TOP 10 REASONS TO DO BUSINESS WITH AN ACTIVE ASSOCIATE MEMBER

1. They support the industry at the local, state and national levels.

2. They volunteer time, talent and treasure to help the association accomplish its goals.

3. They recruit their colleagues and business contacts to become members.

4. They serve on committees and councils gaining valuable networking opportunity while helping to advance the association’s mission.

5. By doing so, you increase the value proposition for all membership in our HBA.

6. They are strong supporters of local and state PACs and BUILD-PAC.

7. They are a major source of non-dues revenue through sponsorships, advertising, etc.

8. As industry partners, they are a valuable resource for business and management tips.

9. They are heavily invested in your business success: You win, they win!

10. Why wouldn’t you do business with a member?

Homeowners Don’t Want to Sell, So the Market for Brand-New Homes Is Booming

from page 11

In the spring of 2022, rapidly rising mortgage rates abruptly slowed buying. Prices in Utah and around the U.S. had risen so rapidly that many buyers were priced out.

“It was the third weekend in May last year, and literally the lights just turned off,” said Ryan Smith, president of home building for Denver-based Oakwood Homes, a unit of Berkshire Hathaway that builds in Colorado, Utah and Arizona. “From there, the fight was on” to keep buyers from canceling.

Ivory Homes had 1,089 homes under construction in last year’s first quarter, including 513 that hadn’t yet been sold. “If I made one big mistake in the way I managed through Covid, it was trying to keep up” with demand, Ivory said. “I should have said to myself, ‘We can’t handle this.’”

In the second half of 2022, builders cut prices to attract buyers for their unsold homes or to persuade buyers already under contract not to back out.

Demand rebounded this year in the first quarter. By April, builders forecast a 7% increase in sales for 2023, according to a survey by John Burns Research & Consulting, reversing their forecast of a 9% drop when surveyed in November.

In Daybreak, a master-planned community about a 30-minute drive from Salt Lake City, developer Larry H. Miller Real Estate initially expected to sell 100 to 125 lots this year to home builders, including Ivory Homes. Now it expects to sell 160, according to Brad Holmes, the developer’s president.

“There was no inventory on the existing market, so everybody was being pushed to a new home,” he said.

Ivory Homes has adjusted its building plans to meet current buyers’ tastes and budgets. It is building in a master-planned community called Holbrook Farms in Lehi, a fast-growing city about 30 miles south of Salt Lake City. Lehi and nearby communities are home to the area’s many tech businesses—a major market for Ivory Homes and other builders.

Last fall, Ivory Homes was building three-story homes with three or four bedrooms in Holbrook Farms to sell for up to $625,000. Called EVillas, they had open kitchens and were targeted at firsttime buyers. As demand slowed late last year, Ivory said, the company decided: “We have to hit a lower price point.” It redesigned the E-Villas to offer a two-story version with three bedrooms, priced below $450,000.

Now the two-story homes are now selling better than the three-story ones, he said.

Builders nationwide are focusing on cutting costs and building smaller homes with lower price tags. Nationally, the proportion of new homes sold in May for under $300,000 rose to 17%, the highest level since December 2021.

Home builders also began offering sweeter terms to buyers. About 52% of builders provided incentives in July, up from 43% in July 2022, according to a NAHB survey. Many builders are paying to lower buyers’ mortgage rates, often by a percentage point or more, to help make the monthly payments more affordable.

Some buydowns reduce rates for only the first few years of a loan, but many builders, including Ivory Homes, are offering to lower the mortgage rate for the life of the loan. The temporary buydowns require buyers to qualify for the highest mortgage rate the loan will reach.

The arrangements benefit buyers and sellers alike. Builders would rather pay for lower mortgage rates than cut prices, because price cuts can affect the value of other homes in the neighborhood. For buyers, a lower mortgage rate can reduce a monthly payment more than a price cut. house from Ivory Homes in early July for about $600,000. They opted for a temporary buydown that reduces their mortgage rate for the first two years of the loan, and they hope to refinance to a lower rate as soon as they can.

Salt Lake City housing prices aren’t rising at the frenetic pace of 2021 and early 2022.

In June, average new-home prices in the metro area fell 11% from the year-earlier period, factoring in the value of incentives, according to a John Burns Research & Consulting survey.

“I’m hoping we made the right decision,” Luke said. “I don’t know if it was the right time to buy, but rents keep going up.”

Buyers remain sensitive to small changes in mortgage rates, and an increase in the average to above 7% could slow demand, builders say.

The average rate for a 30-year fixed mortgage was 6.96% in the week ended July 13, the highest since November, according to Freddie Mac. A recession, higher unemployment or uncertainty about the presidential election also could spook buyers.

First-time home buyers that tour Holbrook Farms are factoring in a mortgage rate of nearly 7%, according to John Savage, an Ivory Homes sales consultant. With a rate buydown from the builder, their purchasing power can go up by $100,000, he said.

Katherine Luke and Muhammad Salman had been looking to buy their first home in the Salt Lake City area for more than two years. They didn’t find many existing homes on the market within their budget that didn’t need renovations. Earlier this year, they started looking at new homes instead.

“For the price point, it does seem like it makes more sense than trying to renovate an older home,” Luke said. There is more to choose from in the new-home market, she said.

The couple bought a new four-bedroom

Some regional and local banks have been tightening credit for small businesses, which could also threaten some builders’ ability to borrow money for new projects. And while builders’ costs have come down somewhat, largely due to a big decline in lumber prices, they are still higher than prepandemic levels. Federal student-loan payments are set to resume in the fall, which could make it more difficult for first-time home buyers to save for down payments.

Yet others who delayed their home-buying plans in 2022 have grown comfortable with current mortgage rates, real-estate agents and builders say.

“People still need a house, because they got married last year, they graduated college last year, and they’re tired of waiting,” said Barry Gittleman, chief executive of Murray, Utah-based builder Hamlet Homes.

And after two years of robust home sales and high margins during the recent housing boom, builders can afford to keep offering rate buydowns to entice buyers.

“We’re all relieved now that we had a really good first half of the year,” Ivory said.

“This is not a market to be scared about.”

Bipartisan Group of Senators Warns DOE Not to Make Transformer Shortage Worse With New Efficiency Rule

By Robert Walton | Construction Dive

Brief: A bipartisan group of 47 senators has asked the U.S. Department of Energy to tread carefully in advancing new energy efficiency rules for distribution transformers that are in short supply. “Such a standard could come at meaningful cost to grid reliability and national security,” they wrote Thursday to Energy Secretary Jennifer Granholm.

DOE proposed new standards for the transformers in December, to go into effect in 2027. But this is a “strategically inopportune time,” the senators said, and the rule could hinder the nation’s clean energy transition.

A senior DOE official said the agency understands the concern and has been working with the power sector for more than a year to address the issue. The official said that a lack of investment in steel manufacturing, rising demand for transformers and labor shortages are contributing factors.

Insight: Average time for utilities to procure distribution transformers has risen from eight to 12 weeks in 2020 to more than two years, threatening storm recovery and the nation’s electrification goals, the senators warned DOE. Senators who signed the letter include Joe Manchin, D-W.Va., Marco Rubio, R-Fla., and Amy Klobuchar, D-Minn.

“We urge the Department to refrain from promulgating a final rule that will exacerbate transformer shortages,” they wrote. The group wants DOE to “convene stakeholders across the supply chain to develop consensus-based approach to setting new standards.”

The group also requested a briefing with the agency on the path forward for the efficiency proposal, and how to best leverage DOE authority to bolster domestic supply chains.

Similarly, more than 60 House members in April asked DOE to withdraw the proposed rule.

Most distribution transformers use grain-oriented electrical steel cores, or GOES, but DOE’s proposed efficiency rule would largely transition the electric industry to using amorphous steel cores. There is only one domestic manufacturer of each type of steel, however.

DOE is “open to exploring both supply- and demand-side solutions to encourage further manufacturing of distribution transformers,” an agency spokesperson said in response to the senators’ letter.

DOE faces a court mandate to finalize any proposed change to the transformer standard by June 2024. Comments on its proposal were due in March, and supporters of the new rule say it could cut energy waste by up to 50% relative to most current transformer models.

The senators said they appreciate the efficiency benefits but “we believe the most prudent course of action is to let both GOES and amorphous steel cores coexist in the market.” DOE must still go through the comments to understand the market dynamics and run a cost-benefit analysis based on new data that were submitted, the senior agency official said. “So, there’s an opportunity for different variations of what was proposed, or ... maybe we need more information and it’s something we should wait and evaluate later,” the official said.

Gov. Desantis Signs Measure Banning Local Voter Referendums On Land Development

It's one of a fleet of bills lawmakers ushered in to passage this Legislative Session.

By Jesse Scheckner

Voters will soon have little say in how the areas around them change through construction large and small, due to legislation Gov. Ron DeSantis just approved.

The measure (SB 718), which goes into effect Saturday, prohibits voter referendums or ballot initiatives on land development regulation.

That means all decisions over zoning, building approval, annexations and various other pivotal matters related to a county or municipality’s streets and skylines will be left to the members of its local governing body.

Jacksonville Republican Sen. Clay Yarborough sponsored the measure, which cleared the Legislature mostly along party lines in April. Republican Reps. Alina Garcia of Miami and Jennifer Canady of Lakeland carried its House companion (HB 41).

DeSantis quietly signed the measure just before 6 p.m. Wednesday.

Proponents like freshman Miami Republican Rep. Vicki Lopez, a co-sponsor of the House bill, argue localities “should not govern by referendum” and instead operate under America’s true form of government, a democratic republic in which elected leaders make decisions on behalf of the voters who put them into office.

Critics of the change say eliminating voter approval of land development is a direct countermeasure to the will of voters. Some labeled the measure the “protect developers from citizens” bill and contend it will further shift power from the many to the few, effectively cutting residents out of decisions concerning local growth management and planning.

“We are basically taking away the ability for citizens across the state of Florida to have any input on the character of their community,” said Jane West, director of policy and planning for 1000 Friends of Florida, during a committee discussion of the issue in late March.

Voters in municipalities across the state — including many in South Florida, a hotbed for real estate development — have rejected building proposals in recent years through the soon-to-be banned referendum process.

In November, Miami Beach voters shot down ballot questions that would have allowed construction of a condo and hotel project Miami Dolphins owner Stephen Ross sought on the former Deauville Beach Resort site. Ross, a prolific campaign contributor to both Democrats and Republicans, is among DeSantis’ roster of billionaire donors.

Voters in some municipalities have shown they’d rather have their elected officials decide on development matters. In March, 63% of voters in Pinecrest, a small, affluent village in Miami-Dade County, said “no” to a ballot question asking whether they wanted to require supermajority approval among the local electorate for future zoning and land use amendments.

SB 718 is one of a fleet of bills Republican lawmakers ushered to passage this past Legislative Session that preempt some local control of local issues.

Among them: SB 102, a sweeping housing affordability package that includes a ban on local rent control ordinances; SB 1068, which codifies state standards for delivery drone ports and limits the say local governments have in their regulation; SB 170, which would create a path for businesses to sue local governments and stop enforcement of ordinances they believe are “arbitrary or unreasonable”; and HB 1417, which would eliminate local ordinances granting residential renters more rights in cases of rent increases and evictions.

Another proposal that would have removed local protections for historic structures in flood-prone coastal areas and allow developers to raze and replace them with far larger, denser buildings crumbled in the waning days of Session. Like SB 718, the bill was interpreted by many as a response to Miami Beach’s rejection of developments in and around the thousands of properties identified in the city’s historic preservation regulations in the aftermath of the Champlain Towers South condo collapse in Surfside.

Several lawmakers, including Miami Beach Republican Rep. Fabián Basabe, say a refined version of the measure is likely to come again next year.

In addition to blocking direct voter influence over local land use, SB 718 reworks how counties and cities must proceed in expanding or contracting municipal borders. In place of a general report on the issue, local governments must produce a “feasibility study” of a proposed annexation or contraction analyzing the economic, market, technical, financial and management impacts of a city boundary change.

The local governing body — a County Commission, City Commission, Town Council, or other such panel — must approve or reject a proposed boundary change within six months of the feasibility study’s completion.

If more than 70% of the land proposed for annexation is owned by individuals, corporations or other legal entities not registered to vote in an area targeted for annexation or contraction, the area may not be absorbed or excised without the consent of at least half the property owners there.