17 in May — its lowest level since the series began in January 1985. Meanwhile, the component gauging sales expectations for the next six months declined three points to 27, and the component gauging traffic of prospective buyers declined two points to 17. The HMI fell in three of the four regions of the country in May, with a four-point decline to 18 registered in the Northeast, a three-point decline to 12 in the Midwest (also an all-time low) and a two-point decline to 22 posted in the South. The West saw a three-point gain to 20 this month, but that was well below the level of a year earlier. 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. Fannie, Freddie Overturn 'Declining Market' PoliciesResponding to concerns from NAHB and other housing organizations, Fannie Mae and Freddie Mac announced last week that they are overturning their policies requiring higher downpayments on home mortgages in areas where house prices are falling. At its spring meeting on May 3, the NAHB Board of Directors called for Fannie Mae and Freddie Mac to repeal their recently imposed declining market policies, which require a reduction of 5% in the maximum financing available for various mortgages in markets where housing prices have been eroding. NAHB argued that these policies were exacerbating an already soft market by shutting out too many potential buyers. Fannie Mae announced that starting on June 1 it will implement a new national policy on downpayment requirements that will allow up to 97% loan-to-value ratios (LTVs) on mortgages processed through its automated underwriting system, Desktop Underwriter (DU), and 95% for loans written outside of that system. Higher LTVs will be allowed on programs offered through state and local housing finance agencies or nonprofit groups. Freddie Mac also announced that it was eliminating its declining markets policy, effective June 1. For purchases and no cash-out refinances, the maximum LTV is now not required to drop below 95% even if the mortgage is for a property in a declining market. In addition, Freddie Mac will allow up to a 100% LTV on its Home Possible mortgages for low- and moderate-income borrowers and borrowers in underserved areas. After Congress and the Department of Housing and Urban Development moved to increase the number of homes that could be purchased by the government-sponsored enterprises, “both Fannie Mae and Freddie Mac have taken a number of steps aimed at increasing capital and reducing mortgage credit risk, which have actually increased the cost and reduced the availability of mortgage credit for borrowers who are most in need of GSE support,” NAHB’s resolution noted. The NAHB resolution also called on the GSEs to repeal new delivery fees, which so far have not been changed. For more information, e-mail Michelle Hamecs at NAHB, or call her at 800-368-5242 x8425. Eye on the Economy: Fiscal Policy Needed to Break Downward SpiralAbout a month ago, I suggested that the U.S. economy had slipped into a mild recession during the early part of 2008. This judgment was based on readings of the economic tea leaves as well as anticipation of a decision to be made later in the year by the Business Cycle Dating Committee at the National Bureau of Economic Research — the official arbiter of cyclical peaks and troughs in the U.S. economy. Economic data received during the past month reduce the probability of an official recession “call” in 2008. First-quarter GDP growth, originally reported at a paltry 0.6% annualized rate with outright contraction in real final sales (excluding business inventory accumulation), is bound to be revised upward when the Commerce Department releases its next estimate around the end of this month. Furthermore, early distribution of personal income tax rebates under the economic stimulus program that was enacted in February will bolster consumer spending to some degree, possibly keeping GDP growth in the positive range in the second quarter and paving the way for a decent third-quarter performance. If things evolve this way, the Business Cycle Dating Committee presumably will not declare an official recession in 2008, even through the committee is quick to point out that quarterly GDP patterns do not dominate their decision-making process. But a ‘Growth Recession’ Definitely Is in the Cards While official recession may be avoided, there’s no doubt that the U.S. economy is in a seriously weakened condition. In fact, a combination of sub-par GDP growth and systematic erosion of the labor market qualifies as an unhealthy “growth recession,” a condition that has afflicted the economy since late last year. Economic weakness is clearly evident in the labor market. Private sector payroll employment started down last December and the cumulative loss through April came to 312,000 jobs. Total payroll employment, including the public sector, started down in January and already is down by 184,000 jobs. The civilian unemployment rate was up to 5.0% in April, from a low of 4.4% in March 2007. Looking forward, we expect payroll employment to continue downward into the third quarter of this year and to post only sluggish growth through the early part of 2009. We also expect the unemployment rate to gravitate upward over the balance of this year, topping out around 5.7%. Housing Still Is the Major Economic Depressant The housing contraction has continued unabated, laying heavy hits on both GDP and the labor market. The housing production component of GDP ― residential fixed investment ― contracted at a 26.7% annual rate in the first quarter and lopped 1.23 percentage points off the GDP growth rate, essentially the same as the dismal performance in the final quarter of 2007. Employment in residential construction ― builders and specialty trade contractors ― continued to move downward through April, recording a loss of 33,100 jobs for the month and a cumulative loss of 477,900 jobs from the peak in early 2006. Downward momentum in home sales and housing starts guarantees another heavy hit to GDP from residential fixed investment in the second quarter of this year, and we now expect a substantial drag on growth to persist through the first quarter of 2009. Employment in residential construction inevitably will decline throughout 2008 and during part of 2009. Commodity Prices Surge But Core Inflation Is Well Behaved Oil prices have been surging to higher and higher records in both nominal and real terms, food prices also have been rising rapidly and the weakening dollar has been delivering an inflationary impulse via higher import prices. But key measures of core consumer price inflation (excluding direct energy and food prices) have been remarkably well behaved largely because the weakening job market has held down labor costs per unit of U.S. economic output. The Consumer Price Index for April released by the Labor Department showed year-over-year top-line inflation around 4%, dangerously high by historical standards. However, the core component was up by only 2.3% on a year-over-year basis and the annualized pace for April came to only 1.3%. These core inflation rates certainly are good news for the Federal Reserve, falling within the Fed’s apparent “tolerance zone” for this important inflation gauge. The Fed Has Adopted a Wait-and-See Posture The Fed enacted quarter-point cuts in both the discount rate and the target federal funds rate at the conclusion of the April 29-30 meeting of the Federal Open Market Committee (FOMC). The funds rate now is 2.0%, down by 325 basis points since last August, and the discount rate is 2.25%, down by 400 basis points over that span of time. The April 30 FOMC statement said that economic activity remains weak and that labor markets have softened, and it projected that a combination of tight credit conditions and a deepening housing contraction will weigh on economic growth over the next few quarters. But the statement also contained some heads-up on the inflation front, including reference to a recent rise in some indicators of inflation expectations. In fact, the statement moved closer to a balanced assessment of risks to the economic outlook, suggesting that the FOMC is anticipating a pause in its rate-cutting campaign. While a pause may very well be preferred by a large majority of FOMC members at this juncture, future policy decisions will be determined by incoming information on the real economy and inflation. We continue to believe that further evidence of economic weakness, combined with containment of core inflation, will encourage another quarter-point cut at the next FOMC meeting (June 24-25), moving the real funds rate deeper into the negative zone. Housing Downswing Deepens and Broadens The national housing contraction that began in the fall of 2005 has been deepening by virtually any measure. Indeed, single-family permit issuance is down by nearly 70% from the peak in September 2005. Furthermore, the geographic scope of the housing contraction has expanded as the national downswing has deepened All states now show declines in single-family permit issuance since the national peak in 2005, and only a few Metropolitan Statistical Areas show positive growth since that national peak. The weakest state and metro performances show up in previously overheated markets in the West and Southeast — Florida, California, Arizona, Nevada and Colorado — and in structurally weak parts of the industrial Midwest — Michigan Minnesota, Ohio and Illinois. Supply-Demand Imbalance Means Downward Price Pressure The record-breaking contraction in new housing production since 2005 reflects a combination of profoundly weak demand and unprecedented excess supply on the market. The Census Bureau’s first-quarter report on residential vacancies showed new records for vacant year-round housing units on the market, whether for sale or for rent. The “home owner vacancy rate” also moved up to a new record high ― 2.9% ― in the first quarter, more than a percentage point above the rate that prevailed early in this decade. The severe supply-demand imbalance is putting strong downward pressure on national average home prices by most measures. The S&P/Case-Shiller home price measures have been falling since mid-2006, and the rates of decline have been accelerating recently. The relatively broad Composite 20 series is down by 14% from its peak, and the seasonally adjusted annual rate of decline reached 26% in February. Furthermore, all 20 major metros show declines since last fall, symptomatic of the geographic spread of the contraction in single-family housing production. Further declines in house prices definitely are in the cards, at least on a national average basis. The way things are going, it’s not unreasonable to expect an additional 10% decline in the S&P/ Case-Shiller measures (including the quarterly “national” measure), although it’s fair to say that we’re in uncharted waters on the house price front. Fiscal Policy Is Needed to Break the Downward Housing Spiral Falling house prices pose a huge risk to the U.S. economy and to the financial markets. Falling prices decimate the quality of outstanding mortgages — whole loans and securities structures. This leads to progressive tightening of lending standards in primary mortgage markets, a process recently documented by the Fed’s Senior Loan Officer Opinion Survey for April. This tightening process further weakens effective home buyer demand while falling mortgage quality feeds the upswing in foreclosures that dumps more supply onto glutted markets — putting more downward pressure on house prices from both directions. The diabolical “feedback loops” in the housing and housing finance markets make it extremely difficult to craft forecasts of housing market activity for the balance of this year and in 2009. NAHB’s current forecast shows very large declines in new-home sales and housing starts in 2008, with only modest recovery in 2009. NAHB’s downbeat housing forecast actually is subject to considerable downside risk. The Federal Reserve would like to break up the feedback loops that are dragging housing downward, but the Fed apparently lacks the tools necessary to do the job. A fiscal policy solution is sorely needed to spur home buying, stem the upswing in foreclosures and cushion the downdraft in house prices. There’s a lot of activity on these fronts, in both the Senate and the House, and the President presumably would be hard-pressed to veto well-structured legislation to help current home owners and to help stem the housing market contraction. 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 May 14 edition. To subscribe to “Eye on the Economy,” click here.
Want to Know the Housing Forecast for the Top 100 Metros? Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables. To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
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: Story Sticks Make Measuring Easy
You can buy commercially available gadgets that do the same thing — they are called bar gauges ― but I’d rather make my own. Here’s how:
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. In a Slump, Builders Redesign Homes to Add ValueHaving reduced their prices about as much as they can, home builders are focusing on making improvements to their business operations and being as resourceful as possible to increase their sales, according to a new study from the NAHB Research Center — “Implications of the Soft Housing Market for Builders, Suppliers and Manufacturers.” Based on surveys of builders earlier this year, the Research Center report says that builders have begun to implement some dramatic changes in how they build and sell homes in order to remain competitive and profitable as the housing downturn drags on longer than originally expected. Among the findings:
“Waiting out” the current slowdown in sales is an unsuccessful strategy for housing businesses both in the short- and long-term, the study finds, and builders need to be positioning themselves so that they are well prepared to gain the most when the housing market eventually rebounds. Also identified by the study are the business and technology improvements that builders are using to reduce their operating costs and increase sales performance; changes in home design and materials usage in response to the downturn; and the most popular manufacturer-sponsored programs for builders. The complete report, including an appendix with detailed data tables, is available from the NAHB Research Center bookstore, or call 800-638-8556. Document All Change Orders and Avoid Potential HeadachesWhy are so many home builders reluctant to document change orders? Is it because they can save five minutes in the field? If that’s the reason, those five minutes saved are not worth the potential long-term consequences. When builders don’t document their change orders, they still end up spending extra time reconciling invoices with the changes made on a project during the construction process because they don’t have the paperwork or paper trail to justify the work done. And that can mean lost revenue ― and trouble. The least painful outcome would be suffering the bookkeeping headaches that arise from trying to track down non-existent paperwork to justify the invoice for the change that you made. But if the home owner is persistent and wants to see the documentation to justify his payment, you also could find yourself in a legal battle. Granted, change orders are not popular. Builders don’t like them because they can be costly and typically add time to the construction schedule. Home buyers don’t like them ― many actually cringe when they hear the term ― because change orders can be confusing. That’s probably because many builders use “change order” as a blanket term for all customer decisions made during the construction process. Don’t confuse your customers. Call the decisions they make what they are — selections, options, enhancements and upgrades — and use the term “change order” only for when they make changes to those decisions. For instance, if a home buyer selects a red brick façade, that’s a selection. If the home buyer then changes the selection to brown, that’s a change — and reason for a documented change order. Bad Decisions Lead to Change Orders The best way to handle change orders is to eliminate as many of them as possible. To do that, implement a decision-making process that helps home owners make good, timely decisions. Some change orders are inevitable, however, so the following is a simple change order process that I found works almost every time:
As a builder, you can include additional details that meet your needs and business processes — for example, you might want to include change order fees, interest fees, profit margins and decision deadlines when discussing the change order process with your home buyers. But keep it simple. Documenting a change is the critical step in the construction and remodeling processes, and implementing changes and accounting for them will become easier once you begin documenting them on a regular basis. And you don’t have to start from scratch. Most home building and remodeling software offer automated change order systems. So there’s no excuse for not documenting change orders — and a lot to gain when you do. Andy Elsbury, a member of NAHB’s Custom Home Builders Committee, is the founder of Indianapolis-based SelectionWare, which provides consulting services and solutions for home builders to improve the building process. For more information, e-mail Elsbury, call him at 866-585-9222 or visit the SelectionWare Web site at www.SelectionWare.com. NAHB Has Nearly 300 Resources to Help You Run Your Business More Profitably Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to nearly 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources. Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed. Missing a deadline can seriously damage your bottom line. The "Scheduling" course from The NAHB University of Housing shows building professionals how to set workable schedules and use various time-management tools. The course teaches the benefits of scheduling and integrating scheduling with other management activities and will help builders, remodelers and site managers deal with those days when nothing goes according to plan. Find upcoming Scheduling courses here, or call 800-368-5242 x8154 for more information. Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Technology Adds Safety, Convenience, Energy EfficiencyBy Lewis Franke, CCPI, CCPD, CCI, DM Home Entertainment But trying to keep up with and explain these advances to customers can be a bit bewildering. Builders should consider establishing relationships with electronic systems contractors (ESCs) who can help customers better utilize the technologies they choose for their homes. Home Entertainment The advances in entertainment-related technology include everything from surround sound and whole-house audio to home theaters and plasma and LCD high-definition television. Not only is the technology advancing the quality of images and sound people enjoy, it gives builders and home owners the flexibility to put the entertainment technology just about anywhere in the house. More home owners are placing their flat panel TVs above fireplaces, for instance, because the new technology has a smaller footprint and needs less cabinetry. The same is true for speakers. Home owners and builders can place them throughout the house so music can be played in any room desired — or all of them ― while controlling the music from one location. Safety, Convenience and Efficiency Lighting controls are gaining in popularity because they not only provide safety and convenience for home owners, they add drama, fun and energy efficiency, too. With lighting controls, home owners can create personal lighting environments for when they come home to an empty house, for when they have guests over for dinner or for whatever mood strikes them. Most lighting scenarios can be accomplished at the touch of a button, through preset timing or a command from a cell phone. HVAC controls are another programmable technology that can help increase energy efficiency while also enabling home owners to enjoy their home environments more. Home Automation Home automation helps tie all these technologies together — and home servers are where home automation technology appears to be heading. Think of home servers as a central computer that seamlessly integrates and distributes information to control the various technologies throughout the house. Not only can home servers store more information than typical desktop and laptop computers so home owners can store their digital music, photos, video and files conveniently, they also can be used to automate and direct all house functions. The above are only a few of the technology options available in home building today ― and they will continue to evolve and provide more benefits to home owners. By offering technology resources that prospective home owners want, builders can position themselves with some of the best advertising available — a pleased customer. Lewis Franke, CCPI, CCPD, CCI, is a CEDIA-certified installer, designer and instructor who specializes in complete systems integration. Franke works with DM Home Entertainment, a custom electronic systems contractor in the Dallas area, and has more than 15 years experience with audio, video and AV systems integration. For more information, contact Franke via e-mail. 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. Madison’s Troy Gardens Builds a Sense of CommunityRecognizing 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 in February. Troy Gardens, a 30-unit mixed-income co-housing community by the Madison Area Community Land Trust in Madison, Wis., was one of the winners Guidelines and applications for the 2008 Livable Communities Awards are available online. The application deadline is June 6.
The neighbors around Troy Gardens in Madison, Wis. originally wanted to preserve a 14-acre space that included community gardens and a place to walk their dogs. But those plans have been surpassed, and now, 12 years later, the Madison Area Community Land Trust (MACLT) has won a Livable Communities Award from AARP and NAHB for Troy Gardens, a 30-unit mixed-income co-housing community. The development’s six acres of open space includes an organic farm, community gardens, a restored prairie and a wildlife habitat. The community was built to be fully “livable.” Before construction, MACLT sought buyers with disabilities so that designs could be adapted to meet their specific needs. All units are wheelchair-ready and all primary pathways are accessible by wheelchair. Twenty of the 30 housing units are permanently affordable. Roadways are limited to the edges of the site and one-third of the homes back up onto the natural areas, away from parking and roads. Because the community has good access to public transportation and is located an easy bike ride from downtown, many residents only have one car — further minimizing the impact of vehicles on the development. “The key to Troy Gardens has been the profound spirit of cooperation between the neighborhood and all the community partners we have been working with on this project over the past 12 years,” said Greg Rosenberg, executive director of MACLT. “While we are quite proud to receive this award, it is important to realize that this project reflects the contributions of many people and organizations.”
MACLT won in the Livable Communities category of best developer up to 250 units. One of the key goals of the project was that it would help build community. To that end, Troy Gardens’ residents enjoy paths for walking, central courtyards and a summer youth gardening program with adult mentors. Plans include building a community center. 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. NAHB Efforts Minimize Problems With Lead Paint RuleAs a result of a series of NAHB meetings with the Environmental Protection Agency, the Office of Management and Budget and members of Congress, the EPA’s Lead: Renovation, Repair and Painting rule released last month recognizes that remodelers cannot be held responsible for pre-existing lead hazards and that professional remodelers make homes safer and cleaner after completing their work. In direct response to NAHB concerns, the rule includes a statement outlining the difference between lead remediation workers, who work explicitly to remove lead from homes, and remodelers, who are not hired or equipped for lead hazard removal work. Professional remodelers minimize lead hazard exposure through clean work practices. Remodelers were concerned that the rule would have required them to spend time and money at the end of a job verifying that the area was clear of lead by testing dust either in a lab or on site. Listening to NAHB concerns, the EPA has now instituted a more reasonable process that outlines cleaning steps after a job has been completed. Also resulting from NAHB advocacy, the rule now recognizes previous training through the Department of Housing and Urban Development on working with lead, which will make it easier for those who hold this certification to receive approval to work in lead-exposed homes under the new rule. While the specifics are still being developed, HUD-certified remodelers would need to take a four-hour refresher course and pass a test to be certified under the new lead paint rule. Remodelers estimate that jobs involving lead paint may increase as much as 20% under the regulation, and they remain concerned that there is no requirement for home owners to comply, opening up a major gap in the protection of children. During the next few months, NAHB will be working to educate its members on the rule and consult with the EPA on rolling out a training program. For an overview of the regulation, click here to read a recent article in NBN; for more information, e-mail Kelly Mack at NAHB, or call her at 800-368-5242 x8451. CAPS Remodelers Are Experts on Aging in PlaceWith an increasing number of baby boomers choosing to stay in their homes as they age, home owners are turning to remodelers for help to renovate their homes to accommodate their changing lifestyles. During May — National Home Remodeling Month, NAHB Remodelers is highlighting the benefits of aging in place with the help of a certified professional. "Even minor aging-in-place remodels make a huge difference in the lives of seniors and people with disabilities," said NAHB Remodelers Chairman Lonny Rutherford, CGR, CAPS, a remodeler from Farmington, N.M. Certified Aging-in-Place Specialist (CAPS) remodelers are trained and certified to assist home owners with making the adjustments needed so that they can live in their homes comfortably." According to AARP, more than 84% of people aged 50 and older want to stay in their homes as they age. CAPS recognizes remodelers who know how to work with older adults and are knowledgeable about common barriers and solutions to aging at home. To earn the CAPS designation, a remodeler must complete a series of industry-specific education courses; provide letters of recommendation, proof of licensing and insurance; and adhere to a strict code of ethics. The CAPS designation stands for professionalism, customer service and a commitment to quality. "CAPS courses teach great design skills, and all home owners can benefit from thoughtful and innovative design options, making their home friendly for people of all ages," said Rutherford. The most popular CAPS solutions make a vast difference in improving livability without wiping out savings:
University of Housing Seeks Feedback on EducationThe NAHB University of Housing is seeking feedback from participants in NAHB courses, designations and conferences about how the education opportunities may have helped increase their profits, expand their networking or enhance their careers. Among the feedback sought:
For more information, e-mail Elizabeth Moore at NAHB. Education Calendar
Learn More About Upcoming Conferences and Designations Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. More Big Changes Ahead Predicted for Green BuildingPeter Yost, a former member of the NAHB Research Center staff, told last week’s NAHB National Green Building Conference in New Orleans that he is surprised at how quickly green building has grown since the annual conference was inaugurated in Denver 10 years ago, a trend he said is linked to the skyrocketing cost of energy. When the conference was launched, the price of oil was less than $12 a barrel, and many industry analysts predicted that energy costs would remain flat for the foreseeable future. That forecast was obviously shortsighted, with the price recently topping $125 a barrel in mid-May with no relief in sight. “Really, the Ouija board is probably the most sophisticated thing we have to predict oil prices,” said Yost, who is now a Vermont-based educator, writer and consultant long experienced in green building and design. In 1999, people didn’t talk about carbon-neutral or zero-energy homes, and the American public was largely unconcerned about global warming. There were only 7,000 Energy Star-certified homes. Now, Yost said, there are more than 800,000. As green building moves into the mainstream, Yost forecasted even bigger changes ahead:
For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Awards Honor Leaders in Sustainable Building PracticesSeventeen building industry professionals from across the country were honored for excellence and innovation in green home building at the 10th Annual NAHB National Green Building Conference in New Orleans on May 11. A special award went to Ray Tonjes, a custom builder in Austin, Texas. Tonjes, who has led the NAHB Green Building Subcommittee almost since its inception, was honored as the Builder Advocate of the Decade. "These honorees are pioneers, artists and building scientists," said NAHB President Sandy Dunn. "They've worked hard to bring sustainable building practices into the mainstream. These winners are not afraid to put great ideas in motion." Outstanding projects included: Single-Family Homes of the Year
For information on green home building resources available from NAHB, click here; or e-mail Calli Schmidt, or call her at 800-368-5242 x8132. CertainTeed Easy-Care Fence Provides Stucco Styling in VinylAs part of its Bufftech vinyl fence product line, CertainTeed has recently launched its CertaStucco privacy fence, which captures the beauty of traditional stucco styling in an economical, easy-care vinyl design. An innovative alternative to stucco walls, CertaStucco won’t crumble, peel, chip or crack due to settlement. It also will not stain like traditional stucco. The vinyl fence is virtually maintenance-free, the manufacturer says, and never needs to be painted. CertaStucco is easy to install, with less impact on home owners since there’s no mess or cost involved with digging a foundation. CertaStucco features CertainTeed’s exclusive WindBreaker Design, which provides exceptional performance in high-wind conditions. Designed to coordinate with a variety of wall surfaces and stucco styles, CertaStucco is available in Mission Ivory, a neutral shade that complements any exterior color scheme. CertaStucco is backed by CertainTeed’s lifetime limited warranty with SureStart protection, which covers warranted repair and replacement costs for five years after installation. Headquartered in Valley Forge, Pa., CertainTeed is a member of the National Council of the Housing Industry — The Leading Suppliers of NAHB. 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 HGTVThe NAHB Production Group produces weekly television shows on DIY, Fine Living and HGTV for consumers. The following is the latest lineup: "Rock Solid" on DIY
HGTV Seeking ‘Dream Home’ Builder/Architect Teams HGTV is seeking developers, builders and architects to create dream homes for the network’s Dream Home Sweepstakes. To learn more, click here. About the NAHB Production Group 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.
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. Lennar Honored for Mental Health Center for Children
Through the years, Lennar has donated to the center and helped built several cottages on the center’s residential campus — the latest being the Ron and Darin Mittelstaedt Cottage, a 20-bed facility for children with severe behavioral and emotional disabilities. In recognition of this project, Lennar received honorable mention in the 2007 Builder Achievement Award for Outstanding Community Service from the National Housing Endowment at the International Builder’s Show in Orlando in February. “We are so grateful for what they’ve done,” said Emilia Godwin, the senior development specialist at River Oak. “This is the way they work. They’re so committed to serving the community any way they can.” Planning for the new cottage began in 2005, with construction beginning a year later when the housing market was already into its downswing. “With the changing market, it did become difficult,” said Troy McCollum, a senior construction manager at Lennar who supervised the project and worked with strapped vendors and contractors to donate materials and services. More than once, he called a supplier to give them a heads up on the supplies they promised for the project. “I’d get a call back and they’d say, ‘Hey, things have changed. Business plans have changed. You’re going to have to find somebody else,” said McCollum. He said California’s North State Building Industry Association and HomeAid Sacramento, the philanthropic arm of the HBA, helped Lennar follow up on vendors’ commitments. Lennar had already built a 20-bed home, the Ivey Cottage, for River Oak, so working with the charity, Lennar “tweaked” the plans for the Mittelstaedt Cottage by incorporating sound control elements and changing color schemes, according to McCollum. The cottage was completed in June 2007. The cottage’s current residents are a challenge for the River Oak staff. All of the children have suffered serious physical, psychological or sexual abuse. All come from low-income backgrounds. Many are wards of the court, said Godwin “These are the most severely challenged children. They are one step below institutionalization,” she said. “They externalize what people have done to them. They can’t live with their families. We take them and stabilize them and try to work with their issues.” The goal of the residential program, she said, is to treat the children so they can eventually be placed in foster homes rather than be institutionalized. The program has been a proven winner with 70% to 80% of the children able to avoid institutionalization, said Godwin. “It is pretty successful,” she said. Unfortunately, county funding for the program has ended and the county will now place emotionally- and behaviorally-disabled children directly into foster care. Godwin said she is hopeful that the county funding that was once intended for the River Oak program will be given to foster families so they have the resources needed to help the emotionally-challenged children in their care. “It was a heartbreaking decision, but at the same time it’s the reality,” said Godwin. “We’re not the only nonprofit trying to handle this issue.” River Oak plans to use the Mittelstaedt, Ivey and its other cottages in one of a half-dozen programs now under consideration to replace its residential program ― either a boarding school for foster kids with emotional problems, an adolescent drug treatment facility, a Head Start program for young children with emotional problems, a short-term mental health crisis care program or a transition home for teens “aging” out of various mental health programs. “All of these have very good benefits. It’s just deciding what fits bets with the mission,” she said. Regardless of what residential program River Oak eventually undertakes, Lennar’s McCollum said the company’s support of the center has been well worth it. “We were happy to step up to the plate,” McCollum said. “It’s our commitment to give back to the community, quite simply. It’s a moral obligation.” In honor of its award, Lennar received a $1,000 donation from the endowment to give to the charity of its choice, the Mustard Seed School in Sacramento. Seven other builders were honored with 2007 Builder Achievement Awards for Outstanding Community Service during a presentation at the Builders' Show. 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.
1990 NAHB President Martin Perlman Dies in HoustonMartin Perlman, president of NAHB in 1990, died on May 13 at the age of 75 in Houston. Born in Brooklyn, N.Y. but claiming his birthright as a native Texan, Perlman was a prominent real estate developer and builder in Houston for almost 40 years. During that time, he built more than 6,000 single-family homes, as well as apartments, offices, residential subdivisions and business parks. He was most recently associated with Imperial Homes. Perlman held a number of leadership positions with the Greater Houston Builders Association, and he was its president in 1978-1979. In 1981, he received the association’s Builder of the Year award. Additionally, he served on the board of directors of the Texas Association of Builders and chaired a number of the association’s committees. Perlman was well-known throughout the U.S. as a philanthropist and a community and real estate industry leader. He was active in local government affairs, serving on the Harris County Housing Finance Authority and on the City of Houston Planning and Development Commission from 1983 through 1986. He was chairman of the Anti-Defamation League of Houston in 1977, a member of the board of trustees of Congregation Emanu El from 1975-1978 and president of the Jewish Community Center of Houston in 1978. At the national level, Perlman served on several NAHB committees, including the Executive Committee, and he was a life director. He was BUILD-PAC trustee between 1982 and 1985 and was chairman of the board of trustees of the National Commercial Builders Council in 1983 and 1984. Perlman was an NAHB area vice president in 1986 and an active Spike. Perlman received many awards for his achievements, including being named to the National Housing Hall of Fame in recognition of his lifelong dedication and indelible contribution to the home building industry. A scholarship fund was established in his honor through the National Housing Endowment. Perlman is survived by his wife of 51 years, Ina Perlman; two sons, Brett, who is married to Cindy, and Andy, who is married to Ilana; sister Betsy and husband Robert Swango; five grandchildren and several nieces and nephews. Free ‘National Homeownership Month’ Material AvailableJune is National Homeownership Month and NAHB is offering members and home builders associations free online promotional material ― including sample articles, radio and print advertisements, member education and other consumer resources — that highlights the benefits of homeownership for consumers and provides positive messages about the home building industry. The material also includes the “Guide to Celebrating National Homeownership Month in June,” which provides tips and ideas on how to celebrate homeownership month, such as planning a news conference and holding a homeownership fair.{{MORE}} Members and HBAs can distribute the homeownership month information to their local news media throughout June or anytime during the year. The ready-to-use articles can also be placed in special tabloid sections for home shows, parades of homes or other special events. All the material can be customized to add relevant local data and contact information. The material also supports the “Buy Now” message. With interest rates near historic lows, competitive prices and great home selections, buying a home today enables families to enjoy all of the traditional benefits of homeownership, including an excellent return on investment, tax savings, wealth-building, price stability and achieving the American Dream. The National Homeownership Month Promotional Kit includes:
Sign Up for ‘Spokesperson Training’ Sessions at Fall BoardLeaders of local and state home builders associations and their members have an opportunity to learn the latest interviewing and public speaking techniques through NAHB’s “Spokesperson Training” program during the association's fall board of directors meeting in San Diego in September. Dates for “Interview Skills” and “Presentation Skills” have been set and members can register securely online with a credit card for one or both of the popular training sessions on the NAHB Web site. The program includes two different one-day seminars:
Session Schedules:
Interview Skills and Presentation Skills cost $495 per person for each one-day seminar. More than 15,000 NAHB leaders have taken Spokesperson Training since the program began in 1979. For more information or to register, e-mail Brooke Fishel in NAHB Public Affairs, or call her at 800-368-5242 x8061. Save 10% With Office Depot Large-Format Printing ServicesNAHB members can save an additional 10% off their Member Advantage discounted prices through July 31 on printing signs, posters, schematics, blueprints, banners and photo enlargements — all up to 60 inches wide ― with Office Depot’s large-format printing services. Office Depot’s large format prints are available in black and white or color on a variety of media types, including matte presentation paper, glossy photo paper, artist canvas and indoor/outdoor vinyl materials. In addition, members can turn basic large format prints into professional looking, durable signs, displays and presentations through foam-board mounting, lamination and grommets available through Office Depot.. Members can use these services at select Office Depot stores, or online at www.officedepot.com/a/design-print-and-ship. With the online services, members have the option of picking up the printed order at any nationwide Office Depot retail store of having it delivered directly to their office or home. NAHB members can receive an automatic 10% discount on all online and phone orders if they are registered as Member Advantage customers. To register for these exclusive Member Advantage Office Depot discounts, call 800-274-2753, or click here for more information. For a coupon that gives members an additional 10% off Office Depot large-format printing services, click here. The coupon expires July 31, 2008. Other Member Advantage Discounts For information on the Member Advantage discount program and all its participating companies, go to www.nahb.org/MA.
Free NAHB Kit Gives Builders Back-to-Basics Tips in 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. GM $500 Private Offer: Easy as 1-2-3Receiving $500 towards the purchase or lease of most new GM vehicles, whether for business or personal use, is now as easy as one, two, three. Follow these simple steps to get your GM authorization number and turn it in at your GM dealer for your $500 discount. The $500 NAHB private offer may be combined with most current GM incentives: One: Create a username and password.
Other Member Advantage Discounts For information on the Member Advantage discount program and all its participating companies, go to www.nahb.org/MA.
Free NAHB Kit Gives Builders Back-to-Basics Tips in 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. Willams Scotsman Offers $1.99 First-Month Storage ContainerThrough July 31, Williams Scotsman is offering 20- and 40-foot storage containers at $1.99 first month’s rent with a three-month minimum lease to NAHB members — plus a free door lock rental with each unit. The storage container deal is in addition to Williams Scotsman’s NAHB member discount of one month free rent — up to $500 ― for each mobile office, storage container or specialty trailer leased for six months or longer. For more information, call Williams Scotsman at 877-884-4065, or visit www.willscot.com/storage. Other Member Advantage Discounts For information on the Member Advantage discount program and all its participating companies, go to www.nahb.org/MA.
Free NAHB Kit Gives Builders Back-to-Basics Tips in 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.
UPS Offers Up to 30% Discount to NAHB Members on ShippingNAHB 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.
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. Calendar of Events
Learn More About Upcoming Conferences and Designations Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. |