The Nail, April 2018

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THE

NAIL The official magazine of Home Builders Association of Middle Tennessee President Keith Porterfield Vice President Justin Hicks Secretary/Treasurer David Hughes Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Charlotte Fischer 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 11 Homeownership is key to household wealth

Survey shows that the primary residence is the largest asset for American households.

13 Showcase of New Homes returns this summer

The scattered-site, new homes event returns for two 4-day weekends this June. Register now for big early bird savings.

15 Membership Mixer, Great Gatsby style!

Don’t miss the next Membership Mixer, a Great Gatsby themed event hosted by the Sales and Marketing Council.

DEPARTMENTS

Advertise in

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8 News & Information 17 SPIKE Club Report 18 April Calendar 18 Chapters and Councils

Visit http://www.hbamt.org/nail.html and click The NAIL Advertising Rates (pdf) to download rates and registration form Email jargo@hbamt.org for more details

ON THE COVER: Homeownership equals household wealth.

For more information see page eleven.

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news&info

February new homes sales flat after upward revisions

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ales of newly built, single-family homes remained virtually unchanged, inching down 0.6 percent in February to a seasonally adjusted annual rate of 618,000 units after upward revisions to the January, December and November reports, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“New home sales are at a steady level, which is consistent with our measures of solid builder confidence in the housing market,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “As hous-

Upward revisions to the sales numbers reflect our forecast for a gradual strengthening of the single-family housing sector.

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ing demand grows, builders need to manage increasing costs for labor, lots and building materials to keep their homes competitively priced.”

“The recent upward revisions to the sales numbers reflect our forecast for a gradual strengthening of the single-family housing sector in 2018,” said NAHB Chief Economist Robert Dietz. “Demographic tailwinds point to higher demand for single-family homes in the months ahead. Combined with solid job market data, we expect more consumers to enter the housing market this year.”

The inventory of new home sales for sale was 305,000 in February, which is a 5.9-month supply at the current sales pace. The median sales price of new houses sold was $326,800.

Regionally, new home sales rose 19.4 percent in the Northeast and 9 percent in the South. Sales decreased 3.7 percent in the Midwest and 17.6 percent in the West. n

Single-family housing starts up, builder confidence steady

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decline in multifamily starts pushed overall housing production down 7.0 percent in February to a seasonally adjusted annual rate of 1.24 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.

Multifamily production fell 26.1 percent to a seasonally adjusted annual rate of 334,000 units after an exceptionally high January report. Meanwhile, single-family starts posted a 2.9 percent gain to 902,000 units.

“The uptick in single-family production is consistent with our builder confidence readings, which have been in the 70s for four consecutive months,” said NAHB Chairman Randy Noel. “However, builders must manage rising construction costs to keep home prices competitive.”

“Some multifamily pullback is expected after an unusually strong January reading.

Multifamily starts should continue to level off throughout the year,” said NAHB Chief Economist Robert Dietz. “Meanwhile, the growth in single-family production is in line with our 2018 forecast for gradual, modest strengthening in this sector of the housing market.”

Regionally in February, combined single- and multifamily housing production increased 7.6 percent in the Midwest. Starts fell 3.5 percent in the Northeast, 7.3 percent

in the South and 12.9 percent in the West.

Multifamily weakness pushed overall permit issuance down 5.7 percent in February to a seasonally adjusted annual rate of 1.3 million units. Multifamily permits fell 14.8 percent to 426,000 while single-family permits were essentially unchanged, edging down 0.6 percent to 872,000.

Permit issuance rose 12.7 percent in the Northeast and 3.4 percent in the Midwest.

Permits declined 3.4 percent in the West and 12.4 percent in the South.

Builder confidence on solid footing Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March from a downwardly revised February reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains in strong territory.

Construction job openings near post-recession high

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he count of unfilled jobs in the construction sector increased in January, nearing a post-recession high set in July of 2017.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs increased to 250,000 at the start of the year. The post-recession high count of open, unfilled construction jobs was 255,000 in July of last year. The number of open construction sector jobs was 159,000, a year ago in January 2017.

The open position rate (job openings as a percentage of total employment) for January increased to 3.4%. On a smoothed, twelve-

month moving average basis, the open position rate for the construction sector ticked up to 2.9%, a post-recession high.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.

The construction sector hiring rate, as measured on a twelve-month moving average basis, slipped to 5.2% in January, as job openings rose. The twelve-month moving average for layoffs is falling again, declining to 2.6%. The quits rate increased to 2.4% in January.

“Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market,” said Noel. “However, builders are reporting challenges in finding buildable lots, which could limit their ability to meet this demand.”

“A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,” said Dietz. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”

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 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.

The HMI component gauging current sales conditions held steady at 77, the chart measuring sales expectations in the next six months dropped two points to 78, and the index gauging buyer traffic fell three points to 51.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57, the South decreased one point to 73, the West fell two points to 79, and the Midwest dropped four points to 68. n

NAHB expects construction sector net hiring to continue in 2018 as the single-family construction market expands.

However, as labor remains a top cited challenge to expansion, builders will increasingly explore options to find ways to build more with less. n

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Hidden tech: stashing speakers and televisions

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usic throughout the home can be beautiful. But the equipment that delivers that music can sometimes be unsightly.

Sure, some clients are fine with exposed speakers, especially as some manufacturers are designing products that are more attractive — some may even say decorative. But for those who prefer a more stealthy delivery of tunes, there are now hundreds of products and solutions that can fit the bill.

Speakers and subwoofers can disappear into a room with the proper planning and the right installer. A few examples: l Architectural speakers with removable covers. These in-wall or in-ceiling speakers are light enough to be clamped right to the drywall, and they’re usually hidden behind a magnetic grille. In-ceiling applications are perfect for distributed, multi-room audio applications and new cinematic immersive audio formats like 3-D audio, which creates a more lifelike effect.

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l “Invisible” speakers. These gadgets are designed so that there’s minimal sonic degradation when they’re covered by any wall treatment, from mud to veneers — even plaster. l Acoustically transparent fabric. Any speaker with the proper baffling can be stashed behind the right fabric covering.

In theater rooms that feature a projector-and-screen setup, the screen itself can be acoustically transparent to allow sound from the center channel speaker to pass through the screen and still be crystal clear. l Outdoor camouflage. Buried subwoofers and rock-shaped speakers are just some of the products that can turn a patio into a listening room.

Similarly, TV placement and installation is a hot-button topic among designers and home owners alike. Many end users desire placements that might seem impractical, and some would prefer their TV screens disappear completely when not in use.

Luckily, the fully articulated TV mount has evolved, allowing a TV to be safely hung in more obscure locations — or places once thought to offer typically poor sight lines (i.e., over the fireplace) — and then drop to proper eye level when being watched.

For those who want the TV to go away entirely when it’s turned off, there are numerous options of motorized lifts and drives from which to choose. Sets can rise from the floor, drop from the ceiling or appear behind sliding doors and cabinets with the touch of a button.

There are also options for those that decide late in the game they want to stash a TV. For example: l Samsung’s “The Frame TV” looks like a framed piece of art when it’s not in use as a television. l TVs hidden in bathroom mirrors are growing in popularity and can be integrated easily. l All-weather TVs can turn any porch or deck into its own entertainment space.

With the right planning, any room in a new build or renovation job can be movie- or music-ready as soon as the studs go up. n

Homeownership is key to household wealth Survey shows primary residence represents largest asset for Americans.

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ccording to the 2016 Survey of Consumer Finances (SCF), nationally, the primary residence represents the largest asset category on the balance sheets of households in 2016 (as shown in Figure 1 below). At $24.2 trillion, the primary residence accounted for about one quarter of all assets held by households in 2016, surpassing other financial assets1 (20%), business interests (20%) and retirement accounts (15%).

The 2016 Survey of Consumer Finances (SCF) was published by the Board of Governors of the Federal Reserve System. Compared to the quarterly Financial Accounts of the United States (previously known as the Flow of Funds Accounts), which provides aggregate information on household balance sheets, the SCF provides family-level data about U.S. household balance sheets and is available every three years. This article uses the 2016 data from the Survey of Consumer Finances (SCF) to analyze household balance sheets, especially their primary residence, by age categories.

In Figure 2 (below), the bars represent the distribution of major assets on household balance sheets by age categories in 2016 and

the lines show the changes in the shares of the primary residence, business interests and other financial assets.

As shown in Figure 2, total assets were $3.7 trillion for households under age 35, while they were $35.6 trillion for households aged 65 or older. The aggregate value of assets held by families where the head was aged 65 or older was approximately 10 times

larger than those held by families where the head was under the age of 35. The increases in the total assets among age groups indicate that the value of assets grows with age groups.

Moreover, the distribution of major assets on household balance sheets varies by age group. Across age groups where households were under the age of 55, the aggregate value

of the primary residence was the largest asset category on these households’ balance sheets.

For households aged between 55 and 64, the primary residence fell to the third largest asset category, following business interests and other financial assets, and for households aged 65 or older, the primary residence became the second largest asset category, less than other financial assets, as business interests shrunk.

Although the aggregate value of the primary residence increased with age, partly reflecting higher homeownership rates across age categories, the aggregate value of the primary residence as a share of total assets declined with age. The decline in the share of total assets represented by the aggregate value of the primary residence was offset by growth in the share of other asset categories in aggregate, most notably business interests, other financial assets, and retirement accounts.

An analysis of the SCF suggests that the offsetting changes in the shares of these asset categories are not mutually exclusive. As shown in Table 1 below, the households who owned primary residences also owned the majority of the other assets in aggregate (see next page)

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as well, such as other residential real estate3, vehicles, other non-financial assets4, business interests, retirement accounts, stocks and bonds and other financial assets. The results shown in Table 1 (at right) combined with the figure above suggest that owner-occupied households expand into and build-up the value of other asset categories as well.

Since homeowners own the vast majority of assets in aggregate, Table 2 (at right) presents median values across all these homeowners by age. After rising for homeowners aged between 35 and 44, the median value of the primary residence remained constant at $200,000 for homeowners between the ages of 35 and 64 before declining for those aged 65 and above.

While the median value of homeowners’ primary residence remained constant between 35 and 64, the median value of homeowners’ other financial assets and retirement accounts continued to rise over these categories. At the same time, the median value of business interests, other non-financial assets, and stocks and bonds among homeowners remained zero, indicating that fewer than half of homeowners own these assets at any age cohort.

However, as illustrated by Table 3 (at right) the median value of business interests, other non-financial assets, and stocks and bonds grew over the 35 to 64 age categories among households that owned these assets.

Table 2 indicates that a minority of homeowners own such assets, but Table 1 suggests that the owners of these assets are likely to be homeowners. As a result, the median value of both non-financial and financial assets on homeowners’ balance sheets, as shown in Table 2 above, rose with age.

On the debt side of homeowners’ balance sheet, the value of the primary mortgage debt was the largest liability faced by the homeowners. However, the median value of mortgage debt declined between the 35 to 64 age categories, more than half of homeowners above the age of 65 did not have mortgage debt (nor a balance on any of the other major debt categories).

Across homeowners, the median amount of primary residence equity, home equity, rose successively with age, largely reflecting a lower amount of mortgage debt as opposed to a higher home value. A previous post illustrated how households 55 and above account for 67 percent of housing equity because they “have had more time to accumulate wealth”.

Among homeowners under the age of 45, home equity was the largest category of the household’s net worth (the sum of medians does not equal the median of the total). However, for homeowners above the age of 45, non-primary residence equity eclipses home equity as the larger portion of net worth, reflecting the accumulation of other assets by homeowners in later life stages. n 12 The NAIL

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2018 Showcase of New Homes Entry Form (one form per entry)

Attached is my CHECK, PLANS (color house picture and floor plans), DIRECTIONS and DESCRIPTIONS. I am completing all sections of this form to be applied to the rate checked below.

SEE RATES AND DEADLINES ON REVERSE SIDE Please note: Money, completed entry form, color photo and floor plans must be returned before final dates to qualify for rate checked.

SECTION I

Please type or print. Fill in the blanks. This form must be complete.

Name of Builder: ______________________________________________________________________________ Home Office Contact Name: _____________________________________________________________________ Contact’s Numbers - Office: _______________________________ Mobile: _______________________________ Contact’s Email address: ________________________________________________________________________ I do hereby certify that I am a Builder Member in good standing with HBAMT. Do hereby agree to abide by all the rules and regulations (available at HBAMT offices). I will put forth my best efforts to have this home completed by June 14, 2018.

Date: _______ Company: ____________________________ Signature: ________________________________

List following information exactly as you would like it to appear in the Home Buyers Guide HOUSE AMENITIES and FACTS (this section is important for both promotional and production purposes).

SECTION II

Name of House and/or Plan Name: ______________________________________ MLS Area #: ______________ Company Name: ______________________________________________________________________________ Model’s Phone: ________________________________ Agent’s Mobile: __________________________________ Street Address: ________________________________ City/Subdivision: _________________________________ Price of Home (as is with options) $_________________ (NOTE: INCLUDE LOT) Base Price of Home (starting at) $_________________ Total square footage: __________ Number Car Garage: ___________________ Marketed by: ________________________________________ Telephone: _______________________________ Please check: Is this a model home? Yes r No r Style of Home? Condo r Single Family r

Is this home furnished? Yes r No r

Judge home for awards? Yes r No r

On a separate sheet of paper, type a brief description (about 75 words) on the unusual and outstanding features of your home. This description will be printed in the Showcase Home Buyers Guide (plan book) as it is submitted!

THIS IS IMPORTANT! Attach explicit directions to the house starting from a major highway (remember, you may know how to get there but the general public does not!) These directions will be included in the plan book.

Entries which have not submitted plans, descriptions and directions by May 18, 2018 will be omitted from the Home Buyers Guide.

Please return completed form to: HBAMT - Showcase l 9007 Overlook Blvd, Brentwood, TN 37027 Phone: (615) 377-1055 l Fax: (615) 377-1077 l Email: jargo@hbamt.net 14 The NAIL

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SPIKE REPORT

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 February 28, 2018.

Top 20 Big Spikes Mitzi Spann Terry Cobb Jim Fischer John Whitaker Trey Lewis James Carbine Jennifer Earnest David Crane Kevin Hale Reese Smith III James Franks Steve Moody Davis Lamb Jackson Downey

759 570 566 545 384 383 362 304 299 261 239 219 203 182

Jim McLean Louise Stark Harry Johnson Steve Cates C.W. Bartlett

164 163 146 142 138

Life Spikes Sam Carbine Tonya Esquibel Steve Hewlett B.J. Hanson Jordan Clark Carmen Ryan Dave McGowan Randall Smith John Zelenak Wiggs Thompson Duane Vanhook Helmut Mundt Michael Dillon Christina Cunningham Erin Richardson David Hughes Lori Fisk-Conners Justin Hicks Beth Sturm Don Bruce Marty Maitland John Broderick Joe Morgan Keith Porterfield

134 131 119 118 115 115 107 106 101 99 98 93 92 77 77 75 68 65 63 62 57 54 54 52

Ron Schroeder Andrew Neuman John Ganschow Derenda Sircy Bryan Edwards Ricky Scott Ashley Crews Jody Derrick Phillip Smith Rick Olszewski Don Mahone Frank Tyree

51 50 49 46 44 41 40 36 36 29 28 26

Spikes Steve Shalibo 23 Jay Elisar 19 Frank Jones 17 John Burns 16 Kenny Burd 10 Perry Pratt 10 Will Montgomery 10 Rob Pease 9 Bob Bellenfant 8 Stacy DeSoto 7 Kim Carman 6 McClain Franks 6 Jim McCann 6

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APRIL Calendar Sunday

Monday

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Tuesday

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Wednesday

Thursday

Friday

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Saturday

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Sales & Marketing Council meeting

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SMC - afternoon mixer “Great Gatsby Style”

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Dickson County Chapter meeting

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Remodelers Council afternoon mixer

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Metro/Nashville Chapter meeting

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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, April 16.

Topic: to be announced.

Price: FREE, lunch dutch treat.

Chapter RSVP Line: 615/377-9651, ext. 264 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, April 23.

Topic: to be announced.

Builders Free pending sponsorship.

Price: $10 per person with RSVP ($20 w/o RSVP).

Chapter RSVP Line: 615/377-9651, ext. 261 ROBERTSON COUNTY CHAPTER

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Next meeting: to be announced.

Robertson County RSVP line: 615-377-9651, ext. 313.

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. 262

HBAMT REMODELERS COUNCIL Council President - Ricky Scott.

The HBAMT Remodelers Council meets on the third Wednesday of the month at varying locations.

Next meeting: Wednesday, April 18.

Location: Kenny & Company.

Topic: to be announced.

Price: free for RMC members with RSVP pending sponsorship; $15 for non-members with RSVP ($20 w/o).

Council RSVP Line: 615/377-9651, ext. 263

WILLIAMSON COUNTY CHAPTER Chapter President - B.J. 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.

Price: free for Green Building Council members pending

INFILL BUILDERS COUNCIL The Infill Builders Council typically meets on the third Thursday of the month, 11:30 a.m. at the HBAMT offices Next meeting: to be announced.

Price: to be announced.

RSVP to: 615/377-9651, ext. 265 - or to cnicley@hbamt.org MIDDLE TENN SALES & MARKETING COUNCIL Council President - Ashley Crews.

The SMC typically meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices.

Next meeting: Thursday, April 5, 9:00 a.m. at the HBAMT. Topic: “Become Insta-Famous!”

SMC members free thanks to Crescent Homes; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 260.

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