Page 1

A publication of Northland Area Builders Association

The

Construction Times March 2012


Mission

NABA Board of Directors

The NABA, chartered in 1989, is a non-profit trade organization comprised of building and construction industry professionals in Ashland, Bayfield, Burnett, Sawyer and Washburn Counties in Northwestern Wisconsin. Promoting professional growth to its members, the Association provides the resources to stay abreast of our ever changing industry. Every member of the NABA is also a member of the Wisconsin Builders Association (WBA) and the National Association of Home Builders (NAHB).

Past President: Russ Smith, Russ Smith Construction 715-462-4170

To maintain the highest professional standards, our membership adheres to a Code of Ethics, monitors legislative issues, and promotes affordable quality housing.

29148 Mail Road • Danbury, WI 54830 Phone: 715-259-3486 • Fax: 888-825-8073 Email: naba@centurytel.net www.northlandareabuilders.com

President: Ed Peterson, Peterson Construction 715-866-7127 President Elect: Joe Gendrich, Culligan of Ashland 715-682-6585 Secretary: Rick Harder, Northern Paradise Homes 715-635-2299

Code of Ethics Members of the Builders Association subscribe to the following Code of Ethics: n

Treasurer: Jim Perlick, Jim Perlick Construction 715-635-7575

n n n

Directors: Jason Olsen, Peoples Bank 715-634-2674

n

Kevin Miller, Northland Recreational Homes 715-634-6366

n n

Todd Knutson, Johnson Bank 715-634-2611 Jeremy Lindgren, Arrow Building Center-Spooner 715-635-2199

n

n

Subscribe to the By-laws of the State and National Associations. Meet or exceed all State required insurance regulations. Maintain a good credit rating in high standards. Respond to consumer complaints, and act on these complaints in a timely manner. Continue to improve their skills and knowledge through educational resources made available at a local, state and national level. Employ other association members to assure the high standards set by its members are maintained. Conduct themselves in a professional manner to maintain the standards of the association. Comply, both in spirit and letter, with rules and regulations prescribed by law and government agencies for health safety, and progress of the community Have a commitment to excellence.

Open seat

WBA State Directors Jack Sjostrom, Sjostrom Construction 715-634-4427 Charlie Johansen, Johansen Electric 715-634-3761 Open seat

NAHB National Directors Jack Sjostrom, Sjostrom Construction 715-634-4427

Need Help? Northland Area Builders Association 715-259-3486 www.northlandareabuilders.com National Association of Home Builders 800-368-5242 www.nahb.org Wisconsin Builders Association 608-242-5151 www.wisbuild.org Wisconsin Department of Commerce 608-266-3151 www.commerce.state.wi.us/SB/

Open Alternate Seat

NABA Staff Jennifer Johnson, Executive Officer

Become a fan of Northland Area Builders Association to receive industry news, updates and network with others in the industry.


The Other Two-Thirds "The home building industry is more than just builders." by Dr. David Crowe, NAHB Chief Economist

Home building is supported by one of the largest, most diverse collection of businesses in the country. The NAHB categorizes the two-thirds of its members who supply builders as “associates.� But without these businesses, without their products, services, and people, no homes would be built. And, like home builders, the companies that comprise the supply chain range from large national giants to small local businesses. Traditionally, home building has been a major contributor to recovery employment and a significant share of the boost comes from associates. The NAHB estimates that for every 1,000 single-family homes built, 3,000 jobs are created. Half of those jobs and 43 percent of the income generated are on-site construction jobs such as framers, electricians, plumbers, sheet rock installers, and the many other subcontractors that are needed to complete a home. Nearly half of the NAHB associate members are subcontractors or specialty trades. Subcontractor and specialty trade companies are small with a median payroll of seven and annual gross receipts in 2010 of $720,000. Top subcontracting specialties in the NAHB associate membership include plumbing and heating and air conditioning, electrical, carpentry, and masonry and plastering. One-third of hard construction costs are framing and trusses, excavation and foundation, plumbing, HVAC, and electrical wiring. The other half of jobs generated by home building are off site and include retail, wholesale, manufacturing, and professional services. Retail and wholesale companies account for 16 percent of associate members and provide builders and their subcontractors with their appliances, flooring, wall coverings, cabinetry, and building materials. The retail and wholesale job impact accounts for 14 percent of the job creation, or over 400 jobs for every 1,000 homes built. The retail and wholesale businesses tend to be some of the larger companies within the NAHB. Median payroll size is 14 and annual gross receipts are $2 million. Manufacturing the items placed in a new home accounts for nearly 500 jobs for every 1,000 homes built and 16 percent of the total income generated in building a home. Manufacturers represent a relatively small portion of associate members but that may be because they depend upon the wholesaler and retailer outlets to represent them at the local level and because single companies represent large amounts of output. The vast majority of exhibitors at the International Builders’ Show are manufacturers. Professional services members, including financial and insurance companies, comprise one-fifth of the associate members and the same share of jobs created from building homes. Collectively, the professional, financial, and insurance industries account for a quarter of the total income generated by home building because many of these services require experience, education, and involve accepting risks. Professional services companies are similar in size to subcontractors with a median payroll of seven and annual gross revenue of $770,000 while financial and insurance companies are larger with a median payroll size of 12 and annual gross revenue over $5 million. Typical retail, wholesale, and financial service associate members have been members for as long as the typical builder member (10 years) but subcontractors and professional service companies have shorter tenures (six and seven years respectively). Home building firms are predominantly male-headed with only 7 percent headed by a female. Associate members are more diverse stretching from over one-quarter female-headed professional and financial businesses to 16 percent of the wholesale/retail companies to 12 percent of the subcontractors headed by a female. While the stylized model of the home building industry may be the small local firm building a couple dozen homes a year, the force behind that business is a massive collection of strong, competitive, and diverse businesses supplying and supporting an industry integral to the U.S. economy and home buyer.


Marketing to Women Home Buyers Michelle Skupin, Builders Digital Experience

Marketing to women is not new. However, how companies market to women is rapidly evolving as more women control or influence purchasing decisions. The companies that proactively engage female consumers on their terms are poised to reap the rewards of increased sales, customer satisfaction and brand loyalty. “Forget China, India and the Internet: Economic growth is driven by women,” says the British newspaper, The Economist. The women at the helm of some of these companies are leading the charge to tap into the female psyche and, ultimately, into their purses. Who Are These Female Buyers? Smith-Dahmer Associates finds that women directly purchase or have a controlling influence in the purchase of 91% of all new homes. “Women are becoming increasingly powerful,” said Melissa Morman, vice president of customer experience for Builders Digital Experi-

ence (BDX), “and the numbers that back that up are staggering.” Morman’s presentation, “She-Conomy: What Women Want,” includes the following statistics: § Women outspend men by two to one. §  Women earn six out of 10 college degrees. §  51%  of  managers  and  professionals  are women. §  Women  own  40%  of  all  businesses  in  the U.S. §  75%  of  married  female  executives  with  a vice president rank earn more than their spouses. §  Women  control  51%  of  private  wealth  in the U.S. §  47% of market investors are women. Understanding that women comprise a powerful consumer group is only the first step. Beyond that, women fall into vastly different


categories and, naturally, are motivated differently to make purchasing decisions.

“With female clients, the devil is in the details,” she added.

According to the Joint Center for Housing Studies of Harvard University, 25% of homes are purchased by unmarried women. Among the characteristics of women who are not married:

“We love to go through and talk about every single element of their home’s kitchen design, storage, function, look, etc. It's part of the fun of envisioning it, and it's a very important step for a woman to know and feel comfortable when creating a new space.”

§ 31% are single moms. §  20% live with other adults. §  Of  the  balance,  who  are  living  by themselves, 18% are under the age of 45, 17% are 45 to 64 and 9% are 65 and older. Women Home Buyer Profiles Smart companies are delving beyond the statistics to truly discover what motivates women. “Now more than ever, we try to understand the female consumer as much as possible,” said Tricia Esser, CEO of the architecture firm KTGY, where consumer research is a key factor in the design and development process. One common theme Esser has found is that woman perceive their homes as a reflection of themselves. Armed with this research, Esser provides her home builder clients with unique designs that are targeted to female home shoppers and effectively compete against resale properties. Making Women Feel at Home Kristen Shellenbarger, a designer and blogger for Midwest Cabinet & Counter, also takes a highly personalized approach when working with her female clients. “Each client has her own personal wants and needs for her space, and it's so important to be able to provide that,” she said. “Working woman to woman is also a comforting element when talking about designing their personal spaces, whether in the kitchen or bath,” Shellenbarger said.

Midwest Cabinet & Counter is developing a fully operational kitchen showroom where it plans to hold “ladies’ night” events, complete with wine and cheese. The goal is to create an entertaining environment that will provide a hands-on experience in helping female consumers envision their future kitchens — down to cabinetry, color and interior organization choices — as well as see how the kitchen will perform in social situations. Recognizing that modern women are “generals of multitasking,” Shellenbarger strives to provide personalized service by being readily available via her clients’ preferred communication method — whether it’s by email, phone or social media. An easy style of communication allows her professional women clients to check items off their lengthy to-do lists and move projects along at a pace that is right for them. Working With Both Men and Women While researchers are working to understand what women want, men have not been cut out of the equation. “We target both men and women with the same house,” Esser said. She has found that women are more interested in the home as a reflection of who they are, whereas men are more concerned with the exterior — the landscaping, the neighborhood and the garage.


PulteGroup Inc., a multi-brand home building company, focuses on a general market approach encompassing both genders because it finds as much interest in its products from men as from women. “Within our general approach, we have been inspired by the needs of our female customers to provide services and design that our general market loves,” said Deborah Meyer, CMO of PulteGroup. With the burgeoning popularity of buying, decorating and designing homes, PulteGroup is engaging consumers with lifestyle staging in its model homes. An in-house design team handles model merchandising that is focused on modern lifestyles, and consumers are offered furniture resource guides to engage them in the design process. In addition, the company has introduced the Pulte Planning Center, a centrally located,

multifunctional room to help families manage the demands of modern life. “Interestingly enough, in the past this might have been targeted as a ‘woman’s’ area, but today we find that all members of the family are interested in this space,” Meyer said. Morman agreed. “Men and women are beautifully complementary,” she said. The bottom line is that it makes good business sense to design for the women who will be living in the house. Understanding women on a personal, individual level will strengthen any outreach. Take the time to find out who your client really is to offer her the product that will make the most sense — and will be something she will rave about to her friends. “Women know they have buying power,” Esser said. The extent to which your company effectively taps into that buying power will set you apart.


Membership Notes Share your accomplishments, awards, and announcements with fellow members. Send your news to jennifer@northlandareabuilders.com and we will be glad to include it in the newsletter. Member Video Introductions Nearly all the Builder member videos have been created and are being uploaded to YouTube and the NABA website under the Member Directory. We thank you for your patience as we create and produce the videos. Builders who haven’t yet had a video created will be contacted next week for additional materials. If we were not able to pull information from your website or the photo quality was poor, we were unable to create a video for you during the first go around. Don’t dispare, when NABA contacts you we will ask you to send us a few dozen photos and complete a brief summary of your business. We plan to have videos for all of our contractor/trade members finished in the next month or two. Home Expo 2012 We have space available for any member who is interested in exhibiting at the March Expo in Spooner. With only weeks to go before the show, we are busy with advertising and last minute details. Posters will be available next week both in print and electronically. We are asking all members to please post a copy at their business or forward the electronic version to their contacts. It only takes a moment and shows your support of NABA and your fellow members. We are also in need of members who are interested in helping out the days of the Expo for an hour or two. Contact the NABA office if you are free.

Member Directory 2012 Thanks to all the advertisers in this year’s NABA Member Directory! You’ll notice them throughout the various NABA publications including this one. Printed copies of the Member Directory will be available at the Home Expo later this month. March Networking Night Don’t forgot to join us on March 6th at the NEW Heartwood Conference Center restaurant for the monthly NABA Networking Night. We will be welcoming Dave Hepfler of Harmony Energy Factor Systems as our guest speaker. Dave is a long time favorite guest of NABA and will be updating us on the Focus on Energy and Energy Star programs as well as energy efficiency updates. The night begins at 5pm with a social hour followed by dinner at 6 pm. Please RSVP by contacting NABA via email, fax or phone. Cost to attend is $20. Non-members and guests are welcome to attend with a NABA member. Riding Lawn Tractor Raffle Tickets All members with outstanding raffle tickets will be mailed an invoice for unreturned raffle tickets. Members were sent one book of six tickets in October 2011 and asked to purchase, sell or return the tickets. To date nearly 50 members still have their tickets. The proceeds from the raffle will benefit the NABA scholarship fund.


New Member Publication The NABA Board of Directors has approved the creation of a new member publication, Member Matters. Member Matters will be created, printed and mailed quarterly to all members. The main focus of the new publication will be various member benefits and features. It will also showcase new members, member to member discounts and services, and members in the news. If you have an item that you want to be featured in the new Member Matters or offer a special service or discount to fellow members, we want to hear from you. Dues payments to Northland Area Builders Association are not deductible as charitable contributions for federal income tax purposes. However, dues payments may be deductible as ordinary and necessary business expense, subject to exclusion for lobbying activity. Because a portion of your dues is used for lobbying by NAHB ($30) and WBA ($46.90), 16.19% of the total dues, or $76.90 is not deductible for income tax purposes (2012).

Date

Event

Location

Time

Mar 6

NABA Networking Night

Heartwood Conference Center

5:00 pm

Mar 21

NABA Board Meeting

Hayward

5:00 pm

Mar 24 & 25

NABA Home Expo 2012

Antholz Gym, Spooner Middle School

Apr 2

NABA Networking Night

Hayward

5:00 pm

Apr 18

NABA Board Meeting

Hayward

5:00 pm

May 1

NABA Networking Night

Spooner

5:00 pm

May 16

NABA Board Meeting

Hayward

5:00 pm

Late May

NABA Golf FUNdraiser

tbd

tbd


These days every business is looking for ways to trim budgets and save money. To help with this, NABA has partnered with the National Purchasing Partners - Home Builders Purchasing Program. This partnership will allow even our smallest NABA member companies to take advantage of special discounts just for the construction industry from Verizon Wireless, Staples, and more. To find out more about the program and how to start taking advantage of the savings, please contact the NABA office for your registration information. There is no cost to join for NABA members. Visit www.northlandareabuilders.com and click on the HBPP logo to download a flyer & instruction sheet with registration details.

Let your membership earn you money back


National Association of Home Builders Update your member dollars at work

Six resolutions were approved at the IBS Board of Directors meeting on Feb. 9, 2012. Below is a summary of each resolution, along with the name of the sponsor. 1. Comprehensive OSHA Reform. Asks NAHB to take immediate and continued steps to work with OSHA and Congress to cause OSHA to revise its procedures and/or pass legislation to fundamentally change the way OSHA approaches and implements its programs and enforces regulations, issues citations, and assesses fines and penalties and transform OSHA into an agency that works with the nation’s single family and multifamily builders to improve the safety of their operations. The fundamental transformation should start with, and be sustained by, the utilization of a “consultative approach” that promotes a mutuallybeneficial relationship between OSHA and the nation’s single family and multifamily builders that will bring about significant improvements in the development, implementation and use of safety practices; remove the “fear factor” associated with working with OSHA; benefit employees and their employers for the near and long-term future; and follow NAHB’s current Occupational Safety and Health Program Reform policy. Sponsored by the Kansas BIA and Texas AB. 2. Lead-Based Paint and Lead Hazard Reduction. Asks NAHB to continue working with federal agencies to eliminate the risk of lead poisoning and support the goal of eliminating childhood lead poisoning; to reconcile and support efforts to create consistency among the states in their lead regulations; to encourage contractor training/certification in lead-safe work practices and promote their use; to support state and local efforts to create “safe harbors” from the risk of future claims and allegations for contractors, remodelers and multifamily property owners who follow EPA’s prescribed lead-safe work practices and are fully compliant with the recordkeeping and reporting requirements. Asks NAHB to urge Congress to direct the federal agencies to report annually; and oppose adding any requirement for dust clearance testing to the rule through the legislative process. Asks NAHB to pursue all options to compel EPA to restore

the Opt Out provision to the Renovation, Repair and Painting (RRP) rule; to continue to oppose any future clearance testing requirements; to urge EPA to increase its efforts to increase consumer awareness; to partner with EPA to develop education and outreach programs for home owners and an improved reliable pre-renovation test kit; and to engage in the development of regulations for 1) public and commercial buildings and work to ensure that any new regulations are based on data; and 2) the definition of lead-based paint and lead-dust hazards. Asks NAHB to encourage Congress to require EPA to develop realistic capital and compliance costs and that the details be made available for public comment. Sponsored by the NAHB Remodelers, Multifamily and Commercial Builders Councils. Staff contact: Matt Watkins (ext 8329) 3. Recognition of Energy Efficient Homes in Mortgage Financing. Asks NAHB to support appraisal practices that reflect the value of investment in energy efficiency and supports home appraisals that account for the full value and reduced operating costs of the energyefficiency investment; and support mortgage lending policies that recognize the value of energy efficiency that would not negatively impact the financing of new or existing homes. Sponsored by the Housing Finance and Energy Subcommittee of the Construction, Codes and Standards Committee. Staff contact: Larry Brown (ext 8565) 4. Improving the Accuracy of New Construction Appraisals. Asks NAHB to urge the following actions to raise awareness and address the problems of appraisals, which are essential to achieving a sound housing finance system and a sustained recovery in the housing industry and America’s economy: strengthen education, training and experience requirements for appraisers of new home construction; improve the quantity and quality of data for new construction; develop new appraisal standards and best practices for conducting appraisals in distressed markets; develop a process for expedited appeals of inaccurate or faulty appraisals; and strengthen oversight of appraisal activities. Sponsored


by the Housing Finance Committee. Staff contact: Steve Linville (ext 8597) 5. Comprehensive Framework for Housing Finance System Reform. Asks NAHB to urge Congress and the Executive Branch to reaffirm support for housing as a national priority in fulfillment of the mandate of the Housing Act of 1949, which pledged a “decent home and suitable living environment for every American family.� Also seeks a multifaceted housing finance system with both competing and complementary components, including private and public participation that provides a reasonable menu of sound mortgage products for both single family and multifamily housing, governed by prudent underwriting standards and adequate oversight and regulation. Supports the following comprehensive framework for housing finance system reform: A) Establish a new securitization system for conventional mortgages backed by private capital and a privately funded federal mortgage-backed securities insurance fund. Transition Fannie Mae and Freddie Mac to a new mortgage securitization system for single family and multifamily mortgages in an orderly fashion over time and not until an alternative system is fully functioning. Support the creation of new private housing finance entities (HFEs) that purchase and securitize single family and multifamily mortgages from loan originators. Mortgage originators would pay premiums into a privately funded insurance pool (similar to the FDIC insurance fund to secure savings deposits) that would be created for mortgage-backed securities (MBS) to provide additional protection to MBS investors (similar to the Ginnie Mae guaranty). HFEs would be permitted to deal only in mortgages with well understood and reasonable risk characteristics, and would have a strong independent regulator. One possible model for the HFEs would be to use the regional network of the twelve Federal Home Loan Banks (FHLBanks), by creating an Office of Securitization within the FHLBank System to purchase and securitize mortgages. B) Restart a carefully regulated fully private mortgagebacked securities system. Ensure all participants in the MBS market operate under adequate oversight and have a stake in the performance of the mortgages that are originated and sold. Reform securities rating firms by establishing an Investor-Oriented Rating Agency (IORA), which would use rating criteria developed by investors. 3) Continue support for the roles of the federal government housing agencies, including HUD, FHA, VA, USDA and Ginnie Mae. C) Enhance the role of state and local housing finance agencies as a source of housing funds, through the

development of new programs for new, for-sale housing and multifamily rental housing involving partnering with federal and private providers of housing capital. D) Continue current activities and expand the role of the FHLBanks. E) Correct the operational and structural problems that produced the housing boom/bust by: ensuring the availability of sound mortgage products and supporting prudent mortgage underwriting guidelines; requiring full transparency for investors and imposing adequate oversight on previously unregulated segments of the mortgage and financial markets; and ensuring that reforms are undertaken in a balanced and flexible manner so creditworthy borrowers are not disadvantaged.

Sponsored by the Housing Policy Working Group. 6. Foreclosures. Asks NAHB to urge bank regulators to reduce the number of homeowners going into foreclosure by improving loan modification programs to require principal reductions when net present value tests support this option (principal reduction should be paired with shared appreciation or other conditions to avoid the risks of moral hazard); adjusting refinancing programs, and requiring second mortgages be incorporated into the protocol for handling nonperforming loans and eligibility criteria for loan modifications. Asks NAHB to support establishing national servicing standards that include clear procedures for handling non-performing loans; and to encourage states to develop best practices for handling non-performing loans. Asks NAHB to support efforts to persuade America’s financial institutions to take more effective loan modification actions and institute reforms in mortgage servicing; to support alternatives to foreclosures and to encourage states to make these processes more efficient. Asks NAHB to support efforts to reduce the inventory of Real Estate Owned (REO) properties, including: permitting forprofit companies to fully participate in the disposition of the REO properties; FHFA and FHA establishing financing options for builders and investors to purchase REO properties; modifying existing federal housing programs to allow investor participation in disposing of REO properties; facilitating the creation of investor lease-to-own programs; Fannie Mae, Freddie Mac and FHA revising their condo policies; and state HFAs should be granted additional authority to assist troubled mortgage borrowers and speed the absorption of foreclosed homes. Sponsored by the NAHB Task Force on Foreclosures.


The Weekly Job Report is distributed to NABA members every Monday. Each report contains a summary of bidding opportunities throughout the NABA region with links to detailed reports containing information on receiving plan documents on the Members Only side of the Association’s website. Members were emailed their user names and passwords for logging into the NABA website. Contact the NABA office for assistance or to retrieve your information. If your membership lapses, your log in information is deactivated.


Industry News

Compete Against Foreclosed Homes - And Win! The best way to compete with less expensive foreclosed homes in today’s competitive marketplace is for builders to tackle the issue head-on and provide consumers distinct contrasts that highlight the differences with new homes, according to experts at an educational seminar during the International Builders’ Show in Orlando. A common misperception is that foreclosed homes offer better value than new homes because they sell for less, but it is up to the builder to set the record straight by pointing out to buyers the many hidden costs of foreclosed homes and the advantages of purchasing a brand new home, said Jay McKenzie, vice president of Builder Digital Experience, LLC based in Austin, Texas. “Even with a slow job recovery, builders are successfully competing with foreclosures,” said McKenzie. Rather than shy away from comparisons, McKenzie cited the examples of Lennar Homes based in Miami and John Wieland Homes and Neighborhoods in Atlanta, both of which are actively making the case of why a new home is a much better option than a foreclosure. McKenzie then listed several reasons why the benefits of a new home far outweigh a foreclosed home: Ÿ Many foreclosures are sold “as is” with no inspection and no disclosure requirements that could lead to extensive repair bills. Ÿ Peace of mind. Brand-new homes are under warranty and can be personalized with appliances, cabinets, countertops, carpets, floor coverings and other preferences to meet individual needs and tastes.

Ÿ Newly built homes are designed to be highly energy efficient, saving the buyer money and helping the environment when properly operated. Ÿ New homes come equipped with the latest home automation and wiring components thaprovide stateof-the-art high-tech capabilities and home entertainment resources. Ÿ Financing a new home is much easier than financing a foreclosed home. Many builders offer incentives to reduce closing costs, unlike banks that are seeking to get foreclosed homes off their books. Dennis Webb, vice president of operations at Phoenix-based Fulton Homes, said his firm has gone a step further by developing a “foreclosure calculator” that allows consumers to gauge the true cost of purchasing a foreclosed home and getting it into move-in ready condition. The calculator allows buyers to estimate legal fees and repair costs based on price per square foot on houses of various sizes and conditions in nearby areas. After the buyer computes the final cost of what it will take to fix up a particular foreclosed home, they can then click on a link to compare that figure with brandnew Fulton homes located nearby that sell in a similar price range. Webb said the calculator makes the buyer see all the hidden add-on costs involved in purchasing a foreclosed home and serves to cast doubt on whether the initial, cheaper sales price is actually a good value. “The true cost of a foreclosure home may give you sticker shock,” he said.


March NABA Construction Times  

Monthly newsletter for members of Northland Area Builders Association.

Read more
Read more
Similar to
Popular now
Just for you