Monday Morning Briefing Letter - 03/01/2010 (Plain Text Version)

Bob Jones, NAHB Chairman and
Jerry Howard, Chief Executive Officer

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Significant housing shortages could be on the horizon,

as the economy strengthens and household formation rates return to normal, particularly in the area of market-rate rental apartments.

According to economists cited in the headline story of the latest edition of Nation's Building News, including NAHB Chief Economist David Crowe, we can expect an eventual surge of demand from echo boomers, who comprise an even larger group than their baby-boomer parents. Meanwhile, NAHB projects that the industry will need to deliver 16 million homes over the next 10 years just to keep pace with demand. And as excess inventory gets worked off – likely by the end of 2012 – the long-run demand for housing will average approximately 1.5 million single-family and 300,000 multifamily units annually, or about 1.8 to 1.9 million total starts. This compares to the 591,000-unit pace of new construction that we saw in January. (Note: this year, production is expected to rise to 45% of normal, with a further increase to 67% of normal next year.) Read much more about our economists' projections in the latest edition of Nation's Building News.

Federal weatherization and retrofit programs may hit a roadblock

when the EPA's Lead Paint: Renovation, Repair and Painting Rule goes into effect on April 22, say the NAHB Remodelers. That's because the new EPA regulation will require contractors working on projects that disturb lead-based paint in homes, child-care facilities and schools built prior to 1978 to be trained, certified and in compliance with specific work practices to prevent lead contamination. At the same time, EPA has fallen behind on approving training programs so that contractors can complete the individual certification requirements. All together, an estimated 200,000 remodelers, painters, electricians, HVAC technicians and others working in targeted homes and buildings need to be certified by April 22, yet there are only about 120 training companies that have been approved so far. Thus, if the Administration doesn't delay the rule or provide a safe harbor for firms making an effort to comply with the regulation, the effort to stimulate jobs growth with weatherization incentives will fail, warns NAHB Remodelers Chair Donna Shirey.

One good thing is that NAHB members are definitely ahead of the curve in terms of their awareness of the new rule and their preparations for its implementation. In NAHB's latest Remodeling Market Index survey, fully 90% of respondents said they knew that the EPA's new lead paint rule goes into effect on April 22. Of those, 81% said they learned about the rule from trade associations like NAHB, and only 2% said they learned about the rule from the EPA. Such results indicate that EPA still has a long way to go in educating remodelers, subcontractors, consumers and others affected by the regulation. Read more in Nation's Building News, or send your questions to MondayMorningQuestions@nahb.org.

QUOTE OF THE DAY: "NAHB has done a great job of educating the members and the industry at-large about the lead paint regulation," says NAHB Remodelers Chair Donna Shirey, president of Shirey Contracting in Issaquah, Wash. "Our members are ahead of the curve in awareness, obtaining training and preparing for the rule." [return to top]

A disappointing report on new-home sales in January,

released by the U.S. Commerce Department on Feb. 24, revealed that such activity fell to its slowest pace on record last month, with an 11.2% decline to a seasonally adjusted annual rate of just 309,000 units. Those results are indicative of how fragile the economic and housing recovery is right now, and the uncertainties that continue to weigh on consumers, particularly with regard to job security. The bottom line, said NAHB Chief Economist David Crowe, is that while the overall economic picture has brightened somewhat, many Americans have yet to see much evidence of improvement first-hand, and are therefore still reluctant to consider a home purchase. At the same time, competition from below-market-priced foreclosed and short-sale homes poses an additional challenge to the new-homes market. Looking to the future, Dave indicated that "Although we continue to expect a boost in overall sales activity prior to the expiration of the $8,000 and $6,500 home buyer tax credits at the end of April, unseasonably poor weather across much of the country may delay the full impact of those incentives until closer to the deadline." Read our press release for more, or see the government's official report online. [return to top]

A free Webinar on Chinese drywall happens March 11,

and that's where NAHB members can get up-to-date information on testing and remediation protocols, insurance ramifications and other helpful information regarding this sometimes problematic product. The Webinar is called "Evolving Solutions to the Corrosive Drywall Crisis," and will be held from 12:00-1:30 EST on Thursday, March 11 and hosted jointly by NAHB and Marsh, an insurance broker and risk advisor group. Log on to hear a panel of experts discuss such topics as: what builders can tell their customers and home owners; how builders can answer customer and home owner questions; the appropriate testing protocol to determine the presence of corrosive drywall; and how recent actions by the Consumer Product Safety Commission and HUD may affect builders. There will be a question-and-answer session at the end of the event — submit your questions in advance to kathy.hill@marsh.com. To register online, visit this link. For more information or to register by phone, contact Kathy Hill at Marsh, at 918-586-7938. Your NAHB contact is David Jaffe, at 800-368-5242, x8317. [return to top]

Three new Biztools business guides are available free

to NAHB members through the NAHB Web site, and we wanted to make sure you're aware of these handy resources. Created to help you manage your business more effectively and increase profits, the guides offer helpful tips on technology, business planning, ensuring the financial health of your business, and more. They are produced by the NAHB Business Management and Information Technology Committee and can be found in the business management resources section of our Web site. These three concise guides are written by experts in the field and can be downloaded at no charge at www.nahb.org/bbg. They include:

1) Business Management for Home Builders: Poising for Recovery as the Market Turns

2) Financial Management for Home Builders: Measuring Key Metrics to Plan Your Path

3) Information Technology for Home Builders: Using Technology to Better Market Your Business

Of course, these are just the latest great Biztools to be produced by NAHB. The 2006, 2007, 2008 and 2009 builder business guides are also available to NAHB members for free, and can be downloaded in PDF format using this link. [return to top]

HBI certification assessments are now available online

for carpentry, house wiring and HVAC, thanks to a special partnership with NOCTI/The Whitener Group. All certification assessments by the Home Builders Institute (HBI) are structured around skill standards set by NAHB industry professionals and educators. They are appropriate for secondary, post-secondary and industry programs. Individuals who meet the industry-based benchmark can be certified at entry, semi-skilled and skilled levels. Additional certifications will be added in the 2010-2011 academic year for basic principles of construction, facilities maintenance, masonry and plumbing, so stay tuned for these new options. For information on costs, an overview of assessment content and steps for administering the assessment, visit www.hbi.org/certification or www.nocti.org/hbinahb.cfm. [return to top]

Registration for Spring Board and the Legislative Conference

is now open. These combined events take place from April 18-23 in Washington, D.C., with the Legislative Conference scheduled for Wednesday, April 21. For member registration and other meeting related information, please visit www.nahb.org/SpringBoard. Information listed at this location includes:

1) A link to online registration for attendees
2) Downloadable registration form
3) Marriott Wardman Park hotel Web page link
4) Attendee housing information
5) Legislative Conference – Save the Date card
6) Schedule of meetings for the week
7) Leadership schedule & grid
8) Airline discounts

There is also an opportunity for members to register for "Train the Trainer" and Spokesperson training while registering online for the Spring Board Meeting. If you have a question about hotel space for the Board meeting week, please contact Renee Thomas at 800-368-5242, x8189. If you have registration-related questions, send them to Chris Klosterman at x8610 or Leslie Shimer at x8181. [return to top]

NAHB bids a sad farewell to Jeffrey J. "Teg" Tegeler,

a respected member of the NAHB Board of Directors, log home builder and past president of the Greater Cedar Rapids HBA and the Iowa HBA. Teg passed away at the young age of 57 on Feb. 2, following a courageous battle with cancer. After graduating from Morrison Institute of Technology in Morrison, Ill., he founded Tegeler Design & Remodeling in Manchester, Iowa, and expanded the business to Cedar Rapids before selling it in 2005. He then turned his focus to home building, with a specialty in log homes. It was a dream come true for him to be able to restore a 100-year-old barn and turn it into an exquisite residence, which was a featured home in the Cedar Rapids 2007 Parade of Homes. Teg also served his community as a volunteer firefighter for 15 years. We are truly saddened to lose such a fine friend and colleague, and our thoughts are with his family at this very difficult time. [return to top]