Nation's Building News Online: July 21, 2008Print All Articles Text Version |
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House Expected to Vote on Housing Stimulus This WeekWith the House expected to vote this week on housing stimulus package H.R. 3221, NAHB is continuing its grassroots push to urge Congress to extend the April 1, 2009 expiration date specified for the proposed home buyer tax credit. In order to maximize the stimulative effect of the home buyer tax credit on the housing market and the U.S. economy, NAHB is urging lawmakers to extend the credit expiration date into the spring and summer home buying season. NAHB members are being urged to contact their members of Congress through the association's free Legislative Hotline at 1-866-924-NAHB (6242). For complete instructions on how to participate in this telephone and e-mail campaign, click here.
As the legislation now stands, the tax credit could be used for homes purchased between April 9, 2008 and April 1, 2009. Since Congress has taken so long to pass the housing bill and is not expected to finalize the bill until later this month, home buyers in effect would lose four months of being able to use the credit unless this provision is modified.
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, contains several other provisions of interest to home builders. The bill would:
For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421; or contact Scott Meyer, x8144. Register for the 2009 Builders' Show in Las VegasRegistration for the 2009 International Builders’ Show (IBS) in Las Vegas on Jan. 20-23 — the single, most important and largest industry event of the year — is now open. This year, IBS will feature:
Full registration provides attendees with access to four days of exhibits on one million net square feet of exhibit space, all the educational sessions and new, daily-featured speakers. Full registration is $295 for members through Nov. 7 and $425 thereafter. Full registration for non-members is $475 and $575, respectively. Exhibits-Only Registration Exhibits-only registration is $50 for members through Nov. 7 and $100 after and $50 for their spouses. Exhibits-only registration for non-members is $100 through Nov. 7 and $200 after and $70 for their spouses. Education Session Tickets Exhibits-only registered attendees can purchase tickets to individual IBS education sessions. Individual tickets are $50 for members and $70 for non-members. Registrants can purchase packages of four tickets and get one free or seven tickets and get three free. (Attendees who purchase full registrations do not have to purchases education session tickets or exhibits-only registration.) To Register For registration information, click here. For hotel information, click here. To register online, click here. For the latest IBS information — including floor plans, renderings and construction photos of The New American Home — visit the 2009 International Builders’ Show Web site at www.BuildersShow.com. Aug. 12 Audio Seminar to Look at Getting Hesitant Boomers to BuyExperts on selling to the 50+ market will give tips on how to get fence-sitting boomers and others in the 50+ market to buy now in an hour-long audio seminar from 2:00-3:00 p.m. EDT Tuesday, Aug. 12. “Get Hesitant Boomers to Buy Now!” audio seminar participants will discuss how to motivate prospective 50+ home buyers to move forward despite today's market conditions. Seminar panelists will discuss:
For more information, visit www.nahb.org/boomersbuynow. Participants will earn one hour of continuing education credit for NAHB’s Certified Active Adult Specialist in Housing (CAASH) designation. To Register Registration is $79 per phone site. Companies, local home builders associations and local 50+ councils are encouraged to register and can participate with one site registration fee. Click here to register. For more information, or to submit questions to be answered during the audio conference, e-mail Jeff Jenkins at NAHB, or call him at 800-368-5242 x8292. Improve Your Focus on the 50+ Market With Publications From BuilderBooks.com The 50+ market provides some great opportunities for builders today. BuilderBooks.com brings together the essential resources for builders seeking to grow their businesses while bringing high-quality product to this demanding, often affluent consumer group that has planned well and is ready to build or buy. BuilderBooks.com also offers publications on customer service so builders can start building strong relationships before breaking ground and turn these experienced consumers into enthusiastic sales people. To view or purchase these and a wide variety of industry publications online, click here or call 800-223-2665. The Certified Active Adult Specialist in Housing (CAASH) designation gives housing professionals serving the rapidly burgeoning 50+ market the essential knowledge, tools and skills that will help them succeed — from conducting initial research to design considerations and features to serving the customer. Find upcoming CAASH classes by clicking here. For more information, call the Professional Designation Help Line at 800-368-5242 x8154 or e-mail CAASHinfo@nahb.com. Indiana Builders Paint a Brighter Picture of Local MarketArmed with extensive local statistics, the Home Builders Association of St. Joseph Valley (HBASJV), which encompasses South Bend, Ind., is putting the national housing crisis into perspective for local news outlets. Two recent news stories highlighted the facts that the builders of St. Joe County want consumers to know about the state of their local industry: “Area housing outperforms national market” appeared in the Tribune Business Weekly and local CBS affiliate WSBT-TV broadcasted a story in which “Experts say local housing market poised for turnaround.” Such optimistic headlines weren’t always the case. “After we read one-too-many sensationalized articles in the South Bend Tribune about the national housing market, we realized that something had to be done,” said Barbara Carmichael, executive officer of the builders association. HBASJV and the Greater South Bend-Mishawaka Association of Realtors® combined their resources and efforts to tackle the negative media coverage. For inspiration, Carmichael brought several of the Myth Buster success stories from NAHB’s online Myth Buster resources to the meeting to show how other markets had found a way to make a difference in their local press. The first order of business was to gather as much statistical research on the local market as possible. “Tom Gruber, our government-relations liaison, did a great job of finding the numbers to show how our market is outperforming the national market. The Realtors® also provided the numbers for the resale side that we didn’t have,” said Carmichael. In fact, when the upbeat statistics were provided to media outlets, there was a surprised reaction and one reporter contacted NAHB to verify that the numbers were in fact realistic for the area. Media Response HBASJV also benefited from Gruber being able to use the contacts he had made while on staff at the South Bend Tribune to arrange a meeting with the newspaper’s editorial board in which builders presented the local angle. That information subsequently began to be reflected in the newspaper’s housing coverage. Local media quickly started viewing the HBA as a credible resource. “Immediately upon our return to the office from the editorial board meeting, two of the area’s television stations interviewed us to get the local perspective on real-estate stories they were reporting,” said Carmichael. And news stories recently have shown much more balance between the national and local numbers, she said. Seeing HBASJV’s successes in the press, the nearby Builders Association of Elkhart County (BAEC) decided it was time to bust the myths in its market as well. BAEC’s board of directors recently approved funds to allow the association to move forward with its own campaign. To help show your side of the story in the press, go to www.nahb.org/mythbuster to access the continuously-updated resources available and to read more Myth Buster success stories about locals around the country. For more information on the Myth Buster resources, e-mail Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447. Credit Seen Drying Up for Small BusinessAs losses mount at American banks and the pain of the credit crisis spreads from housing and finance to the broader economy, many small companies complain it is increasingly difficult to obtain loans. Tighter credit could not only help to push the U.S. into recession, but prolong the downturn as ideas for new businesses get stymied once entrepreneurs sit down with local bank managers, small business representatives warn. “From what bankers have told me, this (tougher approach to loans) is because they are under much greater scrutiny from regulators after the excesses of recent years,” said Weldon Gibson, a consultant at the Lamar University Small Business Development Center in Texas. For the past four years, Dee Smith of Charlotte, Mich. has run a small construction company that buys homes, renovates them and then sells them at a profit. Up until this spring, he flipped five or six houses a year. But when he approached his local bank in April asking for a mortgage loan covering 77% of a $175,000 home purchase, he was told the bank’s new limit was 75% and his application was rejected. “Although I have been with the same bank for many years and have run all my loans through them, I was told times have changed and they couldn’t give me the loan I wanted,” Smith said. “They got burned by the housing crisis and the rules of the game have changed.” Smith has closed his construction company until further notice, but continues to run a bed and breakfast guest house and a small consulting business that don’t require any loans. (www.uk.reuters.com)
Housing Slump? Not With Custom Projects, Builders SayDespite the recent downturn in real estate, some builders of custom homes in central Oregon say business is good, at least for now. Ed Busch, owner of PGC Building and Design in Bend, said he’s on track to make more money this year than he did in 2006 and 2007. Busch builds custom homes, including one listed for $1.7 million that’s part of a local Tour of Homes, but his company also does remodels, which is one reason he’s doing so well, he said. “We try to service whatever someone’s needs are, from shelves in the garage to a Tour of Homes house for $1.7 million,” Busch said. “It’s more about if someone has a need, we service it, and it seems to be working.” Busch said he has enough work to get him through next spring and he keeps hiring workers to help him, although two projects did recently fall through after the clients canceled their plans due to financial concerns. Stricter lending requirements have eaten into people’s ability to borrow money to pay for projects, said Sander Culliton, who builds custom homes and is owner of Crest Building and Design. But for those with cash, it’s not an issue. “Most of my clients are still building. They aren’t building off of construction loans; they have their own money,” Culliton said. “They have cash in the bank or the stock market.” The surprising thing for Culliton was not the real estate slowdown, which he said he knew would come, but the impact the related credit crisis has had on lending. “As a builder, especially right now, when you try to get money, the lender says, ‘Oh, you’re a builder.’ It’s like a scarlet letter,” he said. (www.bendbulletin.com)
As Market Slows, Some Builders See an Opportunity to Renovate the Construction Scene“There’s no secret things are slow,” said longtime York County, Pa. builder Larry Mellott, who is president of the York County Builders Association. But Mellott insists that the housing market is “not all gloom and doom,” but merely a correction from the housing boom earlier this decade. His spin is that it is an opportunity to look at doing things differently, such as constructing smaller homes instead of the McMansions that have sprung up over the past decade. Cherry Tree Development scaled back its original plans to build three-story townhouses selling for $200,000 to $260,000. Only three of the seven built since January 2007 have been sold, and Robert Holweck, one of Cherry Tree’s principals, now has plans to build smaller two-story Cape Cod units starting at about $180,000. The more affordable homes come with all appliances, which, he said, provides more value for home buyers. So far, three are under construction and one is sold, but he said the redesign has netted “incredible interest.” “What we tried to do with this product is hit a niche market,” he said. “We have to redesign houses for today’s buyer.” Holweck said there is a glut of houses in the $250,000 range and not enough so-called workforce homes for the average buyer or retirees who want to downsize. He said the units he has underway address that need. (www.eveningsun.com)
Shipping Containers Become Distinctive Housing on LandEco-friendly, affordable housing that uses as building blocks the 8-by-40-foot steel containers often left vacant at seaports has the potential to take off in the industry, said Bill Gati, a member of the American Institute of Architects Custom Residential Design Committee. Architect Peter DeMaria of DeMaria Design in Manhattan Beach, Calif., said the recycled containers, which cost between $2,000 and $3,000, are only “the tip of the iceberg” of the designs. The homes, which use anywhere from four to eight containers, can include add-ons such as solar panels, green roofs, radiant heating and other environmentally friendly or energy-efficient features, DeMaria said. David Cross, founder of SG Blocks, a company that modifies containers at 17 U.S. locations, said there are about 75 homes nationwide using shipping containers. The company, which was formed at the end of 2006, plans to modify more than 1,000 containers next year. Multifamily, multistory buildings constructed with the containers cost 20% less to build than those that use traditional materials, Cross said. The container builders are also finished 40% faster, he said. DeMaria is planning to offer his container houses starting at $150 per square foot, or $300,000 for 2,000 square feet, through Logical Homes, a Web site being launched this month to let customers purchase the homes, which arrive on location quickly and need little on-site labor, he said. Costs for a traditional custom home in Manhattan Beach run around $225 to $250 per square foot, he added. (www.usatoday.com)
Taking Turbines for a SpinAlthough they have been around for years in rural areas and isolated locations, residential wind turbines are gaining acceptance with more home owners looking to cut their electricity bills and they are spreading to the suburbs and, in some cases, even cities. Because of site requirements, wind turbines generally cannot be used by those whose homes sit on less than an acre of land. “They are definitely growing” in popularity, says Ron Stimmel of AWEA, the national trade association for the wind energy industry. Sales of turbines that generate 2 kilowatts to 10 kilowatts of electricity, the smallest category of turbine and the ones most likely to be in residential use, have been rising nearly 25% annually, he said. The high cost of electricity has been driving wind-turbine sales. Home owners in an area of high winds with a properly sited turbine can shave up to 80% of their monthly electricity bills, industry experts say. But securing those monthly savings will take a hefty upfront investment. The turbines, including installation, can run anywhere from $12,000 to $50,000, with some models even pricier. One of the more popular models on the market, Southwest Windpower’s Skystream 3.7, goes for $12,000 to $15,000 and can generate 1.9 kilowatts. In the most optimal example of a household that spends $200 a month on electricity and realizes savings of 80% from a turbine, it would take almost eight years to recover the cost of a $15,000 system that can last 20 to 30 years. (www.marketwatch.com)
Fairbanks Housing Market Holds SteadyHome sales around Fairbanks, Alaska stuck close to normal this spring, according to numbers reported by the Greater Fairbanks Board of Realtors®. Home buyers purchased about as many new and existing homes in most size categories — excluding big homes with five or more bedrooms — as they did in the springs of 2006 and 2007 and more than years before that, the board reported. The average sales price for the second quarter of this year was $220,692. That was only slightly lower than last spring, although home sellers are making more concessions — such as covering increasing portions of buyers’ closing costs — that are not reflected in reported sales prices. The local housing market is somewhat saturated compared to recent years, with a seven-month supply of homes for sale right now, but that’s a decline from a 10-month supply reported three months ago. While foreclosure numbers in Fairbanks and across Alaska are up slightly, and lending standards are tighter than a couple of years ago, a housing specialist from the Alaska Housing Finance Corp. maintains that Fairbanks is doing better than most places in the country. (www.newsminer.com)
Mandate Benefits Limited for Residential Energy EfficiencyTestifying on behalf of NAHB on July 17 before a House Subcommittee on Energy and Air Quality hearing on “Climate Benefits of Improved Building Energy Efficiency,” St. Louis green builder Matt Belcher cautioned Congress on the danger of one-size-fits-all proposals for home construction. Policies that encourage rather than mandate energy savings are the most meaningful in stimulating greater demand for energy-efficient homes, Belcher said. “The ability of aggressive building code mandates to achieve massive energy and greenhouse gas emissions savings is incredibly limited,” he said. “The wide-ranging geographic differences in state and local climates create specific building needs, making national benchmarks almost untenable.” Further, “significant increases in costs for efficiency upgrades and the additional increase in home price to accommodate them has the potential to harm the part of the market with the least flexibility to react to price constraints: the marginal first-time home buyer,” Belcher said. “NAHB does not support the assertion that a broad public policy objective should be achieved on the backs of a relatively narrow segment of the market with limited resources.” And even when a home is built to be more energy-efficient, it does not translate into automatic energy savings, he said. “Almost half of the energy consumed in a home is the result of the lighting, refrigeration, laundry, cooking and electronics use by the residents,” Belcher pointed out. “The disconnect between [building] envelope improvements — which are primarily the responsibility of the builder — and resident behavior — over which a builder has no control — is one of the major barriers to achieving greater improvements in residential energy efficiency in new homes.” “It is false to assume that just requiring states or local governments to adopt an arbitrary above-code compliance target for all new construction is going to translate into improved enforcement or achieve the energy savings goals envisioned,” Belcher told Congress. “If resources, or infrastructure, to enforce the code are not available, then the savings assumed will never materialize.” Belcher also asked Congress to extend the New Energy Efficient Home Credit, which was enacted in 2005 and expires at the end of the year. Department of Energy research shows that residential buildings consume 21.9% of the nation’s energy and produce 21% of its greenhouse gas emissions. However, Belcher pointed out, mandating that all new homes must achieve significant above-code performance will not produce the greatest energy savings because new homes are a small part of the problem. Solutions to address residential energy use — and include existing homes — require a sharper focus, he said. Belcher also explained how the NAHB National Green Building Program is moving the market. “The dynamic ways that the green building movement is rapidly changing residential construction is only one example of a broader, market-determined push for greater efficiency,” he said. “In the midst of the worst housing downturn since World War II, builders continue to see growth in demand for green and energy-efficient homes, as well as increased requests for efficiency upgrades in the 128 million existing homes comprising the bulk of the nation’s residential energy consumption.” For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132. Single-Family Home Starts Slip Further in JuneResponding to worsening conditions in the nation’s housing and financial markets, single-family home builders continued to slow the pace of new construction in June, according to the latest data released by the U.S. Commerce Department on July 17. Starts of new single-family homes declined 5.3% to a seasonally adjusted annual rate of 647,000 units in June. This was the slowest pace in 17 years, and marked a decline of 64.5% from the peak of the building boom in January of 2006. Meanwhile, issuance of building permits for single-family homes declined 3.5% to a rate of 613,000 units. “Builders continue to do their part to reduce inventories of unsold homes on the market by reining in new construction,” said NAHB President Sandy Dunn. “Now more than ever, it’s up to Congress, which must finish its work on a badly needed housing stimulus package that will help stabilize the housing market and stem the negative effects of the housing downswing on our economy.” “The single-family data from today’s report is exactly in keeping with what our builder members have been telling us in recent surveys,” added NAHB Chief Economist David Seiders. “Traffic of prospective buyers is down substantially, and consumer confidence is very low. Job-market losses, deepening problems in the finance arena and sinking home values aggravated by the wave of foreclosures are all contributing factors that are keeping potential home buyers on the sidelines,” he said. “Clearly there is a need for immediate action by Congress and the Administration to help put an end to this downward economic spiral and restore the homeownership dreams of many Americans,” Seiders said. Overall housing starts and building permits posted misleading gains of 9.1% and 11.6%, to 1.07 million units and 1.09 million units, respectively, for the month, largely due to a one-time bump in multifamily activity that was related to newly instituted building code changes in New York City. Excluding the Northeast multifamily data, there was a 4% decrease in overall housing starts and a 0.7% gain in building permits for the month. Multifamily housing starts, fueled by a big jump in the Northeast, posted a 42.5% gain to a rate of 419,000 units in June. Multifamily permits, also skewed by the Northeast/New York City data, posted a 39.4% gain to 478,000 units. The latest regional data showed housing starts more than doubling in the Northeast in June (as a result of the New York City data), while starts posted a 10.5% decline in the Midwest, a 0.4% percent increase in the South and an 8.2% drop in the West. Building permits (again affected by the New York City data) showed a 73% gain in the Northeast for June, along with a 2% decline in the Midwest, a 3% gain in the South and a 0.9% gain in the West. 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. Builder Confidence Loses More Territory in JulyBuilder confidence in the market for newly built single-family homes fell for a third consecutive month this July, according to the NAHB/Wells Fargo Housing Market Index (HMI), which was released on July 16. The index hit a record low of 16, down from 18 in June, with each of its three component indexes also sinking to new lows. “The worsening housing slump and the near-meltdown in financial markets last week makes it even more urgent for Congress to complete action on the housing bill now, a move that will help stabilize and restore confidence in housing and the U.S. economy,” said NAHB President Sandy Dunn. The housing stimulus bill now being considered in Congress would provide a temporary tax credit for first-time home buyers, helping to stimulate sales, reduce the inventory of unsold homes on the market, stabilize house prices and arrest the rapid deterioration of mortgage credit quality. “Builders are reporting that traffic of prospective buyers has fallen off substantially in recent months,” said NAHB Chief Economist David Seiders. “Given the systematic deterioration of job markets, rising energy costs and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve,” he said. “A tax credit, made available for a limited time, could be just the incentive needed to draw reluctant buyers back into the game,” Seiders said, “and a policy-induced pickup in home sales could gain momentum further down the line.” Derived from a monthly survey that NAHB has been conducting for more than 20 years, the HMI gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective home 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. The HMI index gauging current sales conditions declined one point to 16 this month, the index for sales expectations fell four points to 23, and the index for prospective home buyer traffic receded four points to 12. Builder confidence in July dropped six points to 10 in the Midwest, the lowest point recorded there since the HMI began being reported on a regional basis. Confidence in the West slipped three points to match the record low set this January, and the South posted a one-point drop to a reading of 13. The Northeast was the only region to post a gain on this month’s HMI, rising two points to 14 from the previous month’s record low of 12.
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 Demand Grows as Buyers Struggle to Overcome ObstaclesDespite obstacles to home buying in today’s market, the underlying demand for homeownership remains healthy and a significant share of households say they expect to purchase a home, according to a new survey conducted by Harris Interactive for Move, Inc. Nearly half (41%) of the current home owners who were surveyed said they did plan to purchase a home again, and 80% of all renters indicated that they expected to eventually become home owners. Forty-seven percent of the renters participating in the poll indicated that they planned to purchase a home within the next five years. For the most part, people who are planning to move won’t be doing so for financial reasons, including a rent increase (2%) or to get out from under an expensive mortgage (less than 0.5%). Instead, they are far more likely to expect to be moving to obtain more living space (26%) and for changes related to life stages (17%), such as having children, the survey found. Most prospective home buyers (78%) reported that they would be willing to make sacrifices to save and earn extra income for downpayments and will compromise on neighborhood features and residential amenities in order to buy a home in the current market. Many of their choices reflect changing values shaped by factors that include a growing concern over the environment, the importance of community features and the rising cost of fuel. According to the results of the online poll, which were released on July 15, 81% of home buyers indicated that they remained nervous about the current housing market and cited significant barriers to homeownership But 44% believe that the housing market will improve once a new president takes office next January. Forty-eight percent of women and 41% of men who plan to buy a home in the current market said they think conditions will get better once the new president is in office. "These findings show that despite the difficulties home buyers face in the wake of the subprime crisis and their concerns about economic uncertainty, underlying demand appears relatively strong. Consumers see better times coming," said Lorna Borenstein, president of Move, Inc. "This is great news to us and our colleagues in the real estate industry,” Borenstein said. “As the leader in online real estate, we pay close attention to consumer perceptions and behaviors. This important feedback enables us to identify ways in which we can enhance the search experience so it meets the needs of today's consumers who will become the home buyers of tomorrow." Buyers Face Barriers to Homeownership About four out of five home buyers (81%) said they faced barriers to buying a home in the current market, identifying the greatest single barrier as high home prices (31%), a concern that was considerably higher in the West (39%), than in the South (27%) or Midwest (26%). The second greatest constraint for buyers in the current market is coming up with the money for a downpayment (28%), followed by lack of confidence in the economy (26%). People in the West (45%) cited financial concerns more than Southerners (33%). About one-third of those ages 18 to 34 said they were concerned about lack of money (38%) or poor credit (18%), compared to only 11% and 5%, respectively, for those who are 55 and older. Overall, one out of three (34%) answering the survey said that money-related issues were a concern Four out of five adults (84%) said that there was something intimidating about buying a home. Finding the right home was the most intimidating part of the home-buying process for about one out of five (19%). Nine percent identified understanding financing as the most intimidating aspect of buying a home; 6% cited the uncertainty of the mortgage process. About two-thirds of adults (62%) said they have visited an online real estate Web site. Once on a site, 23% said they were looking to purchase and 52% said they were looking at what's on the market. Trade-Offs Favor Community, Environment The survey respondents ranked crime rates (56%), proximity to daily conveniences (47%) and property taxes (46%) as the top three factors in choosing a neighborhood. In order to purchase a home in the current market, prospective home buyers said that they were more willing to sacrifice cultural and recreational amenities (18%) than green features (16%) like solar heating and energy-saving appliances. In the face of high gas prices, only 7% of home buyers would be willing to sacrifice proximity to work and 6%, proximity to shopping. Only 3% said they would give up proximity to public transportation. About half (49%) said that green features like solar panels, energy-saving appliances and efficient water heaters were "important." Luxury amenities were called important by 31%. Kitchens (67%) and the number of bedrooms (69%) are the most important features today's buyers are looking for in a home. Storage space (66%) and the number of bathrooms (62%) rank third and fourth on their list of priorities. Mortgages Are a Mystery A large number of those surveyed said that understanding mortgages and the financing process during these changing times in the credit industry is a major issue. Eighty-one percent of today's home buyers and three quarters of adults (78%) said that they wished the process of taking out a mortgage was easier to understand. For many buyers, changes in the amount of a downpayment required for a mortgage is a significant issue. The lack of cash for a downpayment is keeping more than one-quarter (28%) of buyers out of homes — more than poor credit (15%), low household income (20%) or lack of confidence in the economy (26%). Seventy-eight percent of home buyers said they were willing to make sacrifices to save money or earn extra income in order to be able to buy a home in the current real estate market. First to go would be spending (65%) on items such as personal luxuries (46%) and clothes, shoes and accessories (43%). Next, home buyers would go out less often (52%). Nearly half would clip coupons (47%) and 27% would cancel a vacation.
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. Federal Reserve Tightens Mortgage Underwriting RulesThe Federal Reserve Board approved a final rule on July 14 that is intended to better protect consumers and facilitate responsible lending by prohibiting unfair, abusive or deceptive home lending practices and restricting certain other mortgage lending practices. The new rule generally follows a proposal that was released by the Federal Reserve in December. In an April 8 letter (link for NAHB members only) commenting on that proposal, NAHB said it supported the Fed’s efforts to bolster mortgage lending standards and consumer protections. However, the association voiced concern over a definition of High Priced Mortgage Loans (HPML). While that definition was aimed at covering all of the subprime market and a significant portion of Alt-A lending, NAHB said that at various times it would also apply to a significant share of the prime mortgage market, which was not the Fed’s intention. The proposed rule defined an HPML as a loan with a rate three percentage points or more above the yield on comparable Treasury securities (five percentage points for subordinate liens). NAHB said that tying the spread to a prime mortgage benchmark — such as Freddie Mac’s Primary Mortgage Market Survey — would be a better approach. A mortgage benchmark, NAHB said, would eliminate problems associated with anomalies in market-based spreads between Treasuries and mortgages and would more precisely identify high-priced mortgages relative to prime loans. In the process, most prime and high-quality jumbo mortgages would be excluded from the regulation, as the Fed intended. In response to NAHB’s comments, under the final rule the definition of an HPML will be based on the spread between a mortgage rate series, the "average prime offer rate," which the Fed will publish. This series will be similar to the survey currently published by Freddie Mac. An HPML will be defined as a first-lien mortgage with an annual percentage rate that is 1.5 percentage points or more above this benchmark, or 3.5 percentage points if it is a subordinate-lien mortgage. NAHB believes that the use of this benchmark will cover virtually all loans in the subprime market, but generally exclude loans in the prime market from the new mortgage lending restrictions. For loans meeting the HPML definition, the following will apply:
The final rules are effective Oct. 1, 2009, with the exception of an escrow requirement that takes effect on April 1, 2010 for site-built homes and on Oct. 1, 2010 for manufactured housing. For more information, e-mail John Dimitri at NAHB, or call him at 800-368-5242 x8529. 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. Aug. 15 Deadline for FHLBank Director ApplicationsEDITOR'S NOTE: The process for applying for public interest director positions has been changed under the housing stimulus legislation signed into law on July 30. Information on the new procedures will appear in the Aug. 11 issue of this publication. The deadline to apply for Federal Home Loan Bank (FHLBank) public interest director positions is looming, and NAHB members who are interested should contact the association’s staff no later than Aug. 15. Each year, the Federal Housing Finance Board (FHFB) appoints public interest directors to serve on the boards of each of the 12 FHLBanks. Under FHFB rules, applicants for these positions must submit eligibility forms to the bank for their district. Candidates can also attach a resume to the form to provide information on additional business, professional or educational achievements that are not otherwise reflected on the application. To access the eligibility form, click here. Each FHLBank board is responsible for conducting a preliminary assessment of candidates in its district and forwarding the most qualified candidates to the FHFB for consideration by Oct. 1. The banks are allowed to submit up to two names per vacancy for the FHFB’s approval. Interested parties such as NAHB are allowed to make recommendations to the FHLBank boards on behalf of individuals they believe are well-qualified for the position. However, candidates are still required to complete and submit their eligibility forms before those recommendations can be considered. NAHB has established a process for assisting members who are interested in serving on FHLBank boards. To view NAHB’s nomination and recommendation process, association members can click here. (Housing stimulus legislation currently under consideration in the Congress may change the process for determining FHLBank directors to one in which all directorships are elected by member institutions.) If you are interested in applying for a directorship and wish to be considered for an NAHB recommendation, e-mail John Dimitri or call him at 800-368-5242 x8529 no later than Aug. 15. 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: Quick and Accurate Shorthand MeasuringI learned this trick about relaying measurements to crew members on the job by listening to drywall hangers call out dimensions to each other. When my crew calls out dimensions now, all the dimensions are given in units of whole inches and in sixteenths of an inch.
— Mark Padbury, Orcas Island, Wash. 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. Performance Solid for Vinyl Siding Over Foam SheathingOver the last two code development cycles for the International Residential Code, questions have been raised on the performance of vinyl siding installed over foam sheathing. Observed damage from high winds has led to attempts to ban vinyl siding over foam sheathing and require solid backing such as OSB or fiberboard, even in areas where there is a low risk of tornadoes and hurricanes. The fact is that vinyl siding installed over foam sheathing and studs has a solid record of excellent performance under the wind conditions and in the urban and suburban environments that are typical for most of the U.S. The key is the proper selection and installation of the siding and foam sheathing products, which must comply with the applicable ASTM standards and must be installed and fastened in accordance with the manufacturers’ instructions and building code requirements. In the 2007 Supplement to the 2006 International Residential Code, the required nail size for fastening vinyl siding to studs was increased to a shank diameter of 0.120 inches and a head diameter of 0.313 inches. A sufficient length of fastener is required to accommodate the wall sheathing thickness and to penetrate a minimum of 3/4” into wall studs spaced at 16 inches on center. Additional information on vinyl siding products and installation guidance can be obtained from the Vinyl Siding Institute (VSI), which qualifies vinyl siding for wind load resistance and other performance criteria under its Vinyl Siding Product Certification Program. In addition, recent recommendations from VSI and the Foam Sheathing Coalition (FSC) clarify requirements for the installation of vinyl siding on a typical foam sheathed wall assembly. The recommendations call for a 1-1/4 inch minimum penetration of siding nails into wall studs spaced at 16 inches on center. Also recommended is a minimum foam sheathing thickness of 1/2” extruded polystyrene or polyisocyanurate, or 1” expanded polystyrene. Also included are special recommendations for gable end wall conditions, where damage from severe winds is more commonly observed, regardless of the sheathing or siding material. These recommendations are based on research and testing conducted by the NAHB Research Center, and they were submitted for consideration at the upcoming ICC code hearings. For additional information and guidance on wind-resistant foam sheathing installations with vinyl siding and other siding products, refer to the technical resources available at the FSC’s Web site. Vinyl Siding in Hurricane-Prone Areas In hurricane-prone areas along the Atlantic Coast and Gulf Coast, it is critical to select a vinyl siding product with the proper design wind pressure rating. These are also the areas where attention to sheathing specification and fastening, wall bracing and roof uplift load path connections become increasingly important. With proper specification and installation, foam sheathing and vinyl siding products can provide adequate wind pressure resistance in hurricane-prone regions. However, continuous structural sheathing is often needed and may be added to provide adequate wall bracing. Structural sheathing may also be used to resist wind uplift when it is properly detailed for this application. With energy code requirements increasing and green building guidelines and standards becoming more prevalent, insulating foam sheathing is critical to building affordable, energy-efficient houses. When properly specified and installed in accordance with building code requirements and manufacturer recommendations, vinyl siding over foam sheathing will continue to provide the excellent performance demanded by builders and home owners. For more information, e-mail Gary Ehrlich at NAHB, or call him at 800-368-5242 x8545. Retaining Assets: How to Get Paid in a BankruptcyBy Marc E. Albert, Alisa C. Lacey, Katherine M. Sutcliffe Becker and Tracey M. Ohm Riding through a down market is all about conserving and protecting money. The goal is to be able to bear the expense of holding your assets until the market improves. In this article, we present tips to assist you in protecting your ability to collect from others who have sought bankruptcy protection. Purchase Money Security Interests and Mechanics’ Liens — Record Lien Notices Section 546(b) of the United States Bankruptcy Code states that the rights and powers of a bankruptcy trustee under §544 (strong arm powers), §545 (avoidance of statutory liens) and §549 (avoidance of post-petition transfers) are subject to any generally applicable law that:
Do you lose your lien? If the time for perfection of your security interest under state law — usually within 20 days of delivery under §9-317(e) of the Uniform Commercial Code — has not expired by the time the debtor files the bankruptcy, you won’t lose you lien, even if another creditor filed an intervening lien notice on the same goods. If your lien notice is recorded in a timely manner under generally applicable law, then your lien relates back in time to the date the debtor took delivery. Timely recording of your lien notice does not violate bankruptcy’s automatic stay. The bankruptcy code similarly protects your ability under applicable state law to perform post-bankruptcy actions that are necessary to maintain or continue a mechanics’ lien if the generally applicable law (usually state law) provides that the rights of a contractor or supplier “relate back” in time and becomes superior to the rights of intervening lien creditors. For example, suppose you begin work on a site. The debtor files a bankruptcy within weeks of when your materials arrive. Can you still record your lien? Yes you can, provided that there is a timely filing of a preliminary lien notice under generally applicable (non-bankruptcy) law in relation to when services or goods are provided to the debtor and relate back to the original date of when the work was begun or the material was delivered. Again, timely recording of your notice does not violate the automatic stay. Warehouseman’s Liens ― Newly Protected Section 546(i)(l) now limits a bankruptcy trustee’s ability to avoid a warehouseman’s lien for storage, transportation or other costs incidental to the storage and handling of goods, notwithstanding the provisions of §545 governing a trustee’s ability to avoid statutory liens. If you are owed money by a debtor in a bankruptcy case, you should file a proof of claim immediately. It is very common for judges to set claims bar dates in Chapter 11 cases. There are exceptions, but generally if you received notice of the bar date and do not file a timely proof of claim, your claim could be disallowed. A timely filing of your proof of claim is even more vital in a Chapter 7 case. Bankruptcy rule 3002(c) generally requires the filing of a claim within 90 days of the first date set for a §341 meeting of creditors. All creditors should receive notice of this date, and often this notice will contain the claim filing deadline (depending on the practice in your area). If you miss the claim filing deadline, chances are high that the court will disallow the late-filed claim. A good business practice is to prepare and file your proof of claim immediately (within 10 days) upon receiving your very first notice in the case. However, if you have pending litigation or a material risk of litigation with the debtor and your company is located in a different geographic area than the debtor, you should always consult counsel before you file a proof of claim. Filing of a proof of claim will be deemed your agreement to the jurisdiction of the bankruptcy court where the debtor’s case is pending. Alternate Sources of Payment ‘Outside’ of Bankruptcy There are at least two instances where you or your attorney should inquire about getting paid when the source of the funds to pay you may be “outside” of the bankruptcy case — not an asset controlled by the debtor. These include:
In a down market, it is almost inevitable that you will end up as a creditor in a bankruptcy case at some point. Following the preceding tips can assist you in making the right moves to protect your assets and your ability to collect on the debts owed to your company. The more assets you retain, the better your chances to successfully weather the down market conditions. The authors are attorneys at Stinson Morrison Hecker LLP, which employs more than 360 attorneys in nine offices and five states, has experience in more than 45 practice areas and represents clients in a full range of corporate, transaction and litigation matters. For more information, visit stinson.com. This article is solely for informational purposes. The views and opinions of the authors expressed do not necessarily state or reflect those of the National Association of Home Builders. NAHB and the authors expressly disclaim any responsibility for any damages arising from the use, application or reliance on any information contained in this article. The ideas presented in the article are not a substitute for considered professional advice. If specific legal advice or professional assistance is required, the reader should seek the services of a qualified professional.
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. Technology Helps Solidify Revenue in Volatile MarketBy Lesley Boyd In the sixth annual “State of the Builder Technology Market Study,” a survey of builders and supplement to a NAHB Annual Builder Practices Survey tracking key technology trends in new housing, nine in 10 builders said that adding home technologies either increased or maintained their revenues. “Builders are starting to recognize the importance of home technologies to their bottom lines,” said Chris Ely, CEA senior research analyst. Builders who are adopting new technology and offering options to potential buyers are able to stay afloat as well as solidify home sales and increase revenue in the process, the survey found. Fully 35% of the builder respondents indicated that they feel they must offer structured wiring and security systems in order to survive and thrive in this market. “Our research shows that more builders are paying attention to market opportunities and consumer demand,” says Steve Koenig, CEA director of industry analysis. “Builders must offer home technology options to compete in the market.” A Builder-Consumer Gap During a housing downturn, it is important for builders and consumers to be on the same page so builders can close deals and solidify customer satisfaction. However, according to the study, there seems to be a gap between builders and consumers regarding home technology. “Consumers are not always aware of the technology options available,” said Ely. Home buyers "are more concerned with other tangible new home elements such as cabinets, countertops and flooring.” Consequently, builders need to better educate their consumers about what technology options are available and how they can enhance their lifestyles. “Builders need to change their sales spiel to link upgrades such as granite countertops with home technology options like lighting control,” said Koenig. “They need to ask questions about their buyer's lifestyle and family so they suggest the right kinds of home technology upgrades.” Technology Trends: Home Theaters, Multi-Room Audio/Video and Energy Management The technology market survey identified three distinct trends in home technology that builders said their buyers wanted —home theater, multi-room audio/video (MRAV) and energy management. Seventy-three percent of the builders surveyed said they offered a home theater option upgrade to their buyers. From simply pre-wiring a room and adding speakers to creating a fully-dedicated media room, the survey indicated that consumers appreciated the upgrade and that it did not result in huge cost increases. MRAV technology was offered by 57% of the respondents, according to the survey. Builders indicated that this technology boosted their profit potential when offered to potential buyers. “The percentage of homes that have MRAV technology installed has grown since 2002,” said Ely, noting that the survey results indicate that a greater number of home owners are interested in listening to music, watching movies and accessing the Internet throughout the house. The third technology trend, energy management, is buttressed in large part by the rising cost of energy and the growing trend toward “green living.” “It is easy to start a conversation with a new home buyer about energy management, as it is a concern shared by most buyers,” said Koenig. “A builder can use a discussion about programmable thermostats as a launching pad to discuss other energy-saving options such as lighting control, smart HVAC and home automation.” No matter where the conversation starts about home technology upgrades, it is important for the builder to launch into the widest array of options available to enhance each particular consumer’s lifestyle and increase the potential for additional revenue. Technology Helps Builders’ Bottom Line Almost nine in 10 builders in the study say home technologies are important for marketing, according to Ely. “In fact, the number of builders who say home technologies are ‘not at all important’ is 11% ― the lowest since we first conducted the survey.” “Simply stated, installing home technologies helps a builder's bottom line,” added Koenig. “Not asking questions and not promoting home technologies is tantamount to leaving money on the table.” Lesley Boyd is a freelance writer based in Orlando who writes about home technology. For more information, e-mail Boyd.
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. SEBC Courses Discuss How to Attract 50+ BuyersAt two NAHB University of Housing courses at the upcoming Southeast Building Conference (SEBC) in Orlando, builders, developers and other industry professionals can learn how to design homes and communities that connect with 50+ buyers. In addition, the recently launched Florida 50+ Housing Council will conduct a meeting at the conference. SEBC will be held July 30 to Aug. 2 at the Orange County Convention Center. 50+ Courses at SEBC The two courses, which will be held on Friday, Aug. 1, are:
The Florida 50+ Housing Council will meet from 9:00-11:00 a.m. Thursday, July 31 in room 309B. To join the council or for more information, e-mail Terri Rea of the Florida Home Builders Association (FHBA), or call her at 800-261-9447 x15. To review the FHBA meeting schedule, click here. For a complete schedule of SEBC activities, click here. To register for SEBC, click here. For more information on SEBC, call FHBA at 800-261-9447. Improve Your Focus on the 50+ Market With Publications From BuilderBooks.com The 50+ market provides some great opportunities for builders today. BuilderBooks.com brings together the essential resources for builders seeking to grow their businesses while bringing high-quality product to this demanding, often affluent consumer group that has planned well and is ready to build or buy. BuilderBooks.com also offers publications on customer service so builders can start building strong relationships before breaking ground and turn these experienced consumers into enthusiastic sales people. To view or purchase these and a wide variety of industry publications online, click here or call 800-223-2665. The Certified Active Adult Specialist in Housing (CAASH) designation gives housing professionals serving the rapidly burgeoning 50+ market the essential knowledge, tools and skills that will help them succeed — from conducting initial research to design considerations and features to serving the customer. Find upcoming CAASH classes by clicking here. For more information, call the Professional Designation Help Line at 800-368-5242 x8154 or e-mail CAASHinfo@nahb.com. During Lean Times, Seek Opportunities Outside the BoxBy Karen Dry and Linda Hebert You’re digging in your heels and working your business plan. Things aren’t great, but you’ve been able to find and capitalize on a few projects. Or maybe you’ve examined your core business and discovered what you do isn’t going to provide the revenue stream to help you ride out the market. Either way, it’s time to diversify and expand. “My business wasn’t doing well at the start of the downturn, so the decision was made for me,” said Michelle Roberts, founder and CEO of Chatham Hill Residential Design and Build, LLC in Boston. “My clients began asking about green-friendly homes and I saw the need to move in another direction. There was a void of expertise in this field and I thought — ‘Why not fill it?’” The health and energy efficiency trend in home design led Roberts to start a new division in her company, Ecohealth Homes, which provides conceptual design and consulting services for sustainable modular and structural insulated panel home construction. Opportunities like these exist in any market. The key is to find them. They will help you capture even more market share when the market bounces back. “Don’t give up and seek resources,” said Roberts, who went to building products and material suppliers to learn about their products and services and to build partnerships. “These partnerships gave me support and a sense that I wasn’t alone, which is especially important in a down market,” she added. “This experience sharpened my business and negotiating skills. It also forced me to educate myself in a new area and trust my instincts.” So, where can you look to diversify and expand? Consider these opportunities: Adjunct Markets Identify markets that complement your current company and see if you can provide a service in those areas.
We said it before, but it’s worth repeating. When you’re tightening your belt, do not stint on marketing or freeze your advertising.
Investing in your future is critical. Sometimes, it’s the very thing that will save your business.
Linda Hebert is the chair of the Women’s Council communications subcommittee and president of Diversified Marketing & Communications, of Pleasanton, Calif. For more information, e-mail Hebert, or call her at 925-577-5300. Next: Exiting gracefully.
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.
Take the “Profitable Business Through Quality Practices” course from The NAHB University of Housing and learn key strategies for providing a quality building/remodeling experience for home owners.
To find out where upcoming courses are being held, click here, or call 800-368-5242 x8154 for more information. Use Escalation Clause to Manage Pricing IncreasesStaying afloat is a major concern for many of us in today's housing industry. Not only do we have to worry about business, competition, labor shortages, subcontractors and collecting our payments, we also have to worry about price increases — and not just one or two increases, but multiple increases. If it was only one price increase, we could and would handle it with no problem. But we’re faced with multiple price increases on many different products, and the prices are changing faster than we can react. Some manufacturers are raising prices twice in a month and others are only stating the price when the items are shipped — thwarting our best efforts to charge the customer accurately. This has made controlling job costs a major problem for remodelers. So what can we do to protect ourselves, especially when we sell projects that won’t be started for several weeks or months? Stockpiling products and materials doesn’t make sense. The NAHB legal staff has developed a price escalation clause that you can adapt and use as an addendum to your contracts to protect yourself from price increases. Consult with your attorney about how to tailor the clause to your business, and just as importantly, be sure to train your sales team on how to discuss the clause with your clients. To download a sample of the price escalation clause, click here. Additional construction liability tips and tools can be found on the NAHB Web site under construction liability. These resources were developed by the Building Products Issues Committee. There is one more related obstacle that is probably affecting your bottom line ― fuel costs. Have your suppliers and manufacturers added a fuel surcharge to your deliveries? NAHB has developed a clause to address that, as well — the sample fuel surcharge clause. As with the price escalation clause, be sure to have your attorney and sales team involved. Doug Sutton, CGR, CAPS, is president of Sutton Siding and Remodeling in Springfield, Ill. For more information, e-mail Sutton, or call him at 217-528-3911. Deadline for NAHB Remodelers Awards Is July 25NAHB Remodelers invites its members and local councils to apply for the CADRE, Remodeler of the Year and Homes for Life CAPS Project awards by Friday, July 25. The awards all highlight remodeling excellence. CADRE — Council Awards for Demonstrating Remodeling Excellence
Remodelers Making a Difference in Their Local CouncilsThe latest in a series that profiles members of local NAHB Remodelers who are strengthening their local councils through networking and recruiting new members. The grassroots champions who are being highlighted in this series have collectively recruited more than 400 new members for the NAHB Remodelers to date.
Steve Hoffacker, CAASH, CAPS, CMP, CSP, MIRM
Business size and focus: Consulting firm primarily focused on serving small- to mid-sized home builders and remodelers. What he does: “I help my clients take their operations to the next level by providing coaching, mentoring and strategic assistance in sales, marketing and business development. “I also help them build new skill sets outside their ‘comfort zone’ — such as builders who want to try their hand at doing sales.” Biggest misconception about his work: “That a builder can be too small to use or afford any help. In my experience, it’s especially the smaller businesses that get the biggest benefits. “At the same time, not every small business owner wants to grow. For example, some of my clients are fine with building one or two custom homes a year and just need guidance in becoming more efficient and profitable.” Proudest association accomplishment: “Last year, I helped start a Remodelers’ Council at the Gold Coast Builders Association. Just by talking about the council with colleagues, we’ve grown it into a group with more than 30 members.” Favorite resource: “My network, developed over the years through interaction with clients, association contacts and fellow council members.” Advice to others: “Create and sustain a solid network of friends and colleagues. Be open to new things and to asking for and sharing advice.”
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. Enter the BALA Design Competition by July 31
Entries are being accepted for the 2008 Best in American Living Awards (BALA), the foremost residential design competition in the country. Builders, interior designers, architects, land planners, developers and marketing and real estate professionals are invited to enter. The entry deadline has been extended till Thursday, July 31. The competition includes 36 categories — from single-family attached and detached homes in a variety of sizes to rental developments and custom homes, plus categories for interior design, communities and neighborhoods, affordable housing, smart growth and others. A panel of design professionals judge entries on design appearance and curb appeal, interior floor plans, how the project relates to its own local market and the construction techniques and materials used. Homes that were completed or that had their first model opened between May 1, 2007 and July 15, 2008 are eligible for this year’s competition. Entry Dates:
Winning entries also will be posted on the Professional Builder Web site (probuilder.com) for up to one year after the announcement. For additional information and to download a BALA entry form, click here, go to www.probuilder.com/bala, or contact Judy Brociek, Professional Builder, at 630-288-8184 or Jennifer Jones at NAHB, at 800-368-5242 x8343. Enter Building Systems Councils Excellence Awards
The entry deadline is Sept. 17. The awards are open to all BSC member manufacturers — concrete, log, modular and panelized — and associates and any NAHB builder member who uses building systems Awards categories in multifamily and green building for concrete, log, modular and panel construction have been added this year. As in the past, all winners will be featured in the January/February 2009 issue of Building Systems Magazine, in Nation’s Building News, on the NAHB Web site and through national and local press releases. Winners will be recognized and honored during a ceremony at the Building Systems Councils' SHOWCASE in Memphis, Tenn. on Nov. 16-19. Award winners also will be recognized during the 2009 International Builders’ Show in Las Vegas in January. To Apply Entry guidelines and submission forms are available online by visiting www.nahb.org/showcase and clicking the “Special Events” tab. For details specific to the marketing awards, visit BSC Excellence in Marketing Awards. Mail entries to: NAHB/Building Systems Councils
Early-bird entry fees, due Sept. 10, are $65. Regular entry fees, due Sept. 17, are $75. For more information, e-mail Scott at NAHB, or call him at 800-368-5242 x8676.
Lean About Solutions That Build Your Business Data shows that 25% to 30% of all new housing in the U.S. now uses systems-built technology. NAHB’s Building Systems Councils SHOWCASE ’08 on Nov. 16-19 in Memphis, Tenn. is the only conference focused on ways to advance and promote building systems — especially in today’s housing market. Network with industry leaders, connect with suppliers and attend education sessions tailored for systems-built housing. For more information, visit www.nahb.org/SHOWCASE. Apply for 2009 Commerical Building Awards by Aug. 1
The deadline for entries is Friday, Aug. 1. NCBC sponsors the Awards of Excellence program to bring recognition to commercial building projects that range from less than 5,000 to more than 100,000 square feet. Projects must have been completed after Dec. 31, 2005 and may be entered in commercial, industrial, institutional, medical, mixed-use commercial/retail, recreational, retail and green building categories. One or several projects can be entered in this competition. Projects may be submitted by the builder, developer, architect or contractor of the project. The six divisions in which a project can be entered include:
Winners will be notified by mail no later than Nov. 7. A public announcement will follow at NAHB’s International Builders’ Show, Jan. 20-23, 2009, in Las Vegas. Recognition includes a desk obelisk; a photo of the project on display with the other winners at the International Builders’ Show; acknowledgment in Commercial Builder magazine; and the opportunity to participate in educational sessions at the Builders’ Show. In addition, some winners may be featured in future issues of Commercial Builder magazine and Nation’s Building News. To Apply To download an entry form, click here. For more information, e-mail Kisha DeSandies at NAHB, call her at 800-368-5242 x8455. Enter The Nationals Sales and Marketing Awards by Sept. 26Enter your best in new home sales and marketing and design for 2009's The Nationals — the National Sales and Marketing awards, the largest and most prestigious competition for new-home sales and marketing professionals and communities. Sponsored by NAHB’s National Sales and Marketing Council, The Nationals honor the best in architectural achievement, product and community design, advertising and promotion, interior merchandising, Web site design and more. The awards are open to individual sales and marketing professionals, home builders, associates and sales and marketing councils. All entries, including fees and exhibits, are due Friday, Sept. 26. Late entries will be accepted by Oct. 3, with an additional fee. The Nationals recognizes innovation and excellence in 52 categories. During a three-day judging process, a panel of industry professionals from across the country selects Silver and Gold award winners from a field that typically includes more than 1,200 entries.
To Apply
Awards Gala at IBS on Jan. 20 Category winners will be honored during a gala event at Caesars Palace in Las Vegas on Jan. 20 during the International Builders' Show. For more information, visit www.TheNationals.com, e-mail Lisa Parrish, or call her at 800-658-2751.
Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com). Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing. Education Calendar
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