Nation's Building News Online: June 22, 2009

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It May Be Time for Builders to Get Back in the Game

Housing markets in California that have been among the worst hit by the current downturn appear poised for recovery, according to speakers at PCBC in California on June 17-19, but the marketplace that emerges there and in other parts of the country in the coming months and years will be far different than what preceded it, they said.

Builders were advised to prepare themselves to do business with prospective home buyers who are looking for a place to live rather than a quick financial investment, and they were told they will have to balance consumers’ diminished, more realistic expectations with their ongoing desire to find a new home that is nevertheless innovative and exciting.

The period of transition to a healthier climate for home building won’t necessarily be easy, analysts cautioned, with major uncertainties over mortgage interest rates, unemployment levels and the success of the Obama Administration’s economic stimulus efforts still clouding the horizon as the nation struggles to wrest itself from the most damaging recession in decades.

“Every builder I know has laid off most of their staff, and contractors and suppliers we’ve done business with for years have folded up shop,” said Horace Hogan II, chairman of the California Building Industry Association, in a June 17 news conference. “I can assure you this is the worst housing recession we’ve ever experienced.”

Based on the number of housing permits pulled during the first four months of this year, he said, the Construction Industry Research Board is projecting that the state will start construction on only about 40,000 homes this year, down from 65,000 permits in 2008, which was a record low.

By comparison, four years ago 212,000 permits were pulled in California, where an estimated 240,000 new units are needed each year to keep pace with population growth.

“But we’re not giving up hope,” said Hogan, who cited indications of a recent turnaround in single-family starts. “And Mark Zandi, chief economist for Moody’s economy.com, told us yesterday that he thought we were hitting bottom and that it’s time for builders and developers to get back in the game.”

An increase in consumer confidence and signs that the national economy is beginning to stabilize provide a basis for optimism among home builders, he said. “But there’s no doubt in my mind that the biggest reason we’re seeing improvements in California is the combination of state and federal tax credits. As predicted, these incentives are getting people off the fence and back into the market.”

In addition to the $8,000 tax credit available from Uncle Sam to first-time home buyers who close before Dec. 1, California has benefitted from a state credit available for new-home purchases. Hogan said the state stimulus had an immediate impact on traffic and sales when it took effect in March and he credited it with helping many builders quickly sell off their standing inventories.

With virtually all of the $100 million allocated for the tax credits likely to be claimed by the end of this month, Hogan said that builders are pressing state lawmakers to allocate another $200 million in funding for the program to keep it up and running through next March.

Continuing the credit, he said, would add to the state and local taxes generated by new construction and help create more badly needed jobs.

Looking on the Bright Side

Pollster J. Walker Smith, president of Yankelovich Partners, Inc., told PCBC attendees that they are going to have to learn how to make the most of the current economy by responding to the “liquidity trap” that has been a shock to demand and has gotten consumers “rethinking value in a fundamental way.”

“There is a lot of change in the marketplace,” Yankelovich said, “but opportunities haven’t disappeared.” He pointed to such companies as Hyundai, Jet Blue, Jos. A. Banks and Bigelow Homes, all of which have offered their buyers financial incentives to help mitigate the risks resulting from losing a job.

”Consumers now have a different framework within which they will make decisions, driven by responsibility,” he said. “Your approach to the marketplace has to reflect this.”

However, even in a smaller economy providing smaller growth, builders’ prospective customers are not going to be driven by frugality and they are not heading back to the basics, he said. “They will be just as aspirational as ever, with a different budget,” and they will be more averse to risk and have a smaller appetite for debt.

“You have to innovate, or you will die,” he said. “Consumers want something new.”

Yankelovich cited recent polling showing that 61% of Americans believe they are headed for a brighter future, about 15 percentage points higher than in 1979. “Optimism is something that sells nowadays,” he said, and builders should be offering their customers something that looks on the bright side and allows them to reinvent themselves.

Eighty-seven percent of the public believes that it’s too easy today to avoid taking responsibility for personal decisions, he said, and 41% say that not buying a home that is larger than what you need is being a good citizen.

Builders should also focus on relating to the local community, according to Yankelovich, a trend that is very much on the rise. “We’re settling in and don’t want to move anymore,” he said, noting that less than 12% of U.S. households changed residences in 2007-2008.

Green Not Always an Easy Sell to Skeptical Consumers

Although “green” is now very much in the nation’s vernacular, green builders should not assume that consumers are sold on sustainability, Suzanne Shelton, president and CEO of the Shelton Group, told the NAHB National Green Building Conference last month in Dallas.

Shelton said that prospective buyers of green homes are more concerned about what sustainable features will do to improve their lives than to save the planet, and at a time when the state of the economy is the leading concern, consumers are looking to save money on energy but also to avoid paying some of the higher prices they associate with green.

Education is key to motivating mainstream consumers to make sustainable choices, she said, and the trick is to provide information that doesn’t overwhelm them.

Armchair Environmentalists

Green builders need to know what they’re up against, and Shelton said that they can use data such as findings from her company’s surveys and focus groups to talk to customers about what they really care about.

For instance, one of her surveys found that 96% of the public doesn’t know that electricity is bad for the environment; two-thirds don’t know that electricity is generated by burning coal. A small majority correctly identifies coal-fired electrical generation as the leading cause of global warming; most think it’s traffic.

“Consumers know enough about green to get them through a cocktail party conversation,” Shelton said.

More than half of those surveyed agreed that it’s important to have a green house, but only about a third could name a green home feature.

“People say one thing and do another,” she said. “They are great armchair environmentalists, but not great at doing it themselves.”

While 49% of consumers say a company’s environmental policies are an important factor in making a decision to make a purchase, only 21% say they have actually bought a product this way and only 7% can name that product.

“There’s a fuzzy cloud around what’s green,” Shelton said, “and consumers are afraid of making the wrong decision. When they don’t know what to do, they do nothing.”

Saving on Energy

In the current economic environment, low-cost and no-cost have the greatest appeal, she said, and households are changing their habits in order to cut down their energy consumption — 5% reported they were doing so in 2005 but by 2008 that response had risen to 50%.

The majority of home owners today would rather replace leaky windows or inefficient HVAC systems than install granite countertops, according to Shelton, but the higher the price, the less likely they are to embrace a sustainable product.

When asked how green compares in price to the regular product, 80% of those surveyed believe it costs more, she said. Participants in focus groups tend to equate green with extravagance.

In an era of pragmatism, builders are challenged with turning this perception around. They should be asking their customers, “Why would you spend more money than you have to on energy?” Shelton said. “It just makes sense.”

In a survey last year, 72% said that energy prices were making it hard for them to make ends meet.

However, prospects are not motivated by savings alone. Almost half say they are looking for a more comfortable home. Upgrading energy efficiency makes them feel more in control, and that gives them more peace of mind.

Consumers want to know “what’s in it for me?” she said. When it comes to green, they are “not doing it for the greater good. And the reasons that they don’t go green are the same reasons that they do go green. They don’t want to give up comfort, peace of mind, freedom.”

“Green” and “sustainable” resonate positively with a majority of buyers, she added, but “conservation” rings best, with 88% of those polled responding positively to the word.

Energy efficiency is an easier sell, she said, because “it’s measurable, tangible, you know it when you’ve done it. Efficiency appeals to the rational part of us.”

For example, 33% would purchase a programmable thermostat when they were provided with information on the energy it saves, and another 10.9% would buy the product if they received a rebate.

Underestimating Consumption

But the biggest hurdle green builders face is that their customers underestimate their energy consumption.

“Sixty-one percent say they don’t use as much electricity today as they did five years ago,” Shelton said. “They are wrong; it has gone up 10%. They have no concept of how much they are actually using.”

About two-thirds of survey respondents think that their home is energy-efficient, the same share who report that their home is more than 20 years old, and that points to a “disconnect,” she said.

Builders also need to keep in mind that consumers are “skeptical about green claims.” While 60% are positive about the attention that the environment is receiving in the media, 40% are negative.

Roughly half of those polled about green companies “think they do it because it makes them look better and they can sell more stuff,” she said.

A full 40% also haven’t bought into the view that humans are responsible for causing global warming, another reason why it’s best not to deviate from the practical or tangible side of a product to explain why it’s beneficial for the environment.

When it comes to leading the green lifestyle, 73% of households say they will turn things off or unplug them, but only 18% will buy organic produce or meats. “It is the easy stuff they are willing to do,” she said. “The hard stuff, not so much.”

‘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 3,500 people have earned the CGPdesignation to date.

For more information, visit www.nahb.org/CGPinfo.

“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.

New Guidelines Needed to Appraise Distressed Properties

Using foreclosed and distressed sales as comparables with appraisals on single-family homes without adequately reflecting the differences in the condition of the respective properties is needlessly driving down home values, according to NAHB.

"Any home buyer can recognize the difference between a well-kept home and a distressed property that is damaged or not properly maintained. So it only makes sense that an appraiser should be required to consider the overall condition of a property and the specific factors related to a foreclosure or distressed property sale when selecting and adjusting the value of comparables," said NAHB Chairman Joe Robson.

Appraisers are often only required to conduct exterior inspections of properties that are being used as comparables because they are normally unable to enter these homes and examine their interiors. Too often, properties that have been subject to foreclosure or distressed sales have issues related to deferred maintenance or internal damage that an external inspection simply cannot reveal.

"While most appraisers do a fine job, there needs to be proper regulatory guidelines for those who use distressed or foreclosed properties as comparables when determining home values," said Robson. "It is essential that appraisers have the proper experience and guidance to accurately assess values in distressed markets."

In neighborhoods where comps include a large number of short sales or foreclosures, appraisers should have the option of expanding the geographic area or extending the time frame for eligible sales to get a more representative basket of the value of homes sold in the area, Robson added.

Currently, improper or insufficient adjustments to the comparable values of foreclosed and/or distressed homes often result in the undervaluation of new sales transactions.

"This practice must be corrected because it contributes to the continuing downward spiral in home prices, forestalling the economic recovery," said Robson.

For more information, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8597.

Mortgage Window Shopping: Rates Have Been Volatile, But Get Ready, They May Fall Again

After a recent spike in mortgage interest rates, some consumers are wondering whether they’ve missed their chance to refinance into an ultra-low rate. In Freddie Mac’s weekly survey, rates recently fell from 5.81% to 5.53%, and it’s possible that rates could continue to fall. “Predicting interest rates is like predicting who is going to win the World Series in January,” said Guy Cecala, publisher of Inside Mortgage Finance. That said, he calls the recent spike “somewhat of an aberration,” and expects rates to continue to drift. Rates may have gone up because over the past month or two, “the economic skies have brightened somewhat,” Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan information, said in an e-mail, and the threat of “trillion-dollar budget deficits for the foreseeable future, the potential for significant inflation and few clues as to how the government might extricate itself from intrusions into markets” created a landscape that was not appealing to investors. But now, rates are retreating partly because inflation doesn’t seem as immediate a threat as investors feared, Cecala said. In his opinion, nothing fundamentally has changed in the economy over recent weeks to warrant the rate rise, yet he expects volatility through the remainder of the year as investors debate the economy’s health. “Realistically, I think that the rates will drift under 5% again. It may take a month, may take two months,” he said. In a statement, Bob Walters, chief economist of Quicken Loans, said: “Luckily, we have seen rates drop some this week, which should help many consumers breathe a little easier. But the fact remains, the government’s plan of purchasing mortgage-backed securities cannot go on indefinitely, and when it ends, we will most certainly see a spike in rates. The hope is that the Fed can keep rates low long enough to kick-start a housing recovery. Whether that will work remains to be seen.” (www.marketwatch.com)
MarketWatch (6/18/09); Amy Hoak

Getting Transferred? Securing a Mortgage Could Be Harder

Reversing a long-standing policy, Fannie Mae no longer will permit mortgage applicants to count the income of “trailing spouses” toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move but who has yet to obtain employment in the new location. Traditionally, lenders have been willing to count at least some of the trailing spouse’s income in the old location toward the qualifying income needed to finance the new house. But under Fannie’s policy switch, no consideration will be given. If the main breadwinner’s income isn’t sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted. Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie’s decision “makes the current challenging relocation environment even more so.” Some couples will have to buy less house than they wanted to or rent for a long time. “If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider” whether they want to make the job shift at all, she said. (www.washingtonpost.com)
Washington Post (6/20/09); Kenneth R. Harney

New State Grants to Aid First-Time Home Buyers

The Maine State Housing Authority has announced it will provide cash to hundreds of home buyers, and possibly boost the overall housing market, too. The agency has launched its “Gift of Green” program, which will provide grants of up to $5,000 that first-time home buyers can put toward a downpayment, closing costs or escrow funds. In addition, the program will provide coupons worth up to $500 to pay for energy audits that could reveal ways to cut heating and cooling costs, saving home buyers more money in the long run. “A program at MaineHousing hasn’t generated this much excitement in a long time,” said Dale McCormick, authority director. McCormick said an average of about 2,500 Maine first-timers buy a house every year, although that number is likely down now because of credit-market turmoil and the uncertain economy. She said about 90% of first-time buyers would meet income and other eligibility requirements of the program. Gov. John Baldacci, on hand for the program’s announcement, said it will do more than help first-time buyers. “So much of our economy is based on housing,” Baldacci said. “To stimulate and get activity going in this sector will have a ripple impact,” on the economy as a whole. (www.pressherald.mainetoday.com)
Portland Press Herald, Maine Sunday Telegram (6/19/09); Edward D. Murphy

Hovnanian Building Energy-Saving ‘House of the Future’

At its Jockey Club community in Oceanport, N.J., K. Hovnanian Homes is building a home that cuts energy costs by 40%. The goal is to do it without adding to the price of the home. The house, a research project, is being built in conjunction with the U.S. Department of Energy’s Building America program and the NAHB Research Center. The project looks at construction techniques, materials and features that K. Hovnanian can put into its production homes to make them more energy-efficient. Once completed, the research home will result in about $930 a year in savings in cooling, heating and water-heating costs over a home built in accordance with standard building codes, said Robert Hofmann, area vice president at K. Hovnanian Homes. New techniques will help reduce overall construction costs to keep the price of the home from rising with the improved efficiencies. For instance, the amount of heating and cooling needed in the house is cut by a third, said Jim Hoffner, Hovnanian’s implementation project manager. “While you are adding costs to the exterior walls of the home and other elements of the home, you’re able to reduce your costs as it relates to some of your heating and cooling equipment,” Hofmann said. The energy savings is expected to hit 41%, Hofmann said. The home will also have solar panels, which will cut electricity costs even more. The house will be completed around August and will eventually be put on the market for $620,000. (www.app.com)
Asbury Park Press (6/18/09); David P. Willis

Jewel Box Homes Are Built Smaller, But Smarter

The current recession, the downturn in the housing market and the emphasis on energy efficiency are all playing into the “jewel box house” trend — small homes designed with top quality materials, upscale detailing and custom built-ins, according to architect Sarah Susanka, author of “The Not So Big House.” For the past two decades, dream homes have assumed McMansion proportions, says Stephen Gidus, co-owner of PSG Construction of Orlando. Now, “downsizing” is the new watchword. “Home owners are taking that portion of their budget that would have been used for larger living spaces, and using it for better details in smaller spaces,” says Gidus. The exterior of one such jewel-box home designed by Lucia Custom Home Designers and built by PSG Construction features the Craftsman styling popular in the early 20th century, complete with a recessed porch, tapered-box columns and fish-scale siding. The interior of the 2,300-square-foot home has a contemporary open floor plan, but is detailed with traditional Craftsman elements such as wood floors with inlaid tile, an oak staircase and a built-in, furniture-grade entertainment center surrounding the fireplace. (www.orlandosentinel.com)
Orlando Sentinel (6/19/09); Jean Patteson

Flex Appeal: Floor Plans That Evolve With Life

Rare is the new-home builder these days who does not offer a “flex room” that can serve more than one purpose or can evolve as the buyer’s needs change. A combination of factors created this phenomenon, explains Bud Dietrich of Harold Forrest Dietrich Architects LLC in Deerfield, Ill. “People are staying in their houses longer instead of moving when the kids reach a certain age, the kids move out or when they develop a disability,” he says. “So they want their houses to change with them. They’re really thinking about how they use each room and how they will use it in the future.” Another contributing factor is the average new-home size, which quit growing in 2008 after a 35-year run, according to NAHB. “Instead of adding more square feet, and having a room for each purpose, as many of the houses of the 1990s did, buyers want their houses to be functional, with rooms that are multi-purpose,” says Dietrich. “The house should fit them like a glove, not like a coat that’s 10 sizes too big. People are asking themselves, ‘Why heat and cool 10,000 square feet when we are only going to live in 2,000?’ It’s silly.” (www.chicagotribune.com)
Chicago Tribune (6/19/09); Leslie Mann

More Jurisdictions in California Slash Housing Impact Fees

More jurisdictions in California are joining the bandwagon of those who are reducing or deferring impact fees to help revive home building and their stalled-out local economies.

On June 1, the California Building Industry Association reported that the city of Menifee in Riverside County had voted five to zero to lower its development impact fee by $2,585.70 per single-family home, down from a previous fee of $5,185.

The council also reduced its staff hourly billing rates by 20% and said it would formalize a new streamlined entitlement process for development applications.

In an effort to further boost new home construction and sales, the city is working to establish a Menifee Money Program that will provide a gift card for buyers of new homes to be used at local businesses. The amount of the card will equal 50% of the home buyer’s first year’s property taxes.

The city’s fee reduction will go into place on July 1 and end on June 30, 2010, or upon the issuance of 500 permits, whichever occurs first.

The California home builders also reported that the Scotts Valley school district, which had the highest school district impact fees in Santa Cruz County, had recently slashed the amount charged from $6.31 per square foot to $3.27. On a typical 2,000-square-foot home, this reduction of nearly 50% will reduce fees from $12,620 per home to $6,540.

On June 4, the BIA added Santa Maria to its list of jurisdictions in the state deciding to reduce their development impact fees on home building.

The city council of Santa Maria voted unanimously to lower its fees by about 7%, which would reduce the cost of building a single-family home in the city, located in northern Santa Barbara County, by about $2,250. The reductions will remain in effect for the next two years.

The council also gave builders an additional five years to begin construction on previously approved projects.

“During the housing boom, many jurisdictions sharply raised the fees they charge new-home builders — and thus new-home buyers — by tens of thousands of dollars per home,” said Mick Pattinson, a San Diego-based home builder and chair of CBIA’s Impact Fee Task Force. “The average total impact fee today for each new home is about $50,000 statewide, and there are many jurisdictions where the fees total more than $100,000 — nearly as much as it costs to actually build many homes,” he said.

“With home prices today half of what they were three or four years ago and builders struggling to compete against repossessed homes being sold well below the cost it took to build them in the first place, it’s welcome news to hear that more jurisdictions recognize market realities. Reducing these fees help make projects financially feasible, and in many cases should lead to increased home building activity.”

In addition to reducing impact fees, more than 50 jurisdictions across the state have deferred their fees from the time the building permit is pulled until the home is sold, which reduces the up-front costs to builders and helps make more projects pencil out financially.

“I believe that when the housing recovery comes, it will be the cities with the lowest fees that will benefit first,” said Pattinson. “Builders (and financiers) are closely watching the fee burdens and those jurisdictions that substantially lower fees will get the early recovery in new-home construction.”

Senate Panel Approves Expansion of Clean Water Act to All Waters

The Senate Environment and Public Works Committee on June 18 voted along party lines to approve legislation that would dramatically expand the scope of the Clean Water Act and have an enormous negative impact on the home building industry.

In a 12-to-7 vote, the committee approved S. 787, the Clean Water Restoration Act, which replaces the phrase “navigable waters of the United States” in the law with “waters of the United States.”

This change would effectively extend the federal government’s reach to all waters — including storm sewers and retention basins, roadside ditches, seasonal streams and any “activities affecting” all waters in the country.

During the committee markup, the underlying bill was replaced by a substitute offered by Sens. Max Baucus (D-Mont.), Amy Klobuchar (D-Minn.) and Committee Chairman Barbara Boxer (D-Calif.) that retained the original bill’s goal of removing the term “navigable waters of the United States” from the Clean Water Act and, therefore, does nothing to limit the federal government’s jurisdictional reach.

The bill also fails to address the broken federal permitting process.

NAHB opposes S. 787 and is participating in a coalition — including the Associated Builders and Contractors, the National Stone, Sand & Gravel Association, the American Forest and Paper Association, the American Farm Bureau Federation and the National Association of Realtors® — to defeat the measure.

Prior to the Senate panel’s vote, NAHB sent a letter to every committee member urging them to oppose the measure.

“Because of the unprecedented scope and enormous regulatory burden the legislation will place on home building activities, I urge your opposition to S. 787,” the letter said.

The letter explained that home builders, who are involved in all facets of home construction and land development, must often obtain Clean Water Act permits to construct their residential, commercial and mixed-use projects.

“The expansion of federal jurisdiction proposed by S. 787 will lead to many more projects requiring federal permits and will exacerbate permitting delays, which will increase construction costs and drive down housing affordability,” the letter said. “As the housing industry, and the national economy as a whole, try to claw their way out of this recession, now is not the time to increase the cost of homeownership.”

During consideration of the bill, several Republicans committee members expressed serious reservations that it would infringe on state and local rights.

Sen. Michael Crapo (R-Idaho) said he has placed a “hold” on the bill and indicated that he would filibuster to prevent it from moving to the Senate floor.

For more information, e-mail Annie Raymond at NAHB, or call her at 800-368-5242 x8307.

Obama Proposes Sweeping Financial Overhaul

President Barack Obama on June 17 announced a sweeping financial reform plan that is intended to restore confidence in the integrity of the U.S. and global financial system.

When unveiling the proposal, Obama emphasized that the proposed reforms seek to build a new foundation for financial regulation and supervision that is simpler and more effectively enforced, protect consumers and investors, reward innovation and adapt and evolve with changes in the financial market.

The plan, which the President wants to complete this year, centers on expanding the power of the Federal Reserve to police large, systemically important institutions and on allowing the government to break firms apart, implement new rules for complex financial instruments and create a new federal agency to oversee consumer products such as mortgages and credit cards.

NAHB is currently reviewing the far-ranging proposal — which would touch almost every corner of financial markets, from tougher consumer-protection policies to stricter rules over exotic financial products such as credit derivatives.

The proposed reform also would bring many of the products and companies that previously operated outside of the banking system under federal scrutiny.

The Administration's blueprint would give the government the power to take over and wind down a large financial company — a power that government officials lacked last year when the financial crisis was intensifying.

The plan would also give the central bank more power over the payments and settlements systems in U.S. financial markets to prevent a breakdown that officials fear could destabilize the economy.

The plan proposes reforms to meet the following five key objectives:

• Promote robust supervision and regulation of financial firms
• Establish comprehensive regulation of financial markets
• Protect consumers and investors from financial abuse
• Provide the government with the tools it needs to manage financial crises
• Raise international regulatory standards and improve international cooperation

The Administration has not submitted legislative language and significant changes to such a plan will probably be made as it works its way through Congress.

While the President would like a reform plan to be enacted this year, the congressional agenda is already full and that timing appears unlikely.

A delay until next year should give NAHB enough time and ample opportunities to weigh in during the debate.

Details of the Administration’s proposal are outlined in an 80-plus page white paper. The white paper and fact sheets on the five major components of the plan are posted on the Treasury’s Web site at www.ustreas.gov/news/index1.html.

For more information, e-mail David Ledford at NAHB, or call him at 800-368-5242 x8265.

Sticker Shock Puts Health Care Reform Off to a Shaky Start

After the independent Congressional Budget Office (CBO) last week said that a draft health care bill by the Senate Finance Committee would cost $1.6 trillion, committee chairman Max Baucus (D-Mont.) delayed consideration of the bill most likely until after July 4 while members work to rein in the costs.

The delay casts doubts on whether the Senate will be able to clear a bill before the Congress adjourns for its August recess.

Meanwhile, the Senate Health, Education, Labor and Pensions (HELP) Committee last week began a markup session on its health care proposal that will extend into this week. Sen. Chris Dodd (D-Conn.) has been temporarily chairing the panel for HELP Chairman Ted Kennedy (D-Mass.), who is battling brain cancer and was unable to attend the sessions.

The CBO estimates that the HELP bill would cost $1 trillion and only cover 16 million more people, leaving 30 million in the U.S. without health insurance.

Republican members on the HELP Committee have complained that they have been left out of the process and that it makes no sense to consider the legislation at this time, since the partial draft omits some of the most costly and controversial sections of the bill. Sen. Judd Gregg (R-N.H.) said that the bill’s price tag could easily reach $2 trillion.

Three House committees — Energy and Commerce, Ways and Means and Education and Labor — are expected to begin debate on a House Democratic health care plan this week.

The House still appears on track to approve its health care legislation by the end of July. However, delays are possible if conservative and centrist Democrats balk at the bill being written by House Democratic leaders.

Lawmakers in both chambers continue to explore a host of funding options, including a surtax on the rich, an increase in the payroll tax imposed on all U.S. workers, new taxes on sugary drinks and alcohol, a national value-added tax of up to 3%, new taxes on the health benefits that millions of workers receive through their employers, a change in the taxation of carried interest and a plan espoused by President Obama that would limit the value of all itemized deductions — including mortgage interest and real estate deductions — for higher-income taxpayers.

As details continue to unfold, NAHB will stand firm against employer mandates as well as changes to the current tax code that would impact the housing community.

For more information, e-mai Erin Tario at NAHB, or call her at 800-368-5242 x8413.

Housing Starts and Permits Post Gains in May

Nationwide housing starts rebounded in May from record lows in the previous month, posting a 17.2% gain to a seasonally adjusted annual rate of 532,000 units, according to U.S. Commerce Department figures released on June 16.

While driven largely by a double-digit gain in the volatile multifamily sector, the uptick also reflected a substantial gain on the single-family side and applied consistently to all regions of the country.

“Having drawn down standing inventories to very thin levels over the past year, some home builders are now carefully replenishing their supplies in response to demand from smart buyers who are taking advantage of low interest rates and prices,” said NAHB Chairman Joe Robson.

“The May report showing three consecutive months of gains in single-family housing starts and two consecutive months of gains in single-family permits is a very welcome sign that the market may be nearing a turning point,” said NAHB Chief Economist David Crowe.

“That said, our recent surveys tell us that builders remain very cautious about the future, and that they are aware of the upcoming expiration of the first-time buyer tax credit at the end of November,” Crowe added. “Homes that get started now should be able to close by that deadline, and this may be spurring some of the latest construction activity.”

Single-family housing starts gained 7.5% in May, breaking the 400,000 mark for the first time since November 2008 to reach a seasonally adjusted annual rate of 401,000 units. Meanwhile, starts in the much more volatile multifamily sector posted a 77% gain following a nearly equivalent decline in the previous month, for a seasonally adjusted annual rate of 124,000 units.

Building permit issuance, which can be an indicator of future building activity, rose 4% overall in May to a seasonally adjusted annual rate of 518,000 units. On the single-family side, permits rose 7.9% to 408,000 units, while on the multifamily side, they declined 8.3% to 110,000 units.

Both housing starts and permits were up across every region in May. Starts rose 2% in the Northeast, 11.1% in the Midwest, 16.8% in the South and 28.6% in the West.

Permits rose 5.7% in the Northeast, 8.9% in the Midwest, 2.3% in the South and 3.8% in the West.

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: Housing Production Should Stabilize Soon

U.S. economic output contracted at a rapid pace late last year and early this year as the economy was rocked by a major financial market crisis that engulfed most of the world. Real gross domestic product (GDP) in this country fell at an average annual rate of 6% during the final quarter of 2008 and the initial quarter of this year, the sharpest two-quarter reversal in more than 50 years, and global GDP fell deeply into the red as well.

Unprecedented monetary and fiscal policy responses to the financial crisis and global recession helped prevent the widely touted doomsday scenario from materializing, and a 1930s-type debacle has been avoided.

Even so, the current episode can be fairly labeled the “Great Recession,” and the world will breathe a deep sigh of relief when it finally moves behind us.

Strenuous and coordinated policy responses, together with necessary structural corrections in housing and other sectors, have laid the groundwork for recovery in economic output that should begin to take shape during the second half of the year.

The economy will be battling some formidable headwinds during the early stages of recovery, however, limiting the takeoff to historically modest proportions.

We expect U.S. real GDP to contract at a 1.2% pace in the current quarter, quite a mild setback by the standards of the two previous quarters, and to expand at an average annual rate of 1.5% during the second half of this year.

This type of below-trend growth in economic output could provoke identification of a cyclical trough before the end of the year by the Business Cycle Dating Committee at the National Bureau of Economic Research, although it’s clear that the committee focused heavily on labor market statistics when pegging the cyclical peak as December 2007.

By those standards, the “Great Recession” most likely will stretch out to two years or more, easily the longest of the entire post-war era.

Labor Market Contraction Still Has Some Distance to Run

Payroll employment in the U.S. has been falling continuously since the end of 2007 and the losses have been quite large since last fall — averaging 573,000 from October through May of this year.

The civilian unemployment rate has moved up from 6.2% to 9.4% during this period, and the government’s broadest measure of labor underutilization (U-6), including discouraged workers and those working only part time for economic reasons, climbed to a lofty 16.4% by May.

The labor market typically continues to contract while the early stages of recovery in economic output are underway as labor productivity (output per hour) rises, and this pattern undoubtedly will materialize in the second half of this year and perhaps in the early part of 2010 as well.

We expect payroll employment to stabilize by year-end at a level that’s about seven million below the cyclical peak, and we’re expecting the unemployment rate to top out close to 10% during the first quarter of 2010 — about double the rate associated with a fully employed, low-inflation economy.

Inflationary Forces Should Be Benign for Some Time

The projected economic recovery should not generate serious inflation issues for quite a while.

It’s true that prices for oil and other key commodities are well off their lows of early 2009, but these prices still are well below the record highs of mid-2008 and do not figure to approach those ranges in the foreseeable future. The dollar clearly is well off its early 2009 highs, delivering another inflationary impulse, but further depreciation is likely to be quite limited.

Most important for top-line and core inflation, the huge and growing degree of slack in the nation’s job market is sure to keep downward pressure on labor cost per unit of output for an extended period while the economy climbs back toward its maximum sustainable output level.

The gap between actual and potential real GDP now is huge, and it will take years of above-trend growth of at least a 3% pace to close that gap.

Recent inflation readings, including the Producer Price Index (PPI) and Consumer Price Index (CPI) for May, point toward a downward path for inflation (disinflation) without the threat of destructive deflation.

We expect both top-line and core consumer price inflation to recede over the balance of this year and in 2010. Indeed, we expect the core personal consumption expenditures (PCE) inflation measure to fall somewhat below the Federal Reserve’s long-term target range, giving our central bank a free hand to support the impending economic recovery.

The Fed Will Not Stand Down Until Recovery Is Assured

The Federal Reserve has been a dominant force in the battle against financial chaos and the threat of depression, and Chairman Ben Bernanke has repeatedly assured the markets that the central bank “will not stand down” until these battles have been won.

In the process, the Fed has pushed conventional monetary policy to the limit, driving the federal funds rate essentially to zero and publicly committing to maintain that position for an extended period.

The Fed also has developed a range of policy innovations, including unconventional measures that employ the unlimited power of its balance sheet to maintain credit flows in sectors of the economy that need it the most — including the agency-related home mortgage market and the private asset-backed securities markets for consumer loans and commercial mortgage-backed securities.

Early signals of near-term economic stabilization have provoked speculation about a shift in Fed strategy — from an all-out war against financial market dislocations and economic weakness to a systematic march back toward monetary neutrality. Indeed, futures markets are signaling expectations of a higher federal funds rate by late this year, but the early stages of economic recovery are likely to be quite tenuous and the labor market is sure to deteriorate for some time beyond the trough in economic output.

We do not expect the Fed to raise the funds rate until the unemployment rate clearly is on a downward path, and that may not occur before the end of next year.

There’s also speculation that the Fed will have to rein in its balance sheet activities because of the inflationary consequences of its asset purchases and corresponding increases in the monetary base, the “high-powered” money. But, so far, these increases have flowed into excess reserve positions of commercial banks, with no immediate inflationary consequences.

In the event that banks come out of their shells and begin to supply ample credit to the private sector, the Fed will be able to quickly run down its balance sheet positions and extract excess reserve balances, as needed, to prevent an inflationary buildup.

The Healing Process Is Underway in Financial Markets

Bernanke has stressed that normal functioning of financial markets is an essential precondition for sustainable economic recovery. The broad range of efforts by the Fed, combined with the financial stabilization policies enacted by Congress and the Bush and Obama Administrations, now are bearing a lot of fruit — reducing obstacles to near-term economic stabilization and recovery.

Progress on this front showed up, first of all, in interbank loan markets here and abroad followed shortly by improvements in commercial paper markets.

We’re now seeing substantial shrinkage of quality premiums in corporate bond yields, and the stock market has staged a recovery from the abysmal lows in March.

Issuance of both corporate bonds and equities is on the rise, and aggressive cost-cutting has bolstered internal corporate cash flows as well.

The Fed’s aggressive monetary policy stance helped generate a Treasury yield curve with a steep upward slope, a boon to many financial institutions and a classic forerunner of economic recovery.

At the same time, the stampede to credit quality provoked by last fall’s financial shock drove down the entire yield curve, pushing long-term Treasury rates to historic lows through the spring of this year.

But the recent brightening of the economic and financial landscapes has encouraged some risk-taking, reducing appetites for longer-term Treasuries. This development, together with investor concerns about heavy issuance of Treasury securities, potential inflation pressures and the prospects for tighter monetary policy, has put significant upward pressure on Treasury yields during the past month — other than for the very short-term instruments that are currently anchored by the rock-bottom federal funds rate.

The key issue in private credit markets, including the home mortgage market, now comes down to a tug-of-war between a rising Treasury yield curve and shrinking risk premiums above comparable-maturity Treasury yields. This actually is a healthier situation than the panic-driven credit structure that prevailed until quite recently.

For housing, the outcome should involve historically favorable prime fixed-rate mortgage yields and stabilization of mortgage lending standards — following the snap-back from absurdly lax standards that fueled the unsustainable housing boom.

The Demand for Homes Is Firming Up

The affordability of home buying has soared as house prices have fallen in many places and mortgage rates have held in a historically favorable range. Consumers’ views of home buying conditions have strengthened in the process — according to measures produced by the University of Michigan.

First-time home buyers also have access to the $8,000 federal tax credit and a few states, including California, have enacted their own credits.

Tighter lending standards continue to be an issue, of course, but that tightening process may have run its course. Expectations of further price declines also may be a damper on demand, but prominent consumer surveys do not reveal a lot of concern on that front.

Recent indicators of home buying activity actually show that demand is firming up to some degree, despite the weakening job market and tighter credit standards. The cyclical troughs for sales of both new and existing homes apparently were hit in the first quarter, and the official sales numbers improved to some degree in April.

NAHB’s proprietary survey of large public and private home builders shows significant improvement in both gross and net home sales in May, even on a seasonally adjusted basis, following smaller gains in other recent months.

Our broad-based single-family Housing Market Index dropped by one point in June, following a series of improvements from the record low in January, as the component that measures sales expectations gave back a bit of the earlier gains. Builders presumably were reacting to a backup of mortgage rates as well as to the rising tide of foreclosures that still presents stiff competition to the new-home market.

Housing Production Should Stabilize Soon

The housing market still is saddled with large numbers of vacant units, both for-sale and for-rent, and the foreclosure wave obviously is adding to the inventory problem facing home builders. But starts of new units recently hit record lows, particularly the for-sale components of the single-family and multifamily sectors, and the recent firming of home-buyer demand should lead to some improvement in the pace of starts.

In fact, the government’s preliminary numbers for May show a bounce-back from the record low in April, and issuance of building permits moved up as well.

We believe that total housing starts have hit bottom in the current quarter. The drag on GDP growth from the long downtrend in residential fixed investment should ease during the second half of the year and housing production should provide positive growth contributions by early next year — as long as financial conditions and support from job growth outweigh negatives for demand associated with scheduled expiration of home buyer tax credits.

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 17 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 Trends

The 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.

• U.S. Census Bureau Construction Price Indexes
  
  
• NAHB's Housing Forecast
  Housing starts, sales and interest rate projections through 2009.
  
  
• Latest Home Mortgage Interest Rates
  Contains current and historical data on fixed and adjustable mortgage rates. Updated weekly.
  
  
• Characteristics of New Housing
  Highlights the latest data on new-home characteristics released by the U.S. Census Department. Includes links to the complete Census report and other trends researched by NAHB.
  
  Additional breakouts of this data and other trends researched by NAHB are available at www.nahb.org/constructionstats under “Selected Characteristics of New Housing” (dated 4/3/2008).
  
  
• Housing Starts
  Updated monthly and based on a seasonally adjusted annual rate.
  
  
• New and Existing Home Sales
  Updated monthly and based on a seasonally adjusted annual rate.
  
  
• New and Existing Single-Family Median Home Prices
  Updated monthly.
  
  
• Home Price Index
  The index measures average home appreciation in more than 250 metropolitan markets. Updated quarterly.
  
  
• Metro Home Building Permits
  Local and state data on housing construction rates. Updated monthly.
  
  
• Employment Trends for Metro/State Markets
  Provides metro and state employment data nationwide. Updated monthly.
  
  
• Local Economic Impact of Housing
  Shows how building 100 homes benefits a typical metropolitan area.
  
  
• Home Building’s Direct Impact on the Economy
  
  
• Housing’s Contribution to Gross State Product
  Measures how much housing contributes to the economic output of each state.
  
  
• Housing Market Statistics from HousingEconomics.com
  Full array of statistical categories available to NAHB members, a limited number available to non-members.
  
  
• In-Depth Analysis from HousingEconomics.com
  Full array of analysis of factors affecting housing and the impact on the industry available to NAHB members, a limited number available to non-members.

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.

Fix Your Balance Sheet Now to Be in Position for the Upturn

By Troy Taylor, Larry Comegys and Travis Hendren, The Algon Group

A fundamental step in any survival strategy you are planning or about to implement is to fix your company’s balance sheet. If you haven’t conducted a serious review of your cash position, asset values and cash projections — and you haven’t held realistic discussions with your banks and lenders — you need to do these things now.

If you don’t address your balance sheet issues as part of your strategic plan, you are only delaying action on a potential problem that could cause you to close down your business.

If your assets aren’t priced to realistic market values you won’t be able to compete — and you’ll have a very difficult time generating sales and revenue to service your debt. In addition, you will have difficulty attracting new capital, debt or equity when they eventually become available.

Fixing your balance sheet is the most important step you can take today.

Be Disciplined and Honest About Your Business

Fixing a balance sheet is not complicated. However, it does require you to be disciplined and brutally honest about your business.

You must be clear about the current condition of your business — the value of all of your assets, including land, inventory and work in process; overheads; current and future cash needs; and your current and future competitive position.

Your business plan must be realistic and include at least a 12-month cash flow — 24 months would be better. Your plan also should encompass working with your bank to re-price assets — land, lots and inventory — to realistic values so that you are competitive.

Any plan presented to your bank must be reasonable and supported by the facts on current market conditions and land and house values.

Finally, make sure you also review your personal planning to determine if your personal assets are protected, particularly if you have recourse loans.

Think You Can’t Fix Your Balance Sheet? Read on

If your loans are non-recourse, your assets are over-valued and your bank won’t re-price your loan, you should consider turning the assets back over to the bank.

If your debt is recourse, the bank won’t re-price your loan and your personal assets are protected, it’s time to consider a possible Chapter 11 strategy. While Chapter 11 is a last resort, the threat of bankruptcy just may get your bank to negotiate with you.

In any case, you should put a plan in place that has honestly analyzed every element of your business — with the help of legal counsel and financial advisors who can help assure that your family and personal assets are protected.

Above All, Conserve Your Cash

If you are putting your own cash into your business — stop immediately. Don’t put any more of your cash into the business until you’ve fixed your balance sheet.

Conserve your cash while you are negotiating with your banks. It will be critical to you and your business until construction financing becomes more readily available.

You will need it to fund your business in the future or to take advantage of new opportunities that might arise. The cash you hold today will give you leverage in your bank negotiations and the flexibility to pursue several different strategies.

It will enable you to wind down your business if you can’t structure an alternative agreement and business strategy with your lenders, and it will provide you with the flexibility to re-enter the business when conditions improve.

Conserve your cash because it’s your best survival tool. If you use it all now essentially funding a business that’s no longer competitive, you will never get it back.

So, before you do anything else, fix your balance sheet to determine how viable and competitive your business is and can be in the future. If you don’t fix it now, you won’t be able to attract new capital — equity and debt capital will only be available to builders with new opportunities or old projects that have been re-priced to the market.

If you don’t fix your balance sheet now, you won’t be in business when the housing market improves.

The Algon Group is a financial advisor and investment banking firm based in Atlanta that specializes in distressed situations. During the last 12 months, the Algon Group has successfully advised home builders and developers on restructuring a combined debt of more than $3 billion. For more information, e-mail Troy Taylor, president, or Larry Comegys or Travis Hendren, managing directors; call them at 813-220-4630; or visit the Algon Group Web site at www.algongroup.com.

Take Control of Your Finances

“Accounting & Financial Management for Residential Construction,” available through BuilderBooks.com, is a sold resource for builders, remodelers, developers and contractors that provides detailed information on how an accounting system operates and the basic principles for processing financial data.

To view or purchase this publication online, click here, or call 800-223-2665.

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.

CRM Systems Put Fundamentals Back Into Accountability, Sales

Accountability. The word can send shivers down the spines of salespeople and sales managers alike.

Salespeople hear the word and immediately assume that their strategies aren’t up to snuff or that their sales manager will strap them with new quotas or standards.

For sales managers, accountability conjures up images of having to micromanage their sales team’s every move — right down to each phone call and e-mail — something most would rather avoid because they don’t want to be labeled as villains or stifle their sales agents’ initiative or creativity.

For those who can embrace accountability as a positive step forward, however, there are numerous advantages to developing a close relationship between salespeople and sales managers across the life of a development’s sales cycle.

Sales managers, for instance, will benefit from having an enhanced awareness of sales and sales center activity, while salespeople will benefit from the advice of experienced managers who are more attuned to what the salespeople face each day and who can offer guidance on how to address objections, mitigate expectations and close deals.

Accountability is really a win-win for all involved.

CRM Sytems Manage Time, Make Accountability Easier

By its very nature, sales team accountability requires aggressive and active tracking of each sales lead as well as contact between the sales team and each lead. The best way to track and manage the leads is through a robust customer relationship management (CRM) solution.

“CRM software helps create a plan to prioritize your follow-ups,” said Carolyn Gladwell, vice president for marketing and sales at CamWest Development, a home builder in the Pacific Northwest, who noted that her company improved its sales after implementing a CRM solution for its 30 independent sales agents.

Successful agents work within a plan that enables them to use their time effectively, she said. “Every agent is extremely busy, and as I tell them, a CRM system provides them with an amazing tool that visually lets them know who they should contact each day and how best to contact them. Our agents are eating it up,” Gladwell said.

The right CRM solution will serve an organization’s specific needs with dashboards designed to keep salespeople on track through follow-ups and communication and, for managers, reports that help them determine how their sales team is progressing with their follow-throughs.

With a CRM solution, a sales manager can develop an effective action plan with each individual salesperson built on their strengths, and that can show them what steps they need to take along the sales cycle to become more successful.

Without one, a sales team generally has to rely on spreadsheets or other ad-hoc, imperfect and incomplete “tracking” systems that are not as accurate or comprehensive as robust CRM systems.

Accountability Reinforces Sales Fundamentals

New home sales largely succeed or fail on how well they adhere to the fundamentals — good communication, strategic pricing and a quality product.

“Everyone talks about traffic and driving people to the model home, but ultimately, sales are not a function of traffic,” said Mike Lyon, a consultant and blogger on real estate sales strategies and marketing. “You have to have a good product, a good price and a good system in place. If you have two people walk into the sales center and you sell one home, that’s a 50% conversion rate. The real question is how you are engaging a customer, and we have more tools than ever before to do that.”

Incorporating accountability into a sales strategy isn’t about finding a magic formula that will enable your team to make additional sales with little to no extra work. It’s about using hard data to examine the fundamentals behind new home sales and answering basic questions.

When a new lead enters the system, does the assigned salesperson execute follow-up in a timely fashion?

What methods of communication work best for each individual lead? Does a particular prospect respond better to e-mails than phone calls?

How many leads were driven by the latest direct mail campaign and what did the sales team deliver on those leads?

Accountability through a robust CRM solution will enable sales managers and sales teams to work closely together to develop effective answers to these and other basic questions in order to optimize sales and update a sales strategy, if needed.

Accountability Reaches Across the Organization

A robust CRM solution will enable stronger strategies not just for the sales team but for all the departments in an organization that “touch” a prospect or customer.

For instance, a robust system enables a builder to keep track of every contacta salesperson, sales manager, construction supervisor, customer service representative or other employee has with a prospect and build a relationship with that person that extends far beyond contact signing. 

“Our policy is that all communication with customers has to go through our CRM system,” said Michelle Mackay, vice president of marketing at WestStone Properties, a builder and developer in British Columbia and the central U.S. “It’s really all inclusive. Every person in our office has access to it, to a certain degree. It’s our single go-to communication center.”

Through the CRM system, WestStone Properties can develop a long-term relationship with a client that begins “the day we meet them through to the day they move in, which is important,” she said.

According to The Yankee Group, a consumer trends research organization headquartered in Boston, as much as 80% of sales leads go stale, are lost or are simply never followed up. For builders, that means as many as eight out of 10 inbound leads for a new home community — whether they are generated through the community’s Web site or sales center — do not receive the attention needed to convert them into home purchases and revenue.

More than anything else, a renewed sense of accountability among sales and marketing teams and their managers should shrink the gap between properly executed and fumbled leads.

Dave Clements is the CEO of Lasso Data Systems, a developer and marketer of innovative “on-demand" CRM software for the real estate industry. For more information, e-mail Clements, or visit the Lasso Data Systems Web site at www.lassodatasystems.com.

This article originally appeared on the NAHB Sales and Marketing Channel.

June 25 Audio Seminar Examines AD&C Lending Challenges

Experts 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 will illustrate ways to deal with increased regulations and strategies for bankers and lenders to maintain relationships with long-time customers.
  
  
• Speakers will explain effective ways for builders to communicate with banks and possibly get more funding.
  
  
• The program will provide vital information on how the AD&C lending crisis is changing the relationship between banks and builders.

Karl Eckhart, NAHB political director, will moderate the seminar and provide strategies and messaging for builders to effectively relate their experiences to local government officials so they can, in turn, apply pressure to local banks.

Speakers include Chellie Hamecs of NAHB’ Housing Finance Department; Scott Meyer, NAHB federal lobbyist; and Kirk Hartley of Bank of America Home Loans California.

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.

Free Webinar to Discuss Storm Water Compliance on July 29

With the U.S. Environmental Protection Agency tightening the screws on job-site storm water permitting compliance, NAHB is holding a free webinar on July 29 to give builders and land developers the information they need to cut through the maze of overlapping, confusing and cumbersome regulations so they can increase compliance and reduce their risk of enforcement action and high-dollar fines resulting from unscheduled inspections.

The webinar, presented by NAHB’s Land Development Committee with support from the Environmental Issues Committee, will give participants an overview of the regulatory framework as well as practical tips on how to submit storm water permit applications, develop storm water pollution prevention plans and survive inspections.

They will also learn about the latest trends and best management practices in storm water management.

"How to Get Through the Stormwater Regulatory Maze: Understanding the Alphabet Soup of BMPs, LID, TMDLs and SWPPP Processes" will begin at 1:00 p.m. on Wednesday, July 29.

The webinar speaker is: 

• Jennifer Hildebrand, CPESC, CPSWQ, of Weis Builders, a third-generation, family-owned builder of multifamily commercial and mixed-use projects. At Weis Builders, which has offices in Minnesota, Illinois, North Carolina and Texas, Hildebrand specializes in compliance issues, inspection programs, program design and site plan reviews.

Chuck Ellison, of builder Miller and Smith of McLean, Va. and a member of NAHB’s Legal Action Committee, is the webinar moderator.

To Register

To register for this free webinar, click here.

The webinar is the second in a series on development issues that will be provided by the NAHB Land Development Committee.

For more information, e-mail Jennifer Jones at NAHB, or call at 800-368-5242 x8469.

Are You Ready for a Visit From the EPA? 

“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.

Builders’ Tip: Putting New Windows in an Old Brownstone

	Click for larger image.

In Brooklyn, N.Y. where turn-of-the-century brownstones and bricks are the norm, replacing a window often calls for some ingenuity.

I have used brick-to-brick replacement windows by two manufacturers in my renovation projects. Both units are custom-made to be 1/4-inch narrower than the brick opening, with a brick molding already attached.

In theory, they are installed by simply putting the new windows into the opening and then strapping them to the interior wall framing with vendor-supplied galvanized straps. After that, the brick moldings are caulked to the bricks and you’re done.

But because Brooklyn’s brownstones have solid-brick walls, there’s no interior wall framing to strap the replacement windows to once the old windows are removed. The area that hid the sash weights is just a large void.

Rather than build unstable framing to fill the void and support the windows, I improved the manufacturers’ strap idea.

• As shown in the accompanying drawing, I screw 2-inch-wide strips of 3/4-inch plywood to the sides, bottom and top of the window.
  
  
• Then I attach the plywood strips to the stud wall — shimming as necessary to square to the window.
  
  
• Then I cut the strips flush with the studs.

The strips also serve as support for jamb extensions or drywall, but before I install the drywall, I stuff the sash-weight voids with insulation.

— Matt Hausmann, Brooklyn, N.Y.

Tips & Techniques provided by Fine Homebuilding.
©2008 The Taunton Press

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.

Help Consumers Address Their Home Energy Concerns

Three-fourths of American consumers are concerned about rising home energy costs, according to a recent study by the Consumer Electronics Association (CEA), and 76% of those surveyed reported that they have taken some action within the last 12 months to reduce the energy they consumed in their homes.

How much action they take, though, ultimately depends upon how much energy they consume in their homes, according to the survey.

Consumers today have more than two dozen consumer electronics products in their homes and the study, “Home Technologies and Energy Efficiency: A Look At Behaviors, Issues and Solutions,” indicated that they are generally aware of technology options — from aftermarket solutions to professionally-installed home technologies — that can help them achieve better home energy efficiency.

But beyond appliances and basic energy-management products like programmable thermostats, they are not as familiar with the more advanced energy-efficiency solutions that are available, such as intelligent HVAC or home automation systems.

While a key finding of the research indicated that consumers recognized that technology is not the silver bullet for reducing energy costs — 57% of the respondents said technology had to to be coupled with behavioral changes if home energy consumption is to be reduced significantly — the survey also indicated that consumers are somewhat reluctant to invest in these advanced solutions.

According to the survey, their monthly home energy bills would have to increase 31% before they would seriously investigate technology options to improve energy efficiency in their homes.

Yet, there may be ways to nudge consumers in the right direction.

Marketing messages focused on financial benefits beyond monthly bills and social responsibility may encourage consumers to learn more about energy-saving technology.

In addition, 72% of the respondents said they would learn more about home technologies if the technologies added value to their homes.

Digging a bit deeper, the survey found that 43% of consumers visited a technology Web site to research ways to mange home energy consumption. Interestingly enough, 66% of those surveyed said they were more likely to visit home improvement stores to find out how to reduce home energy, and 63% said they would contact their utility companies for solutions.

Consumers increasingly are concerned about reducing energy costs at home and are willing to buy technology to help address the issue, but they may not make the right decision without industry help. 

The industry must market home technologies effectively to capitalize on the energy-saving opportunities under every roof. 

Steve Koenig is the director of industry analysis at the Consumer Electronics Association (CEA). As a part of CEA’s market research team, Koenig directs the Market Activity Report and Analysis Program (MARA), which tracks factory shipments of consumer electronics (CE) products to U.S. dealers and oversees the semi-annual CE Industry Forecast. For more information, e-mail Koenig, call him at 703-907-4317 or visit the CEA Web site at www.ce.org.

A version of the article was originally published in the CEA’s Vision Magazine.

Information About Home Technology Available From HTA

The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process.

For more information, visit www.nahb.org/HTA.

Free NAHB Webinar on Building and Home Technology in July

Even in a slower economy, home technology continues to be an important aspect of the home building and home buying process and it is influencing the decisions of builders and their customers, according to a recent study by the Consumer Electronic Association (CEA).

NAHB, the CEA and the Custom Electronics Design & Installation Association (CEDIA) are conducting a fee webinar for members of the three associations from 2:00-3:00 p.m. EDT on Wednesday, July 22 to discuss the findings of the CEA’s “7th Annual State of the Builder Technology Market Study” and what they mean for builders, remodelers and their home technology partners and contractors.

A panel of experts representing different segments of the industry and home technology will offer their views about home technology’s growing importance and what trends they see emerging and give insights into how home building professionals can put these to their advantage.

To Register

Registration is free to members of NAHB, CEA and CEDIA and available by clicking here.

Registrants will receive a confirmation via e-mail and detailed instructions on how to log in to the free webinar.

For more information, e-mail Agustín Cruz at NAHB, or call him at 800-368-5242 x8472.

Revised Requirements Make CAASH Easier to Complete

Active adult housing professionals who are working towards the Certified Active Adult Specialist in Housing (CAASH) designation now have one less qualification to meet. Candidates no longer need to provide evidence of 50 elective credits.

To earn the CAASH designation under the revised requirements, candidates must successfully complete the three required courses — “Designing for the Active Adult,” “Selling to Active Adults” and “Trends and Research Methods to Define the Active Adult Lifestyle” — have a minimum of three years experience in the 50+ housing field and adhere to the CAASH Code of Ethics.

The continuing education requirements remain in place.

The CAASH designation gives housing professionals serving this rapidly burgeoning market the essential knowledge, tools and skills that will help them succeed — from conducting initial research to design considerations and features to closing the sale and servicing the customer.

CAASH designees also are included in the online NAHB Professional Designations Directory.

Individuals who have completed the three required courses may now complete the graduation process by sending in a CAASH graduation application. NAHB members who send in their graduation applications by June 30, 2010 will have a reduced graduation fee of $95.

For questions regarding the revised CAASH requirements, e-mail designations@nahb.com, or call The Professional Designation Help Line at 800-368-5242 x8154.

Find Out What the 45+ Housing Market Wants

“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help 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.

New Lead Paint Resources Available on Web From NAHB

New resources on the U.S. Environmental Protection Agency's rule governing the work of professional remodelers in pre-1978 homes where there is lead-based paint — including how to become a certified firm or certified renovator, how to become a trainer or training provider and an update on EPA lead paint training courses — have been compiled for easy access on the NAHB Web site.

The new materials, plus other resources on the EPA rule, "Lead: Renovation, Repair and Painting," are now available at www.nahb.org/leadpaint.

Available to NAHB members, the information also provides sample contract language that remodelers can use to minimize liability on jobs before the rule goes into effect on April 23, 2010.

“This NAHB lead paint Web site is the most complete, comprehensive resource to help remodelers understand the rule requirements and how to prepare their business for working in pre-1978 homes,” said Robert Hanbury, CGR, of House of Hanbury in Newington, Conn., and a leading expert on the EPA lead paint regulation. “In particular, the rule summary, certification and training information and draft contact language will help NAHB Remodelers members be fully prepared when rule goes into effect.”

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

While training and certification will be required under the new rule, training currently is not available. The EPA, however, is reviewing applications for training professionals and NAHB expects the EPA to share information on training availability with NAHB soon.

The NAHB lead paint rule Web site will be regularly updated as more information becomes available about training, certification and rule implementation.

The Web site also includes a “Latest News” section where updates from NAHB on news and resources for preparing for the lead paint rule can easily be found.

Additional useful resources on the lead paint rule site include:

• An updated overview of the rule requirements and compliance deadlines, including outlining rule requirements for training, certification, consumer education, dust containment, lead-safe work practices, clean up, cleaning verification and record keeping
  
  
• The “Renovate Right” pamphlet for potential clients who own homes built before 1978 and other materials issued by the EPA to help with compliance
  
  
• A link to an NAHB audio seminar about the rule and compliance that is available free to members

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

For more information, e-mail Kelly Mack at NAHB, or call her 800-368-5242 x8451.

Education Calendar

  

June 25	“Examining the Challenges of the AD&C Lending Crisis”	Audio Seminar
Aug. 11-15	Executive Officers Council Seminar	Louisville, Ky.
Aug. 12	EOC Association Excellence Awards	Louisville, Ky.
Sept. 30	Train the Trainer	Chicago, Ill.
Oct. 21	Construction Forecast Conference	Washington, D.C.
Oct. 25-28	Building Systems Councils SHOWCASE	Marco Island, Fla.
Oct. 25-27	CGR and CAPS courses	Indianapolis, Ind.
Oct. 27-30	Remodeling Show	Indianapolis, Ind.
Oct. 29	NAHB Remodeler of the Year Award	Indianapolis, Ind.
Oct. 29	National Remodeling Hall of Fame Award	Indianapolis, Ind.
Oct. 29	CADRE Awards	Indianapolis, Ind.
Oct. 29	Homes for Life Award	Indianapolis, Ind.
Nov. 5-6	Leadership Training Conference	New Orleans, La.
Nov. 6-8	Custom Builders Symposium	San Diego, Calif.
Nov. 6-9	National Conference on Membership	New Orleans, La.
2010
Jan. 15-18	2010 IBS Pre-Show Courses	Las Vegas, Nev.
Jan. 19-22	2010 International Builder's Show	Las Vegas, Nev.
March 29-31	Log Home Council President's Tour	Boise, Idaho
May 16-18	National Green Building Conference	Raleigh, N.C.

Learn More About 2009 Professional Development Offerings

See the variety of professional development offerings available through NAHB and its local associations in this interactive brochure. 

Or, search for specific course offerings and check out upcoming conferences.

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.

Energy-Efficient Homes Can Meet ‘Builders Challenge’

NAHBGreen at the end of this month will enable builders to receive dual certification to the National Green Building Standard and the U.S. Department of Energy's (DOE’s) Builders Challenge.

Spearheaded by the DOE, the Builders Challenge provides certification of a home’s energy efficiency. The program invites home builders across the country to build a new generation of high-performance homes using proven innovations, and to work toward the ultimate goal of providing affordable, net-zero energy homes nationwide by 2030.

DOE designed the Builders Challenge to work with existing energy and green building programs by providing a standardized metric for whole-house energy performance that is easier for consumers to understand and increases credibility for a builder’s efficiency claims.

There are two different paths to meet the Builders Challenge. Qualifying homes must either receive a rating of 70 or better on the EnergySmart Home Scale “E-Scale” (based on the HERS Index), or build to a climate-appropriate Technology Information Package. In addition, a home can comply with Builders Challenge through a Challenge Partner Program — like NAHBGreen — at a specified level.

All paths require third-party verification by a qualified professional and the Builders Challenge Quality Criteria (BCQC). The BCQC will be addressed in the NAHBGreen dual certification through the NAHBGreen Scoring Tool.

Following is a brief description of required BCQC, with a more detailed explanation available on the Builders Challenge Web site:

• Project Documentation: Develop and store construction/design and energy rating documentation in project records.
  
  
• Building Envelope Moisture Management: Develop construction plans with details on moisture management — including flashing, wall system details and foundation details.
  
  
• Space Conditioning Design: Analyze load and duct sizing and keep it in the project records.
  
  
• Windows: Install at least Energy Star-qualified windows.
  
  
• Whole Building Mechanical Ventilation: Design and install an exhaust, supply or balanced mechanical ventilation system to provide outside air to the indoor environment.
  
  
• Kitchen Ventilation: Provide mechanical kitchen ventilation with an exhaust fan that can provide at least 100 cfm (intermittent use).
  
  
• Bathroom Ventilation: Provide mechanical ventilation for all bathrooms via exhaust fans that can provide at least 50 cfm (intermittent use) or 20 cfm (continuous use).
  
  
• Clothes Dryer Venting: Vent the clothes dryer directly to the outside (condensing dryers are exempt).
  
  
• Duct Leakage: Make sure duct leakage to the outdoors is less than 5% of the conditioned floor area when measured at 25 Pascals using duct pressurization methods.
  
  
• Air Barrier and Insulation Integrity: Either the builder or a third-party verifier must complete the Energy Star Thermal Bypass Inspection checklist for the home.
  
  
• Filtration: Equip the central air handler with a MERV 8 filter or higher.
  
  
• Combustion Safety: Fossil fuel-fired furnaces or water heaters installed in conditioned spaces must be sealed combustion, direct-vented or power-vented units.
  
  
• Carbon Monoxide: For homes with combustion appliances or an attached garage, at least one carbon monoxide alarm should be installed in the central location outside of each separate sleeping area in the immediate vicinity of the bedrooms.
  
  
• Air Handler Location: Central air handlers should be isolated from the garage by a thermal barrier and an air barrier.
  
  
• Building Envelope Moisture Management — Field Verification: Document that foundation details, vapor barrier selection and water drainage space details noted in “Building Envelope Moisture Management” are installed according to the construction plans and specifications.

Builders Challenge provides an opportunity to build homes with increased energy efficiency, durability and indoor air quality. Builders participating in Builders Challenge have access to technical and marketing resources provided through the program to help them successfully build and market these high performance homes.

The first step is registering online to become a Builders Challenge builder or verifier.

‘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 3,500 people have earned the CGPdesignation to date.

For more information, visit www.nahb.org/CGPinfo.

“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.

Denver Energy Conference to Examine ‘Houses That Work’

Registration is now open for the Energy and Environmental Building Alliance Conference, which will take place on Sept. 28-30 at the Denver Marriott Tech Center.

Targeted to residential and commercial builders, remodelers, architects and designers, the conference includes sessions on topics ranging from building science to the regulatory environment.

The “Houses That Work” educational sessions on sustainable and green building qualify for continuing education credit in the Certified Green Professional (CGP) designation.

Visit the conference Web site for registration, accommodation and exhibition details.

‘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 3,500 people have earned the CGPdesignation to date.

For more information, visit www.nahb.org/CGPinfo.

“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.

2009 Best in American Living Awards Entry Forms Due July 1

	2008 BALA Home of the Year

Entry forms and fees for the 2009 Best in American Living Awards (BALA), the foremost residential design competition in the country, are due Wednesday, July 1.

Builders, interior designers, architects, land planners, developers and marketing and real estate professionals are invited to enter.

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 judges 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:

• Entry forms and fees due: July 1
• Entry notebooks due/must be postmarked by: July 15

Winners will be announced at the 2010 International Builders’ Show in Las Vegas, which will be held Jan. 19-22.

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.

Icynene Insulation Shows PCBC That Castor Oil Is ‘Cool’

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 Network

The NAHB Production Group produces weekly television shows for consumers on the DIY network. The following is the latest lineup:

"Rock Solid" on DIY

Episode: "Travertine Patio"

• June 24, 5:00 p.m. Eastern

DIY's expert stone masons and hosts Dean Marsico and Derek Stearns work for the first time with travertine, a unique stone akin to marble, to create an elegant and stylish patio and walkway.

"Indoors Out" on DIY

Episode: "Swedish Sauna"

• June 23, 6:00 p.m. Eastern

Hosts Dean Marsico and Derek Stearns help a Swedish expat couple adjust to American life with a one-of-a-kind outdoor spa. Mats and Tanja had no place to celebrate their shared love of European saunas and spas in their tiny, 1920s house. So Dean and Derek surprise the couple with a European-meets-American style room complete with an easy-to-assemble infrared sauna, gorgeous hot tub and a do-it-yourself outdoor shower. Beautiful bluestone and Tennessee crab orchard stone create the floor and outdoor cedar furniture completes the look.

"Operation Salvage" on DIY

Episode: "One-of-a-Kind Kitchen Island"

• June 26, 11:30 a.m. Eastern

Brothers and hosts Matt and Josh White and their father Steve meet several salvage challenges when they hunt for treasure in a huge, old building that's in the middle of being torn down. Diving through the rubble, they find amazing items to take back to their salvage yard. They also build a kitchen island from a scrap metal cart and a desk from old safety glass and factory parts.

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.

Five Awarded Women’s Council Scholarships

Five women pursuing careers in residential construction are the recipients of the 2009-2010 NAHB Women’s Council/National Housing Endowment “Strategies for Success” Scholarship.

The five were chosen from 52 students who applied for the scholarship, now in its eighth year.

The scholarship winners are:

• Amanda Brown, a high school senior in Cumming, Ga. has been accepted by the University of Georgia, Auburn University and Clemson University and plans to pursue a career in the historic preservation of homes and other structures. She was awarded $1,000.
  
  
• Kathleen Busch, a high school senior in Juneau, Alaska, was a member on the winning team in the high school division of the NAHB Residential Construction Management Competition held at the International Builders’ Show in January. This fall, she will begin studying architecture at the Savannah College of Art and Design in Georgia. She was awarded $1,000.
  
  
• Michelle Lachat, a junior at the University of Wisconsin-Stout, is majoring in construction management and is also serving in the Wisconsin Army National Guard. She was awarded $1,000.
  
  
• Indumanthie Tilakaratne, now in her third year at Montgomery College in Rockville, Md., went back to school after working in construction estimating for 15 years. She is studying for a career in construction management and was awarded $1,000.
  
  
• Hannah Woolsey, a junior at Brigham Young University, is majoring in construction management and has participated in the NAHB Residential Construction Management Competition for two years. She was awarded $1,500.

“I was just so amazed at the number of talented women interested in the building industry,” said Carole Hauke, president of Hauke Building Supply in Colchester, Vt., a life director at NAHB and a member of NAHB’s Women’s Council and the National Commercial Builders Council. “It makes me excited for what the future will hold.”

Established in 2001, the scholarship provides financial support to students pursuing housing or housing-related careers. The scholarship is funded by NAHB and Women’s Council members, corporate donors and William and Carole Hauke, founding advocates of the endowment who committed their entire donation to the “Strategies for Success” scholarship fund.

“Supporting education is vital,” said Hauke. “There are so many facets to this industry and it is getting harder and harder to be informed. These scholarships help make more informed female builders. By supporting this scholarship we are investing in the future leaders of our industry,” she added, while noting that two women have already served as presidents of NAHB.

“This scholarship fund is truly in keeping with our mission,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “The endowment is working to increase the number of professionals entering residential construction and this scholarship, along with other programs we sponsor, is leading the effort to reward and encourage the best and brightest to choose this field.”

Endowment Scholarship Programs

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

For more information, visit the endowment Web site at www.nationalhousingendowment.org.

Get Free Videos on New, NAHB-Exclusive YouTube Channel

Free NAHB-produced videos on green building, monetizing the first-time home buyer tax credit and other home building topics now are available to NAHB members and home builders associations on the popular video sharing Web site YouTube.

The high-quality videos — which include industry and consumer information — can be used by members and HBAs to add fresh features, information and content to their own Web sites.

The vides are available at www.YouTube.com/NAHBTV.

Some of the videos featured on the NAHB page include:

• HUD Secretary Shaun Donovan unveiling details on monetizing the tax credit at the NAHB Spring Board of Directors Meeting in May
  
  
• Instructions on how to get started with NAHB's green building program
  
  
• Answers to frequently-asked-questions about the first-time home buyer tax credit — which has had more than 47,000 views to date
  
  
• Information on building modular and concrete homes from NAHB's Building Systems Council

To post videos from the NAHB YouTube page to member and HBA Web sites, first choose the specific video to feature. To the right of the video there is an address that follows the word "Embed."

Then copy that text and or have a webmaster or Web site administrator include it in the HTML code of the member of HBA site.

Members, HBAs and consumers can also subscribe to the NAHB page on YouTube, which will provide updates when new videos are added.

For more information, e-mail NAHB Public Affairs, or call 800-368-5242 x8447.

Save More With Hertz Off-Airport Locations

With 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:

• Unlimited mileage
• Clean, good quality, low-mileage vehicles with many features
• Guaranteed availability
• One-way rentals
• Convenient customer pick-up and return service available within 15 minutes of the HLE location
• Affordable leisure and replacement rates
• Pick-up in your neighborhood and drop-off at the airport

To check rates, make a reservation and receive other, special NAHB Member Advantage discounts from Hertz, visit the Hertz page on the NAHB Web site. Be sure to use NAHB Discount CDP# 51046 when making reservations.

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 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.

Williams Scotsman Offers $1.99 First-Month Storage Container

Through June 30, Williams Scotsman is offering 20- and 40-foot storage containers at $1.99 first month’s rent with a three-month minimum lease to NAHB members — plus a free door lock rental with each unit.

The storage container deal is in addition to Williams Scotsman’s NAHB member discount of one month free rent — up to $500 ― for each mobile office, storage container or specialty trailer leased for six months or longer.

For 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 Offer

NAHB 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.

• Seven GM nameplates are included in the offer — Chevrolet, Pontiac, Buick, Cadillac, GMC, Saab and HUMMER.
  
  
• Vehicles excluded from this offer include Cadillac CTS-V, Chevrolet Corvette ZR1, HUMMER H1 and Saturn vehicles. Medium duty trucks are also excluded.
  
  
• The $500 exclusive offer can be combined with most retail national and regional incentives in effect at the time of delivery.
  
  
• There is no limit to the number of vehicles members can purchase.  
  
  
• Customers must take delivery by Jan. 4, 2010.

To receive the discount, members must present the GM authorization ID number to their dealer. Members can receive their ID number at www.gmfleet.com/nahb or by calling the GM call center at 866-760-7070. One authorization ID number is required per vehicle. 

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

June 25	“Examining the Challenges of the AD&C Lending Crisis”	Audio Seminar
Aug. 11-15	Executive Officers Council Seminar	Louisville, Ky.
Aug. 12	EOC Association Excellence Awards	Louisville, Ky.
Sept. 30-Oct. 4	Fall NAHB Board of DirectorsMeeting	Chicago, Ill.
Sept. 30	Train the Trainer	Chicago, Ill.
Oct. 21	Construction Forecast Conference	Washington, D.C.
Oct. 25-28	Building Systems Councils SHOWCASE	Marco Island, Fla.
Oct. 25-27	CGR and CAPS courses	Indianapolis, Inc.
Oct. 27-30	Remodeling Show	Indianapolis, Ind.
Oct. 29	NAHB Remodeler of the Year Award	Indianapolis, Ind.
Oct. 29	National Remodeling Hall of Fame Award	Indianapolis, Ind.
Oct. 29	CADRE Awards	Indianapolis, Ind.
Oct. 29	Homes for Life Award	Indianapolis, Ind.
Nov. 5-6	Leadership Training Conference	New Orleans, La.
Nov. 6-8	Custom Builders Symposium	San Diego, Calif.
Nov. 6-9	National Conference on Membership	New Orleans, La.
2010
Jan. 15-18	2010 IBS Pre-Show Courses	Las Vegas, Nev.
Jan. 18	Best in American Living Awards (BALA)	Las Vegas, Nev.
Jan. 19-22	2010 International Builder's Show	Las Vegas, Nev.
Jan. 19	Safety Award for Excellence (SAFE) Awards	Las Vegas, Nev.
March 29-31	Log Home Council President's Tour	Boise, Idaho
May 16-18	National Green Building Conference	Raleigh, N.C.

Learn More About 2009 NAHB Professional Development Offerings

See the variety of professional development offerings available through NAHB and its local associations in this interactive brochure. 

Or, search for specific course offerings and check out upcoming conferences.

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.