Print-All Page: April 27, 2009

The nation’s housing industry and the economy have just about seen the worst of the painful downturn that greatly intensified since last September’s turmoil in the financial markets, according to economists speaking on April 23 at NAHB’s Construction Forecast Conference.

And despite a continuation of rising unemployment well into next year, although at a slowing pace, housing in this year’s second half is expected to begin gradually leading the economy to higher ground, they said.

“There’s a lot of skepticism out there. This is a very deep hole we’re in,” acknowledged NAHB Chief Economist David Crowe. But he said thereare several reasons to believe that “the housing recession is nearing an end and housing will return on a very slow basis.”

Crowe said that new single-family home sales probably reached their trough in the first quarter of this year, hitting a record low of 320,000 on a seasonally adjusted annual basis, down from about 1.2 million at their peak.

Sales for 2009 are projected to total 364,000, he said, 24% below the 2008 level, and then climb 48% next year to 539,000.

The onset of a recovery in single-family housing starts should trail closely behind sales, with production hitting its cyclical low in the current business quarter at an annual rate of 330,000.

About 360,000 single-family homes are expected to be started this year, he said, a 42% decline from 2008, which will be followed by a 45% rise to 523,000 units in 2010.

Battered even more severely than single-family builders by the shrinking availability of acquisition, development and construction (AD&C) financing, multifamily starts are not expected to show signs of recovery until next year, bottoming out in the third or fourth quarter at a seasonally adjusted annual rate of 110,000, he said.

According to NAHB’s forecast, multifamily production will total 130,000 units this year, which would be 55% below last year’s level, and slow 3% further in 2010, to a total of 126,000 units.

Crowe indicated that housing markets are now struggling in all parts of the country as the result of the deepening slump in the overall economy and job losses that have escalated to above the 600,000 level in recent months.

However, he said, prime conventional conforming home mortgage interest rates, which are now at a generational low of roughly 4.75% — along with low home prices and the $8,000 first-time home buyer tax credit — have greatly improved housing affordability, generating a notable increase in prospective home buyer traffic that should begin translating into a pickup in sales.

Moving forward, the housing market should derive strength from pent-up demand and demographics, which hold the potential for strong household growth. Annual household formations are forecasted to average 1.532 million for the period of 2009 to 2013, compared to an average of 1.247 during 2004 to 2008. Providing “an extra push” will be the echo boom generation, the children of the post-World War II baby boom, the oldest of which are now in their late 20s, he said.

Following a 6.3% decline in real growth in the gross domestic product in the fourth quarter of 2008, the worst since the early 1980s, deterioration in this year’s first quarter should be almost as bad, Crowe said, with a drop in GDP of about 5.2%. The current quarter should show that “some of the worst is past,” he said, with a decline in growth of perhaps something just above 1%, demonstrating that consumers are slowly coming back to life and paving the way for a return to positive territory in the following quarters.

“It’s not going to be much of a recovery at all, but some recovery is better than no recovery,” said Maury Harris, managing director and chief U.S. economist at UBS Investment Bank.

As a result of the massive fiscal stimulus package that is now making its way through the economy, a gradually waning credit crunch and the nation’s household savings rate stabilizing at a higher level, Harris said he was projecting 2% positive GDP grown in this year’s third quarter, followed by 2.5% growth in the fourth quarter and 2.2% growth in 2010.

Harris said that the unemployment rate should peak at 9.3% in the fourth quarter of this year before subsiding gradually in 2010, but “you can get a turnaround in housing before employment improvement.” Unemployment typically continues to rise for a period of time after the economy returns to growth.

“Housing is a leading indicator,” he said. “Sales turn up before unemployment peaks….You don’t have to get a big share of the population enthusiastic [about buying a home] before there is a housing upturn.”

He added that all of the major housing price indexes are overstating the decline in the value of housing. The Case Shiller House Price Index, for example, “which gets all the attention,” now has prices on average down 28% from their peak and is likely to hit bottom at the end of the year showing a 33% erosion. The index, however, is “skewed to areas with a lot of foreclosures,” he said.

Sales transaction indexes aren’t providing an accurate picture of “what’s really happening to real estate wealth,” he said, because 45% of existing home sales currently are foreclosures that are not typical of the existing housing stock.

Harris forecasted 530,000 total housing starts this year, followed by production of 720,000 units next year, but he said there was a risk that the AD&C credit crunch, particularly among smaller builders, could result in lower numbers if lending fails to sufficiently ease.

The credit crunch won’t end overnight, he said, “but it is a question of degree and starts to be ameliorated.” UBS analysis of bank lending standards, based on data from the Federal Reserve’s Senior Loan Office Opinion Survey, showed that the share of banks tightening standards on business and household loans started declining early this year, although tightening continued to be more pervasive than at any point in the last two recessions.

Harris added that he was in disagreement with those who forecast that further increases in household savings rates this year will prolong the recession. The savings rate climbed from roughly 0% in 2008 to under 5% now, he said, and “if it goes up to 10% to 11%, kiss the recovery goodbye this year.”

Although savings rose to that level in bad recessions 25 to 30 years ago, he said, “people already have saved more money” and savings will average 6% this year because low interest rates are not especially encouraging and, despite setbacks, Americans continue to have sizable amounts of wealth in their housing and financial holdings.

“We’ve been through a tough time. It’s been exacerbated by the credit markets shutting down and turning the lights out,” said James Glassman, senior economist for JP Morgan Chase. But by this fall there will be general confidence “that we’re on the road to recovery and the tide is turning.”

Working to stabilize the economy is the fiscal response from the federal government, which he called “appropriate” and “bold,” along with efforts by the Federal Reserve focused on promoting the flow of credit back into the credit markets.

Glassman said there is reason to be hopeful the economy is now moving into a transitional period because “it was blanketed by storms that are now passing.”

A doubling in oil prices between the summers of 2007 and 2008 shifted $2.5 trillion from consumers to producers, slowing down the economy of every developed country by 1% to 2%, he said. Now, although “there is nothing good going on” for consumers, it looks like consumer spending was up in the first quarter, he said, and that can be attributed to the recent collapse in oil prices, which represents a $300 billion annual benefit to consumers.

The “debacle in the housing market” also appears to be passing, he said. Housing prices are no longer inflated and have returned to their normal levels in relation to household income. Glassman added that he was skeptical that there will be much more downward correction in housing prices.

“The minute prices are within reach, people begin to think differently about housing,” he said. “As things become more affordable, people want to own.”

With credit beginning to return, some pent-up consumer demand is being released, he said.

Glassman said that current fiscal and monetary policies to stimulate the economy are not inflationary at a time when joblessness is far higher than it should be and inflation is too low.

He noted that it will take some time to reduce the existing slack in the economy, and “we need a lot of growth to claw our way back to full employment.”

Housing Guru at Long Last Finds Grounds for Optimism

In a departure from his previous presentations at NAHB forecast conferences, Mark Zandi, chief economist at Moody's Economy.com, was “optimistic” at last week’s 2009 Spring Construction Forecast Conference.

The bottom of the housing recession is coming into view, he said, adding that there are several reasons for his optimism. Inventories have peaked and will begin to drop, housing affordability has improved because the price-income ratio has dropped dramatically, and mortgage interest rates are at record lows.

“Rates are below 5% and will stay there for quite some time,” Zandi said, noting that his forecast calls for a low of about 4.5% this summer.

Also fueling Zandi’s optimism, “more credit is on the way,” and the Administration is working hard to bolster the housing market.

Nevertheless, there are some troubling aspects to the market, he said. Confidence is at a record low, and there is no evidence that the employment situation is improving. The job market is “at a moment of truth,” Zandi said, and he expects it to begin to stabilize this summer. He also said to keep a close eye on measures of consumer confidence, which should begin to rise shortly before the recession ends.

In Zandi’s market recovery timeline, the first quarter of 2009 was most likely the low point for sales; starts will probably bottom-out in the second quarter. Failures of major financial institutions will start to diminish between the third and fourth quarters, and home prices will bottom-out in the fourth quarter of 2009.

“I expect prices to slide sharply, bottom out in the fourth quarter and begin to rise in 2010,” Zandi said. From peak to trough, there will be a 36% decline in prices, and it will be more than a decade before home prices return to the highs recorded during the recent housing boom, he added.

Zandi said he expects foreclosures to peak in the first quarter of 2010 and the jobless rate to peak in the second quarter. The Federal Reserve is likely to tighten the money supply in mid-2010, and a “self-sustaining expansion” should begin in the last quarter of the year, he said.

Bernard Markstein, vice president of forecasting and analysis for NAHB, agreed with Zandi that the first quarter of 2009 probably marked the end of the decline in residential construction.

Revisiting the housing market of recent years, Markstein noted that in the last quarter of 2005 housing starts nationwide were running almost 30% above “normal,” and only a handful of states — Wisconsin, Michigan, Ohio, Kentucky, Maryland and Alaska — were in the 75% to 100% of “normal” range.

By the end of 2006, construction was slowing, but “the pain was minimal.” A year later, at the end of 2007, the slowdown was accelerating rapidly and formerly “hot” markets — including California, Nevada, Arizona and Florida — had become problem markets. Nationwide, housing starts were at about 60% of normal, Markstein said, and housing experts were still hoping for a “soft landing.”

However, the soft landing didn’t materialize and by the end of 2008, single-family production nationwide had dropped to about a third of normal. Only three states — Montana, North Dakota and Wyoming — were in the normal range.

“By the end of this year, some improvement should begin to emerge, and 2010 should mark a significant improvement,” Markstein said. However, the pain will not be over for the formerly “hot” markets and the states in the Great Lakes area that continue to suffer from economic problems unrelated to housing.

Home Builders, Preparing for a Thaw

Some market experts predict that the new-home sector will be the first to recover in the housing market. Working in its favor, they point out, are less expensive construction materials and land, with a significant slowdown in building. “There’s not a lot of speculative building happening,” said Megan McGrath, an analyst at Barclays Capital. “Most builders are only starting construction for a home on which they have an order.” Shifting demographics also augur well for builders. “This is a market that is increasingly dominated by first-time buyers,” said Nishu Sood, a real estate analyst at Deutsche Bank Securities. He noted that this market segment, which encompasses adult offspring of the baby boomers, is unencumbered by a home to sell or a mortgage under water. Further, these buyers can take advantage of a rising number of builder financing programs, along with lower prices and interest rates and the $8,000 federal tax credit. As a result, demand for entry-level homes is expected to increase. That is why McGrath says she favors companies like D. R. Horton and KB Home, which are focused on building smaller, less expensive houses. She said she also liked Toll Brothers because of its relatively low debt level, and because the company will probably benefit from pent-up demand for the luxury homes it builds after the market recovers. But even the more established buyers are scaling back right now. “What you’re seeing in the new-home market is a preference for simpler homes,” said Paul Puryear of Raymond James & Associates. Pulte Homes has embraced the trend toward simplicity. “There’s a bit of a move toward a smaller product nationwide in our communities,” Richard J. Dugas Jr., the president and chief executive, said in a recent interview. He explained that floor plans for some of its new homes are more basic, and their architectural features less elaborate, than those the company once specialized in, with a greater focus on energy efficiency. (www.nytimes.com)
New York Times (4/26/09); Vivian Marino

Mortgage Safety Net May Help More New Buyers Take the Plunge

A previously obscure charitable group based in the District of Columbia, the Rainy Day Foundation, suddenly is doing a booming business in what’s called the mortgage payment protection niche. According to its chief executive, Richard Del Sontro, Rainy Day is offering free job-loss protection coverage and home buyer financial counseling through approximately 100 builders and lenders across the country, plus two large real estate brokerages. Some of the clients and partners are big: Long & Foster Real Estate is the largest independent brokerage in the country, according to industry estimates. Builder Lennar is active in 17 states — including California, Florida, Arizona, the Carolinas, Illinois and the metro Washington area. Keller Williams, whose South Florida affiliate began offering coverage earlier this month, is the third-largest real estate franchise firm in the U.S. Under the Rainy Day plan, people buying homes through a participating builder, lender or real estate agency can qualify for up to six months of mortgage payments — capped at $1,800 per month in some versions and $2,500 in others — if they lose their job during the two years following their closing. There is no direct cost to the buyer. The insurance coverage is underwritten by Virginia Surety. The emergency fund, which Del Sontro estimates will pay out $8 million to home owners in 2009 — up from $4 million last year — is designed to “bridge the gap” and keep full payments flowing for a month or two following an unanticipated financial problem. If the owners only have $1,000 available in a given month, but their mortgage bill is $1,500, Rainy Day contributes the missing $500. (www.washingtonpost.com)
Washington Post, (4/25/09); Kenneth R. Harney

Best Cities for Jobs

Joel Kotkin, a presidential fellow in urban futures at Chapman University, and Michael Shires, associate professor in public policy at Pepperdine University, for five years have been compiling a list of the best places to do business in the U.S. But this year, it might be more appropriate to call them the “least worst,” writes Kotkin, because “you can barely find a fast-growing economy anywhere in this vast, diverse country. In 2008, 2% job growth made a city a veritable boom town, and anything approaching 1% growth is, oddly, better than merely respectable.” The No. 1-ranked big city of Austin, Texas, for example, enjoyed job growth of 1% in 2008 — less than a third of its average since 2003. Out of the 333 regions in the study, Texas dominates in both the best big and small cities for jobs and is home to a remarkable eight of the top 20 cities on the list — including No. 1-ranked Odessa, a small city in the state’s northwestern region. Further, the top five large metro areas for job growth — Austin, Houston, San Antonio, Ft. Worth and Dallas — are all in the state’s “urban triangle.” A healthy energy industry is one factor behind the state’s relative success. Other top-ranked locales boosted by the surge in energy prices in 2007 include Grand Junction, Colo.; Houma-Bayou Cane-Thibodoux, La.; Tulsa, Okla.; and Bismark, N.D. Other factors correlating with job growth — as evidenced by the current and past studies — are lower costs and taxes. For example, the area around Kennewick, Wash. is far less expensive than coastal communities in that state, and residents and businesses there also enjoy cheap hydroelectric power. Compared with high-tech centers in California and the Northeast — such as San Jose and Boston — places like Austin offer both tax and housing-cost bargains, as do Fargo, N.D. and Durham-Chapel Hill, N.C. (www.Forbes.com)
Forbes (4/14/09); Joel Kotkin

CEO Helps People Keep Their Homes; That’s CitiMortgage Chief’s Personal Goal

Just eight months ago, Sanjiv Das, CEO and president of CitiMortgage, found himself charged with motivating 10,000 employees and revitalizing a franchise caught in the throes of one of the biggest housing crises to hit the USA. “The single biggest issue I face is to be able to deal with this onslaught of unemployment and negative sentiment (toward banks) out there that none of us control,” says Das, 47. “We all feel, in our own small way, if we can ebb the tide, it will go toward turning around the economy of this great country, and belief in the housing market and trust in the banking system.” Another goal of Das is to do what he can to avert some of the foreclosures crippling the housing market. About 3.7% of Citi-serviced loans were 90 days or more past due at the end of 2008. Das helped pioneer a first-of-a-kind program at CitiMortgage, the nation’s fourth-largest lender, to help home owners who have lost their jobs. Under the program, CitiMortgage allows eligible borrowers who have been newly laid off to have their monthly mortgage payments lowered by about $500 for three months. The performance of CityMortgage’s loan modifications also has beaten national averages, the company says. It reported in March that 23% of delinquent home loans it modified over the past year fell into default again, far below federal figures that show about 55% of modified loans done by national banks were in default after six months. Since 2007, CitiMortgage has modified 440,000 customers’ loans, affecting $43 billion of mortgage debt. “Our people are driven by the ability to find innovative solutions, as opposed to doing the same thing we do in good times,” Das says. “Our mantra to people is very clear: It’s about keeping people in their homes.” (www.usatoday.com)
USA Today (4/27/09); Stephanie Armour

R.I. Urged to Speed Up Process for Issuing Building Permits

A panel studying Rhode Island’s Economic Development Corporation says the agency should fight to speed permitting procedures across the state, saying the path to construction is slow and unpredictable. A typical project may require approval from as many as eight agencies, “a regulatory morass” the EDC “does not do enough to address,” the report said. The panel also proposed a municipal “streamline permitting” process for projects “of critical economic concern.” The procedure would combine local planning and zoning approvals, set time limits and deputize the planning board as the “one-stop” authority. Local building departments have been a bête noire of developers for years. In 2005, the Rhode Island Builders Association sued nine cities and towns, arguing that the glacial pace of decision-making violates state law and deprives landowners of their property rights. The suit sparked some reforms. But Richard Welch, an association board member, said problems persist. Not even the steep drop-off in permit applications during the recession has reduced waiting times, he said, noting that his business, Apple Construction Corp., had lost 14 days before getting the go-ahead to add a handicap ramp to a building last summer. “You would expect that things would move more smoothly through the system since the amount of work has changed,” Welch said. “But the permitting is as slow as ever.” (www.projo.com)
Providence Journal (4/23/09); Benjamin N. Gedan

The Makeover Moment

Across the country, even as many people are being more cautious than ever about spending, some home owners with a little extra cash on hand are deciding that it’s a good time to renovate. Prices are down for both labor and materials, and contractors are readily available and able to lavish more attention on individual jobs. NAHB Chief Economist David Crowe said the current climate is unlike any he’s seen in his 30-year career. “Consumers are the ones in the driver’s seat now,” he said. “It’s the worst of times for builders and remodelers, who are very anxious, but it’s the best of times for consumers.” A recent survey by Angie’s List found 75% of its contractors were willing to cut prices by 10% to keep busy, with some willing to go higher, according to a spokesperson for the online directory. Many people are also discovering that lower bids by contractors are just the beginning. After years of research, Juliette Reynolds, who works for a publisher of travel guides, and her husband, Billy Hanson, a shop foreman at a sheet metal company, decided to build a prefab guest cottage in their backyard in Sarasota, Fla. last June. Contractors’ prices were already falling precipitously in the area, where the foreclosure rate was one of the highest in the nation last year and new construction had ground to a halt. The couple’s contractor dropped his bid from $125,000 in June to $95,000 in August, when they tried him a second time. And their savings have continued to accrue as the cost of materials and services decline. “Everything’s coming in under what the contractor estimated, like electrical, gas, plumbing,” said Reynolds, 42. “Plumbing was supposed to be $6,000, but it’s only costing about $4,500.” The couple is hoping that the project, now 75% complete, will come in as much as $5,000 under budget.” (www.nytimes.com)
New York Times (4/23/09); Julie Scelfo

NAHB Seeks Enhanced and Expanded NOL Rule

NAHB Chairman Joe Robson last week issued a press statement highlighting the association's ongoing efforts to expand the net operating loss (NOL) carryback provision that was included in the economic stimulus package enacted into law in February.

"NAHB supports the fullest and most robust NOL carryback provision possible in order to avert more costly layoffs in construction and other industries that would take an even worse toll on the nation's economy," Robson said. The statement was also sent to NAHB Executive Officers.

Since passage of the economic stimulus legislation, the NAHB staff has been busy working with both the Congress and the Obama Administration to find opportunities to expand the NOL provision beyond that contained in the American Recovery and Reinvestment Act (ARRA). Among other issues, the ARRA provision contained a gross receipts test of $15 million that excludes many home builders who need NOL carryback rule relief.

Earlier this month, NAHB staff members met with the Department of Treasury’s Office of Tax Policy and the staff of the Joint Committee on Taxation, which is the technical advisory body for the congressional tax-writing committees, to advocate an expanded NOL carryback for all businesses. During the meetings, NAHB stressed that the $15 million gross receipts test is very low, and effectively excludes builders who construct more than 45 homes a year, as well as suppliers and other related businesses in the home building sector.

In addition, NAHB has been working with its Net Operating Loss Coalition partners, which consists of a group of about 75 business organizations, to expand the NOL carryback. The association recently provided data on job losses in the residential construction sector as part of the effort to inform Congress of the severe economic downturn that home builders have been experiencing since late 2005.

In the past, NAHB has provided similar economic statistics on the decline in home building and its effect on the local and national economies to industry allies and members of Congress.

NAHB has always opposed abuse of the NOL provision and will continue to do so, and will work with policymakers to ensure that there are measures that protect and benefit all of the membership and ensure a level and competitive business environment, Robson indicated.

For more information, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421.

New-Home Inventory Whittled Down Further in March

The number of newly built, single-family homes on the market declined for a 23rd consecutive month in March as builders focused on winnowing down their inventories of unsold units, according to new-home sales data reported by the U.S. Commerce Department on April 24.

The inventory shrank to 311,000 units, which is a 10.7-month supply at the current sales pace.

“Builders are doing a great job of thinning the supply of unsold homes and positioning themselves for a slow but steady housing recovery,” noted NAHB Chairman Joe Robson. “The March numbers are a welcome sign that the market is stabilizing as some of the best home buying conditions in a lifetime are drawing consumers off the fence and back into the market.”

The latest government data indicated that new-home sales in March remained virtually on pace with a relatively strong, upwardly revised figure from the previous month. Sales were reported at a seasonally adjusted, annual rate of 356,000 units, which was off just 0.6% from February.

“In line with NAHB’s forecasts, we continue to see evidence that the new-home sales market is bottoming out as historically low mortgage rates, attractive home prices and incentives like the newly created $8,000 first-time home buyer tax credit spur more interest among consumers,” said NAHB Chief Economist David Crowe.

“That’s particularly true in the West,” he said, “where a 15% gain in March can be attributed in part to California’s implementation of an up-to-$10,000 tax credit for buyers of newly built homes — which, when combined with the federal first-time buyer credit, creates a sizable inducement to purchase.”

Regionally, new-home sales activity was somewhat mixed in March, with the two largest markets posting the best results. The West registered a 15.1% gain, while the South held even with the previous month’s improved sales pace, the Midwest posted a 7.8% drop and the Northeast experienced a 32% decline.

Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.

Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

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Refi Boom, Rise of FHA Big News in Mortgage Markets

At a time when conventional 30-year fixed-rate mortgage loans are lingering at their lowest levels in half a century, a major boost in refinancing is making big news in the nation’s mortgage markets, said panelists at last week’s NAHB Construction Forecast Conference in Washington, D.C.

With the federal government stepping up its role to support the housing finance system, affordable financing is also available as a draw for prospective home buyers who have good credit and can make a downpayment and document their income, said Freddie Mac Chief Economist Frank Nothaft.

On the negative side for the housing market, mortgage defaults are likely to continue to rise over the course of this year and won’t show improvement until joblessness stops rising.

Mortgage refinancings have accounted for 75% of loan applications over the past three months, Nothaft said, and refis in 2009 are expected to be double those originated last year “and may go a bit higher,” with positive implications for the household finance of those who are reducing their monthly payments.

Both Nothaft and Fannie Mae Chief Economist Doug Duncan credited the current decline in mortgage rates to intervention by the Federal Reserve to buy up securities and debt by the government sponsored enterprises.

The Administration’s Homeowner Affordability and Stability Plan is also set to help some four to five million home owners refinance loans owned or guaranteed by Fannie and Freddie, Nothaft said, with allowable loan-to-value ratios as high as 105%.

After slowing to a crawl at the height of the housing boom when subprime lending was on the rise, Federal Housing Administration insurance is back in business in a big way, Nothaft said, with its loan volume up sharply as buyers take advantage of the program’s 3.5% downpayment requirement.

FHA lending surged to 29% of single-family mortgage originations in the final quarter of last year, up from about 2% in the 2005 to 2006 period, the highest it has been since 1942, he said. When VA loans are added, the two government housing programs accounted for about one-third of the market at the end of last year, “a big change.”

Another major development in today’s mortgage market is that subprime and Alt-A lending have virtually disappeared; from 2001 they quintupled to about a 34% share of the $3 trillion in single-family loans originated in 2006. Conventional, conforming prime loans accounted for a full 62% share of those originations last year, up from 33.2% in 2006.

In the secondary market, the private label mortgage securities that blossomed during the subprime lending craze, accounting for more than half of mortgage-backed securities at their peak, have faded away, Nothaft said, leaving the market almost entirely to Fannie, Freddie and Ginnie Mae.

Even though they accounted for about only 15%, or 8 million, of the 55 million mortgages outstanding, private label securities held 50%, or 1.7 million, of the 3.46 million loans that were seriously delinquent at the end of last year.

While White House efforts to modify problematic loans with at-risk borrowers will help reduce foreclosures, Nothaft indicated that prime borrowers are also now contributing to defaults, primarily because of the weak state of the economy.

“There is a direct correlation between job losses and increases in delinquency rates,” he said. “If unemployment rises higher, it will trigger additional delinquencies.”

Survey research by Freddie Mac using only data from prime buyers found that the leading cause of delinquency in 2007 was unemployment or the curtailment of income, which was cited by 43% of those who had fallen behind on their payments. The second biggest factor was illness or a death in the family, which accounted for 25.5% of the delinquencies.

“We have poured a lot of things into the housing policy beaker,” said Fannie Mae’s Duncan, but he was not optimistic that everything is in place to support a full-scale housing rebound.

Borrowing $1.23 last year for every dollar they earned, households need to further reduce their ratio of debt to disposable income, he said, and that could cut into the amount of consumption that’s needed to fire up housing and the economy.

The crisis in the subprime mortgage market, he said, “was just the trigger to reveal the excess leverage” on the balance sheets of households and financial institutions.

Duncan also voiced concern that lending standards, while not tightening as much as they were, have still not loosened up to accommodate many potential home buyers, and he suggested that there might be further downward pressure on housing prices and a potential for more foreclosures.

Home Prices Approaching a Bottom in Period Ahead

While the Federal Housing Finance Agency reported that home prices in February registered their first consecutive monthly gain in two years, FHFA Chief Economist Patrick Lawler cautioned it is far too early to conclude that home values have bottomed out.

“There may be issues associated with the foreclosure moratorium. In January and February there were a lot fewer foreclosures than in previous months,” Lawler said while discussing current home price trends in a panel discussion at last week’s NAHB Construction Forecast Conference.

He also added that the FHFA calculated more transactions in areas across the nation where home prices are doing better. “That helped push up prices some,” he said.

From the fourth quarter of 2007 through the fourth quarter of 2008, FHFA reported that home prices fell 8% nationally, Lawler said, while the S&P Case-Shiller Home Price Index reported a drop of 18%.

Part of the discrepancy, Lawler said, is that the FHFA uses the prices of homes backed by mortgages or sold by Fannie Mae and Freddie Mac, and that subprime, jumbo and FHA mortgages are not included in the agency’s home price index. Another difference is that the FHFA encompasses rural areas while the S&P/Case-Shiller home price data are concentrated on major metropolitan markets.

Pointing out that distressed sales accounted for 50% of the total in California during the last quarter of 2008, Lawler added, “we have fewer distressed sales in our index than Case-Shiller.”

A study last year by the Federal Deposit Insurance Corporation (FDIC) to ascertain the total number of home-price boom-and-bust markets found that of 104 markets that experienced a “boom” in 2006, just three were still considered boom markets in 2008 and only one, Detroit, was listed as a “bust.”

The analysis defined a boom market as one that had experienced a real price gain of 30% or more in three years. A market was considered a bust if had posted a nominal price decline of at least 15% in five years.

“The data show that home prices are essentially where they were in 2003,” said Richard Brown, chief economist of the FDIC.

Citing the S&P Case-Shiller Future Prices Index, Brown said that futures prices, which have lagged actual home price declines, suggest a floor in U.S. home prices by early 2010.

To help shore up home prices, Brown said a broader stabilization of the financial system — including policies to provide liquidity to mortgage markets and bolster the capital of banks — is necessary to provide more mortgage credit and to get financial institutions to start lending again. He also said that the number of foreclosures must be whittled down “to arrest some of the downward pressure on home prices.”

Harvard Economist Calls Signs of Recovery ‘Inconclusive'

Recent signs such as increasing affordability and lower mortgage rates indicate improvement in the housing market, but it is still too early to declare that housing has hit bottom, Eric Belsky, executive director for the Joint Center for Housing Studies at Harvard University, said during NAHB’s Construction Forecast Conference last week in Washington, D.C.

“The market is now ‘under-demanded’ as opposed to being overbuilt,” he said. “Demand has been driven down to low levels by fear, accelerating job losses and a lack of access to credit.”

Belsky cited a number of factors that are needed to spark demand — lower mortgage interest rates, stabilizing home prices, stabilizing job markets, a reliable stream of mortgage credit and cause for optimism.

On the flip side, Belsky said that there are tentative signs that buyers are beginning to return to the housing market as a result of low home prices, a significant drop in mortgage interest rates and strong government efforts to provide liquidity to financial markets and keep mortgage rates low. Despite these positive developments, he still sees several danger signs.

“Employment will take a long time to recover, which will put pressure on housing demand. While interest rates are lower, there is sharply less credit available to people who were previously getting it. The subprime and Alt-A markets are near a standstill, so a lot of people who might be looking to buy may be unable to.”

A steady uptick in home sales and consumer confidence is needed for a turnaround in housing, Belsky said.

“I think you look for signs of a recovery over several months,” he said. “If you have three or four good months of increases in home sales and a two- to three-month upturn in consumer confidence, we are turning the corner. Now we haven’t seen these signs, but things are not going much lower.”

Belsky said to look for the following signals to determine if housing has hit bottom:

Examining these factors has so far proven inconclusive, he said. While the economy is well into a recession and the inventory of unsold new homes has been moderating, the rate of job losses has shown no signs of declining and the data on new home sales and prices suggest that it is still too early to declare a positive trend.

“You could make the argument that we are near the bottom and demand is waiting to pull us out of it,” he said.

To restore balance in the marketplace, Belsky said that home builders must continue to hold production below demand in order to work off excess inventory and that foreclosures must be restored to normal levels.

Looking at the market over the long term, Belsky said that new household formations should be robust, fueled by the growing echo boom generation — the children of the baby boomers — and continued immigration growth.

“The echo boom today is even larger than the baby boom at comparable ages and the baby boomers will drive growth in older households,” he said. “Even under low immigration assumptions, household growth in 2010 to 2020 should rival the 1995 to 2005 period.”

U.S. Housing Market Undervalued in Fourth Quarter 2008

In its analysis of housing values for last year’s fourth quarter, IHS Global Insight found that the U.S. housing market was slightly undervalued on the whole following a 9.9% fall in prices from their peak in 2007.

Home prices fell at an annualized rate of 13% during the final four months of 2008, according to the “House Prices in America” study, which was the greatest rate of decline so far in the current housing downturn.

The price contraction continued to be most severe in the Southwest and Southeast, areas of the country that had once been the most over-valued, the study found.

Prices fell in 302 of the 330 metropolitan areas included in the study, or 92% of them.

In the fourth quarter of 2008, only Atlantic City, N.J. met the study’s definition of an extremely overvalued area, compared to 52 metro areas during the peak of overvaluation in the fourth quarter of 2005.

Only the Pacific Northwest, extending into Idaho and Utah, remained overvalued across a wide region in the fourth quarter, the study found.

When the 330 metro areas were weighted by market value, housing was 8.4% undervalued in the fourth quarter, according to the analysis. When weighted by housing units, the nation’s housing stock was 10.2% undervalued.

Statewide average home price declines for 2008 exceeded 20% in Arizona, California, Florida and Nevada, and they dropped more than 10% in Maryland, Michigan, Georgia and Virginia, IHS Global Insight reported.

“We expect prices to decline further through 2009 as consumers remain wary of taking on housing debt in these uncertain economic conditions,” said Jeannine Cataldi, senior economist and manager of IHS Global Insight’s Regional Real Estate Service.

“Markets where the boom was greatest, and the fall the hardest, will be watched carefully for any signals that may indicate a trend towards stability and potential growth,” she said.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.

Eye on the Economy: Free Fall in Economy Losing Momentum

The contraction in real gross domestic product (GDP) for the fourth quarter of 2008 now stands at an annualized rate of 6.3%, according to the “final” estimate released by the Commerce Department on March 26. This represents a major downshift from the third quarter of 0.5% and was the sharpest decline since the depths of the 1982 recession.

The housing production component of GDP (residential fixed investment) contracted at a 22.8% annual rate in the fourth quarter and knocked 0.8 of a percentage point from the overall GDP growth rate — quite a negative contribution from a component that now accounts for less than 3% of total GDP.

Consumer spending, which now accounts for 71% of the total, contracted at a 4.3% annual rate in the fourth quarter and registered a negative growth “contribution” of -3.0 percentage points — an extremely large drag from this part of the economy. Consumer spending rarely goes negative.

Consumer spending apparently stopped falling in the early part of this year, but serious weakness in other sectors of the economy apparently kept real GDP in free fall during the first quarter. We’re estimating -5.2%.

Residential fixed investment probably contracted at nearly a 40% pace — we’re looking for a major downshift in nonresidential fixed investment (structures as well as capital equipment and software) — and businesses undoubtedly cut inventory positions considerably in the first quarter.

The rate of decline in real GDP should slow considerably in the second quarter — we’re estimating -2.0% — as the cutback in business inventories abates and the drag from housing lightens a bit.

We expect real GDP to stabilize around mid-year and to post modest (below-trend) growth in the second half of this year.

The GDP recovery should gather momentum during 2010, with above-trend growth emerging by the second quarter. If this pattern materializes, a significant run of self-sustaining above-trend growth will be in store for 2011 and beyond.

Normal lead-lag relationships ensure that the labor market will continue to lose ground while GDP growth stabilizes and begins to post modest below-trend positive growth later this year.

We’re expecting net payroll job losses over the balance of this year and possibly into the early part of 2010.

We currently expect payroll employment to flatten out in the first quarter of next year and to show decent growth during the second half of the year.

The civilian unemployment rate is destined to rise by about another percentage point from 8.5% reported in March.

We expect this rate to top out at 9.4%, on a monthly average basis, during the first half of 2010, not far below the peak reached in the wake of the double-dip recession in the early 1980s. The projected pace of the GDP recovery during 2010 drops the unemployment rate to 9.0% by late in the year, leaving plenty of labor market slack to support above-trend GDP growth for quite a while into the future.

Today’s home mortgage market is essentially a fixed-rate world, as adjustable-rate loans have nearly exited the scene. Furthermore, Fannie Mae and Freddie Mac recently have been accounting for about 70% of the fixed-rate mortgage (FRM) market, with FHA/VA loans making up most of the rest.

The spread between the prime conventional conforming FRM rate and the 10-year Treasury rate widened out considerably last year when Fannie and Freddie were spurting red ink and their futures were highly in doubt. The spread improved to some degree after federal authorities seized the government-sponsored enterprises (GSEs), placed them under federal conservatorship and affirmed the quality of their debt and guaranteed mortgage-backed securities.

The Federal Reserve clearly wants to drive mortgage rates down further, and our central bank has committed to buy large amounts of GSE debt as well as mortgage-backed securities guaranteed by Fannie, Freddie and Ginnie Mae in order to accomplish that feat.

The Fed also is buying longer-term Treasury instruments in an attempt to drive down mortgage rates and other private yields along with Treasuries.

NAHB’s forecast assumes that the Fed will have some success in lowering long-term Treasury rates in coming quarters and that the spread between the FRM rate and the 10-year Treasury rate will narrow systematically over the short-term forecast horizon.

We expect the prime conventional conforming FRM to hover around 4.7% for much of this year.

Broad measures of consumer confidence by the Conference Board and consumer sentiment by the University of Michigan remained at or below their respective record lows in March — primarily because of the extremely weak labor market conditions prevailing at that time as well as a weak outlook among consumers for income over the next six months.

The University of Michigan regularly asks consumers whether they think it’s a good or bad time to buy a house. The proportion saying “good” has been around 70% in recent months, including March, well up from the cyclical lows posted back in 2006.

The rebound in perceptions of home buying conditions has been driven primarily by lower house prices, but also by lower mortgage rates.

Weak assessments of general economic conditions obviously have been holding back prospective buyers who view house prices and interest rates as favorable.

In March, none of the consumers who rated home buying conditions as “good” cited “good times” as a reason, while a significant number of those saying it was a bad time to buy a house listed “bad times ahead” as a factor.

In previous cycles, home sales ordinarily started up before employment and consumer confidence rose, generally because low mortgage rates and enhanced affordability encouraged some pent-up demand to come onto the market early in the game.

Sales of both new and existing homes perked up a bit in February from their respective record lows. Furthermore, more-timely survey measures produced by NAHB suggest that the demand for new homes is firming up on a seasonally adjusted basis.

NAHB’s proprietary survey of large public and private single-family builders, accounting for roughly one-fourth of the national for-sale market, suggests that seasonally adjusted gross sales (new orders) flattened out in the first quarter and that net sales for the first quarter were somewhat above the fourth-quarter pace.

Furthermore, a strong downtrend in cancellations has produced some recent improvements in cancellation rates, measured relative to current gross sales or to the backlog of signed sales contracts in the hands of builders.

NAHB’s broad-based single-family Housing Market Index (HMI), based on monthly surveys of about 400 companies of all sizes, had been mired in a record-low and narrow range from last November through March of this year.

However, the HMI moved from 9 to 14 in April and improvements were registered for all three components (current sales, buyer traffic and sales expectations) and in all four regions of the country.

While one month certainly doesn’t make a trend, the signals provided by the April HMI definitely are welcome.

The recent data on home buyer demand described above have bolstered our view that new-home sales bottomed out in the first quarter. Our short-term sales forecast depicts a gradual recovery process that begins in the second quarter and gathers momentum through 2010.

Data on housing starts and building permits through March have bolstered our view that total and single-family housing starts will bottom out in the second quarter of this year, although the multifamily sector is not likely to stabilize until the end of the year.

We expect starts to gain ground during 2010, although constraints on housing production credit will undoubtedly limit the gains — particularly in the multifamily sector.

Residential fixed investment (RFI), which includes manufactured home shipments, brokers’ commissions and improvements to structures as well as the production of new single-family and multifamily units, should continue to exert a drag on GDP growth over the balance of this year — although the drag most likely will be lessening as the year progresses.

We expect RFI to post positive growth throughout 2010, helping to lift GDP growth into a healthy range by mid-year.

The Early Stages of Economic and Housing Recovery Will Be Relatively Gradual

Under ordinary conditions, the economy would be expected to rebound at a quick pace as major cyclical drags lift and forceful policy actions give a strong push forward.

However, the coming economic expansion figures to be less robust than usual, due to two structural “headwinds” — tighter credit conditions with less financial leveraging in national and global systems; and less aggressive consumer spending as heavily damaged household net worth and reduced prospects for capital gains encourage more saving out of current income.

Both of these headwinds are blowing now, won’t subside for some time and will inevitably hold back the housing recovery.

Credit conditions for both home buyers and housing producers will be much tougher than during the unsustainable boom period earlier this decade.

Furthermore, the recent wrenching experience with falling home prices and widespread foreclosures is bound to keep some downward pressure on the homeownership rate and to encourage consumers to put less of their resources into housing — unless housing policy enhancements work against these forces.

NAHB 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 the April 22 edition. To subscribe to “Eye on the Economy,” click here.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.

Useful Links to Monitor Economic and Housing Trends

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

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.

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.

Merchandising Choices to Carry You Through to Recovery


	A vignette without all the furniture, such as this one for a dining room by Kettler Forlines Homes, is a cost-effective option that can create a lasting impact on home buyers. Photo by Kettler Forlines Homes

Design professionals are adapting their creative skills and services to meet today’s conscientious budget requirements.

So, while you may ask yourself whether you can afford to merchandise models, perhaps the more important question is whether you can afford not to.

Creating that comfortable feeling of being at home in a neighborhood for your buyer is essential to your selling success — and is more important now than ever.

You do have options to help get you through the downturn. There is no one-size-fits-all approach to model merchandising.

Depending on your needs, your overall sales and marketing goals and your budget, you can decide the direction that makes most sense to you.


	If it's within the budget, a fully merchandised model, such as this one by Ginsburg Development Companies, presents the greatest impact on a potential home buyer. Photo by Steve Hinds, Inc.

Any one of the above merchandising options will benefit your sales and marketing efforts, but you need to determine which one makes sense for you and matches your overall goals.

Discuss the options with your merchandiser to determine which one can work best within your budget and be your most cost-effective choice. Whichever option you choose, you’ll be able to reinforce your prospects’ reasons to buy by creating that comfortable feeling so essential to selling them a home — even in today’s market.

Lisa Lockwood is the national director of sales and marketing for Lita Dirks & Co., an award-winning national merchandising firm based in Greenwood, Colo. For more information, call Lockwood at 303-761-7225, or visit www.litadirks.com.


	Focusing on specific rooms, rather than merchandising the entire house, can help trim a marketing budget without losing impact on buyers. The great room in a Harvard Communities model. Photo by E.L. Imagery

Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

By offering a range of options and upgrades, the design phase provides the best opportunity to make a lasting impression and ensure that buyers will favorably remember the entire buying experience.

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.

Free Webinar on April 29 Looks at Negotiating With Lenders

A free, hour-long webinar on how to negotiate with lenders will be held on Wednesday, April 29, beginning at 2:00 p.m.

A panel of home builders, a financial expert and an attorney will discuss how to do business with lenders under the current economic and credit crisis.

May 14 Audio Seminar Explores Government Stimulus Options

During an hour-long NAHB audio seminar next month, developers, remodelers and single-family and multifamily builders can learn how to use the economic stimulus package to diversify into commercial construction.

Scheduled speakers include builders who have more than 20 years of experience with government contracts and an attorney who specializes in contract law.

“This audio seminar will provide knowledge that individual companies do not have the time, resources or direct access to the government to attain on their own,” said Fred Hoppe, NCBC chair and scheduled seminar speaker. “This is the benefit of NAHB and council membership in today’s tough market. They will help do the homework necessary to run your business.”

Hoppe, a partner at Hoppe & Harner, LLC in Lincoln, Neb., specializes in contract law in construction, commercial real estate, business, landlord/tenant and banking. He is also president of Hoppe Homes, Inc., a real estate ownership, operation and development company.

Audio seminar participants will learn about a variety of government-contracted construction projects listed in the stimulus package and what they need to know to bid on — and win — government contracts.

The seminar will also include information about connecting with federal contractors to work as subcontractors on commercial construction jobs.

“Our members need to learn how to get in on these projects.” said Carl Harris, vice president and general manager of the Carl Harris Company in Wichita, Kan. and NCBC vice chair and moderator of the seminar.

Harris said that government project money is available for schools, fire stations, public works, water treatment plants and even pseudo-government projects like hospitals.

“Now that the stimulus package has passed and project money is being allotted and will be spent on these types of projects, NAHB members should be actively going after it,” said Harris.

The seminar will include a panel discussion as well as questions from the audience. Questions can be submitted in advance through Friday, May 8 to commercialbuilders@nahb.com.

For more information, e-mail Kisha DeSandies at NAHB, or call her at 800-368-5242 x8455.

Builders’ Tip: How to Fashion Heavy-Duty Sawhorse Brackets

Plenty of commercially available sawhorse brackets are on the market, but I’ve found that the ones I weld up for myself suit my needs better than any I have seen.

The sawhorses I fabricated are rock solid, stack nicely and are easy to disassemble.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

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.

Buyers of New Homes Need to Act Soon to Get Tax Credit

With only about seven months remaining before the $8,000 tax credit for first-time home buyers is scheduled to expire, home builders should be conveying the message that prospective buyers looking for a newly built home need to make decisions soon if they want to be able to take advantage of the federal incentive, according to NAHB.

“We have received many inquiries from potential home buyers asking if a sales contract on a new home by the Nov. 30 deadline will be sufficient to receive the first-time home buyer tax credit,” said NAHB Chairman Joe Robson. “They have been surprised to find out that they must complete the purchase of the new home before they are qualified.”

Home buyers may qualify for the tax credit if they purchase the home on or after Jan. 1 but before Dec. 1, 2009. A purchase occurs when the title to the home transfers, typically on the day of closing of the home sale.

In the case of an owner-built home, in which the eventual home owner does not purchase the home from a builder, the date the home buyer takes occupancy of the house is considered the purchase date.

In all cases, a signed sales contract is not sufficient to claim the tax credit.

Mike Dishberger of Sandcastle Homes, Inc., in Houston, said that building a home from scratch can take anywhere from four to six months, depending on the floor plan and location. “Builders are ready and willing to work with potential home buyers to get them into the new home of their dreams, but time is running out to make those dreams a reality while also benefiting from the $8,000 tax credit.”

“Buyers also need to keep in mind that it takes time on the front end to select a community, a builder, a floor plan and the options they want in the home before the first shovel hits the dirt,” said Kevin Enyeart of Gale Home Builders in Kansas City, Mo. “Often it can take up to a month to complete this process in order to ensure the customer is satisfied with the home they will be living in many years down the road.”

It is important that home buyers understand the time requirements and get the process started with a home builder today if they want their new home completed in time to claim the tax credit.

In addition to the Nov. 30 deadline, home buyers must also have not owned a home in the three years prior to the purchase and have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers in order to qualify for the tax credit.

To find a local home builder, consumers can contact their local home builders’ association at www.nahb.org/findanhba.

Resources are also available to help educate consumers on the home building process at www.nahb.org/forconsumers.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

What Star Athletes Can Teach Us About Internet Marketing

How do super star athletes like Michael Jordan and Tiger Woods consistently deliver winning performances — despite the odds, pressure and intense media spotlight?

How could Flight 1549 pilot Chesley “Sully” Sullenberger make the right split-second decision in the midst of a life-and-death crisis?

How do emergency first-response teams manage to carry frightened children out of burning buildings, talk down suicidal jumpers and calm angry mobs when irrational emotions rule the day?

If you’ve ever wondered what makes these professionals great, you’re not alone.

While they share many incredible traits, including determination, discipline and dedication, central to their success is an intense reliance on process to guide their decision-making. They rely on process so much that it works best when the pressure is at its greatest.

Reacting to pressure this way is certainly not innate. It takes practice, practice and more practice.

In the accompanying YouTube video, Michael Jordan gives us a glimpse of his process as he instructs basketball players on how to make the game-winning free throw. He uses a ritual that helps him focus and he is so confident in his process that, just before he shoots the ball, he closes his eyes. He says he’s even done this during a game, occasionally. Amazing.

In our industry, many of us use the time-honored critical sales path to sell homes and ensure a smooth, consistent sales process. It is a proven fact that a sales process leads to more sales.

What if an e-marketing process could help you save time and money and get better results? Now, what if you could learn to market with your eyes closed?

Few builders approach marketing from a strategic, process-oriented point of view. All too often, they react to a lack of traffic by quickly instituting new marketing initiatives — instead of developing a proactive strategic process before a crisis erupts.

Before Internet marketing, this “from-the-hip” marketing approach was easier to correct mid-stream — not an ideal or recommended approach to marketing, but prevalent. Before the Internet, when a print ad or billboard performed poorly, builders and marketers could change it quickly at minimal cost.

In contrast, re-working e-marketing mistakes made on Web sites, in social media campaigns or search engine optimization initiatives provides an expensive lesson they can delay results and eat away at a marketing budget.

For example, many builders have worked for months and spent thousands of dollars on a new Web site only to discover after the launch that the site is not technically sound, cannot be easily updated or wasn’t built to accommodate future growth.

Because implementing Web marketing takes a fair amount of time, effort and money, starting over sometimes isn’t possible, leaving organizations with a tool that doesn’t produce results.

But using a process can help ensure that your Web marketing is on target, has maximum flexibility and increases your return on investment (ROI).

Consider using the Builder eMarketing Strategy™ (BMS), which I introduced in my manual, “Log On to eLeads,” as a roadmap to create a successful Internet marketing process.

The roadmap outlines five building blocks that constitute a sound Internet marketing strategy:

More than just passive online brochures, today’s Web sites are active sales vehicles that should compel visitors to move forward in the sales process. Because your Web site often is a prospective purchaser’s first impression of your community, it’s important that you update it frequently, and that it is easy to navigate and content rich.

Most Web sites need to be redone every two to three years to be competitive with new Web technology and design trends. An outdated Web site can project a poor first impression that can be difficult to overcome because it can give visitors a false impression of your products, construction processes and customer service.

Marketing a Web site without utilizing Internet marketing is like marketing a brand new community 50 miles from the nearest town with no signage, no roads and no entry monument. Without Internet marketing, your Web site essentially does not exist.

If your Web site can’t be found on the first page of Google, Yahoo and the other important and popular search engines, how can you expect prospective buyers to find your community online?

To market your site properly, you have to provide online roads to your Web site — just like you develop physical roads and signage that lead prospects to your community. These online marketing options include referral sites, online display advertising such as banner ads, free listing sites, search engine optimization and paid search.

Many builders don’t know what happens to their e-leads and don’t have a plan to manage and convert the electronic lead requests into onsite appointments and sales?

This building block ensures you get maximum ROI on your Web marketing with consistent follow-up. In any market, but especially today’s market, you need to follow up until you get a yes or a no.

Follow-up must be one-on-one, personal and action-oriented. Either train your agents to conduct effective follow-up or, better yet, invest in a dedicated online sales counselor who can manage, follow up with and track all of your e-lead requests.

Your Internet marketing strategy is almost complete, minus one critical piece — closing the sale.

How well does your on-site sales team close Internet prospects? Do they understand the value of the prospect, the high closing probability and how to adjust their presentation to meet the needs of the dot com active adult customer?

None of the previous building blocks matter if your team isn’t ready, able and willing to close the sale.

Sales managers tend to focus so much time on finding willing and able prospects they forget to make sure the sales agents are ready. Train, coach and evaluate your sales team members regularly to make sure they are high quality, relationship-oriented and effective closers.

As previously mentioned, the ability to track results is a huge benefit to e-marketing, but only if you take advantage of it.

The final step in the Builder eMarketing Strategy is ongoing measurement and refinement. Track all of your eMarketing media performance including:

In addition to tracking the performance of your e-marketing media, also track your sales results with metrics including:

A step-by-step marketing process will help ensure sales success even in difficult markets. It is still early in 2009 so, if you haven’t done so already, take the time now to evaluate your marketing.

Start asking tough questions about what marketing tactics have and haven’t worked. Be honest about how you arrived at your marketing decisions. Then, consider using a customer-centric strategic approach.

Map out a series of action steps to implement a marketing strategy. Finally, stick with the process and make time on a weekly basis to work through each step until the process becomes intuitive to your organization.

That’s what Michael Jordan and Tiger Woods did to reach the height of their professions. They continued to practice routine fundamentals until their rituals helped deliver victory.

Meredith Oliver, MIRM, MCSP is the president and founder of Meredith Communications, a sales training and e-marketing consulting company based in Orlando. that delivers marketing services to builders and developers nationwide. For more information, e-mail Oliver, call her at 321-285-1660 or visit her Web site, www.CreatingWow.com.

A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.

Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.

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.

Cities Take a Second Look at Impact Fees in Hard Times

With building permits in sharp decline because of the current housing downturn, and local government revenues from impacf fees on new construction dwindling as a result, now may be a favorable time for home builders associations to present municipal governments with alternatives to impact fees to pay for local infrastructure needs, according to panelists participating in an April 21 NAHB Web seminar on the “Top Trends in Impact Fees.”

This is also a period when builders should be extra vigilant about what their local jurisdictions are doing, because impact fees are up dramatically in the 27 states where they are used, and there are a number of ways in which the development community is being grossly overcharged for its impact on the community, the panelists said.

J. Michael Noonan, chairman of the NAHB Land Development Committee and Minnesota division president of Rottlund Homes, noted that the association has “a long history in providing help to its members on infrastructure finance” issues.

Noonan directed builders, HBAs and local governments looking for resources on municipal finance tools to www.nahb.org/infrastructurefinance. At this address, NAHB members can find many resources and publications they can download for free — including the NAHB "Impact Fee Handbook," which was updated last year, a three-part series of reports on infrastructure finance alternatives and a new "Impact Fee Rollback Resource Guide."

Also available are contacts in NAHB’s Land Development Services department who can provide technical support and access to experts in municipal finance.

“Stay alert in today’s financial environment,” warned Noonan. “Many municipalities are looking for ways they can raise revenues to make up for financial shortfalls. Impact fees are the goose that laid the golden egg, but they just can’t enact them without having enabling legislation from the state and following the process that is spelled out there.”

Based on research by his company, Carter Froelich, managing principal, Development Planning and Financing Group., Inc., said that average national impact fees have climbed from $13,441 per home in 2003 to $22,759 last year — a 69% increase.

Exactions for “general government” rose the most over that period — 263% — from $346 to $1,257, he said, and charging impact fees for such capital improvements as performing arts centers and city halls has become a growing trend.

Rulings in two U.S. Supreme Court cases on what impact fees can legitimately be used to pay for — Nollan v. California Coastal Commission and Dolan v. City of Tigard — suggest that many municipalities are asking builders and new home buyers to pay for improvements that should be the responsibility of the local taxpayers, Froelich said.

In Nollan, the court ruled that there must be a “rational nexus” — or direct relationship — between the new residential development and the impact fee, he said. And in Dolan, the justices ruled that the fees must be roughly “proportionate” to the impact of the new housing on the existing infrastructure.

The panelists discussed three trends that are occurring with the establishment of impact fees nationally:

No matter what method they are using, jurisdictions commonly make mistakes in calculating impact fees, Froelich said, and builders should look at this process carefully. For a start, the cost of the capital improvements should be based on a capital improvement program (CIP) in which the municipality projects the amount of infrastructure that will be needed as the city grows over a given period of time.

“The lack of a CIP severely weakens the basis for an impact fee,” said Austin, who added that she would encourage HBAs to get into a discussion with cities that don’t use CIPs to start doing so. “It provides accountability in the process,” she said.

Among common mistakes cited by the panelists that can impose an unfair cost on housing:

Cited by the speakers on the NAHB panel as a positive trend, some cities are pushing back the time at which the impact fee is charged. Nationally, the fees are most commonly due at the building permit stage, said Austin, but some are now due at the time of closing.

“The deferral of impact fees to the actual revenue event is a good thing in tough economic times,” said Froelich, giving the builder “a temporary reprieve.”

Austin noted that it is logical to charge the fees late because “the impact on the city doesn’t occur until the resident occupies the home.” However, builders who are lucky enough to live in a place that defers the fee should still determine the amount that will be due as early in the process as possible so that they can more accurately figure their development costs.

Hard economic times are also putting jurisdictions in a state of mind where they are more willing to consider alternatives to impact fees, panelists said, and rollbacks and moratoria are occurring.

Impact fees are “an economically sensitive financing tool,” said Austin, and subject to the ups and downs of the housing cycle.

Last month, she said, the mayor of the city of Albuquerque, N.M. proposed a reduction in impact fees in order to encourage new construction activity and create jobs. That was not a difficult step to take because residential building permit activity in that market has plummeted from 300 to 400 per month to only around two dozen, putting the community at risk of having to refund fees for improvements it can no longer afford to make.

Froelich said that most states require funds that have gone unused for a specific period of time to be refunded to the entity that paid them, although he has not seen it happening.

Among alternative funding sources suggested by the panelists, municipalities should consider special purpose taxing districts, where bonds are issued to build facilities benefitting the area of growth. “The only people who pay are the residents who benefit from that infrastructure,” said Froelich, and this approach “is being used more and more.”

Another financing source worth considering is tax increment financing, which is used primarily in redevelopment areas but can be applied to new growth in some districts. Under this approach, the property tax base is frozen, development occurs in the area and as property taxes increase, that added revenue is used to fund improvements.

Builders may want to consider having states pass new laws to implement some of these alternatives, Froelich suggested, such as the state of Idaho, which recently used legislation to establish additional funding mechanisms for construction of roadways.

Austin, who has expertise in writing legislation related to impact fees, noted that encouraging states to improve their statutes on fees or write new ones is a good stratagy for housing.

Included in such a law should be a requirement for jurisdictions to reduce the impact fee based on the new cash that will flow from the improvement, which is known as the "offset." Also, communities should not be allowed to increase standards for new development above those that exist elsewhere in the community. The fees should be required to be based on a technical study so that the determination is driven by actual facts and true costs. Service areas should be used, and the law should specify a process for refunding fees not spent.

“I like to see impact fees defined in statutes, because then you have a legal basis and a methodology that can be utilized, providing guidance to the jurisdiction and transparency to home buyers that they aren’t being taken advantage of,” said Froelich.

In searching for better ways to finance needed improvements, “it’s always better to work with the municipality than against it,” said Austin. Home builders associations “working in partnership with the community make more progress. The best situation is where all the parties work together to find a financing solution.”

For more information, e-mail Thais Austin at NAHB, or call her at 800-368-5242 x8343.

Multifamily FHA Finance Looks Tempting in Credit Crunch

With Federal Housing Administration lending programs “one of the only games in town” for permanent construction of multifamily housing and building owners looking to refinance their properties on more favorable terms in a difficult financial marketplace, the industry is taking a close look at FHA’s Section 221 (d)(4) program for construction and substantial rehabilitation and Section 223(f) program for acquisition and refinancing, according to Bobby Bowling, president of Tropicana Building Corporation, who moderated an April 22 NAHB Web seminar on “FHA — A Viable Alternative in Today’s Multifamily Lending Market.”

Panelists reviewed the benefits and requirements of the two programs and also advised multifamily professionals who haven’t worked with the Department of Housing and Urban Development in the past that they will be signing up for a different way of doing business than they are used to.

“Welcome to the world according to HUD,” said Stillman Knight, Jr., president and CEO of The Knight Company, who has developed more than 6,000 HUD-insured housing units.

“It’s a little bit like passing through the looking glass, this is a different world,” he said. “It is far different than in the conventional sector” and even experienced builders will “face a steep learning curve.”

“Site control is essential,” Knight said, and builders interested in obtaining HUD program insurance should own or hold a 12-month option on it.

As for the differences, participants in these programs need to understand that “the HUD staff is going to follow the book,” which is based on the statutes passed by Congress and the agency’s regulations. “Your job is to understand these better than HUD staffers,” he said.

Participants also need to know that they will have limited contact with HUD staffers and that they will be working through FHA-approved lenders.

HUD operates out of 18 national hubs, and if the hub is good, the processing office should be good as well. But “which office you’re subject to will make a difference,” Knight said, because they vary greatly in terms of their resources and staffs.

Also, responsible for more than 30,000 of its own properties across the country, HUD’s resources can be strained and it will give priority to its inside deals. “There is a rush to HUD for folks who realize they can’t get financing elsewhere,” he said. “But don’t expect HUD to expand to take care of your needs. The government doesn’t.”

Among construction issues, those considering using the programs should be aware that HUD requires an environmentally clean site. Also, cost certification for the job is required since the mortgage is totally predicated on replacement costs. While this happens at the end of the process, “start early and sign up your cost certification accountant in advance of your presentation to HUD,” he advised, adding that the right accounting firm should have experience working on these reports.

Also, “HUD has its own definition of costs, and you have to translate your glossary of terms into theirs.”

On the management side, multifamily developers are typically not accustomed to having the lender telling them when they can make distributions; distributions can be annual, or in some cases semi-annual, and they can only be from “surplus cash” as defined by HUD.

Certified annual audits are also required, according to HUD’s own specifications. “You cannot continue to do business with HUD if you do not turn in your financials on time,” he said.

Also, developers should be prepared for a review of the physical condition of the property; a minimum score of 60 is needed, and anything below that can result in foreclosure.

The developer should work with the mortgagee to determine which of the two programs to use and should only work with a MAP (Multifamily Accelerated Processing) lender. In choosing a mortgagee, ask how many of your loan types they have closed in the last few years and how many of these loans were in the HUD office with jurisdiction over your site. Ask for an estimate of the processing time, and hire the person, not the firm.

“This is extensive and lengthy,” Knight warned, “and it can be a hair-pulling process.”

“Be sure you don’t have a bad history with HUD; if you have been barred from doing federal programs, you will not be allowed to participate,” he said. “This is not your friendly banker you have done business with for 30 years. They will want to look in your underwear, so be prepared.”

Section 223(f) can only be used to acquire or refinance existing multifamily properties that are at least three years old, said Cathy Pharis, director of Deutsche Bank Berkshire Mortgage, Inc., although that rule is being waived in certain cases where borrowers don’t have any other options than this program to get out of their current debt.

Non-critical repairs and capital improvements can be included in the 223(f) loan, but only one major system can be substantially replaced (more than 50%) and project rehabilitation costs are limited.

Obtaining the financing tends to be a four- to five-month process, Pharis said, “if things go very well.”

For Section 221 (d)(4) new construction and substantial rehab loans, market-rate garden and high-rise buildings, suburban or urban, qualify, as do tax credit properties and elderly projects where there are no meals provided, said Margaret Allen, CEO of AGM Financial Services, Inc.

In a substantial rehab, more than one system is being replaced, or the developer is spending $6,500 a unit, which can be multiplied by a local high cost factor, typically bringing the cost of rehabilitation to $15,000 per unit. Commercial space is allowed on the first floor, she said, with the amount based on a formula.

The process takes seven months at best, 10 months is typical and the developer should allow for 12, Allen said.

For more information, e-mail Carmel McGuire at NAHB, or call her at 800-368-5242 x8207

Apartments Bring Affordable Top Design to Pricey San Jose

At a time when public-private partnerships can be instrumental in expanding financing opportunities for multifamily development, Almaden Apartments in San Jose, Calif., an NAHB Multifamily Pillars of the Industry award finalist for the Most Creative Financing of an Affordable Apartment Community, took an unconventional financing path to develop a 100% affordable apartment community in one of the nation's most expensive housing markets.

Developed by MacFarlane Costa Housing Partners, this 226-unit family apartment community provides high-quality housing to working households with income at 50% to 60% of area median. The community includes one-, two- and three-bedroom apartments with monthly rents ranging from $952 to $1,586. Comparable market-rate rents in the area average from $2,400 to more than $2,700.

The success of the project was based on close public and private partnerships involving the city, the development firm and nonprofit partners. A concerted effort by the various investors in the development avoided the delays that have become all too common in today’s badly weakened financial marketplace.

The effort from each investor thwarted delays and obstacles stemming from financing challenges and changing market conditions, although the development team had to bide its time until an improvement in land values and other costs made construction feasible.

Representing a significant redevelopment effort on the part of the city, the community was built on five acres of land that were previously used for industrial and commercial purposes and required extensive environmental remediation. The city of San Jose was a major investor, and was sold on the project’s proposal for 100% affordability while maintaining condo-level design.

Almaden Apartments experienced one of the fastest lease-ups in market history — all of the units were leased in two months time.

To further bring a sense of community to this previously blighted area, the project donated land to the city for a neighborhood park adjoining the property.

The community features a clubhouse, computer learning center with free on-site computer classes, fitness and business centers, pool and spa, laundry rooms and ample parking. Public transit and a light rail station are nearby, as well as schools and recreational facilities.

The project was designed to exceed market-rate standards, featuring classic contemporary garden-style architecture, with below-podium secured parking, while still appearing to be built on grade from all exterior views.

For more information on the Pillars of the Industry awards and multifamily resources available from NAHB, e-mail Ann Marie Moriarty, or call her at 800-368-5242 x8350.

Remodelers Required to Hand Out EPA Lead Paint Pamphlet

With the U.S. Environmental Protection Agency's Lead: Renovation, Repair and Painting rule governing the work of professional remodelers in homes where there is lead-based paint set to become fully effective a year from now, remodelers are now required to hand out the new EPA pamphlet, “Renovate Right,” to potential clients who own homes built before 1978 so that they are aware of the new lead paint regulations.

The brochure is available free on the EPA’s Web site by clicking here, or by calling 800-424-LEAD (5323).

The rule, which will take effect on April 22, 2010, addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six.

When the rule takes effect, firms working in pre-1978 homes will need to be certified by the EPA and must follow specific work practices to prevent lead contamination. The fee for a firm’s certification is $300.

The seminar is available free to NAHB members, but members must be logged on to the NAHB Web site to see and take advantage of the offer. Regular price is $79.

For more information, e-mail Matt Watkins at NAHB, or call him at 800-368-5242 x8327.

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.

Free ‘Remodeling Month’ Materials for May Available From NAHB

With “National Remodeling Month” only days away, NAHB has free promotional materials available to remodeler members, home builders associations and local remodelers councils to increase remodeling awareness and help them boost their marketing.

The materials, developed by the NAHB Remodelers, are available on the NAHB Web site www.nahb.org/remodelingmonth, and more materials will be added in the coming weeks. The material is available by logging onto the NAHB Web site.

The information available now includes easily customizable press releases, articles and plenty of marketing ideas to help promote remodeling throughout May.

In addition, the information provides a step-by-step guide to lead remodelers and HBAs through a campaign.

Consumer and industry articles, consumer information and marketing tools are also included.

NAHB Remodelers also has a toolkit available on how to start a local remodelers council.

For more information about National Remodeling Month materials, e-mail Kelly Mack at NAHB, or call her at 800-368-5242 x8451.

Webinar to Discuss Using Concrete in Green Building

Participants will learn about the sustainable impact of concrete products in home building, including how to:

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

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 1,000 people have earned the CGPdesignation to date.

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

One-Day Passes Available for Green Building Conference

The passes are being offered to help builders and other housing professionals get the most out of the conference while maximizing their time and financial resources.

A one-day pass for The National Green Building Conference can be purchased any day of the conference, which will be held from May 8-10. The fee for a one-day pass is $300.

Note: A one-day pass does not include the Green Home Tour or the National Green Building Awards Reception and Dinner.

For more information and to see all the National Green Building Conference registration options, including a schedule to determine the best one-day pass to purchase, visit www.nahb.org/GreenBuildingConference.

Advance registration has ended, but full registration and one-day passes can be purchased onsite at the conference.

For more information on The NAHB University of Housing conferences, visit www.nahb.org/Conferences, call the Office of the Registrar at 800-368-5242 x8338 or e-mail registrar@nahb.com.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

Education Calendar

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

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Tax Cuts Needed to Promote Energy-Efficient Homes

NAHB on April 24 called on Congress to ensure that legislation intended to make homes more energy-efficient focuses on measures that provide the greatest environmental benefit without undermining housing affordability.

First, legislation must be flexible and include not just the savings achieved from insulated doors, windows and wall cavities, but also energy-efficient heating and air conditioning systems — or a combination of insulation and appliance requirements — depending on the home’s location or market preference, he said.

“Don’t modify codes and standards so that they can’t accommodate every state’s climate demands simultaneously or equally,” Richardson said.

Second, Congress should “extend or make permanent” the tax credits passed earlier this year that provide an incentive to purchase energy-efficient windows, additional insulation and other improvements for existing homes — where the greatest gains in energy efficiency are most likely to be realized, he said.

The funding available to encourage home owners to make these improvements should also be available to home buyers to help them pay for the additional costs associated with very efficient new homes, Richardson added.

Finally, “Congress must embrace the broadest possible green building policy and provide consideration for homes that comply with standards approved by the American National Standards Institute (ANSI),” which under federal law receive preference over private guidelines and rating systems, he said.

As an example, Richardson pointed to the ICC-700 National Green Building Standard for residential construction, remodeling and land development.

“ANSI recognition of the National Green Building Standard is important because energy code targets by themselves cannot accommodate the more robust sustainability framework of green building, which achieves greater environmental performance as a whole over energy efficiency alone,” he said.

And in all cases, Congress must acknowledge the need for housing affordability — not just to make it less expensive for consumers to live in homes with these improvements, but also to avoid pricing them out of being able to afford the homes altogether.

“NAHB hopes that Congress will not impose policies that increase costs for newer, more energy efficient homes in a manner that relegates lower- and moderate-income families to less-efficient older housing stock,” he concluded.

Texas Leads the Way in Increasing U.S. Wind Power

The U.S. wind industry brought online more than 8,500 megawatts (MW) of new wind power capacity in 2008, increasing the nation’s cumulative total by 50% to more than 25,300 megawatts and pushing the U.S. ahead of Germany as the country with the largest amount of wind power capacity installed, according to a new report from the American Wind Energy Association.

The latest installations place the U.S. on a trajectory to generate 20% of its electricity from wind energy by 2030, the report said.

“The growth in 2008 channeled an investment of some $17 billion into the economy, positioning wind power as one of the leading sources of new power generation in the country along with natural gas,” according to the association’s Annual Wind Energy Report.

“The new wind projects completed in 2008 account for about 42% of the entire new power-producing capacity added nationally during the year, according to initial estimates, and will avoid nearly 44 million tons of carbon emissions — the equivalent of taking over seven million cars off the road,” the report said.

In 2008, Texas once again installed the largest amount of new capacity — 2,671 MW — “moving it into a league of its own,” the association found.

More new wind capacity was added in Texas last year than in any country except China and the U.S. If Texas were a country, it would rank sixth in the world, the study said, behind Germany, the rest of the U.S., Spain, China and India.

Iowa surged into second place in the U.S., followed in third place by California, which was once the location of practically all the wind power activity in the country.

New Rules for Swimming Pool Drain Covers

Builders, developers or property managers who have a swimming pool or spa that is open to the residents of their development or complex should be aware of new rules for pool drain covers that took effect toward the end of last year.

New entrapment devices need to be installed before opening pools and spas to residents this season, and property owners are being advised to consult with a contractor specializing in pool and spa installation or construction to insure that their facility is properly equipped.

After Dec. 19, 2008, public pools and spas in the U.S. with a single main drain other than an unblockable drain are required to be equipped, at a minimum, with one or more of the following devices or systems designed to prevent entrapment by drains:

In addition, swimming pool or spa drain covers manufactured or distributed in the U.S. are required to meet the entrapment protection standards of the ASME/ANSI A112.19.8 performance standard.

For more information, e-mail Larry Brown at NAHB, or call him at 800-368-5242 x8565.

‘Safety Means Always Coming Home’ Theme of Safety Week

Many past entries of ASSE’s annual ‘Safety-on-the-Job’ poster contest for children have included the message that ‘Safety Always Means Coming Home’ for their moms, dads, aunts, uncles, grandparents and friends.

According to NAHB’s “Residential Construction Industry Fatalities” study, from 2003 to 2006 more than 4,700 construction workers, nearly one-third in the home building industry, never made it home — losing their lives from on-the-job injuries.

NAHB works closely with OSHA to provide the residential construction industry with information, guidance and access to training resources to help them protect employees' health and safety. Through a longstanding alliance with OSHA, NAHB has developed printed materials and video resources on safety for residential builders and workers, launched a safety and health Web page on the OSHA site and developed and implemented a training course for OSHA staff.

ASSE is providing an online set of materials to help employers promote NAOSH Week — including a poster, brochures, a PowerPoint presentation and a public service announcement. To access the materials, click here.

As part of NAOSH Week, Occupational Safety and Health Professional Day (OSHP) is May 6. The day was established in 2007 to honor professionals who have dedicated their lives to protecting people, property and the environment.

For more information on NAHB construction safety issues, e-mail Rob Matuga, or call him at 800-368-5242 x8507.

The 30-minute “Fall Protection Video, English-Spanish” can be used by builders to train workers to use safe work practices that eliminate fall hazards and comply with OSHA fall-protection standards.

The “NAHB-OSHA Fall Protection Handbook, English-Spanish” provides guidelines for creating a written fall-protection plan and identifying safe work practices that can prevent costly accidents and injuries. Written with clear text, photographs and illustrations, the book serves as a user-friendly resource for promoting safety on any job site.

Project CRAFT Praised by Florida Lawmakers

Invited to testify by the Florida Department of Juvenile Justice, HBI program manager Tadar Muhammad provided examples of how Project CRAFT has maintained a record of high job placement and reduced recidivism rates even during a period of statewide budget cuts.

Joining Muhammad were Project CRAFT graduate Fontavius, who related to the committee how his enrollment in Project CRAFT helped him move forward with his life, and his mother, who credited the program with making a transformation in her son’s behavior and outlook that was “positively staggering.”

Fontavius completed his training in facility maintenance at Dozier School for Boys and currently resides in Tallahassee with his family. He is enrolled in GED classes through Tallahassee Community College at Tabernacle Church. Upon completion of the degree, he plans to attend Tallahassee Community College.

“Project CRAFT has a long track record assisting young people in making positive life changes,” said Muhammad. “We give our students the employment skills they need and allow them to retake ownership of their lives.”

Following the testimony, the committee affirmed Project CRAFT as a model rehabilitation program. Sen. Victor D. Crist, chairman of the committee, said that “putting young people to work is very important, and programs that achieve this goal are an essential part of the juvenile justice system.”

Members of the committee include: Vice Chair Sen. Frederica S. Wilson, Sen. Dennis L. Jones, Sen. Arthenia L. Joyner and Sen. J. Alex Villalobos.

“It’s a great honor to have the opportunity to dialogue with the Senate Committee on Criminal and Civil Justice Appropriations,” said HBI Trustee Bill Paul. “Several committee members have supported Project CRAFT for many years, but it’s always nice to hear such strong support for our programs.”

Offered through HBI’s Workforce Training and Employment Department, Project CRAFT trains more than 500 youths annually in Florida and more than 90% of its graduates are placed in industry jobs, the military or school. As part of their Pre-Apprenticeship Certificate Training (PACT), each year CRAFT students spend approximately 30,000 hours working on community service projects throughout the state.

HBI currently operates Project CRAFT programs in Florida onsite at the Avon Park Youth Academy, Red Road Academy and Dozier Academy and through community-based programs in Orlando and Tampa.

For more information on Project CRAFT, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908.

Kohler Saves Water for Owners of R.I. Showcase Home

Carrying on a long tradition of being committed to bettering the community and the environment, Kohler last week announced that it is supplying Green Life Smart Life — a Narragansett, R.I.-based green building showcase home — with water-saving and recycled products.

Kohler is bringing to the custom-built home its high-efficiency faucets and showerhead fixtures, Environmental Protection Agency WaterSense-labeled 1.1 gpf toilets, and sinks and tubs made from 93% recycled cast iron.

The cast iron products include the master bathroom’s clawfoot tub and sinks in the home’s kitchen, laundry and four baths.

Kohler’s manufacturing facilities reclaim nickel and chrome previously disposed of as waste, using approximately 200,000 tons of recycled and recaptured metal each year.

Kohler said that water conservation is one of its key objectives in the kitchen and bath products it manufactures, and the products being used in the showcase home will enable its owners to conserve a projected 93,000 gallons of water annually — 32.8% in savings over the amount of water used by an average family.

“We are very excited to announce the addition of Kohler to the Green Life Smart Life project,” said home owner Kimberly Hageman. “The company’s incredible perseverance towards creating eco-conscious solutions for the home — from manufacturing to performance — will allow our family to manage our water consumption with products that beautifully fit the décor and style of our home.”

Kohler recently launched SaveWaterAmerica.com, a campaign dedicated to teaching home owners how easy it is to save water. The Web site provides home owners with water-saving tips and techniques and information on water saving products. Also included is a survey; the company will donate $1 to Habitat for Humanity for each person who completes it.

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

NAHB-Produced Programs on DIY, Fine Living and HGTV

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

HGTV is seeking developers, builders and architects to create the 2010 HGTV Dream Home, the grand prize in the network's annual sweepstakes. To learn more, click here.

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

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

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Last Chance to Apply for 2010 Herman J. Smith Scholarships

Graduate and undergraduate students pursuing building-related studies for the 2009-2010 academic year must apply for a Herman J. Smith Scholarship by Monday, May 4.

The Herman J. Smith Scholarship Fund, honoring 1981 NAHB President Herman J. Smith, provides assistance to graduate and undergraduate students studying construction management, mortgage finance and related fields. Last year, 12 students were awarded scholarships totalling $24,000.

“We are so proud to work with the National Housing Endowment to provide educational opportunities for worthy students,” said Patsy Smith, who serves as a life trustee for the endowment.

Since its inception, the Smith scholarship, administered by the National Housing Endowment, has awarded more than $164,000 to exemplary students.

Applicants interested in applying for the scholarship funds must be in a housing-related program such as construction management, construction technology, civil engineering, architecture, design or any of the trade specialties at a college or university.

Preference is given to students who are residents of Texas or who are attending a Texas college or university, and who are active members in the NAHB Student Chapter at their college.

Smith scholarship applications and instructions can be downloaded from the National Housing Endowment Web site by clicking here. Applications are available in Word and PDF formats.

The endowment administers 12 scholarship programs and awards more than $300,000 each year to students pursuing careers in residential construction and related fields.

Career Ohio Executive Director Jacque Sheley, Dies at 78

Jacque R. Sheley, the executive director of the Home Builders Association of Dayton and Miami Valley in Ohio for 21 years before retiring in 1990, died on April 18. He was 78.

The Centerville resident and member of the Normandy United Methodist Church, was a graduate of Miami University and served during the Korean War as a U.S. Marine before beginning a career in association management as the assistant director of the Home Builders Association of Greater Cincinnati in 1959.

In 1963, he became the executive director of the HBA of Dayton and Miami Valley. During his tenure there, he also served as president of the Dayton Society of Association Executives in 1972 and as president of the NAHB Executive Officers Council in 1976.

Sheley also was a life member of the Dayton and Miami Valley HBA and a life director at NAHB.

In addition, Sheley was a 32nd degree mason and longstanding member of the Dayton Agonis Club and the Centerville Rotary.

Sheley was preceded in death by his wife of 53 years, Martha Ann (Kraus) Sheley and is survived by his daughter, Lisa Ann Sheley Nordloh; son, John R. Sheley; sister, Jane C. Harding; and two grandchildren.

NAHB Spring Board Meeting May 26-30 in Washington

OFFICIAL MEETING NOTICE OF
THE NATIONAL ASSOCIATION OF HOME BUILDERS
BOARD OF DIRECTORS

The following schedule of events is a partial listing provided as a notice for NAHB’s spring board of directors meeting in Washington, D.C., May 26-30, 2009. Meetings will be held at the Marriott Wardman Park Hotel and the National Housing Center. The spring board program will identify the exact time and place of each scheduled meeting.

State Representatives Meeting
Joint National Area/Associate Chairmen and State Representatives Meeting
Executive Board Meeting

Committees, Subcommittees, Councils, Affiliates, etc.
NHC Board of Governors Meeting
Nominations Committee

Committees, Subcommittees, Councils, Affiliates, etc.
NAHB Past Chairmen Council Meeting

Area Caucuses 1-15
Joint Executive, Budget and Resolutions Committees Meeting
Board of Directors

Office Depot Offers Members 14 Deals Under $5

Office Depot is offering NAHB members 14 hot deals on office essentials, all for under $5. The offer ends April 30.

This offer is in addition to the everyday 10% Office Depot discount available to NAHB members and home builders associations that have signed up for the Office Depot Member Advantage program.

As part of the program, Office Depot also offers free shipping on orders of $50 or more.

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

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Williams Scotsman Offers $1.99 First-Month Storage Container

Through June 30, 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 information on the Member Advantage discount program and all its participating companies, go to www.nahb.org/MA.

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Spring Board Last Chance for Spokesperson Training in 2009

These sessions will not be offered during the fall board of directors meeting in Chicago, so the spring sessions will be the last opportunity for NAHB members to receive this valuable training this year.

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

In "Interview Skills," NAHB members will learn how to give clear, concise answers in a high-pressure, spur-of-the moment interview. “Interview Sills” will help participants master strategies for broadcast and print interviews, including message development.

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

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

Each seminar is led by professional communication consultants who have more than 30 years of experience training NAHB members on the critical issues they face every day.

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

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

FTD Offers 15% Discount to NAHB Members

NAHB members can get a 15% discount on all flowers, gifts and gift baskets from FTD, the newest NAHB Member Advantage participating company and the world’s oldest and one of the best known brands in the floral business.

Members can choose from gorgeous red roses, Vera Wang exclusive floral designs, spa sets, chocolates, wine baskets and more. They can also take advantage of FTD’s “Good as Gold” seven-day satisfaction guarantee of receiving beautiful, floral arrangements and plants that are guaranteed to last at least seven days.

Plus, FTD's same-day delivery and guaranteed satisfaction are also available with "Say It Your Way" bouquets that are delivered with your own personal audio greeting.

With 15,000 retail florists and 45,000 international affiliates, FTD can provide same-day floral service to nearly 100% of the U.S. population. FTD owned and operated U.S. call centers also offer 24/7 availability, including all major holidays.

To use the NAHB Member Advantage 15% discount, visit www.ftd.com/nahb , or call 800-SEND-FTD (800-736-3383) and mention code 17421.

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

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Pitney Bowes Postage Meters Offer Convenience, Savings

Pitney Bowes small business postage meters and scales offer the convenience, savings and increased productivity of having your own post office. Pitney Bowes is an NAHB Member Advantage participating company.

Convenience

Pitney Bowes postage meters enable member to have postage available 24/7 and avoid the hassle and time needed to go to the post office.

Save Money on Postage

Pitney Bowes meters and scales let business owners know exactly how much postage is required so they can eliminate overstamping. Small businesses that use postage meters can save up to 20% a year in postage.

Postage Tailored to Your Needs

With several postage meter and scale options, members can tailor a solution to their business based on the amount of mail they send.

Flexible, Trackable

Several employees or departments can use the same meter, but each postage expense can be tracked by user or department.

Be Prepared for Postal Rate Change

Pitney Bowes will notify business owners of new postal regulations and rate changes. Rate changes can be downloaded into Pitney Bowes meters within minutes.

For more information, click here, or call 800-376-7047. Be sure to refer to order number 999991198.

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Calendar of Events

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

What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.

Nation's Building News Online: April 27, 2009

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CEO Helps People Keep Their Homes; That’s CitiMortgage Chief’s Personal Goal

R.I. Urged to Speed Up Process for Issuing Building Permits

The Makeover Moment

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New-Home Inventory Whittled Down Further in March

Refi Boom, Rise of FHA Big News in Mortgage Markets

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Eye on the Economy: Free Fall in Economy Losing Momentum

Useful Links to Monitor Economic and Housing Trends

Merchandising Choices to Carry You Through to Recovery

Free Webinar on April 29 Looks at Negotiating With Lenders

May 14 Audio Seminar Explores Government Stimulus Options

Builders’ Tip: How to Fashion Heavy-Duty Sawhorse Brackets

Buyers of New Homes Need to Act Soon to Get Tax Credit

What Star Athletes Can Teach Us About Internet Marketing

Cities Take a Second Look at Impact Fees in Hard Times

Multifamily FHA Finance Looks Tempting in Credit Crunch

Apartments Bring Affordable Top Design to Pricey San Jose

Remodelers Required to Hand Out EPA Lead Paint Pamphlet

Free ‘Remodeling Month’ Materials for May Available From NAHB

Webinar to Discuss Using Concrete in Green Building

One-Day Passes Available for Green Building Conference

Education Calendar

Tax Cuts Needed to Promote Energy-Efficient Homes

Texas Leads the Way in Increasing U.S. Wind Power

New Rules for Swimming Pool Drain Covers

‘Safety Means Always Coming Home’ Theme of Safety Week

Project CRAFT Praised by Florida Lawmakers

Kohler Saves Water for Owners of R.I. Showcase Home

NAHB-Produced Programs on DIY, Fine Living and HGTV

Last Chance to Apply for 2010 Herman J. Smith Scholarships

Career Ohio Executive Director Jacque Sheley, Dies at 78

NAHB Spring Board Meeting May 26-30 in Washington

Office Depot Offers Members 14 Deals Under $5

Williams Scotsman Offers $1.99 First-Month Storage Container

Spring Board Last Chance for Spokesperson Training in 2009

FTD Offers 15% Discount to NAHB Members

Pitney Bowes Postage Meters Offer Convenience, Savings

Calendar of Events