Builders Outlook
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America's urban downtowns were neglected for decades, abandoned for newer malls in the suburbs and bigger homes on the edge of town. The construction of new highways helped speed their decline. And rising crime nearly killed them. That's the story of much of the second half of the 20th century in cities such as Washington, New York and Chicago. But newly unveiled housing data dating back to 1990 show that these long-shunned city centers have been attracting Americans again. According to detailed data from the Federal Housing Finance Agency, home prices over the past 25 years have appreciated more in the heart of big cities than just about anywhere else. By Emily Badger and Darla Cameron, Washington Post "After decades of hollowing out," write FHFA economists Alexander Bogin, William Larson and William Doerner, "center-cities are becoming increasingly popular." It's clear in the following map of the Washington area, with the highest price appreciation in the yellowish areas of downtown Washington. This is not, on its own, a novel proposition. Downtown boosters and academics have argued that we're witnessing an urban revival in the United States. But there remains deep debate over how widespread the pattern really is and whether it points to a fundamental shift in where and how Americans live. The new evidence, based on unprecedented mortgage data covering 18,000 Zip codes and nearly 100 million transactions between 1975 and 2015, shows that demand for city living has been rising for a generation — even in unexpected corners of the country. "We find that the tide has changed," Doerner says. "After World War II, we saw the rise of the automobile and households flocking to the suburbs. Over the past 25 years, though,
people have been paying more to move into downtown central areas, primarily in large cities. This is a major shift — it's happening across the country, and it's happening for a variety of reasons." That pattern is good for cities, but it raises difficult questions about who will be able to afford them in the future. In many metropolitan areas such as those mapped here using the FHFA data, the farther you get from the center of town, the weaker the appreciation in housing values over time. Bright yellow Zip codes, such as those at the heart of Portland, Ore.; Denver; and Washington have had the steepest annual increases in home prices since 1990 The FHFA documented the trend with a newly constructed home price index — now publicly available — that relies on the repeat sales of properties over time to gauge how homes appreciate in value. In a set of working papers using the data, Doerner and colleagues show that housing in the heart of big cities has enjoyed the greatest appreciation, at least since 1990, suggesting a
National, State & Local Building Industry News 2016: Issue 6
Americans are paying more to live in the very places they once abandoned
growing demand to live there. Price gains in run-ups such as the last housing bubble have also been the most sustainable over time in central cities. "This is really new confirmation about the shift in demand for the urban core of America away from the urban periphery," says Harvard economist Ed Glaeser. "The thing about the resurgence of central cities is not that suburbia is dead – as much as people love that story line, it's not true. What is true is if you look at places like New York in 1970, demand for those cites was quite low, and it’s radically different today." A recent Washington Post analysis of home price data since 2004 found a similar pattern particularly in the Washington area: Suburbs far from the center of the city fared relatively poorly over the course of the bubble, bust and recovery, as home prices in close-in neighborhoods boomed. The FHFA data, extending further back in time, shows a similar picture in Minneapolis and Portland, Chicago and Denver, Atlanta and Philadelphia. The same is true in Boise, Idaho; Columbus, Ohio; and Nashville. Even in Sunbelt cities such as Phoenix and Houston These explanations would not necessarily mean that American preferences for city living have changed — that millennials are more drawn to it than their parents were, or that people who one shunned cities have changed their minds. "Data suggests that you don’t need changing preferences in order to arrive at the patterns we see," Larson says. The traffic got worse. The crime lessened. The amenities improved. And at least some people have accrued more wealth to spend on
high-end restaurants. In many ways, it's the environment that has changed, not us, Larson argues. "It would take very strong evidence to persuade me that [changing preferences are] what’s going on, because there are so many other explanations going on that are economic related and not preference related," Larson says. Demographic data also show that suburban and exurban populations are again gaining population faster than urban counties. And so, as Glaeser suggests, the suburbs aren't dying even as cities come back. Other research also suggests that what is changing in downtowns isn't so much the number of people living there as who lives there. Close-in neighborhoods are becoming higherincome, more educated and more white (this pattern is particularly clear in Washington around Metro stops). These are the residents with the demand and the money to bid up housing prices. And this leads to the caution in all of this that Washington already epitomizes: As home prices rise in these places, they could become unaffordable to people who have lived there in the past — or need to work there today. "Assuming high prices can’t be met with sufficient supply, high prices are going to mean these will increasingly become boutique towns available only to the wealthy," Glaeser says. "That’s what we should be worrying about."
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Builders Outlook
THINK OF US AS PART OF YOUR SALES TEAM. No doubt about it, when you build homes and businesses that are natural gas ready, they’re instantly more attractive to customers. Natural gas furnaces, water heaters and clothes dryers offer greater efficiency and lower operating costs than their electric counterparts, and natural gas kitchens sell themselves. For more information: ElPasoNewBusiness@TXGas.com William Nieves: 915-496-6126 Jorge Sejera: 915-680-7216
2016 issue 6
2016 issue 6
Builders Outlook
President’s Message Carlos Villalobos
President, El Paso Association of Builders
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Growth good for El Paso As most of the world major economies, strapped with record levels of debt, are poised to hit the bench to take a breather, it seems that all is good in El Paso, at least for the foreseeable future. It seems that everywhere you turn nowadays, there is a major construction project going on in El Paso. We have the retail center that will house Whole Foods on the west side, which is looking amazing, congratulations to our friends at CGN Designs on this one. The Caldwell Collaborative Building that just went up by I-10 and Raynolds is an incredibly nice (and expensive) looking building, serving as a testament to the positive outlook many business groups have of El Paso. In speaking to city officials, they estimate there at currently $1.6 Billion in outstanding construction permits in the City, which is a figure that seems to be a record in recent times. This is obviously great for the economy as it creates high paying jobs, injects money into our
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economy and is setting the foundation for our city’s future. There are also messages in between these lines, for example, the 22 story apartment, hotel office and retail tower that is being proposed for the west side on the corner of Mesa and Shadow Mountain, represents a huge investment. Projects like these, costing up to $400 and $500 per foot in other US Metropolitan areas, tend to have low market cap rates (below 5%), but have long term upside value because of asset appreciation, yielding internal rates of return in the high teens. What this means is that larger business groups are looking to El Paso to park/invest large amounts of money for the long term. Rest assured that these investments come with a lot of study and analysis of the local economy. Locally, all of the major developers seems to be heavily investing in El Paso, which is also a very good sign. I often speak of the economic synergies that are formed when a
US City reaches the 1,000,000 population mark, which seems to be the tipping point of greater economic momentum for a community, there are of course many factors in play here, but at an estimated count of 835,593 for El Paso County as of July 1, 2015 (per US Census), it suddenly feels like we’re approaching this monumental mark in our community. This would mean quicker growth, more jobs, better infrastructure, more private investment and larger budgets for our city government to work with, all of which are very positive for our community. Last but not least, please join us for our Parade of Homes 2016 happening at Enchanted Hills (across from the Outlet Malls) off of Transmountain and I-10. Kick-off party is June 24, please join us to support this great event.
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Builders Outlook
2016 Issue 6
Executive’s Message
Ray Adauto, Executive Vice President EPAB
My column this month is about celebrating our annual Parade of Homes™. First of all I’d like to thank the Dallas Home Builders Association. Why? Because they had the foresight 50 years ago to trademark the name Parade of Homes™ and to issue us the permissions required to use that trade name. Secondly it takes a lot of coordination, effort, money, and time to do one of these Parades. Let’s start with finding the site, not an easy job since it falls onto the developer members we have to allow us to designate one of those sites as a Parade site. This year we were invited to look at the new subdivision known as Enchanted Hills by Southwest Land Development Services. The property is located near I-10 west and Trans Mountain, just across the interstate from the Outlet Mall. This area is a hotspot right now with the new Hospitals of Providence just a stone throw away, ADP, and new office complexes rising in that desert. Also in the mix is the new
Everyone loves a Parade Abundant Living Faith Center and planned restaurant pads in that area. Our thanks to Doug Schwartz, Bud Foster, Ana Gregg, Javier Navarro and all the gang at SWLDS. To Conde Engineering our gratitude as things evolved during the site selection. Our next effort was getting builders interested and initially we had 13 interested builders. Land prices, location, commitment all whittled the list down to 10 then to 8. We are so grateful to our eight, including BIC Homes, Pointe Homes, Deal2Deal Homes, Metro Homes, Pacifica Homes, Edwards Homes, Trinity Homes and D R Horton. All of the homes are beautiful even though it is the toughest build they will do this year because it is a Parade home and frankly is under deep scrutiny by other builders. I can assure you that all of our builders have put their heart and soul into the homes and one in particular, Trinity, was struck with a catastrophe on Memorial day as their office was consumed by fire
and water in a major fire. As I write this column they’re desperately trying to have the home completed by opening day. What is truly cool is that our other Parade builders are helping them any way they can. We lined up some terrific major partners including Foxworth Galbraith, Interceramic, First Light FCU, and Morrison/Whirlpool. We also were fortunate to get GECU to sponsor admission for the past and present military; and Rassette Homes sponsoring admission to First Responders. Thanks for your financial and personal support. I’d like to thank Ted Escobedo for partnering with me in collaborating on the media work. He’s been phenomenal from the event at the Home Show to the completion of the media buys. He is creative, hardworking, and committed. Margaret has had her hands full as well. With our two person office we multitask a lot. I can tell you we have worked nights and weekends just to get ready with all
that is required. Along with the regular show is the preview party and all that comes with trying to host the industry. Over 750 tickets were sold for that and keeping track of all of them is a chore. Between Ted and Margaret I’ve been lucky to have a good team. Our TV production was done by Juan Gutierrez who produces all things Chihuahuas and is a gifted audio/video producer. And I would be remiss if I didn’t thank our special TV/print family Frank and Vanessa Corral, Carmelo the older son and Pablo is the younger son. This family was great to work with and very connected with our concept. I think you’ll agree that they represent our show well. So until next month when we’ll be getting ready for Sun Belt show and all that comes with that, getting back to normal and all that, I’m signing out. Go sell something.
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National Builder News House Approves NAHBSupported Health Care Bill
n The House today approved the Small Business Healthcare Relief Act (H.R. 5447), legislation championed by the National Association of Home Builders (NAHB) that would allow small business owners to help their employees pay for health insurance. “The nation’s home builders commend the tireless efforts of Reps. Charles Boustany (RLa.) and Mike Thompson (D-Calif.) for advancing this bipartisan, common-sense bill that will help small business owners across the land to ease the prohibitive cost of health care insurance for their workers,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “We urge the Senate to act promptly to pass companion legislation S. 3060.” The Small Business Healthcare Relief Act would allow home building firms and other small businesses to provide Health Reimbursement Arrangements (HRAs), which let employers contribute something to their employee health costs. Specifically, HRAs allow small businesses to offer pre-tax dollars to insured employees to help pay premiums and/or other out-of-pocket costs associated with medical care and services. HRAs are very flexible and affordable, allowing employers to design their plan to meet the unique needs of their company. All employer contributions to the plan are 100 percent deductible to the employer, and tax-free to the employee, making this a great benefit to help workers to obtain health insurance. Unfortunately, the Internal Revenue Service issued guidance in 2013 stating that employers are no longer able to use HRAs because they don’t meet the requirements of the Affordable Care Act. Not only did the IRS make HRAs illegal, the agency decreed that all employers
can face fines of $100 per day per employee if they offer this benefit to their workers. That can add up to $36,500 per employee over the course of a year and up to $500,000 per company. This $100 per day penalty went into effect on July 1, 2015. “By reinstating the use of HRAs and rescinding the punitive IRS penalties associated with them, this legislation will allow small employers with fewer than 50 employees to help their workers to obtain coverage or pay for their medical bills,” said Brady. “The Senate must now do its part so that our nation’s small businesses can continue to voluntarily provide health care assistance to their employees without fear of government reprisal.”
New Home Sales Fall in May n Sales of newly built, single-family homes
dropped 6 percent in May from a downwardly revised April reading to a seasonally adjusted annual rate of 551,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. “Although new home sales are down from a robust reading in April, they remain solid and builder confidence in the market is growing — two indicators that the housing sector should strengthen throughout the year,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “At an annual pace of 551,000 units, new home sales are up relative to the first few months of 2016 as well as last year,” said NAHB Chief Economist Robert Dietz. “The sales market continues to make overall gains despite monthto-month volatility.” The inventory of new homes for sale was 244,000 in May, which is a 5.3-month supply at the current sales pace. The median sales price
BUILDING
of new houses sold was $290,400. Regionally, new home sales rose by 12.9 percent in the Midwest. Sales fell by 0.9 percent in the South, 15.6 percent in the West and 33.3 percent in the Northeast.
Housing Production Holds Steady in May
n Nationwide housing starts were virtually
unchanged in May, inching down 0.3 percent to a seasonally adjusted annual rate of 1.16 million, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Overall permit issuance edged up 0.7 percent to a seasonally adjusted annual rate of 1.14 million. “Despite May’s relatively flat report, our builders are telling us that the market is improving and consumers are more ready and willing to make a home purchase,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “Builder confidence rose this month and single-family housing starts are up roughly 10 percent from a year ago — two indicators that we can expect further growth in housing production this year,” said NAHB Chief Economist Robert Dietz. “However, builders continue to face supply-side constraints, such as shortages of buildable lots and labor.” Single-family housing starts inched up 0.3 percent to a seasonally adjusted annual rate of 764,000 units in May while multifamily production edged down 1.2 percent to 400,000 units. Combined single- and multifamily starts were mixed in May, rising 14.4 percent in the West and 1.5 percent in the South. The Midwest posted a 2.5 percent loss and the Northeast
El Pa aso
registered a 33.3 percent loss. However, singlefamily production rose in three out of the four regions — the Northeast, South and West. Single-family permits fell 2 percent to a rate of 726,000 while multifamily permits rose 5.9 percent to 412,000. Permit issuance increased 15.3 percent in the West. Meanwhile, the South, Northeast and Midwest posted respective losses of 1.4 percent, 7.8 percent and 9.2 percent.
Builder Confidence Rises Two Points in June
n After holding steady for the past four months,
builder confidence in the market for newly constructed single-family homes rose two points in June to a level of 60 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since January 2016. “Builders in many markets across the nation are reporting higher traffic and more committed buyers at their job sites,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “However, our members are also relating ongoing concerns regarding the shortage of buildable lots and labor and noting pockets of softness in scattered markets.” “Rising home sales, an improving economy and the fact that the HMI gauge measuring future sales expectations is running at an eightmonth high are all positive factors indicating that the housing market should continue to move forward in the second half of 2016,” said NAHB Chief Economist Robert Dietz. 6
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Builders Outlook
National Perspective Home Building
2016 Issue 6
Most Americans Think the Housing Crisis Never Ended
One in five says that the worst is yet to come.
The Great Recession rewrote the American dream. Millions of Americans who thought they’d captured the flag instead got swallowed up by a national mortgage-foreclosure crisis.
Many of those former homeowners are now renters, competing in ever-more concentrated job markets for everscarcer affordable housing. By KRISTON CAPPS
So perhaps it comes as no surprise that most Americans say that the housing crisis never ended. In fact, one in five Americans say that the worst is yet to come, according to a new poll from the John D. and Catherine T. MacArthur Foundation. Maybe these are the same one in five Americans who say that they have sacrificed spending in order to make rent. Maybe they feel squeezed by housing markets where it costs more to rent than to own, but where households can hardly afford to do either. It’s nevertheless a staggering answer: 19 percent of poll respondents said that the worst is yet to come. And the share of respondents who gave that answer, polled between April and May of this year, is virtually unchanged from the share who responded the same way in 2015 (20 percent), 2014 (19 percent), and 2013 (19 percent). Pessimism about the housing market is not a narrow band, either. Asked about the difference between the start of the housing crisis in 2008 and where things stand today, the largest share of respondents said that we’re still in the thick of the housing crisis (44 percent). A whopping 81 percent of respondents said that housing affordability is a problem. And more than one-third of respondents (37 percent) said that housing affordability is a “very serious problem.” This share of worried Americans is also virtually
unchanged from a year ago. The poll also finds an enormous appetite for leadership from Washington, D.C. Respondents were split on how much they thought anyone could really do to solve the housing crisis, with about a third saying “a great deal,” a third saying “a fair amount,” and a third saying “just some” or “nothing at all.” But Americans think that it’s important that their leaders address the problem, no matter what. Large majorities of respondents said that it was “very important” for elected leaders to address housing affordability (60 percent) and that candidates for the presidential election were paying “not enough attention” to the issue (63 percent).
Asked about specific policies that could address housing affordability, the respondents favored them—all of them—by big margins. This portion on solutions follows verbatim from the poll: • Revise the federal income tax code so that more families with incomes from $40,000 to $70,000 receive tax benefits intended to help them purchase homes. (Total favor: 81 percent; total oppose: 16 percent) • Expand federal housing policies and programs to ensure that families earning less than $30,000 with children under age 18 receive some assistance with their housing costs. (Total favor: 80 percent; total oppose: 18 percent)
• Allow developers to build more housing units if they include units that are affordable to families making less than $50,000. (Total favor: 79 percent; total oppose: 18 percent) • Expand federal housing policies and programs to ensure that lowincome families with children under age 18 receive some assistance with their housing costs. (Total favor: 76 percent; total oppose: 22 percent) • Require that at least 20 percent of housing in local communities is affordable for families making less than $50,000. (Total favor: 74 percent; total oppose: 23 percent) • Ensure that federal programs, such as the Earned Income Tax Credit and Temporary Assistance for Needy Families, provide enough income assistance to cover housing costs. (Total favor: 74 percent; total oppose: 22 percent) • Expand rental assistance to ensure that the approximately 14 million Americans who currently qualify for rental assistance but are not receiving it, get it. (Total favor: 73 percent; total oppose: 24 percent) • Give renters a federal tax break, similar to the federal tax break homeowners currently get when they deduct the interest they pay on their mortgage. (Total favor: 70 percent; total oppose: 26 percent) Some of these proposals are fairly radical. Expanding the federal mortgage interest tax deduction to
renters is a far-reaching proposal! Voters might not love several of these ideas after (say) they went through a Congressional Budget Office scoring, but the fact that a majority of them would welcome fairly dramatic action from Congress on affordable housing should give legislators reason to take notice. It should also give voters pause that Congress doesn’t plan to do anything. It is worrying that, several years into the recovery, so many see the problem as not just persistent but worsening. They see the response from the government as not just insufficient but non-existent. There is no reason to think that federal spending on housing—which has declined over time and contributed to the painful persistence of the housing crisis—will improve any time before November or even after. While the Republican or Democratic candidate for the White House could choose to make affordable housing a more salient aspect of his or her respective campaigns, nothing is likely to change without a sea change in Congress. Congressional deadlock has only diminished what little federal support for housing exists in the budget. For many Americans, the housing crisis won’t go away.
2016 ISSUE 6
Thank you! Builders Outlook
We could not build it without you.
The El Paso Association of Builders expresses our sincere gratitude to the major sponsors of the 2016 Parade of Homes. Your commitment to our association and our builders are most valued.
First Responder Free Admission Sponsor:
Military Free Admission Sponsor:
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Enchanted Hills Subdivision Development by: Southwest Land Development Beautiful Homes by: BIC, Pointe Homes, DR Horton, CTU Metro Homes, Pacifica Homes, Deal 2 Deal Homes, Trinity Homes and Edwards Homes
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Builders Outlook On the Scene Parade of Homes Preview Party
Guests were treated to an ‘Enchanted Evening’ at the 2016 Parade of Homes Preview Party. The sold out event offered h'ordeuvres and libations aplenty to the hundreds of guests. At center stage of the event were the eight beautiful homes that comprised this year’s Parade. The west El Paso view of the Franklin Mountains provided a dramatic backdrop in the early evening as guests milled about the homes located at I-10 and Transmountain Road in the Enchanted Hills Subdivision developed by Southwest Land Development. All eight builders were on hand to greet guests, answer questions and receive well deserved compliments on their work. Hundreds of Industry professionals, friends and family made for a lively event. While the evening began perfectly, sudden dust, wind and a spattering of rain drops suddenly fell on the Parade later that night. But the ebnthusiastic crowd was not to be deterred. Visitors shuffled in and out of the homes and carried on.
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Builders Outlook
Lending by Kathryn Vasel. CNN It's now even cheaper to get a mortgage. The average rate of a 30-year fixed mortgage dropped to 3.48% -- the lowest level since May 2013, according to Freddie Mac. A year ago, the rate was 4.08%. The drop comes in the wake of the U.K.'s decision to leave the European Union. The historic vote sent the yield on the U.S. 10-year Treasury, which serves as benchmark for consumer loans, tumbling to 1.45% the week after the decision was made. The rate on the 15-year fixed mortgage also dropped to 2.78% from 2.83% last week. "Obviously it's a good time for anyone who is the market for a home purchase or had been on the proverbial fence about refinancing," said Mark Hamrick, senior economic analyst at Bankrate. The U.K.'s decision to separate from the European Union on Friday triggered a massive selloff that erased a record $3 trillion from the global stock market on Friday and Monday. Some experts expect the fallout from the vote to be a boon for the U.S. real estate market as more foreign buyers seek out a safe haven to park their cash. The drop in home loan rates can provide some breathing room for wanna-be buyers in the U.S. who have been facing rising home prices and tighter lending requirements. Low inventory and high demand have pushed up home prices throughout the country, creating an affordability issue. Home prices increased 5% in April from the year prior, according to the latest S&P/Case-Shiller National Home Price Index released earlier this week. "When you are seeing this continuous 5% increase year over year in home prices without an accompanying increase in either wages or incomes, what can't go on forever does not," Hamrick noted.
Why Brexit is great news for U.S. homebuyers
Thanks, Brexit! WellQualified U.S. Buyers Reap a Windfall By Jonathan Smoke
The surprise victory in Britain of the campaign to leave the European Union may be spurring panic across the Continent (and among some regretful British voters), but “Brexit” has left U.S. home buyers with a very definable windfall: mortgage rates that are now the lowest they’ve been in more than three years. The average 30-year conforming rate on Monday was 3.46%, very near the lowest average rates recorded in late 2012. Lower rates produce lower monthly payments and greater buying power— those who are well qualified can afford a home that’s 8% more expensive than at the beginning of the year. That’s more than enough to offset the rise in prices during that time. And that’s why Brexit has just increased the opportunity to lock in a low associated mortgage rate for a new home. And maybe added a bit of urgency to the proceedings. Low mortgage rates were already driving a strong real estate market this year—right up there with pent-up demand from first-
time buyers, move-up buyers, and retirement buyers. And more and more real estate players these days are individual investors. Those investors—mainly wealthier and older households—are looking at single-family rentals as a reliable alternative to more traditional financial investments that, frankly, are flat-out lousy right now. Those low rates have a downside, though: They motivate lenders to be tougher on credit restrictions. As mortgage rates declined this year, we’ve seen that credit access has gone down, too. That’s because lenders have become more riskaverse as their profit margins have been whittled down by the double whammy of lower rates and higher origination and servicing costs. On the whole, lenders prefer refinances, which present less risk and will likely surge again to capitalize on the low rates. The tighter credit environment limits the first-time buyer pool and favors those who can avoid financing altogether. Or those who have grade-A credit. Or maybe those who can afford to shell out 20% or more on a down payment. So all this gives individual investors an advantage over younger buyers. But both types of buyers tend to look at similar, more affordable properties. And while some are chattering about whether the international economic tumult might push the U.S. Federal Reserve to cut interest rates at its next meeting, remember this: It doesn’t really matter what the Fed does. What matters is the global movement of money. Got that? Bottom line: U.S. investment vehicles are becoming even more attractive to foreign investors. So as foreigners line up to buy the popular U.S. Treasury bonds, their prices go up but their yield (interest rate) goes down. The yield on the 10-year Treasury bond correlates with mortgage rates. Mortgage-backed securities are another investment whose
2016 issue 6
popularity also pushes mortgage rates down. But before we all put up banners, hire marching bands, and hold parades to celebrate the United Kingdom’s bold move, let’s take a big pause. Brexit is not likely to be a boon to all parts of the residential real estate market. The U.S. economy will now likely see a bit less growth than had been expected for the year, as the energy sector and manufacturing are affected by a lower price of oil and a stronger dollar. Likewise, the stronger dollar will dilute buying power for many international buyers (particularly the Brits), affecting such markets as Los Angeles, Orlando, New York, Miami, and Tampa. And in general, we’ll continue to see weakness at luxury price points as long as the financial markets react to the uncertainty with lower stock values. According to the 2015 Home Buyer and Seller Profile Report from the National Association of Realtors®, 20% of last year’s buyers sold stocks or used retirement funds for their down payment. Declines in portfolios will likely disrupt sales and closings, especially at higher price points. If we then see stock indices recover, the effect should diminish. Those already winning in the real estate market are getting a bigger boost from Brexit. Sellers in the right locations and price points will continue to have the upper hand as investors and first-time buyers fight for limited inventory. Well-qualified buyers will be able to capitalize on historically low mortgage rates. And developers and builders should be able to take advantage of those lower rates to line up land and lots to fuel more inventory expansion down the road.
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El Paso Development News
Builders Outlook 2016 Issue6 www.elpasodevnews.com
New Westside Tower Stirs Up Opposing Views By Armando Landin Supporters of a proposed 22-story tower in West El Paso have set up a Facebook page and online petition that urges City Council to approve the ambitious project unveiled in April. Meanwhile, opponents have also setup an online petition calling for the City to deny the required zoning change for the project unless the height of the tower is lowered or it is moved to Downtown El Paso. One of the developers behind the project, Josh Meyers of Meyers Group of Florida, met with both sides at a community meeting held by City Representative Peter Svarzbein on Wednesday. Mr. Meyers heads Meyers Group's El Paso office and lives in the same area as the proposed tower. The supportive Facebook page is called "Rise El Paso" with the corresponding online petition stating: "This innovative mixed use building will give our citizens a place to live, work, and play. Let’s take actions that promote the economic vitality of our beloved city and improve our quality of life. The building will be LEED certified and is designed to blend in with the
Northgate Transit Project To Break Ground
By Armando Landin Northgate's transit terminal is the first part of the larger Metro 31 transit oriented development planned in Northeast El Paso. Dantex Construction of El Paso submitted the winning bid for the $10.6 million project and will have 350 days to complete the project. There were
colors and hues of our natural environment. It does not effect views of our beautiful mountain range. We should foster an environment that encourages entrepreneurs and development. Encouraging investment encourages economic growth which increases the employment rate and increases average income." Meanwhile, the petition set up in opposition is called "Fight the HighRise" and states: "Luxury apartments and a hotel near the #1 rated ballpark, beautiful San Jacinto Plaza, and the arts district — that's progress. The city has spent millions revamping downtown, bettering the quality of life for El Pasoans and adding value to El Paso. A high rise in a residential neighborhood (a suburb in every other city in the country) will be giant step backward." As of this writing, the supportive petition has 669 signatures while the petition in opposition of the project has 336. Petition in support: Support the Shadow Mountain Mixed-Use Development Project
Petition in opposition: Fight the HighRise: Keep Our Mountains Tall The Shadow Mountain project will create a 22-story mixed use tower that includes 228 apartment units, 219 hotel units, and 42,000 square feet of retail space. A five story garage will provide over 700 parking spaces for the development.
The tower will be located at 201 Shadow Mountain Drive, just east of the Sunland Park Drive and Mesa Street intersection. The rezoning application was unanimously approved by the City Plan Commission in May. It is expected to be considered for final approval by City Council in July.
four bids submitted in all. The project includes constructing a transfer center that will be the terminus for the Dyer Corridor of the Brio Rapid Transit System (RTS), running from Downtown El Paso to the Northeast side of the city. The transfer center will consist of a terminal building with a two story, 181space parking garage, 16,000 square feet of retail space on the ground floor, and a circular public plaza.
A public art piece called "Spire" will shoot up from the center of the plaza. Heavy landscaping is also included in the project including 137 new trees, 2,359 shrubs, 581 ground cover plants, concrete benches and planters, and decorative lighting. The Northgate Transfer Center is considered the catalyst for the Metro 31 development, which will create a smart growth, mixed-use community on the vacant property adjacent to the
transit terminal site, formerly the home of Northpark Mall which was demolished years ago. The City of El Paso awarded the contract from Metro 31 to Hunt Development Group of El Paso in late 2014. There has been no movement since then with Hunt presumably waiting for the adjoining transfer center to be completed before starting its project. (
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Builders Outlook
2016 issue 6
BUILDERS: Are you searching for customers who are searching for a new home?
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2016 Issue 5
Association News & Events
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Builders Outlook
If you have an event or meeting that you would like to share with EPAB members, please submit your information to: margaret1@elpasobuilders.com
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UPCOMING EVENTS
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Realtors tour Parade of Homes
Builders Outlook
food truck serving fresh made tacos to order. “I have a good time at these events and I ask my staff to help host which they do an amazing job at,” he continued. Another home builder J. J. Vasquez of Pacifica Homes felt the same way. “You know we appreciate that the agents come out and look at our home and we hope that they walk away with more information on all of our homes, not just this Parade home,”. Realtor Mickey Molina said that this is
The El Paso Association of Builders hosted area Realtors and agents on Thursday, June 30 at the Parade of Homes. All the homes were open for this special two hour event that featured not just the beautiful homes but a good networking opportunity for the agents and builders. “We appreciate that the agents came out to see the homes and get information on our projects,” said Carlos Villalobos. His home hosted a
2016 issue 6
a great time to find out information and be prepared for that customer looking for something different. “Every time we come to a Parade tour we find new things, new builders, new stuff. We like the fact that we can come here without our customers to make sure we are informed first,” he told the Outlook. The event is held specifically for the Realtor / agent so that they can familiarize themselves on the builders. It is especially true for those agents
It’s Time for a 401(k) Tune-Up
Expert Advice
who like to focus in one area of the market, like the east side, and don’t know much about the Westside. “I can tell when the agents are not familiar with our area and I’m glad that we can offer them some new selections for their customer,” said Danny Andrus of Trinity Homes. The Parade of Homes is located at Enchanted Hills Subdivision, northeast corner of Trans Mountain and I-10 west. For information on the Parade visit www.elpasobuilders.com.
Joe Bernal
Employer Benefits of El Paso
Associates Council
Associates make a diffference
John Dorney
Associates Council Chair
I appreciate the comments I have received on my article from last the issue. It’s important to know the rules as you install prewire. Almost all homes are now prewired to accept the Wi-Fi or internet, maybe the security system or surveillance features. This month I want to tell you that I am
amazed at the beautiful homes in the Parade of Homes. I’m especially proud of our Associate members who are suppliers and vendors to the builders. There’s some amazing examples of really great looking, functioning materials being used. For instance the flooring. It was a few years ago that everything was carpeted or you had hard wood flooring, or you had ceramic tile that had some kind of pattern. In these homes the flooring takes on a real wood look but its ceramic tile, and that tile isn’t only on the floor it’s on the walls. The use of this material is growing and it looks terrific. There’s so much to see, to touch and to talk about after seeing these homes that I could write a long column on it, but
what I really want to do here is to thank all the Associates for their work. I’d also like to thank everyone who
has volunteered for ticket booth duty. Without you we couldn’t have the show.
El Paso Disposal
772-7495
Builders Outlook
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2016 Issue 5
6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038
■ executive oFFicers
PresideNt
Carlos Villalobos
NatioNal associatioN oF Home builders (800) 368-5242
vice PresideNt Don Rassette
texas associatioN oF
secretarY/treasurer
builders
Kathy Parry
(800)252-3625
associates cHair John Dorney
ececutive vice PresideNt Ray Adauto
Past PresideNt Edgar Montiel
membership retentiion Patrick Tuttle
Finance committee Kathy Carrillo
Henry Tinajero
■ advisorY to tHe board
Jay Kerr, Firth, Johnston, Bunn & Kerr
James Martinez, Law Office of James Martinez
2015 builder member of the Year edgar montiel
Palo Verde Homes 2015 associate of the Year Interceramic Tile
Mark Dyer
Wayne Grinnell
Don Henderson
Chester Lovelady Cliff C. Anthes Anna Gill
Brad Roe
Walter Lujan, Dawco Home Builders
Sal Masoud, DRE Development
Joe Bernal, Employer Benefits of El Paso Linda Troncoso, TRE & Associates
Bret Thompson, Foxworth Galbraith Lumber Ted Escobedo, Snappy Publishing, LLC Patrick Tuttle, Legacy Real Estate Sam Trimble, Lone Star Title
Luis Rosas, HuB International Gilbert Pedregon, GECu
Gregg Davis, First Light FCu ■ tab state directors
Randy Bowling Greg Bowling
Sam Shallenberger ■ NatioNal directors
Bobby Bowling IV.
Demetrio Jimenez
Now more than ever, El Paso home buyers are planning for the future.
E H Baeza
Bud Foster, Southwest Land Development Services
Samira Gonzalez, ICoN Custom Homes
Give your customers the ‘option of the sun’
Rudy Guel
Robert Najera, Joseph Custom Homes
Jason Cullers, Cullers Homes
915-208-9313 602-708-7560
Honorary life members
Leti Navarrete, Dream Homes/Bella Homes
Edgar Garcia, Bella Vista Cutom Homes
Total Customer Satisfaction
Bradley Roe
Antonio Cervantes, BIC Homes
Leslie Driggers-Hoard, Homes By Design
Residential Specialists Tract Homes • Custom Homes
2015 John shatzman award
■ board oF directors
Fernando Torres, CTu Metro Homes
For All Your Electrical Needs
Past Presidents
committed to serve
Greg Bowling
Kelly Sorenson Mark Dyer
Mike Santamaria
Bobby Bowling, IV Rudy Guel Anna Gil
Bradley Roe
John Cullers
Bob Bowling, III
Doug Schwartz
Hershel Stringfield
Randy Bowling Robert Baeza
Edmundo Dena Pat Woods
ePab mission statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization. © 2015 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Ted Escobedo, Snappy Publishing, LLC ted@snappypublishing.com El Paso • Texas • 915-820-2800
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