Building Business News August 2023

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Member News

SVB Wood Floors New Location

SVB Wood Floors is now open in a new location! Stop by the new storefront at 14101 Norby Rd., Grandview, Mo.

KCHBA Housing Giants

Pro Builder has released their 2023 list of Housing Giants, the top 240 homebuilders in the U.S. ranked by their 2022 revenue. Congratulations to the following KCHBA members for earning their spot on the list:

• Don Julian Builders/New Mark Homes (#165)

• Rodrock Homes (#167)

• James Engle Custom Homes (#182)

Pro Builder conducted polling amongst the Housing Giants to ask what they anticipate the top five challenges of 2023 will be. The biggest challenge by far was rising interest rates, followed by the economy, increased labor and material costs, home prices and finding skilled labor. Potential opportunities within the homebuilding market were identified as well, citing improving operational efficiencies, niche marketing opportunities, market expansion, better product marketing and single-family build to rent as possible bright spots.

The New Home Experts In HVAC

Mike Bryant Heating & Cooling knows how important the comfort and security of your home is to you and your family. So when you choose us for any heating and cooling services, we will do whatever it takes to make sure you are receiving the highest quality workmanship and the most professional customer service possible.

Photo by Matthew Anderson Photography

Tips to Stay Cool in Record Heat on the Jobsite

Ensuring employees and contractors are regularly hydrated and protected from the sun during hot months is essential to the health and safety of workers. Employers and workers should be sure to have heat illness prevention plans in place, access to plenty of water, take adequate breaks when needed as well as access to shade or cool-down areas. Employers and workers should also consider shifting work schedules to times of day when temperatures are lower. Review the upcoming week’s weather forecast and have workers wear light weight, light colored, and loose fitted clothing.

The most serious heat illness is heat stroke. Symptoms of heat stroke include no sweating, confusion, disorientation, slurred speech, unable to think clearly, collapse, unconsciousness and/or potential seizures. If a worker is experiencing heat stroke, cool them down immediately and call 911.

Heat-related illness is preventable. During the extremely hot months it is important to ease into work. According to OSHA, nearly three out of four fatalities from heat illness happen during the first week of work. Build a tolerance to heat by increasing intensity by 20% each day. Additional precautions include:

• Drinking cool water even if you are not thirsty

• Rest for long enough to recover from heat

• Take breaks in a shady or cool area

• Wear a hat and dress for the heat

• Watch out for each other and verbally check on workers wearing face coverings

Go to kchba.org/heatsafety for more resources and information on preventing heat related illness.

NAHB Chief Economist: The Housing Market is Diverging

As the Federal Reserve digests the latest inflation and labor market data, the housing market is diverging. “Singlefamily construction is moving off cycle lows, while multifamily development is slowing after an unexpectedly strong run,” according to NAHB Chief Economist Robert Dietz.

Interest rates moved sharply higher at the start of July and then pulled back as the bond market attempted to predict the final actions by the Federal Reserve for this tightening cycle. From the end of June until the first week of July, the 10-year Treasury rate increased from 3.7% to almost 4.1%. This lifted the average 30-year fixed-rate mortgage to almost 7%, per the Freddie Mac weekly survey. These higher rates were because of hawkish commentary from Fed officials indicating multiple, additional federal funds rate hikes were set for the coming months.

But it’s the inflation data that matters: The June Consumer Price Index data brought good news, with consumer inflation moving down to a 3% year-over-year growth rate. Moreover, the internals indicate additional declines lay ahead, as the Fed attempts to bring inflation closer to 2%. Shelter inflation (rent and homeowners’ imputed rent) accounted for a striking 70% of the inflation gain in June.

However, shelter inflation growth will decline in the months ahead as an above-trend level of apartments under construction are completed. Moreover, the Producer Price Index business inflation measure for May indicate only a 1.1% year-over-year gain, with residential construction material pricing up only 0.5% on a year-to-date basis in 2023.

Taken together, the recent inflation data show slowing price growth, with more ahead. Consequently, the bond market repriced interest rates in mid-July, with the 10-year Treasury rate returning to below 3.8%. NAHB’s outlook is that this is consistent with a Fed rate increase in July and a 50-50 chance of a final increase in September. According to this forecast, mortgage rates reached their peak last fall. Story continued at kchba.org/diverging.

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ChatGPT and Beyond: AI’s Role in Modern Homebuilding

Artificial Intelligence (AI) continues to be a buzzword, moving from the subject of movies and science fiction novels to now integrating AI technologies into everyday life and the workplace.

Bassam Salem is the CEO of Atlas RTX, a software company based in Park City, Utah. Al Trellis is the President at the Home Builders Network, a consulting firm based in Eldersburg, Md. Trellis and Salem recently spoke with NAHB about the potential uses, capabilities and limitations of AI within the residential construction industry.

What is “Artificial Intelligence”

While it might seem self-explanatory, it’s worth diving into what the actual definition of artificial intelligence is. Similar to the dictionary.com definition, Salem defines AI as “technology that can automate what would otherwise require human intelligence.” He expands on this idea, calling AI “a big statistical machine that is looking at our content and deriving answers from what we’ve already built.” This encompasses robots and data analysis, along with but not limited to, systems such as ChatGPT that deal with conversation and vision machines able to identify people and content.

ChatGPT is perhaps the biggest trend in AI at the moment. GPT stands for “generative pre-trained transformer.” ChatGPT was created by the company OpenAI, which was founded in late 2015. ChatGPT is pre-trained to generate text information based on a large data set given to it by humans and continues learning based on user interactions. This foundational data does not change without human intervention, as ChatGPT is not connected to the internet. The first ChatGPT model was introduced in June 2018. The fourth and most current iteration was released to the public in November 2022.

What’s the Use

Salem breaks down why we would use AI into two different categories: what humans can’t do and what humans don’t want to do. What we can’t do involves physical limitations such as operating certain machinery, working in extremely harsh environments and the ability to work 24/7. More intellectual skills include knowing hundreds of languages and being able to process data instantly. Trellis believes ChatGPT’s number one asset is its speed and efficiency. “It can prepare things ten times faster than you can,” said Trellis. “Even if you have to spend 25% more time to edit it and review, that’s still three times faster than if you did it from scratch.”

As far as what humans don’t want to do, the list is arguably very long. One subcategory is repetitive tasks. In relation to the homebuilding industry, Trellis believes certain administrative duties relating to customer service, estimating and purchasing will continue to become

more automated. Trellis has recently spent time with a homebuilding company to identify 200 commonly talked about topics, such as cracks in concrete and hardwood floor shrinking. AI can write the initial letter to the customer based on the topic, then send it on to be reviewed and edited as needed by human eyes. ChatGPT also has the ability to write administrative documents such as job descriptions and construction timelines. Trellis offered a real-time example for a residential construction superintendent and residential electrical subcontractor. The scope of the work was instantly provided, ready to be altered as needed. ChatGPT was able to create a monthby-month construction schedule for a single-family home on a seven-month timeline. This data can be generated as many times as needed with more complex parameters and additional information.

AI will only become a more irreplaceable tool when it comes to business finances and expenses. Trellis has met a lot of builders he considers to be cost-based pricers versus a market-based pricer. AI can help with dynamic pricing without being hindered by cognitive biases – of which, Trellis points out, humans have been documented to have about 350 of. AI can find patterns and trends that aren’t detectable to the human mind.

This can benefit builders when it comes to sales, pricing and warranties. However, Trellis emphasizes the idea that correlation does not automatically imply causality. A human can look at the data and decide for themselves. “The machine can help up find the correlations,” said Trellis. “Humanity must stay involved for success.”

On the consumer’s side, AI can provide a more personal homebuying experience. Trellis points to AI’s ability to change a website’s appearance based on what the user has already seen and/or interacted with. AI provides the ability to have an instant chat available on a homebuilding website at any time of the day. The timing is especially important, as Salem’s data points to two out of three homebuyer conversations happening after business hours and on weekends. When comparing live chat to an AI supported chat, the same data shows AI results in 5-10 times more conversations and leads captured. This is also a

tool to filter down the more serious buyers, saving time for human workers. Additional sales tools include automated follow-up messages on how potential clients felt about a model home and being able to send helpful links. These resources can be provided instantly and in multiple languages as needed.

These automated services provide additional ways to enhance the experience of existing customers. Builders can more easily collect feedback and check in during the building process. It’s easier than ever to send a prompt to write a review, an invaluable asset in the digital age. Or if the customer does need assistance, the problem is brought to the appropriate person’s attention in the timeliest manner.

The Downfalls

As mentioned earlier, ChatGPT has a predetermined set of data it uses to generate additional data. “There is potential for bias in data and algorithms,” said Trellis. “If I had biases when I put the data into the machine, the machine will have the same biases.” There’s also the potential for programs like ChatGPT to generate blatantly wrong information. “The machine can make things up,” said Trellis. “Sometimes it doesn’t know the limits of what it’s supposed to do.” For example, Trellis asked ChatGPT to make an ad for a homebuilder based solely on square footage and the number of bedrooms and baths. The program made up a bunch of stuff about the living room, how much daylight it had and a non-existent dining area adjacent to the kitchen. Trellis also pointed to a situation where a lawyer used ChatGPT to write a brief. This use of AI was quickly unearthed when it was found the precedent cases quoted did in fact not exist.

Job displacement is also a legitimate concern for AI. Certain industries will take advantage of new technology to limit their workforce. For example, out of the approximately 3.3 million truck drivers in America at the moment, Trellis predicts one million of those trucking jobs will be obsolete in 15 years.

It’s still “artificial intelligence” – it’s not human even though it can begin to feel like it. “The evolution of this technology is still in early stages,” said Trellis. AI can help stimulate ideas, but it still lacks human-like intuition and creativity. “The danger is eventually we stop thinking. You want to use the machine as your tool, not the other way around.”

Participate in a Standdown and Possibly Save a Life

Construction Suicide Prevention Week is Sept. 4-8

In 2020, a mission-driven group of volunteers from across the construction industry came together with the goal of saving lives. They collaborated to launch the inaugural Suicide Prevention Week for the industry — a week dedicated to raising awareness about the higherthan-average number of suicides in the construction industry, and to providing resources to help prevent those deaths.

Every year, during September — National Suicide Prevention Month — the construction industry dedicates a week to raising awareness about the unique challenges workers face in construction that lead to suicide and what we can do to prevent it. Together, we can save lives.

What is a stand down at work?

The KCHBA is a sponsor of Construction Suicide Prevention Week and encourages every member company to find a way during this week to break down barriers and stigmas about mental health.

A safety stand down is a voluntary event for employers to talk directly to employees about safety. Any workplace can hold a stand down by taking a break to focus on a topic, which could be anything from fall hazards to mental health, to reinforce the importance of safety.

Anyone who wants to encourage safe and healthy employees can participate in a stand-down. In past years, participants included commercial construction companies of all sizes, residential construction contractors, suband independent contractors, highway construction companies, general industry employers, the U.S. Military, other government participants, unions, employer’s trade associations, institutes, employee interest organizations and safety equipment manufacturers.

How to Conduct a Safety Stand Down

Companies can conduct a safety stand-down by taking a break to have a toolbox talk, watch a webinar or bring in a speaker to talk about mental health. Managers are encouraged to plan a stand-down that works best for their workplace.

If you’d like a template for conducting a safety standdown, contact Kari@kchba.org for an example.

Other Ways to Participate

Every week in August, live webinars will be available for those interested in learning more about mental health and suicide prevention. Topics include:

Aug. 10: Three Ways to Support Mental Health in the Construction Industry

Aug. 17: How to Start (and Continue!) a Conversation

About Mental Health: Talk Saves Lives

Aug. 24: The Impact of Suicide in Construction: Sharing Stories of Hope and Healing

Aug. 31: Risk Factors to Know and Support Employers Can Provide to Mitigate Them

Contact Kari@kchba.org to register to attend one of these webinars or visit contructionsuicideprevention. com/webinars.

Support the Cause Through Sponsorship

The Construction Suicide Prevention Week initiative provides free resources to people in and around the construction industry to help them start conversations, hold stand-down events and share information with colleagues who may be struggling. Your sponsorship support helps us put more tools in the hands of the people who build our communities.

A company that invests $500 as a Supporting Sponsor will receive logo recognition on the designated sponsor page of the website: www.constructionsuicideprevention.com. These sponsors will receive a badge they may display on social media or their website.

Register Your Company’s Participation

Constructionsuicideprevention.org provides resources to plan activities with your workers during Suicide Prevention Week and let us know how you participated. Participating companies will receive an OSHA-recognized, industry-endorsed certificate of participation.

Make

FALL 2023 PARADE OF HOMES BUS TOUR SPONSORSHIPS

FRIDAY, SEPTEMBER 29

BUS SPONSOR | $650 (TWO AVAILABLE)

Recognition as a bus sponsor

Two event tickets

Digital, print and social media acknowledgment

Company logo displayed next to bus during event

FOOD SPONSOR | $500 (TWO AVAILABLE)

Recognition as a food sponsor

Two event tickets

Digital, print and social media acknowledgment

Company logo at food station area

DRINKS SPONSOR | $500 (TWO AVAILABLE)

Recognition as drinks sponsor

Two event tickets

Digital, print and social media acknowledgment

Company logo at drink station area

CONTACT JORDYNN@KCHBA.ORG FOR MORE SPONSORSHIP INFORMATION

New Members

In the Black, LLC

Ashlea Black

4827 W 78th Terr. Prairie Village, KS 66208

816-516-7939

linkedin.com/in/ashleablack

Framing Specialists Inc.

Greg Heath

5403 SW U.S. 40 Hwy. Blue Springs, MO 64015 816-744-0700

KCHBA Member Referrals

THE ESSENTIAL STRENGTH OF FIBERGLASS

Thank you to the following KCHBA members for referring new members to the association in June!

Scott Davis

Crestwood Custom Homes

Shawn Woods

Ashlar Homes

Susan Hearn

Schlage Locks / Allegion

Brian Lunbeck

Simplex Inc.

Building a Foundation of Trust and Service

More than 85 Years of Commitment and Service in Kansas

Natural gas is affordable, reliable and environmentally friendly, making it the preferred energy choice for homes and businesses.

To incorporate natural gas into your next project, contact:

Cris Powell cris.powell@onegas.com 913.594.2527

KCHBA Staff

Will Ruder Executive Vice President will@kchba.org | 816-733-2216

Kelcee Allen

Parade of Homes / Artisan Home Tour Director & Digital Content Strategist kelcee@kchba.org | 816-733-2246

Sheryl Drane Assistant to the Executive Vice President sheryl@kchba.org | 816-733-2221

Kari English Senior Director of Communications & Strategy kari@kchba.org | 816-733-2213

Marcia Jurgens Vice President of Administration marcia@kchba.org | 816-733-2215

Paige Livingston Manager of Communications & Education paige@kchba.org | 816-733-2217

Courtney Reyes Director of Government Affairs & Workforce Development courtney@kchba.org | 816-733-2214

Jordynn Webster Government Affairs & Workforce Development Manager kari@kchba.org | 816-733-2213

The Official Publication of the Home Builders Association of Greater Kansas City

August 2023 | Volume 29 | Issue 8

Copyright 2023

Published by the Home Builders Association of Greater Kansas City 600 E. 103 Street, Kansas City, MO 64131 | (816) 942-8800

Editor Kari English

Contributing Writer Paige Livingston Graphics Kelcee Allen

2023 Executive Committee President Brian Tebbenkamp

Vice President Dennis Shriver

Executive Vice President Will Ruder

Secretary / Treasurer Justin Pfeifer

Immediate Past President Tommy Bickimer

Associate Representative Misty Hanson

Past President Representative Bruce Rieke

To subscribe to Building Business News call (816) 733-2217

To advertise in Building Business News call (816) 733-2213

For change of address requests please email Kari@kchba.org or call (816) 942-8800

For more information, visit KCHBA.org

Member Anniversaries

1956

The Sherwin Williams Company

1963

The Alpert Companies

1978

Don Julian Builders, Inc.

1979

Pella Products of Kansas City

1983

Ambassador Construction Company, Inc.

1987

Reilly Homes, LLC

1988

Factory Direct Appliance a Ferguson Ent.

1991

Bank of Blue Valley

1994

Hoffman Construction, Inc.

1997

NSPJ Architects, P.A.

2003

The National Home Building Co.

2010

2019

Gentry Roofing, LLC

Scott Homes, LLC

2020

Fish Creek Homes

Greenamyre Rentals, Inc.

2021

Architectural Surfaces

Capital One Business Cards

& Payments

Metropolitan Properties, LLC

2022

Carpenter’s Guild

MP360 Design & Build

Cambria

Midgard Development, LLC

Royal Home Builders

American Dream Homes, LLC

CommunityAmerica Credit Union

BOK Financial Mortgage

DIAMOND

Mike Bryant Heating & Cooling

Ferguson

PLATINUM

First Federal Bank of KC

Kansas Gas Service

McCray Lumber

Nebraska Furniture Mart

SVB Wood Floors

GOLD

Bovard Insurance Group

Builders FirstSource

Capitol Federal

CrossFirst Bank

Fasone & Partners

Fidelity Bank

High Definition Drywall

K&E Flatwork

Kitchens & Baths by Briggs

Morgan-Wightman Supply Company

NBKC

Northcraft Flooring & Design

Owen Lumber

Phelps Engineering

Rew Materials

Rocktops Granite & Stone Fabrication

Star Companies

Sun Lumber Company

Sunflower Bank / Guardian Mortgage

United Heating, Cooling & Plumbing, Inc.

SILVER

Denizen

Henges Insulation

Kenny’s Tile

North American Savings Bank

Pacific Mutual Door & Window

PPG Paints

Schlagel

Shamrock Cabinet

Spire

Teague Lumber

Wilson Lighting

Mike VanKeirsbilck Construction, Inc.

2012

SunWest Residential, Inc.

2013

Premier Building Supply of KC

First Choice Custom Homes LLC

2014

Blue Springs Beam Service, Inc

Superior Masonry Inc.

2017

Cover Electric

Lashbrook Co.

Matt Adam Development Co., Inc.

Anything on Anything

Century Plumbing Co.

Keller Williams - Hiatt Home Group

Drees Built Homes

BRONZE

Commerce Bank

Complete Home Concepts

Hermes Landscaping

Locks & Pulls

Pella Products of Kansas City

ProSource

Raynor Garage Door

Real Estate Book & New Home Guide / DesignKC

ReeceNichols

SAPPHIRE

Bank of Blue Valley

Behr Paint Company

Canaan Stone Works (CSW)

CommunityAmerica Credit Union

First American Title

Royals Roofscapes

Schlage Locks / Allegion

Surface Center Interiors (SCI)

Wells Fargo Home Mortgage

Year-To-Date Home Building Activity Lower

With 1,898 permits issued for new single-family homes during the first six months of 2023, building activity has recorded a 32 percent decrease over the same period of 2022. Similarly, June’s total was down 32 percent compared to the same month in 2022., according to the KCHBA’s monthly Residential Building Permit Statistics report.

Kansas City, Mo., continues to issue the most singlefamily permits with 84 in June. Other top permitting cities for the month include Overland Park (42), Olathe (37), Raymore (37) and Lee’s Summit (23).

RESIDENTIAL PERMIT REPORT

Residential Building Permit Statistics

Residential Building Permit Statistics JUNE 2023

JUNE 2023

Comparison of Single Family (Cass, Clay, Jackson, Platte, Johnson, Leavenworth, Miami, Wyandotte Counties)

Building Units for Greater Kansas City

Comparison of Permits By Units Issued Year to Date

2016 - 2023

^The Single Family number is units and includes both attached and detached units. %Multi-Family units are in buildings with 5 or more units.

# Not available at time of report

Permit information reflects the most recent data at time of publication. In order to ensure accurate recording of residential building permit statistics, the HBA may revise monthly and year-to-date figures when updated data is made available. Copyright 2023 Home Builders Assoc of Greater Kansas City. All rights reserved.

Upcoming Events

Aug. 9

Associates Council

Aug. 9

Educators & Industry 2023-2024 Kick Off Happy Hour

Aug. 10

Membership Committee Meeting

Aug. 15

Board Meeting

Aug. 15

Happy Hour, hosted by Young Professionals

Aug. 22

Builders Council Meeting

Aug. 24

Bottle & Barrel Bash Fundraiser, hosted by the Professional Women in Building

Aug. 31

Developers Council

Sept. 4-8

Construction Suicide Prevention Week

Bottle & Barrel Bash 2023

AUGUST 24, 2023 • 6-9 PM • DREXEL HALL

3301 BALTIMORE AVE, KANSAS CITY, MO 64111

Don't be late for a very important date! Join us Down the Rabbit Hole for the KC Professional Women in Building Council's third annual Bottle & Barrel Bash fundraiser! The proceeds from this Alice in Wonderland themed event will support the Council's education and event programming for 2024.

SIGNATURE COC KTAILS • hors d'oeuvres • music silent auction • games • RAFFLE PRIZES

Purchase Tickets:

TINYURL.COM/bbb2023pwb

$50 TICKET • $75 Whiskey TICKET Each ticket includes food, drink and activities.