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NAIL The official magazine of Home Builders Association of Middle Tennessee President Randall Smith Vice President John Zelenak Secretary/Treasurer Keith Porterfield Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Pat Newsome 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 9 Housing recovery continues at modest rate The latest NAHB/First American Leading
Markets Index (LMI) shows continued improvement in the economy and housing industry.
11 Regions Chili Cook-off a winning dish!
The Annual Regions Chili Cook-off was held in conjunction with the 2016 General Elections last month. Check out the winning chili teams here and look for election winners in the January issue of The Nail.
DEPARTMENTS 6 News & Information 13 SPIKE Club Report 14 December Calendar 14 Chapters and Councils
ON THE COVER: Housing growth continues to return to normal activity levels according to the latest Leading Markets Index (LMI) report from NAHB. More details on page eleven. December, 2016
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New home sales down 1.9 percent in October
ales of newly built, single-family homes fell 1.9 percent in October from a downwardly revised September reading to a seasonally adjusted annual rate of 563,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
New home sales have been on an upward trend since last year [and] builders are adding to inventory based on consistent gains in sales, solid builder confidence and ongoing job and economic growth. 6 The NAIL
“Though slightly down from last month, new home sales have been on an upward trend since last year,” said Ed Brady, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Bloomington, Ill. “Builders are adding to inventory based on consistent gains in sales, solid builder confidence and ongoing job and economic growth,” said NAHB Chief Economist Robert Dietz. The inventory of new home sales for sale was 246,000 in October, which is a 5.2-month supply at the current sales pace. The median sales price of new houses sold was $304,500. Regionally, new home sales fell 9.1 percent in the Northeast, 13.7 percent in the Midwest and 3 percent in the South. Sales increased 8.8 percent in the West. n
Housing starts jump 25.5 percent in October
ed by impressive gains in both single-family and multifamily production, nationwide housing starts surged 25.5 percent in October to a seasonally adjusted annual rate of 1.32 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Single-family starts reached their highest level since October 2007 while multifamily production jumped 68.8 percent from the previous month. “These robust figures correlate with strong builder optimism,” said Ed Brady, NAHB chairman. “A firming job market, a growing economy and rising household formations will keep the housing recovery on track into next year.” “Multifamily production bounced back after an unusually weak reading last month while single-family starts exhibited unusually strong growth as well,” said NAHB Chief Economist Robert Dietz. “Though October’s single- and multifamily production rates are clearly unsustainable, we expect continued growth in the housing sector in the months ahead.” Single-family starts rose 10.7 percent in October to a seasonally adjusted annual rate of 869,000 units while multifamily production climbed 68.8 percent to 454,000 units. Combined single- and multifamily starts posted double-digit gains in all four regions in
October. The Northeast, Midwest, South and West increased 44.8 percent, 44.1 percent, 17.9 percent and 23.2 percent, respectively. Overall permit issuance edged up 0.3 percent to a seasonally adjusted annual rate of 1.23 million in October. Single-family permits rose 2.7 percent to a rate of 762,000, while multifamily permits fell 3.3 percent to 467,000. Permit issuance increased 12.1 percent in the Midwest and 7.5 percent in the West. Meanwhile, the Northeast and South posted respective losses of 21.1 percent and 2.4 percent. Builder confidence holds firm Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the NAHB/Wells Fargo Housing Market Index (HMI). “With most of our members responding before the November elections, confidence levels
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.
Housing affordability edges lower in third quarter
ngoing home price appreciation offset a small decline in mortgage interest rates to move housing affordability slightly lower in the third quarter of 2016, according to the NAHB/Wells Fargo Housing Opportunity Index (HOI) released recently. “Historically low interest rates and firming job growth are positive indicators that housing markets across the nation will continue to gradually improve,” said NAHB Chairman Ed Brady. “Home prices, however, continue to be affected by the rising costs of construction, both in terms of land and labor.” “Regulatory restraints along with shortages of buildable lots and skilled workers are adding to the cost of new homes, which is putting upward pressure on home prices,” said NAHB Chief Economist Robert Dietz. “Though these
remained unchanged as they awaited the results,” said Brady. “Still, builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth.” “Job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. This will help keep housing on an upward path in the months ahead,” said Dietz. 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 components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69. Looking at the three-month moving averages for regional HMI scores, the Northeast, Midwest and West each posted respective two-point gains to 45, 58 and 77. The South remained unchanged at 66. n
factors have negatively affected the marketplace, affordability still remains positive. Moreover, attractive mortgage rates, rising incomes and growing household formations make this an excellent time to buy.” In all, 61.4 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $65,700. This is down from the 62 percent of homes sold that were affordable to median-income earners in the second quarter. The national median home price increased from $240,000 in the second quarter to $247,000 in the third quarter. Meanwhile, average mortgage rates edged lower from 3.88 percent to 3.76 percent in the same period. Elgin, Ill., was rated the nation’s most affordable major housing market, where
94.3 percent of all new and existing homes sold in this year’s third quarter were affordable to families earning the area’s median income of $82,500. Meanwhile, Fairbanks, Alaska, was rated the nation’s most affordable smaller market, with 97.7 percent of homes sold in the third quarter being affordable to families earning the median income of $93.800. The top five affordable major housing markets in respective order were Youngstown-Warren-Boardman, ------------ (continued on page 13)
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Housing recovery continues at modest rate
arkets in 162 of the approximately 340 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the third quarter of 2016, according to the latest NAHB/First American Leading Markets Index (LMI). This represents a year-over-year net gain of 73 markets. The index’s nationwide score ticked up to .98, meaning that based on current permit, price and employment data, the nationwide average is running at 98 percent of normal economic and housing activity. Meanwhile, 91% of markets have shown an improvement year over year. “Ongoing job growth, low mortgage rates and rising incomes are contributing to a firming housing market and economy,” said NAHB Chairman Ed Brady. “Though some areas are recovering faster than others, the overall trend is positive.” “House prices continue to show the strongest recovery among the LMI components, with 327 markets, or 97 percent, returning to or exceeding their last normal levels. Meanwhile, 92 metros have reached or exceeded normal employment activity,” said NAHB Chief Economist Robert Dietz. “Single-family permits have edged up to 51% of normal activity, but still lag far behind the other gauges of the index.” “Nearly 80 percent of metro areas posted an increase in their LMI score over the past quarter, while more than nine out of 10 recorded an annual increase,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report. “These are strong in-
dicators that the housing recovery remains steadily on an upward trajectory.” Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.68—or 68 percent better than its last normal market level. Other major metros leading the list include Austin, Texas; Honolulu; San Jose, Calif.; and Provo, Utah. Rounding out the top 10 are Spokane, Wash.; Nashville, Tenn.; Houston; Charleston, S.C.; and Los Angeles. Among smaller metros, Odessa, Texas, has an LMI scores of 2.0 or better, meaning that it is now at double its market strength prior to the recession. Also at the top of that group are Midland, Texas; Ithaca, N.Y.; Walla, Walla, Wash.; and Manhattan, Kan. The LMI examines metro areas to identify those that are now approaching and exceeding their previous normal levels of economic and housing activity. Approximately 340 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For permits and employment, both the 12-month average and the annual average during the last period of normal growth are also adjusted for the underlying population count. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity. n
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Award winning chili cooks! From left, Susan Adams, PPG Paints, Mark McGuire, RSG, Kevin Little, event sponsors Regions, and Jimmy Franks, Tennessee Valley Homes.
Regions Chili Cook-off a winning dish!
he Annual Regions Chili Cook-off was held in conjunction with the 2017 general elections at the HBAMT offices last month. Candidates and cook-off participants campaigned for votes prior to the election and the presentation of the “People’s Choice” award for the best pot of chili served during the evening. The “RSG Heavenly Hogs” from Roofing Supply Group took home first place honors during the judges’ awards for their Holy Smoke Chili. And Tennessee Valley Homes’ “Tennessee Valley Slow Elk Cookers” took home the “People’s Choice” award for their Elk Burger Comfort Chili. The Tennessee Valley team also took home second place honors during the judges’ awards. And the PPG Paints “Smokin’ Aces” team took home the judges’ third place award for their Tres Bean Chili. As always, the raffling of the highly coveted “Regions Green Bicycle” generated a lot of excitement for potential winners. But only Jack Wiesner from Wiesner Custom Homes held this year’s winning ticket. A big thanks to Regions for sponsoring the event and to all the terrific cooks and participating chili teams. All officers and directors who will serve in the upcoming year will be installed at the HBAMT’s Installation and Awards Banquet
Thursday, December 8 at The Omni in Nashville, Tenn. Look for all your 2017 leaders and 2016 award winners in the January issue of The Nail next month. n
Attendees react to the announcement of winners. December, 2016
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Top left: Mark McGuire, RSG. Top right: Susan Adams, Nathan Paul, PPG Paints. Lower left: Kevin Little, event sponsors Regions, Jimmy Franks, Tennessee Valley Homes. Lower right: Little, Jack Wiesner, Wiesner Custom Homes.
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SPIKE REPORT Life Spikes
Twenty-four 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 October 31, 2016. Top 20 Big Spikes Jim Ford 912 Virgil Ray 821 Bill King 776 Mitzi Spann 740 Terry Cobb 568 Jim Fischer 566 John Whitaker 498 James Carbine 371 Jennifer Earnest 351 Trey Lewis 322 Kevin Hale 294 David Crane 287 Tonya Jones 271 Reese Smith III 261 Steve Moody 219 Sonny Shackelford 219 James Franks 208 Davis Lamb 199 Jackson Downey 182 Tim Ferguson 177
Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 141 C.W. Bartlett 138 Sam Carbine 130 Tonya Alexander 128 Steve Hewlett 119 B.J. Hanson 114 Carmen Ryan 113 Jordan Clark 109 Dave McGowan 105 Johnny Watson 101 Julie DuPree 97 Wiggs Thompson 92 Duane Vanhook 92 Jeff Zeitlin 87 John Zelenak 83 Helmut Mundt 80 Michael Dillon 76 Erin Richardson 76 Jeff Slusher 70 Christina Cunningham 69 John Baugh 68 Randall Smith 68 Lori Fisk-Conners 63 Don Bruce 62 Jim Ford, Jr. 62 Beth Sturm 60 Justin Hicks 57 Hill McAlister 57 David Hughes 55 Joe Morgan 54 John Broderick 54 Gerald Bucy 53 Andrew Neuman 50 Al Davis 47
John Ganschow 47 Ron Schroeder 45 Marty Maitland 44 Kay Russell 44 Peggy Krebs 40 David Lippe 38 Derenda Sircy 38 Andy Wyatt 37 Chuck Clarkson 36 Frank Miller 36 Brad Butler 35 Al Hacker 34 Keith Porterfield 32 Ray Edwards 32 Ricky Scott 28 Don Mahone 25 Spikes Frank Tyree 22 Ashley Crews 19 Jay Elisar 18 Rick Olszewski 18 Phillip Smith\ 17 John Burns 15 Frank Jones 15 Gina Hewlett 10 Pam Smith 10 Don Alexander 9 Kenny Burd 9 Tonya Esquibel 9 Will Montgomery 9 Perry Pratt 8 Bob Bellenfant 7 McClain Franks 6 Rob Pease 6
(continued from page 7) Ohio-Pa.; Scranton-Wil-
kes-Barre-Hazleton, Pa.; Indianapolis-Carmel-Anderson, Ind.; and Syracuse, N.Y. Smaller markets joining Fairbanks at the top of the list included Monroe, Mich.; Binghamton, N.Y.; Wheeling, W.Va.-Ohio; and Davenport-Moline-Rock Island, Iowa-Ill. For the 16th consecutive quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. There, just 9.7 percent of homes sold in the third quarter were affordable to families earning the area’s median income of $104,700. Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale; Anaheim-Santa Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and Santa Rosa. Four of the five least affordable small housing markets were also in California. At the bottom of the chart was Salinas, where 17.6 percent of all new and existing homes sold were affordable to families earning the area’s median income of $63,500. Other small markets at the lowest end of the affordability scale included Santa Cruz-Watsonville; Napa; San Luis Obispo-Paso Robles-Arroyo Grande; and Kahului-Wailuku-Lahaina, Hawaii. Please visit www.nahb.org/hoi for tables, historic data and details. n
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DECEMBER Calendar Sunday
Annual Installation & Awards Banquet
Chapters & Councils CHAPTERS
Robertson County RSVP line: 615-377-9651, ext. 313.
Council RSVP Line: 615/377-9651, ext. 308
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
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
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, January 16. Price: FREE, lunch dutch treat. Chapter RSVP Line: 615/377-9651, ext. 307
WILLIAMSON COUNTY CHAPTER Chapter President - BJ Hanson: 615/884-4935. The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Builders Free pending sponsorship. Price: $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 305
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, January 18. Location: to be announced. Topic: to be announced. Price: free for RMC members with RSVP; $15 for non-members with RSVP ($20 w/o). Council RSVP Line: 615/377-9651, ext. 301
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, January 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. 304 ROBERTSON COUNTY CHAPTER Next meeting: to be announced.
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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 sponsorship; $20 for non-members with RSVP ($25 w/o).
INFILL BUILDERS COUNCIL The Infill Builders meets on the third Thursday of the month, 11:30 a.m. at the HBAMT offices until further notice. Next meeting: to be announced. Council RSVP Line: 615/377-9651, ext. 311 MIDDLE TENN SALES & MARKETING COUNCIL Council President - Jody Derrick. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, January 5, 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 December, 2016 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee (HBAMT).