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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 Piedmont Natural Gas Fishing Tournament
The Piedmont Natural Gas 2016 HBAMT Fishing Tournament was held last month on J. Percy Priest Lake and concluded with a weigh-in at Four Corners Marina.
11 Lot shortages reach record high on NAHB index
According to builders reports reflected on the recent NAHB/Wells Fargo Housing Market Index, the supply of lots are at their lowest levels since the information began being collected in 1987.
DEPARTMENTS 6 News & Information 13 SPIKE Club Report 14 June Calendar 14 Chapters and Councils
ON THE COVER: New home sales continue to rise and recently reached their highest levels since the end of the recession. More on page six. June, 2016
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New home sales reach post recession high
ales of newly built, single-family homes rose 16.6 percent in April from an upwardly revised March reading to a seasonally adjusted annual rate of 619,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since January 2008. “Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that grow-
This month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season. 6 The NAIL
ing demand will keep the housing sector on an upward trajectory through the spring buying season,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Rising home sales combined with tight inventory will translate into increased housing production as we move onward in 2016, especially as job creation continues and mortgage rates remain low,” said NAHB Chief Economist Robert Dietz. The inventory of new homes for sale was 243,000 in April, which is a 4.7-month supply at the current sales pace. The median sales price of new houses sold in April was $321,100. Regionally, new home sales rose by 52.8 percent in the Northeast, 18.8 percent in the West and 15.8 percent in the South. Sales fell by 4.8 percent in the Midwest. n
Clayton announced acquisition of Goodall Homes
layton, one of America’s largest homebuilders, recently announced it has acquired Gallatin, Tenn.-based Goodall Homes, a builder of new single-family homes, townhomes and condominiums since 1990. Goodall is the second site-built housing company to become part of Maryville-based Clayton, a subsidiary of Warren Buffett’s Berkshire Hathaway. Clayton acquired Atlanta-area builder Chafin Communities last fall. Clayton, through its site-building arm, Clayton Properties, entered the site-built housing market to expand its portfolio of housing options to homebuyers. The acquisition of Goodall Homes includes approximately 3,600 lots and 180 homes under construction in a five-county area in Middle Tennessee. Goodall Homes closed 436 homes last year.
“Adding great builders like Goodall to our team is exciting,” stated Clayton home building group President, Keith Holdbrooks. “As we continue to grow and expand into the site-built market, it is important to partner with teams that share our culture of providing an excellent customer experience.” Bob Goodall, Jr. started building in 1983, following a tradition that began with his father, Bobby Goodall, Sr. The builder has focused on offering welcoming homes in beau-
Housing affordability posts second straight quarterly gain
purred by a modest reduction in mortgage interest rates and favorable home prices, nationwide housing affordability in the first quarter of 2016 posted a slight increase, according to the National Association of Home Builders/ Wells Fargo Housing Opportunity Index (HOI) released recently. “With interest rates near historic lows and attractive home prices, this is a great time to buy a home,” said NAHB Chairman Ed Brady. “This is the second consecutive quarter that we’ve seen a nationwide improvement in affordability due to favorable home prices and mortgage rates,” said NAHB Chief Economist Robert Dietz. “These factors, along with rising employment, a growing economy and pent-up demand will provide a boost for home sales in the second half of 2016.” In all, 65 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,700. This is up from the 63.3 percent of homes sold that were affordable to median-income earners in the fourth quarter. The national median home price fell from $226,000 in the fourth quarter to $223,000 in the first quarter. Meanwhile, average mortgage rates edged lower from
4.09 percent to 4.05 percent in the same period. For the second consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pa., was rated the nation’s most affordable major housing market. There, 93.1 percent of all new and existing homes sold in the first quarter were affordable to families earning the area’s median income of $53,900. Rounding out the top five affordable major housing markets in respective order were Syracuse, N.Y.; Indianapolis-Carmel-Anderson, Ind.; Scranton-Wilkes-Barre-Hazleton, Pa.; and Toledo, Ohio. Meanwhile, Cumberland, Md.-W.Va., claimed the title of most affordable small hous-
tiful neighborhoods through the development and construction of single-family homes, townhomes, courtyard cottages, condominiums and villas in the Nashville area. The range of housing has allowed Goodall to reach a wide network of buyers through its diverse offerings. The company was named 2014’s National Builder of the Year, as voted by Professional Builder Magazine. “I started building homes 33 years ago. We have been blessed with so many successful opportunities,” Goodall Homes President Bob Goodall, Jr., said. “This acquisition will help our employees, trades, suppliers and our families continue on this path of growth for years to come. Goodall Homes has developed many great leaders and this will provide many possibilities for our team members. We are honored to be on the Clayton team and to contribute to the continued success of Berkshire Hathaway.” Goodall and his management team will retain their respective positions. n
ing market in the first quarter of 2016. There, 98 percent of homes sold during the first quarter were affordable to families earning the area’s median income of $55,100. Smaller markets joining Cumberland at the top of the list included Wheeling, W.Va.-Ohio; Fairbanks, Alaska; Binghamton, N.Y.; and Davenport-Moline-Rock Island, Iowa-Ill. For the 14th consecutive quarter, San Francisco-Redwood City-South San Francisco, Calif., was the nation’s least affordable major housing market. There, just 10.4 percent of homes sold in the first quarter were affordable to families earning the area’s median income of $96,800. 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 San Diego-Carlsbad. Four of the five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, Calif., where 16.1 percent of all new and existing homes sold were affordable to families earning the area’s median income of $85,100. Other small markets at the lowest end of the affordability scale included Salinas, Calif.; Napa, Calif; San Luis Obispo-Paso Robles-Arroyo Grande, Calif.; and Kahului-Wailuku-Lahaina, Hawaii. Please visit nahb.org/hoi for tables, historic data and details. n
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Guide helps builders navigate 2015 Residential Code
new guide co-published by the National Association of Home Builders (NAHB) and the International Code Council (ICC) provides critical answers to the most frequently asked residential construction jobsite code questions. Available through BuilderBooks, NAHB’s publishing arm, the 2015 Home Builders’ Jobsite Codes: A Quick Guide to the 2015 International Residential Code, is a portable guide for home builders, contractors, inspectors, architects, engineers and other construction professionals. The convenient field guide is a quick reference to the 2015 International Residential Code (IRC) and provides easy-to-read code requirements for every aspect of residential construction. The resource covers the impact of the 2015 code changes on things such as common walls separating townhouses, remodeling of an existing basement and more. The 2015 Home Builders’ Jobsite Code includes more than 100 detailed illustrations and useful tables and discussion on other areas of
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the code, including: Foundations Fire Safety Energy Efficiency Mechanical Systems Safe & Healthy Living Environments “This new guide to the 2015 International Residential Code is an excellent resource for building professionals to stay on top of the most recent code changes,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Available both in a compact pocket guide, as well as in e-book, this easy-to-use reference guide is always one of our most top selling publications, as it is an invaluable asset on the job site.” Written by Stephen A. Van Note, the guide features more than 100 illustrations, tables and figures to help the reader understand specific code requirements, as well as a glossary that provides definitions of construction-related terms.
A certified building official and plans examiner, Van Note has more than 15 years of experience in code administration and enforcement and more than 20 years of experience in the construction field, including project planning and management for residential, commercial and industrial buildings. The 2015 Home Builders’ Jobsite Codes is meant to be of practical use on the jobsite, not as a substitute for the complete codes. To purchase the new 2015 Home Builders’ Jobsite Codes: A Quick Guide to the 2015 International Residential Code, please visit BuilderBooks.com or call 1-800-223-2665. (ISBN 978-086718-741-0; Retail $21.95/ NAHB Member $19.95). The Guide is also available as an e-book at ebooks.builderbooks.com. n “2015 Home Builders’ Jobsite Codes A Quick Guide to the 2015 International Residential Code”
Piedmont Natural Gas Fish Tournament! T
he Piedmont Natural Gas 2016 Fishing Tournament was held May 24 on J. Percy Priest Lake at Four Corners Marina. Joe Haas Construction’s Joe Haas and Rusty Rust took home first place honors following the afternoon weigh-in. Haas and Rust reeled in 16.53 lbs worth of catches, a total that included the “Big Fish” winning catch of 4.39 lbs. The Boral Brick team of Jamie Smith and Todd Spann weighed-in with 15.93, just short of the top weight, to secure second place awards. And Jim Ford and Mike Williams took home third place honors for the Ford Construction boat. Ford and Williams reeled in 15.00 lbs worth of catches. A big thanks to title sponsor Piedmont Natural Gas and to all our sponsors; Hermitage Lighting Gallery, Mid-TN Erosion & Sediment Control, Vulcan Materials, and FBC Mortgage, whose attendance and help during the event was most appreciated. A big thanks to you all! n
Annual tournament wraps at Four Corners. Company Boat
Joe Haas Construction
Joe Haas & Rusty Rust
Jamie Smith & Todd Spann
Jim Ford & Mike Williams
Piedmont Natural Gas
Tommy Lynch & Danny Hankins
J.S. Earhart Plumbing
Jody Earhart & Bobby Colson
Joe Haas Construction
Bob Bramel & Rick Swancey
Piedmont Natural Gas
Lamar Morgan & Joe Reese
John Blevins & Doug Manhardt
Jody Smith & Randy Summers
Joe Haas (left) and Rusty Rust (right) took home first place honors at the Piedmont Natural Gas Fish Tournament last month at Four Corners Marina.
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Top left: Todd Spann and Jamie Johnson won second place honors for the Boral Brick boat following the tournament’s weigh-in. Top right: Mike Williams and Jim Ford from the Ford Construction boat, third place winners following the tournament’s weigh-in. Far left: dockside at Four Corners Marina where fishermen weighed in at the conclusion of the tournament. Left: Joe Haas and Rusty Rust hold catches following their weigh-in that helped net the Joe Haas Construction boat first place honors and the “Big Fish” Award.
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Record setting lot shortage
Builders report low lot supplies in recent NAHB/Wells Fargo Housing Market Index.
AHB’s measure of lot shortages hit a new record in May. In answer to special questions on the survey for the NAHB/Wells Fargo Housing Market Index, 64 percent of builders reported that the supply of lots in their markets was low or very low— up from 62 percent last year and the highest the lot shortage percentage has been since NAHB began collecting the information in 1997. “The lack of availability of buildable lots has quickly become one of the biggest issues facing our members,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “While labor shortages and regulatory burdens remain struggles as well, lot shortages are preventing our builders from responding to growing demand for housing.” “We have monitored lot availability for the last two decades, and it is clear that the scarcity of building lots is growing,” said NAHB Chief Economist Robert Dietz. “Whether due to land use policy, geographic constraints
or other regulatory constraints, the lack of lots for residential construction will have negative impacts on housing affordability in many markets.” Perhaps most notable is that builders reported this record shortage at a time when new homes are being started at a rate of fewer than 1.2 million a year. In 2005, when total housing starts were over 2.0 million, the share of builders reporting a shortage of lots was “only” 53 percent. The percentage varies, based on region of the country, size of builder, and type of lot. Although the categories are seldom defined precisely, builders often think in terms of A, B and C lots, based on the desirability of their location. As you might expect, the shortage tends to be most acute for A lots. In the May 2016 survey, 69 percent of the builders said A lots were in short supply, compared to 60 percent for B lots, and 47 percent for C lots. Often, differences show up most clearly in the share of builders who report the supply of lots in their markets is “very low.” For example, the June, 2016
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69 percent of builders reporting low or verylow lot supply in the West is only marginally above the 62 percent in the Midwest and 64 percent in the South, and actually slightly below the 68 percent in the Northeast. But a full 39 percent of builders in the West characterized lot supply as very low, far above the percentages in the other three regions. Compared to lot supply in general, builders are more likely to report a very-low share of A lots, especially in the Northeast, Midwest and South. When the lot supply question is restricted to A lots, these three regions more closely resemble the West. Perhaps surprisingly, lot shortages were also reported somewhat more often by larger home builders. Overall, 70 percent of builders with over 100 starts reported a low or verylow supply of lots, compared to 65 percent for builders with 6 to 99 starts, and 62 percent of builders with fewer than 6 starts. One factor may be that builders with fewer starts are more likely to build one-at-a-time custom homes on land already owned by the homeowner, where lot supply in the area is less of an issue. Larger companies may also be looking to build in multiple locations within an area, making them more likely to run into a shortage if it exists anywhere within the broader area. In any event, larger builders are also more likely to report shortages for A lots specifically. In the 2016 survey, 78 percent of builders with 100-plus starts reported a shortage of A lots, compared to 74 to 75 percent of builders with 6 to 99 starts, and 59 percent of builders with fewer than 6 starts. Part of the reason the percentage is that low for small builders is that quite a few of them checked “Don’t Know/Not Sure” when asked about lots of a particular type (A, B or C). NAHB includes “Don’t Knows” in the base when calculating percentages to avoid overstating the shortages. n
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SPIKE REPORT Life Spikes
Twelve 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 April 30, 2016. Top 20 Big Spikes Jim Ford 912 Virgil Ray 821 Bill King 776 Mitzi Spann 717 Terry Cobb 567 Jim Fischer 566 John Whitaker 468 Jennifer Earnest 348 James Carbine 345 Kevin Hale 287 David Crane 280 Trey Lewis 277 Tonya Jones 271 Reese Smith III 261 Steve Moody 219 Sonny Shackelford 219 Davis Lamb 196 Tim Ferguson 176 James Franks 176 Jackson Downey 174
Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 141 C.W. Bartlett 138 Tonya Alexander 128 Sam Carbine 128 Steve Hewlett 119 Carmen Ryan 109 B.J. Hanson 107 Dave McGowan 104 Johnny Watson 101 Julie DuPree 97 Jordan Clark 95 Duane Vanhook 92 Jeff Zeitlin 87 Erin Richardson 76 Wiggs Thompson 75 Michael Dillon 70 Helmut Mundt 70 Jeff Slusher 70 John Baugh 68 Don Bruce 62 Jim Ford, Jr. 62 Beth Sturm 59 Hill McAlister 57 Lori Fisk-Conners 55 Joe Morgan 54 John Broderick 53 Gerald Bucy 53 David Hughes 51 Christina Cunningham 47 Al Davis 47 Andrew Neuman 47 Benny Sullivan 46 John Ganschow 45 Bryan Edwards 44
Kay Russell 44 Peggy Krebs 40 David Lippe 38 Andy Wyatt 37 Chuck Clarkson 36 Frank Miller 36 Randall Smith 36 Brad Butler 35 Derenda Sircy 35 Al Hacker 34 Justin Hicks 33 Ray Edwards 32 Dan Strebel 32 John Zelenak 31 Steve Wheeley 30 Alvin Basel 29 Marty Maitland 27 Spikes Don Mahone 23 Frank Tyree 18 Ashley Crews 16 Keith Porterfield 14 Ricky Scott 14 Ron Schroeder 12 Gina Hewlett 10 Don Alexander 9 McClain Franks 6 Rob Pease 6
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JUNE Calendar Sunday
Sales & Marketing Council meeting
Remodelers Council meeting
Dickson County Chapter meeting
Metro/Nashville Chapter meeting
Sales & Marketing 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, June 20. 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, June 27. Topic: “Legislative Update,” with Susan Ritter, Executive Vice President, HBAT. 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, 11:00 a.m. at varying locations. Next meeting: Wednesday, June 15. Location and 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 - 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 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 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, June 2. Topic: Special guests from E3 Innovate will deliver an informative presentation detailing ways to keep your home and properties efficient. SMC members free with RSVP thanks to THDA; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 302.
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The June, 2016 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee (HBAMT).