HBA Cornerstone Magazine, December 2023

Fix And Flip Success: How To Create A Financial Plan For A Renovation Project pages 8-9

Thank you for a great 2023.

Wishing you very Happy Holidays!

December 2023 | www.westfloridabuilders.com | page 1

Cover Story

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December 2023 | Home Builders Association of West Florida | page 2

Mary Jordan Agent/Owner

(850) 384-0593

mary@gcainsurance.com

Cassy Smith

Taylor Bubert

(850) 497-6810

(850) 497-6810

Operations Manager

House Agent

Vicki Ruschel

Personal Lines Manager

(850) 497-6810

cassy@gcainsurance.com taylor@gcainsurance.com vicki@gcainsurance.com

Gulf Coast Insurance gcains.com

700 New Warrington Rd Pensacola, FL 32506

December 2023 | www.westfloridabuilders.com | page 3

Pensacola O: 850-497-6810

2023 Leadership Board

2023 Home Builders Association of West Florida Board of Directors BUILDER MEMBERS

Amir Fooladi President Encore Homes

Dax Campbell 1st Vice President Campbell Construction & Company

Jennifer Reese Treasurer Reese Construction Services

Fred Gunther, Gunther Properties Drew Hardgraves, Landshark Homes Ronnie Johnson, J. Taylor Homes Heath Kelly, Heath Kelly Construction Lowell Larson III, Venture Real Estate Alton Lister, Lister Builders, Governmental Affairs Chair Kyle McGee, Sunchase Construction Shon Owens, Owens Custom Homes & Construction Douglas Russell, R-Squared Construction Eric Shaffer, Shaffer Construction Casey Smith, DR Horton Monte Williams, Signature Homes Anton Zaynakov, Grand Builders

ASSOCIATE MEMBERS

Austin Tenpenny Secretary Adoor Properties

Marty Rich Past 2nd Vice President University Lending Group

Lindy Hurd 2nd Vice President/SMC Chair First International Title

Chad Edgar Immediate Past President Joe-Brad Construction

Paul Stanley 3rd Vice President The First Bank

Josh Peden Financial Officer/Treasurer Hudson, Peden & Associates

Bill Batting, REW Materials Rick Byars, Florida Power & Light Bruce Carpenter, Home Mortgage of America Mickey Clinard, Hancock Whitney Bank Laura Gilmore, Fairway Ind. Mortgage, Affordable Housing Liaison Chris Graye, Graye’s Granite Jill Grove, Pensacola Energy John Hattaway, Hattaway Home Design, Cost and Codes Chair Chris Thomas, Acentria Insurance Shellie Isakson-Smith, Supreme Lending Daniel Monie, KJM Land Surveying Alex Niedermayer, Underwood Anderson & Associates Ric Nickelsen, SmartBank Zach Noel, Clear Title of NW FL Charlie Sherrill, SouthState Bank Pam Smith, Real Estate Counselors, Pensacola Assn. of Realtors Liaison (proposed by PAR) Janson Thomas, Swift Supply Wilma Shortall, Trustmark Mortgage Kevin Sluder, Gene’s Floor Covering

COUNCIL CHAIRS Mary Jordan, Gulf Coast Insurance Tradesman Education Chair Suzanne Pollard-Spann, Legacy Insurance Brokers Ambassadors Chair

(850) 476-0318

4400 Bayou Blvd., Suite 45, Pensacola, Florida 32503

www.westfloridabuilders.com

Stephen Moorhead Legal Counsel Moorhead Real Estate Law Group

Cornerstone is published for the Home Builders Association of West Florida by Ballinger Publishing and distributed to its members. Reproduction in whole or part is prohibited without written authorization. Articles in Cornerstone do not necessarily reflect the views or policies of the HBA of West Florida. Articles are accepted from various individuals in the industry to provide a forum for our readers.

Ex-Officio Members of the Board of Directors Blaine Flynn, Flynn Built Shelby Johnson, Johnson Construction Russ Parris, Parris Construction Company Newman Rodgers, Newman Rodgers Construction Thomas Westerheim, Westerheim Properties Doug Whitfield, Doug Whitfield Residential Designer Curtis Wiggins, Wiggins Plumbing

December 2023 | Home Builders Association of West Florida | page 4

Cover Story

Fix And Flip Success: How To Create A Financial Plan For A Renovation Project .................................................................. 8-9

PRESIDENT’S MESSAGE

Cornerstone

Reflecting on 2023 ......................................................................................................... 6

FEATURE STORY

Frustrations Over The Housing Market Bleed Into Americans’ View Of The Economy .................................................................... 18

HBAWF NEWS

Jennifer Mancini Executive Director jennifer@hbawf.com

Members Doing Business with Members .......................................................... 7 & 17 Get Involved in HBA Councils & Committees .................................................. 7 & 20 Membership Networking Night .................................................................................... 9

Next Issue: JAN 2024

Like Us on Facebook ......................................................................................... 12 & 21 Membership Benefits Breakfast ................................................................................. 13

Installation Banquet Registration ............................................................................... 14 Top 10 Reasons To Do Business With An Active Associate Member ..................... 15

Edit: Dec 20, 2023 Display Ads: Dec 20, 2023

Spike Club ................................................................................................................... 22

NAHB NEWS

Small Businesses Weigh In on Potential OSHA Heat Stress Standard .................... 10

Undue Regulations Hurt Housing Affordability, NAHB Tells Congress ................. 11 Demand Falls, Standards Remain Tight for Real Estate Loans in Q3 2023 ............ 12

Publisher Malcolm Ballinger

Help Save a Critical Jobs Training Program .............................................................. 15 Square Foot Prices More than Double Inflation in 2022 ..................................... 16-17

Advertising Account Executives

Paula Rode, Account Executive ext. 28 paula@ballingerpublishing.com

FHBA NEWS

HBA President and Executive Officer Give Industry Update to NABOR ...................... 7

Geneva Strange, Account Executive ext. 31 geneva@ballingerpublishing.com For advertising rates Phone: 433.1166 • Fax: 435.9174

FHBA Legislative Conference ........................................................................................ 7

DEPARTMENTS INDEX

Advertisers Index, Web, & Email Addresses ………….....……...........……… 22

Cornerstone, the monthly publication of the Home Builders Association of West Florida serving Escambia and Santa Rosa Counties, is published monthly, twelve (12x) per year. Send address changes to HBA of West Florida, 4400 Bayou Boulevard, Suite 45, Pensacola, Florida 32503-1910. Cornerstone, is published in the interests of all segments of the home building industry and is distributed to its members and others associated with the HBA of West Florida. HBA of West Florida and Ballinger Publishing does not accept responsibility for, or endorse any statement or claims made by advertisers or authors of any articles. Every effort has been made to assure accuracy of information, but authenticity cannot be guaranteed. No part of this publication may be reproduced without the written consent of Home Builders Association of West Florida, Copyright ©, 4400 Bayou Boulevard, Suite 45, Pensacola, Florida 325031910, 850.476.0318. Advertisers and advertorials in Cornerstone do not constitute an offer for sale in states where prohibited by law.

December 2023 | www.westfloridabuilders.com | page 5

President’s Message

Reflecting on 2023

FHBA News

FHBA Legislative

A

Conference

s the year 2023 comes to an end and with the holiday season in full swing, it is a great time to reflect on all that we have accomplished this past year and give thanks. The year 2023 was a big year of change for the HBA, and there is no way I could have done it as President without the help of all of you. It feels like yesterday when David Peaden came to my office to advise me that he was leaving us, and I must say that although it was a big surprise and setback initially, we as an organization are stronger than ever now.

I have so many people to thank and will not be able to touch on all of them in this Cornerstone message, so I will touch on a few of the major points we accomplished. I want to start by thanking the special committee members we selected that handled the search for our new Executive Officer.

The Search Committee worked so hard and volunteered numerous hours so they could find the best candidate to help lead our organization.

I also want to thank the Board of Directors for their help in re-writing the Association By-laws that had not been updated in decades. I know that our future business and affairs within the HBA will be consistent going forward for years to come, so many thanks to all that put so much effort into it.

Lastly, I want to thank my fellow Senior Board members for their help, support, and commitment to the HBA. I know that I called on them for probably a record number of special meetings and asked for all of them to step up in ways they never expected this past year. It was their unwavering commitment to the HBA and our membership that showed me how selfless and truly amazing our organization is. I know that we will be in good hands for years to come.

I look forward to seeing all of you at the HBA Installation and Awards Banquet at Sander’s Beach on December 6th. I will share more of our great accomplishments and give thanks to many more of you individually at this great annual event. It has been my honor and privilege to serve all of you and our industry. Happy Holidays!

Tallahassee January 15-17th

J

Amir Fooladi

“The year 2023 was a big year of change for the HBA, and there is no way I could have done it as President without the help of all of you.”

HBA President and Executive Officer

Give Industry Update to NABOR

H

BA President Air Fooladi (ParsCo) and HBA Executive Officer Jennifer Mancini were guest speakers at the November Navarre Area Board of Realtors (NABOR) membership luncheon in Navarre. Amir gave an economic climate and builder/vendor sentiment report. He noted that despite the higher home prices the number of homeowners paying for homes in cash has increased due to rising interest rates. Amir also noted that locally, the inventory of new homes in the pipeline is down slightly overall although the larger home builders like D.R. Horton have a significant number of build to rent and new homes for purchase currently under construction. Jennifer provided a report on legislative issue that HBA is working on in conjunction with the Florida Home Builders Association (FHBA) for the upcoming legislative session in Tallahassee. She also gave an update on the HBA’s efforts to work with local elected officials in Santa Rosa County on the proposed impact fees o new residential construction as well as advocating for the passage of the half cent local option sales tax for infrastructure projects.

oin us as FHBA hosts the 2024 Legislative Conference, January 15 – 17, 2024 in Tallahassee, Florida, where members and leaders in Florida’s residential construction and remodeling industry participate in legislative training, engage with elected officials, and meet to address organizational agendas. Legislators and Capitol observers use this event as a barometer of FHBA member intensity regarding our legislative initiatives. Be sure to join us as we firmly support the building industry in Florida.

CONFERENCE VENUE AC Hotel | 801 S Gadsden Street, Tallahassee, FL 32301 | (850)392-7700 QUESTIONS? Please contact Kailin Koch (850) 402-1849 or by email, kkoch@fhba.com

Photo Above: (Left to Right) HBA Executive Officer, Jennifer Mancini, NABOR President, Amy Mullins, and HBA President, Amir Foodladi

If you do

Wishing you very Happy Holidays from the Home Builders Association of West Florida!

business with previous members, please give

HBA Councils and Committees!

HBA Ambassadors

them a call and reinforce the value of membership as well as the importance of

Sales & Marketing Council

Members Doing

Tradesman Council

Business with Members

December 2023 | Home Builders Association of West Florida | page 6

GET INVOLVED Meets 1st Friday of each month

Meets Quarterly Meets Quarterly

Board of Directors

Meets 3rd Tuesday of each month

December 2023 | www.westfloridabuilders.com | page 7

Cover Story

HBAWF News Research Costs An investor can perform this step individually or with the help of the aforementioned general contractor or project manager.

Either way, researching the costs associated with the renovations you plan to undertake is paramount. Investors should shop around for quotes from contractors, suppliers, and other professionals to estimate the expenses accurately.

Shopping around can take some time, but it can also save the investor a lot of money once they find the right deal. In some instances, it’s even okay for investors to let the contractors and suppliers know they’re shopping around. They won’t always be willing to give you the best deal, but sometimes the contractor will be willing to sell at a discount if it means earning an investor’s business. An investor should consider all factors such as materials, labor, permits, and any unexpected costs that may arise.

Fix And Flip Success: How To Create A Financial Plan For A Renovation Project Create A Detailed Budget

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reating a renovation budget and a financial plan is a crucial step when undertaking a fix and flip project in the real estate investment space. Often a race to the finish, fix and flip properties are completed on time and flipped for the biggest profit when there is a sound plan in place. A well thought out budget helps ensure that investors allocate their resources effectively and maximize potential profits.

Investors must do their research and rely on their preferred form of organization and budgeting in order for this to truly work. Here are a few steps to help investors create a renovation budget and stay on track during their next renovation project.

Assess The Property and Project The first step is to take a step back and review the property in its entirety. Start by thoroughly inspecting the property and identifying areas that require renovation or repair. Take note of any structural issues, outdated features, or necessary upgrades.

If some of these repairs require professional help, be sure to seek that out very early on in the process. Assuming the condition of structural components of the house can be a dangerous game. Calling in a property assessor should be worked into the budget in cases where an investor wants to be cer-

tain about what they are getting involved in. Once the property review is complete, an investor can feel comfortable moving towards specific plans for the renovations and how much everything will cost.

Prioritize Renovations Determining which renovations will have the most significant impact on the property's value is the next step for an investor.

Another factor to consider is how long each repair will take. If there’s a longer project that needs to be completed, starting that early and completing it in phases can be a big help.

Once you have gathered cost estimates, create a detailed budget that includes all the necessary expenses. This is where an investor needs to dial in on what works best for them in terms of organization and strategy. An Excel spreadsheet can be an option, but technology has come to the forefront in this industry and there are a number of budgeting apps out there that can help investors. According to Nerdwallet.com, here are the 8 best budget apps in 2023.

Categorize your budget into different sections, such as materials, labor, permits, and contingency funds. Be sure to ac-

Next, focus on essential areas such as the kitchen, bathrooms, flooring, and curb appeal. Allocate a larger portion of your budget to these high-impact areas. Potential buyers often focus on these rooms and are looking for certain features when assessing these areas of a property, so investors can be confident in the fact that these areas are worth the most time and effort.

Calling in a professional at this stage isn’t always a must, but it can offer peace of mind to an investor. A project manager or general contractor would be happy to help during this stage and look to provide value instantly. This way, they are hoping to form a relationship with the investor that will lead to more work later on in the project as well as future projects.

count for any miscellaneous expenses that potentially come up during the renovation process. Preparing for the worst-case scenario isn’t always prioritized, but renovation projects can be unpredictable so the investors that have back up plans are usually the most successful.

Membership Networking Night HBA November Membership Networking Night hosted by Legacy Insurance Brokers and KJM Land Surveying was held on Thursday, Nov. 16th at the Legacy Insurance office in Pensacola. Thank you again to Suzanne Spann and Daniel Monie for sponsoring this great event!

Renovation projects often encounter unexpected issues or additional expenses.

As a rule, investors should allocate a contingency fund of around 10-20% of the total budget to account for these unforeseen circumstances. Throughout the renovation process, investors should closely monitor expenses to ensure they stay within the allotted budget. Keep track of all receipts and invoices, and regularly review the budget to make any necessary adjustments.

Set Realistic Expectations While it's important to aim for a high-quality renovation, it's equally important to set realistic expectations within the budget.

Avoid overspending on unnecessary upgrades that may not provide a significant return on investment. Keep every aspect of the property and renovation in mind when deciding what to upgrade. For instance, if there was significant structural damage that needed to be repaired, saving on light fixtures, appliances and furniture may be what is required to stay on budget.

There is a delicate balance for investors when it comes to transforming a renovation project into the perfect investment property, but every aspect must be considered and sometimes sacrifices need to be made. Having the right expectations going into a renovation project and being able to adapt throughout is a key to success for investors.

Find A Property and Start Planning Today Remember, creating a renovation budget requires careful planning and research. It's essential to strike a balance between investing in quality renovations and staying within your financial limits. By following these steps and consulting with professionals in the industry, you can create a renovation budget that sets you up for a successful fix and flip project. Reach out to RCN Capital today with any questions regarding the plan for your next property and we’d be happy to offer guidance on your journey to success.

Source: Nate Zielinski, of RCN Capital

December 2023 | Home Builders Association of West Florida | page 8

December 2023 | www.westfloridabuilders.com | page 9

NAHB News

NAHB News many objected to OSHA specifying the frequency of rest breaks.

Solo and Mobile Workers. Panelists with employees who work alone or travel between jobsites during a shift were concerned about implementing some provisions such as supervision, temperature monitoring and rest breaks.

Other areas of concern for the small business leaders included requirements around drinking water, acclimatization, engineering and administrative controls (like AC and fans), and temperature measurement.

Small Businesses Weigh In on Potential

OSHA is accepting public comments on the information currently in the rulemaking docket, including the panel final report, until Dec. 23. NAHB is very engaged in this process and will submit comments at every stage of the rulemaking.

OSHA Heat Stress Standard

A

panel of small business owners from varied industries, including construction, recently discussed the contours of a potential heat illness and injury standard from OSHA. The final report on the panels had specific recommendations for OSHA to consider when writing a proposed rule.

OSHA convened Small Business Advocacy Review (SBAR) Panels to get feedback from small businesses on the impact a heat safety standard might have on their operations. Over two weeks in September, 82 small businesses participated in video conference calls; 21 were in construction, nine were landscapers, and six do utilities work. At least one NAHB member participated in the panels.

In 2021, OSHA issued an Advance Notice of Proposed Rulemaking for a standard defining employer obligations to reduce the number of heat-related injuries, illnesses and fatalities at indoor and outdoor workplaces.

• Medical treatment and heat-related emergency response procedures • Worker training • Recordkeeping The final report includes the panelists’ areas of concern and recommendations for how OSHA should move forward with the rulemaking: Flexibility and Scalability. The panel recommends that an OSHA standard should be flexible, with a programmatic approach that allows employers to tailor their program to their particular workplace and climate.

Heat Triggers. Panelists felt that the heat triggers that OSHA suggested were too low and were confusing. The panel recommends that OSHA reconsider and simplify the presentation of the heat triggers and provide additional data supporting the levels selected.

• The scope of a potential standard

Recordkeeping. Panelists felt that some recordkeeping requirements that OSHA had suggested were unnecessary, burdensome or infeasible, and recommends that OSHA reconsider or simplify recordkeeping of temperature monitoring and not require documentation of rest breaks.

• Heat hazard identification, assessment, prevention and control measures

Rest Breaks. The majority of the panelists said that they allow their employees to take rest breaks when they need to, but

OSHA gave the September panelists topics to discuss related to the potential rulemaking, including:

December 2023 | Home Builders Association of West Florida | page 10

Undue Regulations Hurt Housing Affordability,

NAHB Tells Congress

I

n a congressional hearing today examining the effects of Department of Energy (DOE) regulations on America’s job creators, the National Association of Home Builders (NAHB) told lawmakers how burdensome DOE regulations are exacerbating the housing affordability crisis and impeding the ability of builders to increase the production of quality, affordable housing.

Testifying before the House Small Business Committee, NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala., said that residential construction is one of the most heavily regulated industries in the country.

“Government policies and regulations are making it harder and harder for home builders and multifamily developers to build housing that is affordable,” said Huey.

She then noted three examples of how excessive regulations originating from the DOE worsen housing affordability: • Transformer standards. Soaring costs and shortages of electrical distribution transformers are delaying housing projects across the nation at a time when the DOE is seeking to minimally increase the energy efficiency standards for these products by a mere one-tenth of a percentage point, even though the agency already mandates distribution transformers be manufactured to very high efficiency standards. The DOE proposal would force manufacturers to retool production lines to produce new transformers and worsen the historic 18-to-24-month backlog that is hampering development across the country and raising housing costs.

“Therefore, NAHB supports H.R. 4167, the Protecting America’s Distribution Transformer Supply Chain Act,” said Huey. “The legislation would prohibit the secretary of energy from changing energy conservation standards for distribution transformers for a period five years, which will allow time for the market to stabilize so that manufacturers can catch up with demand.”

ers. A study conducted by the Home Innovation Research Labs in 2021 found that the additional up-front cost to build an all-electric house (as compared to a house with natural gas equipment and appliances) ranged from $3,832-$15,100 depending on climate zone.

Meanwhile, DOE’s currently proposed rule, Energy Conservation Standards for Consumer Conventional Cooking Products, would ban the sale of most current gas cooktop models sold in the United States. More than 187 million Americans currently use natural gas appliances, saving them an average of $1,068 each year. The proposed rule would force manufacturers to retool their appliance production lines, drastically limit the availability of gas stoves across the country, and result in appliance production delays that would raise consumer costs for both electric and gas stoves in the coming years. NAHB remains committed to promoting energy choices for consumers.

• Building energy codes. The Inflation Reduction Act included $1 billion in grants to state and local governments to adopt updated energy codes that are more costly and restrictive, such as the 2021 International Energy Conservation Code (IECC). Adoption of the 2021 IECC can add as much as $31,000 to the price of a new home. NAHB understands the importance of energy efficiency, but the savings from the 2021 IECC can take a home owner as long as 90 years to see a payback. That’s not a reasonable trade-off.

“If we want to make a difference on energy efficiency, we must focus on existing housing, particularly older homes built before the introduction of modern energy codes,” said Huey.

According to the National Renewable Energy Laboratory, upgrades to the existing housing stock could yield a projected reduction of 5.7% of the total annual U.S. electricity consumption in 2030. Given this potential, NAHB believes that upgrading the existing housing stock must be the primary focus if the nation is to make measurable progress.

“Improving the nation’s housing supply and easing housing affordability challenges will take a coordinated and concerted effort all levels of government,” said Huey. “Let’s begin by fixing the broken regulatory process. Congress should pass legislation such as H.R. 358, the Small Business Regulatory Flexibility Improvement Act, to ensure that all regulations are designed with small businesses in mind, that regulatory rulemaking agencies are required to consider the true cost of regulations on small businesses, and that regulatory rulemaking agencies comply with the letter and intent of the law in crafting new regulations.”

• Electrification and gas stoves. Electrification mandates can be costly and infeasible in some areas of the country and create challenges for builders, home owners and consumDecember 2023 | www.westfloridabuilders.com | page 11

NAHB News

HBAWF News mand was most widespread for subprime loans as 71.4% banks reported weaker demand, on net, up from 9.1% in Q2 2023.

Demand Falls, Standards Remain Tight

Roughly two-thirds of banks reported tightened standards for both multifamily loans as well as all CRE construction and development loans, on net, in Q3 relative to Q2.

for Real Estate Loans in Q3 2023

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ccording to the Federal Reserve Board’s November 2023 Senior Loan Officer Opinion Survey (SLOOS), lending standards tightened for all commercial real estate (CRE) loan categories and most residential real estate (RRE) categories in the third quarter of 2023. Moreover, demand for RRE and CRE loans weakened across all categories over the quarter.

A higher net percentage of banks reported tighter residential mortgage lending standards in Q3 compared to Q2 across all categories of RRE loans except government and subprime. The net share of banks that tightened standards for subprime loans fell to 14.3% while just 2.1% of banks, on net, reported stricter standards for government loans.

Home & Auto go together.

Like you & a good neighbor.

Major shares (greater than 50%) of banks reported weaker demand for construction and development (52.6%) and loans secured by multifamily properties (55.2%) in the third quarter.

Those shares were little changed over the quarter but are higher than they were one year ago.

Source: NAHB Eye on Housing 11/10/23

Stay up-to-date on news and events Have access to exclusive promotions and giveaways In contrast, the share increased from 19.6% to 26.0% for QM jumbo. The remaining loan categories all saw relatively modest increases.

Whereas tightening relaxed for two RRE loan categories, no category was spared from declining demand in Q3. The net share of banks reporting weaker demand for all RRE loans nearly doubled over the quarter, climbing from 30.9% to 56.8%. Declining de-

Michael Johnson, Agent 3127 E Langley Avenue Pensacola, FL 32504 Bus: 850-478-7748 www.michaeljohnsonagency.com

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December 2023 | Home Builders Association of West Florida | page 12

1601975

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December 2023 | www.westfloridabuilders.com | page 13

HBAWF News

NAHB News

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.

Help Save a Critical Jobs

Training Program

T

he severe labor shortage in the construction industry is raising construction costs and harming housing affordability. NAHB’s workforce training affiliate, the Home Builders Institute, is building the next generation of skilled tradespeople and is the largest Job Corps national trades training contractor.

A House appropriations subcommittee has eliminated funding for the Job Corps program, the nation’s largest residential career training and education program. In response, NAHB is urging all residential construction industry members and supporters to contact their members of Congress and tell them to fully fund the Job Corp program.

December 2023 | Home Builders Association of West Florida | page 14

The redesigned BuilderLink portal allows members and supporters to send a letter to their congressional representative easily. The portal will be prepopulated with your information if you are signed in to nahb.org. To change the information on file to your current home address before sending a letter, visit the “My Information” page in the BuilderLink portal.

As part of the BuilderLink portal redesign, users can now access information on NAHB’s top advocacy issues. In addition, users can connect with BUILD-PAC, NAHB’s bipartisan political arm, which helps elect pro-housing, probusiness candidates to federal office.

Visit https://builderlink.org/take-action/

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?

December 2023 | www.westfloridabuilders.com | page 15

NAHB News England divisions registered the highest median prices. Half of new for-sale single-family detached homes started in these divisions in 2022 were sold at prices exceeding $214 and $219 per square foot of floor area, respectively, paid on top of the most expensive lot values in the nation.

The most economical SFD spec homes were started in the South region, where the median sale prices per square foot were at or below the national median.

Square Foot Prices More than

Double Inflation in 2022

M

edian square foot prices (excluding record-high improved lot values) for new for-sale single-family detached (SFD) homes started in 2022 increased 18%, according to NAHB’s analysis of the latest Survey of Construction data. Increases for square foot prices in new custom SFD homes were similarly high, averaging 19%, more than double the US inflation of 8% registered by the CPI the same year. Median contract prices per square foot of floor area went up across all US regions, undoubtedly, reflecting fast rising construction and labor costs

that pummeled home building in the postpandemic environment.

Contract prices of custom, or contractorbuilt, homes do not include value of improved lot as these homes are built on owner’s land (with either the owner or a contractor acting as a general contractor).

Consequently, contract prices are typically lower than sale prices of spec homes. To make comparison more meaningful, the cost of lot development is excluded from sale prices in this analysis.

In the for-sale market, the Pacific and New

The East South Central division is home to the least expensive for-sale homes. Half of all for-sale SFD homes started here in 2022 registered square foot prices of $132 or lower, paid on top of the most economical lot values in the country. The other two divisions in the South – West South Central and South Atlantic – also registered median prices below the national median of $155 per square foot of floor area. Their corresponding prices are $152 and $150 per square foot, excluding improved lot values Because square foot prices in this analysis exclude the cost of developed lot, highly variant land values cannot explain the regional differences in square foot prices.

However, overly restrictive zoning practices, more stringent construction codes and higher other regulatory costs undoubtedly contribute to higher per square foot prices.

Regional differences in the types of homes, prevalent features and materials used in construction also contribute to price differences. In the South, for example, lower square foot prices partially reflect less frequent regional occurrence of such costly new home features as basements.

In the custom home market, new contractor-built SFD homes in the New England are by far most expensive to build. Half of

“Because square foot prices in this analysis exclude the cost of developed lot, highly variant land values cannot explain the regional differences in square foot prices.” custom SFD homes started in New England in 2022 registered prices in excess of $213 per square foot of floor area. The Mountain division came in second with the median of $200 per square foot of floor space. After showing strong appreciation of 23%, median prices in the East North Central division reached $185 per square foot– third highest in the nation. The median custom square foot prices in the neighboring Mid Atlantic division were $160 per square foot.

The Pacific division had similarly high custom square foot prices. Half of custom SFD started in the Pacific in 2022 had prices of $160 per square foot or higher. The corresponding median price in the West North Central was $155.

improved lot values. Over the last two decades, this custom home premium averaged slightly above 9%, suggesting that new custom home buyers were not only willing to wait longer to move into a new home but also pay extra for pricier features and materials. However, these custom home premiums largely disappeared since 2021 when median square foot prices for new for-sale homes caught up and, in five divisions, exceeded divisional custom homes square foot prices.

The South Atlantic division is where most economical custom homes were started in 2022 with half of new custom homes registering prices at or below $131 per square foot of floor space. The remaining two divisions in the South – East South Central and West South Central – recorded slightly higher median square foot contract prices of $156 and $141 – all at or below the national median of $156.

Pandemic-induced supply chain disruptions, skyrocketing building materials costs and home prices setting new records on a monthly basis, combined with shorter build times for spec homes and more flexibility that spec builders have in delaying sales to keep up with the production pace – all likely contributed to a faster appreciation of spec home prices per square foot in 2021. As of 2022, the custom home premium per square foot returned into a positive territory but remains well below the historic norms, suggesting that custom home buyers now less likely to pay for pricier features and materials than before the pandemic.

Typically, contractor-built custom homes have been more expensive per square foot than for-sale homes after excluding

The NAHB estimates in this post are based on the Survey of Construction (SOC) data. The survey information

comes from interviews of builders and owners of the selected new houses. The reported prices are medians, meaning that half of all builders reported higher per square foot prices and the other half reported prices lower than the median.

While the reported median prices cannot reflect the price variability within a division, and even less so within a metro area, they, nevertheless, highlight the regional differences in square foot prices.

For the square footage statistics, the SOC uses all completely finished floor space, including space in basements and attics with finished walls, floors, and ceilings.

This does not include a garage, carport, porch, unfinished attic or utility room, or any unfinished area of the basement.

Source: NAHB Eye on Housing 11/9/23

If you do business with previous members, please give them a call and reinforce the value of membership as well as the importance of Members Doing Business

with Members

December 2023 | Home Builders Association of West Florida | page 16

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Feature Story

Frustrations Over The Housing Market

Bleed Into Americans'

View Of The Economy

I

t’s not just the housing market that’s depressing Americans. Broader worries about the economy are now weighing on sentiment. In the latest survey from Fannie Mae measuring housing sentiment, 85% of respondents in October said now is a bad time to purchase a house because of high home prices and high mortgage rates. That marked a survey high.

Their downbeat outlook extended beyond housing, with 78% of respondents saying the economy is on the wrong track, Fannie Mae found. That’s up 7 percentage points from last month, with the vast majority once again saying inflation is the main culprit.

Consumers expressed even greater pessimism toward the larger economy this month, in addition to their ongoing frustration with the housing market," Fannie Mae chief economist Doug Duncan said in a statement. "We expect this tightness in household finances, along with high home prices and elevated mortgage rates, to prolong the affordability challenges facing many would-be homebuyers."

Only 17% of respondents believe that mortgage rates will go down over the next 12 months, according to Fannie Mae, while 47% expect rates will increase and 36% expect rates to stay where they are. "Interest rate headwinds have been unfortunate for buyers and we’re seeing a lot of frustration on their end," Robert Dietz, chief economist at the National Association of Home Builders, told Yahoo Finance.

Rates have hovered above 7% since mid-August, a stretch not seen since 2000. And though the 30-year fixed mortgage rate paused its multiweek climb toward 8% last week, "geopolitical uncertainty and continued ambiguity" around the Federal Reserve’s next moves "continue to stall improvements in the housing market," Freddie Mac chief economist Sam Khater said last week.

Elevated rates are also keeping homeowners from sell-

ing. More than a third of respondents said it’s a bad time to sell a home, Fannie Mae found.

The continued dearth of resale properties on the market has propped up home prices, increasing affordability challenges.

The latest reading on home values showed that prices hit another record high in August, and many Americans expect no relief any time soon.

Just over three-quarters of survey respondents expect prices to go up or remain where they are in the next 12 months, according to Fannie Mae. Just 23% believe prices will go down in that same period.

"Traditionally when rates go up, prices go down to compensate for that. But when you have restricted inventory, prices aren’t going down, so you just are left hanging in there," Ruben said. "It’s really depressed the market."

That pessimism is also overtaking the bright spots in Americans’ lives. Greater shares of survey respondents felt good about their job security, their income, and the future of their personal finance situation versus the prior month, Fannie Mae found.

Still, 78% of Americans think the economy is going in the wrong direction, up from 71% the previous month. That was also the highest share since June 2022 when 81% of respondents felt that way and the third-highest percentage since March 2011 when the question was first asked.

"Although the labor market is strong and wages have risen in the past year, consumers may believe that their purchasing power has not kept up with prices," Duncan said. "Across all income groups, inflation has consistently driven the 'wrong track' belief since the end of last year, suggesting consumers are fed up with the high prices of many goods and services."

Source: Yahoo Finance, Gabriella Cruz-Martinez 11/7/23

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December 2023 | Home Builders Association of West Florida | page 18

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NAHB News

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New Members Associate Members Guild Mortgage Company Michelle Oliver, Sr. Loan Officer 1810 S. Eagle Rd. Meridian, ID 83642 p 208.407.4166

ServePro of West Pensacola William A Schroeder, Business Development 1101 S Fairfield Dr. Pensacola, FL 32506

guildmortgage.com

p 850.469.1160 servprowestpensacola.com

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In construction, a spike is a steel object that is essential to making a building strong. As in construction, the HBA of West Florida sees a Spike as someone that works to keep our association strong. Spikes work on the recruitment and retention of members in addition to keeping members active with the association. Anyone is eligible for Spike status. On Spike credit is awarded for each new member recruited and an additional credit is awarded for that new member’s renewal on or before their anniversary date. If you help to retain a member, you are eligible to receive a half point for each member.

Spike Club Levels Spike Candidate Blue Spike Life Spike Green Spike Red Spike Royal Spike Super Spike Statesman Spike Grand Spike All-Time Big Spike

1-5 credits 6-24 25-49 50-99 100-149 150-249 250-499 500-999 1000-1499 1500+

Spike Club Members and their credits as of 09/30/2023.

Statesman Spike 500 Credits Harold Logan 525.5 Super Spike Rod Hurston

250 Credits 432.5

Royal Spike Rick Sprague Edwin Henry William “Billy” Moore Bob Boccanfuso

150 Credits 210.5 201.5 184 165.5

Red Spike harlie Rotenberry Oliver Gore Ron Tuttle Newman Rodgers IV Ricky Wiggins

100 Credits 150 115 110 102 101.5

David Holcomb

100.5

Green Spike Doug Sprague Kenneth Ellzey, Sr. Russ Parris Blaine Flynn Paul Stanley Bob Price, Jr. Thomas Westerheim Darrell Gooden Bill Daniel Wilma Shortall

50 Credits 90.5 80.5 73.5 70 68.5 60 58.5 52.5 51.5 51.5

John Hattaway

50

Life Spike Doug Whitfield Amir Fooladi Suzanne Pollard-Spann Garrett Walton Bruce Carpenter III Luke Shows Steve Moorhead Brent Woody Karen Pettinato Larry Hunter Taylor Longsworth Lee Hudson Alton Lister Jon Pruitt Milton Rogers Doug Herrick Dean Williams Lorie Reed Martin Rich William Merrill Kevin Ward Rick Faciane Bill Batting Alex Niedermayer

25 Credits 42.5 36.5 35 32 30 26.5 23 22.5 21 21.5 20.5 19.5 19 17.5 17.5 16.5 16.5 16 15.5 15.5 13.5 13 12 11

Kim Cheney

10

Spike Credits Shelby Johnson Mary Jordan Kevin Russell James Cronley Shellie Isakson Smith Rodney Boutwell Dax Campbell

9.5 9.5 9.5 9 8 7 7.5

Advertiser’s Index Alpha Closets p 850.934.9130 AlphaClosets.com

23

Ballinger Publishing p 850.443.1166 ballingerpublishing.com

21

Campbell Construction & Company, LLC p 850.698.4153 dax.campbellconstruction@gmail.com

3

Force 5 Walls p 251.213.2423 p 251.213.9255 force5walls.com

19

Gulf Coast Insurance p 850.497.6810 gcins.com

3

Metal Craft p 850.478.8333 metalcraftofpensacola.com

18

Michael Johnson Insurance Agency p 850.478.7748 michaeljohnsonagency.com

13

Pensacola Energy o 850.436.5050 pensacolaenergy.com

2

REW Building Materials, Inc. o 850.471.6291 c 850.259.7756 ecbmfl.com

3

West Fraser westfraser.com/osb

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If you would like to join the Spike Club or Desire Additional Information, please contact Vicki Pelletier (850) 476-0318

December 2023 | Home Builders Association of West Florida | page 22

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