Monday Morning Briefing Letter - 06/16/2008 (Plain Text Version)

By Sandy Dunn, NAHB President and
Jerry Howard, NAHB Executive VP and CEO

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Maintaining an adequate flow of credit to small builders

is a primary objective for NAHB as recent evidence points to tougher conditions in the market for acquisition, development and construction (AD&C) financing.

During our Board of Directors meeting this spring, it was noted that lenders are increasingly asking builders and developers to pay down their loans – actions that are viewed as especially threatening to the small businesses that constitute the core of NAHB membership. Indeed, for builders who have been caught in the most bruising cyclical housing downturn in generations, being required to provide lenders with additional capital to keep projects going can impose formidable challenges on struggling businesses, especially in the hardest-hit parts of the country where sales have floundered. As a result, NAHB has intensified its efforts to reach out to decision makers in the nation's capital regarding credit conditions within our industry, while our Economics Department is stepping up its surveying efforts with quarterly polls of the membership on AD&C lending and more detailed monthly surveys of builders' experiences with outstanding loans.

NAHB has been working relentlessly on Capitol Hill for enactment of housing and economic stimulus legislation, and association leaders have been meeting behind the scenes to discuss the urgent need for keeping credit flowing as housing moves into position to stage a slow recovery beginning toward the end of this year. In recent weeks, NAHB delegations have met with Federal Reserve Board Chairman Ben Bernanke and the heads of the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision. At each of these meetings, we have conveyed the important message that the credit squeeze on builder loans threatens to prolong the housing downturn, and we have asked officials to work with us to ensure that AD&C loans for builders remain available at a reasonable cost. Read more in the June 9 edition of NBN Online. Contact: Dave Ledford, x8265.

NAHB Member Benefit: Small builders who are contacted by their lender can consult a valuable online resource that NAHB has made available to its members. The "Builder's Guide to Working With Lenders to Resolve AD&C Problems" is based on advice from banking experts and experienced builders on actions and options builders can pursue to achieve the best outcome on outstanding AD&C loans.

Keeping up the pressure on Congress to act fast

on housing and economic stimulus legislation, NAHB continues to run hard-hitting, full-page ads in inside-the-beltway publications that are widely read on Capitol Hill. Our latest ad (at right), will be running in this week's editions of National Journal, Roll Call and Politico, urging lawmakers to take action on a much-needed bill before their July 4 recess. This is just the latest in a series of advertisements that NAHB has been running to get our messages front-and-center and build recognition of our cause in Congress. To see our complete ad campaign, go to www.nahb.org/congress. Contact Jay Shackford (x8406) for more information. [return to top]

NAHB resources to help get you through the tough times

are available for our members at www.nahb.org/. These resources are designed to help the small business owner, and are accessible free of charge to NAHB members. The reason? We know that information is key to the survival of your business! Among the many great resources at your fingertips right now are:

Back to Basics Toolkit for a Challenging Business Environment. Resources in the toolkit are designed to help members fine-tune their business operations, apply sound business management strategies and boost their sales and marketing operations. Topics of special relevance to today’s marketplace include information on construction financing and mortgage options.
Myth Buster. This section provides local HBAs assorted materials to counter negative reports in the news media, promote the local market and ensure that news reporting is accurate. The section includes fact sheets, talking points on specific media topics, a regularly updated chronology of the credit-crunch, op-eds, talking points, market forecasts, building permit data for states and metro areas, and press releases.
Biz Tools. This section is an easily navigated library of articles, tip sheets and other resources designed to help builders manage their businesses more efficiently and increase their profits. Materials cover strategic planning, financial management, information technology, customer service, human resource management and more. Information has also been especially compiled for custom builders.
E-newsletters. In addition to the weekly Nation’s Building News and Monday Morning Briefing, NAHB produces 37 other specialized newsletters on a regular basis in such areas as the remodeling market and multifamily trends. Check these out!

NAHB's Builder 20 Clubs are also great resources, and are among our association's most effective networking forums. They bring together organized groups of builders from different parts of the country who have similar business interests and profiles so that members can share their observations on what's working and what's not in their individual markets. It's a great way to get ideas on how to boost your business using tried-and-true techniques. Find out more about the 20 Clubs by emailing 20clubs@nahb.com.

NAHB Member Benefit: While NAHB's advocacy team knocks on doors and keeps the phones ringing off the hook on Capitol Hill to get housing stimlulus legislation passed, we also know that our builder members need help weathering the economic downturn right now. That is why NAHB has developed a massive number of online and other resources and made them as accessible as possible to you. See NBN Online for more information. [return to top]

Builder confidence in the rental apartment market dropped

sharply in the first quarter of 2008, according to the latest results of NAHB's Multifamily Rental Market Index (MRMI). While oversupply is not as serious of a problem for multifamily rentals as it is for condos, multifamily builders are nonethelss cutting back on new production. Components of the MRMI that track current supply conditions for low-rent (federally subsidized) and market-rent apartments stood at 31.7 and 34.4, respectively, in the first quarter, down considerably from their 46.6 and 53.5 readings at the same time a year ago. Asked about their expectations for the next six months for market-rate apartments, respondents' confidence remained steady from the previous quarter at 51, but was still down 12 points from the beginning three months of last year. "Rental vacancy rates are rather high and the demand for rental apartments is being held back by various economic conditions – including a weakening job market and record-high prices of food and energy," noted NAHB Chief Economist David Seiders. Read more in our press release, or contact Ann Marie Moriarty, x8350. [return to top]

Green building news:

Audio Seminar: NAHB held an hour-long teleconference entitled "Green Building Is Good Business" on June 11. The event featured a panel of building industry experts explaining the benefits, costs and liabilities, and laws and regulations surrounding green building. See the next NBN Online for complete coverage of the conference, or visit www.nahb.org/gobuildgreen for more info. Contact: Augie Cruz, x8472.

NAHB Names Green Building Award Winners

NAHB Honors Developers for "Building With Trees"

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Education calendar

Aug. 5-9

Executive Officers Council Seminar

Providence , R.I

Oct. 2-3

Leadership Training Conference

Des Moines , Iowa

Oct. 3-5

National Conference on Membership

Des Moines , Iowa

Oct. 24-26

Custom Builder Symposium

Austin , Texas

Nov. 16-19

Building Systems Councils SHOWCASE

Memphis , Tenn.

Nov. 20-22

State and Local Government Affairs Conference

Memphis , Tenn.

2009

Jan. 20-23

2009 International Builders' Show

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