Builder confidence rises but traffic remains low

Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May, released today. This gain, from a downwardly revised 41 in April, reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted gains in May. The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53 – its highest level since February of 2007. The index gauging traffic of prospective buyers gained three points to 33.

Looking at the three-month moving averages for regional HMI scores, no movement was recorded in the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May.

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Guest post: going green with gutter guards

Reduce, reuse, recycle. It’s not a slogan exclusive to paper, plastic, or glass anymore.

Over the past 30 years, the recycling movement has evolved into a comprehensive initiative focused on limiting wasteful consumption of resources in all areas of our lives. Hence, “going green,” which is now synonymous with any activity that classifies as a pro-active environmental-friendly approach to life.

One way to improve and maintain the look, longevity, and natural resource use of a home involves the installation of gutter guards. In addition to keeping natural and unnatural debris from building up inside your gutters, gutter guards have proven to save homeowners time and money in areas of their home that are traditionally identified as green.

Research before you buy
Of course, the environmental benefit to using a product is void if that product does little to help the environment. Most gutter guard manufacturers have some sort of statement on their website discussing their organizational affiliations, product composition (copper, recycled aluminum, etc.), and the general environmental impact of their guard. Many companies make using recycled metal a regular practice when constructing their guards.

Examples of these organizations include LEED (Leadership in Energy and Environmental Design) certification, the U.S. Green Build Council, and American Rainwater Catchment Systems Association. More often than not, the gutter guard manufacturer in question is affiliated with at least one of these, but it’s always safe to verify.

Rainwater reclamation

This is perhaps the most obvious “green” advantage to gutter guards. Harvesting rainwater via rain barrels is a commonplace practice among landscaping and horticulture enthusiasts. It’s much healthier for plants than tap water, which contains many purified minerals that can degrade soil and hurts plant growth.

Many gutter guards strip out leaves, needles, and unnatural debris (shingle grit, roofing oil), leaving nothing but clean rainwater flowing through your gutters. Of all the gutter guard construction types, micro mesh screen guards are most commonly associated with this “filtering” process. The cleaner the water, the better it is for you and your plants, and the less tap water you have to use.

Limit foundational damage
Sometimes, it’s the little things we don’t notice that have the biggest impact. In the case of your house, helping it age gracefully creates many secondary benefits to other areas of your green-focused lifestyle. Whether it’s immediately noticeable or not, foundational water damage, or water damage to the siding, windows, and/or fascia on your house can lead to increased heating and energy bills.

Gutter guards that conform to the pitch of your roof prevent water from seeping behind your gutters or under your shingles and can eliminate water splash back that can rot your siding. That moisture has the potential to attract insects capable of further damaging your home and requiring costly repairs and additional resources.

It’s important to note that this advantage can be rendered moot if the guard in question does not align with your roof slope/angle, creating a flat spot in the shingles between the roof and gutter that becomes easily susceptible to pooling water.

It goes without saying that everyone wants their home to last a lifetime, and then some. “Greening” up your home helps achieve this goal, and gutter guards have proven to be handy partners in the ongoing process that is making homes more energy and resource efficient.

Karen Sager is president of Mastershield, a manufacturer of micro mesh gutter guards.

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Universities to host panel on building community wealth

MIT and University of Maryland will convene a national conversation on May 8 about how an innovative business model can help anchor institutions in urban cities to drive economic development and build sustainable community wealth.

A panel of presenters will release a new MIT-University of Maryland Case Study which highlights Cleveland’s University Hospitals Vision 2010 Program, a $1.2 billion strategic growth plan.

The panel discussion following will be held May 8 at 4 to 6 p.m. Access to live-streaming video: or Twitter: #anchorpower. The panel will be held at MIT School of Architecture & Planning, Wong Auditorium, 70 Memorial Drive, Building E-51, Cambridge, MA.

A news-teleconference with the authors will be held at 2:30 to 3:30 p.m. on May 8 prior to the panel discussion. Pre-register to receive call-in detail: or call 216-844-5158.

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Housing’s New Job: Rebuilding the Economy

Here’s something we haven’t heard in the last five years: while government and retail shed jobs, builders continue to add them.

A closer look at the numbers shows a split recovery. While the overall economy added 88,000 jobs in March, three areas lost workers that month: government (7,000), retail (24,000) and manufacturing (3,000). Since the start of 2011, government has shed 391,000 jobs, and millions of workers continue to leave the labor force, according to figures quoted in the Wall Street Journal.

The opposite is happening in the building trades. Reflecting the growing recovery in the U.S. housing market, the construction industry added 18,000 positions in March and a healthy 169,000 since last September. That brings construction’s cumulative gain since 2011 to 367,000, beating the 357,000 gain in manufacturing.

Those figures reflect increasing activity in the market. Privately owned housing starts in February stood at a seasonally adjusted annual rate of 917,000, 27.7 percent above the February 2012 rate of 718,000, the U.S. Census Bureau reports. Sales of existing homes and condos have also grown, from 4.52 million to 4.98 million over the same period.

While the economy still faces headwinds, housing looks like it’s building a solid foundation for recovery.

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NeoCon 2013 features The Outdoor Office

NeoCon returns June 10-12 to Chicago’s Merchandise Mart for its 45th year with show components developed to educate, inspire and engage the design world. The show will feature more than 40,000 expected attendees, nearly 100 CEU-accredited seminars, thousands of new products from more than 700 of the world’s top manufacturers, and a list of keynote speakers.

NeoCon will be the first trade show to feature The Outdoor Office, an innovative exhibit developed by Jonathon Olivares and most recently on display at the Art Institute’s Modern Wing. As working habits change and mobile devices allow the freedom to work outside traditional office, The Outdoor Office was developed with the goal of understanding the possibility of new types of work spaces located outdoors. To compliment this new Market, each day will feature expert speakers and programs on this subject.

Show organizers have booked four keynote speakers including Bjarke Ingels, Founder of BIG, Michael Vanderbyl, Principal of Vanderbyl Design, Holly Hunt, President & CEO of Holly Hunt and Theaster Gates, Director, Arts and Public Life Initiative and Lecturer at the Department of Visual Arts at the University of Chicago, and Chairman of The Rebuild Foundation, NFP. Keynote programs are free to attend for trade professionals only

Bjarke Ingels founded BIG (Bjarke Ingels Group) in 2005 after co-founding PLOT Architects in 2001 and working at OMA in Rotterdam. Through a series of award-winning design projects and buildings, Ingels has developed a reputation for designing buildings that are as programmatically and technically innovative as they are cost and resource conscious. Ingels has received numerous awards and honors, including the Danish Crown Prince’s Culture Prize in 2011, the Golden Lion at the Venice Biennale in 2004, and the ULI Award for Excellence in 2009. His keynote will take place on Monday, June 10, at 8 a.m.

Michael Vanderbyl has gained international prominence in the design field as a practitioner, educator, critic and advocate. Since being established in San Francisco in 1973, his firm – Vanderbyl Design – has evolved into a multidisciplinary studio with expertise in identity, print and digital communications, interiors, showrooms, retail spaces, signage, textiles, fashion apparel, packaging, furniture and product design. His keynote will take place on Tuesday, June 11, at 8 a.m.

A native of Texas, Holly Hunt describes her design-centric business of showrooms and product for interior designers, as a business of 10,000 details. Hunt leads HOLLY HUNT, the company, as President and CEO and is intimately involved in design and creative work. Her keynote will take place on Tuesday, June 11 at 1 p.m.

Theaster Gates, Jr. has developed an expanded artistic practice that includes space development, object making, performance and critical engagement with many publics. Gates transforms spaces, institutions, traditions, and perceptions. Gates’ training as an urban planner and sculptor, and subsequent time spent studying clay, has given him keen awareness of the poetics of production and systems of organizing. His keynote will take place on Wednesday, June 12, at noon.

Show organizes bill NeoCon as North America’s largest contract furnishings trade show.

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IBS, KBIS to co-locate in 2014

The National Association of Home Builders (NAHB) and the National Kitchen & Bath Association (NKBA) will co-locate the International Buildilers’ Show (IBS) and the Kitchen & Bath Industry Show (KBIS) in Las Vegas beginning in February 2014.

The two events will remain separate and distinct shows held simultaneously at the Las Vegas Convention Center through 2016, creating Design and Construction Week, an event focused on ideas, products and technologies to design, build and remodel homes.

“This new format allows exhibitors to reach a full range of design and construction professionals who buy, specify and influence the products that go into American homes,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “For attendees, it means access to two expansive trade show floors and hundreds of additional suppliers to meet.”

The new event will be held Feb. 4-6, 2014 in Las Vegas, with each show occupying a separate hall. Kitchen and bath brands that have participated in both shows can choose to exhibit in the KBIS or IBS hall. One pass will provide access to both exhibits. NKBA and NAHB will continue to produce separate educational programming and special events. Future show dates are Jan 20-22, 2015 and Jan 19-21, 2016 at the Las Vegas Convention Center.

Design and Construction Week 2014 is expected to draw more than 75,000 specifiers, builders, dealers and suppliers and 2,000 exhibiting brands, based on recent trends for both shows.

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Nation’s Home Builders Elect 2013 Leaders

Members of the National Association of Home Builders (NAHB) elected four senior officers to top leadership positions within the federation during the association’s International Builders’ Show in Las Vegas.

Taking the helm as NAHB’s Chairman of the Board this year is Rick Judson, a Charlotte, N.C.-based home builder with more than 35 years of experience in the building industry. Judson is the owner of Evergreen Development Group in Charlotte, and is a successful builder and developer with several decades of experience in land development and construction of single-family, multifamily and commercial projects.

“To keep the fledgling housing and economic recovery moving forward, NAHB this year will work with the Obama Administration and congressional lawmakers on both sides of the political aisle to promote policies that encourage homeownership, rental housing opportunities and job growth,” said Judson.

Also moving up on the association’s leadership ladder during NAHB’s Las Vegas board meeting was Kevin Kelly, a Delaware builder and developer with more than 30 years of experience in the building industry. He was elected as the 2012 First Vice Chairman of the Board. Kelly has been a builder and developer since he joined Leon N. Weiner & Associates in 1979 and became actively involved at the Home Builders Association of Delaware. His building experience includes land development, multifamily and single-family home building, construction financing and property management.

Tom Woods, a Blue Springs, Mo.-based home builder with more than 40 years of experience in the home building industry, was elected as the 2012 Second Vice Chairman of the Board. Woods is president of T.E. Woods Homes, a company he founded in 1974. His firm has developed scores of communities and more than 1,000 homes in the Greater Kansas City area.

Ed Brady, a Bloomington, Ill.-based home builder, joined the NAHB leadership ladder with his election to the post of Third Vice Chairman of the Board. Brady is president of Brady Homes, a company founded in 1964 by his father, William Brady Sr. One of the largest home building firms in central Illinois, Brady Homes has developed 20 residential communities throughout the state, building more than 1,800 single-family homes, 2,000 apartment units and more than 100,000 square feet of light commercial property.

2012 NAHB Chairman Barry Rutenberg, from Gainesville, Fla., remains on the leadership ladder as Immediate Past Chairman. Rutenberg is president of Barry Rutenberg and Associates, Inc. His firm has developed more than a dozen communities and 1,000 homes in the Gainesville area.

Rounding out the association’s leadership is NAHB Chief Executive Officer Jerry Howard, from Washington, D.C. Howard heads up a professional staff of more than 230 working out of the National Housing Center in Washington.  He has served as the association’s CEO/EVP since February of 2001. Previously, Howard was NAHB’s chief tax counsel.

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NAHB Announces National Green Building Awards Winners

Several builders, remodelers and other home building industry professionals were honored yesterday as winners of the National Green Building Awards given by the National Association of Home Builders (NAHB). The awards were presented during the International Builders’ Show (IBS) in Las Vegas.

Each year, NAHB recognizes individuals, companies and organizations for excellence in residential green design and construction practices and for green building program and advocacy efforts. The awards were presented during the Eco-Disco, a special networking and awards event held during Green Day at IBS, a day featuring education sessions, special events and product and home tours on green building.

“This year’s winners are particularly impressive,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “All of those honored have shown superior dedication and leadership to the mission of sustainable and eco-friendly living.”

Individual Project Awards
Three single-family home projects were honored:

  • The New Edition at Damonte Ranch, Reno, Nev., for Project of the Year: Single-family, Small Volume
  • Persimmon – Willis Ranch, San Antonio, Texas, for Project of the Year: Single-family, Production
  • Maryland Green Designer Show Home, Gambrills, Md., for Project of the Year: Single-family, Custom

One remodeling project and one multifamily project were also honored:

  • Finding Paradise on Picardy, Raleigh, N.C., for Project of the Year: Remodel
  • Seabourn Cove, Boynton Beach, Fla., for Project of the Year: Multifamily

Green Building Advocacy Awards
Five awards were given to individuals or organizations for their efforts in green building advocacy:

  • Dan Wise, Wise Construction, Boalsburg, Pa., for Advocate of the Year: Builder
  • Paul Sullivan, The Sullivan Company, Inc. Newton, Mass., for Advocate of the Year: Remodeler
  • Drew Smith, Two Trails, Sarasota, Fla., for Advocate of the Year: Individual
  • Maryland Residential Green Building Council, for Advocate of the Year: Group
  • Build San Antonio Green, for Advocate of the Year: State/Local Government

Laclede Gas Company of St. Louis, Mo., was also named the Utility Partner of the Year for its dedication to high-performance building, the ICC-700 National Green Building Standard and education at the local and national level.

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Housing outlook brightens but faces headwinds

The housing upturn that took root last year is expected to pick up momentum in 2013 but headwinds along a number of fronts could impede the pace of the recovery, according to economists speaking at the International Builders’ Show in Las Vegas this week.

“Nearly every measure of housing market strength – sales, starts, prices, permits and builder confidence – has been trending upward in recent months and we expect to see gradual but steady growth along these lines in 2013,” said NAHB Chief Economist David Crowe.

In particular, Crowe said that house prices are up nearly 6 percent on an annualized rate over the past 10 months, and that “this has been a trigger for demand to return. People feel comfortable if they buy a house that it will appreciate, not depreciate, in value.”

Other factors that bode well for the housing outlook include low mortgage rates, strong housing affordability, rising household formations and the fact that two-thirds of U.S. housing markets can now be considered improving, according to the NAHB/First American Improving Markets Index.

For the past five quarters, housing has acted as a net contributor to the economy, steadily increasing its share to 12.8 percent of economic growth in the fourth quarter of 2012.

However, Crowe cautioned that builders continue to face several challenges, including stubbornly tight mortgage lending conditions, inaccurate appraisals, rising materials prices and a declining inventory of buildable lots.

Moreover, continuing gridlock in Washington over how much more fiscal tightening is needed to stabilize the debt-to-GDP ratio, along with calls by some policymakers for major changes to the mortgage interest deduction, threaten to negatively impact consumer confidence and future housing demand.

Setting the 2000-2003 period as baseline benchmark for normal housing activity, Crowe reported that residential remodeling has returned to previously normal levels and that remodeling activity is expected to post a 2.4 percent increase in 2013 over last year.

Meanwhile, multifamily production, which has posted a 273 percent gain from its fourth quarter trough of 82,000 units in 2009 to 306,000 units in the final quarter of 2012, is expected to reach what is considered a normal level of production by 2014.

The single-family market, which has the farthest to go, was running at 44 percent of normal production in the fourth quarter of 2012. Single-family starts are expected to steadily rise to 52 percent of what is considered a typical market by the fourth quarter of this year and 70 percent of normal by the fourth quarter of 2014.

NAHB is forecasting 949,000 total housing starts in 2013, up 21.5 percent from 781,000 units last year.

Single-family starts are anticipated to rise 22 percent from 535,000 last year to 650,000 in 2013, Crowe said. They are expected to jump an additional 30 percent in 2014 to 844,000 units.

On the multifamily side, NAHB is anticipating that starts will increase 22 percent from 246,000 units last year to 299,000 in 2013, and rise an additional 6 percent to 317,000 units in 2014.

Housing to Lead the Economy in 2013
Echoing many of the same concerns cited by Crowe regarding the spending and budget impasse in Washington, David Berson, senior vice president and chief economist at Nationwide Insurance, said it is still too soon to completely rule out the chance that a policy stalemate will lead to an economic downturn.

However, he said a more likely scenario is that the administration and congressional Republicans will likely reach some type of agreement that addresses the pending deadlines concerning the debt ceiling, sequestration and continued funding for the federal government.

The House this week is expected to vote on short-term extension of the debt ceiling to allow government borrowing through May 18.

Berson projected GDP growth of 2 to 2.5 percent this year, with slower first quarter growth in response to the unresolved spending issues before the economy picks up modestly as the year progresses. If the full spending sequester is triggered and more than $100 billion in defense and non-defense cuts is implemented this year, then 2013 growth could fall to 1 to 2 percent.

If a relatively positive outcome occurs on the spending debates in Washington, Berson said this will pave the way for the housing and auto industries to lead the economy in 2013. Low mortgage rates, steady job growth, stronger household formations and widespread house price gains over the past year are all positive for home sales.

At the same time, in places where buyers are ready to go forward with a purchase, persistently tight mortgage credit standards continue to limit the number of creditworthy borrowers from entering the housing market, he said.

“The problem is mortgage lending standards are way too tight,” he said. “If we were at a scale of nine or 10 in 2005-2006, we are at a two today. We want to be around a five.”

Moreover, Berson noted that several federal agencies will be releasing final rules later this year on a national qualified residential mortgage standard that could further restrict mortgage lending.

Low Mortgage Rates Drive Housing Demand

Qualified buyers who gain access to credit will find affordable home loans, according to Frank Nothaft, chief economist at Freddie Mac. He said that 30-year, fixed-rate mortgages will stay below 4 percent through the end of 2013.

“An important stimulant driving housing demand has been declining mortgage rates,” said Nothaft. “These are the lowest rates we have seen in 65 years.”

The refinance boom for single-family homes associated with low mortgage rates is expected to continue this year but gradually taper down. While overall mortgage originations are forecast to fall 15 percent in 2013, Nothaft said that home purchase originations will be trending higher, thanks to a projected 8 percent increase in home sales this year.

U.S. house prices increased 4 percent between September 2011 and September 2012, according to the Freddie Mac House Price Index, and this included price hikes in 42 states. By comparison, home price appreciation only occurred in a handful of states during 2010-2011.

Nationwide home prices are expected to rise 2 to 3 percent in 2013, added Nothaft. With the oversupply of vacant homes at their lowest level in a decade, this will further ease downward price pressure.

Rental vacancy declines have occurred in most markets since 2010 and U.S. apartment values are up about 8 percent over the past year. This has led to an increase in rental rates, but rents still remain relatively low adjusted for inflation, said Nothaft.

Nothaft forecast 930,000 housing starts for 2013 and Berson said starts could hit 980,000 this year.

The 2012 International Builders Show

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A New Year’s resolution for housing

Viewed daily, the stock market looks like a roller coaster. Viewed from a longer period, the market charts a smoother path that indicates a trend.

The housing market appears to follow the same course. Extrapolated from a single month, statistics show either triumph or tragedy. With hindsight, the numbers reveal a trend that, while not indicative of future performance, can give us some basis for confidence, and action.

As we close out 2012, monthly numbers for housing display a similar pattern. The S&P/Case-Shiller index of property values in 20 cities, released this morning, shows seasonally unadjusted prices dropped 0.1 percent in October from the prior month. But year over year, property values in 18 of the 20 cities increased an average of 4.3 percent.

Sales this year have followed a similar pattern. Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November, according to data from the National Association of Realtors. The November number stands 14.5 percent higher than a year ago, with sales at the highest level since November 2009.

The picture for construction remains mixed. New-home starts declined by 3 percent from October to November. Yet year over year, new construction has risen 21.6 percent.

The trend holds in some of the hardest-hit areas of the country. Take bellwether Florida. Sales of existing stock declined 4 percent in November but posted a 24 percent gain over the past 12 months. The real success story was in new-home sales. Year over year, Florida housing starts jumped in November by 60.2 percent and median home prices rose by 11.2 percent, according to data released last week by Florida Gov. Rick Scott.

In regions driven by real estate, the pattern looks even more dramatic. In Southwest Florida, sales of existing homes rose 2 percent from October to November and 25 percent from the same time a year ago. New-home construction in Sarasota and Manatee counties dipped in November by 21 percent but posted an 88 percent year-over-year increase. Those numbers are important because Southwest Florida usually experiences a season dip in real estate sales.

Despite the occasional setback, the trend seems clear. Real estate and construction are back. That’s a resolution we hope the markets can keep.

Neal Communities’ Central Park at Lakewood Ranch near Sarasota, Florida

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