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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 Builders First Source MargariTeeville
The Builders First Source MargariTeeville kicked off the golf tournament in style at the Legend’s Golf Club.
12 2017 James Hardie Golf Tournament
The James Hardie Golf Tournament was held last month drawing over 200 HBAMT golfers to The Legend’s Golf Club.
DEPARTMENTS 6 News & Information 14 SPIKE Club Report 16 September Calendar 16 Chapters and Councils
ON THE COVER: HBAMT members teed off during morning and afternoon rounds at the James Hardie Golf Tournament last month. More on page twelve. September, 2017
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New home sales pull back in July after strong spring season
ales of newly built, single-family homes in July fell 9.4 percent to a seasonally adjusted annual rate of 571,000 units from an upwardly revised June reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This was the lowest sales reading since December 2016. Meanwhile, yearto-date, new home sales are 9.2 percent above their level over the same period last year. Some pull back in new home sales this month is not surprising after strong May and June readings, said Granger MacDonald, chairman
We should see this sector continue to strengthen throughout the year as consumers show interest in the housing market. 6 The NAIL
of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. Builders must continue to manage construction costs to ensure houses remain affordable. The year-to-date growth shows that new home sales continue to trend upward at a steady pace over the longer term, said NAHB Senior Economist Michael Neal. Steady economic growth and a healthier labor market suggest that the underlying economic fundamentals remain in place for a continued recovery. The inventory of new homes for sale was 276,000 in July, which is a 5.8-month supply at the current sales pace. Regionally, new home sales increased 6.2 percent in the Midwest. Sales fell 4.1 percent in the South, 21.3 percent in the West and 23.8 percent in the Northeast.. n
Single family starts hold steady, builder confidence up
ationwide housing starts fell 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Single-family production slipped 0.5 percent in July to a seasonally adjusted annual rate of 856,000 after a strong, upwardly revised June reading. Year-to-date, single-family starts are 8.6 percent above their level over the same period last year. Multifamily starts dropped 15.3 percent to 299,000 units. “The overall strengthening of the single-family sector is consistent with solid builder confidence in the market,” said NAHB Chairman Granger MacDonald. “The sector should continue to firm as the job market and economy grow and more consumers enter the housing market.” “New-home production numbers this month are in line with our forecast for a slow and steady recovery of the housing market,” said Robert Dietz, NAHB Chief Economist. “We saw multifamily production peak in 2015, and this sector should continue to level off as demand remains solid.” Regionally in July, combined single- and multifamily housing production rose 0.6 percent in the South, and fell 1.6 percent in the
West, 15.2 percent in the Midwest and 15.7 percent in the Northeast. Overall permit issuance in July was down 4.1 percent to a seasonally adjusted annual rate of 1.22 million units. Single-family permits held steady at 811,000 units while multifamily permits fell 11.2 percent to 412,000. Regionally, overall permits rose 19.2 percent in the Northeast. Permits fell 1.4 percent in the South, 7.9 percent in the West, and 17.4 percent in the Midwest. Builder confidence up four points Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the NAHB/Wells Fargo Housing Market Index (HMI). “Our members are encouraged by rising demand in the new-home market,” said MacDonald. “This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence.” “The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,” said Dietz. “GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face
LMI indicates continued improvement across the country
ccording to the NAHB/First American Leading Markets Index (LMI), 89 percent, 299 metropolitan statistical areas, recorded growth in their LMI Score over the second quarter of 2017. The index uses single-family housing permits, employment, and home prices to measure proximity to a normal economic and housing market. A value of 1.0 means the three components have achieved a level of recovery averaging 1.0 when combined. 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 finan-
cial burden on taxpayers, add undue complexity to the tax code or exceed IRS authority. Of the 337 metro areas tracked by the LMI, 196 of them have an LMI Score that exceeds 1.0. In addition, 4 out of 5 metro areas have a LMI Score that exceeds .89. The number of metro areas where overall market activity has normalized was 176, exactly 20 more than the number in the first quarter of 2017. House prices continue to be a key driver of the LMI results. Of the 337 markets tracked by the LMI, house prices in 329 areas have normalized or are above normal. Meanwhile, in 109 markets employment conditions have normalized, while in 74 markets, single-family permits have normalized. However, growth in
supply-side challenges, such as lot and labor shortages and rising building material costs.” 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 gains in August. The component gauging current sales conditions rose four points to 74 while the index charting sales expectations in the next six months jumped five points to 78. Meanwhile, the component measuring buyer traffic increased a single point to 49. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively. 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
the number of markets where employment or permits have normalized has been rising. Over the past quarter, the number of markets where house prices reached at least normal rose by 1, but the number of areas where employment has normalized rose by 13 and the number of areas experiencing normalization in single-family permits rose by nine. The LMI Score for the country as a whole has reached 1.02. However, at 1.52, only the house price component is above 1.0. Meanwhile, the employment component sits at .98 and single-family permits are currently at .54. Slower recovery in housing supply coupled with strong demand could be contributing to house price appreciation. However, individual market analysis reveals that in areas where the overall economic fundamentals are strongest permits have normalized; areas where the overall recovery is not as strong, the recovery of single-family permits represents a key challenge. n
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Home Price Index rises 1.4 percent in June
he Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 4.4% in June, faster than the 3.2% in April and the 3.7% in May. Home prices in nominal terms reached a new high and were 3% higher than the pre-recession peak. House price appreciation continued and averaged 4.5% over the first six months of 2017. The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 1.4% in June, slower than the 4.1% increase in May. It was the lowest one in the past three years. House price appreciation reflects both recovering demand and low inventory. Information provided by the Bureau of Labor statistics indicates that national payroll employment con-
tinues to grow. A healthier labor market is supportive of stronger housing demand. However, on the supply side, inventory of existing homes declined and the July unsold inventory was low, at 4.2 months. A monthâ€™s supply reading at 6.0 months is considered the benchmark for a
New single family home size trending smaller
fter increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the second quarter of 2017. This change of the last two years marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, NAHB expects typical new home size to fall as well. According to second quarter 2017 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was slightly lower at 2,388 square feet. Average (mean) square footage for new single-family homes declined to 2,616 square feet. On a less volatile one-year moving average, the recent trend of declines in new home size can be see on the graph above, although current readings remain elevated. Since cycle lows, the average size of new single-family homes is 10% higher at 2,622 square feet, while the median size is 13% higher at 2,403 square feet. The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buy-
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ers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions. This pattern was exacerbated during
healthy housing inventory. The methodology used to construct the S&P/Case-Shiller National House Price Index means that it is based on prices of existing homes. However, the data suggest that new home prices have been rising faster than existing home prices since the recession. As a result, the gap between the two has widened from $20,000, its average between 1990 and 2008, to $80,000. Although the labor market has strengthened and house price appreciation has improved home equity, the inventory of new homes also remains low. Builders remain optimistic, but the challenges faced by the industry are raising production costs and inhibiting housing production growth which is limiting inventory expansion and pushing up new home prices. Labor shortages represent one of the biggest problems that builders have been facing. In addition, the cost/availability of developed lots, regulations, and building materials shortages are other top problems faced by builders. n
the current business cycle due to market weakness among first-time homebuyers. But the recent declines in size indicate that this part of the cycle has ended, and size will trend lower as builders add more entry-level homes into inventory. In contrast to single-family patterns, new multifamily apartment size is down compared to the pre-recession period. This is due to the weak forsale market and strength for rental demand. n
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Jimmy Franks (center) and Mark McMillen (far right).
Byron Stanley and Rebekah Church represent our event sponsors.
The Builders First Source MargariTeeville kicked-off the annual golf tournament in grand style at the Legendâ€™s Club House last month! Live music, margaritas, cold beverages and the generosity of our sponsors helped ensure another fun-filled evening was had by all.. n
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2017 James Hardie Golf Tournament!
he James Hardie Building Products Golf Tournament was held Thursday, August 10 at the Legends Golf Club in Franklin. With well over two-hundred golfers taking part in the event, the annual tournament continues to grow by leaps and bounds with each subsequent year. Helistar Aviation made the always popular golf ball drop between the morning and afternoon rounds. Golf ball number
sixty-seven found its way closest to the hole to make Neil Dyer the big winner of the contest. The top score of the day was posted by Paul Huff, Jerry Underwood, Marty Underwood and Cory Luehke whose 47 secured first place honors for Stonegate Homes. Closest to the hole and longest drive competition winners included: Clint Ing, “Closest to the Hole” on hole three; Tommy Sidwell, “Closest to the Hole” on hole eleven; and
Brian Combs, who won “Longest Drive” on the eighteenth holes. A big thanks again to our title sponsor James Hardie Building Products, and to all the tournament sponsors who are recognized on page thirteen. n
James Hardie’s Joe Dalton (far right) with the Celebration Homes team, Todd Jackson, Chris Apple and Randall Smith.
Jimmy Franks, Ellen Pulford, Mark McMillen, Moore Russell and Taylor McCormick.
The US Lumber foursome, Richard Arrendale, John Ganschow, Mike Cooper and Anthony Mitchell.
Neil Dyer with his game winning ticket, golf ball and cash prize winnings. Congratulations!
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Charlotte Fischer, Jimmy Franks, Connie Nicley and NAME HERE, on the course for the Helicopter Golf Ball Drop.
The Helistar Aviation copter, ready for flight prior to dropping the golf balls during the annual event.
Jennifer Earnest, ready with Caribbean flavored dishes and cold beverages at the Kenny and Company sponsored hole.
Matt Dryden, Mark McMillen and Jock Wiesner enjoy themselves during the post-tournament activities at the pavilion.
Thank you tournament sponsors! James Hardie Building Products title sponsors Builders FirstSource - MargariTeeville DR Horton - Breakfast Platinum sponsors Bond Mortgage Design Stone Expo, Inc Ferguson Enterprises Informa LP Building Products Movement Mortgage Wells Fargo Vinyl Siding Institute Woodstone Cabinetry Gold sponsors
American Heating & Cooling Atmos Energy FBC Mortgage Franklin American Mortgage Kenny & Company Regions Mortgage Hermitage Lighting Gallery Metro Carpets Pulley & Associates Summit Funding
Roofing Supply Group Salem Music Network/94 FM The FISH Steelsafe Shelters Synergy Real Estate Group, Inc. THDA The Cunningham Team tnMedia Trane Waynes Wilson Auto Motors
Silver sponsors Carpet Den Interiors Foundation Title & Escrow Mid-TN Erosion MarKraft Cabinets Ole South Properties
Hospitality sponsors Cambria Lennar Highlands Mortgage Company MetroStudy Piedmont Natural Gas September, 2017
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Builders First Source
LP Building Products
Embrace Home Loans
Kenny and Company
American Heating and Cooling
Hermitage Lighting Gallery
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Synergy Real Estate Group
Design Stone Expo
PJ Stairways, LLC
Carpet Den Interiors
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 July 31, 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
752 569 566 534 377 362 357 299 297 261 227 219 201 182
Tim Ferguson Jim McLean Louise Stark Harry Johnson Steve Cates C.W. Bartlett
177 164 163 146 142 138
Life Spikes Sam Carbine Tonya Esquibel Steve Hewlett B.J. Hanson Jordan Clark Carmen Ryan Dave McGowan Wiggs Thompson Duane Vanhook John Zelenak Randall Smith Helmut Mundt Jeff Zeitlin Michael Dillon Erin Richardson Christina Cunningham David Hughes Lori Fisk-Conners Beth Sturm Don Bruce Justin Hicks Marty Maitland John Broderick
132 131 119 117 114 114 106 97 97 95 91 89 87 85 76 74 67 65 63 62 61 55 54
Joe Morgan 54 Ron Schroeder 51 Andrew Neuman 50 John Ganschow 48 Bryan Edwards 44 Derenda Sircy 44 Keith Porterfield 42 Ricky Scott 38 Ashley Crews 32 Jody Derrick 30 Phillip Smith 29 Don Mahone 27 Frank Tyree 25 Rick Olszewski 25 Spikes Jay Elisar 19 Steve Shalibo 18 Frank Jones 17 John Burns 15 Kenny Burd 10 Gina Hewlett 10 Pam Smith 10 Will Montgomery 9 Perry Pratt 9 Bob Bellenfant 8 Stacy DeSoto 7 Rob Pease 7 McClain Franks 6 Jim McCann 6
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SEPTEMBER Calendar Sunday
Dickson County Chapter meeting
HBAMT Remodelers Council 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, September 18. 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, September 25. 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, September 20. 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: to be announced. Topic: to be announced. Price: to be announced. 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, September 7, 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 September, 2017 issue of The Nail, the official monthly publication of the Home Builders Association of Middle Tennessee.