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NAIL The official magazine of Home Builders Association of Middle Tennessee President Michael Dillon Vice President Trey Lewis Secretary/Treasurer Randall Smith 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.
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FEATURES 7 Why are new homes getting so big?
To find our why home sizes are continuing to grow it’s important to take a look at who’s buying them.
8 2014 Home Show at Ag Expo Park a success
The annual Home Show returned for its annual three day weekend Friday, February 21 at the Williamson County Ag Expo Park in Franklin, Tenn.
DEPARTMENTS 4 News & Information 13 SPIKE Club Report 14 March Calendar 14 Chapters and Councils
ON THE COVER: The 2014 Home Show drew big crowds to the Williamson County Ag Expo Park in Franklin last month. See page eight (8) for more about the show. March, 2014
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Housing affordability holds steady in fourth quarter
lightly lower median home prices along with a small uptick in mortgage rates contributed to housing affordability holding steady in the fourth quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released recently. In all, 64.7 percent of new and existing homes sold between the beginning of Octo-
Housing affordibility is stabilizing at a time when pent-up demand and ongoing job growth are helping housing markets across the nation. 4 The NAIL
ber and end of December were affordable to families earning the U.S. median income of $64,400. This is virtually the same as the 64.5 percent of homes sold that were affordable to median-income earners in the third quarter. Meanwhile, the national median home price dipped from $211,000 in the third quarter to $205,000 in the fourth quarter while average mortgage interest rates rose from 4.45 percent to 4.54 percent in the same period. “Housing affordability is stabilizing at a time when pent-up demand and ongoing job growth are helping housing markets across the nation to gradually strengthen,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “While this bodes well for housing in 2014, builders continue to
face challenges, including tight credit for home buyers, inaccurate appraisals, and a shortage of workers and buildable lots.” Youngstown-Warren-Boardman, OhioPa was the nation’s most affordable major housing market, as 89.4 percent of all new and existing homes sold in this year’s fourth quarter were affordable to families earning the areas’ median incomes of $53,900. Meanwhile, Kokomo, Ind., claimed the title of most affordable smaller market, with 96.3 percent of homes sold in the fourth quarter being affordable to those earning the median income of $60,100. Other major U.S. housing markets at the top of the affordability chart in the fourth quarter included Harrisburg-Carlisle, Pa.; Syracuse, N.Y.; Buffalo-Niagara Falls, N.Y.; and Scranton-Wilkes-Barre, Pa.; in descending order. Smaller markets joining Kokomo at the top of the affordability chart included Springfield, Ohio; Monroe, Mich.; Vineland-Millville-Bridgeton, N.J.; and Cumberland, Md.-W.Va. For a fifth consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. held the lowest spot among major markets on the affordability chart. There, just 14.1 percent of homes sold in the fourth quarter were affordable to families earning the area’s median income of $101,200. Other major metros at the bottom of the affordability chart included Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and San Jose-Sunnyvale-Santa Clara, Calif.; in descending order. All of the five least affordable small housing markets were in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 18.6 percent of all new and existing homes sold were affordable to families earning the area’s median income of $73,800. Other small markets at the lowest end of the affordability scale included Salinas, San Luis Obispo-Paso Robles, Napa, and Santa Rosa-Petaluma, respectively. Please visit nahb.org/hoi for tables, historic data and details Editor’s Note: The NAHB/Wells Fargo Housing Opportunity Index (HOI) is a measure of the percentage of homes sold in a given area that are affordable to families earning the area’s median income during a specific quarter. Prices of new and existing homes sold are collected from actual court records by Core Logic, a data and analytics company. Mortgage financing conditions incorporate interest rates on fixed- and adjustable-rate loans reported by the Federal Housing Finance Agency. The NAHB/Wells Fargo HOI is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. n
New-home sales rebound in January
ales of newly built, single-family homes rose 9.6 percent to a seasonally adjusted annual rate of 468,000 units in January from an upwardly revised pace of 427,000 units in the previous month, according to data released today by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the strongest sales pace since July of 2008. “The fact that the cold weather that hit much of the country didn’t stop home buyers from going out and purchasing a piece of the American dream is a great sign,” said Kevin Kelly, chairman of the NAHB. “However, the very low
supply of new homes on the market and the continued concern of available buildable lots still have builders cautious about getting ahead of
Cold weather drives housing starts down in January
ue largely to unusually severe weather, across much of the nation, housing starts fell 16 percent to a seasonally adjusted annual rate of 880,000 units in January, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Meanwhile, single-family permits, which are often a harbinger of future building activity, posted a modest 1.3 percent decline to a seasonally adjusted annual pace of 602,000 units. “Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” said Kevin Kelly, chairman of NAHB. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.” “Though the decline in starts is largely weather related, it is worth noting that on the upside housing production for the fourth quarter was above 1 million for the first time since 2008 while single-family permits held relatively steady,” said NAHB Chief Economist David Crowe. “The less weather sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.” In January, single-family housing starts posted a 15.9 percent decline to 573,000 units while multi-
family production fell 16.3 percent to 307,000 units. Regionally, single-family starts activity rose 10.7 percent in the West and 2 percent in the Northeast and fell 13.8 percent in the South and 60.3 percent in the Midwest. Overall permit activity fell 5.4 percent to 937,000 units in January. The decline was due primarily to a pullback in buildings with five units or more, where permits fell 13 percent to 309,000 units. Regionally, overall permit issuance was down 10.3 percent in the Northeast and 26 percent in the West, but rose 8.6 percent in the Midwest and 3.4 percent in the South. Weather dampers builder confidence Unusually severe weather conditions across much of the nation along with continued concerns over the cost and availability of labor and lots caused builder confidence in the market for newly-built, single-family homes to post a 10-point drop to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released recently. “Significant weather conditions across most of the country led to a decline in buyer traffic last month,” said Kelly. “Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots and labor.” “Clearly, constraints on the supply chain for building materials, developed lots and skilled workers are making builders worry,”
themselves.” “We saw a weaker sales number in December 2013 than was previously trending, and I think much of January’s increase is due to sales catching up with pent up demand,” said NAHB Chief Economist David Crowe. “Still, there is little doubt that historically low interest rates, affordable home prices and a healing economy are bringing buyers back into the marketplace.” Regionally, new-home sales were generally strong with three of the four regions posting large gains. The South, the West and the Northeast showed improvement, with respective increases of 10.4 percent, 11.0 percent and 73.7 percent. New-home sales in the Midwest fell by 17.2 percent. The inventory of new homes for sale remained steady at 184,000 units in January, which is a 4.7-month supply at the current sales pace.” n
said Crowe. “The weather also hurt retail and auto sales and this had a contributing effect on demand for new homes.” 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 of the major HMI components declined in February. The component gauging current sales conditions fell 11 points to 51, the component gauging sales expectations in the next six months declined six points to 54 and the component measuring buyer traffic dropped nine points to 31. Looking at three-month moving averages for regional HMI scores, the West was unchanged at 63 in February while the Midwest registered a one-point decline to 57, the South registered a three-point decline to 53 and the Northeast posted a four-point decline to 38. Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com. n March, 2014
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Why are New Homes Getting so Big?
hough the average size of new homes keeps getting bigger, there is more to this home buying trend than meets the eye, according to Census Bureau data presented by the National Association of Home Builders (NAHB) during the International Builders’ Show in Las Vegas. “The average home size has continued to rise for the past four years, from 2,362 square feet in 2009 to 2,679 square feet in 2013,” said Rose Quint, NAHB assistant vice president for survey research. The share of new homes with at least four bedrooms has also been on an upward trend, rising from 34 percent in 2009 to 48 percent last year. Meanwhile the percent of homes with at least three full bathrooms has gone from 23 percent in 2010 to 35 percent in 2013, and the share of homes with three-plus garages has climbed from 16 percent in 2010 to 22 percent last year. The upward trend also applies to the percentage of two-story single-family homes started, with the share steadily rising from 51 percent in 2009 to 60 percent in 2013. As homes get bigger, so does the average sales price, rising from $248,000 in 2009 to $318,000 in 2013. To find out why homes are getting so big you need to look at who is buying them. “It requires a high credit score and a nice income to qualify for a mortgage,” said Quint, who noted that the spread between the average Experian credit score of all U.S. consumers and the average home borrower’s score has risen from 33 points in the early 2000s to 58 points in 2013.
The median income of new-home buyers has steadily climbed from $91,768 in 2005 to $107,607 in 2011. During the same period, the number of new-home sales has dramatically declined, from 1.28 million to 306,000. “There are not as many people who have the income that can qualify for a new home,” said Quint. Most Popular Features in 2014 Homes The features that builders are most likely to include in a typical single-family home this year are a walk-in closet in the master bedroom, low-e windows, a laundry room and a great room, according to the latest survey by NAHB. Energy-efficiency is also a key theme, as Energy-Star rated appliances, programmable thermostats and Energy-Star rated windows also rank high on the list. According to builders, granite countertops, a double-sink and a central island will likely make the cut in the kitchen as well as a linen closet and a private toilet in the bathroom. Other features that builders are likely to include are first-floor ceilings at least nine-feet high, a front porch, exterior lighting and a patio. Conversely, the most unlikely features to show up in 2014 homes are laminate kitchen countertops, an outdoor kitchen, an outdoor fireplace, a sunroom, a two-story family room, a media room, a two-story foyer and a whirlpool in the master bathroom. n March, 2014
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Showtime! Big event draws big crowds over its annual three-day weekend.
he 2014 Home Show concluded last month, Sunday, February 23 following a successful three-day run at the Williamson County Ag Expo Park in Franklin, Tennessee. Strong attendance numbers matched totals from last year as vendors and visitors alike continue to grow accustomed to the new location. This year’s show marked the fourth year the event has been held at the Ag Expo Park. “The Park is very comfortable for both our visitors and our exhibitors,” event chairman B.J. Hanson said. “No matter how many booths and exhibits we prepare it always feels like we could have fit in a few more.” In addition to the vendors, products and educational seminars attendees find at each Home Show, this year’s event featured a “New Home Zone,” an area of booths comprised solely of local builders. “We added the ‘zone’ to this year’s event to showcase the new homes and communities available in the middle Tennessee area,” says Hanson. “That means those in the market for new homes were able to visit a host of potential home builders all under one roof.” The 2015 Home Show is already signing up vendors for next year’s event scheduled for another three-day run beginning Friday, February 20 and concluding Sunday, February 22nd. Call the HBAMT at (615) 377-1055 to request your 2015 Home Show registration form. Or visit the event’s page at www.hbamt.org. n
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John Whitaker, Hermitage Lighting Gallery.
Cindy Moore, Fancy Vents.
Randall Smith, Celebration Homes.
Home Show Chairman B.J. Hanson promotes the event, above with Meryll Rose on Talk of the Town and below with Channel 4.
Zac Potts, Siano Appliance.
Ed Bouillet, Hi-Fi Buys.
HBAMT Vice President Trey Lewis talks Home Show with Kacy Hagerty on More at Midday and below on-air with Lisa Spencer.
Jackie Beeler, Precision Air.
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SPIKE REPORT Life Spikes
Twenty-one 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 January 31, 2014. Top 20 Big Spikes Jim Ford 912 Virgil Ray 819 Bill King 776 Mitzi Spann 666 Jim Fischer 566 Terry Cobb 565 John Whitaker 371 James Carbine 331 Jennifer Earnest 318 Dan Stern 306 Bruce Hancock 297 Kevin Hale 286 Tonya Jones 271 Reese Smith III 259 David Crane 235 Steve Moody 219 Sonny Shackelford 216 Michael Apple 185 Cyril Evers 181 Davis Lamb 180
Jackson Downey 174 Tim Ferguson 164 Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 140 C.W. Bartlett 138 Trey Lewis 131 Tonya Alexander 126 Steve Hewlett 119 Tom Kelley 115 Sam Carbine 112 Carmen Butner 104 James Franks 104 Johnny Watson 101 Dave McGowan 98 Bill Kottas 97 B.J. Hanson 95 Lee Santiago 95 Kim Dykes 89 Jeff Zeitlin 87 Duane Vanhook 82 Jordan Clark 81 Erin Richardson 76 Randy Parker 75 Jeff Slusher 70 John Baugh 68 Don Bruce 62 Jim Ford, Jr. 62 Wiggs Thompson 62 Hill McAlister 57 Joe Morgan 54 Gerald Bucy 53 John Broderick 52 Beth Sturm 52 David Hughes 48 Al Davis 47
Sheila Rawlings 47 Bernie Laine 46 Greg Langley 46 Benny Sullivan 46 Kim Nichols 45 Andrew Neuman 45 Bryan Edwards 44 Kay Russell 44 Lori Fisk-Conners 43 Peggy Krebs 39 John Ganschow 37 Chuck Clarkson 36 Frank Miller 36 Andy Wyatt 36 Brad Butler 35 David Lippe 35 Al Hacker 34 Ray Edwards 32 Dan Strebel 32 Steve Wheeley 30 Alvin Basel 29 Matt Burnett 25 Spikes Michael Dillon 24 Christina Cunningham 21 Jess Dillon 16 Don Mahone 16 Marty Maitland 15 Tracy Lomax 14 Frank Tyree 11 Pam Smith 10 Derenda Sircy 8 Don Alexander 7
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MARCH Calendar Sunday
Sales & Marketing Council meeting
Dickson County Chapter meeting
HBAMT Remodelers Council meeting
25 Metro/Nashville Chapter meeting
Green Building Council meeting
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: Monday, March 17. Topic: to be announced. 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: Monday, March 24. Topic: to be announced. Price: Builders Free pending sponsorship; $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 304
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ROBERTSON COUNTY CHAPTER Next meeting: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313. 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 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. Topic: to be announced. Price: Builders Free pending sponsorhip; $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 CUSTOM BUILDERS COUNCIL The CBC meets on the second Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Council RSVP Line: 615/377-9651, ext. 311
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: Wednesday, March 26. Topic: to be announced. 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 HBAMT REMODELERS COUNCIL Council President - Jason Broderick. The HBAMT Remodelers Council meets on the third Wednesday of the month, 11:00 a.m. at varying locations. Next meeting: Wednesday, March 19. 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 MIDDLE TENN SALES & MARKETING COUNCIL Council President - Trey Lewis. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, March 6. Topic:”Price Increases in New Construction; the Rising Costs of Home Building,” with special guests. Price: SMC members free thanks to our sponsors ($10 w/o RSVP); $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 302.
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