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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
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 10 Housing recovery still looking up
NAHB index shows that an improving economy and continuing job creation are strengthening national housing markets.
DEPARTMENTS 6 News & Information 13 SPIKE Club Report 14 March Calendar 14 Chapters and Councils
ON THE COVER: The housing recovery continues to show gradual improvement according to NAHBâ€™s Leading Market Index. Story on page ten. March, 2016
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Housing starts fall 3.8 percent in January
ationwide housing starts dropped 3.8 percent to a seasonally adjusted annual rate of 1.099 million units in January, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Overall permit issuance edged down 0.2 percent. “January’s production numbers are in line with our recent HMI reading and show that builders are being cautious as they face some market uncertainties and supply side constraints,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Despite the modest dip in starts this month, we expect to see ongoing, gradual growth in housing production in 2016,” said NAHB Chief Economist David Crowe. “An improving economy, solid job creation and pent-up
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demand for housing should keep the market moving forward.” Both single- and multifamily production dropped in January. Single-family housing starts fell 3.9 percent to a seasonally adjusted annual rate of 731,000 units while multifamily starts declined 3.7 percent to 368,000 units. Combined single- and multifamily starts fell in all four regions in January, with the West, South, Northeast and Midwest posting respective losses of 0.4 percent, 2.9 percent, 3.7 percent and 12.8 percent. Multifamily permits rose 2.1 percent to a rate of 482,000 while single-family permits fell 1.6 percent to 720,000. Regionally, the Midwest, West and South registered respective permit gains of 26.5 percent, 24.5 percent and 0.3 percent. Permits fell in the Northeast by 55.4 percent. n
NAHB moves needle on EPA online lead paint training
emodelers who are certified by the Environmental Protection Agency (EPA) to work on homes that may contain lead paint under the Lead: Renovation, Repair and Painting (RRP) rule now have the option to complete refresher training online, according to an EPA announcement. However, EPA recertifications obtained via an online refresher course will be valid for only three years, versus five years for hands-on training courses, and can only be exercised every other recertification cycle. “As a longtime advocate for a simplified recertification process, NAHB Remodelers appreciates that the EPA’s changes provide some flexibility, but the limited and convoluted parameters of the online training op-
tion are unnecessarily complicated and could affect the number of renovators who opt to become recertified,” said NAHB Remodelers Chair Tim Shigley, CGR, CAPS, CGP,
GMB, GMR, a remodeler from Wichita, Kan. “Whether they choose to refresh their training online or in person, with the March 31 recertification deadline looming for over 100,000 remodelers, and thousands more later in 2016 and 2017, remodelers are left with precious little time to meet their recertification obligations.” Additionally, certified renovators who were grandfathered in under a HUD or EPA lead-based paint training course before the RRP rule was adopted must attend a refresher course with a hands-on component. The rule also made several streamlining and clarifying changes to RRP provisions that apply to training providers. The EPA’s changes only apply to those states where EPA administers the program; the 14 states that administer their own programs will have to take legislative or regulatory action to adopt the online refresher course option. n
Three community amenities topping home buyer wish lists
ome-buyer preferences constantly evolve, making it a challenge to stay up to date on who wants what. Luckily, the majority of buyers – regardless of age – are looking for the same features in a community. One of NAHB’s latest studies shows which community amenities are the most sought after. The study, Housing Preferences of the Baby Boomer Generation, captures the opinions of more than 4,300 prospective home buyers and compares the wants of Boomers (born between 1946 and 1964) to those of seniors (born before 1946), Gen-Xers (born 1965 to 1979), and Millennials (born after 1979). Though the priority rankings vary slightly between generations, the results of the study reveal these different age groups actually have very similar tastes. Among the top four most-wanted amenities, three were the same for every age
group: They all desire to live in a community that’s typically suburban, with close proximity to a park area, and that has access to walking/jogging trails. All of the groups – except Millennials – ranked being located near retail space in their top four. Millennials, instead, chose playgrounds as their fourth-most-wanted community amenity. (Gen-Xers ranked playgrounds at No. 8.) The other most desirable community amenities listed by all of the age groups included: a swimming pool, lake and exercise room. When comparing the groups’ lists of their top eight amenities, only two items varied:
All age groups in the study desired to live in a (typically) suburban community with close proximity to a park area and with access to walking and jogging trails.
In addition to community amenities, the survey covered many other items, including preferences in home size, layout, features, technology and environmental impact. It also looked at preferences in street design. For more detailed information, go to EyeOnHousing.org. The full study is available at NAHB BuilderBooks. n
Playgrounds – not surprisingly, these have minimal significance to the majority of seniors and boomers. Outdoor maintenance service – apparently, not very popular among either of the younger two generations.
Age can play a significant role in what buyers want to see in a potential new home. This study presents findings not just for the average home buyer, but also highlights the housing preferences of Baby Boomers and how they compare to buyers of other generations. Housing Preferences of the Boomer Generation: How They Compare to Other Home Buyers discusses the latest data on preferences for home size, central-city versus the suburbs, kitchen, bathroom, and community features, and much more. See more at: http://ebooks. builderbooks.com/product/housing-preferences-boomer-generation.
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Affordability edges up in fourth quarter
odest home price and interest rate decreases resulted in a slight increase in nationwide housing affordability in the fourth quarter of 2015, according to the NAHB/ Wells Fargo Housing Opportunity Index (HOI). “Affordable home prices, attractive mortgage rates, and pent-up demand are keeping the housing market on a gradual, upward path,” said NAHB Chairman Ed Brady. “While this bodes well for housing in 2016, builders continue to face a number of challenges, including excessive and costly regulations and a lack of available lots and skilled labor.” “The signs point to continuing growth in home sales,” said NAHB Chief Economist David Crowe. “We’ve seen an improvement in affordability due to favorable home prices and interest rates. Steady employment and economic growth, along with rising consumer confidence and pentup demand will also help encourage more buyers to enter the marketplace.” In all, 63.3 percent of new and existing homes sold between the beginning of October and end of
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December were affordable to families earning the U.S. median income of $65,800. This up from the 62.2 percent of homes sold that were affordable to median-income earners in the third quarter. The national median home price fell from $231,000 in the third quarter to $226,000 in the fourth quarter. Average mortgage rates edged lower from 4.18 percent to 4.09 percent. Youngstown-Warren-Boardman, Ohio-Pa. was rated the nation’s most affordable major housing market, switching places with Syracuse, N.Y., which fell to the second slot on the list. In Youngstown-Warren-Boardman, 90.1 percent of all new and existing homes sold in last year’s fourth quarter were affordable to families earning the area’s median income of $53,700. Rounding out the top five affordable major housing markets were Scranton-Wilkes-Barre, Pa.; Toledo, Ohio; and Columbia, S.C. Meanwhile, Binghamton, N.Y. claimed the title of most affordable small housing market in the fourth quarter of 2015. There, 94.6 percent of homes sold during the fourth quarter were
affordable to families earning the area’s median income of $66,400. Smaller markets joining Binghamton at the top of the list included Cumberland, Md.-W.Va.; Fairbanks, Alaska; Sandusky, Ohio; and Monroe, Mich. For the 13th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation’s least affordable major housing market. There, just 10.4 percent of homes sold in the fourth quarter were affordable to families earning the area’s median income of $103,400. Other metros at the bottom of the affordability chart were located in California. In descending order, they were Los Angeles-Long Beach-Glendale; Santa Ana-Anaheim-Irvine; San Jose-Sunnyvale-Santa Clara; and Santa Rosa-Petaluma. All five least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, Calif., where 16.3 percent of all new and existing homes sold were affordable to families earning the area’s median income of $87,000. Other small markets at the lowest end of the scale included Salinas; Napa, San Luis Obispo-Paso Robles; and Santa Barbara-Santa Maria-Goleta, respectively. Please visit nahb.org/hoi for tables, historic data and details. n
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Housing recovery still looking up
An improving economy and continuing job creation strengthen markets.
arkets in 117 of the approximately 340 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the fourth quarter of 2015, according to the NAHB/First American Leading Markets Index (LMI) released recently. This represents a year-over-year net gain of 52 markets. The index’s nationwide score inched up to .94, meaning that based on current permit, price and employment data, the nationwide average is running at 94 percent of normal economic and housing activity. Meanwhile, 90 percent of markets have shown an improvement year-over-year. “Housing markets are strengthening gradually as the economy firms and job creation continues,” said NAHB Chairman Ed Brady. “While some areas are recovering at a faster rate than others, the large majority of metros are moving in the right direction.” “Among the LMI components, house prices continue to show the most extensive recovery, with 322 markets having returned to or exceeded their last normal levels. Meanwhile, 76 metros have reached or exceeded normal employment activity,” said NAHB Chief Economist David Crowe. “Single-family permits are edging forward, but remain at only 48 percent of normal activity.”
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“The number of markets on this quarter’s Leading Markets Index at or above 90 percent has reached 217—almost 65 percent of all markets nationwide,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company, which co-sponsors the LMI report. “This demonstrates that the breadth of the housing recovery continues to grow.” Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.52 – or 52 percent better than its last normal market level. Other major metros leading the list include Austin, Texas; Honolulu; Houston; and San Jose, Calif. Rounding out the top 10 are Oklahoma City; Los Angeles; Nashville, Tenn.; Salt Lake City and Charleston, S.C. Looking at smaller metros, both Midland and Odessa, Texas, have LMI scores of 2.0 or better, meaning that their markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Wheeling, W.Va.; Manhattan, Kan.; and Walla Walla, Wash.; respectively. The LMI identifies those areas 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
single-family permits and home prices, 20002003 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. Editorâ€™s Note: In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. In 2015, the Census Bureau revised the manner in which it obtains monthly counts of MSA single-family permits data. To maintain consistency within the LMI, NAHB excluded certain MSAs and improved comparability with previous years for the remaining areas. The LMI is published quarterly on the fourth working day of the month, unless that day falls on a Fridayâ€”in which case, it is released on the following Monday. For historical information and charts, please go to nahb.org/lmi. n
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SPIKE REPORT Life Spikes
Sixteen SPIKES (in bold) increased their recruitment numbers last month. What is a SPIKE? SPIKES recruit new members and help the association retain members. Here is the latest SPIKE report as of January 31, 2016. Top 20 Big Spikes Jim Ford 912 Virgil Ray 821 Bill King 776 Mitzi Spann 708 Terry Cobb 567 Jim Fischer 566 John Whitaker 458 Jennifer Earnest 345 James Carbine 344 Kevin Hale 287 David Crane 276 Tonya Jones 271 Trey Lewis 263 Reese Smith III 261 Steve Moody 219 Sonny Shackelford 219 Davis Lamb 194 Tim Ferguson 175 Jackson Downey 174 James Franks 168
Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 140 C.W. Bartlett 138 Tonya Alexander 128 Sam Carbine 127 Steve Hewlett 119 Carmen Butner 108 B.J. Hanson 105 Dave McGowan 104 Johnny Watson 101 Julie DuPree 97 Jordan Clark 90 Duane Vanhook 90 Jeff Zeitlin 87 Erin Richardson 76 Wiggs Thompson 74 Jeff Slusher 70 John Baugh 68 Michael Dillon 67 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 Al Davis 47 Andrew Neuman 46 Benny Sullivan 46 John Ganschow 45 Christina Cunningham 44 Bryan Edwards 44 Kay Russell 44
Peggy Krebs 40 David Lippe 38 Andy Wyatt 37 Chuck Clarkson 36 Frank Miller 36 Brad Butler 35 Al Hacker 34 Ray Edwards 32 Derenda Sircy 32 Randall Smith 32 Dan Strebel 32 Steve Wheeley 30 Alvin Basel 29 Justin Hicks 29 Marty Maitland 27 John Zelenak 27 Spikes Don Mahone 22 Frank Tyree 17 Ashley Crews 13 Ricky Scott 11 Gina Hewlett 10 Ron Schroeder 10 Don Alexander 9 Keith Porterfield 8 McClain Franks 6
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MARCH Calendar Sunday
Sales & Marketing Council meeting
Metro/Nashville Chapter meeting
Dickson County Chapter meeting
Sales & Marketing Council meeting
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, March 21. 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, 11:00 a.m. at varying locations. Next meeting: to be announced.. 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: Tuesday, March 15. Speaker: DocAir will make an informative presentation. 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, March 3. Topic: “Appraisals and the Appraisal Process.” SMC members FREE with RSVP pending sponsorship; nonSMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 302.
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The March, 2016 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee (HBAMT).