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NAIL The official magazine of Home Builders Association of Middle Tennessee President John Zelenak Vice President Keith Porterfield Secretary/Treasurer Justin Hicks Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Charlotte Fischer Cilla Lamar 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 Home buying a strong boost to economy
New NAHB analysis highlights how consumer spending increases during the first year of a new home purchase.
12 Builders and designers set for October Parade
Construction is underway and on schedule at Witherspoon, site of the 2017 Pinnacle Financial Partners Parade of Homes.
DEPARTMENTS 6 News & Information 14 SPIKE Club Report 16 August Calendar 16 Chapters and Councils
ON THE COVER: On site at Witherspoon, where builders and designers are gearing up for the 2017 Pinnacle Financial Partners Parade of Homes. More on page twelve. August, 2017
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Single family housing starts rise 8.3 percent in June
ationwide housing starts rose 8.3 percent in June to a seasonally adjusted annual rate of 1.22 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Single-family production increased 6.3 percent to a seasonally adjusted annual rate of 849,000 units from a below-trend May reading of 799,000, while multifamily starts rose 13.3 percent to 366,000. Single-family production was at its second-highest rate this year. “We are encouraged by the June production report, but our builders continue to express concerns about lot and labor shortages, and building materials price increases,” said Granger MacDonald, chairman of the National Associ-
We should see this sector continue to strengthen throughout the year as consumers show interest in the housing market. 6 The NAIL
ation of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “We are seeing housing production return to trend after a softer reading last month,” said NAHB Chief Economist Robert Dietz. “The gradual growth in single-family starts in 2017 is in line with our forecast, and we should see this sector continue to strengthen throughout the year as consumers show interest in the housing market.” Regionally in June, combined single- and multifamily housing production rose 83.7 percent in the Northeast, 22.0 percent in the Midwest, and 1.6 percent in the West. Starts fell 3.8 percent in the South. Overall permit issuance in June was up 7.4 percent to a seasonally adjusted annual rate of 1.25 million units. Single-family permits increased 4.1 percent to 811,000 units while multifamily permits jumped 13.9 percent to 443,000. Regionally, overall permits rose 19.7 percent in the Midwest, 9.9 percent in the West, and 6.9 percent in the South. Permits fell 13.9 percent in the Northeast. n
Builder confidence slips two points in July, remains solid
uilder confidence in the market for newly-built single-family homes slipped two points in July to a level of 64 from a downwardly revised June reading on the NAHB/ Wells Fargo Housing Market Index (HMI). It is the lowest reading since November 2016. “Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber,” said NAHB Chairman Granger MacDonald. “This is hurting housing affordability even as consumer interest in the new-home market remains strong.” “The HMI measure of current sales conditions has been at 70 or higher for eight straight months, indicating strong demand,” said NAHB
Chief Economist Robert Dietz. “However, builders will need to manage some increasing supply-side costs to keep home prices competitive.” 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.
NAHB recommends Treasury recind, modify tax regulations
he Treasury Department has identified eight tax regulations issued since Jan. 1, 2016 it intends to modify or fully repeal. Among the eight regulations, NAHB plans to recommend that Treasury rescind and significantly modify the following: The definition of “political subdivision.” A political subdivision of a state is eligible to issue tax-exempt bonds for government purposes. The proceeds provide for the construction of sewer systems, water lines and other infrastructure necessary to incorporate a new development into a city. As NAHB stated in comments submitted to Treasury, the new rule would overly restrict which developments are eligible for tax-exempt bond financing and add to already bur-
densome compliance costs.
Estate tax rules on how family businesses are valued. When a business owner passes away and his or her financial interest in the business is given to multiple heirs, the total value of these interests is less than what the value was to the decedent. This is because, unlike the former owner, the new owners of the business cannot unilaterally make decisions that affect the company’s bottom line—including selling the company outright. Without this ability, the business interest held by any one person is less attractive to potential investors. As a result, an investor is not willing to pay as much for a stake in the business. The new regulations seek to end this practice entirely, adding to estate taxes owed by
All three HMI components registered losses in July but are still in solid territory. The components gauging current sales conditions fell two points to 70 while the index charting sales expectations in the next six months dropped two points to 73. Meanwhile, the component measuring buyer traffic slipped one point to 48. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 47. The West and Midwest each edged one point lower to 75 and 66, respectively. The South dropped three points to 67. 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
those who inherit ownership of a business. The ability of the IRS to label a business’ financial interests as debt or equity. This regulation seeks to change what items on a company’s balance sheet are classified as debt or equity for federal tax purposes. As the rules would have required businesses to track financial holdings among each of its affiliates, they would add to tax complexity and compliance costs. In their original form, the rules would have potentially classified certain holdings of S-corps as debt, effectively disallowing S-corp business structures.
The Treasury notice comes in response to Executive Order 13789, in which President Trump directed Treasury to “review all significant tax regulations issued by [the department] on or after January 2016” and deliver a report identifying tax regulations that impose an undue financial burden on taxpayers, add undue complexity to the tax code or exceed IRS authority. n
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What are the top 5 mobile apps for home builders?
lanning and overseeing your projects has never been easier thanks to a variety of apps available on mobile devices. These apps can help you more efficiently communicate with superintendents and workers, draw up designs for projects and keep track of dates and deadlines. Here is a quick look at five mobile apps – some are relatively new, others more established – that home builders are using. These apps focus on project, not business, administration.
and track hours and material costs. It’s a solid project management app for bridging the gap between office staff and workers in the field.
Magicplan, an app geared toward interior design, allows builders to virtually – and accurately – place design elements and appliances in their floorplans. The app uses images and videos from their smartphones to construct the floorplan of the selected space. Magicplan is a solid choice for home builders, designers and others looking for an easier way to create floorplans and imagine design elements and appliances within them.
Eagleview. Where Magicplan focuses on interior design, Eagleview is geared specifically toward roofline planning. Using GPS technology, Eagleview allows home builders to calculate the proportions of any roofline, an important assist for builders planning to add extensions to standing structures or renovating rooflines on existing homes.
Fieldwire enables construction managers to share floorplans more easily with the rest of their teams, including subcontractors. Fieldwire helps construction managers share assignments
LumberCalc focuses specifically on materials cost evaluation. It enables home builders to scan boards and quickly convert their dimensions into board feet. The app also allows users to calculate order totals after plugging in the MBF price, and enables them to estimate dimensions for specific paneling profiles.
Evernote is a cross-platform app that helps home builders keep track of their schedules through note-taking and archiving software. Builders who find it a challenge to keep track of different aspects of their projects – budget-
Remodeling Market Indicator remains in positive territory
he NAHB Remodeling Market Index (RMI) posted a reading of 55 in the second quarter of 2017, down three points from the first quarter of 2017. For 17 consecutive quarters, the RMI has been at or above 50, which indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. “While remodelers continue to see robust demand across the country, the lack of skilled labor continues to be a serious issue,” said NAHB Remodelers Chairman Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. “Remodelers are finding they have to decline projects because they can’t hire enough skilled staff to keep up with the demand.”
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ary expenses, timetables, individual worker assignments, and punch lists – can use Evernote to easily record it all. Users can tag, annotate, edit and share their notes with attached photos and files. Evernote has over 200 million users worldwide, making it one of the most popular mobile apps. The apps listed above are just a handful of the countless mobile tools that can make it easier for home builders to manage their projects more efficiently. n
An overwhelming majority of respondents—84 percent—stated that the cost/ availability of labor is the most significant challenge residential remodelers are currently facing.
At 55, current market conditions declined three points from the first quarter of 2017. Among its three major components, major additions and alterations waned three points to 54, minor additions and alterations decreased six points to 53, and the home maintenance and repair component fell three points to 57. The future market indicators index stood at 55, also slipping three points from the previous quarter. Calls for bids fell three points to 56, amount of work decreased five points to 53, and the backlog of remodeling jobs dropped four points to 58. Meanwhile, appointments for proposals rose one point to 55. “The RMI has remained above 50 for the past four years, indicating strong demand for remodeling work,” said NAHB Chief Economist Robert Dietz. “However, the challenges posed by rising labor and material costs will constrain remodelers’ ability to increase production at a faster pace.” For the full RMI tables, please visit www. nahb.org/rmi. For more information about remodeling, visit www.nahb.org/remodel. n
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Home buying a strong boost to economy NAHB analysis highlights the boost in consumer spending during the first year of new home ownership.
new consumer spending analysis from NAHB highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects â€” 2.6 times as much as other home owners in a typical year. Using the Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics (BLS), NAHB Economics research shows that a home purchase triggers additional spending on appliances, furnishings, and remodeling. NAHBâ€™s most recent estimates are based on the 2012-2014 data and show that during the first two years after closing on the house, a typical buyer of a newly-built single-family detached home spends on average $4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing single-family detached home tends to spend over $4,000 more than a similar non-moving home owner, including close to $3,700 during the first year. The NAHB analysis compares spending behavior among three groups of single-family detached home owners: buyers of new homes, buyers of existing homes and non-moving owners. Home buyers, and new home buyers in particular, tend to be larger households with children, and on average wealthier, with higher levels of education and concentrated in urban areas. Any of these factors could potentially explain higher spending on appliances, furnishings and remodeling by home buyers. Thus, the NAHB analysis controls for the impact of household characteristics on expenditures, and, nevertheless, finds that a home purchase alters the spending behavior of homeowners and that otherwise similar homeowners spend more across all three categories compared to non-moving owners during the first two years after moving. Looking at spending patterns of new home buyers and identical households that do not move, the differences are largest on furnishings. A typical new home buyer that buys a new home is estimated to spend almost $2,500 more on furnishings than an identical household that stays put in a house they already own. In the same way, moving into a new home triggers higher levels of spending on appliances. A typical new home buyer that moves into a new home is estimated to spend over $1,250 more on appliances during the first year compared to a non-moving owner. In the case of property repairs and alterations the differences are smallest, $714. Similarly, buying an older home triggers additional spending. The typical buyer of an existing home tends to spend over $4,000 more on remodeling, furnishings, and appliances compared to otherwise identical homeowners that do not move. However, in case of buying an older home, most of this extra spending goes to remodeling projects, more than $2,000, and occurs during the first year after closing on the house. For furnishings, buyers of existing homes boost their spending by over $1,200 during the first year after moving in. The elevated level of spending on furnishings persists into the second year when old home buyers spend additional $500 over their typical budget on furnishings. In the case of appliances, buyers of existing homes outspend similar non-moving owners by $433.
The statistical analysis further shows that this higher level of spending on furnishings, appliances and property alterations is not paid by cutting spending on other items, such as entertainment, transportations, travel, food at home, restaurants meals, etc. This confirms that home buying indeed generates a wave of additional spending and activity not accounted for in the purchase price of the home alone. NAHBâ€™s latest research updates the 2008 study that was based on 2004-2007 data. The earlier data, collected during the housing boom, showed somewhat higher spending by home owners overall. Nevertheless, the tendency of home buyers to outspend non-moving owners on appliances, furnishings, and home improvements was similar. n
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Parade homes underway, set for Fall opening
The 2017 Pinnacle Financial Parade of Homes to open this October at the Witherspoon neighborhood in Brentwood, Tennessee.
onstruction is underway on the houses taking part in the 2017 Pinnacle Financial Partners Parade of Homes™. The highly anticipated custom home tour will open Saturday, October 7 and run daily through Sunday, October 22 at the Witherspoon community in Brentwood, Tenn. This year’s event features an impressive cast of local construction professionals and interior designers. The Parade teams include: Austin Pennington, Barlow Builders, and Julie Paranjape, mrs.paranjape designs; Alan Looney, Castle Homes, with Rozanne Jackson, Ginny Garett and Katy Austin, The Iron Gate; Mike Ford, Ford Custom Classic Homes, and Autumnflora Miklich, Bella Vita Designs; Doug Her-
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man, Legend Homes, and Marie-Joe Bouffard, JFY Designs; Keith Schumacher, Schumacher Homes, and Tim Clausey and Chuck Feltner, Recreations; and Paul Huff, Stonegate Homes, and Julie Davis, Julie Davis Interiors. “The builders and designers are working non-stop to create truly inspiring homes that attendees won’t soon forget ,” says Danny Hester, Pinnacle Financial Partners. “We’re excited about the October show and are proud to sponsor this year’s event.” For more information visit www.theparadeofhomes.org and follow the event right up until opening day on the 2017 Pinnacle Financial Partners Parade of Homes Facebook page. n
Builders and Designers - 2017 Pinnacle Financial Partners Parade of Homes House
Lori Paranjape, mrs.paranjape
Castle Homesâ€™ in-house design team partnering with Rozanne Jackson, Ginny Garett and Katy Austin, The Iron Gate
Ford Custom Classic Homes
Autumnflora Miklich, Bella Vita Interiors
Marie-Joe Bouffard, JFY Designs
Tim Clausey and Chuck Feltner, Recreations
Julie Davis, Julie Davis Interiors
Ford Custom Custom Homes
Stonegate Homes Parade homes under construction, Tuesday, July 12th. August, 2017
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SPIKE REPORT Tim Ferguson Jim McLean Louise Stark Harry Johnson Steve Cates C.W. Bartlett
Seventeen 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 June 30, 2017. Top 20 Big Spikes Mitzi Spann Terry Cobb Jim Fischer John Whitaker James Carbine Trey Lewis Jennifer Earnest Kevin Hale David Crane Reese Smith III James Franks Steve Moody Davis Lamb Jackson Downey
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750 569 566 533 374 360 357 299 296 261 223 219 201 182
177 164 163 146 142 138
Life Spikes Sam Carbine 132 Tonya Esquibel 131 Steve Hewlett 119 B.J. Hanson 115 Jordan Clark 114 Carmen Ryan 114 Dave McGowan 106 Wiggs Thompson 96 Duane Vanhook 95 John Zelenak 92 Helmut Mundt 89 Randall Smith 88 Jeff Zeitlin 87 Michael Dillon 84 Erin Richardson 76 Christina Cunningham 74 David Hughes 66 Lori Fisk-Conners 65 Don Bruce 62 Beth Sturm 62 Justin Hicks 60 Joe Morgan 54 John Broderick 54
Marty Maitland Andrew Neuman Ron Schroeder John Ganschow Bryan Edwards Derenda Sircy Keith Porterfield Ricky Scott Ashley Crews Jody Derrick Phillip Smith Don Mahone Frank Tyree
53 50 50 48 44 43 40 38 32 30 29 26 25
Spikes Rick Olszewski 23 Jay Elisar 19 Frank Jones 17 Steve Shalibo 17 John Burns 15 Gina Hewlett 10 Kenny Burd 10 Pam Smith 10 Will Montgomery 9 Bob Bellenfant 8 Perry Pratt 8 Stacy DeSoto 7 Rob Pease 7 McClain Franks 6 Jim McCann 6
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AUGUST Calendar Sunday
SMC meeting Infill Builders Council Mixer
HBAMT Remodelers Council meeting
Dickson County Chapter meeting
Metro Nashville Chapter 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, August 21. 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, August 28. 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. 304 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. 306
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, August 16. 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 - 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: Thursday, August 3rd - 4:30-6:30PM Topic: “Afternoon Mixer at Fat Bottom Brewing!” Fat Bottom Brewing - 800 44th Ave N - Nashville, 37209. Price: $20 w/RSVP Builders FREE thanks to James Hardie Building Products and Franklin American Mortgage Company. RSVP to: 615/377-9651, ext. 303 - or to email@example.com MIDDLE TENN SALES & MARKETING COUNCIL Council President - Ashley Crews. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, August 3, 9:00 a.m. at the HBAMT. Topic: to be announced. SMC members free pending sponsorship; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 302.
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The August, 2017 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee (HBAMT).