Building Business News September 2020 by Home Builders Association of Greater Kansas City

September 2020

Professional Women in Building

600 E. 103rd Street | Kansas City, MO 64131

On the Cover: Cover story

KCHBA Creates Professional Women in Building Council KCHBA is proud to announce the formation of the Professional Women in Building Council (PWB), which will be dedicated to promoting industry professionalism and supporting our members at the local level.

Features EO Op-Ed: KCHBA Costs $1.85 a Day

When visiting with a potential new member of the KCHBA, we’re frequently asked what they will get out of it. It’s a fair question.

Foundation Donates $40,000 to Local Non-Profits

Between the Parade of Playhouses fundraiser and grant requests, the Foundation has distributed funds to six local organizations.

Economic Update: Housing a “Bright Spot” When Covid-19 hit, the entire world had to reset its expectations and forecasts. As we begin the second half of 2020, KCHBA provided both national and local economic updates to help members with their business planning.

In Every Issue New Members

Anniversaries 21 Residential Permit Statistics

KCHBA Establishes Professional Women in Building Group

KCHBA: What made you want to be involved in forming the PWB committee?

CHBA is proud to announce the formation of the Professional Women in Building group (PWB). The PWB is the voice of women in the building industry, dedicated to promoting industry professionalism and supporting our members at the local level.

Beerup: In my short time working within this industry I have noted a lack of female participation and leadership at the national and local level. Yet there are so many women in the industry on the front lines or behind the scenes supporting, solving problems and making things happen. Unfortunately, there is very little support, connection or resources for these hard-working women. That is where the PWB steps in.

Members of our PWB are engaged in all aspects of the building industry including builders, remodelers, architects, suppliers, marketing experts, designers, real estate agents and mortgage lenders. Angie Beerup is a co-owner/partner with Elevate Design+ Build, LLC and has been involved in the residential construction industry for about four years. She is serving as chair of KCHBA’s PWB committee and Angie Ripley, with Engel & Völkers Kansas City, is serving as co-chair. The KCHBA spoke with Beerup about her personal history within the building industry and what she is most excited about with the creation of KCHBA’s PWB.

Why do you think it is important for KCHBA to have a PWB group? Beerup: I believe it is incredibly important for the KCHBA to have a PWB that will provide resources, education, and Continued on page 5

Sept/Oct Calendar

KCHBA: $1.85 a Day

ased on a traditional understanding of how a calendar operates, I’ve been working for you as your Executive Officer for 18 months. But I think many of you would agree that these past six months have seemingly altered our perception of time. The Kansas City metro home building market started off 2020 in a strong way, which extended the positive run that began in the third quarter of 2019. Things were looking good! Then we had a global pandemic dumped in our lap that completely upended conventional thinking.

Sept. 30: Introduction to the KCHBA for New Members - Virtual Event Oct. 10-25: Fall Parade of Homes Oct. 14:

Parade Awards Ceremony

Oct. 16: Associate Appreciation Clay Shoot Oct. 28: Missouri Area Council – Virtual Event

Those last two weeks of March were the longest decade of my professional life! As schools closed, restaurants shuttered, and stay-at-home orders were issued it would have been easy to become disheartened. As the KCHBA went to work ensuring that the components of our industry were deemed “essential” across local, state, and federal jurisdictions, something came into focus for me in the wee hours of the morning. In a world now relying on staying home to stay healthy, I was working for the very people devoted to providing those homes. Now, I’m a guy who typically only cries when watching Rudy but I was overcome with the enormity of the task at hand. Not only does this industry support more than 20,000 jobs while generating $1.8 billion in economic activity in the Kansas City region on any given day, but our entire society was then engaged in a fight with a killer virus and the primary response to it was housing. I was filled with a simultaneous sense of gratitude and responsibility. I was grateful that the members of this organization had the opportunity to lead the way while also filled with a sense of responsibility to provide all of you the chance to stay busy building these shelters from the viral storm while also keeping you safe.

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What has been made clear in this ongoing battle against Covid-19 is that where we live has never been more important. Our homes are no longer simply where we sleep. Our homes are where we work, where we work-out, and where we worship. And the members of this organization make that possible. I hope you are as proud of the extraordinary contribution you continue to make to the communities we serve as I am proud to work for you.

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Continued on page 7

KCHBA Establishes Professional Women in Building Group Continued from page 3

Beerup: The PWB inaugural kick-off event was a huge success and we were very excited to see such a great turnout. It is exciting and refreshing to see so many women come out to support the PWB and each other.

connection to women in our local building community. Women play a vital role within our industry and we want to help them advance their careers and enrich their lives. At the national level the PWB Council is dedicated to promoting industry professionalism and supporting members. They have established chapters throughout the country to amplify the voice of women in the building industry. Locally, through the KCHBA, we are dedicated to providing education, resources and strategies for career advancement and fun opportunities for connection.

Who can become involved in PWB? Are there annual membership dues? Beerup: The PWB is open to all women within our local building community whose company is a current member of the KCHBA. Men can be part of the PWB, too. Most chapters have about 10-15 percent male members who are excited to support the PWB. The annual membership dues are $100. However, through the end of the year, we are offering memberships at a discounted rate of $50.

What do you hope PWB will accomplish in the first few years? Beerup: As we gear up for the upcoming year, we look forward to establishing sub-committees for membership, events, education, community enrichment and connection. Our goals include building our membership, connecting our members in a way that creates a community and providing career advancement education opportunities. It is my vision to have a large connected network of women that support each other and work together to accomplish the goals of the PWB.

Is there anything else you want people to know about PWB? Beerup: We are excited to see new members join the council and we have several leadership opportunities and sub-committee roles to fill for those who have interest. Courtney Reyes is the KCHBA representative for PWB. If you have questions or would like to get involved, contact Courtney@ kchba.org.

Are you surprised by the response you’ve received thus far to PWB?

Average New Home Price Now $14,000 Higher Due to Lumber

ccording to NAHB’s standard estimates of lumber used to build the average home, the recent spike in softwood lumber prices has caused the price of an average new single-family home to increase by $14,116 since April 17. Similarly, the market value of the average new multifamily home has increased by $5,322 over the same period due to the surge in lumber prices.

products are typically marked up by the manufacturer before being sold to a lumber yard or other intermediary. To account for the manufacturer’s margin, sawmill prices for the lumber in these products are further marked up by the percent difference between receipts and cost of goods in the “wood product manufacturing” industry, as reported in the IRS Returns of Active Corporations tables. In the average home, this applies primarily to cabinets, windows, doors and trusses.

These estimates are based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs. Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses) sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls. The softwood products considered include lumber of various dimensions (including any that may be appearance grade or pressure treated for outdoor use), plywood, OSB, particleboard, fiberboard, shakes and shingles—in short, any of the products sold by U.S. sawmills and tracked on a weekly basis by Random Lengths.

At the prices reported by Random Lengths on April 17, the total cost to a builder for all the lumber and lumber-related products described above was $16,927 for the products in an average single-family home, and $5,940 for the products in an average multifamily home. But by the time Random Lengths reported prices on August 14, the cost to builders had risen to $28,765 for the softwood lumber products in an average single-family, and $10,403 for the products in an average multifamily, home. This is an $11,838 (or 70 percent) and $4,463 (75 percent) increase, respectively, in only four months. The price of the home to the ultimate buyer has gone up by even somewhat more than this, due to factors such as interest on construction loans, brokers’ fees, and margins required to attract capital to residential construction and get construction loans underwritten. For items such as lumber that are purchased and used throughout the construction process, NAHB has estimated that the buyer’s price will increase by an additional 19.2 percent (see the appendix to Government Regulation in the Price of a New Home for details).

Builders do not in general buy lumber directly from sawmills, but from an intermediate wholesaler or retailer—often a lumber yard. For that reason, sawmill prices are marked up by “gross margin as a percent of sales” for the “lumber and other construction materials” industry, as reported in the U.S. Census Bureau’s Annual Wholesale Trade Tables, to better reflect the price builders pay. Softwood lumber is also an input into certain manufactured products that are subsequently used in residential construction. These

Continued on page 7

KCHBA: $1.85 a Day Continued from page 4

THE

When visiting with a potential new member of the KCHBA, we’re frequently asked what they will get out of it. Fair question. We can talk about the discounts on goods and services (which are numerous), and we can expound on the value of making personal and professional connections with the best and brightest in the industry. We can explain how we’re deepening relationships with high schools and career centers across the metro that are educating our future workforce, and we can exhort about the mayors, city councils, county commissions, state legislatures, and congressional delegations that rely on our expertise.

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What we don’t talk about — but should — is the fact that your annual dues boil down to $1.85 per day. For $1.85 a day, you have access to full breadth and depth of everything the KCHBA and our National Association of Home Builders (NAHB) has to offer. For $1.85 a day, you have access to a professional staff of KCHBA employees solely devoted to promoting, educating, growing, and fighting for your business. So I will ask this of you. Please go out and tell the story of the KCHBA to those who need to hear it. Ask them to join us in this noble cause. A broader coalition adds more force to our collective voice. We’re strong, but we can always be stronger. If we continue to grow and emphasize the benefit of our members of doing business with one another, then not only will we weather this current storm but we will weather all future storms as well.

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Will Ruder Executive Vice President will@kchba.org Cell: 816-517-3187

Lumber Price Increases Continued from page 6

The bottom line is that the spike in lumber prices that occurred between April 17 and August 14 of 2020 caused the price of an average new single-family home to increase by $14,116, and the market value of an average new multifamily home to increase by $5,322. Based on NAHB’s standard priced-out calculations, a $14,116 increase in the median new home price will price more than 2.1 million U.S. households out of the market, meaning that these households could qualify for a mortgage to buy the median-priced new before home the price increase, but not afterwards.

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KCHBA Participates in Human Service Summit Focused on Housing

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here’s no quick fix. That was the ultimate determination during a United Community Services of Johnson County Human Services Summit that focused on attainable housing. KCHBA Executive Vice President Will Ruder sat on the multi-sector panel to provide the residential construction industry’s perspective along with Eric Mikkelson, mayor of Prairie Village; Qiana Thomason, president/CEO, Health Forward Foundation; Dennis Strait, LEED AP - Principal at Gould Evans; and Maria Zuluaga of The Zuluaga Real Estate Group. Moderated by Steve Kraske of KCUR, the panel discussed what cities can do to lower the cost of housing, what other cities are doing to diversify housing stock and how Kansas City is different from other cities in regard to residential construction.

Statement

“Kansas City is the only top 50 market in the U.S. without a top 50 home builder,” said Ruder. “We’re made up of many local builders who build anywhere from 12 to 20 homes a year. That means all the money from home building stays in the community, but it also means there is great competition, particularly as it relates to skilled labor.” Strait is aligned with the Incremental Development Alliance, which believes city zoning is a large part of the problem. To diversify the housing stock, Strait believes the way land is apportioned needs to be revised. “It’s not about building cheaper housing,” said Strait. Instead, Strait suggested cities should consider smaller plats such as 5,000 square feet instead of 15,000 square feet. Then, duplexes, triplexes, townhomes and condos can be incorporated into neighborhood more seamlessly. “It’s going to take 20 to 40 years to fix this problem,” Strait said.

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Ruder agreed that there no simple answer and that it will require everyone involved taking ownership and asking themselves “how can I contribute to providing attainable housing?” Ruder also participated in a virtual roundtable to discuss how best to spend the additional $35 million Johnson County was allotted through the CARES Act, which must be spent by the end of the year.

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KCHBA will continue to participate in discussions surrounding attainable housing on an ongoing basis, both in Johnson County and in other areas of the region, in an effort to share the residential construction industry’s perspective and to assist entities in finding solutions to this issue.

YOUR LOCAL SHOWROOMS: NORTH KANSAS CITY | LEE’S SUMMIT

KCHBA’s Foundation Donates $40,500 to Local Organizations in 2020

he KCHBA’s Foundation Fund was formed as the charitable arm of the association and is committed to supporting the KC community in three main areas: education related to the construction industry, development and/or redevelopment of Kansas City area communities, and charitable causes such as human services like transitional and supportive services and housing. The Foundation Committee is proud to have partnered with the Veterans Community Project (VCP) for its 2020 Parade of Playhouses fundraiser and is excited to announce that it raised $15,000 for VCP during the Parade of Playhouses. VCP is on a mission to eliminate veteran homelessness by providing transitional-housing and enabling access to exceptional 360-degree service solutions. Additionally, at the Foundation Committee’s August meeting, the group approved grants to several other local non-profits totaling $25,500. Organizations receiving grants this year are Community Housing of Wyandotte County, Johnson County Developmental Support, Habitat for Humanity of Kansas City, Rebuilding Together Kansas City and Make-a-Wish MO & KS. Thank you to everyone who has supported the Foundation this year. The Foundation’s next fundraiser will be a Top Golf tournament on Nov. 4. More details to come!

2021 Builders’ Show Registration Opened Sept. 1 The International Builders’ Show (IBS) returns to Orlando, Fla., once again Feb. 9–11, 2021. There is so much to experience during this three-day event! You can expect to find these fantastic offerings at IBS 2021: • Education sessions covering different tracks featuring the industry’s most highly sought-after speakers, plus dozens of show floor demos and workshops within the Centrals. • Manufacturers and suppliers showcasing the latest products and services specific to the home building industry.

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A block of rooms for KCHBA members have been reserved at the Hyatt Regency Orlando and the Rosen Centre hotels.

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Registration for the building industry’s biggest event opened Sept. 1. Sign up for show updates at BuildersShow.com/signup and stay in the know.

home

NAHB Committee and Council Application Period Now Open

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APPLIANCES

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The online application for NAHB committees and council board of trustees appointments is now live. NAHB committees and councils meet during the Spring and Fall Leadership Meetings and at the International Builders’ Show to discuss legislative and regulatory news, business updates, and other issues of importance to the membership and to the industry. Their role is to make informed recommendations to the NAHB Board of Directors on matters of policy.

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The deadline to apply is Oct. 30.

NAHB YOUNG PROFESSIONAL AWARDS NOMINATIONS FOR THE 2020 NAHB YOUNG PROFESSIONAL AWARDS ARE OPEN AND WILL BE ACCEPTED THROUGH OCTOBER 16.

APPLY NOW! (CLICK HERE)

Application Guidelines Anyone under 45 (born AFTER December 31, 1975) is eligible to be nominated or self-submit. All nominees must be an active member in good standing, excluding last yearâ&#x20AC;&#x2122;s winners, judging panelists, and the current NAHB Young Professionals Committee Chair, Vice-Chair and 2nd Vice-Chair. There is no fee to nominate or apply. Nominations will only be accepted via the online awards portal. Program Definition The NAHB Young Professional Awards recognize young building industry professionals under the age of 45 who propel their careers forward; advance in all three levels of the NAHB Federation; advocate for the home building industry; engage with their peers; and establish themselves as exceptional members of their communities. The winners of this award represent the future of the industry and will set new standards for the support and growth of home building, as well as the NAHB brand. They are valuable assets in their communities and are moving the home building industry forward.

FOR MORE INFORMATION OR QUESTIONS ABOUT THE AWARDS PROGRAM, CONTACT JORDYNN WEBSTER, JORDYNN@KCHBA.ORG 11

KMBZ Interviews Will Ruder About the Skilled Trades

ast month KCHBA Executive Vice President Will Ruder discussed the labor shortage and how to garner more student interest in pursuing skilled trades careers during KMBZ’s show Jayme & Grayson. “Much of what we’ve learned related to the interest in students to enter the trades is really through the relationships we’ve developed with career centers and high schools in the region that have shop classes. As you’ve probably heard, shop classes and some of those hands-on educational curriculums were some of the first things to get cut during budget cuts. And those are on their way back,” noted Ruder. But “it’s going to take time to cultivate that workforce to get them skilled and trained to the point where they’re then able to provide that service that is so sought after right now.” As skills become more valuable and difficult to find, the law of supply and demand will impact not only skilled trades salaries, but also the cost of housing. “There is a consumer consequence to that,” says Ruder. As the timeline for finishing a home is extended due to lack of qualified labor, the result is a more expensive home. “It’s not that you’re getting more house, you’re just paying a little bit more because it takes longer to build.”

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2020 Artisan Home Tour Ticket Sales Double from 2018

hank you to everyone who visited homes on the Artisan Home Tour! The tour had a terrific turnout with approximately 4,000 tickets sold. From July 20 and Aug. 30, the ArtisanHomeTourKC. org website hosted over 21,000 unique visitors. The HBA appreciates the Artisan Committee members for all the time and energy they put into ensuring this Artisan Home Tour would be a success. Special appreciation goes to 2020 Artisan Tour Chairperson Scott Bickford, Bickford & Company. Members also supporting the Artisan tour were Jeff Ashner of Ashner Construction, Chris Ragland of Homes by Chris and Patrick Willis of Willis Custom Homes, all of whom served on the Artisan Home Tour Committee. “The Artisan Tour is much better for our company than the Parade of Homes,” said Todd Hill of Todd Hill Homes, who participated in the Artisan Tour for the first time this year. “I think the fact that you have to purchase tickets helped limit the participants to people that seriously wanted to view a custom home.” The 2020 Artisan Home Tour sponsors were responsible for making this event possible. A wealth of thanks goes to the following sponsors: Presenting sponsor, Ferguson Enterprises Signature sponsor, Philm Creative Official title company, Coffelt Land Title Inc. Official HVAC company, Lennox/Mike Bryant Heating & Cooling Official roofing company, Century Roofing Ticket sponsor CrossFirst Bank Platinum sponsors: Andersen Windows and Doors and McCray Lumber Gold sponsors: 84 Lumber, ABI Corp., Bickford & Company, and Doctor’s Lawn and Landscape Silver sponsors: Kenny’s Tile, Teague Electric, United Heating, Cooling & Plumbing, the Real Estate Book and IN KC. And last, but certainly not least, the custom home builders who participated in the 2020 Artisan Home Tour: Scott Bamesburger, SAB; Louie and Kyle Freeman, Freeman Custom Homes; Tom French, Tom French Construction; Todd Hill, Todd Hill Homes; Don and Jeff Julian, Don Julian Builders; John Moffitt Jr., Mojo Built; Jeff Robinson, J.S. Robinson Fine Homes; and Gerry Starr, Starr Homes.

Mid-Year Updates: The Future of Housing – a “Bright Spot” in the Economy By Paige Waltman

ur industry started 2020 off strong. When Covid-19 hit, the entire world had to reset its expectations and forecasts. As we begin the second half of 2020, KCHBA provided both national and local virtual economic updates to help members with their business planning. Robert Dietz, chief economist at the National Association of Builders provided a look at the national outlook while Chris Kuehl, managing director of Armada Corporate Intelligence, provided a more local economic perspective.

building have been hit the hardest. Dietz predicted non-residential construction will take four to five years to fully recover. There is cause for cautious optimism for the remainder of 2020. Dietz anticipates growth in the third quarter. Some economists are estimating as much as 20 percent, but Dietz stays closer to 7 percent due to the “start and stop” nature of reopening. “For the year, we’re expecting about a -6.8 percent decline,” said Dietz. “In 2021, we think we will get 4 percent back.”

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Both Kuehl and Dietz forecasted a strong economy in 2020 before Covid-19 lockdowns went into effect.

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“There was nothing about the economy in January, or even February, that was suggesting we were in any trouble at all,” Kuehl said, noting that the U.S. was looking at a GDP growth of 2.5-2.6 percent for the year. “Unemployment numbers were astonishingly low at 3.5 percent. We were expecting a pretty good housing year. We were expecting a pretty good year in most everything,” said Kuehl.

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No one anticipated a 32 percent decline in GDP for the second quarter, according to Dietz.

And despite notable failings in other areas of government, Dietz said the Federal Reserve has done an “A+ job” during this recession. “They’ve acted as the lender and buyer of last resort. They have prevented a liquidity and a solvency crisis. And through their actions we have a low interest rate environment.”

Kuehl highlighted the nature of the “small business economy” present in the U.S., “more so than most countries in the world. If you look at Japan or Germany, or even the UK, these are countries that are more dominated by their large businesses in terms of contribution to GDP, number of jobs and even local impact.”

Current Housing Trends Builder confidence is now back to the same level it was pre-recession. For 2020, according to the Housing Market Index, there is a 12 percent decline in single family starts nationwide. Dietz notes this is not unusual for a recession, but the trend is moving in a positive direction. Dietz predicts that negative 12 percent will end up closer to negative 5 percent come year-end.

Small businesses are more vulnerable to the impacts of Covid-19, and this can include builders and suppliers. A strong word of advice from Kuehl is developing a strong relationship with your bank if you don’t already have one. “The most important relationship you have during a situation like this is your bank… [it’s] the only thing that is going to keep a lot of businesses afloat during this period.”

Fortunately, Kansas City did not follow this trend. Dietz notes, according to local MSA data, Kansas City family home starts are up 20 percent compared to the first half of 2019. Kuehl is surprised by the number of housing starts. After a collapse in April and May, there was a definite rebound in June that carried through July and August. “We saw a 20 percent increase in starts and a 20 percent increase in existing home sales,” said Kuehl.

According to Dietz, we’re looking at about a two year recovery to get back to the economy we had in February. And housing is expected to play a major role in getting there. Dietz noted housing is now about 16 percent of GDP, up from 14-15 percent in recent years. Housing is one of the “bright spots for the overall economy,” added Dietz. “If [the government is] looking for sectors that can help recreate jobs and foster economic growth, it really is in housing, homebuilding and remodeling.”

“There are a lot of pockets of strength, like Kansas City, throughout the country,” said Dietz, pointing out the higher density areas are the ones struggling. “We really didn’t even get the dip that was occurring in other parts of the country,” said Kuehl.

Kuehl agreed that the “housing market was expected to have horrific problems” amid the pandemic, but that has not been the case, at least on the residential side. Commercial and public

Dietz noted 47 percent of single-family

Continued on page 19

The Future of Housing

family members moving in, along with pets being a priority. The aforementioned reasons could also help explain the 7 percent growth in remodeling for 2020.

Continued from page 18

construction is currently in low density markets – a geographic trend he predicts likely to persist even after a Covid-19 vaccine. Within that single-family market, only about 4 percent is built for rent. Dietz predicts this could get up to 6 percent in the near future. Custom home building is also expected to take a larger market share of the single-family market. Currently at about 20 percent, Dietz forecasts a rise over the next few years, possibly topping out at 30 percent.

Two areas that have not been seeing a steady rise are townhomes and apartments. “Townhouse construction didn’t have a particularly good year in 2019,” said Dietz. But there is potential, he believes, as townhouses could expand beyond its current 12 percent market share going forward due to redevelopment of retail spaces.

Kuehl reported the stock market bouncing back has been good for the higher-end buyer. And mortgage applications are up 20 percent compared to just one year ago, even in the midst of a housing shortage. The country has about a five month supply, when “we basically need about five and a half to six months to be a normalized market,” said Dietz.

Apartments, however, are the “weak leg of the residential construction sector,” said Dietz. Apartment construction is currently down 19 percent nationally for the year and will likely stay there. Kansas City reflects this trend, standing at a decline of 18 percent. “Housing that contains a public space, such as an elevator, is at a disadvantage,” noted Dietz.

And while the demand keeps growing, that does not mean the houses are. “New home sizes have been falling for the last four or five years. Mostly because we were building more entry-level housing,” said Dietz.

Future of Housing Kuehl acknowledged forecasting housing trends is not so simple a task. “Housing is local,” said Kuehl. “What happens in Kansas City is not what’s happening in Chicago or St. Louis or in Portland.”

However, Dietz forecasts this trend ending soon, with house sizes levelling off and then rising a bit. This is likely due to an increased demand for home offices and more space needed for

But applying trends and forecasts across one large metro area is Continued on page 24

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Anniversaries 1961 Saul Ellis and Company, Inc. 1966 Kennyâ&#x20AC;&#x2122;s Tile & Floor Covering 1974 R. M. Standard & Company 1979 David R. Gilsdorf Concrete Finishing Company, Inc. 1985 Ben Cerra Construction, Inc. 1987 Kansas City Millwork Company 1990 J.S. Robinson Fine Homes 1991 Town & Country Guttering & Sheet Metal Neese Construction Corp

2005 Ray Cochran & Co. LLC Concrete Work 2006 Comerio Corporation 2008 Builders Stone & Masonry Hermes Landscaping, Inc. 2009 Precision Woods, Inc 2011 A+ Insulation King Building, Inc. 2012 Select Living Systems, LLC 84 Lumber 2013 Monticello Homes Inc ER Marketing Shaw Excavating and Grading Inspired Homes, LLC

1994 Becca Masonry, Inc. 1995 ECS Geothermal Inc. 1999 Ken Praiswater Construction, LLC 2001 James Engle Custom Homes 2004 Wood Brothers Construction Inc. Mike Bryant Heating & Cooling, LLC 2005 Ernst Brothers Home Construction, Inc. Reynolds Construction, Inc Lancaster Brothers Heating & Cooling

HBA Staff 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

2015 RW Scott Homes, LLC 2016 Westside Holding Co., Inc. Quicksilver Readymix, LLC Simplicity 2017 Shepard Homes, LLC 2018 Roth Living REconstruct 2019 Beginnings KC Real Estate Minder Plumbing, Inc. Lennox Industries Elkay Mfg. Co.

Single Family Permits Continue Upward Trajectory in July

etro-wide housing starts continued to climb in July, according to statistics compiled by the Home Builders Association of Greater Kansas City (KCHBA). The organization reported a seasonally adjusted total of 493 single-family homes permitted in July, up 15 percent from a total of 420 homes permitted in June. The top three permitting cities in July were Kansas City, Mo., with 91; Lee’s Summit, Mo., with 41 permits; and Olathe, Kan., with 35 permits. Although housing continues to be a strong driver of economic activity both locally and nationally, KCHBA is actively monitoring the availability and rising cost of building materials, particularly softwood lumber, which has caused the price of the average new single-family home to increase by $14,116 since April 17, according to the National Association of Home Builders (NAHB). “Housing accounts for about 16 percent of the national GDP,” said KCHBA Executive Vice President Will Ruder. “This industry has both the desire and the ability to lead an economic recovery, but the extent to which we are able to do so will be greatly affected by the supply and cost of the necessary materials.”

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Editor Kari English Contributing Writers Marcia Jurgens, Paige Waltman Graphics Karla Peterie, Creative Services 2020 Executive Committee President Jerry Braklow Vice President Kevin Kirtley Executive Vice President Will Ruder Secretary/Treasurer Tommy Bickimer Immediate Past President Shawn Woods Associate Representative Richard Holtcamp Past Presidents Representative Bob Frost

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Residential Building Permit Statistics

Residential Building Permit Statistics JULY 2020 CASS COUNTY Archie Belton Cass County Cleveland Garden City Harrisonville Lake Winnebago Lee's Summit Peculiar Pleasant Hill Raymore Village of Loch Lloyd

CLAY COUNTY Clay County Excelsior Springs Gladstone Kansas City Kearney Lawson Liberty North Kansas City Pleasant Valley Smithville JACKSON COUNTY Blue Springs Buckner Grain Valley Grandview Greenwood Independence Jackson County Kansas City Lake Lotawana Lee's Summit Oak Grove Raytown Sugar Creek PLATTE COUNTY Kansas City Parkville Platte City Platte County Riverside Weatherby Lake Weston JOHNSON COUNTY De Soto Edgerton Fairway Gardner Johnson County Leawood Lenexa Merriam Mission Hills Olathe Overland Park Prairie Village Roeland Park Shawnee Spring Hill Westwood

Single MultiS-F M-F Total Family Family Total Units Units Units Units^ Units% Units YTD YTD YTD 1 8 0 0 0 1 2 3 0 8 13 0 36

0 0 0 0 0 0 0 0 0 0 396 0 396

1 8 0 0 0 1 2 3 0 8 409 0 432

5 185 11 0 0 7 24 12 24 9 71 7 355

0 0 0 0 0 0 0 0 0 0 396 0 396

5 185 11 0 0 7 24 12 24 9 467 7 751

0 1 0 64 5 0 0 0 0 7 77

0 0 0 0 0 0 0 0 0 0 0

0 1 0 64 5 0 0 0 0 7 77

19 15 2 333 29 0 22 0 0 26 446

0 0 0 315 0 0 0 0 0 0 315

19 15 2 648 29 0 22 0 0 26 761

25 0 12 1 0 10 2 8 0 41 0 0 0 99

0 0 48 0 0 0 0 0 0 4 0 0 0 52

25 0 60 1 0 10 2 8 0 45 0 0 0 151

146 0 71 9 0 51 35 75 0 222 0 0 0 609

0 0 48 0 0 0 0 116 0 314 0 0 0 478

146 0 119 9 0 51 35 191 0 536 0 0 0 1087

19 0 7 11 1 0 0 38

0 0 0 0 0 0 0 0

19 0 7 11 1 0 0 38

135 27 7 69 12 0 0 250

0 0 0 0 0 0 0 0

135 27 7 69 12 0 0 250

8 0 0 5 4 4 29 0 0 35 32 9 0 11 16 1 154

0 0 0 0 0 0 88 0 0 10 0 0 0 0 0 0 98

8 0 0 5 4 4 117 0 0 45 32 9 0 11 16 1 252

30 0 0 53 21 26 125 0 0 356 211 38 0 54 60 1 975

56 0 0 0 0 0 386 0 0 95 0 0 0 67 0 0 604

86 0 0 53 21 26 511 0 0 451 211 38 0 121 60 1 1579

July 2020

Single MultiS-F M-F Total Family Family Total Units Units Units Units^ Units% Units YTD YTD YTD LEAVENWORTH COUNTY Basehor 13 0 42 0 13 42 Lansing 1 0 11 0 1 11 Leav. County 18 0 46 0 18 46 Leavenworth 24 0 30 0 24 30 Tonganoxie 3 0 25 0 3 25 59 0 59 154 0 154 WYANDOTTE COUNTY Bonner Springs Edwardsville KCK/Wyandotte Co MIAMI COUNTY Louisburg Miami County Osawatomie Paola Spring Hill Totals

0 0 23 23

0 0 4 4

0 0 27 27

6 0 141 147

0 0 4 4

6 0 145 151

0 7 0 0 0 7

0 0 0 0 0 0

0 7 0 0 0 7

6 35 0 1 11 53

0 0 0 0 0 0

6 35 0 1 11 53

493

550

1043 2989 1797 4786

Comparison of Single Family Building Units for Greater Kansas City (Cass, Clay, Jackson, Platte, Johnson, Leavenworth, Miami, Wyandotte Counties) Month/Year January February March April May June July August September October November December Annual Total

2013 273 224 335 444 337 333 409 354 384 369 340 288 4,090

2014 2015 2016 2017 2018 2019 2020 287 240 274 457 463 234 355 216 260 408 477 463 234 475 362 393 542 571 549 357 438 439 437 523 562 564 411 434 385 395 503 504 598 391 374 364 438 578 567 569 387 420 375 399 494 512 485 471 493 352 425 536 480 514 429 383 462 424 514 353 396 468 459 466 583 485 500 312 360 417 502 354 410 328 432 352 468 276 434 4,271

4,700

5,517

6,197

5,673

4,654

2989

Comparison of Permits By Units Issued Year to Date

2013 -2020 2013 2014 2015 2016 2017 2018 2019 2020

S-F Units 2355 2428 2562 3322 3650 3691 2485 2989

M-F Units 1702 2157 1706 2409 1191 1305 1211 1797

Total Units 4057 4585 4268 5731 4841 4996 3696 4786

^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 2020 Home Builders Assoc of Greater Kansas City. All rights reserved.

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The Future of Housing Continued from page 19

also not always accurate. Even in smaller cities, there can be dozens of different housing markets. “We have lots of neighborhoods. What goes on in the area around Basehor and Piper is different than what happens around Blue Springs and Lee’s Summit,” said Kuehl.

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Dietz is confident in mortgage rates staying below 4 percent until the end of 2022. Low mortgage rates help combat rising home prices, which has been a trend due to demand and the scarcity in resell inventory, resulting in about a 5 percent year-overyear gain.

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“I think some of that is going to soften. That’s a function of the fact the buyer pool is going to be reduced somewhat due to high level of unemployment.”

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But don’t expect big price declines like in 2008. Dietz compares the future market to what was seen in the early 2000s. And despite the pool of potential homebuyers possibly shrinking, there was a very strong demand for homeownership going into 2020.

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“Until about 2016, the market was really being pushed on the renter’s side. And then in 2016 it switched,” said Dietz. And the data can back this up; the first quarter of 2020 was the “best quarter for home ownership since the Great Recession.”

NBKC

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But there are always factors to be weary of, with Kuehl acknowledging the labor shortage in construction will continue to be a problem for at least a few more years. As jobs remain unfilled and the average age of skilled trades workers continues to rise, the need to recruit in the industry and bring skills up to speed is crucial.

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According to Dietz, the construction industry did experience a loss of less than half a million jobs in the spring. But about 70 percent of those jobs came back in the May-July period. Dietz predicts about a year from now the industry will actually have “a larger job base than it did before the recession.”

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Another potential pitfall is rising commodity costs, with lumber being top priority. “We have not seen domestic increases in lumber production. We still have tariffs on Canadian softwood lumber, about a third of our lumber supplies,” said Dietz. This year has seen a remarkable set of price gains for lumber.

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“At the end of July, we were up $627 per board feet. Early August is now at $670. Since mid-April, lumber prices have increased 90%,” said Dietz.

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In the end, both economists seemed upbeat about the future of residential construction both locally and nationally in 2021.