The Nail - May, 2012 by Home Builders Association of Middle Tennessee (HBAMT)

THE

NAIL The official magazine of Home Builders Association of Middle Tennessee President Dan Strebel Vice President James Franks Secretary/Treasurer Michael Dillon Executive Vice President John Sheley

Editor and Designer Jim Argo Staff Connie Nicley Pat Newsome

CONFERENCE ROOMS AVAILABLE Need space for an upcoming meeting, seminar or special event? Call the Home Builders Association and reserve one (or both) of the spacious, first-floor conference areas. Located in the heart of Brentwood at the HBA’s first-class office building, each room makes an ideal venue for both business and social engagements alike.

Boardroom Members Non-members -

$350* $600*

THE NAIL is published monthly by the Home Builders Association of Middle Tennessee, a non-profit trade association dedicated to promoting the American dream of homeownership to all residents of Middle Tennessee. SUBMISSIONS: THE NAIL welcomes manuscripts and photos related to the Middle Tennessee housing industry for publication. Editor reserves the right to edit due to content and space limitations. POSTMASTER: Please send address changes to: HBAMT, 9007 Overlook Boulevard, Brentwood, TN 37027. Phone: (615) 377-1055.

Classroom Members Non-members -

$250* $500*

Rooms are reserved on a first-come, first-serve basis. Call (615) 377-1055 for availability and reservation information. *Each room requires a deposit of $100 (refundable) and half the amount of the rental fee due prior to date of occupancy. Boardroom furniture may not be taken from the room or rearranged. The Home Builders Association of Middle Tennessee

9007 Overlook Blvd., Brentwood, TN 37027 615/377-1055 Fax: 377-1077

May 2012 z The NAIL 3

Round three on the horizon... Sign up for the third round of the Piedmont Natural Gas Bass Trail Tournament:

Tuesday, May 15th.

FEATURES 9 Housing outlook brightens say economists at NAHB construction forecast Economists participating in the NAHB’s construction forecast webinar expect housing to continue its upward path in the year ahead.

11 Piedmont Natural Gas Bass Trail Tournament continues with second round The second round of the year was held April 17 at Fate Sanders Marina. Find all the scores on page 12 to keep up with this year’s points leaders. Download your registration form on page fourteen to join the tournament!

DEPARTMENTS 6 News & Information 15 SPIKE Club Report 16 May Calendar 16 Chapters and Councils

ON THE COVER: The NAHB’s construction forecast generated positive discussions about the year ahead for the home building industry. Full story on page nine.

May 2012 z The NAIL 5

NEWS&INFO

Dickson County Chapter President Mark Denney (center) with JV Vinson(left) and Kelly Higgins from Ferguson Plumbing and Building Products. Higgins was Denney’s guest speaker at the chapter’s April meeting.

Single family housing starts virtually unchanged in March ingle-family housing production held virtually unchanged in March as a double-digit decline in the more volatile multifamily sector brought combined nationwide starts activity down 5.8 percent to a seasonally adjusted annual rate of 654,000 units, according to data released by the U.S. Commerce Department today. “While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “At the same time, in places where buyers are ready to go forward with a purchase, access to credit for both builders and buyers and difficulties in obtaining accurate appraisals are persistent challenges that continue to slow that process considerably.” “While combined U.S. housing starts lost some ground in March, this was almost entirely due to typical month-to-month volatility on the multifamily side,” said NAHB Chief Economist David Crowe. “The fact is that single-family and multifamily starts and permits were all stronger in the first quarter of 2012 than they were in the fourth quarter of 2011, indicating that the market continues to slowly strengthen, albeit in fits and starts.” The 5.8 percent decline in overall housing starts in March was mostly due to a 16.9 percent decline on the multifamily side, which brought that

Permit issuance gained gained 4.5%, the fastest pace since September of 2008. 6 The NAIL z May 2012

sector’s annual production pace to 192,000 units, seasonally adjusted. Meanwhile, single-family starts held virtually flat for the month with a 0.2 percent decline to 462,000 units. Permit issuance, which can be an indicator of future building activity, gained 4.5 percent to a seasonally adjusted annual rate of 747,000 units in March – the fastest pace since September of 2008. This gain was due to a 20.8 percent increase on the multifamily side to 285,000 units, while single-family permit issuance declined 3.5 percent to 462,000 units.

Builder confidence slips slightly Builder confidence in the market for newly built, single-family homes declined for the first time in seven months this April, sliding three notches to 25 on the NAHB/Wells Fargo Housing Market Index. The decline brings the index back to where it was in January, which was the highest level since 2007. “Although builders in many markets are noting increased interest among potential buyers, consumers are still very hesitant to go forward with a purchase, and our members are realigning their expectations somewhat until they see more actual signed sales contracts,” noted Rutenberg. “What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September,” said Crowe. “This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery – particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals.”

John Ritterpusch, NAHB, Erin Richardson, GBC President, Matt Belcher, NAHB Green Building Contesse, Subcommittee Chairman, and Stefan Peter-C GBC Secretary/Treasurer, at the GBC’s April meeting. Belcher, a home builder from St. Louis, Missouri, spoke to the council about the role “green” building practices will play in the construction industry as the economy begins to recover. The meeting was held April 30, day 2 of the NAHB’s National Green Building Conference at the Nashville Convention Center.

Metro/Nashville Chapter President John Whitaker (left) talks with Carl Renegar from Ideal Building Systems prior to the chapter’s April meeting. Renegar delivered a presentation titled "Concrete Construction & Passive House Technology” for meeting attendees.

Remodeling Market Index remains flat in first quarter emodeling activity remained relatively flat in the first quarter of 2012, as the Remodeling Market Index (RMI) compiled by the NAHB decreased one point to 47 from the upwardly revised 48 in the previous quarter. The overall RMI combines ratings of current remodeling activity with indicators of future activity. An RMI below 50 indicates that more remodelers report market activity is lower (compared to the prior quarter) than report it is higher. In the first quarter, the RMI component measuring current market conditions dropped one point to 49, while the component measuring future indicators of remodeling business fell two points to 44. “We are seeing that the demand for remodeling work has been pulled forward because of a mild winter,” said NAHB Remodelers Chairman George “Geep” Moore Jr., GMB, CAPS, GMR and owner/president of MooreBuilt Construction & Restoration Inc. in Elm Grove, La. “That is why many remodelers reported lower numbers for future activity.” The three components measuring current market conditions moved in different directions in the first quarter: major additions remained even at

44; minor additions rose one point to 52; and maintenance and repair dropped four points to 51. Two of the four components measuring future market indicators decreased: backlog of remodeling jobs dropped four points to 43 and appointments for proposals fell five points to 45. Meanwhile, calls for bids rose one point to 47 and amount of work committed for the next three months remained even at 42. Regionally, remodeling market conditions in the West increased three points to 47, while the other three regions showed declines: the Northeast to 48 (from 55), the Midwest to 50 (from 52) and the South to 46 (from 49). “Even though many remodelers report that consumers are showing increased interest in remodeling, they are hesitant to act because of financing constraints and the spotty nature of the economic recovery, which so far has failed to reach some of the larger markets in country,” said NAHB Chief Economist David Crowe. “Many consumers are likely to be deferring large remodeling projects until they feel more comfortable with the economic climate in their area.” For more information about remodeling, visit www.nahb.org/remodel.

March 2012 z The NAIL 7

Housing outlook continues to brighten Economists speculate on the housing market during NAHB’s construction forecast webinar. irroring the uneven economic recovery, the housing market is expected to move in a slow, gradual upward path in 2012, while encountering its share of speed bumps along the road, according to economists participating in last month’s NAHB construction forecast webinar on the housing and economic outlook. While the latest monthly housing data have shown signs of a slight softening, NAHB Chief Economist David Crowe said this is more reflective of typical month-to-month volatility in the numbers and unusual seasonal factors than they are an indication of any significant downward trend in the broader housing market. “The aggregate information suggests we’re just in a pause mode right now in terms of these measures,” said Crowe, who noted this could partly be the result of an early spring that

brought much better weather than usual into the picture at the start of this year and pulled some housing activity forward. Pointing out that less volatile quarterly data have continued to show modest improvement in key housing indicators such as builder sentiment, new-home sales and housing production, Crowe said the “housing outlook continues to slowly brighten.” Crowe noted that numerous other fundamentals remain positive for housing at this time, including demographic factors (with pent-up household demand expected to ramp up and echo-boomers heading into their prime household formation ages), historically favorable mortgage rates that are not expected to move higher than 5 percent by the end of next year, more than 100 local markets currently listed on the NAHB/First American Improving Markets

Index, and the fact that house price-to-income ratio has now returned to its historical average of about three-to-one versus the nearly five-toone to which it had previously risen during the height of the housing boom. However, he cautioned that housing still continues to face formidable challenges of its own -- such as rising foreclosures, persistently tight lending standards for home buyers and builders and difficulties in obtaining accurate appraisals. Moreover, disappointing job growth numbers in March and uncertainty in the European economy are undermining prospects for a vigorous recovery. “No one is anticipating that an upward path for housing will run in a straight-line trajectory,” said Crowe. “The economy is in an uneven recovery and we can expect some corresponding ups-and-downs in the housing market in the months ahead. However, NAHB believes that on the whole, we can expect a slow and gradual recovery in housing starts, home sales and the overall housing market in 2012.”

Starts and sales on upward path New-home sales are expected to climb from a record-low of 305,000 units in 2011 to 357,000 this year and 505,000 in 2013. Existing singlefamily sales are expected to follow suit and rise from 3.8 million last year to 4.4 million in 2012 and 5.4 million next year. Housing starts are also anticipated to move in the same upward trajectory, Crowe said, with single-family housing production increasing from 434,000 units last year to 503,000 this year and a more solid 660,000 in 2013. Delving into the economic forces that housing will be contending with in the next two years, Chris Varvares, senior managing director and cofounder of Macroeconomic Advisers, LLC, projected growth in the gross domestic product of 2.6 percent this year and about 3.3 percent in 2013.

U.S. economic outlook Citing a number of risks to this outlook, Varvares said the “eurozone is the 800 pound gorilla in the room,” and if Spain or Italy face a (see page 11)

The Five Star Building Group team of Randall Herbert and Clayton Richardson earned first place honors following the April 17 tournament at Fate Sanders Marina.

Second round down

Round two of the 2012 Piedmont Natural Gas Bass Trail Tournament was held April 17th at Fate Sanders Marina.

he second round of the 2012 Piedmont Natural Gas Bass Trail Fishing Tournament is in the books! Held Tuesday, April 17 at Fate Sanders Marina, round two of this year’s five qualifying tournaments wrapped up under rainy skies outside before concluding with a delicious fish fry inside. Top fishermen were recognized during the awards ceremony held during the fish fry at the marina’s restaurant. Randall Herbert and Clayton Richardson topped the scoreboard and were awarded first place prizes and winners’ trophies during the ceremony. The Five Star Building Group duo weighed in with 17.19 lbs worth of catches for the day in landing the top spot. Second place was reeled in by Triton Stone & Granite’s Jim Ford and Mike Williams who weighed in with catches totaling 15.85 lbs. Ford and Williams also took home the “Big Fish” award for a catch weighing 5.53 lbs. Danny Hankins and Mark Snead of the CPS Land, LLC boat secured third place honors with a weigh-in of 15.73 lbs. And fourth place honors went to JS Earhart Plumbing’s Bobby Colson and Jody Earhart who weighed in with 15.12 lbs. A complete rundown of posted scores are listed on page twelve. The scoreboard includes only those teams who chose to weigh-in and therefore does not include every fishing boat that participated during the tournament. Special thanks to tournament sponsors Piedmont Natural Gas. Our next tournament will be held Tuesday, May 15 at Bull Creek Marina. See page fourteen (14) for your registration form.

Fishermen are treated to a fish fry at the Fate Sanders Marina Restaurant. May 2012 z The NAIL 11

Bill Terry congratulates second place winners Jim Ford and Mike Williams, Triton Stone & Granite.

Company/Boat

Third place winners Mark Snead and Danny Hankins, CPS Land, LLC.

Fishermen

Pts

Five Star Building Group Randall Herbert & Clayton Richardson 17.19 lbs.

100

Triton Stone & Granite

Jim Ford & Mike Williams

15.85 lbs.

CPS Land, LLC

Danny Hankins & Mark Snead

15.73 lbs.

JS Earhart Plumbing

Bobby Colson & Jody Earhart

15.12 lbs.

Joe Haas Construction

Joe Haas & Rusty Rust

13.40 lbs.

Piedmont Natural Gas

Myatt Brown & Tim Cunningham

12.92 lbs.

Benchmark Construction Trey Bain & Nathan Vaughn

12.80 lbs.

Five Star Building Group Jason King & JP King

12.30 lbs.

Jeffco Flooring

Oliver Bradley & Jeff Johnson

11.47 lbs.

Piedmont Natural Gas

Jimmy Capps & Danny Talley

11.45 lbs.

Piedmont Natural Gas

Lamar Morgan & Joe Reese

11.44 lbs.

Custom Classic Homes

John Hopkins & Keith Roberson

10.50 lbs.

10.13 lbs.

Building Solutions by Spann Todd Spann & Bill Terry

Fourth place winners Jody Earhart and Bobby Colson, JS Earhart Plumbing. 12 The NAIL z May 2012

Piedmont Natural Gas

Dennis Jenkins & Mark Reavis

9.80 lbs.

McKenzie Construction

John Bornstein & David Gnewikow

9.06 lbs.

American Heating & Cooling Roger Dunn & Kevin Isreal

6.95 lbs.

Bob Kennedy Builders

Bob Kennedy & Donnie Kennedy

6.56 lbs.

Piedmont Natural Gas

Jerry Bell & Rob Hall

5.22 lbs.

Piedmont Natural Gas

George Brown & Milton Henderson

4.88 lbs.

Piedmont Natural Gas

Jerry Deal & Kevin Tidwell

3.41 lbs.

2.62 lbs.

Spencer Mill Woodworks Ronnie Collins & Barry Welch

Jerry Bell and Rob Hall earned the top spot and first place honors following the first tournament of the year held March 20 at Mason’s Boat Dock. The Piedmont Natural Gas team also took home that tournament’s “Big Fish” award.

May 2012 z The NAIL 13

COMPLETED

14 The NAIL z May 2012

SPIKE REPORT Life Spikes

Fouteen SPIKES (in bold) increased their recruitment numbers last month. What is a SPIKE? SPIKES recruit new members and help the association retain members. Here is the latest SPIKE report as of March 31, 2012. Top 20 Big Spikes Jim Ford Virgil Ray Bill King Mitzi Spann Jim Fischer Terry Cobb James Carbine Dan Stern Bruce Hancock Kevin Hale Tonya Jones John Whitaker Jennifer Earnest Bill Towe Reese Smith III Steve Moody Sonny Shackelford Michael Apple David Crane Cyril Evers

909 813 776 593 566 561 320 306 297 283 271 269 266 262 256 219 207 185 180 180

(Housing outlook brightens cont’d) financial default, the effects could spill over into the U.S. Soaring oil prices and the standoff with Iran over its nuclear stance could also unnerve financial and commodity markets. In the U.S., he said that the payroll tax holiday, emergency unemployment benefits, and the Bush-era tax cuts are all due to expire at the end of the year. So if Congress does not act, he said we could be “hitting a fiscal cliff.” On the plus side, he said that increasing household formations, rising real incomes, steadily upward payroll growth and a bullish stock market will contribute to the current economic expansion. Turning to the housing front, Varvares said “we believe we have hit the trough in home prices” and expects prices to be flat this year and to rise 1.5 percent in 2013. He anticipates 514,000 single-family starts in 2012 and 751,000 next year. Multifamily housing production should hit 221,000 this year and 238,000 in 2013. “Our long-term analysis suggests that given the demographics, we need to build roughly 1.6 million units a year over the next decade to meet demographic demand for housing,” said Varvares. “Obviously, we are now well below that. We do believe we will see a fairly nice run in 2013 and beyond as we need to build those units.”

Conditions vary by state Looking at various state statistics behind the national numbers, Robert Denk, NAHB’s assis-

Anne McKnight Jackson Downey Jim McLean Louise Stark Davis Lamb Harry Johnson Steve Cates C.W. Bartlett Tonya Alexander Steve Hewlett Tom Kelley Tim Ferguson Johnny Watson Bill Kottas Carmen Butner Lee Santiago Dave McGowan Kim Dykes B.J. Hanson Randy Parker Erin Richardson Jeff Slusher Duane Vanhook John Baugh Jordan Clark Don Bruce Sam Carbine Jim Ford, Jr. Hill McAlister Joe Morgan Gerald Bucy John Broderick Al Davis Sheila Rawlings Bernie Laine

179 170 163 163 156 146 140 138 120 119 115 113 101 97 95 95 91 89 81 74 71 70 69 68 65 62 62 62 57 54 53 51 47 47 46

tant vice president for forecasting and analysis, noted a range of conditions across the country and differences among the states in the amount of distress suffered during the recession and the headway that is being made in recovering. Housing nationwide bottomed out at an average 27 percent of normal production, which he defines as the residential building that occurred in

2000 to 2003, before the housing boom. The hardest hit states – such as California, Florida, Nevada and Arizona – bottomed out at between 10 percent and 15 percent of normal production, while better states, in sharp contrast, declined to 50 percent of normal production. Denk said that housing prices are drifting back to near-normal in many states. The number of states where house prices now exceed their

Greg Langley Beth Sturm Benny Sullivan Kim Nichols Bryan Edwards David Hughes Andrew Neuman Kay Russell Peggy Krebs Chuck Clarkson Wiggs Thompson Brad Butler Andy Wyatt Al Hacker Ray Edwards Dan Strebel David Lippe John Ganschow Steve Wheeley Alvin Basel Matt Burnett James Franks

46 46 46 45 44 44 44 43 37 36 36 35 35 34 32 32 31 30 30 29 25 25

Spikes Lori Fisk-Connors Trey Lewis Jess Dillon Tracy Lomax Eric DeBerry Frank Tyree Marty Maitland Kelvey Benward Lou Farringer Ron Myers Pam Smith Christina Cunningham Bridget Thompson

24 24 16 14 12 9 8 7 7 7 7 6 6

historic trend are continuing to recede, joining the states where prices are in the normal range. Some states however, such as Arizona and Nevada, have seen an overcorrection of boom prices and will take longer to get back to normal. Nationally, he said prices have dropped back to normal. “What we are seeing is stabilization of house prices across the country, back to nearly their historical averages,” he said. Most states saw their foreclosure rates jump from an average of 0.5 percent during the period before the boom to a peak of nearly 1.5 percent in the third quarter of 2009, but there were those – such as California, Arizona, Florida and Nevada – where foreclosures increased by a factor of four, five or six times normal. Nationally, foreclosure rates have dropped back down to an average of 1 percent, and while they remain a problem in most markets, they are at crisis proportions in only a few, Denk said. He added that Texas and Florida have roughly the same number of mortgages, but Florida has four times as many foreclosures. The protracted housing recovery now underway will bring housing starts to 40 percent of normal production by the fourth quarter of this year and 55 percent of normal by the end of 2013. Getting back to normal considerably faster will be oil states Texas and Oklahoma; coal and natural-gas producing Wyoming and Montana; and Iowa, supported by agricultural commodities. May 2012 z The NAIL 15

MAY CALENDAR SUNDAY

MONDAY

TUESDAY

WEDNESDAY

THURSDAY

FRIDAY

SATURDAY

SMC Special Event with Mike Lyon

Bass Trail - Round 2 Williamson County Chapter

HBAMT Remodelers Council

Rick O Fundraiser

Dickson County Chapter

22 HBAMT Membership Day

23 Green Building Council

Metro/Nashville Chapter

CHAPTERS & COUNCILS CHAPTERS CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles: 615/646-3303 Cheatham County Chapter details are currently being planned. Next meeting: to be announced. Topic: to be announced. Chapter RSVP Line: 615/377-9651, ext. 310 DICKSON COUNTY CHAPTER Chapter President - Mark Denney: 615/446-2873. The Dickson County Chapter meets on the third Monday of the month, 12:00 p.m. at the Ponderosa Restaurant in Dickson. Next meeting: Monday, May 21. Topic: to be announced. Price: FREE, lunch dutch treat. Chapter RSVP Line: 615/377-9651, ext. 307 MAURY COUNTY CHAPTER Maury County Chapter details are currently being planned. Next meeting: to be announced. Price*: to be announced. Chapter RSVP line: 615-377-9651, ext. 312; for callers outside the 615 area code, 1-800-571-9995, ext. 312 METRO/NASHVILLE CHAPTER Chapter President - John Whitaker: 615/843-3300. The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: Monday, May 28. Topic: to be announced. Price*: to be announced. Chapter RSVP Line: 615/377-9651, ext. 304 ROBERTSON COUNTY CHAPTER Next meeting: to be announced. Topic: to be announced. Price*: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313.

16 The NAIL z May 2012

SUMNER COUNTY CHAPTER The Sumner County Chapter meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library. Next meeting: to be announced. Topic: to be announced. Price*: to be announced. Chapter RSVP Line: 615/377-9651, ext. 306 WILLIAMSON COUNTY CHAPTER Chapter President - BJ Hanson: 615/884-4935. The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: Tuesday, May 15. Topic: “Mortgage Fraud,” with Nikole Avers, Executive Director, Regulatory Boards, State of Tennessee. Price: to be announced. Chapter RSVP Line: 615/377-9651, ext. 305 WILSON COUNTY CHAPTER The Wilson County Chapter meets on the second Thursday of the month, 11:30 a.m. at the Five Oaks Golf & Country Club in Lebanon. Next meeting: to be announced. Topic: to be announced. Price*: to be announced. Chapter RSVP Line: 615/377-9651, ext. 309 *Builders free pending sponsorship.

COUNCILS CUSTOM BUILDERS COUNCIL Council President - Alan Looney: 615/309-8200. The CBC meets on the second Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Topic: to be announced. Price: to be announced.

Council RSVP Line: 615/377-9651, ext. 311 GREEN BUILDING COUNCIL Council President - Erin Richardson: 615/883-8526. The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m. at the HBAMT offices. Next meeting: Wednesday, May 23. Price: free for Green Building Council members thanks to our annual sponsors Trus Joist and E3 Innovate; $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 308 HBAMT REMODELERS COUNCIL Council President - Don Mahone. The HBAMT Remodelers Council meets on the third Wednesday of the month, 11:00 a.m. at varying locations. Next meeting: Wednesday, May 16. Location: to be announced. Topic: to be announced. Price: free for RMC members with RSVP; $15 for non-members with RSVP ($20 w/o). Council RSVP Line: 615/377-9651, ext. 301 MIDDLE TENN SALES & MARKETING COUNCIL Council President - David Lippe. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: SPECIAL EVENT - “Browsers to Buyers” with author and sales trainer Mike Lyon. Thursday, May 3, 9:00AM to 11:00AM at Piedmont Natural Gas in Nashville. More details on page 4 (four) of this issue. Price: $15 for SMC members with RSVP ($20 w/o); $35 for nonmembers with RSVP ($40 w/o). Meeting sponsored by: The Jones Company, Norfolk Homes, Piedmont Natural Gas, Builder Designs, Lasso, and New Homes Directory. Council RSVP Line: 615/377-9651, ext. 302. Mike Lyon event RSVP Line: 615/377-9651, ext. 303.