BISMARCK-MANDAN HOME BUILDERS ASSOCIATION MAY 2020 || WWW.BMHBA.COM
BUILDING Building Buzz is a publication of the Bismarck-Mandan Home Builders Association.
PROFESSIONALS BUILDING OUR COMMUNITY THROUGH PROMOTION OF
Bismarck-Mandan Home Builders Association 2600 Gateway Ave, Ste 1 Bismarck, ND 58503 Phone: 701.222.2400 Fax: 701.250.9730
www.facebook.com/bmhba
SINCE 1958.
PRESIDENT Sattler Homes 701-255-7628 jeff@bismarckbuilder.com VICE PRESIDENT Aspire Homes 701-426-8583 greg@daretoaspire.com 2ND VICE PRESIDENT Triton Homes 701-223-3030 jamie.schmidt@investcore.com
Northern Plains Plumbing, Heating & Air 701-222-2155 greg@northernplains.net Townsquare Media 701-250-6602 bill.schmid@townsquaremedia.com
www.twitter.com/bmhba
www.bmhba.com
Stoneshire Builders 701-471-6935 brian@stoneshirebuilders.com Hallmark Homes 701-471-7634 hallmarkhomes@outlook.com
TREASURER
PAGE 5
Boulder Homes 701-400-5554 boulderhomesnd@gmail.com
Dakota OutdoorScapes 701-214-1255 mckenzie@ndscapes.com
Great Plains Rehab 701-400-0676 rtank@primecare.org
Joe Vetter Construction 701-258-9394 joevetterjvc@gmail.com
Apex Builders 701-527-7899 amy@apexbuildersnd.com
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PAGE 14 Dawn Watson dawn@bmhba.com Office: 701-222-2400 Cell: 701-390-5049
Simone Marchus simone@bmhba.com Office: 701-222-2400 Cell: 701-527-7230
Elysha Head
Representing the diversity of the building industry, the BMHBA consists of building specialists from every section of the construction field and associated industries. Your membership strengthens our voice in Bismarck-Mandan construction sector as well as at a state and national level. Please renew your membership by May 31, 2020.
Greg Meidinger
Bryan Brendel Brandon Fraser
Kathy Feist Shirley
Thomas
Howard Malloy
Vern Vetter Tim
Davenport
Chad Moldenhauer Brad Hauff
Cary Otterness
Heidi Dietrich Darren
Schmidt
Kelly Johnson Terry Richter Amy Sornsin
2020 May is here and I hope it brings warmer temperatures and plenty of sunshine with it. As I drive around town, I notice that many contractors have had a great start to their spring projects. Our building permit numbers are steadily climbing. I would like to wish everyone a great construction year in 2020. With an election year ahead of us I would like to remind our membership of BUILD-PAC as well as NDAB-PAC. One of the most important aspects of our association is BUILDPAC and NDAB BUILD-PAC. These are the two political action committees that our association has access to. These committees have a tremendous impact on our local building industry. As your BUILD-PAC trustee, I am available for any questions you might having regarding this. Vance Vetter of Vance Vetter Homes is also a great resource for this topic. I would love to see an increase in participation in PAC from our association. To help lead the way I have increased my PAC contribution this year. I encourage you to do the same. In 2018 the association
Regards,
2020 PRESIDENT :: BMHBA
used $6,750 of PAC funds to support our local Bismarck, Mandan, Burleigh and Morton elections. Without support from our members, we lose our voice in local politics. To make a donation to NAHB BUILD-PAC you can visit NAHBPAC.com. Thank you to all past and present donors. Our donations and political efforts help pave the way for the home building industry. The Bismarck-Mandan Home Builders Association is saddened to announce that the Spring General Membership Meeting has been cancelled. Ideally, we would love to get together and celebrate the strong start to the season our members have had. However, a mixer doesn’t seem appropriate at this time. Thank you for being patient and understanding with us. We look forward to convening at a later date.
MONTH
YEAR
‘16
‘17
‘18 ‘19
‘17
‘18
‘19
‘20
‘15
‘16
‘17
‘18 ‘19
‘20
‘15
‘16
‘17
‘18 ‘19
‘20
‘15
‘16
‘17
‘18 ‘19
JANUARY
0
9
1
0
10
‘20 2
‘15
‘16
0
0
0
0
1
0
0
2
0
0
0
2
0
0
2
0
0
0
0
0
2
1
FEBRUARY
3
4
5
2
0
10
0
0
0
1
1
2
6
5
0
0
0
0
0
3
0
2
1
1
0
0
0
3
MARCH
21
22
14
2
9
32
2
2
1
4
11
6
4
8
2
8
0
3
0
0
0
1
9
9
4
2
4
12
APRIL
52
29
40
27 26
4
3
6
14
12
8
16 11
18
2
4
0
6
14
5
11 11 14
MAY
31
46
29
16 28
5
6
4
26
13
11
15 11
17
2
5
5
0
14
16
7
20 10
JUNE
31
43
48
24 18
10
2
2
21
20
13
13
4
1
6
3
1
1
8
11
4
4
6
JULY
40
16
60
22 17
3
3
2
9
13
6
11 12
0
5
1
5
1
13
9
4
3
11
AUGUST
20
48
16
27 19
6
1
7
17
7
13
20 10
8
2
9
4
5
8
9
6
8
5
SEPTEMBER
28
44
26
22 23
8
3
10
16
14
26
11 10
3
3
4
5
2
9
9
9
6
5
OCTOBER
54
14
22
15 36
4
7
3
9
29
20
9
9
17
10
7
5
3
4
7
3
7
1
NOVEMBER
16
11
9
11 14
3
0
1
7
7
7
6
2
2
5
0
0
0
3
4
1
0
2
DECEMBER
1
0
0
1
0
0
0
0
0
0
0
0
1
0
4
0
0
0
0
2
0
0
45
27
36
5
132 123
114 116
71
8
67
40
37
28
20
3
83
80
51
61
60
16
45
27
36
5
132 123
114 116
71
8
67
40
37
28
20
3
83
80
51
61
60
16
Data not collected for the ETA in 2015 and 2016.
‘15
.
1
TOTAL
297 286 270 169 201
44
YTD TOTAL
297 286 270 169 201
44
0
0
‘20
BISMARCK SINGLE FAMILY DWELLING
K&L HOMES
5933 VALLEY VISTA LANE J.E. HOMES
3722 BOGEY DRIVE
BOULDER HOMES
3909 SILVER BLVD
K&L HOMES
1116 LIMITED LANE
JOE VETTER CONST.
8230 NICKLAUS DRIVE
BOULDER HOMES
3905 SILVER BLVD
K&L HOMES
1206 COMMUNITY LOOP
MANDAN SINGLE FAMILY DWELLING
BOULDER HOMES
5201 GOLD DRIVE
SATTLER HOMES
4808 MALTBY STREET
J.E. HOMES
3814 AMARI LOOP NW
BOULDER HOMES
202 RUTLAND DRIVE
SATTLER HOMES
2617 PEACH TREE DRIVE
J.E. HOMES
1014 CHIPPEWA AVE NW
BOULDER HOMES
208 RUTLAND DRIVE
STONESHIRE BUILDERS
4114 SILVER BLVD
J.E. HOMES
3813 AMARI LOOP NW
J.E. HOMES
5304 GOLD DRIVE
STONESHIRE BUILDERS
4116 SILVER BLVD
J.E. HOMES
3817 AMARI LOOP NW
J.E. HOMES
5308 GOLD DRIVE
STONESHIRE BUILDERS
4118 SILVER BLVD
VERITY HOMES
3713 GALE CICLE SE
5214 GOLD DRIVE
STONESHIRE BUILDERS
4120 SILVER BLVD
VERITY HOMES
3717 GALE CIRCLE SE
JOE VETTER CONST.
3817 COGBURN ROAD
VERITY HOMES
218 HURON DRIVE
708 KEIDEL TRAIL SW
3915 COGBURN ROAD
BISMARCK ETA
VERITY HOMES
JOE VETTER CONST. K&L HOMES
1411 COMMUNITY LOOP
ASPIRE HOMES
K&L HOMES
5801 CRESTED BUTTE RD. ASPIRE HOMES
J.E. HOMES
4511 FERNWOOD DRIVE 6619 SELLAND LOOP
Join the BMHBA and Bismarck-Mandan Board of Realtors for the 32nd Annual PAC Golf Tournament. We're hitting the links of Hawk Tree Golf Club for an afternoon of fun. Funds raised with support both associations’ advocacy and/or PACs. Registration is available and limited sponsorships remain. Registration begins at 9:30 AM, with a shotgun start at 10:00 A.M. Drive-by lunch will be served at 12:00, with food and awards following golf. Golfer registration includes 18-holes, boxed lunch, dinner and a chance at door prizes and hole-in-one contests. Call 222-2400 ext. 2 or email Simone at simone@bmhba.com to register for this
BMHBA staff recently sent a survey to all exhibitors of the 2020 Home Show. The survey helps the BMHBA gain insight into which event aspects went well, and what can be improved for future Home Shows. The survey received 47 responses. Some interesting stats from the 2020 Home Show survey include: •
65% of exhibitors were members of the BMHBA.
•
89% of exhibitors would like to see the continuance of Free Admission Friday, sponsored by American Bank Center.
•
85% of exhibitors would like to see the continuance of the Beer Garden, which was hosted for the first time this year.
•
63% prefer a two-day event.
If you exhibited at the 2020 Home Show and did not have a chance to complete the survey, please do so by visiting SurveyMonkey.com/r/ BMHBAHomeShow. The Home Show committee is always looking to improve both spectator and exhibitor experiences, and your opinion helps us do that.
The BMHBA recently solidified the date for Lunch with Heroes. Lunch with Heroes is a free lunch program for youth in Mandan, throughout the summertime. Lunch is provided by the MSA United Way and Public Schools. Each year, on the last Tuesday of July, the BMHBA brings a construction-related craft and the Board of Directors guides children through the activity. This year the theme is Fairy Tales and Fantasy, “Imagine Your Story”. If you would like more information on how to contribute to the MSA United Way Free Summer Lunch Program, please visit MSAUnitedWay.org.
The North Dakota Industrial Commission approved an allocation of almost $200,000 today through Helping Housing Across North Dakota (HAND). The program addresses the housing rehab needs of lower-income individuals and families by providing grants to targeted community programs. North Dakota Housing Finance Agency (NDHFA) administers the program. “Helping HAND ensures North Dakotans of limited means continue to have a safe and affordable place to call home,” said Commission members in a joint statement. The Industrial Commission, consisting of Gov. Doug Burgum as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees NDHFA. The 2020 grant distribution follows: • Community Action Partnership, Dickinson/Williston, $15,479. •
Community Action Partnership, Minot, $20,489.
•
Dakota Prairie Community Action Agency, Devils Lake, $15,505.
•
Red River Valley Community Action, Grand Forks, $21,441.
•
Southeastern ND Community Action Agency, Fargo, $42,709.
•
Community Action Region VI, Jamestown, $11,697.
•
Community Action Program Region VII, Bismarck, $27,080.
•
Spirit Lake Tribal Housing, Fort Totten, $14,666.
•
Trenton Indian Service Area, Trenton, $14,666.
•
Turtle Mountain Band of Chippewa, Belcourt, $14,666.
•
Rebuilding Together, Fargo, $800.
•
Rebuilding Together, Mandan, $800.
Helping HAND assistance is provided to households with incomes that do not exceed 80 percent of the U.S. Department of Housing and Urban Development’s median for the county in which their home is located. Matching funds of at least 25 percent of the total project costs are required to access the grant dollars. “Through Helping HAND, North Dakota Housing Finance Agency has allocated over $6 million in agency earnings since the program began in 1993 to assist more than 7,500 lower-income individuals and families statewide,” said Dave Flohr, NDHFA interim executive director.
Written by Andy Tsubasa Field for The Bismarck Tribune The value of building permits Bismarck issued in 2019 decreased 19% from the previous year, and the number of commercial permits issued dropped 26%.
"There’s no question that we’ve seen somewhat of a slowdown in the commercial industry. I mean, it’s tough to build things when we’ve got things to fill," Ritter said. "We’ve got a lot on the market, and there’s only so many The total value of building permits buyers and tenants that are going to fill issued in North Dakota’s capital city last these things." year was just under $206.9 million, compared to about $254.7 million in Bismarck issued 185 permits for 2018. The city issued 201 commercial single family homes in 2019, compared building permits in 2019, compared to to 151 in 2018. The city also issued 52 272 in 2018. building permits for townhouses in 2019, compared to 45 building permits Costco’s upcoming 157,400-squarethe year before. foot facility in Bismarck made up 9% of the city’s building permit value last "I wouldn't say slow, but I wouldn't year, while Evangel Church’s expansion say booming. I would say just pretty and renovations made up 7%. Both steady," said Jeran Thomson, owner of projects are under construction. JE Homes. "I think the (housing) market They're among the top contributors to just needed to kind of readjust." the total value of building permits last The South Meadows housing year, said Brady Blaskowski, a city development in south Bismarck, and building official. the Boulder Ridge and Eagle Crest Bismarck’s school construction developments in northeast projects in 2018 -- such as Bismarck Bismarck, were significant residential High School’s renovations and the housing projects completed in the past construction of the Gateway to Science two years, Thomson said. Museum -- along with other Residential remodels and additions commercial construction projects that accounted for about $4.3 million in year influenced the drop in building building permit activity in 2019, permit values the next year, Blaskowski compared to $3.5 million in 2018 -- a said. 23% increase. Commercial remodels Commercial developers have been and additions accounted for about having a "tough time" dealing with a $86.7 million in 2019, compared to shortage of businesses willing to rent about $100.5 million in 2018 -- a 14% space, according to Scott Ritter, a decrease. commercial Realtor with Aspen Group The value of building permits Real Estate.
Bismarck issued last year is the thirdlowest since 2010. The number of building permits for single family and two-family homes are both the secondlowest in the past 10 years. The four highest values in building permits over the past 10 years were between 2012 and 2015 -- a result of the North Dakota oil boom, Blaskowski said. Home builders are bracing for the impact of the coronavirus pandemic on the housing market, Thomson said. "Somebody just backed out of (buying) a house of someone just yesterday because oil prices are down, and Doosan (Bobcat) laid people off," he said. "These things are going to affect the home building market, the residential real estate market, now this year, I think." Thomson said he was expecting an increase in activity in the housing market in 2020. The number of houses on the market began to fall below 1,000 in the past three months, which "usually is an indicator we need to build more houses," he said. Ritter said interest from businesses in renting commercial property was "incredibly encouraging" moving into 2020. "Then, of course, this thing hits, and then the stock market hits, and the oil prices hit," Ritter said. "It's going to be a tough April, and hopefully it's weeks and not months."
2010: $175.43 million
2011: $234.99 million
2012: $316.05 million
2013: $372.34 million
2014: $385.23 million
2015: $361.66 million
2016: $236.69 million
2017: $188.13 million
2018: $254.67 million
2019: $206.85 million
THIS MONTH’S SPOTLIGHT MEMBER IS BRANDON FRASER. BRANDON IS A LOCAL BUILDER, WHO STARTED HIS COMPANY, BURLEIGH BUILDERS, IN 2018. BURLEIGH BUILDERS WAS BORN FROM A DESIRE TO CREATE UNIQUE, FUNCTIONAL, AND WELL THOUGHT OUT SPACES THAT LIVE AS GOOD AS THEY LOOK.
W
e are BURLEIGH BUILDERS.
A creative design build general contracting firm located in Bismarck ND. Born from a desire to create unique, functional and well thought out spaces that LIVE as good as they LOOK. What made you decide to enter the home building industry? I am not sure it was a decision. I feel like it happened naturally. When you find something you are good at and realize you can make a living doing it… It just kind of made sense.
What is a typical day like for you? Of course, typical isn’t really a thing right now but before our current circumstance, my days always started with getting my girls up and ready for the day. Followed by waiting for our nanny or a drop off at school/daycare. Then I would head to job sites to check progress, answer questions, and ensure everyone had what they needed to keep projects moving forward. I find my myself spending a lot of time on jobsites, bringing donuts for breakfast or pizza for lunch and just hanging with the crews. Having a positive company culture is the key to success in any business. Do you have any advice for new business owners? Absolutely. Everything should come from an energy management perspective. It is tough running a business, and the sooner you realize you only have so much energy in a day, the quicker you become aware of how you use it. What’s an interesting fact about your business most people don’t know? I started Burleigh Builders with literally nothing. I was laid off by my current employer, we recently had a new baby and my wife had exploded her knee and was on disability. Things were crazy. I truly believe you place yourself in this world exactly where you want to be. I had a vision of where I wanted to be, and I made it happen. If I wasn’t a home builder, I’d be a…I am not really sure. I was born for this. I feel like there is nothing else that I could do that I would hate any less. Maybe a helicopter pilot? What’s your favorite part of your job? I don’t think it’s fair to even consider this a JOB. When you wake up everyday and get to choose what you do, it’s amazing. Taking a project concept and making it real is super rewarding.
CONNECT WITH BRANDON FRASER | BURLEIGH BUILDERS: @BURLEIGHBUILDER
WWW.BURLEIGHBUILDERS.COM
WWW.FACEBOOK.COM/BURLEIGHBUILDERS
We are in this Together: “Building is about getting around the obstacles that are presented to you.” – Jeremy Renner We are all experiencing a point in history that is probably challenging you personally and professionally like never before. Each day you are presented with new questions and new challenges. We want to remind each of you that we are here to help you in any way that we can. The nation is learning how together we must be fluid and adapt to ever changing needs. As America responds to the novel NDAB CEO · KIM SCHNEIDER 2020 NDAB PRESIDENT coronavirus, COVID-19, and practices social distancing to control its NATE APPLEGREN spread, the National Association of Home Builders is working hard to help its members respond to the economic effects. We want to make sure members are apprised of NAHB federation efforts to mitigate the economic effects of COVID-19. NAHB is making available to members a broad range of materials on its website. The materials can be found at NAHB.org/ coronavirus. These include economic forecasts and information about business continuity and personal preparedness. The site also includes consumer resources and materials for NAHBs state and local partner associations. NAHB has also conducted a series of webinars to inform members of the association’s resources, policy advocacy efforts, and the industry outlook from NAHBs Chief Economist, Robert Dietz. NDAB continues to work closely with the local associations and monitoring what is happening within the state. If you don’t already follow us on Facebook, we encourage you to do so. With the influx of emails coming to your inbox, we are using social media and our website to get valuable information out to our members. We look forward to gathering together, sharing ideas and laughter, but until then, our wish is that you are all staying safe and healthy. Wash your hands, use individual water bottles, stay home if not feeling well, and keep a safe distance. For a bit of normalcy, May brings us spring weather and time for cleaning and repairs. Owning a home is a big responsibility, and that fact becomes even more obvious every year when spring rolls around. Spring cleaning for home owners typically means much more than just cleaning out the garage and washing windows. For most, the to-do list can be quite extensive. If the thought of spring cleaning makes you long for winter, try thinking about these annual chores to protect your family’s home and your future finances. All it takes is just a few days to complete some simple tasks. Here are several items that should be on your spring cleaning checklist: • • • • • • • •
Inspect all windows to ensure they operate properly and that all window screens are in place. Clean the window tracks and check that the weather-stripping hasn’t cracked or torn. Preventing unwanted outside air from leaking into your home also will reduce your energy bills. Have your air conditioning system inspected and cleaned. If your system has a filter, replace it every three months to keep your unit working efficiently. Check the condition of the glazing compound, caulking and exterior paint. Replace or paint as needed. Exchange glass and screens in storm doors and/or windows. Ensure the screens are clean by washing gently with soapy water. Inspect your roof for damage caused by snow or debris. While you’re up there, clean your gutters of debris. Even though you did this last fall, winter weather often brings a mix of storms and heavy winds that can cause debris to build up. Keep out pests and rodents by sealing any cracks and openings along baseboards, behind sinks, and around pipes and windows. Also, repair any holes in doors and window screens. Check for evidence of termites such as sagging floors and ceilings or dry, brown tunnels in the ground near the home’s foundation. Seed and feed the lawn and plant annuals, cut back perennials that need pre-growth pruning.
Stay informed, stay physically distant, stay healthy: Nate Applegren, NDAB President and Kim Schneider, NDAB Chief Executive Officer
Authentic architectural style with great window and door design just about guarantees great curb appeal. But to take it to the next level, create designs that allow you to include front porches. This American iconic design element elicits nostalgic visions of porch swings, inviting friendly conversations with neighbors on cool summer nights. Buyers can’t help but want to look inside. A few design tips will make sure your front porches will have the most effective impact on curb appeal within the production-built environment. Tip #5: Choose the “right” side for the front porch and garage. Garage orientation is an important consideration for porch design. In Denver, we do a lot of narrow rear-load product, so the whole front is a blank canvas. But porches can get expensive, especially in the square footage ranges typically needed to make smalllot product pencil out. To give a narrow plan more interest, I often design a recessed entry on the main floor. Integrating an inviting front porch is achieved without sacrificing too much square footage. Even a very small welcoming porch placed in the front corner can greatly enhance the entry sequence. For front-load designs, the front porch can enhance the streetscape and make garageforward homes look terrific. Pushing the front porch forward of the garage improves the look from the street, placing focus on the front door. But the plan will still capture the construction efficiencies that a forward garage provides. Tip #6: Frame the entry. The porch is really a picture frame for your front door. Designs should help buyers see the entry first then help them feel great on their way inside. Pay attention to column placement to make sure the front door is centered and any windows are logically framed, too. Even if the porch perfectly frames the entry, buyers will instantly know if their favorite Adirondack chair won’t fit. It’s important to think of the front porch as an outdoor room. Porch depth is sometimes reduced to cut costs, but avoid the temptation to shrink porch depths so much that they become unlivable. Tip #7: Spotlight your style. Architectural style should guide your decision to include a porch. Some styles are known for their iconic front porches, so if you’re building Ranches, Craftsmans and Farmhouses, you’ll be wise to include a porch. But for these styles, detail matters. Even at the lowest price points, a 4×4 post won’t cut it. Invest a bit in stylistic columns, brackets and details to make sure your porch enhances the style you’ve chosen.
PLACE YOUR AD HERE FOR PREMIUM EXPOSURE. JUST $21 PER ISSUE.
EMAIL INFO@BMHBA.COM.
Home builders can learn how to achieve low Home Energy Rating System (HERS) Index scores by looking closer at data points captured in energy modeling software to see what trends emerge. Using all the homes registered in this energy modeling software in 2019 as an example, the most common HERS Index score was 58, and most scores fell within a standard bell curve ranging between 45 and 80. Keep in mind, the lower the score, the more energy efficient the dwelling is compared to a 2006 code-built home. One general industry trend confirmed by these data points is that homes with HERS Index scores below 50 tend to have smaller square footages of livable space, and multifamily units generally have lower scores because of this. Efficient building practices and features also play a role: Heating Equipment Type: •
Ground source heat pumps dominated the lower score ranges.
•
Homes with air source heat pumps ran the gamut on scores overall, but homes that scored between 20 and 5 (which is almost or even better than net zero energy) had mostly air source heat pumps.
•
Electric resistance heating (such as baseboards) was only found in houses that scored 75 or higher.
•
Homes that had scores between 25 and 70 mostly had traditional furnaces.
Heating and Cooling Efficiency: •
Houses that ranged in scores on the lower end from 25 to 40 had Seasonal Energy Efficiency Ratios (SEER) of 17-24, while homes that had HERS Index scores of 45 and above had SEERs hovering at about 14.
•
For higher HERS scores in the 70-75 range, the Annual Fuel Utilization Efficiency (AFUE) was in the mid-80s, versus AFUEs of 90 and above for more efficient homes with HERS scores below 55.
Mechanical Ventilation Type (additional ventilation is key for tighter homes): •
Homes with HERS scores of 40 and below almost exclusively have Energy Recovery Ventilators (ERVs) and Heat Recovery Ventilators (HRVs).
•
Homes with scores between 40 and 50 are more likely to have exhaust only
•
Houses with HERS scores between around 56 and 80 tend to have air cyclers.
Solar photovoltaics (PV): •
On average, the lowest score without PV is in the low 40s.
•
Almost 100% of homes that scored 30 and below have solar PV.
Although there might not be a single formula to get the lowest HERS score, the good news is you have options. To increase energy efficiency, you may want to consider selecting heating and cooling equipment that has a high Coefficient of Performance (COP) and a high SEER, integrating mechanical ventilation, and incorporating renewable energy. Combining multiple efficient products and incorporating sound building science principles into early design and planning stages has the potential to make the building more efficient. As always, many of these choices depend on the client, the project’s geographic location, and local and state codes and regulations. Trends like these can help builders get a sense of how newly constructed homes in the market have scored on the HERS Index based on various factors. Consider learning more about the HERS Index, and also exploring the value of third-party green certifications on your next build.
In the wake of the COVID-19 pandemic, Fannie Mae has announced additional temporary guidance, including use of virtual inspections for appraisals and renovation loans, and flexibilities for condominium project reviews. Additionally, Fannie Mae updated information about flexibilities for new construction loans and Homestyle® Renovation loans, as well as other temporary appraisal requirement flexibilities. View more details here. Fannie Mae has also released a video to help appraisers and lenders understand how to use the temporary flexibilities, including the modified scopes of work, how to perform thorough desktop appraisals, and more. Check out “Top 6 Tips for Appraisers on Using COVID-19 Flexibilities” and other resources on Fannie Mae’s Appraisers page. Fannie Mae and Freddie Mac are also extending the implementation timeline for the redesigned Uniform Residential Loan Application (URLA) and updated automated underwriting systems (AUS) specifications to support the industry during the COVID-19 pandemic. The new mandate for required use of the redesigned URLA is March 1, 2021. The extension will provide lenders and other stakeholders additional time to prepare and implement the redesigned URLA. View more details here. Due to disruption related to COVID19, many states are temporarily allowing remote notarization in conjunction with paper-based loan closings. A new job aid from Fannie Mae provides information on use of remote ink-signed notarizations.
Prices paid for goods used in residential construction decreased 0.8% in March (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The year-to-date decline in residential construction inputs prices is the first January-to-March decrease since the Great Recession. Building materials prices have fallen 1.8% since March 2019 by 0.15% per month, on average. In contrast, prices increased 0.17% per month, on average, from March 2018 to March 2019. Prices paid for gypsum products increased 2.2% in March (seasonally adjusted) after posting a record 5.2% decline in February. The price index for gypsum products has decreased 3.1% in 2020 and has fallen 8.4% since its most recent peak in March 2018. The PPI report shows that softwood lumber prices rose 3.7% (seasonally adjusted) in March, following a 2.0% increase in February 2020. The increase is at odds with prices reported by Random Lengths, which showed prices falling more than 13% over the month. The discrepancy between the BLS and Random Lengths data likely stems from timing differences, as nearly 60% of the decline took place over the final 10 days of March. Some of that change— and possibly the 4% drop seen in the first three days of Random Lengths data for April—should be captured in next month’s PPI report. Prices paid for ready-mix concrete (RMC) advanced 0.7% in March (seasonally adjusted), following a 0.7% increase in February. The RMC index has increased 7.2% since January 2018.
Ken Calligar, CEO of RSG 3-D, an advanced technology structural panel manufacturer in business since 1996, is somewhat of an evangelist for panelized home construction in the United States.
RESILIENCE ADU takes the proven RSG 3-D Structural Panel
“Imagine the benefits of a ‘future-proof’ community built using RSG 3-D Structural Panel homes,” said Calligar. “It would be safe against hurricane, wildfire, tornados, and earthquakes. And it is affordable.”
Calligar said that his NAHB membership has been critical to the rollout of this new offering. “Through our participation in NAHB Building Systems Councils and IBS 2019 and 2020, we have been globally discovered,” he noted. “These are exhausting shows, but it is very exciting for our team of nationwide builders to see the ‘Aha!’ moment when another builder sees the future.”
He notes that the United States has historically lagged the rest of the world in the use of panelized building, which he considers to be the equivalent of ignoring the emergence of computers and mobile phones.
and scales it to affordable and disaster-resilient housing. The globally available system creates non-combustible, hurricane-resilient and earthquake-resilient buildings.
He also notes that a major relationship with Andersen Windows came from contact initiated on the Building RSG 3-D’s small homes division, RESILIENCE ADU, won System Councils. “We are now breaking ground on 600 units the 2019 NAHB Global Innovation Award for Leadership of housing in Texas with Andersen and have spec’d them Product. Judges recognized RSG 3-D and RESILIENCE into developments in South Carolina and New Hampshire,” ADU for its unique ability to create resilient, energy-efficient, said Calligar. “It’s great to have high quality partners along healthy and affordable housing. The system is ICC Evaluated for the ride.” and Certified and surpasses California’s Title 24 energy code.
A recent survey of NAHB members reveals they are implementing several measures to allow them to continue selling homes during the coronavirus pandemic. The most common strategy is private showings of model homes, with 59% of builders saying they doing this already or planning to in the near future. Significant numbers also offering online closings or other services (46%), and providing drive-through closings or other services (34%). All of these are attempts to keep selling homes while adhering to a form of social distancing. The survey reveals the top measure builders are taking in response to the outbreak is to allow non-construction employees to work from home. Eighty-four percent said they are already doing so or plan to employ this strategy.
The Federal Emergency Management Administration (FEMA) recently began to roll out its new grant program, Building Resilient Infrastructure and Communities (BRIC). BRIC replaces the existing Pre-Disaster Mitigation program and is a result of amendments made to the Stafford Act by the Disaster Recovery Reform Act of 2018 (DRRA). Through the BRIC program, FEMA hopes to promote a national culture of preparedness and public safety by encouraging investments to protect communities and infrastructure and strengthening national mitigation capabilities to foster resilience.
before any disaster happens. BRIC is designed to support a range of hazard mitigation projects undertaken by states, local communities, tribes and territories.
establishes the operational parameters for the program including eligibility criteria for applicants and projects. Public comments will be accepted on the policy through May 11, 2020.
Home builders, developers or remodelers may be impacted when those projects aim to elevate or otherwise mitigate the risk to individual residential structures or local infrastructure that serve their developments.
NAHB staff is reviewing the draft policy. Because the draft focuses more on overall principles and additional details for how any funding may be used will be provided in the subsequent Notice Of Funding Opportunity (NOFO) announcements that will be released annually, it is not yet clear if or how it may be used by NAHB members. The draft policy does, however, provide some clarity on the minimum conditions that mitigation projects must meet to be eligible for funding.
On March 27, FEMA launched a new webpage with background information on the program and a timeline for its implementation. The site also includes access to the Summary of Stakeholder To do so, the BRIC program will shift Feedback document that reviews the the focus for a significant amount of comments FEMA received during its federal disaster spending from reactive 2019 stakeholder engagement process. FEMA anticipates finalizing the policy (post-disaster) toward proactive and releasing a NOFO by fall 2020. This On April 10, FEMA published the investments in risk mitigation and timing is subject to change. To learn proposed BRIC policy, which community resilience that would occur more, visit fema.gov/bric.
Reflecting the growing impact of the COVID-19 pandemic, total housing starts decreased 22.3% in March from a downwardly revised February reading to a seasonally adjusted annual rate of 1.22 million units, according to a report from the U.S. Housing and Urban Development and Commerce Department. Meanwhile, overall permits declined 6.8% to 1.35 million.
“Housing has been deemed an essential business in most of the nation, and in the few states where the governors have not acted, we urge them to deem construction as essential,” said NAHB Chairman Dean Mon. “Housing can help lead an eventual rebound, as it has done in previous recessions.”
“We expect further declines in The March reading of 1.22 million housing starts in April, due to the starts is the number of housing units unprecedented decline in builder builders would begin if they kept this confidence in our latest member pace for the next 12 months. Within survey,” said NAHB Chief Economist this overall number, single-family starts Robert Dietz. “It is worth noting that decreased 17.5% to an 856,000 there are currently 534,000 singleseasonally adjusted annual rate. The family homes currently under multifamily sector, which includes construction and 684,000 apartments. apartment buildings and condos, Approximately 90% of these singledecreased 31.7% to a 360,000 pace. family units are located in states where
home building is deemed as an ‘essential service,’ while 80% of apartments are located in such states.” With respect to regional singlefamily and apartment construction, compared to a year ago, first quarter home production increased in all regions: 31.9% in the Northeast, 23% in the Midwest, 18.9% in the South and 27.1% in the West. These increases are due to strong construction data in January and February and weak comparable data at the start of 2019. Overall permits declined 6.8% to a 1.35 million unit annualized rate in March. Single-family permits decreased 12% to an 884,000 unit rate, while multifamily permits increased 4.9% to a 469,000 pace.
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