Nation's Building News Online: June 8, 2009Print All Articles Text Version |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HUD Secretary Looks for Housing to End Recession
In his work with Congress to pass the Recovery Act, Donovan said, the President stated that “this economic downturn began with a downturn in the housing market and a recovery in our economy has to begin with the recovery in the housing market, as well.” Bringing the Tax Credit to the Closing Table In a move to further stimulate home sales across the country, Donovan announced that the FHA was allowing home buyers to apply the Obama Administration’s $8,000 first-time home buyer tax credit toward the purchase of an FHA-insured home. Under new FHA rules, state housing finance agencies and other government entities can “monetize” up to the full amount of the tax credit to enable borrowers to immediately apply the funds toward their downpayments. Home buyers who are using FHA-approved lenders can apply the tax credit to a downpayment beyond the 3.5% minimum required on an FHA-insured mortgage — or to their closing costs. To read a related story in this issue of NBN on the new rules, click here; to read the FHA’s mortgagee letter on the new rules, click here and scroll down to Document Number 09-15. Donovan cited estimates from NAHB that the tax credit would help to stimulate 160,000 incremental home sales — 101,000 to first-time buyers who receive the credit and another 59,000 to existing home owners who will be able to buy another home after selling their current home to a first-time buyer. “Given FHA’s current market share, we believe that tens of thousands of families will be able to purchase a home by our actions today in allowing this tax credit to be applied toward their FHA-insured mortgage,” he said. “I believe this policy is a real win for everyone,” Donovan said. “And today, we are, by doing this, taking another important step toward accelerating the recovery of the nation’s housing market. “Families will now be able to apply this tax credit toward their home purchase right away. And at the same time, I want to be very clear, we are putting in place the necessary safeguards to ensure that consumers will be protected in using this.” A Major Role for the FHA Donovan added that the new policy on the tax credit would provide an important step in clearing away the overhang of housing supply that is standing in the way of a full-fledged housing recovery; and he said it was an example of how the FHA is now playing a major countercyclical role in the housing market. Volume in the FHA’s flagship single-family program has surged from $60 billion in fiscal 2007 to an anticipated $290 billion in 2009. To meet the rising demand for FHA financing, Donovan said that HUD is asking for up to $400 billion in budget authority for FHA insurance commitments in 2010. Just on the loans it originates next year, he said, the FHA believes it can generate a surplus of $1.7 billion. “One of the primary reasons for that is that we have seen over the last year a dramatic increase in our credit scores within the FHA program, up from a year ago at 626 to, in our most recent date, an average credit score of 678.” With the FHA reaching a 24% market share in the final quarter of last year, Donovan said that it has substantially stepped up its hiring to address personnel shortages and is in the process of modernizing the agency, with plans for a big increase next year in information technology investments to replace obsolete systems. Reestablishing a Priority for Multifamily Although much of the focus in the early months of the Administration has been on restoring the health of the single-family housing market, Donovan said that the HUD budget will also be reestablishing a priority for multifamily and rental markets that are “critically important” for low- and moderate-income households. HUD has proposed a $1 billion capitalization of the National Housing Trust Fund to initiate the first new housing production program since the creation of the home investment partnerships program in 1990. On May 4, it was announced that more than $5 billion in Recovery Act funding was being provided to finance the acquisition and construction of affordable housing through the Low-Income Housing Tax Credit at a time when close to 50% of all tax-credit deals in the country were stalled by the economic crisis. Donovan said that HUD is putting $100 million into an energy innovation fund “that can go to support innovative lending products across the country that have spurred new developments, new standards for single-family and multifamily housing on energy efficiency." A “Sustainable Communities” initiative, he said, will receive $150 million to help support higher density housing that is more integrated with the transportation needs of local residents. Donovan entertained several questions from NAHB members following his presentation, and invited the association to work with him to find solutions on challenging issues. Among the issues raised at the meeting were: finding a way to increase FHA limits in sub-markets; seeking changes that would allow organizations that are not affiliated with a labor union to access federal funding for training in green and energy-efficient technologies; taking a broad approach to solving the problem of distressed sales being used in the appraisal process; coordinating with other federal agencies to address the training needs presented by the Environmental Protection Agency’s lead-based paint rule; training lenders, appraisers and real estate brokers to recognize the benefits of green building; and stepping up support for rural housing programs. “You are the National Association of Home Builders. You are about building for families, for communities, the single-most important building block of success in this nation,” Donovan said at the outset of his remarks. “And despite the challenges that we have faced over the last few years, I believe very, very strongly that the work that you do continues to be the foundation of success and opportunity in this country. “It’s the success upon which families and parents raise their children and provide them a place to grow up that is safe and secure, to get a decent education; all of the important things in rural communities and urban communities across this country that a family hopes for their children begins with home. “And I want to thank you, through these challenging times, for your continuing commitment to making sure that American families have the access to that American dream.” Photos by Herman Farrer Tax Credits Helping Housing Regain Its Footing, Robson SaysParticipating in a June 2 business roundtable hosted by Vice President Joe Biden to promote the benefits of the economic stimulus package enacted into law earlier this year, NAHB Chairman Joe Robson said that the $8,000 first-time home buyer tax credit has helped to arrest a slide in housing sales, but much more needs to be done to get back to anything resembling a healthy housing market. The event, which took place at Pace University’s Lubin School of Business in New York, also featured New York Governor David Paterson, Deputy Secretary of the Treasury Neal Wolin and other business leaders from across the country. “The Recovery Act is putting people to work, and our business leaders here today are a testament to that. They are on the front lines of hiring folks for new jobs and preventing layoffs. They have first-hand knowledge of how this economy — and our policies — are working,” said Biden. “We’re looking to those in the business community to be creative, to be innovative and really take advantage of the new opportunities made possible by this Recovery Act.” Providing a snapshot of the state of the housing sector, Robson reported that recent economic indicators show signs that the housing market is at or near bottom. “Builder and consumer confidence is on the rise, new and existing home sales have stabilized, unsold new home inventories continue to fall, and housing affordability is at record highs due to historically low mortgage rates and low house prices,” he said. “We could be bumping along at this level for a few months — we still have a ways to go to get the supply-demand equation in balance and builders continue to face serious problems in obtaining financing for the production of housing,” Robson added. Robson said that the recent decision to permit home buyers to monetize the first-time home buyer tax credit to help cover the closing costs on an FHA-insured home “will result in tens of thousands of additional new and existing home sales.” (For related stories in this issue of NBN, click here and click here.) “Overall, we believe the home buyer tax credit will stimulate nearly 200,000 additional home sales across the nation this year,” including more than 70,000 sales to existing home owners who will be able to buy another home after a first-time buyer purchased their home. “This is an important point,” Robson said. “The tax credit will provide a ripple effect, enabling move-up buyers to advance up the rung of the housing ladder. This will spur overall home sales and help to stabilize the housing market.” The tax credit stimulus is expected to produce 73,000 jobs in 2009, Robson said, but much more needs to be done to get the housing sector back on a solid footing. “Keep in mind,” he said, “we have lost three million jobs in housing and housing-related industries since the peak of the market in 2005.” Biden said that the economic stimulus package also includes numerous tax credits that are helping to drive new product demand — including more than a dozen energy efficiency and renewable energy tax credits that are creating new opportunities for companies. Robson said that two tax credits in the stimulus package related to remodeling will help put people back to work and make the country more energy-efficient:
“These tax credit programs are not only important to the remodeling industry, but will also create new green jobs and spur the necessary investment in research and development that will help make our nation more energy secure,” said Robson. A Nascent Recovery: Overlooked Signs the U.S. Housing Market Is TurningIn the Sacramento Delta suburbs east of San Francisco — where home prices soared and fell as viciously as anywhere in the country — a housing market rebound is feverishly underway. A 1,600-square-foot rancher in Antioch listed for $179,000 — after last selling for $425,000 in 2004 — drew multiple offers last month with a high of $210,000 in cash. The property was a “short sale” whose owner needs lender approval to sell for less than the mortgage owed — and which buyers wouldn’t touch just three months ago. “My phone was ringing off the hook, my voice mail was on overload and people were coming into the office receptionist saying they couldn’t reach me,” said Christy Howard, a Coldwell Banker Coon and McCreary agent who listed the house. “Everyone was waiting for the bottom, and the problem is they waited too long, because the bottom has already come and gone.” Spurred by markdowns up to 80% from market highs, first-time buyers and investors both American and foreign descended en masse in the last three months on San Francisco’s hardest-hit hinterlands as Wall Street and the economic climate improved. They’re picking clean the Delta region’s bank-owned inventory as soon as properties hit the market and are engaged in unprecedented bidding wars even on short sales. The panicked buying — fueled by buyers fearing they will miss out on fire-sale prices — belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity. After spending most of the 1990s in the $250,000 range, the median-priced home that was sold in the seven-county San Francisco area rose to a staggering $850,000 by its May 2007 peak. It since fell to a low of $399,000 in February — a 53% drop in just 21 months — before posting its first monthly gain in March, a 1% uptick. (www.marketwatch.com)
Green Home Builders Facing New Economic RealityAlthough green building has not been spared from the economic gloom that has affected every sector of the housing industry, many builders are finding that green has given them an upper hand in helping survive the market. Some are even thriving due to increasing demand for eco-friendly dwellings, new funds for green public projects and passage of the $787 billion federal economic stimulus bill. Ironically, regions that have been on the forefront of the green movement seem to have been hit the hardest by the slowdown. Green builders in California, Colorado and New Mexico are suffering more than those in other areas because the general construction market is doing so poorly. Heather Ferrier of Ferrier Custom Homes in Ft. Worth, Texas, says the stock market decline had the biggest impact on her family’s sustainable building business. “We had clients who overnight were severely impacted by the plunge, which caused their home building plans to be postponed, in some cases indefinitely.” But Ferrier says other clients have recommitted themselves to building sustainable homes. “For those individuals, the current market conditions have only refueled their passion to move forward with building sustainable homes,” she said. Ferrier Homes is having a record year. “The experienced green builders who have been doing this for a while — who know that green is more than just a fad,” are surviving and even thriving, she said. “Those who are truly committed, and have established themselves as so, are riding it out.” Chevy Chase, Md.-based Bethesda Bungalows also is riding the wave of interest in sustainable and energy-efficient homes. The company is known for building small- to medium-sized green residences on infill lots in Washington, D.C.’s close-in neighborhoods. While the market for spec homes has dramatically dropped, vice president Brad Beeson says the company’s custom home business is thriving. “It’s been really busy — super busy,” he said. “A lot of it is because we are known locally as a green builder. That has been really good for business.” (www.ecohomemagazine.com)
Prefab Homes Sprout Green Designs, Improve AffordabilityMichelle Kaufmann couldn’t find an affordable, eco-friendly home in the San Francisco area in 2003, so she built her own. Construction took 14 months. “This needs to be easier,” the architect recalls thinking. To make green homes more accessible, she says, she “stalked” factories until she found some that agreed to build her modern designs. She built dozens of prefabricated homes, including several identical to her own, each taking four months at 15% less cost. Last week, however, she began closing her firm. “We have tons of work,” she says, but her clients can’t get financing and two factory partners went out of business. She will continue her work as a consultant. Kaufmann is one of a growing cadre of architects and builders who, with varying luck, have turned to factories to build green. The homes range from simple cottages, available for less than $100,000, to high-end showpieces at $1 million or more. These “modular” homes are built to local codes and set on permanent foundations. They often consist of several customized modules that are pieced together at the property. “It’s the future,” says David Johnston, Colorado-based author of “Green From the Ground Up.” In the past year, Johnston has held green-building workshops at factories in several states. Despite Kaufmann’s experience, other companies report widespread interest from customers and expect orders to pick up once the economy recovers. “We’re already seeing the boom,” says Maura McCarthy, co-founder of Blu Homes in Waltham, Mass. The green modular builder, which has its own factory plus partners in three other states, launched its Web site in July. It has four homes nearing completion and a dozen more in the pipeline. (www.usatoday.com)
Seniors Want to Age at Home, But Will Builders Adapt?Senior advocates say that 85% of the elderly want to remain at home as they age as opposed to moving into care facilities. Emerging technologies that are still not widely known could help them do that. There are systems available to test cognitive abilities daily, track vital signs and plot their movements by using motion detectors and pressure pads. The results can be continuously uploaded to the Internet and sent to children, physicians or caregivers. The question is whether builders and the nation’s older home buyers are catching on to these technologies, which can be hard to retrofit to existing homes but could be easily and cheaply accommodated in newly constructed ones as part of the design process. Some builders who concentrate on “active adult” communities de-emphasize features related to age and health issues — largely because their buyers don’t want to think about them. Instead, they hype bigger great rooms for entertaining guests and amenity-packed clubhouses. “Baby boomers are never going to get old,” joked Edward Johanson, a boomer himself and president of Lakemont Homes. The Roseville, Calif. company partners with Eskaton, a provider of senior housing and services. The partnership is building homes in Roseville and Placerville, Calif. aimed at 65-year-olds and above, and buyers in this group are more attuned to health needs than the slightly younger boomers. The homes Johanson is building include the physical characteristics residents will need later in life, such as wheelchair access to all areas. The effort adds about $6,000 to $8,000 per home, including wiring for advanced technologies. But while they also include technological upgrades, such as more wiring capacity, he said many of the new technologies are too new to generate much interest. “We are not rolling that out in a comprehensive fashion,” he said. “We do anticipate, like many technologies, that it will grow very fast.” (www.sacramento.bizjournals.com)
The Most Dangerous Room in the House?Although the federal Centers for Disease Control and Prevention compiles statistics on falls, it doesn’t track where falls occur. It is known, however, that bathrooms greatly trouble the people charged with retrofitting homes for the disabled, young and old. Bathrooms abound in hard surfaces — tile, porcelain, cast iron, marble — that get wet and slick. People often use them at night, when they’re less alert. Everyday actions such as closing your eyes to rinse off shampoo can throw off your balance. “Bathroom falls are major bone-breakers, particularly for older women with osteoporosis,” said Kent Mickelson, director of the Center for Independence of the Disabled. To make bathrooms safer for seniors, specialists suggest: a handheld shower and a bench to sit on, a higher toilet seat that makes it easier to sit and rise, grab bars, adequate lighting and floors free of scatter rugs. Almost 400 independent living centers across the country provide assessments and home modifications, or refer to local companies that do. NAHB has also trained more than 2,500 certified aging-in-place specialists (CAPS) who’ve completed a three-class course. (www.nytimes.com)
Bringing the Inside Out; Backyard Kitchens Offer Convenience While Increasing Home’s ValueEven in a city like Chicago with its frigid winters, an outdoor kitchen is a popular feature that adds value to the home and provides an additional fun area for family enjoyment and entertaining. According to the Propane Education & Research Council, more than half of all grill owners use their grills year round. “I have people asking me about outdoor kitchens all the time,” said John Hirsch, owner of Krugel Cobbles in Lake Bluff, Ill., which builds about five outdoor kitchens a year. In this soft real estate market, an outdoor kitchen could help clinch a sale, because a complete outdoor kitchen increases the value of a home comparable to an indoor kitchen remodel, according to NAHB. Russ Faulk of Kalamazoo Outdoor Gourmet, a manufacturer of outdoor cooking appliances, said that traditional kitchen design should be considered — including cold areas, hot areas, wet areas and dry areas, as well as adequate counter space. He recommended the National Kitchen & Bath Association’s Kitchen Planning Guidelines as a good resource. The materials used to build the kitchen should be able to withstand outdoor conditions and be easily cleaned and grease-resistant — such as stainless steel, stone and tile. Pergolas or awnings should be considered to provide shade and shelter from rain. Natural gas patio heaters, portable propane patio heaters, radiant heat under patio tiles and countertops, fireplaces and hearths all extend the use of an outdoor kitchen into cool weather. (www.suntimes.com)
Sales Boost Expected From New FHA Tax Credit RulesThe recent decision to allow home buyers to apply the Obama Administration’s $8,000 first-time home buyer tax credit toward the purchase of an FHA-insured home is expected to provide a further boost to homes sales, said Robert Dietz, NAHB’s director of tax issues. In order to maximize the impact of the latest changes to the credit, home builders are well advised to scrutinize the details, which can be found in FHA Mortgagee Letter 09-15, Dietz said. State Housing Finance Agency Role Under the new FHA rules, state housing finance agencies and other government entities can “monetize” up to the full amount of the tax credit to enable borrowers to immediately apply the funds toward the FHA-required 3.5% downpayment, he said. The announcement of the new rules on May 29 by HUD Secretary Shaun Donovan “blesses” the tax credit loan programs that have been established by 10 state agencies, he said, and will encourage more states to join this list. (Click here to read a related story in this issue of NBN.) Under these programs, state housing finance agencies make a short-term loan in an amount that is approximately equal to the anticipated tax credit, as calculated on IRS Form 5405. The loan is backed by the tax credit itself and secured by a second lien against the purchased home, and it is generally paid off when the home buyer receives their tax refund from the IRS. If it is not paid off at this time, the loan becomes a self-amortizing second mortgage at a fixed interest rate. For a continuously updated list from the National Council of State Housing Agencies describing the state programs, click here. FHA-Approved Lender Role In contrast to the housing finance agency rules, home buyers who are using FHA-approved lenders can only apply the tax credit to a downpayment exceeding the 3.5% minimum required on an FHA-insured mortgage — or to their closing costs, Dietz advised. The mortgagee letter permits lenders to purchase the anticipated tax credit from the home buyer. The proceeds from this sale can be used by the home buyer to provide an additional downpayment or to pay closing costs, such as escrow for taxes, insurance and community association assessments. The funds can also be used to buy down the interest rate of the mortgage. FHA-approved lenders are not allowed to place a second lien on the home, he said. Instead, they must secure repayment through a contract with the home buyer. It is unclear at this time what form the lender option for monetization of the tax credit will take. NAHB will be following this issue and providing updates as they develop. In all cases, the FHA limits fees associated with either a tax credit loan from a government entity or the purchase of the tax credit by an FHA-lender to no more than 2.5% of the tax credit amount, or $200 for an $8,000 tax credit. Prospective first-time home buyers should be cautious in participating in programs that offer monetization, Dietz said. If the organization is part of the state government, it is safe to assume that its program is reputable. Otherwise, home buyers may want to check with their local Better Business Bureau or a state or local government’s department of consumer affairs. Expected Market Benefit Assessing the impact of the tax credit on the housing market, NAHB Economics earlier this year calculated that it would help to stimulate 160,000 incremental home sales — 101,000 to first-time buyers who receive the credit and another 59,000 to existing home owners who will be able to buy another home after selling their current home to a first-time buyer. In an update of those projections following the FHA announcement and including the impact of prior state monetization programs, NAHB analysis indicates that the tax credit program now will generate 192,000 incremental home sales, including 121,000 to first-timers and an additional 71,000 to move-up buyers. These transactions will add 73,000 jobs to the economy this year. More than 560,000 taxpayers claimed the tax credit for sales in 2008, according to data from the Treasury Inspector General for Tax Administration, and NAHB forecasts that more than one million taxpayers will claim the $8,000 tax credit for 2009 purchases. Under current law, the first-time home buyer tax credit only applies to home sales completed prior to Dec. 1, 2009. More information on the tax rules of the program is available at www.federalhousingtaxcredit.com. For further information, e-mail Rob Dietz, or call him at 800-368-5242 x8285. Bolstering GSEs Key to Future of Nation’s Housing Finance SystemIn contemplating the future status of housing government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, NAHB on June 3 told Congress it is critical for the federal government to provide a backstop to the housing finance system to ensure a reliable and adequate flow of affordable housing credit. Testifying before the House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, NAHB Chairman Joe Robson said that NAHB supports changes to the structure and operations of Fannie Mae and Freddie Mac to enable them to support mortgage market liquidity and address affordable housing finance needs without creating excessive taxpayer risk. “NAHB believes that the federal backstop must be a permanent fixture in order to ensure a consistent supply of mortgage liquidity, as well as to allow rapid and effective responses to market dislocations and crises. It has been clearly demonstrated that the private sector, unaided, is not capable of consistently fulfilling this role,” said Robson. “Fannie Mae and Freddie Mac should be recast, retaining federal backing but limited primarily to providing credit enhancement of mortgage-backed securities,” he added. “Limited portfolio capacity should be permitted to accommodate mortgages and housing-related investments that do not have a secondary market outlet, although Fannie Mae and Freddie Mac should have the flexibility to support the mortgage market in times of crisis, such as the conditions we are currently experiencing.” NAHB outlined several principles for federal government support and structure of the housing finance system:
At the present time, he called on Fannie Mae and Freddie Mac to roll back changes in single-family and multifamily underwriting requirements that are resulting in the denial of credit to viable borrowers and projects and impeding the economic recovery. “We urge the committee to direct the Federal Housing Finance Agency (FHFA) and the GSEs to take the interim steps of eliminating the risk-based delivery fees for their mortgage purchase programs introduced since August 2007,” said Robson. “Elimination of these fees will directly increase mortgage affordability, enhance policymakers’ attempts to reduce foreclosures and help the country get back on the road to economic recovery.” Noting that Fannie Mae has implemented changes to its condominium project approval standards that have raised the pre-sale requirement to 70%, Robson urged the FHFA, as the regulator and conservator of the GSEs, to bring their condominium pre-sale requirements into line with the Federal Housing Administration's 50% pre-sale requirements. Failure to act, he cautioned, could “result in the denial of homeownership opportunities for thousands of prospective condominium purchasers and lead to financial ruin for innumerable condominium projects and developers.” In addition, NAHB strongly recommends that the temporary loan purchase limit framework — enacted earlier this year under the American Recovery and Reinvestment Act of 2009 — be made permanent. The legislation restored the 2008 ceilings and local area loan limits for loans that can be purchased by Fannie Mae and Freddie Mac, up to a maximum of $729,750. Photo by Morris Semiatin New Home Inventories Continue to Shrink in AprilThe number of newly built single-family homes on the market shrank 4.2% to 297,000 units in April, thinning supplies to their lowest level since May 2001, according to figures released by the Commerce Department on May 28. The report noted that April’s pace of new-home sales held virtually even with the previous month, at a seasonally adjusted annual rate of 352,000 units. "The fact that the new-homes inventory is now below the 300,000 mark shows that builders have made substantial progress in winnowing down their backlogs to a much more comfortable level," noted NAHB Chairman Joe Robson. April was the 24th consecutive month in which the number of unsold new homes declined. "This continued reduction in the new-homes inventory helps bring supply in line with demand, which is an important step toward the market's recovery. We can expect the pace of new home sales to bounce along the bottom a bit before picking back up towards the end of this quarter," said NAHB Chief Economist David Crowe. Sales of newly built, single-family homes climbed a marginal 0.3% to 352,000 units in April from a downwardly revised pace in March. The inventory of new homes for sale in April represented a 10.1-month supply at the current sales pace. Regionally, the pace of new home sales was mixed in April. No change was recorded in the Northeast or Midwest, while the South posted a nearly 2% increase and the West declined 3.8%. Tax Credit Web Site Looks at Opportunity of a Lifetime 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. Spanish Version Also Available Online 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. Want to Know the Housing Starts Through 2017? Find out in HousingEconomics.com's Long-Term Forecast. Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more. To learn more, visit www.housingeconomics.com. Foreclosures, Tight Credit Pose Housing Recovery HurdlesHome builders in recent weeks and months have begun to see early, tentative signs that the housing downturn has hit bottom, but panelists appearing at the May 30 NAHB Board of Directors meeting in Washington, D.C. to report on where they see the industry heading said that serious impediments remain. Standing in the way of a return to more normal times are the foreclosures that have been flooding the market and the impact their depressed values have on the appraisal process, undermining home values and creating headaches for home buyers who have limited downpayments and builders who are trying to maintain existing lines of credit or find financing for future projects, the speakers said. The panel was moderated by NAHB Chief Economist David Crowe. Stringent lending requirements for jumbo mortgages exceeding the Fannie Mae and Freddie Mac conforming loan limit — which has been raised until the end of the year to a ceiling of $729,750 for high-cost areas — also impose a problem, they said, for high-priced housing markets concentrated in California and in the Northeast. Builders were also told that their prospective customers have been scarred by their experiences in the current economic downturn and are likely to emerge with an appetite for smaller, less expensive housing than they once sought. In the meantime, they said, the job losses that have undermined consumer confidence and are now fueling foreclosures will continue to rise, albeit at a slower pace, for a period of time after economic growth resumes. Lew Ranieri, founder of Hyperion Funds and vice chairman of the NAHB Mortgage Roundtable, said that less than 40% of the homes taken back by lenders have cleared the foreclosure process and made it to the marketplace so far. “The rest will come roaring through,” he predicted. “We’re not moving this stuff fast enough,” he said. “It is going to choke us and damage the appraisal process.” Ranieri cited the example of a foreclosed house he knows of in Long Island, N.Y. that sold for $670,000 in 2006, was recently listed by the bank for $495,000 and sold in a week for $430,000. In a more stable market, the home could have been sold for a higher price. Instead, the fire-sale price it was sold for has become the new price the appraiser will cite when looking for the value of the next comparable home in the vicinity that comes up for sale. “We have to find a process to get the REO (real estate owned by the lender) inventory into safe hands more quickly,” he said. “We have to get investors back” because home buyers for these homes cannot be found fast enough.” Ranieri suggested a 50% loan-to-value program that would enable investors to purchase the properties with a 50% downpayment and government financing. “These homes represent value,” he said, and they should be taken off the market so that their values can be stabilized. He added that the Federal Reserve has acknowledged research showing that short sales bring a 20% lower price than homes sold by their owners. “Getting foreclosures out of the way will change the benchmark numbers” being used by appraisers, he said. Noting that government programs have focused their attention primarily on home buyers, Ranieri said that “it’s the housing production system that’s at risk, not the mortgage system.” However, as far as mortgages are concerned, “the government owns all of the access points for capital for housing” and is supporting the mortgage security system, which has suffered “fundamental damage.” To be sustainable, government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have to get back into the business of selling their securities “to the rest of the world,” he said. Rising Delinquencies, Tight Jumbo Lending Ann Schnare, a partner at Empiris LLC, also cited the current housing oversupply as a vexing problem for the industry. She voiced particular concern over “the shadow inventory” of housing that will begin to materialize once housing prices start rising again and people put their homes back on the market. Presenting a more immediate problem, she said, are rapidly rising delinquencies among holders of prime mortgages, which will push the year’s total foreclosures into the 2.5 million to 3 million range, despite Administration efforts to modify mortgages to keep households from losing their homes. “The recession is a major part of the problem, not bad mortgage product but job losses,” Schnare said. “It’s hard to modify a loan if the family doesn’t have a job to stay in that house.” Schnare said there is better news for those looking for financing to purchase a home, as a result of the availability of the Federal Housing Administration's mortgage insurance program and government efforts to reduce mortgage interest rates. The GSEs and the FHA “are more important now than ever before,” she said, accounting for virtually all of the current mortgage market. “The FHA is the only game in town,” she added, for prospective home buyers who want to take advantage of notable improvements in housing affordability at a time of higher downpayment requirements and tighter underwriting standards for conventional financing. The FHA’s market share has climbed from roughly 3% in 2005-2006 to about a third by the end of last year, she said. As a result, the agency will need more staff and processing capability. Schnare also noted that the surge in mortgage refinancing brought on by the reduction in interest rates is providing more stimulus to the economy than many government programs that were conceived for that purpose. The losers in the current market, she said, are those seeking jumbo mortgages, which are only available from the private sector and only being made to those who can come up with substantial downpayments of at least 20% to 25% and have sterling credit histories and sizable amounts of money in the bank. The interest rates on jumbo mortgages have been running about 140 to 150 basis points higher than the cost of conventional loans, she said. “This will be a factor in retarding the housing recovery” in high-cost housing areas, she said. Affordability a Positive John Burns, president of John Burns Real Estate Consulting, said that an immediate challenge for home builders is getting the attention of “consumers who can buy a home but aren’t even looking right now” because of fears of holding onto their jobs. “Affordability is a real positive” in the current market he said, and builders should be advertising the decline in the monthly payments on their homes. For example, in Phoenix, buying a home can now cost $800 a month, compared to a $1,100 monthly cost of renting. Burns voiced optimism that the housing industry is just about ready to stage a recovery, which will begin once the volume of resale listings is pulled down to normal levels — probably at the end of the year. Resales still continue to slide in Florida and the Carolinas, he noted. Washington, D.C.; Sacramento and Oakland/East Bay, Calif.; and Dallas/Ft. Worth already appear to be in the early stages of recovery, he said. Among markets that Burns said have already hit bottom and are likely to be among the first to come out of the slump are: Atlanta, Phoenix, Denver, San Antonio, Chicago, Las Vegas, Houston, Denver, Minneapolis, Bellevue, Wash. and Southern California. Burns compared today’s housing recession to the four-year downturns that hit Houston in the early 1980s and Southern California in the early 1990s. “We are now in the midst of year four,” he said, “and then we’ll claw our way back.” Preparing Businesses for the Recovery With signs suggesting that housing is in the “very, very beginning of recovery,” Boyce Thompson, editorial director of the Builder Group of Magazines, suggested that now is the appropriate time for builders to recreate their businesses even as they continue to keep an eye on improving their cash flow and keeping expenses down. Worth considering, he said, are business models that worked and best prepared builders to weather the downturn. These included such practices as:
Among the findings of a recent Builder survey of prospective home buyers, he said, 60% of the respondents strongly agreed and 21% agreed with the statement, “I don’t want to stretch my finances too much when buying a home.” Ninety percent of those surveyed said that the community was more important than the house, and two-thirds indicated they would accept a smaller home in order to live in the community they wanted. Photos by Herman Farrer
Tax Credit Web Site Looks at Opportunity of a Lifetime 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. Spanish Version Also Available Online 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.
Want to Know the Housing Starts Through 2017? Find out in HousingEconomics.com's Long-Term Forecast. Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more. To learn more, visit www.housingeconomics.com. Eye on the Economy: House Price Depreciation May Be Easing OffThe sharpest contraction in economic activity during the current recession occurred in the final quarter of last year when a massive financial shock threatened to wreck the U.S. and global economies. Real gross domestic product contracted at a 6.3% annual rate in that quarter as spending declined sharply for all sectors other than the federal government. The “advance” estimate of GDP growth for the first quarter of this year showed a 6.1% annual rate of contraction, but this was revised to 5.7% in the “preliminary” report. Available monthly data for the second quarter point toward a further slowdown in the pace of contraction, and we’re currently estimating a decline of 1.2%. We also continue to believe that GDP growth will turn positive in the second half of this year, partly because of a decreasing drag from the housing sector ― although the pace of growth most likely will be below-trend and not strong enough to prevent further deterioration of the labor market. Recent signals from the labor market still are quite downbeat, but there are hints of a slowdown in the rate of deterioration. The cutback in payroll employment in April was not as severe as in earlier months, and the ADP National Employment Report released last week points to a somewhat smaller decline in May. Weekly data on claims for unemployment insurance still are quite recessionary, and continuing claims continue to climb to record highs. But the pattern of initial claims has been improving to some degree, at least on a four-week moving average basis, despite rising layoffs in the auto industry. This pattern, if it continues, will signal the beginning of the end for payroll declines and we’re expecting stabilization of employment by early 2010. Consumers Are Expecting Somewhat Better Economic Times Major measures of consumer confidence and sentiment recently have been regaining some of the ground lost during earlier stages of this economic recession. The recent gains primarily reflect brighter expectations regarding economic conditions down the line rather than more upbeat assessments of current economic conditions. The Conference Board's Consumer Confidence Index moved up in May following a solid increase in April but remained uncomfortably close to the record low struck earlier this year. Consumer assessments of the present economic situation have hardly moved off the bottom, while the expectations component has moved back up to levels prevailing at the end of 2007 — the official starting point for this recession. The Consumer Sentiment Index, produced by Reuters/University of Michigan, did not plummet into early 2009 to the degree shown by the Consumer Confidence Index, and smaller percentage increases were registered in both April and May of this year. The Consumer Expectations Index — a component of the sentiment index — is off the deck but still in a weak range. The pickup in measures of consumer expectations apparently reflects the view that the end of the economic recession is in sight, partly because of the stimulus programs enacted by the government late last year and early this year. However, the absolute levels of this measure remain quite low, suggesting that consumers expect only a modest recovery in the latter part of this year. Housing Affordability Measures Continue to Improve The affordability of home buying continued to improve through April, as declines in house prices and mortgage interest rates more than offset the effect of eroding median family income. The standard measures do not capture the effects of changes in mortgage lending standards or price expectations harbored by prospective home buyers, but the recent improvements are essential to a meaningful turnaround in home buying activity before long. The National Association of Realtors® Housing Affordability Index has been hovering around record highs since early this year, and the April reading was up by nearly 30% on a year-over-year basis. All major regions showed gains of at least 20% during that period, paced by the West, which recorded a 41% year-over-year improvement. The home mortgage market now is essentially a fixed-rate world dominated on the supply side by Fannie Mae, Freddie Mac and the FHA. The recent increases in long-term Treasury rates have put some upward pressure on these government-related home mortgage rates despite Fed purchases of Fannie Mae, Freddie Mac and Ginnie Mae securities, and the boost to affordability from falling mortgage rates presumably is behind us. But house prices still are adjusting downward in many areas, and household income growth will pick up as the economic recovery comes together. Thus, housing affordability should remain quite favorable over the balance of this year and in 2010, providing vital support to the early stages of the projected housing market recovery. Consumers’ Views of Home Buying Conditions Continue to Strengthen The Reuters/University of Michigan survey of consumer sentiment revealed that 80% of consumers had a favorable view of home buying conditions in May, up from 72% in April and the highest reading since early 2004. Falling house prices have been the main driver of the recent upswing. They were cited by 74% of the consumers surveyed in May, a 60-year record proportion. Low interest rates also have been a key factor. They were cited by 40% of the respondents — the largest proportion to cite low interest rates since fall 2005. On the other hand, very small proportions of consumers cited good economic times, concerns about rising interest rates or house prices down the line, or positive investment aspects of home buying as reasons for favorable home buying conditions. The University of Michigan points out that about 90% of consumers in the May survey viewed home selling conditions as unfavorable. Home owners always want to sell at peak prices, of course, but market realities dictate that sales must occur at going prices — just as subsequent purchases by home sellers will occur at reduced market prices. Absent an organized effort to hold homes off the market until prices recover, sales volume will be picking up at prices close to or below current levels. House Price Depreciation May Be Easing Off All measures of national average house prices have shown stunning declines from the unsustainable highs of 2006 to 2007. These declines have taken a heavy toll on household wealth, as well as on the quality of mortgage credit and the strength of financial institutions while restoring the affordability of home buying to a large degree. Recent readings on home price behavior are quite a mixed bag, with some measures showing continuation of rapid rates of price depreciation while other measures are suggesting a significant slowdown in the rate of decline. Stabilization of house prices is essential to a sustained economic recovery and, on balance, available evidence suggests that most of the house price correction now is behind us. The S&P/Case-Shiller repeat-sales National Home Price Index was down by a record 19.1% in the first quarter of this year, compared with a year earlier, and the seasonally adjusted annual rate of decline for the quarter came to 24.9% — also the largest on record. This measure now is down by 32% from the peak in the first quarter of 2006 and has returned to the level prevailing at the end of 2002 — prior to the unsustainable surge in home prices. The repeat-sales purchase-only national House Price Index produced by the Federal Housing Finance Agency (formerly OFHEO) fell by 7.1% in the first quarter compared with a year earlier, and the seasonally adjusted annual rate of decline for the quarter came to only 2.2%. This measure now is down by 10.4% from its peak in the second quarter of 2007 and has returned to the level prevailing in the first quarter of 2005. The median price of existing single-family homes sold in April was down by 14.9% compared with a year earlier, paced by a 21.8% decline in the West. This measure, unlike the two repeat-sales measures discussed, is not available on a seasonally adjusted basis and changes in median prices are subject to compositional shifts, but it appears that the most recent rates of decline are not as severe as those recorded last year. The major house price declines that now are under our belts have restored price/income and price/rent ratios to normal levels in many places and have combined with favorable mortgage rates to boost affordability considerably. The improvements in home sales that we’re projecting should help stabilize home prices before long, assuming that government efforts to weaken the foreclosure wave prove to be successful. Home Sales Apparently Have Bottomed Out The cyclical trough for home sales (seasonally adjusted) apparently was reached early this year, and a gradual recovery may very well be under way at this time. Sales of new homes (Commerce Department series) fell by 76% from the cyclical high in July 2005 to the apparent low in January of this year, but sales volume was up by 7% as of April. It’s worth noting that the Commerce series does not recognize cancellations of sales contracts on the downswing or resales of homes handed back to builders via cancellations on the upswing. It’s highly likely that the series now seriously underestimates the actual number of homes being sold by builders, a proposition supported by NAHB’s proprietary survey of large builders that yields estimates of both gross and net sales. Sales of existing homes (closings or “pending” sales) also peaked around the middle of 2005 and apparently hit bottom in January of this year before managing a modest recovery through April. The peak-to-trough decline was roughly half as big in percentage terms as the collapse in new-home sales, primarily because of the rising importance of foreclosure-related sales. Distressed sales have represented about half of the sales volume reported by the National Association of Realtors® in recent times. Such sales are bound to be a major force in the markets for single-family homes and condo/co-op units as we move ahead, bolstering existing-home sales and exerting downward pressure on prices in the broader market. NAHB’s single-family Housing Market Index hit bottom with a record-low reading of 8 in January and moved up to 16 in the May survey. This measure is designed to capture builder sentiment regarding the demand side of the market, and the recent increases have at least mild positive implications for new-home sales in the near term. Backup in Long-Term Rates Will Not Prevent Housing Recovery Long-term Treasury rates have moved up considerably from their recent lows in mid-May, even though the Fed is holding the federal funds rate near zero and committing to maintain that policy stance for an extended period. Long-term fixed-rate mortgage yields have been subject to some upward pressure in the process, moving above 5% for the first time since March. In testimony before the House Budget Committee last week, Fed Chairman Ben Bernanke said that the recent increases in long-term Treasury yields appear to reflect not only market concerns about very large federal budget deficits and extremely heavy Treasury issues but also greater optimism about the economic outlook and a reversal of flight-to-quality flows that drove down the Treasury yield curve to an unsustainable degree late last year and early this year. Thus, in a sense, the backup in longer-term Treasury yields is a welcome development, suggesting that the panic mode in financial markets is moving behind us. In this regard, the Fed apparently is not prepared to greatly increase the purchase of longer-term Treasury securities for its own balance sheet beyond the commitment ― $300 billion in 2009 ― made earlier. However, the Fed is proceeding with efforts to reduce spreads between private borrowing costs and comparable-maturity Treasury securities, targeting sectors that are essential to economic recovery. The spread between prime conventional conforming fixed-rate mortgages (FRMs) and 10-year Treasury yields exploded late last year and early this year, along with spreads in other private fixed-income markets (including the corporate bond markets). But the FRM-Treasury spread has narrowed considerably since the Fed announced its intention to buy up to $1.45 trillion in agency debt and mortgage-backed securities in 2009, and the Fed so far has bought only $581 billion for its portfolio. The recent backup in long-term rates has prompted some upward adjustment to our forecast of FRM rates over the balance of this year and in 2010, but we’re expecting further compression of the FRM-Treasury spread to limit the impact ― with the Fed’s help. The mortgage rate picture still looks quite favorable by historical standards, and we’ve preserved the upswing in home sales needed to lay the ground work for an upswing in housing starts beginning in the third quarter of this year. 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 June 3 edition. To subscribe to “Eye on the Economy,” click here.
Tax Credit Web Site Looks at Opportunity of a Lifetime 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. Spanish Version Also Available Online 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.
Want to Know the Housing Starts Through 2017? Find out in HousingEconomics.com's Long-Term Forecast. Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more. To learn more, visit www.housingeconomics.com. Useful Links to Monitor Economic and Housing TrendsThe following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market. To access the latest information available, simply click the links.
Tax Credit Web Site Looks at Opportunity of a Lifetime 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. Spanish Version Also Available Online 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.
Want to Know the Housing Starts Through 2017? Find out in HousingEconomics.com's Long-Term Forecast. Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more. To learn more, visit www.housingeconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Home Builders Offering Job Loss Payment Protection Plans
Within the housing industry, the programs provide a safety net that many home buyers need in order to feel confident about making such a major purchase. High production builders such as Lennar, Pulte Homes, Ryland Homes and Toll Brothers have initiated job loss protection plans. Many have partnered with the Rainy Day Foundation, a nonprofit established to create and maintain responsible homeownership, to provide that coverage. Small builders and real estate agencies are also beginning to offer similar programs. Small Builder’s Program Creates Community Buzz, Traffic and Sales Brookside Homes, based in Wilmington, N.C., launched its own builder-funded “Homebuyer Protection Plan” in April. “No doubt the program restores confidence in the buyers,” says Page Robertson, owner/manager of Brookside Homes. “We assume some of the risk our buyers would otherwise be burdened with. It frees them up to have an easier decision-making process, restores their faith that the American dream is still attainable and exemplifies our own faith in the economy.” Home buyers eligible for the Brookside Homes program must have had 12 months of continuous employment at closing, must live in the home for at least 60 days before receiving funds from the program and cannot have had previous knowledge of any pending job loss. If unexpected job loss does occur for Brookside home buyers who meet those criteria, the builder will pay up to $1,000 per month for six months. The program is also weighted to assist two-earner households. “For example, in the event of a married couple where the wife may bring in 60% percent of the income, if she loses her job, the benefit to both home owners would be $600 per month for six months,” Robertson said. The protection plan is available to the first 25 sales that meet the program’s criteria. The idea for the program arose from several discussions involving the Brookside Homes sales team and the company’s development partners. “We are very lucky to be able to sell homes under $200,000, offer 100% financing through the USDA rural home loans program and attract buyers who can take advantage of the federal first-time home buyer tax credit,” said Robertson. “But even with all of these things going for us, we were not selling more homes. Through our discussions, we were able to identify job security concerns among potential buyers and form the program.” When creating the program, Brookside Homes determined that the chance to increase traffic and sales outweighed any financial risks that could occur. “We based our scenarios on 30% unemployment, and even in those worse-case scenarios, the offer made sense in terms of momentum in the neighborhood and the subsequent payoff on development company debt,” said Robertson. Because the home buyer protection plan is not a mortgage insurance program, Brookside Homes has funded the program by escrowing funds for any necessary payments in its development company. Robertson attributes six sales as well as increased traffic and Realtor® participation to the buzz created by the builder’s “Homebuyer Protection Program.” “We are small and we can react quickly to what the market is telling us,” said Robertson. “We talked about such buyer protection on a Thursday, created a logo, changed our advertising message, hired a public relations firm and rolled out the program to the public in less than a week.” Real Estate Agency Offers Tools to Build Home Buyer Confidence
Long & Foster, the largest privately held residential real estate company in the country, has partnered with the Rainy Day Foundation to offer its own job loss protection program to help its real estate agents and agencies sell in today’s market. The Chantilly, Va.-based company has launched its “Buy Confident” campaign that incorporates the Rainy Day Foundation’s HELP service — home owner education and loan protection — created to keep home owners from becoming delinquent, make home owners current if they are delinquent and to create long-term financial stability. The program is offered by its agencies throughout the mid-Atlantic. “This is the first time the HELP program has been available through the real estate broker channel,” said Scott Shaheen, of Long & Foster in Richmond, Va. The job loss protection program is available for any current or new listings — both resale and new properties — and is funded out of the seller’s proceeds at settlement. Buyers who are employed full time, are a U.S. resident and between 18 and 66 at the time of closing are eligible. Underwritten by Virginia Surety Company, qualified buyers can receive up to $1,800 a month for six months in the event of a job loss within the first 24 months of the loan. The agency’s “Buy Confident” plan also offers tools and resources — such as personalized assessments, a home mortgage rate guarantee (in conjunction with Prosperity Mortgage, an affiliate of Wells Fargo Home Mortgage) — along with the Rainy Day Foundation’s job loss protection. Rainy Day’s HELP program also offers buyers six months of counseling by phone and through newsletters, if needed. “Everyone is touting that it’s a great time to buy,” said Shaheen. “We want to make sure that potential buyers fully assess their situation and select a knowledgeable real estate agent to help them make responsible choices.” Tough Times Call for New Floor PlansAmped-up Web marketing and sales strategies will help in today’s tough market, but to really survive in this economy, builders need to refine and refurbish every aspect of their business — especially their product offerings. If builders show discerning buyers new and innovative floor plans, I’m confident that they will see results. Think Smaller and Smarter Today’s economically conservative climate and a growing desire to live a more eco-friendly and energy-conscious lifestyle are generally two factors in the marketplace that are influencing buyers’ desires for smaller, more modestly sized homes. But builders should keep in mind that the most popular homes are not just smaller, they are designed more precisely to function better by eliminating some excess traditional-use space and creating new, flexible spaces that fit the lifestyles of today’s buyer. For example, in the 2,620-square-foot Cordoba model of Sarasota, Fla.-based Fidelity Homes, architect Don Evans of The Evans Group designed a kids’ work and study center that wrapped around the back side of the kitchen and was adjacent to the laundry room. The configuration and location enables parents to prepare dinner, while overseeing their kids’ Internet browsing and managing the laundry.
We merchandised the laundry room as a multi-use space that also functions as a space for wrapping gifts, doing crafts and storing pet supplies and cleaning supplies. An adjacent Florida basement serves as space for storing kids’ backpacks, gardening tools, golf clubs and other sports gear and hobby items that would normally clutter the garage. And the garage has easy access to the kitchen — a must-have convenience to make it easier for home owners to unload groceries.
Cocooning Is Back “Cocooning” is back and open floor plans with seamless connections from the kitchen to the family and dining rooms make for easy home entertaining with family and friends.
Remember, too, that outdoor living is a popular way to demonstrate lifestyle to entertainment-savvy buyers. We turned the modestly-sized porch of the Creek Club Cottage model at Reynolds Plantation in Greensboro, Ga., into a summer kitchen, a perfect spot for winding down from work with friends over wine and steaks sizzling on the grill. While summer kitchens are popular, they can be scaled back in size.
Floor Plan Do's and Don'ts With the market as tight at it is, we cannot afford to make mistakes, so here are a few pointers on what to do — and what not to do — with floor plans. In today’s market, it’s best to learn from the mistakes of others, rather than your own. Be very careful to preserve the sanctity of the master bedroom suite. Don’t have the master bedroom share a wall with the laundry room and its noisy washer and dryer or with kitchen cabinets. A spouse waking up early and banging around in the kitchen when the other spouse is sleeping on the other side of an adjoining wall does not make for a happy household — or generate many referrals. We also suggest that you don’t overwhelm prospective buyers with too many floor plans. Most buyers will be satisfied with a handful of choices to select from — so we recommend that you offer no more than four or five floor plans. But since you still want to appeal to a wide range of buyer demographics and life stages and you don’t want to limit the options available to prospective buyers who like to customize their homes, make sure those plans are flexible. “Sliding Scale,” an article by Jenny Sullivan in Builder magazine, profiled a California builder who offered only a few plans with a variety of flexible floor plan configurations to “accommodate spaces such as a formal dining room, hobby room, guest suite or extra garage space as well as universal design features.” Not only do prospective buyers today want options, to save money some of them are willing to provide their own. Lennar Homes is selling homes to this do-it-yourself market segment at a community in the suburbs of Jacksonville, Fla. by offering homes without added upgrade costs. A sales agent in the community told me the model was part of the company’s “what you see is what you get” sales strategy, and it has been working. Lennar sold eight homes in one month not too long ago. Rollout New and Different Products Before television, homes did not have family rooms. Families gathered in the formal living room or parlor. Before washing machines and dryers, there were no laundry rooms dedicated to those appliances. These inventions brought lifestyle and floor plan changes. Now that we have the Internet, laptops, PDAs, cell phones, digital cameras and iPods, I encourage builders to think about how these advances are changing lifestyles and how they can accommodate those changes in floor plans. For instance, wireless home networking has reduced the need for dedicated office/den spaces. Then again, many people are working from home. Technology has also helped foster the resugernce of a turn-of-the-last-century concept — living above the store — that is gaining some popularity in mixed-use communities in certain markets.
The Rutledge townhouse by Dock Street Communities, which builds in the Myrtle Beach area of North Carolina, is an example of this concept. We merchandised the commercial space of the townhome as an art gallery and included a “stop-and-drop” space at the entrance to the residence on the second floor where home owners can dump their wallet, Blackberry and iPod. I challenge builders to work with their architects and interior merchandisers to examine their product and determine if their floor plans need a facelift. Success in today’s market hinges on a willingness to innovate and update. Kay Green, MIRM, CMP, is the founder of Kay Green Design, a nationally recognized leader in model home and sales center merchandising based in Orlando. Green is a regularly featured speaker at national and regional builder conferences and an an instructor for NAHB Institute of Residential Marketing qualifying courses. For more information, e-mail Green, call her at 407-246-7155 or visit her Web site at www.kaygreendesign.com. ‘Affordable Home Plans’ Available at BuilderBooks.com “Affordable Home Plans,” available through BuilderBooks.com, offers 275 of the most popular, stylish and affordable home designs available. In addition to the home plans, this publication provides practical tips and expert advice to guide the potential home owner through creating interior and exterior accents for the home. To view or purchase this publication, click here, or call 800-223-2665. NAHB Supports Struggling HBAs With 66 Grants Worth $499,925NAHB recently approved 66 home builders association assistance grants totaling $499,925 as part of a federation-wide program created to strengthen struggling state and local HBAs during the downturn. The grants were available to HBAs that have fallen below specific membership and retention thresholds. Under the support fund program, struggling HBAs will use individual grants ranging from $750 to $22,500 to fund membership recruitment, retention and other core revenue-generating member programs and discounted consulting services available through NAHB. The $500,000 fund was established at the March meeting of the NAHB Executive Board, and a task force was created to analyze and address HBA challenges caused by significant membership losses as a result of the downturn and to develop a course of action to support the struggling HBAs. The task force — made up of members who serve on the NAHB Budget, Associates, Association Planning and Membership committess as well as the Executive Officers Council — originally planned to conduct application reviews and disperse the funds throughout the year. After receiving state and local HBA requests of nearly $1.3 million prior to NAHB's spring board of directors meeting, the task force recommended that all the funds be released immediately to meet the urgent need. As a result, no other applications for grants for struggling HBAs will be reviewed this year. Many applications represented collaborative efforts where state and local associations worked together to develop shared initiatives and to pool resources. Overall, the grants that were approved represent projects that will touch nearly 75,000 NAHB members. No other applications for grants for struggling HBAs will be reviewed this year. Copies of the funded applications, minus the applicant’s financial data, will be posted on the NAHB Web site. To view the list, click here. As part of each grant, the program includes a 10% holdback provision. To receive the final 10% of the grant, HBAs must submit a final report detailing the results of their efforts. These final reports also will be posted to the Web to serve as a resource for other HBAs. For more information, e-mail William "Rusty" Deiss at NAHB, call him at 800-368-5242 x8231 or visit www.nahb.org/NAHBSupportFund. June 25 Audio Seminar Examines AD&C Lending ChallengesExperts from the policy and lending arenas will discuss the challenges of and possible solutions to the acquisition, development and construction (AD&C) lending crisis during an upcoming NAHB audio seminar beginning at 2:00 p.m. on June 25. Panelists in the seminar, “Examining the Challenges of the AD&C Lending Crisis,” will explore strategies to respond to the crisis and messaging that builders and remodelers can use to help communicate the AD&C lending problems they are experiencing to their federal, state and local government officials. Seminar participants also will get an update on NAHB's efforts with regulators and lawmakers. In addition, during the seminar:
Speakers include Chellie Hamecs of NAHB’ Housing Finance Department; Scott Meyer, NAHB federal lobbyist; and Kirk Hartley of Bank of America Home Loans California. Audience Questions Encouraged Participants will be able to ask questions of the speakers after their presentations. However, questions must be submitted in advance of the seminar. E-mail questions for the speakers to keckhart@nahb.com by Friday, June 19. To Register The registration fee is $79 per phone site and enables as many people as can fit in a room to participate. The fee also provides participants with free online access to the archived seminar after June 25. To register, visit www.nahb.org/ADCLoanAudio. For more information, e-mail Karl Eckhart at NAHB, or call him at 800-368-5242 x8126. Builders’ Tip: How, Why and When You Should Tint SpackleAs a trim carpenter, I try to stay as far away from painting as possible. But there are times when I do have to pick up a paintbrush — such as when the walls aren’t white and I have to paint over spackling to match the wall color. One trick that I have learned to reduce my frustration with painting is to tint the spackling compound with some wall color before I apply the spackle. Tinting lets me cover the patches with one coat. Otherwise, I need at least two. Tinting the spackle is easy, and for vinyl spackle I found that I can use acrylic paint that's a little darker than the wall color. Here’s what I do:
— Todd Leback, Charlottesville, Va. Tips & Techniques provided by Fine Homebuilding.
To contact Fine Homebuilding, e-mail Christina Glennon.
Tax Credit Web Site Looks at Opportunity of a Lifetime 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. Spanish Version Also Available Online 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.
Set Yourself Apart With CGB Designation Join the ranks of the nation’s top building industry professionals with the Certified Graduate Builder (CGB) designation. The “Builder Assessment Review” (BAR) is your first step towards obtaining the CGB. This comprehensive assessment measures your expertise in the four key areas of the building industry: building technology, business and finance, project management and sales and marketing. Your results will show the areas where your knowledge is strongest and weakest and will help determine the courses required for you to obtain your CGB. To learn where the next BAR will be held, visit NAHB’s education listings, or call the Professional Designation Help Line at 800-368-5242 x8154.
BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish. To view these publications online, click here, or call 800-223-2665. Recognition, Acknowledgement Boost Morale and ProductivityWhile layoffs are painful for all involved, they are a necessary reality of the recession and housing downturn. After the layoffs, however, it’s more important than ever for owners and managers to do what they can to keep the remaining staff members at peak performance and maintain a positive mood in the workplace. Two relatively simple ways to boost mood and performance are recognition and acknowledgement. Motivational expert Frederick Herzberg reported in the Harvard Business Review that recognition is 300% more important to motivate employees than the size of their salary or compensation package. While most builders I’ve spoken with believe that they effectively recognize their staff members, most employees tell me they are under-appreciated for the work they do. Who’s right? It doesn't matter. What does matter, however, is how effectively owners and managers can bridge that gap in perception and what steps they are willing to take. Strategies for Acknowledging Employees Builders can choose from a number of ways to recognize and acknowledge their staff members. Regardless of the form, however, be sure that the acknowledgment and recognition are deserved because acknowledging staff members for half-hearted efforts and marginal results diminishes the power of recognition. The following are several strategies for recognizing employees. Initiate the ones you are most comfortable with first, and then build from there:
Dennis DuRoff is a business coach, speaker and author whose clients include builders and remodelers. He also offers a low-cost, turnkey newsletter program that helps builders and remodelers stay in touch with prospective customers and past clients and maximize referrals and increase sales. For more information, e-mail DuRoff, call him at 206-722-6067 or visit www.thebuildersnewsletter.com.
NAHB Has Nearly 300 Resources to Help You Run Your Business More Profitably Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to nearly 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more. Resources are added weekly, so bookmark www.nahb.org/Biztools to go directly to these vital business management resources. Expectations for 50+ Market Show Modest RiseBuilders of single-family housing for the active-adult home buyer market noted an increase in the traffic of prospective buyers during the first quarter of this year, according to the 55+ Housing Market Index (55+ HMI) released on June 4 by NAHB. The overall index, however, dropped to 14, from 16 in the final quarter of 2008, driven down by a five-point decline in the sales component of the index to 12. "A strong and growing number of retirees and empty-nest households are interested in either downsizing or moving to a more user-friendly home — especially if it's near their existing community," said NAHB Chief Economist David Crowe. "But the current market still presents significant obstacles to home owners who need to sell an existing home before buying a more appropriate one. That situation is holding many mature consumers back from moving." Derived from quarterly surveys of builders and developers, the 55+ HMI gauges perceptions on current sales conditions, prospective buyer traffic and market expectations for the next six months. Reported on a scale of 0 to 100, a rating of 50 generally indicates that positive and negative responses are about equal. Builders exhibited guarded optimism looking forward to the next six months, with that component of the index rising from 24 to 26 for single-family sales and from 17 to 20 for condominiums. However, expectations for multifamily rentals in the coming six months fell from 37 to 35. To see a chart of the latest index findings, click here. "With the return of a more stable, healthier housing market, the pent-up demand for housing with the features and amenities that appeal to baby boomers will keep builders in this sector busy for years to come," noted Crowe. For more information on 50+ resources available from NAHB, e-mail Ann Marie Moriarty, or call her at 800-368-5242 x8350.
“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help determine the right design, home features and amenities to attract boomer home buyers in your market. Author Margaret A. Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry. To view or purchase this publication online, click here, or call 800-223-2665. June 10 Webinar Presents Survey of What Boomers WantThe preferences of baby boomers and their older cohorts as they reposition themselves for their final home purchase in the face of the financial markets turmoil will be discussed during the first in a series of Web seminars beginning at 3:00 p.m. EST on Wednesday, June 10. The seminar, “55+ Housing by the Numbers (Part I),” will examine the most recent research conducted by NAHB and the MetLife Mature Market Institute (MMI). The seminar is presented by NAHB’s 50+ Housing Council. Industry experts will analyze data from the most recent American Housing Survey by the U.S. Census Bureau, discuss relevant trends that have emerged over time and provide participants with a profile of today's 55+ consumers. Seminar participants will also:
The Web seminar is free to 50+ Housing Council members; $69 for NAHB members; and $100 for non-NAHB members. Register by Tuesday, June 9 by clicking here. Participants will need an NAHB login and password to register. For more information, e-mail Jeff Jenkins at NAHB, or call him 800-368-5242 x8292.
“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help determine the right design, home features and amenities to attract boomer home buyers in your market. Author Margaret A. Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry. To view or purchase this publication online, click here, or call 800-223-2665. Lean How to Leverage LIHTC Deals With TCAP on June 11
During the seminar, “Leveraging Your LIHTC Deal With TCAP and Exchange Funds,” industry experts will address:
To Register The conference is $59 for members, $89 for non-members and free for Housing Credit Certified Professional (HCCP) designation holders. To register, click here. Participants will earn a one-hour educational credit toward their HCCP designation. Education Calendar
Learn More About Upcoming Conferences and Designations Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. IRS Clarifies What Qualifies for Home Owner Energy Tax CreditThe Internal Revenue Service has published new guidance on Internal Revenue Code Section 25C, which allows up to a $1,500 tax credit for home owners who install energy-efficient windows, insulation and other qualifying products. The tax credit is equal to 30% of the qualified energy efficiency expenses paid by the home owner, but it is limited to $1,500 for improvements made during 2009 and 2010. Notice 2009-53 explains the requirements for home owners to claim the 25C credit and provides detailed technical information regarding what improvements can qualify. Home owners can claim the credit only for improvements made to an existing home. However, NAHB has learned from the IRS that tax credit-qualified improvements installed in an addition to an existing home also qualify for the 25C program. The guidance should help clear up confusion about the recent expansion of the tax credit that Congress approved earlier this year as part of the American Recovery and Reinvestment Act of 2009. Among the highlights:
Taxpayers can generally rely on certification statements made by the manufacturer that the installed product qualifies for the Section 25C tax credit. Taxpayers should maintain records of certification statements after claiming the credit in case they are subject to future IRS review. The manufacturer’s certification should contain:
In particular, taxpayers can claim the credit for installation of windows and skylights that meet Energy Star requirements, requirements listed under prior IRS Notice 2006-53 or manufacturers’ certifications for 25C made under IRS Notice 2006-53. For installations on or after June 1, the requirements listed in Notice 2009-53 and described above are binding. Section 25D incentives Some remodelers and new home builders are also using a related tax credit to help home owners install products that generate energy. Claimed by home owners and home buyers, the Section 25D credit is equal to 30% of expenditure costs. Thanks to changes made in the economic stimulus legislation and unlike Section 25C requirements, the Section 25D credit is not subject to any cap. Qualifying products include solar electric systems, geothermal heat pumps, fuel cells and wind products. In addition, installation costs can be included in the calculation of the credit. Tax credits can be claimed for installation in primary or second homes, except for fuel cell products, which must be installed in a principal residence for tax credit purposes. NAHB has confirmed with the IRS that home builders can provide an itemized cost breakout of installed Section 25D qualified products to a home buyer for tax credit claims after the purchase of the home. Home owners can claim both tax credits on IRS Form 5695. Using the Credit to Sell Remodeling Jobs A media teleconference held by NAHB in May to promote the use of the Sections 25C and 25D tax credits for home remodeling projects highlighted the role of the professional remodeler in helping consumers obtain the credit. A panel of experts reviewed the tax credit rules and provided examples of how remodelers are using them to expand into the field of energy-efficiency retrofitting. Moderator and NAHB Remodelers Chairman Greg Miedema, CGR, CAPS, GMB, CGP, president of Dakota Builders in Tucson, Ariz., told reporters that much more work needs to be done to update the energy efficiency of the 111 million existing homes in the U.S. Robert Dietz, NAHB’s director of tax issues, provided an overview of the credits, pointing out that the 25C credit is only available for qualified energy-efficient products placed in service in a principal residence after Dec. 31, 2008 and before Jan. 1, 2011. Unlike a tax deduction, tax credits offset income tax liability dollar for dollar. Michael Strong, CGR, GMB, CGP, president of Brothers Strong in Houston, an exclusively green remodeling company, said that the tax credit is very important to his business and consumers and is “one of the best kept secrets for selling remodeling jobs.” To promote their use, Strong creates a worksheet for the home owner calculating the cost of each option compared to the benefit of using the credits — including possible savings on future utility bills. Donna Shirey, CGR, CAPS, CGP, president of Shirey Contracting in Issaquah, Wash., is building a zero-energy demonstration home that includes a wind turbine, evacuated tubes for solar water heating and a geothermal system for generating the home’s energy. Shirey said these products should yield an $11,000 tax credit and help to make the home more affordable. All three remodelers emphasized the benefits of conducting a pre-remodel energy audit to help identify where energy is being lost and calculate possible utility savings. The audits should include post-completion testing to measure changes in the home’s energy efficiency. Energy-efficient improvements can be suggested on nearly every job, the panelists agreed. As the energy-trained remodeler examines the house, there is an opportunity to look at all its systems to determine the best places for improvements. To replay the teleconference, download a fact sheet on the energy-efficiency tax credits or access a comprehensive Web site on the credits, visit www.nahb.org/efficiencycall. For further information on the tax credit, e-mail Rob Dietz at NAHB, or call him at 800-368-5242 x8285. For information on green remodeling, e-mail Kelly Mack, x8451. ‘National Green Building Standard’ Available at BuilderBooks.com “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. To view or purchase this publication online, click here. The Future of Residential Construction Is Green 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 3,300 people have earned the CGPdesignation to date. For more information, visit www.nahb.org/CGPinfo. ‘Build Green and Save’ Available at BuilderBooks.com “Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption. To view or purchase this publication online, click here, or call 800-223-2665. Don’t Miss Energy Value Housing Awards June 30 DeadlineThere is still time to act, but with the June 30 deadline drawing near for the 2010 EnergyValue Housing Award applications, builders of extremely energy-efficient or even zero-energy homes don’t want to miss this opportunity to have their work showcased nationally. Funded by the U.S. Department of Energy’s Building America Program and administered by the NAHB Research Center, the EnergyValue Housing Award (EVHA) recognizes builders who successfully integrate energy efficiency into all aspects of new home production, as exemplified by a specific home. For those who have not participated in the EVHA before, here are some helpful hints for providing the detailed information and documentation needed in the application:
Builders who have questions about completing the application and manufacturers interested in sponsoring the 2010 EVHA ceremony are encouraged to e-mail Debra Sagan, EVHA program manager, at the NAHB Research Center.
‘National Green Building Standard’ Available at BuilderBooks.com “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. To view or purchase this publication online, click here.
The Future of Residential Construction Is Green 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 3,300 people have earned the CGPdesignation to date. For more information, visit www.nahb.org/CGPinfo.
‘Build Green and Save’ Available at BuilderBooks.com “Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption. To view or purchase this publication online, click here, or call 800-223-2665. Seminar Proposals Sought for Green Building ConferenceProposals are now being accepted for educational seminars to be offered at the 12th Annual NAHB National Green Building Conference on May 16-18, 2010, in Raleigh, N.C. The NAHB Green Building Conference Working Group is seeking a variety of proposals — on topics ranging from business management and marketing to building science and technology. The group is looking for proposals that target different project types, including remodeling and multifamily construction and development, and varying skill levels, from green building beginners on up. Sessions can be either 60 minutes or 90 minutes long. Slide presentations can be submitted after the proposal is accepted and will be posted for downloading by conference attendees. To submit a proposal, visit the Speaker and Instructor Information page at the NAHB Web site. All proposals must be completed and submitted online and include a brief biography of the presenters. Seminar proposals that promote individual products or services will not be considered. The 11th Annual NAHB Green Building Conference took place on May 8-10 in Dallas and attracted nearly 1,200 participants. Speakers included financier and gas industry advocate T. Boone Pickens and green business specialist Joel Makower. The annual conference includes the NAHB National Green Building Awards and the Green Homes Tour, where industry professionals can look at a variety of green building projects in different phases of construction. For additional information about the educational seminar proposal process, e-mail Chad Riedy, or call him at 800-368-5242 x8225. For more information about the NAHB National Green Building Conference or to be notified when registration opens, visit the Web page. For sponsorship information, e-mail Julie Mines. For exhibit information, e-mail Chris Hood.
‘National Green Building Standard’ Available at BuilderBooks.com “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. To view or purchase this publication online, click here.
The Future of Residential Construction Is Green 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 3,300 people have earned the CGPdesignation to date. For more information, visit www.nahb.org/CGPinfo.
‘Build Green and Save’ Available at BuilderBooks.com “Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption. To view or purchase this publication online, click here, or call 800-223-2665. Free Webinar Looks at Energy-Efficient Window UpgradesA free Web seminar on window upgrades to help create energy efficiency at all prince points is being offered on Tuesday, June 11, by the Alliance to Save Energy. “Window Energy Efficiency: Beyond Business as Usual,” takes place at 2:00 p.m. EST. Speakers representing research, industry and low-income housing will highlight solutions that can help maximize energy savings. A closer look at the available options for window upgrades reveals a significant and cost-effective savings potential for many homes and businesses, say conference organizers. The webinar will explore lower-cost products such as low-E storm windows and high-performance R-5 or higher windows and commercial glass, an increasingly affordable solution for maximum energy savings. The presenters will explain the technologies and performance metrics, provide information on incentive programs and offer a perspective on how these solutions relate to the needs of weatherization programs. Conference participants include Marc LaFrance of the U.S. Department of Energy; Christian Kohler of the Lawrence Berkley National Laboratory; John Hamilton of the Community and Economic Development Association of Cook County, Ill.; and two window manufacturers. Click here to register for the free seminar.
‘National Green Building Standard’ Available at BuilderBooks.com “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. To view or purchase this publication online, click here.
The Future of Residential Construction Is Green 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 3,300 people have earned the CGPdesignation to date. For more information, visit www.nahb.org/CGPinfo.
‘Build Green and Save’ Available at BuilderBooks.com “Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption. To view or purchase this publication online, click here, or call 800-223-2665. NAHB Proposes Alternatives to Limit Storm Water RunoffTo protect the nation’s waterways from storm water runoff and recognizing that most smaller building projects already do an adequate job using current practices, NAHB last week submitted an alternative proposal to the U.S. Environmental Protection Agency effluent limitation guidelines (ELGs) plan, which was published in November. The EPA is under a court-ordered deadline to finalize ELGs for the construction and development industry by the end of this year. EPA considered three options for home builders and developers to keep rainwater runoff from construction sites out of nearby water bodies and wetlands:
“If all construction sites meet appropriate construction and development ELG standards as outlined in the NAHB proposal, construction discharges will be further reduced below this already de minimus level,” NAHB said. For more information, e-mail Calli Schmidt, or call her at 800-368-5242 x8132.
'Storm Water Permitting: A Guide for Builders and Developers' Available at BuilderBooks.com “Storm Water Permitting: A Guide for Builders and Developers,” available through BuilderBooks.com, provides a starting point for builders and developers to use in locating and understanding storm water permitting requirements. The publication has been prepared to help builders comply with the U.S. Environmental Protection Agency's storm water requirements, and includes information on state permitting programs and more than 50 of the most commonly used Best Management Practices. Also included are tips on compliance, including how to handle visits from inspectors. To view or purchase this guide online, click here, or call 800-223-2665. 2009 Best in American Living Awards Entry Forms Due July 1
Co-sponsored by Professional Builder magazine and NAHB, the competition includes 37 categories — from single-family attached and detached homes in a variety of sizes to rental developments and custom homes, plus categories for interior design, communities and neighborhoods, affordable housing, smart growth and new this year — certified green homes. A panel of design professionals judge entries on design appearance and curb appeal, interior floor plans, how the project relates to its own local market and the construction techniques and materials used. Homes that were completed or that had their first model opened between Jan. 1, 2008 and July 15, 2009 are eligible for this year’s competition. Entry Dates:
Winning entries also will be posted on the Professional Builder Web site (probuilder.com) for up to one year after the announcement. For additional information and to download a BALA entry form, click here, go to www.probuilder.com/bala, or contact Judy Brociek, Professional Builder, at 630-288-8184, or Jennifer Jones, NAHB, at 800-368-5242 x8343. Save 15% on NAHB Safety Products During Safety MonthBuilderBooks.com is offering 15% off all NAHB safety publications purchased online during the National Safety Council’s annual National Safety Month campaign this month and extending the offer through July. The failure to properly train workers is one of the 15 most frequently cited Occupational Safety and Health Administration (OSHA) violations in residential construction and could cost a company up to $7,000 for a single incidence. OSHA requires employers to train their employees to recognize and avoid safety hazards on the job and to understand the applicable safety regulations. To help meet this need, BuilderBooks offers numerous safety publications in both English and Spanish, including: New Releases
Visit www.BuilderBooks.com/Safety and enter the discount code SAFE15 on the checkout page to receive an additional 15% discount.* Offer expires on July 31. Click here for more information. *The 15% discount is available only on Web orders. It is not good on prior purchases and cannot be combined with any other offer. Project CRAFT Success Stories Brought to Florida State CapitolProject CRAFT students from the Bristol Youth Academy traveled to the state capitol in Tallahassee earlier this spring to participate in the Florida Department of Juvenile Justice’s (DJJ) annual Youth Success Week and provide accounts of how the Home Builders Institute (HBI) program has improved their lives. Hosting a booth at the event, students were on hand to provide an update on the program for DJJ Secretary Frank Peterman, who has been a strong ally of Project CRAFT since his time in the Florida House of Representatives. In his current position, Peterman has visited the program’s site in St. Petersburg and meets regularly with HBI Trustee Bill Paul. “Youth Success Week presents a great opportunity for Project CRAFT programs and students to show the state legislature what a strong impact HBI’s training can have,” said Paul. “The students participating have undergone significant positive changes in their lives and they are eager to talk to everyone about Project CRAFT.” Peterman joined Florida Governor Charlie Crist and youths who had successfully transitioned out of the system on the steps of the capitol for a live press conference. The following day, the Florida Juvenile Justice Foundation honored the recipients of the Youth Investment Award. Earlier this year, Avon Park graduate Jonathan Holmes was among the first HBI students to receive the award. Project CRAFT trains more than 500 youths annually in Florida; more than 90% of its graduates are placed in industry jobs, the military or school. As part of their PACT (pre-apprenticeship) training, each year CRAFT students spend approximately 30,000 hours working on community service projects. For more information on Project CRAFT, e-mail Dennis Torbett at HBI, or call him at 800-795-7955 x8908. S.C. Idea Home Uses Benjamin Obdyke Siding Drainage MatrixA builder specializing in custom, green-built homes has selected Home Slicker from Benjamin Obdyke to contribute to the sustainability of the 2009 Idea Cottage being constructed by Coastal Living magazine only minutes away from the city’s historic downtown. The patented, vertically channeled, three-dimensional matrix will be applied behind the model home's fiber cement siding. Home Slicker creates an even, continuous space for drainage and drying; a thermal break; and pressure equalization between the home's sheathing and exterior siding. It is part of a rain-screen assembly that building science experts agree is the optimum method of wall construction in an area such as South Carolina, which is prone to excessive moisture, wind-driven rain and humidity. "We are close enough to the beach to experience some of the corrosive elements that the environment brings, like excessive heat and humidity," said R.P. Newton, production manager for Structures Building Company. Home Slicker creates the drainage space, which enables bulk water that enters the wall cavity to drain, while allowing for air movement to dry any remaining moisture. "Since we typically integrate a drainage space behind any of the wood or fiber cement siding we use on our custom homes, we knew that using the Home Slicker rain-screen product would be a good match for this project," Newton said. The new home is being constructed in the community of l’On Village in Mount Pleasant. The village was selected as "Best Community in the Nation" and "Best Smart Growth Neighborhood in the Country" by both NAHB and Professional Builder magazine. Coastal Living’s Idea Houses and Cottages celebrate the best in home innovation and construction. They are built in coastal communities selected for environmental consciousness and sensitivity to shoreline preservation. The Coastal Living Idea Cottage features Caribbean-style architecture and a private courtyard. The home will be open to the public for tours in August and will be offered for sale among 13 custom home offerings designed as the Courts on Jefferson Canal. For more information on Home Slicker or other Benjamin Obdyke roof and wall products, contact a local Benjamin Obdyke dealer, visit www.benjaminobdyke.com or call Benjamin Obdyke Customer Service at 800-346-7655. Headquartered in Horsham, Pa., Benjamin Obdyke is a member of the National Council of the Housing Industry — The Leading Suppliers of NAHB. This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page. NAHB-Produced Programs on the DIY NetworkThe NAHB Production Group produces weekly television shows on DIY, Fine Living and HGTV for consumers. The following is the latest lineup: "Rock Solid" on DIY
"Indoors Out" on DIY
HGTV Seeking ‘Dream Home’ Builder/Architect Teams 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. About the NAHB Production Group The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use. The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Green Building Scholarship Receives Tonjes DonationA newly created National Housing Endowment scholarship to provide funding for students to attend NAHB’s annual National Green Building Conference received a donation from Ray Tonjes, a former chairman of the NAHB Green Building Subcommittee and an Austin, Texas remodeler and builder, during the association’s spring board of directors meeting in Washington, D.C. on May 27-30. Tonjes presented a check during the meeting of the Green Building Subcommittee. The scholarship was announced during this year’s National Green Building Conference, which was held in Dallas on May 8-10. Founding contributor Tommy Ford Construction endowed the scholarship in honor of Texas entrepreneur T. Boone Pickens. Managed by the National Housing Endowment, the new fund provides financial support to students in a two-year or four-year design and construction education and training program. The Green Building Subcommittee will determine eligibility requirements and recommend recipients for the scholarship. “With the help of generous contributions from our member leaders, the National Housing Endowment continues to invest in the future of the home building industry by recognizing the demand for green building education,” said Endowment Board of Trustees Chair F. Gary Garczynski. “Ray’s contribution will help make a difference in students’ careers and lives by giving them access to the most advanced green building technologies and set an example for other longtime green builders,” he said. Both NAHB members and nonmembers are eligible to contribute to the scholarship fund. Checks can be made out to the National Housing Endowment and sent to: National Housing Endowment, 1201 15th Street NW, Washington, D.C. 20005. For more information, e-mail Tracy MacMaster at the National Housing Endowment, or call 800-368-5242 x8069. Save More With Hertz Off-Airport LocationsWith more than 1,700 off-airport locations around the country, finding a Hertz Local Edition close to home or your travel destination is convenient. NAHB members also can take advantage of Hertz local pick-up and return service and NAHB discounts for their business and personal travel. Some of the benefits found at Hertz Local Edition (HLE) locations include:
Other Member Advantage Discounts For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA. Williams Scotsman Offers $1.99 First-Month Storage ContainerThrough 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 more information, call Williams Scotsman at 877-884-4065, or visit www.willscot.com/storage. Other Member Advantage Discounts For information on the Member Advantage discount program and all its participating companies, go to www.nahb.org/MA.
Free NAHB Kit Gives Builders Back-to-Basics Tips in Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Drive Away With a Shiny New $500 GM OfferNAHB members can receive $500 towards the purchase or lease of most new GM passenger cars, light-duty trucks, vans and SUVs — whether for business or personal use.
For complete details, visit www.gmfleet.com/nahb. The program runs through Jan. 4, 2010. For more information, e-mail Tiffany Lindsley at NAHB, or call her at 800-368-5242 x8273. Other Member Advantage Discounts For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. Calendar of Events
Learn More About Upcoming Conferences and Designations Interested in attending a University of Housing conference or learning more about NAHB designation programs? Visit www.nahb.org/notifyme, and sign up to receive more information.
Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn. To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here. To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar. For assistance, call the NAHB Member Service Center at 800-368-5242. |