February, 2015
l
The NAIL 1
2 The NAIL
l
February, 2015
February, 2015
l
The NAIL 3
THE
NAIL The official magazine of Home Builders Association of Middle Tennessee President Trey Lewis Vice President Randall Smith Secretary/Treasurer John Zelenak Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Pat Newsome
THE NAIL is published monthly by the Home Builders Association of Middle Tennessee, a non-profit trade association dedicated to promoting the American dream of homeownership to all residents of Middle Tennessee. SUBMISSIONS: THE NAIL welcomes manuscripts and photos related to the Middle Tennessee housing industry for publication. Editor reserves the right to edit due to content and space limitations. POSTMASTER: Please send address changes to: HBAMT, 9007 Overlook Boulevard, Brentwood, TN 37027. Phone: (615) 377-1055.
4 The NAIL
l
February, 2015
FEATURES 9 A More Robust Year for Housing in 2015
A boost in single family production is expected in 2015 according to economists speaking at the International Builders’ Show in Las Vegas last month.
10 Home Show this month at Nashville Fairgrounds
The Nashville Home Show returns to the State Fairgrounds this month, Friday through Sunday, Feb 20-22nd.
DEPARTMENTS 6 News & Information 17 SPIKE Club Report 18 February Calendar 18 Chapters and Councils
ON THE COVER: The 2015 Nashville Home Show returns to the State Fairgrounds this month. More details on page ten. February, 2015
l
The NAIL 5
news&info
New home sales rise 11.6 percent in December
S
ales of newly built, single-family homes rose 11.6 percent in December to a seasonally adjusted annual rate of 481,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. “This uptick is in line with what our builders are telling us in surveys and on the ground — that they are seeing increased traffic and more serious buyers in the market for single-family homes,”
We can expect this momentum to continue into 2015 with the release of pent-up demand, particularly as existing home owners are trading up. 6 The NAIL
l
February, 2015
said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo. “After a slow start to 2014 precipitated by bad weather conditions, new home sales have ramped up in the second half of the year,” said NAHB Chief Economist David Crowe. “We can expect this momentum to continue into 2015 with the release of pentup demand, particularly as existing home owners are trading up.” The inventory of new homes for sale rose to 219,000 in December, which is a 5.5-month supply at the current sales pace. Regionally, new home sales rose 53.6 percent in the Northeast, 17.7 percent in the South and 3.1 percent in the West. Sales dropped 11.5 percent in the Midwest. n
Millenials seek smaller houses, won’t sacrifice details
A
s Millennials begin to enter the home buying market in larger numbers, homes will get a little smaller, laundry rooms will be essential, and home technology will become increasingly prevalent, said panelists during an IBS press conference on home trends and Millennials’ home preferences. NAHB Assistant Vice President of Research Rose Quint predicted that the growing numbers of first-time buyers will drive down home size in 2015. Three million new jobs were created in 2014, 700,000 more than the previous year “and the most since 1999,” Quint said. At the same time, regulators have reduced downpayment requirements for first-time buyers from 5 percent to 3 percent and home prices have seen only moderate growth. “All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable homes.” Quint said.
Quint also unveiled the results of two surveys: one asking home builders what features they are most likely to include in a typical new home this year, and one asking Millennials what features are most likely to affect their home buying decisions. Of the Top 10 features cited by home builders, four have to do with energy efficiency: Low-E windows, Energy Star-rated appliances and windows and programmable thermostats. Top features: a master bedroom walk-in closet and a separate laundry room. Least likely features include high-end outdoor kitchens with plumbing and appliances and two-story foyers and family rooms. When asked what features fill their “most-wanted” shopping list, a separate laundry room clearly topped the list, with 55 percent responding that they just wouldn’t buy a new home that didn’t have one. Storage is also important, with linen closets, a walk-in pantry and garage storage making the Top 10 – along with Energy
Housing starts rising, builders confidence holding steady
L
ed by solid gains in single-family housing production, nationwide housing starts rose 4.4 percent to a seasonally adjusted annual rate of 1.089 million units in December, according to newly released data from the U.S. Commerce Department. For the year, overall housing starts topped 1 million units. “Today’s figures continue to be in line with our recent surveys, as builders have been becoming increasingly optimistic,” said Kevin Kelly, NAHB chairman. “With overall starts ending the year above 1 million units for the first time since 2007, we expect this momentum to carry forward in 2015,” said NAHB Chief Economist David Crowe. “A growing labor market and strengthening economy will spur steady growth in single-family housing production in the year ahead.” Single-family housing production rose 7.2 percent to a seasonally adjusted annual rate of 728,000 in December while multifamily starts edged 1 percent lower to 361,000 units. Combined single-family and multifamily production was up in three out of four regions in December. The Northeast posted a 12.5 percent gain, the South was up 8.8 percent and the West registered a 5.8 percent increase. The Midwest posted a 13.3 percent decline.
Overall permit issuance was down 1.9 percent in December to a rate of 1.032 million. Single-family permits rose by 4.5 percent to 667,000 units while multifamily permits fell 12 percent to a rate of 365,000 units. Regionally, permits were mixed in December. The Midwest and South posted gains of 6.7 percent
and 9.6 percent, respectively, while the Northeast and West dropped 16.8 percent and 20.5 percent. Builder confidence declines one point Builder confidence in the market for newly-built single-family homes declined one point to 57, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index released recently. This marks the third straight month
Star certifications. In fact, this group is willing to pay 2-3 percent more for energy efficiency as long as they can see a return on their power bills. A whopping 75 percent of this generation wants to live in single-family homes, and 66 percent of them prefer to live in the suburbs. Only 10 percent say they want to stay in the central city. Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed Millennials’ emphasis on the importance of outdoor living and that generation’s seamless use of technology, and how those two trends play into their home buying and home renovation decisions. Because they don’t have as much ready cash as older home owners, Millennials seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights, and landscaping that needs less watering and mowing. They’re also very comfortable with their smartphones and tablets, and seek ways to control their heating and air-conditioning and security and lighting as well as other electronics from their phones. “They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” Waage said. n
that the index has hovered in the upper 50s range. “After seven months above the key 50 benchmark, builder sentiment is reflecting the gradual improvement that is occurring in many markets throughout the nation,” said Kelly. “January’s HMI reading is in line with our forecast as we head into the new year,” said Crowe. “Steady economic growth, rising consumer confidence and a growing labor market will help the housing market continue to move forward in 2015.” Derived from a monthly survey that NAHB has been conducting for 30 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 from 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. The HMI component gauging current sales conditions remained unchanged at 62 in January while the index measuring expectations for future sales dropped four points to 60 and the component gauging traffic of prospective buyers fell two points to 44. Looking at the three-month moving averages for regional HMI scores, the West rose by four points to 66, the Midwest registered a three-point gain to 57 and the Northeast was up two points to 47. The South dropped two points to 58. n
February, 2015
l
The NAIL 7
8 The NAIL
l
February, 2015
A more robust year for housing in 2015
A
strengthening labor market, low interest rates, improving mortgage availability and growing pent-up demand will help to significantly boost single-family housing production in the year ahead and move the housing recovery to higher ground, according to economists speaking at the International Builders’ Show in Las Vegas last month. With economic growth near 4 percent for the last half of 2014 and employment gains averaging more than 250,000 per month last year, NAHB Chief Economist David Crowe said these are the primary factors that have helped consumer confidence jump back to pre-recession levels. “The signs point to a more robust year for housing,” Crowe said. “Household balance sheets are returning to normal levels, home owners’ equity is increasing and significant pent-up demand is rising. More than
7 million existing home sales were postponed or lost during the downturn; and while some are lost forever, we should see some catch-up.” The Forecast NAHB is projecting 993,000 total housing starts in 2014, up 6.7 percent from last year’s total of 930,000 units. Single-family production is expected to rise 26 percent in 2015 to 804,000 units. “While a good beginning, this is still well below a normal level of 1.3 to 1.4 million single-family starts,” Crowe said. On the multifamily front, NAHB is anticipating 358,000 starts in 2015, up 2 percent from 352,000 last year. The sale of new single-family homes is expected to hit 564,000 this year, a 29.3 percent increase above last year’s (continued on page 17)
February, 2015
l
The NAIL 9
Home Show returns to fairgrounds
I
f you are in the market for home improvement products or services, or if you are a company that provides home improvement products and services, don’t miss the 2015 Nashville Home Show! The annual event returns to the State Fairgrounds this year for a busy three-day weekend kicking off Friday, February 20th. The Home Show is an annual event and has been a middle Tennessee tradition for over forty years. Everyone enjoys attending the show and taking part in the wide variety of activities that are available each day. In addition to all the vendor exhibit booths, attendees will find informative product demonstrations and daily educational seminars covering a variety of home care and home dÊcor topics. See the seminar schedule on page eleven for a full listing of all the terrific opportunities being offered during the show. If you are interested in purchasing exhibit space at the 2015 Home Show please visit www.hbamt.org and download the registration forms, or find the one-page form on page thirteen of this issue. A layout of the event show floor indicating booth availability (at time of this publication) can be found on pages fourteen and fifteen of this issue. For more exhibit booth information please contact Connie Nicley at cnicley@hbamt.net. For more information about the show visit at www.hbamt.org. n
10 The NAIL
l
February, 2015
WHEN February 20-22 (Friday through Sunday) Fridsy and Saturday: 9 AM to 8 PM Sunday: 10 AM to 5 PM WHERE State Fairgrounds, Nashville, Tennessee 500 Wedgewood Avenue, 37203 HOW Adults: $10 per person | Children under 12: Free Tickets available at the gate MORE INFO (615) 377-1055 | www.hbamt.org
Seminar Schedule
Mark your calendars now for these fun and informative seminars being held at the 2015 Home Show. Seminars are free to attend with your admission! Friday 10 A.M. - Ready, Set, Go! On the Road To Aging - Aging in Place Transition Services, Sara Beth Warne 11 A.M. - Landscaping with Tennessee Native Plants - David Lynn Cook, Davidson County Extension Agent Noon - Spring, Summer, Fall & Winter Vegetable Gardening in Middle Tennessee - David Lynn Cook, Davidson County Extension Agent 1 P.M. - The Energy of Change: Your Key to a Stress-free Home - Gail Adkins, Change-Magic 2 P.M. - Five Ways to Make More Money Selling Real Estate (builders & realtors) - Michelle Moore, The Power of Real Estate Show 3 P.M. - The Color Wheel: Understanding and Using Color as an Element of Landscape Design David Lynn Cook, Davidson County Extension Agent 4 P.M. - Options for today’s kitchens with LED - Brad Dobson, Hermitage Lighting 5 P.M. - The Ease and Advantage of Purchasing a New Home - Trey Lewis, Ole South Builders 6 P.M. - Green Building/Urban Development - Renee Condre, Beth Haley Design 7 P.M. - What Homes are Worth & Why - Kevin Pellatiro, Benchmark Realty Saturday 9 A.M. - Cabinets 101, Everything You Want to Know About Cabinets But Were Afraid to Ask Barbara French, French’s Cabinet Gallery 10 A.M. - Window Coverings: From Simple to Divine - Bohnne Jones, Decorating Den Interiors 11 A.M. - Designing Your Perfect Outdoor Kitchen - Crystal Watson, Embers Grill & Fireplace Store Noon - Selling Your Home? Is It Ready For its Close Up? - Carol Bass, The Decorating & Staging Academy 1 P.M. - Seven Things Every Home Seller Should Do Before Listing Their House - Michelle Moore, The Power of Real Estate Show 2 P.M. - Finding the Key to Calm - Lesley Clavijo & Denise W. Iroler, Chaotically Creative 3 P.M. - Make A Change With Paint…And More - Rosemary Anderson Palmer, Not Just Paper and Paint 4 P.M. DIY & Craft Projects You Can Complete In An Hour or Less - Jenna LaFevor, Rain on a Tin Roof 5 P.M. - How to Make a Monogrammed Doormat: Personalize Yours with Style - KariAnne Wood, Thistlewood Farms 6 P.M. - How to Decorate with Boxes - Shirley Horowitz, Davishire Interiors 7 P.M. - The Secrets to a Kale Salad that People Will Eat and The Secret to Making a Southern Fluffy Biscuit - Angela Pomone Roberts, Spinach Tiger food blogger Sunday 10 A.M. - Trends in Glass, Stone, Porcelain, Ceramic Tile For Your Perfect Look - Gina Hewlett, Louisville Tile 11 A.M. - Container Gardening - Barbara Wise, LSI Noon - Flower Gardening - Barbara Wise, LSI 1 P.M. - Identifying Your Home Purchasing Power - Tonya Esquibel, Summit Funding 2 P.M. - Dynamic Dogwoods for Your Home - Patrick Larkin, Cheekwood 3 P.M. - Making a Home for Life: Things to Consider for Aging in Place - Cindy Natsch & Denise Becker, A Better Nest 4 P.M. - Pet Rescue Across the Country - Pilots & Paws February, 2015
l
The NAIL 11
12 The NAIL
l
February, 2015
February, 2015
l
The NAIL 13
14 The NAIL
l
February, 2015
February, 2015
l
The NAIL 15
16 The NAIL
l
February, 2015
SPIKE REPORT Life Spikes
Fifteen SPIKES (in bold) increased their recruitment numbers last month. What is a SPIKE? SPIKES recruit new members and help the association retain members. Here is the latest SPIKE report as of December 31, 2014. Top 20 Big Spikes Jim Ford 912 Virgil Ray 821 Bill King 776 Mitzi Spann 688 Terry Cobb 566 Jim Fischer 566 John Whitaker 408 James Carbine 339 Jennifer Earnest 331 Dan Stern 306 Kevin Hale 287 Tonya Jones 271 Reese Smith III 260 David Crane 257 Steve Moody 219 Sonny Shackelford 218 Trey Lewis 190 Davis Lamb 187 Cyril Evers 182 Jackson Downey 174
Tim Ferguson 171 Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 140 C.W. Bartlett 138 James Franks 132 Tonya Alexander 128 Sam Carbine 120 Steve Hewlett 119 Carmen Butner 108 B.J. Hanson 102 Dave McGowan 101 Johnny Watson 101 Julie DuPree 87 Jeff Zeitlin 87 Duane Vanhook 86 Jordan Clark 85 Erin Richardson 76 Jeff Slusher 70 John Baugh 68 Wiggs Thompson 67 Don Bruce 62 Jim Ford, Jr. 62 Hill McAlister 57 Beth Sturm 55 Joe Morgan 54 John Broderick 53 Gerald Bucy 53 Michael Dillon 51 David Hughes 50 Lori Fisk-Conners 49 Al Davis 47 Sheila Rawlings 47 Bernie Laine 46 Greg Langley 46 Benny Sullivan 46
(continued from page 9) 436,000 in sales.
Meanwhile, residential remodeling activity is expected to register a 3 percent gain this year over 2014. The ongoing housing recovery will see single-family starts steadily climb from 49 percent of normal production at the end of the third quarter of 2014 all the way up to 90 percent of normal by the end of 2016, Crowe said. Examining the recovery on a state level, by the end of 2016, the top 40 percent of states will be [close] to normal production levels, compared to the bottom 20 percent, which will still be below 75 percent. Where are All the New Households? David Berson, chief economist at Nationwide Insurance, said the number of new household formations was far fewer in the current economic expansion than in previous recoveries. “Give the job growth we’ve seen in 2014, there should have been better household formations,” he said, adding that the slower pace may be because “the real acceleration in job growth has occurred in the last six months.” As the economy and job growth continue to strengthen in 2015, Berson said this will be a “significant factor to encourage people who have doubled up to move out on their own.” Moreover, he noted that the real slowdown in household formations has come from the Millennials, who have suffered disproportionately from stagnant wage growth and student debt. However, he added that this key demographic is getting older and ready to set down roots. “The leading edge are now in their young
Andrew Neuman 45 Bryan Edwards 44 Kay Russell 44 John Ganschow 42 Peggy Krebs 40 David Lippe 38 Andy Wyatt 37 Chuck Clarkson 36 Frank Miller 36 Brad Butler 35 Al Hacker 34 Christina Cunningham 33 Ray Edwards 32 Dan Strebel 32 Steve Wheeley 30 Alvin Basel 29 Spikes Don Mahone 19 Marty Maitland 19 Justin Hicks 18 Jess Dillon 16 Tracy Lomax 14 Derenda Sircy 12 Frank Tyree 12 Pam Smith 10 Randall Smith 10 Don Alexander 9
30s,” said Berson. “Homeownership desire is much higher for those who are in their 30s than those in their 20s.” A Rising Economy Lifts Housing Freddie Mac Chief Economist Frank Nothaft also foresees a good year for housing. “We’re projecting 3 percent economic growth in 2015, which would only be the second year in the last decade that we’ve seen growth at that level,” said Nothaft. “A stronger economy supports a rise in household formation and home buying.” Not quite as bullish as NAHB, Nothaft expects that housing starts will rise about 15 percent in 2015, and that home sales will be up 4 percent, which would be the best year for home sales since 2007. He added that nationwide home prices this year should increase about 3.5 percent to 4 percent above last year’s level. With 30-year mortgages currently running at about 3.75 percent, Nothaft called them “dirt cheap” and said he expects rates to rise this year but remain at affordable levels. “If we see economic growth running at 3 percent at an annualized, rate, the Federal Reserve should begin to push up short-term interest rates by the second half of 2015,” said Nothaft. “We see mortgage rates going up to 4.5 percent on the high side at the end of this year, going from dirt cheap to cheap. Overall, affordability for buyers in most markets will be well maintained in the context of strong job and income growth.” n February, 2015
l
The NAIL 17
FEBRUARY Calendar Sunday
Monday
1
2
Tuesday
3
Wednesday
Thursday
Friday
5
4
Saturday
6
7
Sales & Marketing Council meeting
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Dickson County Chapter meeting
22
2015 HOME SHOW Nashville Fairgrounds
Remodelers Council meeting
2015 HOME SHOW Nashville Fairgrounds
23
24
25
26
27
28
2
3
4
5
6
7
13
14
2015 HOME SHOW Nashville Fairgrounds
1
Sales & Marketing Council meeting
8
9
10
11
12
Chapters & Councils CHAPTERS CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles: 615/646-3303 Cheatham County Chapter details are being planned. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 310 DICKSON COUNTY CHAPTER Chapter President - Mark Denney: 615/446-2873. The Dickson County Chapter meets on the third Monday of the month, 12:00 p.m. at the Ponderosa Restaurant in Dickson. Next meeting: Tuesday, February 17. Topic: “Legislative Update.” Price: FREE, lunch dutch treat. Chapter RSVP Line: 615/377-9651, ext. 307 MAURY COUNTY CHAPTER Maury County Chapter details are currently being planned. Next meeting: to be announced. Chapter RSVP line: 615-377-9651, ext. 312; for callers outside the 615 area code, 1-800-571-9995, ext. 312 METRO/NASHVILLE CHAPTER Chapter President - John Whitaker: 615/843-3300. The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: FRIDAY, February 20. Topic: “Home Show at the Fairgrounds.” Builders Free pending sponsorship Price: $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 304
18 The NAIL
l
February, 2015
ROBERTSON COUNTY CHAPTER Next meeting: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313.
Price: free for Green Building Council members pending sponsorship; $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 308
SUMNER COUNTY CHAPTER The Sumner County Chapter meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 306
HBAMT REMODELERS COUNCIL Council President - Ricky Scott. The HBAMT Remodelers Council meets on the third Wednesday of the month, 11:00 a.m. at varying locations. Next meeting: Wednesday, February 18. Location: to be announced. Topic: to be announced. Price: free for RMC members with RSVP; $15 for non-members with RSVP ($20 w/o). Council RSVP Line: 615/377-9651, ext. 301
WILLIAMSON COUNTY CHAPTER Chapter President - BJ Hanson: 615/884-4935. The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Builders Free pending sponsorship. Price: $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 305 WILSON COUNTY CHAPTER The Wilson County Chapter meets on the second Thursday of the month, 11:30 a.m. at the Five Oaks Golf & Country Club in Lebanon. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS GREEN BUILDING COUNCIL Council President - Erin Richardson: 615/883-8526. The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m. Next meeting: to be announced. Topic: to be announced.
INFILL BUILDERS COUNCIL The Infill Builders meets on the third Thursday of the month, 11:30 a.m. at the HBAMT offices until further notice. Next meeting: to be announced. Council RSVP Line: 615/377-9651, ext. 311 MIDDLE TENN SALES & MARKETING COUNCIL Council President - Derenda Sircy. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, February 5. Topic: “Dodd Franks impacts for sales agents.” SMC members FREE with RSVP thanks to THDA; nonSMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 302.
February, 2015
l
The NAIL 19
20 The NAIL
l
February, 2015