Nation's Building News Online: May 2, 2011

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Getting Off to a Slow Start in 2011, Housing Expected to Show Its Strength in 2012

Despite a disappointingly slow first quarter of 2011, the pace of housing activity will pick up some momentum for the balance of the year and actually start feeling like a real recovery in 2012, according to panelists participating in NAHB’s Construction Forecast Webinar on April 27.

With more foreclosures in the pipeline and some further decline in housing prices nationwide, the industry is not entirely out of the woods yet, the economists warned.

But home prices nationally are just about back to where they should be relative to income following explosive growth during the boom, mortgage rates will remain relatively affordable and an increasing number of prospective buyers will start coming out of the woodwork as they see job prospects and the national economy continue to improve.

Panelists also cited wide variations in local market conditions across the country, with those that became most overheated at the peak of the cycle having the most ground to regain on the road back to health.

Many other markets, which tended to see more moderate levels of activity during the run-up of the mid-2000s, are just about where they need to be to stage a recovery now, they said.

The only thing holding back builders in these locations are traditional lenders, who still aren’t providing the credit needed to renew the production process, restrained by a blanket interdiction against real estate lending across the country that has yet to be lifted by banking regulators.

There is the hope that banks will start easing up on credit availability in fairly short order as they see opportunities for sound and profitable acquisition, development and construction (AD&C) loans emerge in their communities.

For this year, “the bottom line is that there has been some improvement, with the rest of the economy pulling us out of recession rather than the housing market pulling the rest of the economy, which is the more typical sequence of events following recession,” said NAHB Chief Economist David Crowe.

Citing a “nice, but slow uptick” in sales and starts, Crowe said that second-quarter data would show a modest increase over the first quarter, “and then momentum will build from the end of 2011 into 2012.”

Starting From a Hole in the Ground

Single-family starts this year will be about the same as last year because “we have started from a hole in the ground,” with builders breaking ground on new homes in the first quarter at about the same pace as in the second half of 2010.

But single-family building will show “significant improvement in 2012,” Crowe promised.

Having fallen to an annual level of roughly 400,000 units, single-family starts “are dramatically off any type of normality,” he said, and “are less than a third of where we should be at 1.5 million.”

Cumulatively, the severe slump of the past several years has left single-family production 3 million homes short of where it would have been under normal trend production levels.

Multifamiily housing stands to recover a bit more rapidly, he said, buoyed by an increase in household formations and a modest decline in the number of home owners.

He estimated the recession inhibited the formation of as many as 2 million households, many of which are beginning to occur now with the improving economy. “The 30-year-old living in mom’s basement is not a sustainable lifestyle,” he said.

Most recently, year-to-year there has been an increase of about 750,000 new total households, about double the level of a year ago, he said, and they are absorbing some of the excess housing inventory.

Renters are now exceeding that pace, growing by 1 million in the past year, which will help yield a 23% increase in total multifamily housing starts this year.

That still won’t meet the growing demand for rental apartments, however, which have stumbled to an annual pace of only 100,000 units in the past couple of years, not even enough to replace the older units falling out of the housing stock.

Reporting on the third major segment of the housing industry — residential remodeling — Crowe said that “we are looking at some nice improvements” in this sector as more people decide to improve the home they have rather than “encounter the uncertainties” of selling and moving to a new home in the current market.

Remodeling has lost a good amount of steam during the downturn because a large amount of remodeling occurs after a person moves into an existing home, and sales have been down dramatically.

Even so, remodeling “didn’t fall off as much as new construction, partly due to tax credits for energy improvements,” he said.

Crowe noted that there were only 183,000 new homes for sale in March, 2,000 off the all-time low. And those who want to buy a home right now will have to search from an inventory of only 78,000 completed homes — “an extremely low availability.”

At the end of 2012, he said, new home sales will be back to where they were at the outset of the recession in 2007.

Another 12 to 18 Months

“It’s going to take another 12 to 18 months to work through the remainder of the mess that was created during the housing boom and bubble,” said Mark Zandi, chief economist for Moody’s Analytics.

Nationally, home prices will drop an additional 5% this year on the Case-Shiller index, he predicted, bringing the peak-to-trough decline in home prices to 35% over a “six-year-long housing crash.”

Also, “the ongoing foreclosure crisis is not over,” he said, with 3.7 million first mortgage loans now at least 90 days delinquent, out of 50 million first mortgage loans outstanding.

As a result, Zandi said he expected the share of distressed home sales to rise, from one-fourth today to up to a third by the end of the year.

With 14 million home owners underwater, half owning more than 30% on their mortgage than their home is now worth, “most worrisome is that when prices are falling, you run the risk of getting tracked back into a vicious cycle” of more defaults and more price declines, he said.

“This is going to feel uncomfortable,” said Zandi. “As long as house prices are falling, we have a good reason to be nervous.”

Even so, Zandi voiced optimism that housing is unlikely to encounter any major setbacks in the period immediately ahead.

“Investor demand is key to ensuring that we do not see more significant price declines” in battered markets such as those in Florida, Nevada, Arizona and California, he said. Those places are enjoying “very healthy investor demand” driven by prices that encourage purchasing properties and renting them out.

“I don’t view these folks as flippers. They are not in the market for making a sale anytime in the near future; they are investors with a longer-term horizon and I don’t expect these properties to come back into the marketplace” until conditions are healthier, which could be a matter of a few years.

Absorbing Excess Inventory

Zandi was also sanguine about prospects for the absorption of the excess housing inventory, which according to his “back-of-the-envelope” calculations equals about 1.1 million vacant homes more than usual.

At the current rate of household formations of about 750,000, that leaves an oversupply of 625,000 units and “it will take a little over a year to work off that inventory,” he said.

He also noted that the excess inventory is regionally concentrated, “with a whole lot of stock in Arizona, the Central Valley of California, Florida, Georgia and parts of the Midwest.”

And “the obsolescence rates on these homes is quite high” when they are left untended, especially in places like Florida, where he has a home and where pests can be particularly problematic.

“We’re not done yet. We’ve got more work to do. The crisis isn’t over, but we’re making progress,” Zandi said.

Though conditions remain “far from normal now,” he said, “as we move into 2012, particularly the second half, and 2013,” the strength of the housing recovery will become evident “and the mid-decade will be characterized by normalization of the housing market” — with estimated demand and supply running with “a lot of juice” at about 1.75 million homes per annum.

Zandi said that he had expected the year to get off to a better start than the 555,000 unit starts rate of the first quarter, but by year end he said that should rise to 750,000.

“The data for the first quarter came in worse than anticipated, and that partly may be weather related and from higher energy prices sucking the wind out of consumer sentiment, which is at very low levels,” he said.

But markets will start seeing their sales pick up, and with virtually no inventory of new homes, builders will be running to the bank to convince them that real demand has arrived, he said.

It may “take a while to get the banker on board, but the psychology of the marketplace will change rapidly,” Zandi said, “and next year at this time we will see things much differently than now.”

Bouncing Along the Bottom

From available statistics on housing prices and income, home price changes, unemployment rates and housing production relative to the more normal years preceding the housing boom, Robert Denk, NAHB’s assistant vice president for forecasting and analysis, suggested that there are a growing number of states in which housing is ready to return to normal.

He said that single-family starts did bottom out in January of 2009, picked up some steam from the home buyer tax credits into the first half of 2010, “and since then we have been bouncing along the bottom.”

“Flatness is not great news, but it does suggest we will not have another significant layer of decline for housing,” Denk said.

“The strength of current conditions has a lot to do with where you are in the country,” he added. “There is a lot of variation in overbuilding and price spikes and the level of distress you are seeing now.”

National housing production bottomed out in the first quarter of 2009 at 27% of "normal" housing starts (the average level from 2000 to 2003), he said, climbed to 39% in April 2010 and then fell back to 31%.

In the depths of the downturn the hardest hit states — such as California, Nevada, Arizona and Florida — bottomed out at between 10% and 20% of normal production, compared to “the least bad” — largely energy states and agricultural commodity states — which found themselves at 50% to 60% of normal levels of home building at the trough.

What Happens to House Prices

In the period ahead, what will drive the recovery will have “a lot to do with what happens to house prices,” Denk said.

Denk said that “the worst is behind us as far as prices go.”

Based on National Association of Realtors® statistics on median home prices of existing homes compared to income, home prices have just about returned to the fairly stable level that prevailed through the 1990s of 3 to 3.5 times income.

During the boom, home prices climbed to 4.7 times income, Denk said, or 149% of the historical average. In some of the highest flying states, prices ran to 180% to 200% of the historical average.

Today, the nation’s home prices are averaging about 104%.

“Home prices are getting back to normal in many parts of the country, and that is an important factor in supporting recovery,” he said.

In some states — Nevada, Michigan and Georgia — the pendulum has swung too far and prices are now below their historical average. And for others — Arizona, Florida and California — further price declines may occur.

But “in most cases, the change in house prices, whether up or down, is relatively small — one, two or three percentage points,” he said.

Foreclosures a Crisis in a Few Places

Foreclosures also point to important differences among the states.

Before the housing crisis, through 2006 the quarterly foreclosure rate was about 0.5%, with a “relatively flat distribution no matter where you were,” Denk said.

But at their peak in the third quarter of 2009, “in most of the country foreclosure rates had doubled and in some parts of the country they were much higher – at multiples of four, five and six of earlier levels,” he said.

While foreclosures have been problematic just about everywhere, “there has been a crisis in a relatively small number of states,” Denk said.

Before the housing bust, the top five states with the most foreclosures were responsible for about 15% of the foreclosures nationwide. At their peak, that jumped to 45%.

By the end of this year, housing production will return to 41% of normal production (2000-2003) on a national average, and by the end of 2012, it will rise to 60% of normal, Denk forecasted.

However, the worst off states — Arizona, Florida and California — will only be getting back to 20% and 30% by the end of 2011 and below 40% at the end of next year.

And a large number of states — including Wyoming, North Dakota, Louisiana, Texas, South Dakota, Montana, Oklahoma, Pennsylvania, Hawaii and Washington — will be just about back to 80% and 90% of the housing started in a normal year by the end of next year.

Floor Plans: Rustic Appeal, Modern Amenities a Beautiful Blend in Jefferson City, Mo.

Modern amenities blend with the appeal of historic and rustic architecture in The Hillview, an award-winning, custom- designed 3,167-square-foot log home in Jefferson City, Mo., that the owners plan to enjoy as they grow older.

An example of modern log home construction, the home owner designed the property to take full advantage of magnificent views of the surrounding countryside from several vantage points.

She also added aging-in-place features, including wider hallways, three-foot-wide doorways, a main-level owner’s suite and other smart elements.

The lead designer of log home manufacturer Expedition Log Homes based Oostburg, Wis., provided structural guidance and practical modifications. 

The home earned Expedition a 2011 Excellence in Home Design: Log award in the NAHB Building Systems Councils Excellence in Design & Marketing competition.

The entryway staircase features half-log treads and an open riser.

A Step Above

The half-log treads and open riser of the home’s entryway staircase acts as an impressive focal point. Recessed lighting gives the space a warm glow, as does the stain's “brown sycamore” shade.

The use of mixed media helps create a sophisticated kitchen.

A Chef’s Oasis

The use of mixed media — including log posts and purlins, knotty alder cabinets, granite countertops and a sand-toned subway-tile backsplash — comes together to create a sophisticated kitchen.

Varied ceiling heights help create a variety of areas for entertaining.

Rooms Without Boundaries

The overall floor plan is open and airy, but varied ceiling heights of the great room, kitchen, dining area and entry keep the space from feeling hollow and empty. The technique also creates a variety of areas for entertaining.

The front view of the home exemplifies its rustic and historic allure.

Outstanding Views

The home’s medium-gold exterior stain really shows  at dusk — especially on what the owners call the “view elevation” because of its wall of windows that helps blur the lines between outdoors and in.

The catwalk to the upper bedrooms and loft overlooks the great room.

The roofline is complex from a design standpoint, but the fact that it was hand-framed on site elevated it from an elaborate construction project to an art form. The open loft and catwalk contribute to the home’s exceptional flow.

The owners also wanted an angled sunroom off the dining area to foster architectural interest and to vary the views.

First floor Click for larger view.

Second floor Click for larger view.

Features and Specifications

Build Team Manufacturer — Expedition Log Homes, Oostburg, Wis. Builder — Mike Andrews Construction, Jefferson City, Mo. Features Three-bedroom, 3,167-square-foot custom log home with wall of windows and angled sunroom to take full advantage of hillside views Foyer featuring a rustic staircase with half-log treads and an open riser First floor owner's suite First floor laundry room Two second-floor bedrooms, one with a full bath Loft and powder room on second floor Great room with stone fireplace and wall of windows Kitchen with knotty alder cabinets, granite countertops and a sand-toned subway-tile backsplash Two-car garage Mudroom Aging-in-Place Features Wider hallways 3'-wide doorways

Rental Market Unprepared to Meet Quick Climb in Demand, Harvard Joint Center Warns

Rental housing is poised to recover quickly from the ill-effects of the recession and is likely to lead the housing recovery, according to new study from the Joint Center for Housing Studies of Harvard University.

But the supply of housing, the Harvard researchers suggest, may not be adequate to keep up with fast-rising demand, resulting in a significant climb in rents that will be especially difficult for households at the lower end of the pay scale who disproportionately make up the ranks of the nation’s renters.

While rental housing lost significant ground during the Great Recession, “the ingredients for a surge in demand may be present,” according to the report, “America’s Rental Housing — Meeting Challenges, Building on Opportunities.”

“The recession has not only dampened the rate at which young adults form independent households, but also stalled the pace of immigration — both drivers of rental demand,” the study says.

But “when job growth regains momentum, the number of renter households could climb quickly,” Harvard researchers conclude.

Given the extremely low production levels of new multifamily buildings in recent years — the result of a drought in available financing — and the long lead times needed to develop new multifamily housing, a sudden surge in demand for rental homes could result in a squeeze, with vacancy rates plummeting and rents rising to a gallop.

“While this would be good news for owners and investors in rental housing, it would also fuel the intense affordability pressures that low-income renters already face,” the report says.

A weak economy pushed the overall rental vacancy rate to 10.7% at the end of 2009, up from 9.6% at the end of 2007.

Professionally managed apartments were particularly hard hit, with MPF Research reporting a 4.1% drop in effective rents nationally as of the fourth quarter of 2009.

But conditions in the rental property market have already improved, the Joint Center says, with MPF Research reporting a 1.7% percentage-point drop in vacancy rates and a 2.3% annualized increase in rents as of the fourth quarter of last year.

Property values have also begun to recover.

After nearly doubling from the end of 2000 to the end of 2007, Moody’s Commercial Property Price Index for apartment buildings was down 31% over the two-year period from the end of 2007 to the end of 2009.

That same index now points to a 12% rise in values since the end of 2009, leaving the rental housing industry with the need to rebound another 28% in order to reach its former peak in real terms.

A Boost From the Bust

The Harvard report notes that rental demand is receiving a big boost from the housing bust, the national decline in housing prices and skyrocketing foreclosures in the hardest-hit markets.

“With millions of home owners delinquent on their mortgages, further increases in the renter population are likely,” the report says.

And “owners that have gone through foreclosure are especially likely to remain renters for a number of years to come.”

The Joint Center estimates that the number of renter households could increase by 360,000 to 470,000 annually between 2010 and 2020. While that is in line with growth over the past decade, it is woefully below recent production levels, which haven’t even covered the number of rentals being removed from the housing stock.

While the imbalance between supply and demand that is now shaping up is likely to have at least some impact on renters across the board, housing analysts at the Joint Center are particularly concerned about the burden it will impose on the nation’s lowest-income renters, with affordability already at crisis proportions.

Affordable Rentals Getting Scarcer

“In the last decade, rental housing affordability problems went through the roof,” said Eric S. Belsky, managing director of the Joint Center and one of the authors of the study.

“And these affordability problems are marching up the income scale,” Belsky said. “In real terms, it means more people have less money to spend on household necessities such as food, health care or savings.”

The study found that in 2009, 63% of extremely low-income renters — those with less than 30% of area median income — were paying more than 50% of their household income on rent and utilities. That left just $571 a month to spend on all other items.

Today, one in four renters — or 10.1 million households — spends more than half their income on rent and utilities, the report says, and another quarter of renters — 26.2% — spends 30% to 50% of their income for that purpose.

At the same time, the supply of affordable rental housing has been shrinking, the study says.

Since the mid-1990s, more than 700,000 rentals with federal subsidies tied to them have been lost from the subsidized housing stock through demolition or their owners deciding to convert the units into market-rate rentals.

Meanwhile, nearly 12% of the low-cost market-rate rentals that existed in 1999 were demolished or otherwise permanently lost from the housing stock by 2009.

“Smaller and older rental buildings, which account for high shares of affordable units, are especially vulnerable to loss,” the study says.

“With a median age of 38 years, the rental housing stock is now older than it has ever been. As housing ages, owners must devote an increasing share of rents to maintenance and replacements of aging systems to maintain the structures in adequate condition.

The report singles out the Low-Income Housing Tax Credit (LIHTC) because it is nearly alone among federal programs in replenishing the affordable rental stock through new construction and substantial rehabilitation of existing properties.

From its inception in 1986 through 2007, the LIHTC program helped to develop 1.7 million affordable units, with roughly two-thirds newly constructed and one-third substantially renovated.

“The high-water mark for production through this program occurred in 2003-5 when strong investor demand increased the market value of credits,” the report says.

“During that period, LIHTC development reached more than 125,000 units annually, including about 80,000 new apartments.”

However, the tax credits cannot bring rents down to affordable levels for extremely low- and very low-income households, Harvard says.

 Also, the credits are capped at 60% of area median income, adjusted for family size, and the government’s voucher program usually caps eligibility at 50% of area median income.

A Time to Get Creative

From a policy standpoint, “affordability problems will remain at staggeringly high levels, if not worsen,” the researchers conclude, unless there is a dramatic expansion of federal assistance or a shift in state and local land use and building regulations to allow expansion of modest, high-density rental developments.

But the government most likely does not have the resources to run to the rescue and it is having a hard enough time maintaining existing support, the study suggests, which means that “creative approaches” will be needed to close the affordability gap.

“While the need for affordable rental housing is growing, the squeeze on government budgets is putting these much-needed programs in jeopardy,” said Chris Herbert, director of research for the Joint Center.

“Investments to preserve existing assisted housing may be cost-effective,” he said. “But the public sector can’t tackle this problem on its own.

“Policy makers must look for ways to support efforts by the private sector to invest in both existing and new rental housing, while keeping prices affordable.”

More NAHB Builder Members Taking Up Remodeling to Increase Business

More builders are diversifying their business to include remodeling, according to recent NAHB survey research of the business activities of the association's membership. 

While an estimated 19% of the association’s building industry professionals were primarily engaged in remodeling in 2008, in a 2010 survey 25% indicated that they were primarily remodelers.

The percentage of members who indicated that remodeling was a primary or secondary business activity rose to 57% in 2010, up from 53% in 2008.

Paul Magleby, chairman of Magleby Companies in Salt Lake City, transitioned into remodeling five years ago because he wanted to expand his business offerings and had a ready market of clientele.

Magleby said many of his home building clients contacted him years after they had settled into their homes asking him to renovate and remodel their homes. So branching out into remodeling made perfect sense, he said. 

Bart Jones, chief financial officer of Merlin Contracting in Las Vegas, said his company also began remodeling the homes of its former buyers but expanded its client base to include the owners of foreclosed and short-sale homes — a large market in the Las Vegas area.

A Different Business

Builders who are now taking on remodeling projects are quickly learning that the business activities and practices they used as builders do not directly transfer to remodeling.

Remodeling requires builders to educate their work crews on working in owner-occupied homes.

For Magleby, the shift meant preparing his staff and subcontractors for a different set of client expectations and educating his work crew on working in owner-occupied homes.

“It’s different than building new,” he said. “You have to be more vigilant dealing with clients and their expectations. You’re in their living space, so they’re watching as you do the work.”

“There’s little room for error,” he added.

Clients generally contact their remodelers almost daily, a change for builders who are used to visits by new-home buyers checking on progress much less frequently.

Jones said his company provides remodeling clients with daily progress reports — including details on the personnel involved and information on any surprises or problems that need to be addressed.

“Communication with the client is extremely important when remodeling,” he said.

Tackling the Unknowns

Both Jones and Magleby had to re-evaluate their billing practices and increase their markups. Remodeling, they said, requires higher overhead costs than typical new construction.

“We charge more because remodeling is substantially more difficult. It’s all about the unknowns — what’s behind the walls and how the house was originally built,” Jones said.

Remodeling also requires additional skills and costs to bring a home into top condition. “Sometimes we have to do more to bring the home up to our standards,” he said.

In addition to the other adjustments, Magleby said he had to beef up his company’s liability insurance policy to cover potential damage to his clients’ valuables and personal possessions.

“It was a learning process for us, and we had to continually adjust not only our business practices but our expectations as well,” said Magleby.

“As more builders look to branch out into remodeling I would highly recommend that they do their research first in order to save them from wasting time and resources learning on the job,” he said.

Continuing Education Courses for Remodeling

NAHB offers continuing education remodeling designees such as courses on customer service and estimating that can be helpful to builders who are transitioning to remodeling.

NAHB is also developing training and information on business management and sales and marketing to further help builders successfully make the transition.

HBAs to Reveal Winning Hands on National Membership Day, May 24

As NAHB kicks off the 2011 National Membership campaign, one South Dakota home builders association plans to take advantage of this year’s poker-style theme, The Winning Hand, by upping the ante of its successful fundraising campaign for its charitable and scholarship foundation, which netted more than $20,000 last month.

The Home Builders Association of The Sioux Empire will build on the excitement and energy generated during a recent casino night benefiting its Care Foundation. The fundraiser “far exceeded any and all expectations we had,” said the HBA’s executive officer, Julie Terrell.

The event featured a raffle, poker, a bean bag toss, black jack, dice and other games. “We even had an HBA version of beer pong. There was water in the cups,” Terrell said.

“We also had fun with karaoke,” she said. Participants paid $5 to nominate someone to sing. If the nominee refused, “they had to pay an additional $5 to get out of it.”

Because members had so much fun at the charitable fundraiser, the HBA will continue its game-night theme for its membership drive.

This time, the stakes will be about building membership.

Other HBAs across the country will be dealing their own winning hands through similar events this month. Then, on National Membership Day on Tuesday, May 24, participating HBAs can call a special NAHB phone line — 800-899-6242 — between 12:00 p.m. and 5:00 p.m. EDT to report their projected number of new members recruited in May.

“It’s a day we all look forward to,” said Robin Newhouse, chair of the NAHB Membership Committee. “Senior officers and other volunteer leaders spend the day at NAHB in Washington, D.C., taking calls from the locals. We love having the chance to answer questions and talk to members from all over the country — and it’s fun to watch the officers jostling to answer the phones.”

Participating members can earn double Spike credits for each new member recruited in May. In addition, recruiters can qualify members to attend the invitation-only Spike Party at the 2012 NAHB International Builders’ Show in Orlando in February.

Other prizes for recruiters are listed on the National Membership Day web page.

To learn which HBAs are participating in National Membership Day, or how to sign up, email the NAHB membership staff, or call 800-368-5242 x8347.

NAHB Relief Fund Poised to Help Victims of Tornadoes That Ripped Through the South

NAHB and home builders associations throughout the federation are ready to help the victims of the severe tornadoes and storms that tore through large portions of the South in late April, wiping out homes and businesses and claiming hundreds of lives.

Alabama, where 31 of 67 counties saw significant damage, was the hardest hit. Arkansas, Georgia, Mississippi and Tennessee are among states also affected.  

On May 2, NAHB Chairman Bob Nielsen sent a memo to the board of directors and all state and local HBA executive officers to let them know how they can help.

“The Home Building Industry Disaster Relief Fund (HBIDRF) is a recognized 501(c)(3) charitable organization that assists areas affected by disaster by facilitating the rebuilding of communities,” Nielsen said in the memo. “The HBIDRF makes funds available for direct contribution to other recognized charities working to rebuild and/or repair housing in the affected area.”

“While the fund cannot provide assistance available directly to individuals or to NAHB’s affiliated associations, the HBA of Alabama does have a recognized 501(c)(3) charitable organization, and any contributions earmarked for the tornado disaster will go directly towards helping the local affiliated associations and their members recover from this tragedy,” Nielsen said.

Potential donors can visit www.nahb.org/hbidrf; or email Jessica Lynch or Melissa Voorhees for additional information.

“NAHB staff has reached out to each of the state associations affected by the disaster as well as several members from these same states. By and large, they are reporting that they are faring okay and are in the process of checking in with their members and conducting needs assessments,” Nielsen said.

“Most of the HBAs themselves have had power restored and are back in operation. So far, we have not heard news of any loss of life from the NAHB membership on account of these storms, but the physical damage to these communities is tremendous and will take a great deal of time to rebuild,” he said.

Nielsen also noted that NAHB resources for afflicted areas include radio PSA scripts to warn consumers about unscrupulous contractors following a disaster, and government assistance links and downloadable information from FEMA, the Red Cross and the Small Business Administration.

A list is available at www.nahb.org/disasterresources.  

To Contribute

To contribute, make checks payable to the Alabama Home Builders Foundation earmarked for “Tornado Disaster” and send them to:

Home Builders Association of Alabama
7515 Halcyon Summit Drive
Suite 200
Montgomery, Ala. 36117

“NAHB staff will continue to work with the HBAs in the affected areas and we will keep you informed of any new developments. I know you join me in extending our sympathies to those who have lost so much and wishing them all speedy progress towards recovery and rebuilding,” Nielsen said.

Mortgage Denied, Sometimes for No Good Reason

As the result of tighter standards from Fannie Mae and Freddie Mac, getting a mortgage has gotten tougher and many home buyers are getting rejected for loans they could easily afford. A quarter of all mortgage loan applications get denied for loans, according to the Federal Reserve. Many other potential home buyers never even try to get loans, said Jerry Howard, CEO of NAHB. “The pendulum has swung too far in the other direction,” Howard said. “This overreaction is retarding the housing market recovery.” Among the tougher requirements, for Fannie/Freddie lenders to approve a mortgage on a condo, 70% of the units in the building have to be already sold or under contract to individuals. Before 2009, the threshold was 51%. Today, if someone’s total debt exceeds 45% of income, the mortgage will be denied. In 2009, the limit was 55%. Fannie and Freddie also have gotten stricter in how they factor in missed payments on credit cards, auto loans and other debts in which the balances do not have to be paid off every month. They used to be OK with a missed payment or two. Now, one missed payment will hit the debt-to-income ratio, because banks will add 5% of the outstanding loan balance to the debt part of the calculation. (www.money.cnn.com)
CNN Money (4/19/11); Les Christie

‘Qualifying’ Loan Definition May Disqualify Many Clients

Forthcoming regulations could make conventional mortgages more expensive to the wide swath of home buyers and owners who can’t put 20% down, depressing originations and potentially undermining the housing recovery. If 20% down becomes the standard for “qualifying residential mortgages,” nearly half of all current home owners with a mortgage and 70% of first-time home buyers would not make the cut, according to data from CoreLogic. Under the Dodd-Frank act, lenders will have to retain 5% of the credit risk of any non-QRM home loan they securitize. Therefore, whether or not lenders held such loans in their portfolios, they’d have to hold capital against them — a cost that’s apt to be passed on, in the form of higher mortgage rates, to borrowers without 20% equity. “The economics just don’t work,” said Cameron Findlay, chief economist at LendingTree. He estimates that rates for low-downpayment loans could rise as much as three percentage points. “We think the housing market would be hurt through the endorsement of a mandatory downpayment.” (www.americanbanker.com)
American Banker (3/22/11) Kate Berry

FHA, Fannie Mae Programs Back Loans for Energy-Efficient Upgrades to Your Home

Both the Federal Housing Administration and Fannie Mae recently launched start-ups to provide the cash households need to pay for energy improvements to their homes. The FHA’s new Powe Saver program allows eligible owners to borrow up to $25,000 at fixed rates between 5% and 7% for as long as 20 years to finance high-efficiency windows and doors, heating and ventilating systems, solar panels, geothermal systems, insulation and duct sealing, among other retrofits. An estimated 30,000 loans will be closed in the next two years and PowerSaver could become a major national program for energy upgrades, according to Housing and Urban Development Secretary Shaun Donovan. Fannie Mae’s “energy improvement” mortgage add-on program is significantly different from the FHA’s. Rather than a separate loan to finance energy retrofits, Fannie folds the cost of the improvements — capped at up to 10% of the estimated market value of the home following the energy efficiency enhancements — into the mortgage amount itself. (www.washingtonpost.com)
Washington Post (4/29/11); Kenneth R. Harney

Puget Sound Condo Supply Shrinks

The supply of new condos in Washington’s Puget Sound area is steadily shrinking. Marking the end of the last development cycle, only 32 new condo units are expected to deliver in downtown Seattle in 2011, according to Realogics Sotheby’s International Realty principal Dean Jones. Those are part of the Volta condos, which were built in 2008, but were later foreclosed on. And, according to Jones, it is likely they will be purchased out of foreclosure and converted into apartments. Future demand will be in part satisfied by remaining inventory from the previous development cycle. Jones estimates that 351 new construction condos remain available in downtown Seattle for sale by developers, down from more than 570 a year ago. And those units are going somewhat fast, because so many projects have lowered prices to avoid foreclosure. (www.bizjournals.com/seattle)
Puget Sound Business Journal (4/2/11); Kelly Gilblom

Aging in Place

With more than 7,000 Americans a day turning 65 for the next 19 years, there’s a huge market out there for anything that can help them stay in their homes. Builders, companies that retrofit existing housing, AARP and agencies that work with the aging population are all seeking plans, devices and adjustments to existing housing and home services that will keep people from having to go into assisted living facilities and nursing homes if they don’t want to. Already 211,864 residents of Hillsborough County, Fla., are more than 60 years of age. That’s 17.6%. 21,000 of those are below the poverty level; 20,000 are medically underserved; and 12,000 are raising grandchildren. According to statistics kept by the U.S. Bureau of Labor, 76 million baby boomers (which make up 43% of the current U.S. workforce) will be eligible to retire in the next 10 years, but an AARP poll conducted by Woelfel Research Inc. in 2010 says many of them say they don’t plan to retire. But whether they work or not, how and where they will live will be a major concern and should be planned for early; not when the time comes that changes must be made. (www.observernews.net)
Observer News (4/21/11); Penny Fletcher

Dusting Off the Maid’s Room

Several new developments in Manhattan have incorporated maid's rooms into their larger apartments, and while the rooms are separate from family sleeping areas, they are generously sized and have standard en-suite bathrooms. The Laureate, a new 20-story building at the corner of Broadway and 76th Street, has four such apartments — each has four or more bedrooms and is priced at about $11 million. The maid’s room is listed simply as another bedroom, but it is away from the others, closer to the front door and living areas. Two of the building’s penthouse units even have separate entrances that lead directly to the servant’s rooms. Demand for family-sized apartments with separate quarters for live-in help has been so marked at the Laureate that the Stahl Organization, the developer, has decided to combine some smaller apartments to create more units that fit the bill. Even in the current economy, there is still strong demand for live-in help, said Brian Taylor, the owner of New York Domestics, which places hundreds of nannies and housekeepers annually in the New York area. From the suburbs, the majority of requests fielded by his agency are for live-in help, but in Manhattan, where space is more of an issue, only about 40% to 50% of clients want someone to live in. (www.nytimes.com)
New York Times (4/28/11); Vivian S. Toy

New-Home Sales Rise a Promising 11.1% in March

Sales of newly built, single-family homes rose 11.1% to a seasonally adjusted annual rate of 300,000 units in March, the U.S. Commerce Department reported on April 25.

The gain partially offsets a large decline that occurred in new-home sales this February, when activity hit a record low due partly to poor weather conditions.

"The fact that new-home sales have regained some of the ground they lost earlier this year is a promising sign at the start of the spring home buying season," said NAHB Chairman Bob Nielsen.

"While potential buyers continue to be extremely cautious, they are starting to take a look around and evaluate their very good options with regard to attractively priced new homes," Nielsen said.

"The March pace of new-home sales more accurately reflects current market conditions than the extremely low pace we saw in the first two months of this year, when unusually poor weather likely kept buyers away," said NAHB Chief Economist David Crowe.

"That said, the average sales pace for the first quarter of 2011 held at about the same level seen for the last half of 2010,” he said.

“A limiting factor is the extremely thin inventory of new homes for sale, which is now at its second-lowest level in history. Builders continue to confront major challenges in obtaining financing to build new homes, and the shortage of new product makes it that much tougher for them to compete with existing homes on the market. At the same time, tighter lending conditions are making it more difficult for qualified buyers to obtain a mortgage."

New-home sales regained lost ground in three out of four regions this March.

Sales rose 66.7% in the Northeast — up from a very low sales pace in the previous month — and climbed 12.9% in the Midwest and 25.9% in the West. Sales were virtually unchanged in the South, falling 0.6%.

The inventory of new homes for sale fell to 183,000 units in March, which is the second-lowest level on record. This represents a 7.3-month supply at the current sales pace.

Subscribe to the Free Eye on Housing Blog

For in-depth analysis of the latest housing statistics and research from the federal government, NAHB and other sources, Eye on the Economy readers are encouraged to visit Eye on Housing at http://eyeonhousing.wordpress.com/.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Data You Can Build On

Get historical data, industry analysis and the latest forecasts, including state and metro, from HousingEconomics.com. Support your business decisions with in-depth analyses, detailed Excel tables, overviews and more. For more information, visit HousingEconomics.com.

FHA Pilot Program Offers Low-Cost Loans for Energy-Saving Home Improvements

Eighteen lenders are participating in a two-year pilot program backed by the Federal Housing Administration (FHA) that offers home owners low-cost loans to make energy-saving improvements to their homes. 

The PowerSaver loans program will offer home owners up to $25,000 to make energy-efficient improvements — including insulation, duct sealing, new doors and windows, HVAC systems, water heaters, solar panels and geothermal systems — according to the U.S. Department of  Housing and Urban Development and the U.S. Department of Energy.

The pilot program is designed to assist about 30,000 home owners and create more than 3,000 jobs. 

The loans will be available in Charlottesville, Va.; the greater Chicago area; 16 municipalities in Maryland; Cape Cod and Martha's Vineyard, Mass.; Omaha and Lincoln, Neb.; Portland, Ore.;  Allegheny County, Pa.; Eagle County, Colo.; Indiana; Minnesota; South Carolina; and Texas.

PowerSaver financing will be similar to a home equity loan that must be paid off at the time of sale, or in some cases, when refinancing occurs. It will use the existing FHA Title 1 home improvement program, with additional incentives and requirements.

The combined loan-to-value ratio of the mortgage and energy refit loan cannot exceed 100%. Participating home owners must have a minimum 660 credit score and the total debt-to-income ratio cannot exceed 45%.

FHA mortgage insurance will cover up to 90% of the loan amount in the event of default. Lenders will retain the remaining risk on each loan, which the Administration hopes will encourage responsible underwriting and lending standards.  

HUD developed PowerSaver as part of the Recovery Through Retrofit initiative launched in May 2009 by Vice President Joe Biden’s Middle Class Task Force to develop federal actions expanding green job opportunities and boosting energy savings by improving home energy efficiency.

Subscribe to the Free Eye on Housing Blog

For in-depth analysis of the latest housing statistics and research from the federal government, NAHB and other sources, Eye on the Economy readers are encouraged to visit Eye on Housing at http://eyeonhousing.wordpress.com/.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Data You Can Build On

Get historical data, industry analysis and the latest forecasts, including state and metro, from HousingEconomics.com. Support your business decisions with in-depth analyses, detailed Excel tables, overviews and more. For more information, visit HousingEconomics.com.

NAHB submitted comments on the program that reflected the findings of an NAHB task force on financing options, training and education needs and potential problems.

Spring Board Panel to Focus on Builder Strategies for Success

NAHB members who are planning on attending the association’s upcoming spring board of directors meeting in Washington, D.C., will have the opportunity to hear from builders who are having success in securing acquisition, development and construction financing and in getting homes sold in today's challenging marketplace

Builders will share their winning strategies with participants in a newly scheduled panel discussion — "Builder Focus: Proven Strategies for Success."

The panel will be moderated by NAHB Chairman Bob Nielsen.

Presenters will include:

• Don Ferrier, founder and president of Ferrier Custom Homes in Fort Worth, Texas
• Mick Galatio, founder and president of Desert Wind Homes in Las Vegas
• Phil Kean, president of Phil Kean Designs, Inc. in Winter Park, Fla.
• Dean Mon, president and CEO of DR Mon Group, Inc. and an NAHB state representative from Shrewsbury, N.J.
• Ivar Pietri, chairman and CEO of Peregrine Development Co., president of Klassik Builders Inc. and NAHB national area chairman from San Juan, Puerto Rico.

No prior registration is necessary, although seating will be limited.

The program will be held from 7:30-8:30 a.m. on Wednesday, May 18, in Marriott Ballroom Salon 1, Lobby Level, in the Marriott Wardman Park Hotel.

For more information, email Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447.

Subscribe to the Free Eye on Housing Blog

For in-depth analysis of the latest housing statistics and research from the federal government, NAHB and other sources, Eye on the Economy readers are encouraged to visit Eye on Housing at http://eyeonhousing.wordpress.com/.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Data You Can Build On

Get historical data, industry analysis and the latest forecasts, including state and metro, from HousingEconomics.com. Support your business decisions with in-depth analyses, detailed Excel tables, overviews and more. For more information, visit HousingEconomics.com.

Eye on the Economy: Housing Still in the Doldrums Despite Upticks in Sales and Starts

Mid-April found the sales volume of both new and existing homes moving off recent lows, but housing prices continued to fall due to weak demand and relatively high unemployment.

While housing starts increased by more than 7% in March, overall starts remained at a level well below what will be required to keep up with demand from population growth.

Residential construction activity has been restrained, in part, by the scarcity of builder financing. The lending crisis contributed to builder confidence receding somewhat in April. Also a factor was competition from distressed sales, which rose in April to 40% of all existing home sales.

Beyond housing, recent data show the economy slowly gaining strength, particularly in manufacturing. Hiring is growing across economic sectors, but it has not been strong enough to inspire consumer confidence or generate increases in wages. At the same time, businesses are encountering growing energy and commodity price pressures — costs not easily passed along to anxious consumers, who are contending with rising energy and food costs of their own.

The last few weeks have also seen the debate over the nation’s long-term fiscal challenges heating up, with Rep. Paul Ryan (R-Wis.) and President Obama unveiling competing tax and spending blueprints. The Congress and the President did manage to agree to repeal last year’s health care bill’s new 1099 information reporting requirement, which is good news for small businesses.

The Latest Postings 

• March New Home Sales Off Record Low
  Chief Economist David Crowe discusses the March new home sales report, which at 300,000 on an annualized basis is an 11.1% increase from February’s record low pace. New home inventories neared their all-time low, with the supply falling to 7.3 months at the March sales pace. Posted: April 25
  
  
• House Prices Continue to Slide in February
  House price data from the Federal Housing Finance Agency showed continued housing price declines, with the FHFA index down 1.6% in February and 5.7% for the year. Posted: April 21
  
  
• Existing Home Sales Resume Upward Growth in March
  Estimates from the National Association of Realtors showed  sales of existing homes increasing in six of the last eight months, with sales in March rising 3.7% to 5.1 million on an annualized basis. Investors were responsible for 22% of existing home purchases in March. Posted: April 20
  
  
• Home Construction Rebounds
  Housing starts increased more than 7% in March, with increases in every region and for both single-family and multifamily construction. The increases support NAHB’s forecast of gradual growth in housing construction in 2011, with momentum building throughout the year. Posted: April 19
  
  
• April’s Housing Market Index
  Chief Economist David Crowe discusses the April NAHB/Wells Fargo Housing Market Index reading. Posted: April 18
  
  
• Home Builder Index Slips Backward
  The NAHB/Wells Fargo Housing Market Index (HMI) dropped one point in April. Posted: April 18
  
  
• Beige Book: General Economic Improvement
  The Federal Reserve’s Beige Book, which provides an overview of economic conditions by region and sector, showed the economy slowly improving, with the notable exception of persistent weakness in the housing sector. Posted: April 15
  
  
• Inflation Expectations Build With the Consumer Price Index Rising Again in March
  Rising food and energy prices pushed the Consumer Price Index (CPI),, up for the ninth straight month. The year-over-year increase now stands at 2.7%. Posted: April 15
  
  
• Onwards and Upwards — Energy Price Rises Continue Unabated,  Pushing the Producer Price Index Higher in March
  With businesses facing rising energy and commodity costs, the Producer Price Index (PPI)  rose 0.7% in March, and the cost of finished goods has risen 5.8% over the past year. Posted: April 14

Tax Policy Updates Affecting Home Builders and Housing’s Tax Incentives

• Tax Day Post: Federal Tax Revenues
  This post examines the state of federal tax revenues (including individual tax revenues) and the recent history of the top marginal income tax rate, with a focus on the structural budget deficit. Posted: April 18
  
  
• Health Care Law’s 1099 Reporting Requirement Repealed
  New legislation has repealed the onerous 1099 reporting requirement that was enacted as part of last year’s health care reform bill and was set to take effect in 2012. NAHB estimates that the average builder would have been required to submit an additional 40 1099s absent the repeal. Posted: April 15
  
  
• Individual Tax Policy: The President’s New Deficit Proposal
  President Obama laid out a new deficit plan with an automatic cut in tax expenditures, including the mortgage interest deduction, if the federal government does not achieve certain budget targets. This post examines the plan in detail and explores its possible impact on housing and home building. Posted: April 14

Subscribe to the Free Eye on Housing Blog

For in-depth analysis of the latest housing statistics and research from the federal government, NAHB and other sources, Eye on the Economy readers are encouraged to visit Eye on Housing at http://eyeonhousing.wordpress.com/.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Data You Can Build On

Get historical data, industry analysis and the latest forecasts, including state and metro, from HousingEconomics.com. Support your business decisions with in-depth analyses, detailed Excel tables, overviews and more. For more information, visit 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.

Subscribe to the Free Eye on Housing Blog

For in-depth analysis of the latest housing statistics and research from the federal government, NAHB and other sources, Eye on the Economy readers are encouraged to visit Eye on Housing at http://eyeonhousing.wordpress.com/.

They can also subscribe to the blog’s free RSS feed, which will automatically alert them to every new posting.

Data You Can Build On

Get historical data, industry analysis and the latest forecasts, including state and metro, from HousingEconomics.com. Support your business decisions with in-depth analyses, detailed Excel tables, overviews and more. For more information, visit HousingEconomics.com.

Builders’ Tip: 'Cow Magnet' Adds Balance, Convenience to Framing Hammer Handle

I use a wood-handled California framing hammer on my framing jobs, but the hammer is a bit top-heavy.

To provide better balance for the top-heavy framer, I installed a “cow magnet” in the end of the handle.

Dairy farmers and veterinarians feed the cylindrical magnets, which are about 1/2 inch in diameter and 3-1/2 inches long, to calves at branding time in order to prevent “hardware disease” — a condition cows get after ingesting bits of metal such as staples, nails and baling wire as they graze.

The magnet stays in the cow’s reticulum —or second stomach — its entire life. The magnet attracts metal that might otherwise lodge in the cow's other organs, causing inflamation and lowering its milk production.

To install the magnet in the framing hammer:

• Drill a 9/16-inch-diameter hole in the end of the hammer's handle.
  
  
• Then smear some silicone caulk on the magnet as you install it.

In no time, you’re ready to drive those sinkers.

An added benefit to using the magnet as a counter-balance is that when you spill some nails, you don’t have to bend over as far to pick them up.

You can get cow magnets at agriculture supply stores. Or, you can find them online at sites such as www.magnetsource.com.

— Gary Ervin, Dover, Ohio

Tips & Techniques provided by Fine Homebuilding.
©2010 The Taunton Press

To contact Fine Homebuilding, e-mail Christina Glennon.

Use Fixed Costs to Strategically Invest in Your Company and Improve Profitability

By Jeff Prager Backroom Management

The final installment in a series on seven keys to managing your business and building profits.

Most business owners dread their fixed costs — the rent, utilities and other regular business expenses they have to pay each month.

By the time the first of the month arrives, they reckon they’re already in the hole for thousands of dollars and will be spending the rest of the month digging themselves out of it — and that’s before they tackle their payroll.

But that’s the wrong way to look at fixed costs.

Instead, business owners should regard their fixed costs as an investment in their business. By structuring these costs strategically — key #7 in this series on managing your business and building greater profits — they can watch their investment pay off in time and energy saved, and more money made.

Seven Keys Working Together

Unlike the other articles in this series, where I explored the techniques you can use to optimize each of the seven keys essential to managing your business, in this article I will focus on how they interact and can be adjusted to achieve optimal results.

Such an approach — which enables you to model the impact of decisions on your company — also can help guide the strategic investment of your fixed costs.

This can be accomplished through a simple mathematical relationship that can help you set a profit goal — and then determine how your business needs to perform to achieve that goal.

It’s a formula that can be demonstrated in an Excel table. All seven essential keys are numbered in the chart:

Keys (Beginning with profits)	Example	Your Value
Profit Goal	$30,000
Costs
7.  Fixed costs       Gross profit (profit + fixed costs)	$120,000  $150,000
6.  Gross profit percent*       Revenue goal	20%  $750,000
Sales
5.  Average price per transaction       Number of sales	$500  1,500
4.  Customers per transaction       Number of customers needed	4  375
Existing Customers
Customers at start of period  3.  Rate of customer retention        Number of customers retained	100   50%   50
Sales Efforts
Number of new customers needed  2.  Sales conversion rate	325   25%
1.  Number of leads	1,300
*Gross profit percent = 100% - variable cost % (key #6). If key #6 is 80%, gross profit percent is 20%.

With your goals set, you can make the necessary adjustments to the other keys to achieve them.

In the table below, the goal is to achieve a profit of $30,000. However, between managing your business, paying the bills and generally stressing out from the pressure, you no longer have time to generate enough leads to achieve your profit target. You want to hire a new salesperson at $65,000 a year, but can you afford to and will you still be profitable?

Keys	Current	After fixed cost increase
Profit goal	$30,000	$30,000
7.  Fixed costs	$150,000	$215,000
6.  Variable costs	80%	80%
Total unit sales	1,800	2,450
Total revenue	$900,000	$1,225,000
5.  Average price per transaction	$500	$500
4.  Transactions per customer	4	4
3.  Rate of customer retention	50%	50%
2.  Conversion rate	25%	25%
1.  Leads target	1,600	2,252

As indicated in the table above, if you increase your fixed costs by $65,000 and hold your business performance equal, your new salesperson will have to generate an additional 652 extra leads — or roughly 40% more — in order to cover your costs and meet your profit goal. Clearly, this is possible, but it may not be a realistic goal.

Not the Whole Story

But you’re not just hiring your salesperson to increase your company’s leads, you expect them to boost your conversion rate and your customer retention rate, as well — which changes your overall business performance.

Keys	Current	After fixed cost increase	Fixed cost increase + salesperson performance
Profit goal	$30,000	$30,000	$30,000
7.  Fixed costs	$150,000	$215,000	$215,000
6.  Variable costs	80%	80%	80%
Total unit sales	1,800	2,450	2,450
Total revenue	$900,000	$1,225,000	$1,225,000
5.  Average price per transaction	$500	$500	$500
4.  Transactions per customer	4	4	4
3.  Rate of customer retention	50%	50%	65%
2.  Conversion rate	25%	25%	40%
1.  Leads target	1,600	2,252	1,370

With the higher conversion rate factored in, as indicated in the table, your salesperson now only has to generate 1,370 leads. That’s 230 less than when you were generating them — while you also were managing your business, paying your bills and otherwise stressing out.

This insight into business operations can be extremely helpful when you are considering making changes.

By analyzing all seven keys together, you are able to determine that when you hire a new salesperson, you also can actually reduce your marketing expenditure by about 15% because you aere also able to reduce the number of new leads needed while still meeting your profit goal.

The modeling in this example was predicated on two variables, but there are many others you can consider for your particular situation.

For instance, if you decide that your new salesperson will increase capacity beyond your current production capabilities, then you could model hiring new field employees and model that scenario. Or, on the other hand, you could consider raising your prices, which would lower demand to a level you can fulfill. Of course, raising prices can also require an upgrade in materials and features, which would add to costs.

As you can see, the variables you could model are endless. That’s fine as long as you are constantly modeling and constantly refining your models. Your business can’t grow without investments in fixed costs.

The seven keys to managing your business we examined in this series encompass your entire business funnel — revenue and expenses, marketing and sales, production and administration — everything needed to obtain and keep customers, manage costs and make money. And it begins every time you get a new lead.

While each article has focused on a particular key, keep in mind that nothing in your business happens in isolation.

The decisions you make to boost sales impact your gross profit. The decisions you make for marketing impact production. And the decisions you make for fixed costs impact all of the above.

To read the previous articles in the series, visit:

• “Seven Keys to Managing Your Business and Increasing Profits”
• “Increase Your Profits by Systematically Improving Your Sales Conversion Rate”
• “Optimize Your Rate of Customer Retention, and Profit From Lifelong Customers”
• “Create a Lifetime Relationship With Your Customers”
• “Initiate a New Pricing Strategy and Build to Thrive, Not Merely to Survive” 
• “Save Time, Money, Energy by Managing All Your Variable Costs — Not Just Your Money” 

Jeff Prager is the CEO of Backroom Management, based in Centennial, Colo., which provides the proprietary tools, systems and expertise that builders need to increase their profits. His “7 Key Numbers” system helps business owners determine their own seven key goals — and the paths to reach them — to make managing their business toward greater profits far simpler. For more information, visit Backroom Management at www.backroommanagement.com; or email Prager, or call him at 303-221-0823.

How Does Your Business Measure Up?

“The Cost of Doing Business Study, 2010 Edition,” available through BuilderBooks.com, provides home builders with a rare glimpse at profitability, cost of sales and expenses from hundreds of home builders across the country.

Several categories — including volume, operation type and land vs. no land costs — are analyzed to help builders fine-tune comparisons between study results and their companies.

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

Homeland Security Testing Disaster Preparedness in Central States

The Department of Homeland Security (DHS) is planning a series of exercises this month to test disaster preparedness and business continuity readiness throughout the Central states.

The National Level Exercise 2011 (NLE11) takes place May 16-20 with events planned for eight states in four Federal Emergency Management Administration regions.

NLE11 is intended to simulate a catastrophic (7.7 on the Richter scale) earthquake in the New Madrid Seismic Zone, which includes Alabama, Kentucky, Mississippi, Tennessee, Illinois, Indiana, Arkansas and Missouri.

The exercise represents an opportunity for businesses to test their continuity plans, identify gaps, improve communication and practice how to respond to a national catastrophe.

DHS is offering five options designed for businesses and for individuals who want to make sure their families are prepared for a disaster.

For instance, the Virtual Engagement option enables participants to download scenario and exercise updates at regular intervals and then provide feedback to event organizers.

Groups and businesses outside the NLE11 target area may also participate through the Virtual Engagement program — but must first register by sending an email to: Private.SectorNLE@dhs.gov. 

For additional information, send an email to nep@dhs.gov, or visit the NLE11 website.

Builders Say 20 Clubs Helping to Save Their Businesses in a Challenging Marketplace

Up against a challenging marketplace, builders and remodelers have been reporting that participation in NAHB’s 20 Club program has provided their businesses a decisive edge over the competition and has enabled them to survive today’s difficult times for housing.

Steve Spanjer, president of Spanjer Homes and a custom home builder in Fort Collins, Colo., said that the program “has been the single most important benefit to my career.” He has been a 20 Club member for more than 15 years.

The 20 Clubs are small groups of builders, remodelers or other industry professionals from non-competing markets who are then paired according to their type of company (i.e., custom, production or small volume builder; remodeler; and land development); the number of units they produce annually; and their dollar volume.

Each club meets twice a year in a location determined by the group to review such key areas as cutting expenditures, instituting best-practice efficiencies and procedures and pinpointing areas needing particular attention.

One of those trouble areas for Spanjer’s 20 Club group — The Doors — was the heavy toll of the housing downturn on custom home building.

The knowledge and support he derived from interacting with his group members was a lifesaver for his company during the thick of the storm.

“Our group saw the wave hitting early,” Spanjer said. “We talked about what we would do to get through the hard times and it was the group participation that helped my company survive what could have been a devastating couple of years.”

Because all 20 Club members sign confidentiality agreements and hail from different markets, members are able to discuss their pressing business issues openly.

Survey research has found that 20 Club members perform better than non‐members in their operational systems and long-term success.

20 Club members are also frequently regarded as leaders in their markets and many are recipients of prestigious industry awards.

Although the 20 Club program is seen by those who are familiar with it as one of the most valuable resources NAHB offers its members, its availability is not as widely known throughout the membership as it should be, according to association staff members with expertise in business management.

Among the advantages afforded by 20 Clubs, members can:

• Get advice on how to control costs and increase margins
  
  
• See the results achieved by different management structures and styles
  
  
• Gain insights from discussions with builders or remodelers who have similar operations
  
  
• Select meeting topics that are important to the group
  
  
• Share new ideas that are helping builders make more money
  
  
• Establish benchmarks by comparing financial information with similar builders
  
  
• Discuss how to improve customer service and marketing strategies
  
  
• Access other club members throughout the year for advice or ideas
  
  
• Get away from the daily grind to work on long-term management goals with the group
  
  
• Identify new trends
  
  
• Learn about new business opportunities and how to profit from them

For more information on the 20 Club program, visit www.nahb.org/20clubs; or email Christopher Slye at NAHB, or call him at 800-368-5242 x8241.

Aging Population Stimulates Renewed Interest in Universal Design Products

Judging from exhibits at the 2011 International Builders’ Show in January, building product manufacturers are beginning to more aggressively market their universal design products to reflect the growing demand for homes that are built or remodeled to accommodate aging in place.

While some products are new to the market, many of the products have been around for a while but are getting renewed interest within the industry.

“During the universal design product tours on the IBS exhibit floor, we were finding builders and remodelers who were seeing products for the very first time, even though they weren’t new,” said Diana Schrage, senior interior designer at the Kohler Design Center.

“This just shows that the profile of universal design, or aging-in-place, products are seeing a surge in popularity,” she said.

While the nation’s fast growing population of aging baby boomers is driving the market for these products, manufacturers are designing them to appeal to an audience that includes young and old alike, with varying degrees of mobility and agility.

Baby boomers themselves may balk at products that connote aging and infirmity. Accordingly, the new crop of universal design products aims at maximizing lifestyle while adding beauty and aesthetic interest to the home.

Here are some universal design products that are “hot” right now:

The Hidden Hand Rail

Kohler has provided a product that makes it easy for home owners to enter and exit the bathtub.

The Belay in-tile grab bar can be artfully incorporated into the design of the bath, avoiding the institutional look often associated with this product.

The grab bar has an interior edge that helps with balance while supporting the weight of someone using the shower.

Those who shower while seated can use the hand rail to steady themselves as they enter, and as they stand to exit.

The hand rails can be installed on one, two or three walls of the shower or bath and can be cut to fit the length of custom-sized showers.

For more information, visit www.Kohler.com.

A Range Within Reach

Well-designed range hoods can add a stylish touch to any kitchen decor and they also help eliminate smoke, odors and airborne grease during cooking.

They also can be hard to reach, which is why Broan has created the Evolution Three under-cabinet range hood, which can be operated by a handy remote. 

The magnetic remote control can be placed on almost any metal surface in the kitchen allowing anyone who does not have the ability to reach the controls — such as those using a wheelchair — to operate this appliance with ease.

Four different fan speeds — including a “boost” mode, a four-level lighting system and a delay-off feature — are added bonuses.

For more information, visit the Broan website.

Elevate with Ease

Savaria, the largest personal mobility and accessibility company in Canada, offers three styles of residential elevators that provide quiet, smooth rides — without taking up a lot of space in the home.

Two of the three elevators, the Infinity and Eclipse models, have an automatic “slim door” that doesn’t swing out, but disappears into the sides of the unit.

This allows the elevator to be entered and exited more easily by those who are using a walker or wheelchair — as well as by anyone else boarding or alighting from it.

Telecab, the third style of elevator offered by Savaria, is the quickest and easiest way to add an elevator to the home.

This unit requires minimal construction because no elevator hoistway is required for installation. 

For more information, visit www.Savaria.com.

One-Handed Roll Change

Moen offers a large selection of spring-free, pivoting toilet roll holders that can be operated with one hand, and demands little in the way of manual dexterity, but is secure when closed.

The home owner simply lifts the arm, inserts the new roll and sets the arm back into place. The pivoting arm remains attached so there's no spring to lose or extra parts to drop.

The fixtures have a limited lifetime warranty. For more information, visit www.Moen.com

‘Universal Design for the Home’ Available From NAHB BuilderBooks

“Universal Design for the Home,” available through NAHB BuilderBooks, features a blend of projects, creative ideas and substantive planning information for incorporating universal design. 

Highly visual, the book features projects showing room contexts and photos of details. Basic specifications, how-to tips and other technical content are featured throughout the book in easy-to-find boxes and sidebars. 

To view or purchase this publication online, click here.

Find Out What 45+ Housing Buyers Want

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

Surrounding Amenities Heighten Appeal of Award-winning Multifamily Projects

A former department store converted into a mixed-use community, a mid-rise suburban condo with a distinctly urban feel and small condos in downtown Los Angeles featuring multiple gathering spaces with spectular views were among the award-winning designs discussed during NAHB’s “Design Ideas From Award-Winning Apartment and Condo Communities” webinar last month.

Several architects shared their strategies and concepts on apartment and condo design, often focusing on the amenities available in the surrounding community as an extension of their projects.

Seafood Restaurant Lures Renters

Dan Withee, of Withee Malcolm Architects, discussed how a restaurant carved out of space for what would have been two apartments in Avalon at Anaheim, a mixed-use community in Anaheim, Calif., sparked leasing there.

“The commercial component is difficult to lease unless it is adjacent to a busy area,” said Withee. “Two units were taken out of the corner of the building to create the commercial space on the front of the development, creating an additional amenity to attract new residents."

The Catch restaurant moved into the space and “became a catalyst for leasing activity,” Withee said.

Other commercial space within the high-density, mixed-use infill project, which features 251 apartments, also functions as community amenities.

Nearby activities, including Angel Stadium of Anaheim, home to baseball’s Los Angeles Angels, also can help boost the number of prospective renters and keep vacancies down, he said.

Surrounding Township Serves as Condo’s Amenities

The township of Morristown, N.J., and all it has to offer, helped earn the 40Park condominiums the 2010 Pillars of the Industry award for Best Mid-Rise Condominium Community.

Bill Warwick, of BartonPartners, said 40Park, which was converted from a former Epstein’s department store, is part of a large mixed-use redevelopment that also includes apartments and shares Morristown’s amenities.

“The amenity spaces are fairly small in this building,” “Warwick said. The real thought was that the street level and the town itself would be the amenity space, as you would see in an urban environment.”

The community website boasts a walkable downtown with restaurants, cafes, galleries, boutiques, theaters and the nearby Morristown Train Station, where residents can quickly and directly shuttle to Manhattan.

The convenience of downtown Morristown wasn’t 40Park’s only draw, Warwick said. “Almost every unit has a unique and fun design giving it the feel of a custom condo home — because your unit is not the same as your neighbors’.”  

Little Recreational Spaces With Views Mean a Lot

Thomas Cox, of Thomas P. Cox Architects, explained how smaller common areas in an attractive locations brought big results to 7950 West Sunset apartments in downtown Los Angeles.

While the 2008 Pillars finalist for Best Mid-Rise Apartment offered smaller floor plans —  790 square feet per unit — and many smaller recreational spaces, Cox said the key to its success was capitalizing on its prime location along Sunset Boulevard by providing a variety of public spaces where residents could easily gather, socialize and enjoy the view.

“One of the real challenges for this project was to find quality open space,” Cox said. “We carved out a deck, leasing office and amenities right at the podium level 30 feet about the street — which provided unrestricted views of downtown L.A.”

“This created a major gathering space for the entire community,” he said.

To further maximize the appeal of the community’s vista, Cox said the kitchens in 7950 West Sunset were designed to afford residents a street view of Sunset Boulevard — because residents were inclined to entertain friends in their apartments, often in the kitchen.

In addition, Cox said four units on the fifth floor overlooking Sunset Boulevard were replaced with bars, lounges and other gathering spaces for residents.

Replay Available

The fee for a replay of “Design Ideas From Award-Winning Apartment and Condo Communities” is $19.95 for Multifamily council members, $24.95 for NAHB members and $44.95 for non-members.

To purchase a replay, click here.

For more information on upcoming multifamily webinars, visit www.nahb.org/elearning.

Pillars Electronic Applications Due Friday, May 13

Applications for the 2011 Pillars of the Industry Awards competition honoring excellence in apartment and condominium design and development, as well as leadership in marketing and property management, are due by Friday, May 13

The Pillars awards program is the largest and most prestigious of its kind, and both multifamily housing professionals and the media look to the awards as a showcase of future trends and innovation.

Complete details on the Pillars awards — including eligibility requirements, categories and electronic applications — are available at www.nahb.org/pillarsawards.

A Sign of Better Times Ahead, Remodeling Market Index Reaches Four-Year High

A good indication that the remodeling market is heading into a recovery, the NAHB Remodeling Market Index (RMI) for this year’s first quarter rose to 46.5, up from 41.5 in the fourth quarter of 2010 and its highest level since the fourth quarter of 2006.

On a scale of 0 to 100, a rating below 50 means that more remodelers review the market unfavorably rather than favorably, although the latest results show responses moving close to crossing that threshold.

The overall RMI combines ratings of current remodeling activity with indicators of future activity, such as calls for bids.

Current market conditions for the first quarter of 2011 rose to 46.1 from 43.3 in the previous quarter.

Future market indicators climbed to 46.8 from 39.7 in the previous quarter.

"Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo.

"However, many home owners are still slow to commit to remodeling because they feel uncertain about the economic recovery and the difficulty in obtaining loans."

Regionally, the RMI rose from 38.8 to 46.1 in the Northeast, from 45.8 to 46.1 in the South and from 39.7 to 46.1 in the West.

Only the Midwest experienced a decline — from 54.3 to 47.1.

All current remodeling market indicators increased in this year’s first quarter over the final quarter of 2010:

• Major additions rose to 50.3, up from 48.6.
• Minor additions increased from 43.9 to 48.0.
• Maintenance and repair climbed from 37.0 to 39.5.

Future market indicators also improved across the board:

• Calls for bids rose from 47.2 to 53.1.
• Appointments for proposals were at 52.4, up from 43.1.
• The backlog of remodeling jobs climbed from 42.6 to 49.7.
• The amount of work committed for the next three months rose to 32.1, up from 25.9.

Added to the survey on which the RMI results are based, respondents were asked why prospective customers are refraining from remodeling their homes.

Among the results:

• Customers think it is hard to get financing — 90%.
• Customers have lost equity in their homes — 81%.
• Customers are uncertain about their future economic situation — 74%.
• There is reluctance to invest in the home when it is uncertain that the home will hold its value — 67%.
• Negative media stories are making customers more cautious — 62%.
• Inaccurate appraisals are making financing more difficult — 54%.

"Home remodeling continues to slowly increase, and continued growth through the year is expected," said NAHB Chief Economist David Crowe.

"The fact that some indicators are breaking 50 means remodelers are seeing improving activity in their markets,” he said.

“While credit scarcity and economic uncertainty continue to weigh down remodeling, signs of increasing consumer interest are promising."

For more information about remodeling, visit www.nahb.org/remodel.

Learn How to Run a Successful Remodeling Company

“The Paper Trail: Systems and Forms for a Well-Run Remodeling Company,” available through NAHB BuilderBooks, shows how to use proven management systems to run a successful remodeling company.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

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

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at NAHB BuilderBooks, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler.

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

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

NAHB Free Resources Help Remodelers Promote May National Home Remodeling Month

May is National Home Remodeling Month, and with remodeling activity starting to pick back up, the timing is perfect for members and local home builders associations and remodelers councils to promote the benefits of remodeling and highlight professionalism in the industry.

To help in this endeavor, NAHB Remodelers has created a members-only toolkit that includes resources such as:

• Press releases
• Column service articles
• Fact sheets, including ones on aging in place and green remodeling
• Public service announcements
• A remodeling month proclamation
• "May is National Home Remodeling Month" logos

Also included are guidelines for conducting marketing campaigns that promote the benefits of remodeling, emphasize the advantages of hiring a professional remodeler, increase awareness about remodeling and attract prospective customers.

Members will also find tips to get them started, including ideas for public events as well as how to use social media effectively and promote aging-in-place and green remodeling.

“This is a great opportunity for our members to promote the professionalism of remodeler members with NAHB,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP and president of Associates in Building & Design, Ltd. in Ft. Collins, Colo. “Also, we are starting to see a small light at the end of the tunnel for the industry. With everyone’s support in promoting not only the benefits of remodeling in May, but year round, we can help give remodeling the extra kick it needs to get back on a strong footing.”

The materials in the kit can be downloaded and customized with information on remodeling from local areas.

Download "May Is National Home Remodeling Month" materials by visiting www.nahb.org/remodelingmonth.

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

Learn How to Run a Successful Remodeling Company

“The Paper Trail: Systems and Forms for a Well-Run Remodeling Company,” available through NAHB BuilderBooks, shows how to use proven management systems to run a successful remodeling company.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

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

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at NAHB BuilderBooks, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler.

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

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

NAHB Remodelers Announces Spring Board Meetings and Events

The following are NAHB Remodelers meetings at the NAHB Spring Board of Directors Meeting in Washington, D.C., on May 18-19.

Wednesday, May 18

• NAHB Remodelers committee meetings scheduled throughout the day
  Marriott Wardman Park, Delaware Suite A & B, Lobby Level
  To download a complete schedule of committee meetings, agendas and meeting materials, visit www.nahb.org/nahbrspringboard.

Thursday, May 19

• NAHB Remodelers Board of Trustees meeting
  10:30 a.m.-12:30 p.m.
  Marriott Wardman Park, Washington 2, Exhibition Level
  
  
• NAHB Remodelers General Session meeting
  1:30-4:00 p.m.
  Marriott Wardman Park, Washington 2, Exhibition Level

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

Learn How to Run a Successful Remodeling Company

“The Paper Trail: Systems and Forms for a Well-Run Remodeling Company,” available through NAHB BuilderBooks, shows how to use proven management systems to run a successful remodeling company.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

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

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at NAHB BuilderBooks, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler.

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

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

Want More Sales? Maximize the Traffic You Already Have

By Shirleen Von Hoffmann Home Builder's AdvantEdge

Sales training is almost always one of the first items on the chopping block when it comes to paring budgets in a down market. That’s unfortunate because having better-trained salespeople than the competition is one of the best ways to gain the edge, especially in this market.

But don’t take my word for it.

According to a blind study of 12,000 salespeople by the Greensboro, N.C.-based training firm, The Brooks Group, salespeople who follow a linked, sequential selling process stand a 93% chance of getting the sale. Without one, their chances drop to under 40%, less than half their potential sales.

Those numbers are too large to ignore.

“In this time of limited budgets, training is usually the first item to be cut,” said Dave McKown, sales and marketing director for William Lyon Homes, headquartered in Newport Beach, Calif. “My philosophy is it should be the last.”

“The battle is won and lost on the sales floor, and to win you must have every agent at the top of their game,” he said.

It is quite amazing, when you think of everything that goes into starting a new community — purchasing the land, planning, land loans, holding costs, approvals, studies, research, competitive analysis, building permits, community and house plans, grading, construction, model complexes, construction loans, architects, building inspections, roofers, fencers, pool companies, decorators, landscaping, marketing teams, graphic artists, signage companies and more — that they no longer want to invest in the very agent who is going to sell their community.

Not only don’t I get it, sales training is actually the least expensive element in the entire development and sales process.

“We noticed an immediate increase in sales once we implemented a regular training program,” said Jill Hardy, sales and marketing manager for Regis Homes of Northern California. “We feel we have a team of highly qualified sales professionals selling our homes, but the sales training polished skills that needed to be honed on a constant basis.”

She said the sales agents appreciated the training because it helped them become more effective, but also because Regis Homes was making an investment in them and their future.

The company benefited as well. “We have noticed an upturn in sales, even in this slow market, and I feel it is directly related to training, confidence and skill sets it brings to my team,” Hardy said.

Make Your Traffic Matter

What also amazes me is how many business owners and sales leaders, when complaining about sales, tell me they plan to increase their marketing to drive more traffic to their models.

Why increase marketing to increase traffic when the traffic you already have isn’t being handled correctly? The smarter solution is to train the sales team to maximize their efforts with everybody walking in the door.

We tend to think that a sales slump is simply the result of a lack of activity, but bad markets are generally the result of a combination of factors and there are buyers out there. What matters is if they are buying from you.

Seven Steps Agents Can Take to Maximize the Traffic You Already Have

There are seven steps agents can take to prepare for and engage the traffic you already have walking through your models:

• Winning Sales Attitude: Your agents need to have a great attitude. They must believe that they are better than their competition, that their product is better and that there is no reason why buyers don’t want to buy from them. If they bring that attitude to work with them each day, you will see an increase in sales.
  
  
• Act: Action will help clear an agent’s head and slowly start bringing in the business they — and you — so desperately need. So all new-home agents should be getting out of the office, calling on Realtors® and marketing to key businesses on a regular basis. The networking opportunities are endless, and the more often they network, the more comfortable — and effective — they’ll become.
  
  
• The Golden Goose: The most important thing you, as an agent, can do is close in on the business that walks through your door. Don’t just let them walk away before you discover their key motivations for buying and their timeline. Build rapport and either close the prospect or arrange a “be back” appointment.
  
  
• Change Prospecting Strategies: Find and implement proven strategies that can help build your sales team’s confidence. Include them in your prospecting efforts; it will make them feel like they are part of the marketing plan. They’ll appreciate being part of the process.
  
  
• Smart Follow-Up: Some agents hate to follow up and if one of these agents works for you, it’s time to part company. You want agents who regard follow-up as an opportunity. Most prospects are not going to make the biggest purchase of their lives in one visit. So you should have extensive notes about their needs and wants and anything else involved in their decision-making process. A sure way to get that information is through follow-up.
  
  
• Ask Why They Didn’t Buy: If 20 prospects visited my model during the week but there was only one sale, I’d want to know why the other 19 prospects didn't buy. As a sales manager, your sales reports should include a section about “non-buyer” follow-up, including extensive notes about how the sales team is following up with them. Your agents should know who their next 10 buyers are at all times.
  
  
• Increase Expectations: We must increase our expectations of our salespeople. In today’s market, your salespeople should be networking, strategizing, following up, conducting campaigns and seminars, and analyzing the competition. Expectations set by the builder and sales managers will set the pace and help them be better salespeople.

The bottom line is: if you have to make cutbacks, don’t cutback the sales training for your sales teams. It’s the most important element they’ll need to increase their skills, spirits — and sales.

Shirleen Von Hoffmann is president and sales coach of Home Builder’s AdvantEdge, which specializes in sales agent secret shopping, sales training, seminars, one-on-one onsite training, sales coaching and builder consultation. A published author, keynote speaker, sales trainer and former top producer, she has closed more than $1 billion in new-home sales during her career. For more information or to contact Von Hoffmann, visit www.homebuildersadvantedge.com or www.thequeenofsales.com.

Option Selling Can Boost Sales, Make Lasting Impression

In “Option Selling for Profit: The Builder’s Guide to Generating Design Center Revenue and Profit,” authors Gina Gullo and Angela Rinaldi share their hands-on understanding of high-powered selling in the ever-expanding market of options for new homes.

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

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

In Today’s Market, 'Think Sold!' With Help From NAHB BuilderBooks

“Think Sold! Creating Home Sales in Any Market,” available at NAHB BuilderBooks, is a practical, how-to guide for developing the self-awareness, knowledge and skills needed to succeed in the competitive field of new home sales.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

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

Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

Make Referrals a Priority by Cultivating Your Current and Past Home Buyers

By Dorothy Tayloe MIRM, CMP, CSP Daniel Homes/Ingram and Associates

New-home sales professionals, builders and  developers spend hundreds of thousands of dollars a year on advertising, websites, social media, general brokerage promotions and the like in an effort to get new prospects through their door.

All of these marketing efforts are certainly worth pursuing, but they overlook the home buyers who already live in your community. These buyers are already enjoying fruits of your labor, so they should be a great source for referrals.

Like any marketing effort, generating referrals from your home owners requires a plan and a budget. Consistency, along with variety, is the key to getting results.

Many builder and developers don’t market to their past and current home owners because they either don’t truly believe it will be beneficial or they just don’t have enough money in their budget to take advantage of the opportunity.

Either way, they’re making a mistake not to cultivate referrals from people who have already bought their homes.

By continuing to maintain a relationship with your buyers after closing, you are reinforcing their decision-making; that they chose wisely when they bought from you. You also are letting them know not only that you are thrilled that they purchased from you, but that they are just as important to you now as when they were ready to buy.

Keeping in touch with them this way also conveys the message that you are different from the competition — which also reinforces their decision-making — so much so that they are willing to tell their friends and family about how great their new home and community are.

When developing your plan to cultivate referrals, be sure to get accurate contact information from your home owners.

Once the home buyer has closed, have your sales agent give them a small “welcome to the neighborhood” gift. Many, if not most, builders do this. But don’t stop there. This is only the beginning of what should be a long relationship.

Implement a ‘Friends and Family Plan’

One easy way to begin asking for referrals is to implement a “friends and family plan.”

Such a plan, for example, can simply give your buyers the inside scoop on new developments in your community — the opening of a new phase of home sites, models, the clubhouse, etc. A week or 10 days prior to the opening, contact your buyers and let them know that you’ve scheduled a “sneak peek” for their friends and family to see the community addition before it’s opened to the general public.

Do this every time there is a new development in your community. It’s an easy and pleasant way to stay in touch with your buyers, keeps them informed of what is happening in their neighborhood and helps make them feel special.

Almost everyone likes to feel special and to be the first to know something. A “friends and family” referral plan bolsters this feeling and, what’s more, it’s easy to implement and free.

Make Living in Your Community a Party

When developing your referral cultivation plan, include home owner get-together events. The events can be as low-key as a sales office drop-by for coffee and pastries or as involved as a community barbeque.

The get-togethers provide a friendly setting for buyers to meet each other and for salespeople to interact with the home owners.

Several parties and events should be scheduled throughout the year.

Drop by Owners’ Homes With Small Gifts

Another way to stay connected and build rapport with your home owners is to have your sales team deliver small seasonal or anniversary gifts. You can choose from countless gift options, but whatever you give, be sure to include a tag asking for a referral.

Last fall, our sales team dropped off sacks of candy corn to one neighborhood of home buyers with a note that read, ““Happy Fall –Y’all!” (We’re a Southern builder.) The note also included contact information and a message asking for referrals — “If you know someone who is interested in falling in love with a new home, just give us their name and number and we’ll be happy to help them fall in love with (community name) just like you did.”

These small “pop by” gifts are easy to deliver, relatively inexpensive and should be part of your referral marketing at least once a quarter.

Easy Party and ‘Pop By’ Ideas

To help you get started with your referral marketing plan, here are a few ideas for community parties and “pop by” gifts:

• Ice cream on a Sunday afternoon at the model
• A card or Bunco night
• A cookout and scavenger hunt
• Holiday activities for the neighborhood children — making Mother’s Day and Father’s Day cards, decorating pumpkins for Halloween, etc.
• Holiday decorating ideas, given by a local florist
• Sacks of red M&M’s for Valentine’s Day
• Cook a BBQ spice rub — include the recipe on the card
• Herb or tomato plants — include growing instructions and recipes

Be creative and make it fun. As with any marketing plan, there are no hard and fast rules. Just stay in contact with your home owners on a consistent basis.

Your home owners will appreciate whatever you do for them — and return your attention with referrals.

Dorothy Tayloe, MIRM, CMP, CSP, is a director of sales for Daniel Homes/Ingram and Associates based in Birmingham, Ala. For more information, email Tayloe.

This article originally appeared as an “Ask a MIRM” column on the NAHB Sales and Marketing Channel.

Social Media for Home Builders’ Available at NAHB BuilderBooks

“Social Media for Home Builders: It’s Easier Than You Think,” available at NAHB BuilderBooks, demonstrates the power of social media through case studies and online outlets created specifically for the home building industry.

Learn how to use social media sites to build your brand, engage new and existing consumers, manage your online reputation and sell more homes.

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

In Today’s Market, 'Think Sold!' With Help From NAHB BuilderBooks

“Think Sold! Creating Home Sales in Any Market,” available at NAHB BuilderBooks, is a practical, how-to guide for developing the self-awareness, knowledge and skills needed to succeed in the competitive field of new home sales.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

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

Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

More Than 30 Sales in 2010 Help Dan Kauffman Earn Sales Person of the Year Honors

Dan Kauffman averaged more than two-and-a-half sales a month at the Breakwater single-family home community near the Delaware seashore last year, a sales pace that helped him earn the 2011 Sales Person of the Year during The Nationals sales and marketing awards program earlier this year.

“When August hit I had 20 sales and I thought I could get to 30 if I put my mind to it,” Kauffman said. He finished the year with 31 sales.

Schell Brothers hired Kauffman to be the community’s sales manager in February 2009. A Washington, D.C.-area native, Kauffman moved to the Delaware beaches — a popular seaside retreat for Washington residents — after serving a deployment in Iraq with the U.S. Army Reserve.

Time to Assess His Market

He began selling the community during what was one of the slower months during the housing recession — “when selling one or two homes per month would have made any builder jump for joy,” he said.

Undaunted, Kauffman used his downtime to gain a better understanding of the type of community Breakwater could become and “to recognize the people who want to buy here.”  

“I was able to see the community developing from an imagination standpoint,” Kauffman said, and hone a strategy to reel in the sales.

Breakwater, which features single-family homes with between three and six bedrooms, is only minutes from the Delaware beaches and has such amenities as walking trails, two outdoor pools (one, a kiddy pool), a clubhouse and fitness center, and an outdoor kitchen.

Washington area baby boomers who want a second home near the ocean where they can eventually retire are the community’s primary target market. The amenities and bedrooms offer plenty of room and activities for visiting children and grandchildren.

To sell the homes, Kauffman often asked the president and vice president of the development firm to meet with his prospects to explain the benefits of a Schell home, which enabled Kauffman “to step out of his ‘salesy’ role and be more of an educator. It worked.

“Schell Brothers is a smaller company. Our president and vice president are very hands-on and it’s easy to share their vision. It’s a very big help,” he said.

Not surprisingly, they also encouraged Kauffman to apply for The Nationals Sales Person of the Year Award.   

Candidates who apply for the award must answer a series of self-assessment questions on their sales approach, company culture, targeted market and other factors that influence the sales process.

“Salespeople are really superstitious, and we don’t like to toot our own horn,” said Kauffman. Filling out the application “required me to assess the job I did in a different way. I had to really look at it from a different perspective, a humbling perspective.”

“My accomplishments were a result of my training and a really good sales environment,” he said. “I never would have entered The Nationals on my own, I had never even thought about it before. But the process made me look at my job differently, tap into some resources I hadn’t used.”

“Thirty-one sales is a pretty darn good year, and I wouldn’t have gotten there if I didn’t think anyone who wants to be salesman of the year should do more than 24,” Kauffman said.

Apply for 2012 Nationals

Entry forms for the 2012 Nationals awards will soon be available. For more information about The Nationals, email Lisa Parrish, or call her at 800-658-2751.

Find Out What 45+ Housing Buyers Want

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

Option Selling Can Boost Sales, Make Lasting Impression

In “Option Selling for Profit: The Builder’s Guide to Generating Design Center Revenue and Profit,” authors Gina Gullo and Angela Rinaldi share their hands-on understanding of high-powered selling in the ever-expanding market of options for new homes.

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

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

In Today’s Market, 'Think Sold!' With Help From NAHB BuilderBooks

“Think Sold! Creating Home Sales in Any Market,” available at NAHB BuilderBooks, is a practical, how-to guide for developing the self-awareness, knowledge and skills needed to succeed in the competitive field of new home sales.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

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

Subscribe to Sales + Marketing Ideas Magazine for Cutting-Edge Information

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

Panelized Building Systems Enable Builders to Frame Faster, Reduce Labor, Materials Costs

This is the third in a series introducing different forms of systems-built housing and the possibilities that exist when putting these concepts into practice. This issue: panelized building systems.

Home builders who use traditional stick-built construction can frame faster and reduce overall labor and materials costs using panelized building systems, a construction technique that also enables them to quickly gear up production as the housing market begins to improve.

With panelized construction, builders can create exceptional homes in a fraction of the time required by more traditional building methods. Skilled craftsmen build individual wall, floor and roof components in a climate-controlled manufacturing facility using high-quality materials before the various components are loaded onto a truck and delivered to the job site for assembly.

At the site, the panel, floor and roof systems are set in place quickly and easily using a light crane — enabling the home to be weather-tight within a matter of days and, consequently, reducing the likelihood of weather damage and mildew.

Because of its efficiency, flexible design possibilities and environmental benefits, panelized construction is one of the most widely used building systems in the market today.

Structural insulated panels (SIPs) are popular in panelized construction. The rigid foam core sandwiched between two layers of OSB have a very high R-value and can significantly reduce onsite construction time.

The Builder’s Advantage — More Predictable Fees and Timetables

One of the leading advantages of using panel building systems is that all the components for a new home can be delivered to the site in a few truckloads — minimizing the need for builders to orchestrate numerous deliveries from a variety of local suppliers and vendors.

In addition, panel manufacturers typically perform pricing, estimating, engineering and architectural designs for their builder clients — stabilizing the production process and eliminating many of the builder’s production headaches. Knowing the cost of a manufacturer’s panel package gives builders the ability to bid more-predictable fees and production timetables to consumers.

Using factory-built panels and components also greatly reduces onsite waste, reducing the time and money builders would otherwise spend on maintaining their job site.

According to the results of the “Framing the American Dream” demonstration project by the Structural Building Components Association (formerly the Wood Truss Council of America) and the NAHB Building Systems Councils, of two identical 2,600-square-foot homes, the one built using panel construction realized 16% savings in labor and material costs over the one built using traditional stick-built techniques.

According to the Structural Building Components Association, panel-built houses typically use 26% less lumber, saving valuable resources, and require 37% less construction time, enabling builders to complete the home faster, while yielding significant financial savings.

Panelized System Options

Much like other systems-built construction techniques, builders can choose from a variety of panelized systems from among four primary systems:  

• Whole House/Open Wall Packages: Requiring less onsite labor than precut packages, panelized houses are delivered to the building site as a complete set of engineered exterior and interior wall panels, structural floor systems and roof and floor trusses — all of which have been constructed to the exact specifications of the home’s footprint in a factory-controlled environment.
  
  Some packages only include the structural components of the home, while others can include everything from windows and doors to siding, paint and even appliances.
  
  
• Structural Insulated Panels: Although individual products from manufacturers can vary, structural insulated panels (SIPs) share the common characteristic of a rigid foam core sandwiched between two exterior “skins” — usually made from oriented strand board.
  
  Even though this building system has been available for decades, it remains one of the best-kept secrets in construction. Builders point to labor savings, strength and thermal performance as the top reasons they switch to SIPs.
  
  Home owners appreciate the benefits — the comfortable environment and the savings on heating and cooling they can enjoy — that result from the tight, energy-efficient building envelope created by SIPS.
  
  
• Post and Beam/Timber Frame: This modern application of a centuries-old building technique creates rustic yet elegant homes from timbers, posts and beams that are precut at the mill and that quickly come together as “bents” on site.
  
  With this construction technique, a timber framework of horizontal posts and vertical beams can be tied together at the roof using a variety of truss systems — from the simple king-post to the intricate web of a hammerbeam roof.
  
  Among the various post-and-beam homes, builders of timber frame are often considered some of the true craftsmen of the industry. These homes are held together by wooden pegs rather than metal fasteners and SIPs are often used to enclose a post and beam.
  
  
• Round/Geometric Structures: Builders who like to create homes outside the box, often build using panelized circular and geometric structures.
  
  Round, octagonal, dome and other geometric structures can easily be built with panels and offer buyers stunning panoramic views — and enhanced wind resistance.

Nearly every builder employs panelized construction techniques in some way. Whether it’s as basic as the roofing system or the entire framework of the house, panelized building systems can make a builder’s job easier.

The Panelized Building Systems Council, part of the NAHB’s Building Systems Councils (BSC), is America’s premier resource for panelized home construction information. The council connects manufacturers, builders and customers and educates them on the advantages of building with panel systems. For more information, visit www.nahb.org/Panel. Search for manufacturers by building type at www.nahb.org/PanelizedDirectory. To view a gallery of homes built using panelized building systems, visit www.nahb.org/PanelizedHomePhotos. To view a short, informative video about the benefits of panelized construction, visit www.nahb.org/PanelizedVideo.

Some content used with permission from Home Buyer Publications (www.homebuyerpubs.com).

Commercial Construction on the Right Track in March, But With Miles to Go

New construction starts figures for March from McGraw Hill Construction suggest that commercial construction remains in a state of limbo — no longer spiraling down into the depths of recession but still a considerable distance away from truly healthy levels of activity.

At first glance, the news from McGraw Hill, released on April 20, was especially favorable for nonresidential building starts, which jumped 25% in March to an annual rate of $165.5 billion.

However, the year got off to a shaky start for nonresidential production, with the starts for January and February averaging 14% below the monthly average for all of 2010.

On a quarterly basis, according to statistics from McGraw Hill, nonresidential building in the first quarter of 2011 was down 2% from the fourth quarter of 2010, “depicting a market that’s still receding but beginning to stabilize.”

Commercial Builders Waiting for Better News

"We are all desperately waiting for good news and try to dig it up at every opportunity," said Ken Ringe, president of Bayview Construction Corp. in Stuart, Fla.

"There are a lot of approved commercial projects waiting to be taken off the shelf and built," Ringe said.

Unlike busier times when it was a long process obtaining needed project approvals from the government, in today's considerably slower marketplace "most commercial entrepreneurs have their approvals in hand and are awaiting the rebound," he said.

"Of course, financing and the availability of capital remains the largest single factor holding back the recovery, but a lot of banks are opening their range to include products like credit lines again," he said.

Ringe predicted that it may not be long before financial restraints begin to loosen, "and when they do," he said, "builders will have more projects ready to go than anytime I can remember."

Current conditions in Coupevill, Wash., the home of Ted Clifton's company, Clifton View Homes, Inc., are even more sobering.

"We are seeing the worst year ever for all lines of construction in our area," Clifton said. "I have not seen any non-residential work in over a year, not even a remodel or tenant improvement."

Residential builders in the area have been keeping themselves busy with small remodeling projects, he said, but they are not enough to sustain a business.

And the tight lending situation is critical. "The flow of money has completely dried up around here," Clifton said. "Everyone would like to do something, but nobody has any money to do it with."

Gains in Nonresidential Structures

Offering some encouragement, McGraw Hill reported that most of the nonresidential structure types saw gains in March, although in many cases this reflected a boost coming from large projects.

At the top of the list, the starts volume of office construction surged 87% in March, lifted by the start of a $1.1 billion data center in Utah for the National Security Agency.

Manufacturing plants climbed 42% in March, helped by the start of a $900 million semiconductor plant in Oregon.

Store construction in March rose 37%, supported by $245 million for work on the retail portion of the Revel Resort Hotel and Casino in Atlantic City, N.J.

Warehouse and hotel construction were up 67% and 43%, respectively in March, with some assistance from large projects that were more moderate in scale.

On an unadjusted basis, commercial building was up 18% during the first three months of 2011.

“For nonresidential building, there’s still the downward pull coming from the institutional categories, but on the plus side commercial building seems to have already reached bottom, and the gains for commercial building in March would appear to be a positive development going forward,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.

“The note of caution for commercial building is that market fundamentals such as occupancies have only just begun to improve, and banks remain very cautious with regard to lending for new projects.”

Total new construction starts in March — which include residential and nonbuilding construction — came in at a seasonally adjusted annual rate of $404.9 billion, essentially the same as in February.

Construction Employment Slump Far From Over

Construction employment figures from the Associated General Contractors of America (AGC) depicted a similar scene in March.

Construction employment increased in 138 out of 337 metropolitan areas between March 2010 and March 2011 based on federal employment data, AGC reported on April 26, with decreases in 153 and little change in 46.

However, association officials warned that the industry’s five-year employment slump is far from over, and could worsen as public construction winds down.

“Even with more metro areas adding jobs than in any 12-month period since November 2007, the fact is most areas are far below previous construction employment peaks,” said Ken Simonson, the association’s chief economist.

“With federal stimulus, base realignment and Gulf Coast hurricane-protection projects slated to end soon, many areas are at serious risk of another downturn in construction employment,” he said.

While private nonresidential and multifamily construction appear to be stabilizing or picking up in most markets, those gains are likely to be offset by pending drops in public construction, according to AGC.

For information on commercial building resources available from NAHB, click here; or email Lisa Leone at NAHB, or call her at 800-368-5242 x8455.

May 6: Free Webinar to Help Members Comply With New OSHA Fall Protection Requirements

NAHB is offering a free webinar to help members comply with new Occupational Safety and Health Administration fall protection requirements that will go into effect on June 16.

“OSHA Fall Protection” will be held from 10:00-11:30 a.m. on Friday, May 6.

The new requirements replace a 1995 OSHA directive that was a source of confusion among home builders over what fall protection methods and systems should be used to comply with OSHA’s fall protection standards.

Builders now will be required to follow 29 CFR 1926 Subpart M Fall Protection Regulations, a change resulting from OSHA’s Dec. 22 decision to withdraw the Plain Language Revision of OSHA Instruction STD 3.1, Interim Fall Protection Compliance Guidelines for Residential Construction.

To help members prepare for this change, NAHB has been offering free in-person Fall Protection Training Seminars, which are funded through a grant provided by OSHA’s Susan Harwood Training Grant Program. NAHB has trained nearly 1,000 housing professionals to date and has scheduled training seminars at more than 40 sites across the country.

Matt Murphy, president of SEE, Inc., a safety training consultant with more than 12 years of experience establishing and implementing occupational safety and health programs in the residential and commercial construction industries, is the primary instructor during the NAHB in-person training sessions.

Murphy also will be the presenter for the webinar, which is based on the in-person training.

During the webinar, participants will:

• Learn about the changes to OSHA's fall protection requirements and how they will affect compliance
  
  
• Receive guidance on how to comply with OSHA’s Fall Protection Regulation (Subpart M), as it applies to residential construction
  
  
• Understand how a written site-specific fall protection plan is used — including examples of circumstances where it may be warranted

Changes to the requirements were outlined in the Jan.10 edition of Nation’s Building News.

In addition to the webinar, training materials used in the in-person training sessions can be downloaded and delivered to employees and members directly. The materials include a PowerPoint presentation, an instructor’s guide and a post-instruction test, which can be downloaded in English or Spanish.

To Register

The webinar is free for NAHB members and $44.95 for non-members.

To register, click here on the NAHB website, and then use promo code 11WWOS when adding the webinar to the shopping cart to eliminate the registration fee. Members must be logged into the NAHB website to complete the free registration.

For more information on fall protection, visit www.nahb.org/fallprotection; or email Marcus Odorizzi at NAHB, or call him at 800-368-5242 x8590.

Boost Job Site Safety With Fall Protection Training Products

In an effort to increase job site safety and reduce the chance of job related accidents, NAHB has produced the “Fall Protection Video, English-Spanish” and “NAHB-OSHA Fall Protection Handbook, English-Spanish.”

Both are available through BuilderBooks.com.

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

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

To purchase the handbook and video online, click here, or call 800-223-2665.

May 11: Webinar to Explore How to Operate Business More Effectively With Less

The NAHB Business Management and Information Technology Committee will be presenting a “Business Operations” webinar — part of its business improvement series — from 2:00-3:00 p.m. EDT on Wednesday, May 11.

The webinar will explore the critical areas that builders should concentrate on in order to improve their business operations.

Attendees will learn about:

• The critical areas of their business that require immediate attention
• The primary challenges to continued business improvement
• Some of the business operations mistakes builders continue to make
• What builders and other industry professionals should take away from the market shake-up

The speakers include Ron Robichaud, of Robichaud Associates; Joe Pfeiffer, of Business RIO, Inc.; and Frank Wiesner, of Olde South Homes, Inc.

To Register

The fee is $24.95 for NAHB members and $44.95 for non-members.

To register, visit www.nahb.org/webinars. Registrants will receive an email confirmation.

For more information, email Marcia Childs at NAHB, or call her at 800-368-5242 x8388.

How Does Your Business Measure Up?

“The Cost of Doing Business Study, 2010 Edition,” available through BuilderBooks.com, provides home builders with a rare glimpse at profitability, cost of sales and expenses from hundreds of home builders across the country.

Several categories — including volume, operation type and land vs. no land costs — are analyzed to help builders fine-tune comparisons between study results and their companies.

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

May 25: Webinar to Provide Tips on How to Use Social Media to Sell Homes

NAHB BuilderBooks is hosting an upcoming webinar providing proven social media strategies that will help builders expand their presence online by improving search engine optimization.

The webinar will also provide tips on how to create content that attracts and engages prospective home buyers.

“He Said. She Said: Social Media for Home Builders 2.0” will be held from 2:00-3:00 p.m. EDT on Wednesday, May 25.

During the webinar participants will learn how to:

• Build a firm foundation for their social media marketing campaign
• Generate online buzz that will move prospective home buyers to visit their communities rather than simply browsing the company website
• Personalize the home buying experience

The program will feature Internet marketing experts Mitch Levinson, managing partner of mRelevance; and Carol Flammer, managing partner of mRelevance, president of Flammer Relations, Inc. and author of “Social Media for Home Builders 2.0: It’s Easier Than You Think.”

Participants are encouraged to email questions for the webinar to Flammer by Friday, May 20.

Participants will receive a complimentary copy of Flammer’s publication and can earn one hour of continuing education credit for their NAHB professional designation.

To Register

The webinar is $19.95 for NAHB council members, $24.95 for NAHB members and $44.95 for non-members.

To register, visit www.nahb.org/builderbookslive. Registrants will receive an email confirmation.

For more information, email Patricia Potts at NAHB, or call her at 800-368-5242 x8224.

May 26: Webinar to Present Latest Remodeling Outlook

The NAHB Remodelers will be presenting a “Remodeling Outlook” webinar from 2:00-3:00 p.m. EDT on Thursday, May 16.

Speakers David Crowe, NAHB chief economist, and Kermit Baker, director of the Remodeling Futures Program at Harvard University’s Joint Center for Housing Studies, will present their latest forecasts for the remodeling market and answer questions on how to maximize remodeling opportunities.

Participants will:

• Examine current remodeling trends and how they can be applied to individual markets
  
  
• Learn how changing home owner demographics affect the remodeling market
  
  
• Gain more knowledge on how energy retrofit activities and aging-in-place remodeling can provide increased business opportunities for remodelers

Participants can earn one hour of continuing education credit toward their designations.

To Register

The fee is $19.95 for NAHB Remodelers members, $24.95 for NAHB Members and $44.95 for non-members.

Click here to register; or call NAHB’s Office of the Registrar at 800-368-5242 x8338, or e-mail registrar@nahb.org.

For more information about this NAHB Remodelers webinar, email Therese Crahan at NAHB, or call her at 800-368-5242 x8211.

Learn How to Run a Successful Remodeling Company

“The Paper Trail: Systems and Forms for a Well-Run Remodeling Company,” available through NAHB BuilderBooks, shows how to use proven management systems to run a successful remodeling company.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

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

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at NAHB BuilderBooks, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler. 

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

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

AIA to Hold NAHB Course for Building Professionals on May 11 in New Orleans

NAHB’s popular “Business Management for Building Professionals” course, one of the courses in the curriculum for six NAHB designations, will be offered by the American Institute of Architects (AIA) on May 11 in New Orleans.

Held during the AIA National Convention & Design Exposition, the course will help participants learn management skills that can give them the edge over their competition. 

The course will help students earning their CAPS, CGA, CGB, CGP, CGR and Master CSP designations build a solid foundation in best business practices in planning, organizing, staffing/directing and controlling that are so valuable to small businesses.

Tom Stephani, MIRM, CMP, CSP, Master CSP, will provide practical and applicable tools for management success.

Graduates of the course will learn to:

• Discuss common business challenges and learn practical tips and tools to overcome them
• Explain the three basic functional areas within a company
• List the five main tools used to improve a business
• Apply each of the five Ps to the three functional areas of the business
• Identify methods of recruiting, interviewing, training and retaining quality personnel
• Apply the key measures of business performance to their own business

To Register

Costs vary depending on AIA membership.

For more information and to register for “Business Management for Business Professionals,” click here.

For more information about NAHB Education courses, visit www.nahb.org/education.

Popular NAHB Education ‘Customer Service’ Course Now Conveniently Available Online

NAHB Education’s popular "Customer Service" course — which teaches students how to manage every phase of customer interaction, from the initial contact through construction, the warranty period and beyond — is now available online.

Based on the premise that customers who are satisfied with the planning, execution and follow-up of home building and remodeling projects are more likely to recommend the contractors who do the projects to their friends and family, the online version of the six-hour course enables students to save on travel and meet course requirements on their own schedules — stopping and starting coursework at their convenience.

The online version includes content in audio and video formats, on-screen text, transcripts and other downloadable resources. Students can also participate in a discussion forum where they can pose questions, share perspectives and enhance what they’ve learned.

Graduates of this course will be able to:

• Understand customer expectations and behaviors
• Set appropriate service criteria
• Establish quality standards and communicate them
• Administer the customer service process
• Know their obligations for warranty service and fulfill them
• Enhance their repeat and referral sales

To preview the course, watch this video clip.

To Register

The fee is $245 for NAHB members and $345 for non-members.

For more information or to order “Customer Service,” click here.

For more information about NAHB online courses, email Jennifer Johnson, or call her at 800-368-5242 x8162.

'Customer Service for Home Builders' Available at NAHB BuilderBooks

"Customer Service for Home Builders," available through NAHB BuilderBooks,provides the tools needed to give new life to a dormant customer service program.

The book includes forms, checklists, documents and a resource guide to enable builders to start managing their customers’ experiences rather than just reacting to the issues they raise.

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

Education Calendar

May 5	"Leadership Training Webinar — Good Governance"	Webinar
May 6	“OSHA Fall Protection”	Webinar
May 11	"Business Operations"	Webinar
May 25	“He Said. She Said: Social Media for Home Builders 2.0”	Webinar
May 26	"Remodeling Outlook Webinar"	Webinar
June 9	"Leadership Training Webinar — Building a Remarkable Organization"	Webinar
June 22	"LIHTC Webinar — LIHTC Application Due Diligence"	Webinar
July 7	"Leadership Training Webinar — Speak With Confidence"	Webinar
Aug. 4	"Leadership Training Webinar — Fundraising: The Decision to Give"	Webinar
Aug. 17-20	Executive Officers Council Seminar	Naples, Fla.
Sept. 1	"Leadership Training Webinar — Great Events"	Webinar
Sept. 21	"LIHTC Webinar — Correcting Non-Compliance and  Responding to an Audit"	Webinar
Oct. 6	"Leadership Training Webinar — Change Management"	Webinar
Oct. 23-25	Building Systems Councils SHOWCASE	Baltimore, Md.
Oct. 26	"Fall Construction Forecast Webinar"	Webinar
Nov. 9-11	NAHB Summit on Association Excellence	Dallas, Texas
Dec. 14	"LIHTC Webinar — Combining LIHTCs with Other Programs"	Webinar
2012
Feb. 8-11	2012 NAHB International Builders' Show	Orlando, Fla.

Learn More About NAHB Professional Development Offerings

View the variety of professional development offerings available through NAHB and its local associations at www.nahb.org/education.

Search for Upcoming Courses in Your Area

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

Senators Complain About Proposal to Add Clearance Testing to EPA's Lead Rule

The Environmental Protection Agency’s plan to add clearance testing to its Lead: Renovation, Repair and Painting (LRRP) rule has come under attack by 11 Senate Republicans.

The opposition comes on the heels of an NAHB lawsuit against the agency for eliminating another provision of the rule that had allowed the owners of homes in which there were no children under the age of six or pregnant women to opt out of requirements to use lead-safe work practices.

As it wends its way through the federal approval process, the clearance testing proposal — which requires remodelers to conduct lead-paint abatement-style cleanup and testing both in and around the project site after the work is finished — is now being reviewed by the White House Office of Information and Regulatory Affairs, part of the Office of Management and Budget.

In mid-April, senators led by James M. Inofe (R-Okla.) sent a letter to EPA Administrator Lisa Jackson saying that clearance testing would create “significant confusion and complication” and “result in additional costs for home owners” that would make it more likely for them to hire uncertified contractors — the opposite of the rule’s intent to protect home owners from the dangers of lead dust.

In meetings with Senate staff members, particularly those working on the Committee on Environment and Public Works, NAHB has continued to raise awareness of the problems associated with the clearance testing.

In an April 27 letter to Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, Inhofe and the other Republican Senators complained that their previous correspondence with the EPA had gone unanswered.

Calling it a “dramatic change” to the lead rule, the senators told Sunstein that the clearance testing requirement would “amplify the unintended consequences we have heard from our constituents: that the higher costs from current LRRP renovators have pushed home owners to either hire uncertified individuals or to perform renovation work themselves."

In addition, they said, the testing would add even more costs to the renovation work — an expense that the EPA has not accurately portrayed in its analysis of the impact of the new requirement.

“Protecting pregnant women and children from lead exposure is important to all of us and we continue to support the intent of the LRRP rule,” the senators wrote.

“However, we remain concerned that this amendment will have the unintended consequence of driving people away from using LRRP-certified renovators and missing the clear health benefits that come from employing LRRP renovators,” they said.

For more information about the lead paint rule and the actions NAHB has been taking on this issue on behalf of association members, email  Matt Watkins, or call him  at 800-368-5242 x8327.

First Phase of Chesapeake Bay Cleanup Would Cost Marylanders $9,750 Per Household

Maryland’s plan to comply with new federal regulations designed to clean up the Chesapeake Bay would shrink the state's economy by $10 billion, result in the loss of 65,000 jobs and cost the state, taxpayers and consumers more than $11 billion by 2017, according to a report released on April 14 by Sage Policy Group.

The overall cost to Marylanders would be $21 billion, or $9,750 per household.

The Sage Group study — “The Impact of the Phase I Watershed Implementation Plan on Key Maryland Industries” — was commissioned by the Maryland State Builders Association, which represents the state’s home builders, remodelers, suppliers and contractors.

"Clearly the findings of this report are cause for concern," said Steve Seawright, the builders association president.

“We believe the focus of bay cleanup should center on the leading causes of pollution and the most economically beneficial reduction measures that can be put in place now with the limited resources available," he said.

The largest cost category, according to the Sage Policy Group report, includes various actions proposed to reduce storm water runoff from impervious cover and surfaces in the state’s 10 largest counties and from the state’s highways.

It also includes taking other steps to reduce this pollution, such as legislation to reduce phosphorus in fertilizers.

Collectively, these actions account for almost 35% of the total costs in Phase I.

Turning to Housing for Funding

The plan would definitely have a damaging impact on housing, the report says.

“Maryland’s counties have long histories with fees on new construction that are designed to compensate local governments for the fiscal impacts of new housing and other development,” the study says.

“It is not difficult to imagine that local governments in Maryland will turn to the housing industry as a source of new revenue to generate the billions of dollars of cost that Phase I may entail,” it says.

The plan would divert an estimated $2.5 billion worth of consumer spending on housing and related real estate services, the report says, assuming that housing prices would rise as localities imposed new impact fees and “similar impositions” on the industry to generate their share of Phase I costs and as septic system costs rose.

As a result, the state’s housing and real estate industries stand to lose 6,600 direct years of work.

“When the full multiplier effect is considered, the total economic cost includes over 15,000 jobs with associated income of almost $700 million and sales to Maryland businesses of $3.7 billion,” the Sage research finds.

To assist in the cleanup effort, the state’s Bay Restoration Fund is currently funded by a $30 annual fee on each housing unit that uses an onsite septic system.

For the state’s entire economy, pushing forward with Phase I threatens to result in a devastating loss of $2.8 billion in wages and income, a particular concern for Maryland builders at a time when the economy is still struggling to emerge from recession.

The authors of the report point out that their cost projections are conservative and do not include the additional spending between 2017 and 2020 that will be needed for the effort to achieve its final goals.

“The burden to be borne by industry and taxpayers is slated to expand over time,” the report says.

Bad for Business

The report also notes that Maryland is putting more into the effort than neighboring states, which will leave it at a competitive disadvantage in generating new economic activity and attracting new businesses and residents.

“The economic impact of these effects could be massive over time and have not been included in this analysis,” the study says.

“For example, if home prices rise in the state, more residents are likely to choose to live in Virginia, Pennsylvania, the District of Columbia, Delaware or West Virginia.

“This could cause retailers and certain employers to relocate to these states,” the study says, and rising energy prices resulting from the plan would only make things worse for Maryland, which “continues to hemorrhage manufacturing employment.”

The report points out that Maryland “has considerable control regarding implementation details” of the regulations coming from the Environmental Protection Agency, even though the EPA is providing a significant amount of guidance on the Total Maximum Daily Loads (TMDLs) — or amount of permissible pollution — that can enter the bay.

Phosphorous and Nitrogen

The report also calls the effectiveness of Maryland’s plan into question.

Phase I is expected to reduce phosphorus loads into the bay by 57% and nitrogen emissions by 37%, short of the plan’s 70% reduction estimate.

The state says that since 1985, it has reduced nitrogen pollution by 33% and phosphorous pollution by 38% despite a 29% increase in population through 2009.

But, “for the most part, these efforts appear to have achieved modest results on a micro level,” the study says.

On a scale of one to 100 — where 70 is the target and 100 reflects the pristine conditions that existed before 1600 and the European settlement of the area — the Chesapeake Bay Foundation (CBF) at the end of 2010 gave the bay a 31, up from a score of 28 in 2008.

“Neither score is substantially higher than the worst conditions for the bay in the early 1980s, roughly a quarter of a century ago, when CBF indicates that the score would have been 23,” the report observes.

“The Phase I Plan estimates that, of the 10.33 million pounds of nitrogen that need to be eliminated to meet the plan’s goals for 2020, the efforts undertaken in Phase I between 2012 and 2017 will still leave Maryland 6.46 million pounds short of its goal,” the analysis finds.

“That is, the investments and costs of Phase I will only accomplish 37% of the reduction needed to meet the long-range target.”

From a practical standpoint, it is unclear how the plan’s $11 billion price tag will be paid for given the current budgetary limitations on the state and localities, which expect to face substantial cuts and growing liabilities this year and over the following two years, said Seawright.

While some costs will be passed onto consumers and industries, Maryland and its counties would incur dramatically increased costs for compliance over the plan’s first five years.

"The Maryland State Builders Association certainly supports efforts to strengthen the health of the bay, as every Marylander would,” said Seawright.

“We, however, believe that those efforts should be undertaken within the confines of affordability and in way that keeps Maryland competitive economically," he said.

For more informatiion on this issue, email Glynn Rountree at NAHB, or call him at 800-368-5242 x8662.

Proposed Clean Water Act Guidance Would Push Building Costs Higher

New proposed guidance released by the Environmental Protection Agency and the U.S. Army Corps of Engineers on April 27 to make Clean Water Act regulations clearer, more consistent and more effective in protecting the nation’s water resources looks like another example of regulatory overreach that will ultimately push home building costs higher, according to policy experts at NAHB.

The guidance is intended to streamline the permitting process for builders and developers who are planning projects in watersheds where the presence of wetlands or nearby navigable “waters of the United States” require a permit from the EPA or the Corps.

An initial reading of the revised guidance by the NAHB staff and association members as they prepare to submit comments finds that the proposal falls short of that goal.

“The EPA and the Corps are proposing to increase the scope of their jurisdiction under the Clean Water Act. The fact is, however, that the wording of the legislation that determines their responsibilities has not changed,” said NAHB Chairman Bob Nielsen.

“Extending federal jurisdiction regarding ‘waters of the U.S.’ increases the regulatory burden and raises the cost of new homes without providing a demonstrated benefit to the environment,” Nielsen said.

“In addition, it results in ‘jurisdiction by default,’ rather than requiring that the agencies demonstrate why a piece of property belongs under their jurisdiction,” Nielsen said.

The Clean Water Act was designed to protect intrastate waterways and other bodies of water necessary for commerce, he noted.

Previous efforts to extend federal jurisdiction over “waters of the U.S.” have failed to win congressional support because they are costly and time-consuming for both regulators and permit applicants and they invariably tread on states’ rights.

The EPA has also said that it is planning a rulemaking to further clarify its jurisdiction over “waters of the U.S.”

Members of Congress and industry groups — including NAHB — have continuously asked the EPA and the Corps for a rulemaking, rather than repeated iterations of “guidance.”

NAHB will participate in the rulemaking when the EPA begins the process. 

For additional information, email Glynn Rountree at NAHB, or call him at 800-368-5242 x8662.

Pennsylvania 32nd State to Make Fire Sprinklers Optional in New Homes

Under a measure signed into law on April 25 by Gov. Tom Corbett, fire sprinkler systems will no longer be mandated in new one- and two-family homes in Pennsylvania.

While the law — H.B. 377 — ends the mandate, it does require builders to offer sprinkler systems to home buyers as an option.

Pennsylvania is the 32nd state that has taken action against fire sprinkler mandates, either legislatively or through the codes adoption process.

This count includes Missouri, whose governor signed legislation on April 29 to extend a previously approved measure that prohibits local governments from creating any new laws mandating fire sprinklers and requires home builders to offer sprinkler systems to buyers. New Mexico, Nebraska and Oklahoma also have recently passed similar measures on fire sprinklers.

Pennsylvania’s new law permanently repeals the mandate for fire sprinklers in all one- and two-family homes, unlike some states which only delayed implementing the requirement.

Moreover, H.B. 377 actually reforms the code adoption process to make it more collaborative, making the approval of new code provisions in the future less likely unless there is a strong consensus for them and they truly benefit Pennsylvanians.

The provision to adopt sprinklers was added to the International Code Council’s 2009 International Residential Code, but ultimately was only enacted in California and Pennsylvania.

“Consumers have been saying that the sprinkler mandate was excessive and infringed on their consumer choice and personal liberties since it became law on Jan. 1,” said Pennsylvania Builders Association President Ray Venema.

“We are grateful to our state lawmakers that the decision to install sprinklers is now back in the hands of the consumers, where it belongs,” he said.

The new law also takes steps to improve safety standards by requiring increased fire protection for lightweight floor assemblies.

The measure passed in the Pennsylvania Senate by a vote of 33-17 and in the Pennsylvania House by a vote of 129-68.

To read the legislation, click here.

For more information, email Steve Orlowski at NAHB, or call him at 800-368-5242 x8303.

‘2009 Home Builders’ Jobsite Codes’ Available at NAHB BuilderBooks

“2009 Home Builders’ Jobsite Codes,” available through NAHB BuilderBooks, provides easy access to the code information needed on the job site.

A quick reference to the 2009 International Residential Code, the user-friendly field guide provides easy-to-read code requirements for every aspect of residential construction and is packed with illustrations, tables, figures and a glossary.

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

NAHB Seeking Representatives to Serve on 2012-15 ICC Code Committees

‘2009 Home Builders’ Jobsite Codes’ Available at NAHB BuilderBooks

“2009 Home Builders’ Jobsite Codes,” available through NAHB BuilderBooks, provides easy access to the code information needed on the job site.

A quick reference to the 2009 International Residential Code, the user-friendly field guide provides easy-to-read code requirements for every aspect of residential construction and is packed with illustrations, tables, figures and a glossary.

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

Safety Tip of the Month: Protecting Workers from Silica Hazards

Workers need to take precautions against exposure to silica, a basic component of soil, sand and granite that can present a hazard on construction sites.

There are many ways to be exposed. Sand, for instance, can be 100% quartz, which is where most crystalline silica is found.

Silica is contained in many commonly used building products, including mortar, grout, cement, stucco, plaster, bricks/blocks, rocks/stones, ceramic tile, drywall joint compound, fiber-cement board (used for siding) and sandblasting materials.

Over extended periods of time — 10 to 30 years — exposure to high levels of crystalline silica can lead to chronic silicosis.

Exposure to high levels of crystalline silica that can be breathed in can cause acute or accelerated forms of silicosis that ultimately can be fatal.

Silicosis can lead to heart failure, has been linked to several forms of lung cancer and can increase the risk of other diseases such as tuberculosis.

It is important to take corrective measures to reduce employee’s exposure to respirable crystalline silica.

A simple control may work, such as using a water hose to wet down dust at the point of where it is being generated.

Some additional steps that can provide protection:

• Always use the dust control systems that are available for many types of dust-generating equipment, and provide good maintenance for them.
  
  
• When sawing concrete or masonry, use saws that provide water to the blade.
  
  
• Use local exhaust ventilation to prevent dust from being released into the air.
  
  
• Minimize exposures to nearby workers by using good work practices.
  
  
• During abrasive blasting, use abrasives containing less than 1% crystalline silica to prevent harmful quartz dust from being released into the air.
  
  
• The use of respirators should be considered as a last resort, when engineering or administrative controls are not possible or they are insufficient to achieve acceptable limits of exposure.

Respirators should only be used in the absence of other dust control methods. Employees using respirators must be included in a respiratory protection program. (See 29 CFR 1910.134.)

For more information on this health hazard, see NAHB’s Silica Safety Card.

For further information, email Marcus Odorizzi at NAHB, or call him at 800-368-5242 x8590.

Help Make Job Site Safety a Priority With Video From NAHB BuilderBooks

The “Jobsite Safety Video,” available through NAHB BuilderBooks, is the first-ever job site safety video for home builders.

The video provides an overview of the key safety issues that residential builders and workers need to focus on to reduce accidents and injuries.

Based on the NAHB-OSHA Jobsite Safety Handbook, this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos on one DVD.

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

OSHA Outreach Campaign Educating Workers on How to Beat Heat-Related Illnesses

Secretary of Labor Hilda Solis on April 26 announced a national outreach initiative by the Occupational Safety and Health Administration (OSHA) to educate workers and their employers about the hazards of working outdoors in the heat and steps needed to prevent heat-related illnesses.

“If you’re working outdoors, you’re at risk for heat-related illnesses that can cause serious medical problems and even death,” said Secretary Solis.

“But heat illness can be prevented,” she said. “This Labor Department campaign will reach across the country with a very simple message — water, rest and shade.”

OSHA recommends taking the following steps to reduce the risk of developing heat-related illnesses:

• Drink water often.
• Rest in the shade.
• Report heat symptoms early.
• Know what to do in case of an emergency.

OSHA has developed heat illness educational materials in English and Spanish, as well as a curriculum to be used for workplace training.

Additionally, a new web page provides information and resources on heat illness — including how to prevent it and what to do in case of an emergency — for workers and employers. 

An NAHB safety tip in the June 2010 EH&S Monthly educates members on the dangers of working in the sun.

For more information, email Marcus Odorizzi at NAHB, or call him at 800-368-5242 x8590.

Help Make Job Site Safety a Priority With Video From NAHB BuilderBooks

The “Jobsite Safety Video,” available through NAHB BuilderBooks, is the first-ever job site safety video for home builders.

The video provides an overview of the key safety issues that residential builders and workers need to focus on to reduce accidents and injuries.

Based on the NAHB-OSHA Jobsite Safety Handbook, this DVD is intended to be used as part of an essential residential construction safety-training program and includes two 20-minute videos on one DVD.

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

Management Competition Lets Students See What It Takes to Build a House

The NAHB Student Chapters Residential Construction Management Competition (RCMC) is more about the learning experience than winning, nine future home builders recently told the Pennsylvania Home Builders Association’s board of directors at its annual meeting in Gettysburg.

The students emphasized that participation in the competition had given them a taste of the decision-making process involved in building housing and that the experience would give them an advantage once they start their own careers in the industry. 

“I really enjoyed being part of this team, and I feel I gained a lot from being part of it — not just because we won first place but because I got to see what it would take to build a house in a real-life situation,” Shane Beckner, a member of the winning team from the college, told the more than 100 home builders attending the meeting.

The HBA honored students from the Pennsylvania College of Technology School of Construction and Design Technologies and the Cumberland Perry Area Vocational Technical School for receiving top honors in the two-year college and secondary school divisions of the competition, which was held during the 2011 NAHB International Builders’ Show in Orlando.

The respective HBAs sponsoring the schools' NAHB Student Chapters are the West Branch Susquehanna Builders Association and the Home Builders Association of Metropolitan Harrisburg.

Ray Venema, president of the Pennsylvania HBA, said that the winning teams "represent the best and birghtest of the future of Pennsylvania''s buidling industry. Their hard work is made even more evident through their achievements."

The competition required the students to be project managers, estimators and schedulers as they tackled a real-life construction management project for Sedgewick Homes, a member of the Wilkes & Yadkin County (North Carolina) Homebuilders Association.

The students also placed change orders and filled out green building verification documents.

Incorporating green products and technologies was a very big part of the RCMC, Billy Brougher, a member from the Cumberland Perry team, told the crowd.

“Energy savings and clean products are important in selling a house today,” he said. “This project gave us experience with these products and how to use them the best.”

Citations from the Pennsylvania State Senate recognizing each of the teams for bringing “well-deserved distinction to themselves, their communities and this commonwealth in the spirit of personal sacrifice and teamwork” were read at the recognition ceremony.

Along with Shane Beckner, the Pennsylvania College of Technology team members included Brent Hey, Brandt Hey and Thomas Whitehouse; and their adviser was Barney Kahn, instructor of building construction technology.

Cumberland Perry team members, in addition to Billy Brougher, were Ray Atticks, Steph Weber, Greg Houtz and Nick DeMuro. Jody Snider was the team’s coach and adviser, and Melena Perry was their co-adviser.

Home Builders Institute (HBI), the workforce development arm of NAHB, administers the NAHB Student Chapters program and the RCMC.

For more information on NAHB Student Chapters and the RCMC, email Page Browning, or call her at 800-798-7955 x8918.

Masco Cabinetry Survey Finds New Generational Needs in Kitchen Design

Generational and societal influences are changing kitchen design, according to a recent survey by Masco Cabinetry — whose brands include KraftMaid, Merillat, QualityCabinets and DeNova.

The study — “2011: Lifestages Redefining the Kitchen” — was conducted among baby boomers and members of Gen X and Gen Y to help architects and designers better understand the changes in kitchens that are needed to meet the needs of these prospective customers.

Among the results of the survey, which was conducted online by Harris Interactive from Feb. 28-March 2:

• Twenty-two percent of home owners 18-65 felt that a place for feeding pets is a top-three kitchen extra, compared with only 10% who felt they needed a space for wine storage.
  
  
• While 63% of baby boomer home owners, aged 45-65, plan to stay in their current home over the next five to 10 years, 75% don’t feel that their current kitchen is universally designed to meet their needs.
  
  
• Gen X home owners, aged 35-44, are staying put and nearly half (49%) think they will spend up to a decade in their current residence.
  
  
• 40% of Gen Y home owners, aged 18-34, embrace the concept of multigenerational living and believe their parents will live with them in the future.

“Design professionals who have a strong understanding of generational influences and needs will be better prepared to deliver functional and attractive kitchens that home owners of all ages are willing to invest in,” said Sarah Reep, director of designer relations and education at Masco Cabinetry.

“From highchair to wheelchair needs and pet food to wine storage, we’ve uncovered how kitchen extras, floor plans, counter space and table heights can lead to flexible and functional designs,” she said.

“As architects and designers, we need to provide kitchen solutions specific enough to reflect the personal wants and needs of today’s home owners and flexible enough to accommodate a rapidly changing household demographic.” said Reep.

For more information on the survey results, click here.

Headquartered in Ann Arbor, Mich., Masco Cabinetry is a member of NAHB’s Leading Suppliers Council.

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.

Applications for Herman J. Smith Student Scholarships Due by Friday, May 6

Graduate and undergraduate students pursuing building-related studies for the 2011-2012 academic year can apply for the Herman J. Smith Scholarship Fund of the National Housing Endowment, the philanthropic arm of NAHB. Applications are due by Friday, May 6. 

The Herman J. Smith Scholarship Fund, honoring 1981 NAHB President Herman J. Smith, provides assistance to graduate and undergraduate students studying construction management, mortgage finance and related fields.

“We are so proud to work with the National Housing Endowment to provide educational opportunities for worthy students,” said Patsy Smith, who serves as a life trustee for the endowment. “Herman’s favorite motto has been, ‘Always leave the woodpile higher than you found it.’ I believe this scholarship is a testament to his philanthropic work and to his great love of this industry.”

Since its inception, the Smith scholarship has awarded more than $193,000 to exemplary students.

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

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

To Apply

Scholarship applications and instructions can be downloaded from the Herman J. Smith Scholarship page of the National Housing Endowment website. Applications are available in Word and PDF formats.

About Endowment Scholarship Programs

The endowment administers 12 scholarship programs and awards more than $200,000 each year to students pursuing careers in residential construction and related fields. Even in these difficult times, the endowment continues to support students who are pursuing careers in residential construction.

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

NAHB Spring Board Meeting Set for May 17-20 in Washington, D.C.

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

The following schedule of events is a partial listing provided as a notice for the upcoming spring meeting of the NAHB Board of Directors in Washington, D.C., on May 17-20, 2011. Meetings will be held at the National Housing Center and the Marriott Wardman Park Hotel. The spring board program will identify the exact time and place of each scheduled meeting.

Tuesday, May 17
National Area/Associate Chairmen Meeting
State Representatives Meeting
Joint National Area/Associate Chairmen and State Representatives Meeting
Executive Board Meeting

Wednesday, May 18
Committees, Subcommittees, Councils, Affiliates, etc.
NHC Board of Governors Meeting
Nominations Committee

Thursday, May 19
Committees, Subcommittees, Councils, Affiliates, etc.
NAHB Past Presidents/Chairmen Council Meeting

Friday, May 20
Area Caucuses 1-15
Joint Executive, Budget and Resolutions Committees Meeting
Board of Directors

FTD Offers 20% Discount to Members on Flowers and Gifts for Mother's Day

FTD is offering NAHB members 20% discount on all Mother's Day flowers and gifts from now until till May 31.

Visit www.FTD.com/NAHB — or call 1-800-SEND-FTD and use code 17421 — for more information and to take advantage of this special opportunity.

Other Member Advantage Discounts

If she is allergic to flowers, find other gift ideas through the Member Advantage discount program and all of the participating companies at www.nahb.org/MA.

Don’t Put Your Foot in Your Mouth on Camera — Sign Up for Spokesperson Training

It happens all of the time. A reporter ambushes someone with questions they are unprepared to answer. Or, an executive blows an on-camera opportunity to promote their organization's key messages. 

Don't let this happen to you.

Register for the NAHB Spokesperson Training sessions held during the NAHB Spring Board of Directors Meeting in Washington, D.C., on May 17-20 — the last sessions to be offered until the 2012 NAHB International Builders' Show in February.

The seminars will help association members and leaders be more persuasive and effective communicators, in particular, during on-camera media interviews and when giving speeches and other presentations.

Led by professional communication consultants with more than 30 years of experience, the seminars — which include on-camera role playing — focus on the issues and situations that home builders, HBA staff and affiliate members frequently face.

“Being put on the spot and seeing it on TV was very helpful, and the information was top-notch,” said Rick Parmeter, of Clear Creek Log Homes in Eau Claire, Wis., and a seminar attendee.

Spring Board Spokesperson Training Sessions:

• Interview Skills — Tuesday, May 17
   
• Presentation Skills — Wednesday, May 18

Interview Skills teaches NAHB members how to give clear, concise answers while in a high-pressure, spur-of-the moment interview. The training also helps participants master strategies for broadcast and print interviews — including message development, the “bridging” technique and controlling the interview.

Members attending the Presentation Skills session learn how to confidently prepare and deliver dynamic presentations to any audience. The session focuses on how to organize and deliver a speech and presentation with accompanying question and answer sessions.

Each full-day session is $495 per person. Registration is limited to 12 participants.

To Register

Members can register securely on the spring board registration website with a credit card for one or both of the spokesperson training sessions.

For more information, email Gwyn Donohue at NAHB, or call her at 800-368-5242 x8447.

Be Productive With Lightweight Heavyweight Slate 500 Tablet PC From HP

The hard-working, easy-to-tote HP Slate 500 Tablet PC can keep members in the office or on the job site connected to their email, the Internet and familiar Windows applications — including Word documents, presentations, spreadsheets and more.

At just 1.5 pounds before add-ons, this full-featured performer enables members to work intuitively.

For maximum workspace flexibility, rest the HP Slate in its docking station and gain two additional USB ports to easily connect accessories, such as a keyboard, mouse and printer. An SD card can be inserted to quickly and easily import photos or other files.

HP Slate 500 Tablet PC (XT962UA#ABA)

• Regular price: $799
• NAHB member price: $727.09 (Instant savings valid while supplies last.)
• Genuine Windows 7 Professional 32-bit
• 8.9-inch diagonal touchscreen
• Intel Atom™ Z540 Processor

To Order

For more information, or to order, call 888-202-4488 and mention NAHB; or visit www.hp.com/go/nahb.

Special NAHB benefits:

• Discounts on proven HP products, built to last: desktops, notebooks, tablet PCs, servers and printers
• Free U.S. ground shipping
• Flexible financing and leasing options
• Solutions specialists trained to assist NAHB members
• Award-winning service and support

Not all features are available in all editions of Windows 7. The system may require upgraded and/or separately purchased hardware to take full advantage of Windows 7 functionality. See www.microsoft.com/windows/windows-7/ for details.

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.

NAHB Calendar of Events

May 5	"Leadership Training Webinar — Good Governance"	Webinar
May 6	“OSHA Fall Protection”	Webinar
May 11	"Business Operations"	Webinar
May 11-12	2011 Multifamily Leadership Board Spring Meeting	Austin, Texas
May 17-20	Spring NAHB Board of Directors Meeting	Washington, D.C.
May 18	50+ Housing Council Night Out at the 2011 NAHB Spring Board Meeting	Washington, D.C.
May 25	“He Said. She Said: Social Media for Home Builders 2.0”	Webinar
May 26	"Remodeling Outlook Webinar"	Webinar
June 9	"Leadership Training Webinar — Building a Remarkable Organization"	Webinar
June 22	"LIHTC Webinar — LIHTC Application Due Diligence"	Webinar
July 7	"Leadership Training Webinar — Speak With Confidence"	Webinar
July 14	2011 Multifamily Pillars of the Industry Awards	n/a
Aug. 4	"Leadership Training Webinar — Fundraising: The Decision to Give"	Webinar
Aug. 15	Best in American Living Awards	n/a
Aug. 17-20	Executive Officers Council Seminar	Naples, Fla.
Aug. 18	EOC Association Excellence Awards	Naples, Fla.
Sept. 1	"Leadership Training Webinar — Great Events"	Webinar
Sept. 7-10	Fall NAHB Board of Directors Meeting	Milwaukee, Wis.
Sept. 15	Best in American Living Awards	n/a
Sept. 21	"LIHTC Webinar — Correcting Non-Compliance and  Responding to an Audit"	Webinar
Oct. 6	"Leadership Training Webinar — Change Management"	Webinar
Oct. 12-15	Remodeling Show	Chicago, Ill.
Oct. 14	CADRE Awards	Chicago, Ill.
Oct. 14	Homes for Life Award	Chicago, Ill.
Oct. 14	NAHB Remodeler of the Year Award	Chicago, Ill.
Oct. 14	National Remodeling Hall of Fame Award	Chicago, Ill.
Oct. 23-25	Building Systems Councils SHOWCASE	Baltimore, Md.
Oct. 26	"Fall Construction Forecast Webinar"	Webinar
Nov. 9-11	NAHB Summit on Association Excellence	Dallas, Texas
Dec. 14	"LIHTC Webinar — Combining LIHTCs with Other Programs"	Webinar
2012
Feb. 7	NAHB/Builders Mutual Safety Award for Excellence (SAFE) Awards	Orlando, Fla.
Feb. 8-11	2012 NAHB International Builder's Show	Orlando, Fla.

Learn More About 2009 NAHB Professional Development Offerings

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

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