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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
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 Hire a professional remodeler to get the job done right Planning a remodeling project during â€œHome Remodeling Month?â€? Check out these tips and contact the HBAMT to find a pro!
10 Spring Membership Mixer on the rooftop!
The HBAMT held its first membership mixer of the year at the Thompson Hotel atop the L.A. Jackson Rooftop Bar!
13 How not to lose the trades you have What are the key areas to focus on to strengthen your ties with trades.
DEPARTMENTS 6 News & Information 14 SPIKE Club Report 16 May Calendar 16 Chapters and Councils
ON THE COVER: May is National Home Remodeling Month. Check out the story on page nine when planning your next big renovation project. May, 2017
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March sales roar like a lion, surge 4.4% in March
xisting home sales, as reported by the National Association of Realtors (NAR), surged 4.4% in March to the highest pace in ten years. At the current sales rate, the March unsold inventory represents a 3.8-month supply, unchanged from February. March existing sales were up 5.9% from the same month a year ago, and reached a seasonally adjusted rate of 5.71 million compared to a downwardly revised 5.47 million in February. Total existing home sales include single-family homes, townhomes, condominiums and co-ops. March existing sales increased 10.1% in the Northeast, 9.2% in the Midwest and 3.4% in the South, while decreasing 1.6% in the West. Yearover-year, all regions advanced, ranging from 8.5% in the South to 3.1% in the Midwest. Total housing inventory increased 5.8% in March, but remained 6.6% below the level a year ago, and has declined year-over-year for 22 straight months. Homes stayed on the market for only 34 days in March, down from 45 days in February and 47 days during the same month a
Both jobs and incomes are growing, suggesting an improving market for new single-family construction. 6 The NAIL
year ago. Some 48% of homes sold in March were on the market less than a month, compared to 42% of homes sold in February and 38% January. The March all-cash sales share decreased to 23%, down from 27% in February and 25% a year ago. Individual investors purchased a 15% share in March, down from a 17% share in February, but unchanged from the same month a year ago. Some 63% of investors paid cash in March, down from 71% of investors in February. The first-time home buyer share remained at 32% in March, but was up from 30% a year ago. The March median sales price jumped 6.8% from last year to $236,400, representing the 61st consecutive month of year-over-year increases. The March median condominium/ co-op price of $224,700 was up 8.0% from the same month a year ago. Pending sales increased 5.5% last month, so the increase in existing sales was not unexpected. NAR states that “Last month’s swift price gains and the remarkably short time a home was on the market are directly the result of the homebuilding industry’s struggle to meet the dire need for more new homes.” However, builders continue to address the low inventory of homes as builder sentiment held firm in April. Both jobs and incomes are growing, suggesting an improving market for new single-family construction. n
Home ownership rate stable, survey says
ccording to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate was 63.6% in the first quarter 2017, which is statistically no different from its last quarter reading of 63.7%. The rate of homeownership appears to be stabilizing after reaching a cycle low of 62.9% in the second quarter of 2016. Compared to the peak at the end of 2004, the homeownership rate has steadily decreased by 5.6 percentage points and remains below the 27-year average rate of 66.1%. Homeownership increased among all age groups under 55 years old since a year ago.
The millennial and Generation X homeownership rates both increased slightly by 0.1%, meanwhile, households aged 45- 54 years old rose by 0.2%. This suggests that people are gradually returning to the housing market.
After strong February, housing starts fall in March
otal housing starts declined in March, after a strong pace was recorded in February. Total starts were down almost 7%, falling to a 1.215 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. Single-family starts posted a monthly decline of 6% in March, falling to an 821,000 annual rate. The February annualized rate, 875,000, was the fastest monthly pace since the Great Recession, while the March rate ranked fourth. Single-family permits were down 1% in March, but recorded the third largest annual pace since the recession. Unseasonably warm weather for much of the country in February, followed by snow in March, likely affected the February-to-March changes. As measured on a three-month moving average, the data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence. The threemonth moving average of single-family starts reached a post-recession high in March, and NAHB is forecasting continued growth for this sector as the year progresses. Multifamily starts declined again in March. Total multifamily starts fell 8% to a 394,000 seasonally adjusted annual rate. However, multifamily permits recorded a nearly 14% increase in March. NAHB is forecasting that multifamily development will continue to level off over the course of 2017. Focusing on housing’s economic impact, 58%
of homes under construction in March were multifamily (631,000). This multifamily count is almost 12% higher than a year ago. There were 454,000 single-family units under construction, a gain of 6% from this time in 2016. This is the highest count of single-family units under construction since the fall of 2008. Regionally, single-family starts posted a month-over-month gain in the South (3%) and were flat in the Northeast. Single-family starts were down 35% in the Midwest and 6% in the West. The Midwest decline was likely related to the positive weather in February followed by less favorable conditions in March. These numbers are consistent with NAHB’s 2017 forecast, which indicates continued growth for single-family construction (limited by availability of workers and lots) and continued leveling off of multifamily production in the year ahead. Recent increases in lumber prices are an item to watch going forward. Builder confidence holds firm Builder confidence in the market for newly-built single-family homes remained solid in April, falling three points to a level of 68 on the NAHB/Wells Fargo Housing Market Index (HMI) after an unusually high March reading. Builders continue to report significant interest among potential home buyers, with the traffic measure continuing to score above the breakeven level of 50. It was 52 in April.
The nonseasonally adjusted homeowner vacancy rate remained low at 1.7% in the first quarter 2017, down by 0.1% from last quarter 2016. At the same time, the national rental vacancy rate held at 7%. The HVS also provides a timely measure of household formations – the key driver of housing demand. Although it is not perfectly consistent with other Census Bureau surveys (Current Population Survey’s March ASEC, American Community Survey, and Decennial Census), the HVS remains a useful source of relatively real-time data. The housing stock-based HVS revealed that the number of households increased to 118.8 million for the first quarter 2017. This is 1.2 million higher than a year ago. Growth in household formations will spur rental housing demand first, and ultimately, home sales. n
Additionally, the HMI measure of current sales conditions has been over 70 for five consecutive months, which shows that there is continued demand for new construction. However, builders face several challenges, such as hefty regulatory costs and ongoing increases in building material prices. 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. All three HMI components posted losses in April but remain at healthy levels. The components gauging current sales conditions fell three points to 74 while the index charting sales expectations in the next six months dropped three points to 75. Meanwhile, the component measuring buyer traffic edged one point down to 52. Looking at the three-month moving averages for regional HMI scores, the West and Midwest both rose one point to 77 and 68, respectively. The South held steady at 68 and the Northeast fell two points to 46. n 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.
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Remodelers more confident about business prospects
he National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) rose to 58 in the first quarter of 2017, an increase of five points from the fourth quarter of 2016 and the highest reading since 2015. An RMI above 50 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. “A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” said NAHB Remodelers Chairman Dan Bawden, CAPS, GMB, CGR, CGP, a remodeler from Houston. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.” Regaining strength from a three-point dip in the previous quarter, the current
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market conditions increased five points to 58. Among its three major components, all saw an increase from last quarter, with major additions and alterations up four points, demand for smaller remodeling projects increasing by seven points and the home maintenance and repair component rising six points. The index measuring future market indicators also reached 58, meeting the highest point of 2016. Calls for bids rose significantly from 49 to 59, amount of work committed grew from 50 to 58, the backlog of remodeling jobs increased from 55 to 62, and appointments for proposals remained constant at 54. “At 58, the Remodeling Market Index is seeing broad-based improvement with all major components well over 50,” said NAHB Chief Economist Robert Dietz. “However, remodelers will face challenges meeting the demand as the labor shortage
continues and costs for materials, such as lumber, are rising.” For the full RMI tables, please visit www. nahb.org/rmi. For more information about remodeling, visit www.nahb.org/remodel. n
Hire a remodeler to get the job done right
ny homeowner planning to remodel wants nothing less than a professional job. Who wouldn’t want the best quality in terms of workmanship and materials when it comes to improving their most prized and most valuable asset? However, when it comes to selecting a remodeler, too many buyers conveniently forget the time-proven adage that “you get what you pay for.” The dilemma that confronts many homeowners is their desire for a top-notch job at the lowest possible price. With price as their primary focus, they ignore other criteria that may carry more weight in producing a successfully completed project and a smooth working relationship with the remodeler.
It’s understandable that price is a major consideration when it comes to remodeling. The cost of remodeling has increased as the demand for remodeling grows. Higher costs of materials (such as copper pipes) and scarcity of skilled labor are just two factors contributing to price hikes. Homeowners need to understand that remodeling is a service and not merely a product. This service encompasses the intangibles that make up the process of remodeling – how everything comes together and results in a satisfying experience and an acceptable finished product. The materials and products that go into it can’t define a professional job alone. The nature of remodeling as a service
becomes even more pronounced when you consider that inevitably you’ll be sharing your home with the remodelers’ crews for weeks or even months, depending on the scale of the project. All remodeling involves some degree of inconvenience, but inconvenience can easily turn into a nightmare if your remodeler doesn’t put your family’s comfort and concerns first. Rather than selecting a remodeler based on where one bid falls compared to others, shift your focus to finding a professional remodeler; then go about getting a bid on your job. If the bid is higher than what you budgeted, work with the remodeler to decide where you can cut back or what you can (continued on page 14) May, 2017
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Mixer on the rooftop!
irst HBAMT Membership Mixer of the year! The Spring Mixer at the Thompson Hotel in Nashville was a big hit drawing strong attendance numbers at the L.A. Jackson Rooftop Bar. Over 200 members were
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on hand to enjoy the ambiance, good cheer and amazing city views. Donâ€™t miss the next fun-filled membership mixer, details coming soon! A big thanks to event sponsor Ferguson and to all our sponsors, including; Bell Law
Settlemanent, Celebration Homes, DalTile, Delta, Drees Homes, FBC Mortgage, First Community Mortgage, Hermitage Lighting Gallery, Metro Carpets, Mid TN Erosion, Neal Clayton Realtors, Shaw Floors, Summit Funding n
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How not to lose the trades you have
inding skilled tradesmen has become increasingly difficult. So the last thing a builder wants to do is anything that might damage relations with the trades they currently do business with. “Consistent, detailed communication is key,” says Scott Paige, vice president of operations for Mattamy Homes’ U.S. Group. “Our trades manage their workflow based on the communication we have with them, and at the end of the day if we aren’t communicating with them on the [same] level of how we communicate with our internal employees, we’re doing [those trades] a huge disservice.” To find areas where it could improve, Mattamy Homes recently created a trades council within each of its seven divisions across the U.S. Each of the councils has as many as seven members representing the various trades whom Mattamy works with on a regular basis. The councils hold monthly meetings to discuss their various projects — what’s going well and what, if anything, Mattamy
should improve. Council presidents then share that feedback with their Mattamy representative each quarter. “We know there’s always room for improvement, and there’s no better way to find out how than to ask our trades directly,” Paige says. “Sure, we already know about many of the things they tell us, but it shows the trades that we’re listening and want to continually improve. We’ll follow up with them later on to tell them about the changes we’re making, and we think that goes a long way.” Strong two-way communication is just one of the key areas to focus on. Paige also notes a few others to help strengthen ties with trades: Pay them on time, every time. That one should be obvious. If, for example, you are continually delayed in adjusting purchase orders when changes occur, the time it takes to re-issue a corrected purchase order is costing both parties money. Over time, those little things can add up to real dollars.
Understand your trades’ work capacity. They need to know as early as possible which jobs and how many will be coming up. And you need to know realistically what can be accomplished within a specified time frame. Together, you are creating a mini business plan because each of you depends upon the other to succeed. Above all, focus on job readiness. Consistently having the jobsite prepped and the materials ready in advance will give your trades the confidence to send their best crews. Having the site ready allows them to do their job more efficiently, and helps to ensure the project — and the others that are currently or soon to be underway — stay on schedule. Members can visit nahb.org/biztools to access a wide variety of tips, articles and presentations from industry professionals that can help builders keep their business running more efficiently. n May, 2017
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SPIKE REPORT Tim Ferguson Jim McLean Louise Stark Harry Johnson Steve Cates C.W. Bartlett
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 March 31, 2017. Top 20 Big Spikes Mitzi Spann Terry Cobb Jim Fischer John Whitaker James Carbine Jennifer Earnest Trey Lewis Kevin Hale David Crane Reese Smith III Steve Moody James Franks Davis Lamb Jackson Downey
748 569 566 508 371 356 345 294 293 261 219 218 200 182
(continued from page 9) postpone to keep the project on budget. For example, you can always have the remodeler frame in a fireplace to be installed later, but he can’t upgrade the company’s customer service if there wasn’t any to begin with. Some important characteristics you should be looking for to ensure that you hire a professional remodeler are:
Experience - Ask how long the remodeler has been in business. Longevity suggests financial stability, which is necessary for the remodeler to finish the job and still be available if problems crop up after the job is completed. Also, the more jobs the company has completed, the more expertise the remodeler will bring to your project and the hidden surprises that remodeling typically entails. Reputation - Look to the remodelers’ former and current customers to gauge the company’s reputation. Obtain the names and phone numbers of customers you can call to get their impressions of the company’s work and customer service. Call them and make personal visits to see the work they had done. Even better, get references from customers whose projects were similar to the one your family is 14 The NAIL
177 164 163 146 142 138
Life Spikes Sam Carbine 131 Tonya Esquibel 126 Steve Hewlett 119 B.J. Hanson 115 Carmen Ryan 114 Jordan Clark 113 Dave McGowan 106 Duane Vanhook 95 Wiggs Thompson 94 Jeff Zeitlin 87 John Zelenak 87 Helmut Mundt 83 Michael Dillon 79 Erin Richardson 76 Randall Smith 75 Christina Cunningham 71 Lori Fisk-Conners 65 Don Bruce 62 Beth Sturm 61 Justin Hicks 60 David Hughes 56 Joe Morgan 54 John Broderick 54
planning. Also, go visit one of the company’s jobs in progress to evaluate how they manage the construction process and how tidy they keep the job site. Ask whether these homeowners would hire the company again. Business Credentials - A good place to start your search for a remodeler is with your local builders association and it’s affiliated local Remodelers Council. Groups like these help to keep their members informed about new products, construction techniques, business practices and industry issues. Participation demonstrates a remodeler’s commitment to professionalism and to the remodeling industry. Many trade groups also confer profes-
Marty Maitland Andrew Neuman Ron Schroeder John Ganschow Bryan Edwards Derenda Sircy Keith Porterfield Ricky Scott Ashley Crews Don Mahone Phillip Smith
50 50 48 47 44 42 38 32 31 26 25
Spikes Frank Tyree 24 Rick Olszewski 21 Jody Derrick 20 Jay Elisar 19 Frank Jones 16 John Burns 15 Gina Hewlett 10 Pam Smith 10 Kenny Burd 9 Will Montgomery 9 Perry Pratt 8 Bob Bellenfant 7 Stacy DeSoto 7 Rob Pease 7 McClain Franks 6
sional credentials, such as Certified Graduate Remodeler (CGR), to those who meet their requirements, which is a positive indicator of the remodeler’s reputation. License and Insurance - Ask to see a copy of the remodeler’s license, if your state has such requirements, and call the licensing agency to find out if there are any unresolved complaints against the company you might hire. It is also important to verify that the remodeler carries workers’ compensation and liability insurance. Have the remodeler show you copies of both insurance certificates to protect yourself from liability in situations involving job site injuries or property damage resulting from the work being done on your home. If your goal is a professional remodeling project, then your best bet is to hire a professional remodeler. The extra cost will pay for itself in the satisfaction you receive while the project is in progress and during the many years you will enjoy the completed project. To find a professional remodeler, ask the HBAMT about their Remodelers Council (see page sixteen for details). Or look online at www.hbamt.org by searching for “Remodeler” on the Find a Builder directory page. n
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MAY Calendar Sunday
Dickson County Chapter meeting
Metro/Nashville Chapter meeting
HBAMT Remodelers 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, May 15. Topic: PPG Paints. 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, May 22. Topic: “Lien Waver Discussion,” with Reid Leitner, attorney. 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, May 24. Location: Kenny and Company. Topic: “RMC Mixer at Kenny and Company.” 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 - Ashley Crews. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, May 4, 9:00 a.m. at the HBAMT. Topic: “Understanding Multi-Cultural Buyers,” with a panel of sales professionals sharing their insight for selling in a culturally diverse market. SMC members free thanks to Wells Fargo; non-SMC members $25 w/RSVP, $35 w/o RSVP Council RSVP Line: 615/377-9651, ext. 302.
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The May, 2017 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee (HBAMT).