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Metro Building Outlook: Home building rebound would buoy economy

November 17th, 2008

Everyone is painfully aware of the economic downturn affecting our region and country. What started as a housing slowdown has spread across many industries.

What is becoming more obvious to a lot of people is how much the housing industry impacts so many other industries. Fewer homes built or remodeled means fewer jobs for title professionals, loan officers, real estate agents, framers, carpenters, roofers, landscapers and dozens of other professions directly connected to the construction and sale of housing.

It also means less lumber is purchased, so lumber yards and loggers suffer. It means fewer building materials are transported across the state or country, so truck drivers and truck stop owners suffer. It means fewer marketing dollars are spent, so those who work for ad agencies, newspapers, TV and radio suffer.

The housing slowdown also affects government. Fewer homes mean fewer development approvals and permits are being sought, which means engineers, planners, architects and city and county staff in the planning and building departments suffer. Far less revenue coming in to the economy means we all suffer.

As one local elected official recently said, “I have long felt that the building of homes is one of the most effective job development tools that exists. It’s not only the labor to construct the home, but also the labor to manufacture all of the components, such as carpet, windows, appliances and so forth. It is great for the economy, and provides one of the most highly prized commodities there is — a home.”

The National Association of Home Builders recently released an annual study that estimates the direct economic impact of new residential and remodeling construction, including the number of jobs and the government revenues generated. In 2008, NAHB estimates that:

Construction of 1,000 new single-family homes creates 3,049 jobs and generates more than $89 million in tax and other revenues for federal, state and local governments.

Construction of 1,000 new multifamily rental units creates 1,155 jobs and generates more than $33 million in tax and other government revenues.

$100 million worth of residential remodeling activity creates 1,109 jobs and generates more than $30 million in tax and other government revenues.

Read more here….


New Home Characteristics

November 15th, 2008

New homes today are larger, far more energy efficient and have more amenities than ever before. The average new single-family home built in 2006 was 2,469 square feet, 45 percent larger than a typical home built in 1976.

The percentage of new homes with 2.5 or more baths in 2006 was 59 percent, compared to just 22 percent in 1976. Thirty-nine percent of new homes built today have at least four bedrooms, compared to just 23 percent for those built in 1976. Today, nearly 90 percent of all new homes have central air conditioning – vs. less than 50 percent in 1976.

More than 80 percent of modern homes have at least a two-car garage, up from 59 percent in 1976. And today’s homes are built for the wireless age, with high-speed data access, modular wiring systems and multiple telephone lines.


Greener Pastures for America’s Homebuilders?

October 26th, 2008

A recent survey of the 13 largest publicly traded U.S. homebuilder entitled Greener Pastures for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industy found that, while every major homebuilder has incorporated some environmental and efficiency programs and products into some of their new homes, none has fully embraced the emerging market of sustainable building design and construction. This study of the sustainable policies, programs, and performance of the nation’s largest homebuilders revealed that the industry has a long way to go before any of the companies can truly claim to be addressing the risks and opportunities inherent in the environmental and climate change dilemmas.

Local builders that ranked among the nation’s Greenest large-scale homebuilders include D.R. Horton and Centex.


Remodeling 101

October 20th, 2008

Industry professionals guide you through the complete remodeling process in this FREE in-depth seminar.  Seats are limited, call the HBA at 503-684-1880 to reserve your seat today!

Saturday, October 25th 9am-noon at the JMG Conference Center at the Home Builders Association (15555 SW Bangy Rd, Lake Oswego, OR 97035). Click here for more information….


Builders Surplus Sale

September 29th, 2008

sept-2007-040Returning to the Portland Fall Home & Garden Show this year is the Builders’ Surplus Sale, where Portland-area builders and remodelers bring their surplus materials to sell at amazing prices. Whether it’s windows, doors, appliances, roofing material, wallpaper, light fixtures or flooring – if you’re looking for a bargain, this is the place to be. This year look for great deals on tile, tile and more tiles. Thinking of a doing a fall home improvement project? You don’t want to miss the best prices on materials anywhere in the Portland area.

The Portland Fall Home & Garden Show runs Oct. 2-5 at the Portland Expo Center. Celebrating its 20th anniversary as a fall favorite home owners and gardeners will be delighted to find expert advice, simple solutions and inspired ideas from top remodelers, decorators, landscapers, and suppliers. The Builders’ Surplus Sale will be open during normal show hours, Thursday through Saturday, from 11 a.m. to 8 p.m. and Sunday from 11 a.m. to 6 p.m.

sept-2007-046“This is a wonderful opportunity for the do-it-yourselfer to get quality materials at great prices,” said Hallie Gentry, Remodelers Council manager. “We’ll have such an incredible selection of items including home lighting, paint, tile and a large selection of doors and windows. There really is something here for everyone.”

Items left at the end of the show will be donated to The Rebuilding Center, the largest non-profit used building materials resource in North America. It is a popular destination for those interested in building with affordable, environmentally low impact materials.


A Believer in Appeal of Brick

September 28th, 2008

From the Oregonian by Connie Potter 

Builders use brick for all kinds of reasons, from its strength and durability to the value it adds.

But to Jerry Reeves, the bottom line is: Brick is beautiful.

Reeves, owner of J.C. Reeves Development & Construction, combines brick and cedar siding on virtually everything his company builds. It’s his signature look.

One of his newest developments, on Sitka Court in Tualatin, features six luxury homes, all with brick and cedar exteriors, used in differing combinations for unique looks. The homes range from about 3,500 square feet to more than 4,500 square feet, with prices of $790,000 to $995,000. A gated entrance is anchored by a brick wall that borders the project.

There’s a perceived value in brick that buyers appreciate, said Reeves. And there are benefits beyond beauty. Brick is durable and won’t warp, rot or burn. It never needs painting. Because of its dense mass, it can help moderate temperature extremes and even lower heating and cooling bills.

Reeves, who started his company in 1980, also appreciates the feng shui qualities that brick and stone and other natural products bring. Feng shui is the ancient Chinese practice of arranging home or work environments to promote health, happiness, and prosperity. Natural products have an energy that man-made products don’t, he said.

Buyers of his homes are drawn to the classic look of brick and the fact that natural products are proven, said Reeves. There are no questions about whether the product will wear well over time or whether it will be adversely affected by the elements.

“That’s a huge benefit to them,” he said.

Although brick adds beauty and interest to the architecture of a home, it also adds to the cost. It takes more time to build a brick house, said Reeves, and engineering costs are higher because of the extra weight. On the plus side, many insurance companies offer lower fire insurance rates for brick houses.

While people use various adjectives to describe brick homes — classy, timeless, high-quality, to name a few — Reeves said many buyers don’t know exactly what it is they like about brick. They just know that they like it.

“When they come up to a home and see brick and stone, it has a higher perceived value,” he said, “and they feel better about their home.”


Metro Building Outlook: Builders take brunt of slow market

September 24th, 2008

by David Nielsen, chief executive officer of the Home Builders Association of Metropolitan Portland from the New Home Monthly section of the Oregonian 

One of the biggest issues facing the housing industry right now is challenges within the mortgage banking markets. Consumers have found tighter credit requirements and less funding available for new home loans, as well as for home equity loans for home improvement or remodeling projects.

However, the situation is much more difficult for builders and others in the industry.

At risk of oversimplifying, the problems boil down like this. Falling land values, especially in the Sun Belt regions, have caused banks to have to reassess their portfolios — some for pure business reasons, others due to federal regulatory requirements.

One of the most common business decisions banks make is to sell off their mortgage positions in land holdings. However, given the fact that demand is much weaker, banks sell them for far less than their note value. This creates a new value that is substantially lower, and thus brings down other property values.

The downward spiral becomes self-fulfilling, and banks, builders and homeowners trying to sell or refinance have even bigger problems.

Builders have responded to the slower housing market by cutting production. Substantially. I know many small builders who haven’t built anything new in several months or more than a year. Large builders are building just enough to be able to continue their operations.

The building permit stats that accompany this article show how much production has declined over the last year. While remodeling activity remains pretty strong, its market cycle always lags new-home activity, and I’m seeing signs of a slowdown in remodeling, too.

Good Signs 

Interest rates are low and have dropped even more in the last couple of weeks. Financing is available for people with good credit and the ability to make a down payment. The region is still growing. And new-home production has dropped considerably.

In fact, once the market does turn around, we could very well see the exact opposite of what happened a year or so ago — the switch that turned off so quickly could very well turn on full blaze again. The reason is that since new-home production is down so much, once greater numbers of people start buying again, there will be a lag before supply can ramp back up. That means demand will suddenly outpace supply. And values will rise again.

There are some positive signs already. The housing stimulus bill passed by Congress this summer gives a huge signal that the federal government understands the importance of getting the housing market back on track. So does its recent takeover of Fannie Mae and Freddie Mac, which should help bring much needed stability to the market.

The Home Builders Association of Metropolitan Portland is working at both local and national levels to improve trends in the housing and banking industries. Locally, we are trying to improve communications between builders and banks and also help our members make the best decisions possible to get their businesses through this market cycle.

Nationally, we are working closely with the National Association of Home Builders (NAHB) in their efforts. Key NAHB staff and leaders have met with the Federal Reserve, the Office of Thrift Supervision and top congressional and presidential aides to find solutions that help the banking and housing industries.

Many leaders from our local HBA will be attending national meetings next week in San Diego, where this will be the top issue for our members and industry. It’s what we all need — the housing market impacts our local economy tremendously. Based on what I’ve seen already, I believe we’re moving in the right direction.


Legend Homes Starts Building Again

September 15th, 2008

Today Legend Homes will put masons, framers and drywall hangers back to work at four subdivisions in Tigard, Hillsboro and Corvallis. (YEAH!!!)  It’s the first time Legend will start a new home since its Chapter 11 filing in June.

Read more here…


Home Builders and Earth Advantage Launch Programs to Help Builders Go Green

September 15th, 2008

In April, Oregon’s new residential building code took effect, raising energy efficiency requirements to equal EnergyStar standards for new homes. To qualify for an EnergyStar rating a home must be 15 percent more efficient than the 2004 international residential code for buildings.

The new code aims to reduce home energy use by 10 to 15 percent in the state by 2015 in order to help meet the state’s greenhouse gas reduction goals of 10 percent below 1990 levels by 2020.

State building codes officials also expect to continue increasing efficiency and sustainability standards over the next decade. Industry associations and nonprofits have taken notice and are starting to offer more training for builders that want to be prepared.

The Oregon Home Builders Association plans to launch a pilot project this month with the city of Portland to build eight to 12 high-efficiency homes throughout the city to serve as models for green building practices. Also, Starting Sept. 26, Earth Advantage will offer a six-month certification course in green building for appraisers, architects, builders, real estate agents, inspectors and other building industry professionals.

Story from The Daily Journal of Commerce.  Read more here…


What is Cohousing?

September 3rd, 2008

According to the Cohousing Assocition of the United StatesCohousing communities are old-fashioned neighborhoods created with a little ingenuity. They bring together the value of private homes with the benefits of more sustainable living. That means common facilities and good connections with neighbors. All in all, they stand as innovative answers to today’s environmental and social problems.

Although Cohousing communities may seem radical to some they are becoming more and more mainstream.  As a matter of fact there are at least 3 cohousing projects under construction right now in the Portland Metro area.  Plus, later this month a symposium is scheduled at Portland City Hall to discuss collaborative housing developements and a community-based approach to design and developement.

Read more about cohousing in the Oregonian…

and the Daily Journal of Commerce….