Member News

Summit Homes Donates Over $777,000 to Hope Haven

During the month of June, Summit Homes presented Hope Haven of Cass County with a check for $777,1444.47 following the sale of the builder’s 2020 Raising Hope KC home, located in Lee’s Summit. Hope Haven of Cass County is a non-profit safe shelter dedicated to providing supportive services, community resources and education to survivors of domestic and sexual violence. This is the second year Summit has partnered with Hope Haven. Contributions are allocated toward building a new shelter for the organization.

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Theft on the Rise: Mark Your Tools and Supplies

Higher material costs have brought about an increase in theft on job sites. This is a reminder to mark not only your tools but also your building materials. According to Sidney Kile of S.K. Security, about 50 percent of stolen equipment is found but only about 20 percent will be returned to the owner. If your property is recovered but you have no proof of ownership, law enforcement will not be able to give back the stolen product(s). Recommended practices include taking pictures of product serial numbers and/or permanently marking property in a unique way you can describe. The latter method recently worked in a KCHBA member’s favor. Cardinal Crest Homes had lumber stolen from a jobsite in June. Due to the lumber being marked, Cardinal Crest was able to identify the materials when they appeared for sale on Facebook Marketplace. The Kansas City Police Department was then able to apprehend the thieves and return the supplies.

12 KCHBA Members Listed on Ingram’s Fastest-Growing Companies

Since 1986, Ingram’s magazine has released an annual list of the 100 fastest-growing companies in the Kansas City region. The 2021 list includes the following KCHBA members: NBKC (#13), Gianni Custom Homes (#15), NASB Financial (#26), Weichert, Realtors Welch & Co. (#33), CrossFirst Bank (#43), Roeser Homes (#44), Re/Max Heritage (#46), First Federal Bank (#47), Country Club Bank (#53), Ashlar Homes (#56), Ask Cathy Marketing Group (#77) and Homes by Chris (#95). Congratulations on a year of tremendous growth!

How to Talk to Your Homeowners About Lumber Futures

The historic rise in lumber prices since April 2020 has impacted the national home building market in significant ways. In May of this year, Random Lengths ’ lumber futures rose to nearly $1,700 per thousand board feet, which equated to an additional $36,000 in price for the average single-family home, according to the National Association of Home Builders (NAHB). Now,Now, many headlines are touting declining prices on those same lumber futures contracts. Lumber futures prices have been decreasing by 52 percent (on a front-month basis) over the past couple of months as mill prices have fallen 48 percent over the same period, according to NAHB. InIn contrast, prices paid by builders since late May have declined by a fraction of that. Lumber still costs about 80 percent more now than it did before the pandemic, according to NAHB.

AsAs the price declines began grabbing headlines, the price of lumber packages quoted to builders held at record highs. In economics jargon, prices paid by builders — or “ street” prices — were “ sticky. ”

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This dynamic is primarily due to dealers ’ inventory carrying costs and potentially large differences between the price at which inventory is bought and sold. As is the case with every industry, retailers and wholesalers do their best to buy low and sell high. At the very least, they try to avoid buying high and selling low, which happens to be the biggest risk in an environment of rapidly falling prices. Suppliers ’Suppliers ’ inventories will also tend to be tighter during periods of falling prices. Whatever inventory the business has on hand was expensive relative to current prices. This gives wholesalers and retailers incentive to run through that inventory while they can still get close to what they paid for it — and doing so without souring relationships with customers. HomeHome builders and customers may begin to see some price relief once mill prices have substantially decreased for an extended period and/or stabilized. Note that large price decreases alone may not be sufficient. Prices must fall for long enough to materially lower a supplier ’ s average costs after a run-up. Depending on the rate and consistency of price decreases and whether prices have stabilized at the lower level,level, it may take months for builders to see price relief on the order initially reported in the futures or cash markets. So how do you explain this to your homeowners? In basic terms, the price of their home will not decrease right away because the lumber has already been produced and purchased at the higher price. Until the supply of lumber that was produced at those historically high prices is used up, the price of homes will remain elevated. Depending on the inventories of lumber in our market, it may be a fair amount of timetime beforebefore costscosts stabilize.stabilize. And those Random Lengths lumber futures fluctuations only tell part of the story. Oriented strand board, or OSB, which is not a building component considered random length and therefore not part of the calculation of that price, has skyrocketed in price and is showing no sign of declining. What was once a $6 board of OSB is now $62. So while lumber has been the focal point in the rise in building material costs over thethe last 18 months, it is far from the only culprit contributing to the explosion in the costs of new home construction we ’ re seeing today. Add in other supply chain issues with appliances, tools, wiring as well as the chronic lack of labor, one can quickly see that the lumber prices the public sees in the headlines is not an accurate or reliable metric for consumers trying to determine what it will cost to build their new homes. As consumers, we don ’t look up beef cattle futures to determine what this weekend’ s barbecue is going to cost nor should we look at lumberlumber futures and assume we have a handle on what full scope of materials used in a new home will be.

KCHBA Instrumental in Bringing Awareness to D.C.

The KCHBA has consistently and frequently educated municipalities, counties, civic groups, chambers of commerce and other community leaders on the spiking costs of home building in addition to weekly, and oftentimes daily, communication with your representation at NAHB. NAHBNAHB has communicated with most of the state Attorneys General across the country to highlight the rapid rise in materials costs. Just this month, at the urging of NAHB and U.S. Senator Jerry Moran (R-KS), the Biden Administration convened a summit to address the historic rise in the costs of building new housing in the U.S. Joining our senior NAHB leadership were Commerce Secretary Gina Raimondo, HUD SecretarySecretary Marcia Fudge, Assistant to the President and Director of the National Economic Council Brian Deese, Assistant to the President and Director of the Domestic Policy Council Ambassador Susan Rice and Chair of the Council of Economic Advisers Cecelia Rouse. Together, NAHB and the KCHBA prepared a series of questions and briefing documents for Senator Jerry Moran to engage U.S. Trade Representative Katherine Tai on April 28. During their exchange, Senator Moran explained the harm experienced by buyers and home builders brought on by lumber and steel tariffs.

SenatorSenator Moran continued to press this issue in Washington, D.C. Following a series of conversations between Senator Moran, his staff and the KCHBA, U.S. Secretary of Commerce Gina Raimondo agreed to convene the previously mentioned building materials summit to address not only the current price spikes, but also to identify solutions to prevent these circumstances from occurring so dramatically again in the future.future. In an article on nbcnews.com published May 17 titled, "Should Joe Biden worry about soaring lumber prices?" Senator Moran was quoted saying, "The reality is that record high lumber prices are putting the American dream of homeownership out of reach for hundreds of thousands of potential homebuyers. " Senator Moran also teamed up with U.S. Senator Jeanne Shaheen (D-NH) to urge Ambassador Tai and U.S. Commerce Secretary Gina Raimondo to take action to resolve the trade dispute between the U.S. and Canada on softwood lumber. InIn June, KCHBA's Executive Vice President Will Ruder visited the office of Senator Moran in Washington, D.C. to thank him and his staff for leading the effort to address the residential construction sector's supply chain problems at the federal level and to quip them with updated information related to challenges of meeting consumer demand and expectations in today ’ s market.

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Fall Parade of Homes Returns Sept. 18 Through Oct. 3

The Fall Parade of Homes returns to Kansas City Sept. 18 through Oct. 3. Sponsored by Mike Bryant Heating & Cooling, the Fall Parade will feature hundreds of homes by some of the area’s finest builders and includes townhomes, villas and single-family homes with a variety of floor plans featuring the latest design trends. Presented twice a year by the Home Builders Association of Greater Kansas City (KCHBA), the Kansas City Parade of Homes is the second largest in the United States. Since 1947, millions of greater Kansas City residents and visitors have enjoyed viewing the latest in-home innovations, styles and decorating, and this year’s fall parade will be no different as it showcases the area’s premier new homes, home builders and communities. Homes will be open daily from 11 a.m. to 6 p.m. and admission is free. Free parade guides will be available for pickup at the HBA (I-435 & Holmes) beginning the week prior and at all parade homes during the event. Consumers can also download the user-friendly mobile app from the Google Play or Apple Store. Using the app, parade-goers can save their favorites and then map a customized route to each home. For more information, please visit KCParadeofHomes.com.

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Aug-Sept Calendar

Aug. 18: Onsite Construction 101 Aug. 25: One Hour MBA Aug. 26: PWB Wine & Whiskey Pull Event Sept. 13-17: Professional Women in Building Week Sept. 18-Oct. 3: Fall Parade of Homes Sept. 22: Fall Parade Awards Ceremony Sept. 24: YP & PWB Parade Bus Tour

Check out the weekly e-newsletter, This Week at the HBA, for the most up to date event information.

Will Ruder

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

Dawn Allen

Director of Member Services & Partnerships dawn@kchba.org 816-733-2241

Kelcee Allen

Director of Parade of Homes/Digital Content Strategist kelcee@kchba.org 816-733-2246

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

Courtney Reyes

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

Paige Waltman

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

Jordynn Webster

Manager of Government Affairs & Workforce Development jordynn@kchba.org 816-733-2218

The Official Publication of the Home Builders Association of Greater Kansas City August 2021 • Volume 27 • Issue 7 Copyright 2021

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 Writers Marcia Jurgens, Paige Waltman Graphics Karla Peterie, Creative Services

2021 Executive Committee President Kevin Kirtley Vice President Tommy Bickimer Executive Vice President Will Ruder Secretary/Treasurer Brian Tebbenkamp Immediate Past President Jerry Braklow Associate Representative Richard Holtcamp Past Presidents Representative Bob Frost

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