Building Business News - December 2012 by Home Builders Association of Greater Kansas City

Building Business News

Volume Volume17 18• •NO.7 NO.11

December 2012 November July2012. 2011

www.kchba.org

The Official Newspaper of The Home Builders Association of Greater Kansas City

January 22-24, 2013 in Las Vegas

Build Opportunity at the NAHB International Builders Show

The International Builders’ Show (IBS) is the largest annual light construction show in the world and takes place January 22-24 in Las Vegas. The exhibit floor presents miles of the latest and most advanced building products and services ever assembled. See all of the innovations for yourself with handson demonstrations and working models in over 300 building industry categories at the National Association Home Builders’ annual convention.

Information and registration are online at www.buildersshow. com. The HBA’s designated hotel is the Wynn Las Vegas which also is the NAHB headquarters hotel, www.wynnlasvegas.com. IBS is where you’ll find more builders and more suppliers than anywhere else in the world. Make sure you’re there to discover the products and services you need to keep your business going strong. Highlights in this professional yet relaxing setting include: • The exhibit floor is packed with new products, pertinent information, and face-to-face conversations with experts and suppliers. • Networking events where you can establish business relationships and find out what’s happening in all parts of the country. • More than 150 education sessions covering topics ranging from industry trends to how home builders are retaking the market. • The New American Home will again feature design, construction and amenities that are market driven and showcase the latest in innovative products for the future of home building.

New Building Codes Expected to Take Effect in the New Year Following the passage of new building codes in Kansas City, Missouri, Overland Park and Olathe, building code officials from several cities and counties across the Kansas City metro area are close to finalizing their building code proposals to present to their respective city councils for approval before the end of the year. As of November 14, 2012, the HBA expects several new codes to take effect on either January 1 or April 1, 2013 (see chart on page 7). Last month the HBA hosted building code officials from six different jurisdictions to talk about the status of their building code proposals and to provide an opportunity for members to

PRSTRT STD U.S. Postage PAID Permit No. 108 Lawrence, Ks

weigh-in on the changes. In this meeting, a common approach emerged on how to handle compliance with the energy code. Some cities, such as Shawnee and Olathe, are providing builders with two options for compliance. The “prescriptive option” would require that builders follow the code requirements by the book. The alternative option or “HERS option” would require builders to enlist an independent energy auditor to provide a Home Energy Rating System (HERS) Index Score on all new homes to meet the energy efficiency requirements in the code. The HBA has expressed support for the HERS approach provided that certain parameters are Continued on page 7

Inaugural Welcomes Incoming President & Announces Awards Join with the HBA for the Inaugural Dinner 2012 to welcome the 68th President of the Board of Directors and for the annual awards presentation. Incoming President Fred Delibero, Summit Custom Homes, will receive the gavel and award winners will be announced for the Builders Hall of Fame, the Fred J. Geier Associate of the Year, and the Bob Bollier Award for Sales and Marketing. These recipients will be recognized for their lasting and significant contributions to the housing industry in Kansas City. Enjoy the festivities in the glow of the Plaza holiday lights.

Thursday, Dec 6 at

Brio Tuscan Grill on the Plaza

6 pm Cocktails 7 pm Dinner followed by Program

75 per person

Inside this Edition Building Code Dates

Past Presidents Dinner

December 2012

Calendar

Nov 1-Dec 31

HBA Membership Drive

Dec 6, 10 am

Parade Committee Meeting

Dec 6, 6 pm

Inaugural Dinner at Brio on the Plaza

Dec 11, 11:30 am

Missouri North Area Council Lunch

Dec 18, 2 pm

Board of Directors Meeting and Holiday Gathering

Jan 22-24

International Builders Show (IBS) in Las Vegas

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www.kchba.org

Volume 18 • NO. 12

Missouri North Area Council Lunch: Business Management

Steve Hays from RubinBrown will be talking about accounting, tax and business management issues affecting residential construction, December 11, 11:30 a.m. at Tiffany Greens. Price is $20. Register at www.kchba.org or contact Andrew McKeegan, andrew@kchba.org or 816-733-2224.

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h N w

t r d r o T r f

r o i T t e T

For more information or to register for any event, go to www.kchba.org or call 816-942-8800

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Building Business News B

Volume 18 • NO.12

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December 2012.

Government & Politics

The Facts on that Rumored 3.8% Sales Tax on Homes

The Fiscal Cliff and Housing

Among the most common tax and housing policy questions, according to NAHB, is whether a 3.8 percent sales tax will hit home sales in 2013. The answer is no. NAHB has been tracking a set of emails that falsely claim that the 2010 health care reform legislation (which contained a burdensome 1099 reporting requirement, now repealed) imposed a 3.8 percent sales tax or transfer fee on all home sales in 2013. There is an element of fact underlying this rumor, but for the most part this claim is false. The new tax added by the health care reform law is an add-on to existing taxes on capital gains and other ”unearned income” (dividends, rents, and interest). The new 3.8 percent tax is often referred to as a Medicare tax because its revenues will be dedicated to the Medicare Trust Fund. For capital gains, presently taxed at a 15 percent rate, the gains rate would rise an additional 3.8 percentage points for high-income taxpayers, those with adjusted gross incomes (AGI) above $250,000 ($200,000 if filing a “single” return). Capital gains arise with the sale of capital assets, such as stocks, bonds, and real estate. But importantly for home sales, the existing $500,000 / $250,000 gain exclusion for a seller of a principal residence continues to apply, so most principal resi-

dences sales will not be affected. Some second home sellers with high incomes may have to pay some additional capital gains tax to the extent that their AGI exceeds $250,000, but only on that portion of the gain that causes the taxpayer’s AGI to exceed $250,000 and only for the realized capital gain - not the actual sales price. Consider the following typical example. Suppose a married couple sells their principal residence for $500,000, after having purchased the home for $200,000. Suppose the capital gain on the sale is $300,000. The couple is allowed (under Section 121 of the Internal Revenue Code) to exclude from all tax (including the standard capital gains tax and the new 3.8% tax) up to $500,000 of gain, so there is no tax on the realized $300,000 gain from the home sale. To be clear, the 3.8 percent tax is not in any way a sales tax paid against the sales price of the home for either the home seller or home buyer. Nor is it an additional business income tax for home builders selling a new home out of inventory. The housing market has enough policy uncertainties today. We hope this false rumor concerning a 3.8 percent sales tax on home sales is not among them. Please contact Beatriz Ibarra at bibarra@kchba.org with any questions or comments.

Spring Parade of Homes Entry deadlines & pricing for a black & white or color rendering are:

Members Non-Members Deadline B/W Color B/W Color

Early, Jan 11 $1,095 $1,395 Regular, Jan 25 $1,295 $1,595 Late, Feb 8 $1,995 $2,295 Building Business News

$2,095 $2,295 $2,995

$2,395 $2,595 $3,295

With the 2012 election over, Congress, the White House and the country have moved on to a discussion on how to avert the “fiscal cliff.” In short, the “fiscal cliff” is the combination of across-the-board spending cuts in defense and domestic government programs and tax increases that begin to take effect in January 2013 unless Congress passes new legislation to avoid them. These automatic spending cuts and tax increases were part of a deal included in the Budget Control Act of 2011 designed to force both parties to come to a budgetary compromise by the end of the year or face painful economic and political consequences. But with only a few work weeks scheduled in the lame duck session to reach a new deal, it is unclear whether or not leaders can come together and how their inaction would impact an already delicate recovery in the housing market. What is clear is that Congress’ inaction would hurt almost every American’s pocketbook and send a message to the world that the U.S. is not in control of its economic destiny. The nonpartisan Congressional Budget Office predicts that falling off the “fiscal cliff” would put the U.S. back into a recession. Up to 3.4 million

jobs would be lost and the unemployment rate would reach 9.1 percent. Further, taxes would increase for individuals and businesses already struggling to make ends meet. The economic uncertainty may delay a family’s decision to build or buy a home in the near-term. Barry Rutenberg, chairman of the National Association of Home Builders (NAHB), issued the following statement: “In the closing weeks of the 112th Congress, NAHB urges President Obama and congressional leaders to work together to resolve issues related to the ‘fiscal cliff’ by extending all of the 2001 and 2003 tax cuts while being mindful of how broadbased tax reform will affect the fledgling housing recovery. Any effort to engage in tax reform should be done in a careful and deliberate manner and demands the proper vetting by Congress and all relevant stakeholders. There should be no rush to judgment on an issue that will affect virtually every American citizen.” The KCHBA encourages members to reach out to their representatives in Washington to urge them to reach a deal and avoid hurting an already fragile economy. For more info, please contact Beatriz Ibarra at bibarra@kchba.org.

Other Important Dates: Feb 21-25 Builder Proofing Feb 25 Substitution within subdivision deadline Mar 1 Early deadline American Dream Awards Contest $250 Mar 8-11 Online viewing of Parade Guide Mar 20 Sold/Unfinished notification deadline Mar 22 Late deadline American Dream Awards Contest $400 Mar 28 Deadline to get contest marketing material and price changes Apr 16 & 17 Material pick up Apr 19 & 20 Judging Apr 20-May 5 Parade Dates Apr 24 Awards Ceremony

April 20-May 5, 2013

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December 2012

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Volume 18 • NO. 12.

News & Events

HBA Welcomes New Board President Fred Delibero

Missouri State Senator David Pearce stopped by the HBA to have a conversation about his plans for the upcoming session. The HBA staff shared information about the state of the housing market in the area, issues for our members, and our priorities for the upcoming legislative session. Pictured with Pearce are Sara Corless, Beatriz Ibarra and Phil Yancey.

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The HBA Inaugural Celebration will welcome new Board President Fred Delibero as the HBA’s 68th President. “It has been an honor serving on many HBA committees over the past decade, and most recently serving on the executive committee as secretary/treasurer and vice president helping to lead the HBA through some of the most challenging times in our history,” said Delibero. “My commitment to the homebuilding industry and this organization remains steadfast,” he added. Fred is founder and president of Lee’s Summit based Summit Custom Homes, one of the largest volume homebuilders in the metro area. He has been a member of the HBA since 2002, the same year he started his company. “I started Summit Custom Homes during some very good times for the homebuilding industry and rode the roller coaster of uncertainty together with all of our members over the past five years. It’s been a challenging, educational and rewarding experience and one I’m happy to have survived. Through it all, the HBA was there to support our industry with quality education, market information, political advocacy at the local and state level and unmatched networking opportunities,” Delibero said. Prior to founding Summit Custom Homes, Fred was involved in commercial and retail real estate development and leasing with several companies including locally based Copaken Brooks where he was responsible for shopping center and outparcel leasing and development. In addition to his service at the HBA, he also serves as a member of the NAHB Board of Directors and is a member of the Lee’s Summit planning commission. Fred earned his Bachelor of Science in Marketing and Master of Business Administration degrees from Nova Southeastern University in Fort Lauderdale, FL. He, his wife Lisa, and their two children Griffin and Riley reside in Lee’s Summit. www.kchba.org

Fred Delibero, HBA President 2013

“The HBA has survived and thrived over the past several years and I look forward to continuing the lasting legacy that those before me have left the membership,” Delibero said. “Our organization is on a solid footing and the future is bright. My goals for the upcoming year include continuing to build upon our recent political advocacy successes; renewing our efforts to retain existing members and increasing the number of new members we recruit; enhancing our educational programs, committees and member services; and reinforcing the HBA’s position as the voice of the Kansas City housing industry,” he added. In addition, Fred plans to support initiatives aimed at giving back to the communities in which our members reside. “We are a powerful and well respected organization and as such we’re in a position to effect positive change for our community and we need to embrace that responsibility,” he said. “I look forward to working together with the volunteers and membership of our organization to continue our mission.”

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Volume 18 • NO.12

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HBA News & Events

December 2012.

Join with HBA Members at IBS! January 22-24, 2013 in Las Vegas More than fifty HBA member companies will be represented by nearly 150 individuals who have already registered for the International Builders Show, January 22-24 in Las Vegas. This is the ideal opportunity to network with fellow members in a professional and relaxing atmosphere. The companies registered as of November 14 include: Ashner Construction Company Inc. B L Rieke Custom Homes Barney Ashner Homes Inc. BMW Communities Bodine-Ashner Builders Bovard Insurance Group Brown Midwest LC Builders Development Corporation C. H. Development LLC CrossFirst Designed 4 You

Ken Mather Development McCray Lumber and Millwork Midwest Custom Builders LLC Midwest Fireplace Stoves & Spa Morgan-Wightman Supply Co. Norburg Contracting Northcraft Flooring and Granite Owens Built Properties Inc. ParkView Homes LLC Phelps Engineering R & S Home Builders Richard Mather Builders Inc.

Dreams & Design Building Dusselier and Marks Homes Dusty Dahmer Construction James Engle Custom Homes ER Marketing Ernst Brothers Home Construction Inc. Extraordinary Homes Factory Direct Appliance Frost Construction Company Gary Kerns Homebuilders LLC Graham Construction Company Gregory Allen Enterprises Inc. GWS Inc. Hoffman Construction Homes by Chris LLC Homoly Construction Hunt Midwest Real Estate Internet Builder Consulting J.S. Robinson Fine Homes Joseph Lane Homes

Singleton Construction LLC Starr Homes LLC Stoneworth Building Products Summit Custom Homes LLC Walsh-Schreiber Wilson Fans & Lighting

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IBS Offers Pre-Show Education for Everyone Take advantage of developing sharp new skills and advancing your industry knowledge by taking a pre-show course on a specific industry topic whether you plan to attend IBS or not. These one- or two-day courses give you the chance to delve deeper and really immerse yourself in the subject matter. Courses encourage collaboration and participation, with the understanding that your industry experience plays a crucial role in the classroom. Nowhere else during the year will you find all these courses available in one place at one time. Courses count towards credit of NAHB’s 13 professional designations. So if you’re looking to begin or move towards completion of a designation, this is an ideal time to take a class – or two. Pre-show courses help you build a better career, business and industry relationships. Individuals choose to obtain Building Business News

a designation as part of their career goals or business marketing strategy. These courses are offered before the Show starts and they are scheduled so that you can take multiple courses if you’re working towards a designation. This gives you the added benefit of also being able to attend the regular education sessions offered during the Show. Although these courses require an additional fee outside of your International Builders’ Show registration, you can register for them during the Show registration process at www.buildersshow. com. If you’re just taking courses, you can register for them individually. Complete registration details can be found in the Pre-Show Education Fees & Cancellation Policies.

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December 2012

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Volume 18 • NO. 12

Join the HBA Leadership Circle

Take Advantage of 2013 Sponsorship Opportunities and Benefits Once a year, the Home Builders Association of Greater Kansas City offers member companies the opportunity to take part in a year-long sponsorship program with benefits and privileges that add value to the sponsor’s HBA membership. Collectively these sponsorships exemplify a unique commitment to the homebuilding industry and provide the HBA with an additional source of support for marketing, advocacy, networking, and education as well as underwriting for HBA major events. See the 2013 overall sponsorship packages with the varying levels of benefits here. For additional sponsorship opportunities go to kchba.org or contact Phil Yancey, phil@ kchba.org, 816-733-2245, or Lori Kodanaz, lori@kchba.org, 816-733-2217. Bronze—$2,000

Silver—$3,500

Gold—$5,000

Platinum—$10,000

HBA Membership Dues for One Year (Value:$595) - Print and PowerPoint Recognition at the Major Events - Sponsorship Acknowledgement In Building Business News - $150 Loaded Value for the HBA Area Council meetings and Educational Events - $300 Loaded Value toward HBA Permit Reports - 2 Tickets Each to the Fall and Spring Awards Ceremony - 25 Tickets to the Spring Home Show - Specially-Designed 2013 Bronze Sponsorship Logo - 1 Free Golf Tournament Golfer or 1 Free Clay Shoot Shooter

- HBA Membership Dues for One Year (Value:$595) - Print and PowerPoint Recognition at the Major Events - Sponsorship Acknowledgement in Building Business News - Monthly Quarter Page Ads in Building Business News - $300 Loaded Value for the HBA Area Council Meetings and Educational Events - $460 Loaded Value toward HBA Permit Reports - 4 Tickets Each to the Fall and Spring Awards Ceremony - 50 VIP Tickets to the Spring Home Show - Specially-Designed 2013 Silver Sponsorship Logo - 2 Free Golf Tournament Golfers or 2 free Clay Shoot Shooters

- HBA Membership Dues for One Year (Value:$595) - Print and PowerPoint Recognition at the Major Events - Monthly Acknowledgement in Building Business News and on the HBA Website - Monthly One-Third Page Ads in Building Business News - $500 Loaded Value for HBA Area Council Meetings and Educational Events - $650 Loaded Value toward the HBA Permit Reports - $500 Loaded Value toward a Booth in the Spring Home Show - 6 Tickets Each to the Fall and Spring Awards Ceremony - Specially-Designed 2013 Gold Sponsorship Logo - 100 VIP Tickets to the Spring or Fall Home Show - One Free Golf Tournament Team or One Free Clay Shoot Team

- All of the Benefits of the Gold Sponsorship - Benefits to Suit the Needs of the Sponsor - Sponsorship of the Fall or Spring Parade of Homes

More choIceS. More StYLe. LeSS tIMe.

Your Business Wins When the HBA Grows

More choIceS. More StYLe. LeSS tIMe.

Continue to Recruit New Members in December!

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trim to achieve hundreds of options.

3 Interior wood species: Select from the rich grain of natural pine, oak or maple for the window or door interior. 9 Interior finishes: Six different factory stains, two paint choices or a primed finish let homeowners create or complement any look. 3 Interior wood species: Select from the rich grain of natural pine, oak or maple for the window or door interior.

Phil Yancey awards John Lambert NAHB’s Green Spike for membership recruitment.

The HBA Membership Drive has been extended through December so receive double and quadruple Spike points from NAHB for participating during this window of time. Membership in the HBA is an important business investment that provides your business and career with a wealth information and opportunities in BELTON 816 331 2211 homebuilding. As a member you appreciate the advantages of having access to BELTON 816 2211 331SPRINGS 2211 BELTON 816 331 EXCELSIOR 816 628 6025 educational classes and governmental affairs support to unique marketing and social EXCELSIOR SPRINGS 8166025 628 6025 EXCELSIOR SPRINGS 816 628 LEE'S SUMMIT LEE'SLEE’S SUMMIT 816 524 3522 SUMMIT 816 524 3522 816 524 3522 opportunities. Share these benefits with your industry peers by recruiting them to Kansas City’s Top Producing Anderson Dealer OWENLUMBER.COM Kansas City’s Top Producing Anderson Dealer join the HBA this month during the membership drive. For HBA membership OWENLUMBER.COM OWENLUMBER.COM “ENERGY STAR” is a registered trademark of the U.S. Environmental Protection Agency. “Andersen” and all other marks where denoted are trademarks of Andersen Corporation. information and to volunteer contact Phil Yancey, phil@kchba.org, 816-733-2245.

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“ENERGY STAR” is a registered trademark of the U.S. Environmental Protection Agency. “Andersen” and all other marks where denoted are trademarks of Andersen Corporation. © 2010 Andersen Corporation. All rights reserved.

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Volume 18 • NO.12

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December 2012.

Government & Politics

New Building Codes Expected to Take Effect in the New Year Continued from page 1

established, such as the requirement that the energy audit be conducted by a certified and independent third party. The HBA will continue to work with building officials to ensure that the newly adopted building codes are reasonable and efficient and work with HBA members to ensure they are abreast of all the latest code changes. HBA members are encouraged to contact Beatriz Ibarra at bibarra@kchba. org with any questions or concerns about any building coderelated issues.

New Residential Building Codes City/County Enforcement Date KC, MO Effective October 1, 2012 KC, KC No plans to amend current code until 2015 Overland Park Effective October 1, 2012 Olathe Effective April 1, 2013 Shawnee Expected April 1, 2013 Leawood Expected April 1, 2013 Lenexa No plans to amend code at this time Unincorporated JOCO Expected April 1, 2013 Gardner Expected April 1, 2013 Platte County (Unincorporated) Effective January 1, 2013 Clay County (Unincorporated) Effective January 1, 2013 Independence Expected January 1, 2013. Energy Code will be implemented at a date TBD

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Building Business News

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December 2012

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Volume 18 • NO. 12

Travis Graham Honored at Past Presidents Dinner The Past Presidents of the Home Builders Association gathered for an annual dinner recently at Jasper’s Italian Restaurant to honor 2011 HBA President, Travis Graham, Graham Construction. Travis’ dedication to the HBA is unprecedented since he is the first president to serve two terms, 12 years apart. He first served as the youngest president in 1999 then he served again in 2011. Bruce Rieke (HBA President 2005) recalled how the HBA was at a crossroads a few years ago and needed leadership that could navigate the association through difficult times. “We are deeply grateful that Travis answered the call,” said Bruce. This special occasion brought together a distinguished group that has members from across the decades including: Charles Bleakley (1966) Jim Young (1974) Richard Mather (1978) Dusty Rhodes (1980) Denis Stewart (1981) Phil Acuff (1984) Hank Riffe (1985)

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Buzz Dulaney (1987/1988) Paul Burger (1990) Tom Woods (1991) Bob Frost (2004) Bruce Rieke (2005) George Schluter (2008) Travis Graham (1999/2011)

Above: Past Presidents gather at Jasper’s. Above left: Travis Graham and Bruce Rieke. Above: Dusty Rhodes, Richard Mather, Bruce Rieke, Paul Burger. Left: Sara Corless, Jasper Mirabile, George Schluter.

Unified Government Waives Building Fees for New Home Construction

Above: Greg Kindle, Wyandotte Economic Development Council presents information to the Kansas Area Council. Left: Eric Soriano, Hermes Landscaping, talks with Greg Talkin, Unified Government Wyandotte County/Kansas City, KS.

The Unified Government Board of Commissioners is waiving all building permit fees, inspection fees and sewer connection fees for new single family home construction beginning this month through December 2013. The move is designed to spark a renewed wave of home construction to meet the demand created by thousands of new jobs coming to Wyandotte County. The Kansas Area Council members learned about the details from Greg Kindle, Executive Director for the Wyandotte Economic Development Council recently at the Council luncheon at the HBA. They also heard from John Kelly, Olathe Chief Building Code Official, who reviewed recent changes in the building code. www.kchba.org

Coldwell Banker John Moffitt & Associates Opens Relocation Office

Coldwell Banker John Moffitt & Associates has opened a new relocation office that will be serving the entire Kansas City metropolitan area. Previously associated with the Coldwell Banker Relocation Center of Kansas City, Moffitt decided to bring the relocation business in-house where he has three city-wide offices and highly trained relocation agents. The home office is located at 5300 College Blvd. in Overland Park. Additional offices are in Blue Springs and in the Crossroads District of Kansas City.

Building Business NewsBB

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HBA Industry News

December 2012.

New Households Sprouting Up

As Recession-Era Fears Ease, Confident Consumers Take Steps to Rent or Buy By Robbie Whelan,The Wall Street Journal, November 7, 2012

Americans are setting up house at the fastest rate in more than six years, an indication that recession anxiety, which prompted adult children to move in with their parents and single people to postpone marriage, is starting to ease. The nation added 1.15 million households in the 12 months that ended in September, according to the most recent Census Bureau data. That is a significant rise from the past four years when an average of 650,000 households were formed annually. While what economists call “household formation” is running a little lower than the average 1.25 million added annually during the boom years, the latest data nevertheless represent an important shift. Rising household formation, which is tied to employment growth, means more students are finding jobs when they leave college, more adult children are leaving their parents’ homes and more couples feel confident enough about the future to tie the knot. It could also mean that immigration is picking up. “During the recession, a lot of those major life events like marriage, children and migration were put on hold,” said Kenneth Johnson, a senior demographer at the University of New Hampshire’s Carsey Institute. “It may be that there are couples who are thinking about living together, and they’re thinking, ‘The jobs picture is getting better. It’s time to make the next step.’” That is what happened with Imran Akram, a patent inspector for the U.S. government, and his wife, Salmah Rizvi, who works for the Defense Department. The couple, who married in September, recently closed on their first home, a $250,000 condominium in Baltimore. Mr. Akram, who is 29 years old, and Ms. Rizvi, who is 26, say they wanted to buy a condo as soon as possible after their wedding. They plan to live there for at least a year and then rent it out if Ms. Rizvi decides to go to law school and they move. “At least here in Baltimore, purchase prices are still low, but rents are pretty high, because everyone’s scared to buy,” Mr. Akram said. “We’re both employed and feel secure with our jobs. We also feel like the housing market is on an upward swing. Prices are still depressed, but they’re probably going up.” Building Business News

While young home buyers represent one source of new households, the overall growth is due mainly to renters, many of them recent college graduates. The number of homes lived in by renters has grown by more than five million since 2006 to 39.6 million. During the same period, the number of homes lived in by owners fell 1.4 million to 75.1 million as many properties slipped into foreclosure or became vacant for other reasons. But the number of owneroccupied units is starting to rise again as buyers emerge.

List of Improving Housing Markets Expands to 125 in November November 6, 2012 - The number of U.S. housing markets showing consistent improvement in three key measures of strength expanded by 22 in November to a total of 125, according to the National Association of Home Builders/ First American Improving Markets Index (IMI), released today. This marks a third consecutive NAHB Improving Markets Index 130 monthly gain for the index, which 98 now includes 65 r e p r e s e n t a t i v e s 33 from across 38 0 states as well as Nov 11 Feb 12 May 12 Aug 12 Nov 12 the District of Kansas City has been included since February 2012 Columbia. The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Markets added to the list in November include such geographically diverse locations as San Diego, Calif.; Gainesville, Ga.; Omaha, Neb.; Louisville, Ky.; and Charlotte, N.C. “Not only did 22 additional markets qualify for the improving list in November, but the geographic distribution of included metros expanded from 33 states to 38 (plus the District of Columbia), while 97 out of 103 markets retained their spots on the list from the previous month,” observed Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “This shows that a housing recovery is firmly taking root and helping generate needed jobs and www.kchba.org

economic growth across much of the country -- though we know that this expansion could be even stronger were it not for ongoing challenges including overly tight lending conditions and difficult appraisals.” “The solid increase in the number of improving housing markets this month illustrates the degree to which the housing recovery has gained momentum since we initiated the IMI last year,” noted NAHB Chief Economist David Crowe. “Compared to the 30 markets that made the list as of November 2011, we now have 125, which is about onethird of all the markets surveyed for this index.” “This new high point for the Improving Markets Index provides the latest evidence that housing has turned a corner due to rising demand from consumers who are increasingly confident about the direction of local home values,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list. Page 9

November 2012 December

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Volume Volume18 18••NO. NO.11. 12

HBA-PAC Supports Several Pro-housing Candidates in Kansas and Missouri The HBA-PAC supported several pro-housing candidates in Kansas and Missouri during the 2012 election cycle. Overall, the HBA-PAC contributed to 38 candidates, 19 in Kansas and 19 in Missouri, competing for positions ranging from seats on county commissions and in state legislatures to statewide races. Of these candidates, 33 were elected to office, an 86 percent success rate. Since its founding, the HBA-PAC has served to help elect hundreds of prohousing candidates to office at the state and local level, which could only happen with the continued support of its members. These efforts are necessary to ensure that the voice of the housing industry is heard at all levels of government and that our elected officials understand the importance of new home construction for building strong communities and local economies. The HBA encourages members to get

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involved in the process. Your experience and opinions are essential to shaping public policy that makes sense. The HBA looks forward to working with all of our elected officials during the upcoming legislative session.

Build PAC is Key to Keeping Housing Strong

A key reason for the HBA’s strength is its aggressive political affairs program. The HBA is associated with four local political action committees; one PAC representing the entire metro and another PAC affiliated with local area councils. This allows members to get involved at the grassroots level by supporting candidates representing the areas where they live and work. The HBA is also one of the strongest supporters in the nation for BUILD-PAC, the political action committee for NAHB. The HBA has twice in recent years ranked as the largest fundraiser in the nation for BUILD-PAC. Contributions to the national group are shared with local candidates, allowing HBA members the opportunity to support candidates at home and nationwide who understand the importance of housing. To make a contribution, become involved or to learn more, contact Beatriz Ibarra, V.P. Government Affairs, bibarra@kchba.org.

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Welcome New Members

Happy Anniversary The strength of an association is in its membership and a thank you goes out to all of those members who continue to support the HBA.

1947 Byers Construction Co dba Brinton Homes 1948 e First Federal Bank, F.S.B. 1951 Kansas City Power & Light Company 1952 Acme Floor Company, Inc. 1954 Capitol Federal 1971 Neighbors Construction Company, Inc. 1973 Arrowhead Drywall Supplies 1976 ABI Corporation 1987 Arklyn Homes, Inc. James III Homes, Inc. 1988 Midwest Fireplace Residential Warranty Company LLC 1990 Phelps Engineering, Inc. 1991 Hedrick Construction Company, L.L.C. 1996 Robert A Washam Construction, Inc. 1999 Sallee Homes, Inc. Click this logo at

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Online Resources for HBA Members! Register for HBA Events Safe & secure online registration Personalized calendar of events. Notification of your events

Update Your Membership Change your profile, contact info & membership directory listings.

Call today 816-942-8800, or email gina@kchba.org or scorless@kchba.org

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Pride Built Homes, Inc. Koehler Building Co., Inc. Distinctive Homes by J & K Properties Golden Key, Inc. 2000 Robben Development Company John Shilt Homes, Inc. Rounbehler Construction, Inc. McIntyre Construction LLC 2002 Casa Bella Construction Inc Still Builders, Inc. 2004 C & B Construction Company, Inc. John Gray Homes, L.L.C. Raintree Builders Inc. Prairie Homes Inc Olsson Associates Weber Stucco 2005 Hall Custom Builders 2006 S & H Homes LLC Life Design Homes LLC Mark DeBrabander Foundations Co 2008 Pyramid Homes, LLC 2009 Provident Ventures Wineteer, Inc. dba LifeWise Renovations Metro Renovators & Construction Services, Inc Mike Hagen Electric, Inc. Builders Development Corporation 2010 Rhino Builders Inc Rausch Coleman Homes of KC LLC K Stucker Enterprises Bright Construction, Inc. Arvest Bank Prairie Greens Comapny, Inc. Dow Building Solutions Geo Comfort/Enertech 2011 Todd Hill Homes LLC. Culligan of Greater KC Elevated Electronics LLC MBL Development Co

Congratulations to our new members. Let’s make them feel at home! Sherrie Balmer Renewal by Anderson 7220 West Frontage Road Merriam, KS 66203 (913) 227-4656 renewalbyandersen.com sherrie.balmer@andersencorp.com

Jim McKim Blinds Corners & Curves 8400 East Iliff Ave #14 Iliff, CO 80231 (816) 966-8001 www.bccblindskc.com info@bccblindskc.com

Denny Van Moorleghem Regency Homes 7002 South 131 Ave. Omaha, NE 68138 (402) 895-9200 regencyhomesomaha.com denny@regencyhomesomaha.com

Michael Yeates The Brookeview Group 9000 N.E. 79th St Kansas City, MO 64158 (816) 668-0803 www.brookeviewkc.com myeates@brookeviewkc.com

Chris Armer Compass Design Build 8019 El Monte, Prairie Village, KS 66208 (913) 707-4008 ww.compass-db.com chris@compassarchitecture.com

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December 2012

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Industry News

Volume 18 • NO. 11.

Nationwide Housing Affordability Improves in Third Quarter Lower interest rates helped make homes more affordable to median-income families even as house prices continued to inch up in metro areas across the country in the third quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released today. Nationwide, 74.1 percent of all homes sold in this year’s third quarter were affordable to families earning the U.S. median income of $65,000. This was up slightly from the 73.8 percent of homes sold that were affordable to median-income earners in the second quarter. “The latest housing affordability data is good news on two fronts, because it shows that the share of homes affordable to median-income earners has risen even as home prices have continued to gradually recover from their recession lows,” noted NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla.

Page 12

“This is primarily due to the fact that mortgage rates are now lower than we’ve seen them since the HOI was initiated more than a decade ago. That said, given today’s overly tight lending conditions, we know that it remains very difficult for potential buyers to qualify for and obtain those great rates.” “The median price of all new and existing homes sold in the third quarter was $189,000, which was up from $176,000 in last year’s third quarter and the strongest number we’ve seen since the final three months of 2008,” explained NAHB Chief Economist David Crowe. “But at the same time, mortgage rates were at their lowest levels in decades, which kept homes quite affordable. Clearly, for families who qualify for a mortgage at such favorable terms, the outlook is brightening -- but being able to afford a home and getting approved for a mortgage are still two different things in the current marketplace.” Topping the affordability list for the first time in the HOI’s history, OgdenClearfield, Utah, was named the most affordable major housing market in the country in the third quarter. There, 93.2 percent of all new and existing homes sold between July and September of this year were affordable to families earning the area’s median household income of $71,500. Also ranking among the most affordable major housing markets in respective order were Youngstown-Warren-Boardman, Ohio-Pa; Indianapolis-Carmel, Indiana.;

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Lakeland-Winter Haven, Florida.; and Toledo, Ohio. Among smaller housing markets, Fairbanks, Alaska, retained its standing at the top of the affordability chart with an incredible 99.4 percent of all homes sold there in the third quarter being affordable to families earning the area’s median income of $92,900. Other smaller housing markets at the top of the index included Mansfield and Lima, Ohio; Wheeling, W.Va.-Ohio; and Kokomo, Ind. Meanwhile, New York-White PlainsWayne, N.Y.-N.J. retained the title of the least affordable major housing market in the country for an 18th consecutive quarter, with just 28.5 percent of homes sold there being affordable to families earning the area’s median income of $68,300. Other major metros at the bottom of the affordability chart included perennial entrants San Francisco-San MateoRedwood City, Santa Ana-Anaheim-Irvine and Los Angeles-Long Beach-Glendale, Calif., as well as Bridgeport-StamfordNorwalk, Conn., in that order. The least affordable small housing market in the third quarter was Santa Cruz-Watsonville, Calif., with just 44.4 percent of homes sold being within reach of families earning the median income of $87,000. Other small metros at the bottom of the list included Ocean City, N.J.; San Luis Obispo-Paso Robles, Calif.; Laredo, Texas; and Santa Barbara-Santa MariaGoleta, Calif., respectively.

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Volume 18 â&#x20AC;˘ NO.12 NO.11

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November December 2012.

HBA Staff

Office: 816-942-8800 Sara Corless Executive Vice President scorless@kchba.org, 816-733-2216 Beatriz Ibarra Vice President of Government Affairs bibarra@kchba.org 816-733-2237 Gina Battle Tour & Membership Records Coordinator gina@kchba.org, 816-733-2219 Marcia Jurgens Permit & Accounting Mgr. marcia@kchba.org, 816-733-2215 Stephanie Stollsteimer Director of Marketing and Communications stephanie@kchba.org, 816-733-2213 Lori Kodanaz Director of Consumer & Trade Shows lori@kchba.org, 816-733-2217

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for events online

Andrew McKeegan Association Services Manager Andrew@kchba.org, 816-733-2224 Natalie Tucker & Cindy Pearson Events Support Natalie@kchba.org, 816-733-2247 Phil Yancey Membership Manager Phil@kchba.org, 816-733-2245 Megan Fratzke Marketing Assistant mfratzke@kchba.org, 816-942-8800

BuildingBusinessNews THE OFFICIAL PUBLICATION OF THE HOME BUILDERS ASSOCIATION OF GREATER KANSAS CITY

December 2012 Volume 18 Issue 12 Copyright 2012 Published by the Home Builders Association of Greater Kansas City 600 E. 103rd Street, Kansas City, Mo. 64131 (816) 942-8800 Executive Vice President Sara Corless Editor Stephanie Stollsteimer Contributing Writer: Beatriz Ibarra Graphics Karla Peterie, Creative Services 2012 Executive Committee Home Builders Association of Greater Kansas City President Kevin Stucker Vice President Fred Delibero Secretary/Treasurer Chris Ragland Associate Representative Kevin Kirtley Immediate Past President Travis Graham To subscribe to Building Business News, call (816) 733-2224 To advertise in Building Business News call (816) 942-8800 For change of address requests, please fax changes to (816) 942-8367 or call (816) 942-8800 For more information, visit the HBA online at www.kchba.org

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HBA 2012 SPONSORS

December 2012

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Platinum

Bank of Blue Valley

Gold

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Capitol Federal Factory Direct Appliance Ferguson Enterprises bronze First Federal Bank Commerce Bank K & E Flatwork Complete Home Concepts Kansas City Star First American Title Kenny’s Tile Hermes Landscaping McCray Lumber & Millwork Kansas City Title Kitchens & Baths by Briggs Nebraska Furniture Mart Pacific Mutual Door Owen Lumber Pella Products Shamrock Cabinet ProSource of Lenexa Sun Lumber Western Chandelier Weber Flooring

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Volume 18 • NO. 12

Housing Permits Fourth Quarter Starts Out Strong Housing production continues to climb in cities across the Greater Kansas City Metropolitan Area. The monthly graph is up and down, but the trends show the fourth quarter is off to a strong start as builders make plans for the winter months. Single family permits in October were 331, the best October since 2007. Multi-family housing production continues to climb in 2012 with the total unit number coming in at 277, according to the Home Builders Association of Greater Kansas City’s (HBA) monthly Residential Building Permit Statistics report. “Builders are encouraged with national news that indicates an increasing number of households being created at the fastest rate in six years along with price appreciation that is now occurring for homes in many neighborhoods,” said Executive Vice President Sara Corless. “Builders are making decisions now while material costs and interest rates are favorable and create significant opportunities for buyers. All reports are that fall sales have been brisk and builders must prepare for spring buying activity. In addition to this activity, custom home builders, those who build to specific needs and wants of a client, are busier than they have been in several years. ” Five counties have increased year to date in October with the highest increases in Platte County up by 109 percent, Clay County up by 75 percent, and Wyandotte County up by 74 percent, and Johnson County up by 43 percent. Top cities ranked by number of single family units year to date continue to be led by Kansas City with 534, though only 15 permits were pulled in October. Builders attributed the drop to uncertainty and costs associated with new building code that took effect October 1. Cities rounding out the top ten year to date include Olathe with 358, Overland Park with 313, Lee’s Summit with 224, Platte County with 130, Shawnee with 115, Lenexa with 105, Kansas City, Kansas with 89, Blue Springs with 80, and Leawood with 62.

Building Business NewsBB

Volume 18 â&#x20AC;˘ NO.12

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December 2012.

HOME BUILDERS ASSOCIATION OF GREATER KANSAS CITY

CASS COUNTY Archie Belton Cass County Cleveland Drexel 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 Edgerton 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 Shawnee Spring Hill

Building Business News

Single Family Units^

M-F Units Sale%

M-F Units Rent

0 0 1 0 0 0 0 0 6 1 1 3 1 13

0 0 0 0 0 0 0 0 0 0 0 0 0 0

12 0 0 4 2 0 3 0 0 8 29 32 0 3 0 5 3 3 0 0 23 0 0 0 69

Residential Building Permit Statistics OCTOBER 2012 Total Units

S-F Units YTD

M-F Sale YTD

M-F Rent YTD

Total Units YTD

0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 1 0 0 0 0 0 6 1 1 3 1 13

0 5 27 0 0 1 3 2 21 2 14 52 13 140

0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 5 27 0 0 1 3 2 21 2 14 52 13 140

0 0 0 0 0 0 0 0 0 0 0

12 0 0 4 2 0 3 0 0 8 29

44 28 1 392 40 0 29 0 0 41 575

0 0 0 0 0 0 0 0 0 0 0

44 28 1 392 40 0 29 0 0 41 575

0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 21 0 0 0 0 0 21

32 0 3 0 5 3 3 21 0 23 0 0 0 90

80 0 23 14 27 53 31 35 4 203 2 1 1 474

0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 5 0 0 0 0 69 0 0 0 0 0 74

80 0 28 14 27 53 31 104 4 203 2 1 1 548

0 11 6 0 12 0 0 0 29

0 12 0 0 0 0 0 0 12

0 0 0 0 0 0 0 0 0

0 23 6 0 12 0 0 0 41

1 107 46 0 130 1 1 0 286

0 20 0 0 0 0 0 0 20

0 298 0 0 0 0 0 0 298

1 425 46 0 130 1 1 0 604

0 0 0 2 2 10 15 1 0 40 37 0 10 3 120

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 14 0 0 0 230 0 0 0 244

0 0 0 2 2 10 29 1 0 40 267 0 10 3 364

9 0 0 30 13 62 105 5 1 358 313 4 115 31 1046

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 292 0 0 0 230 0 0 0 522

9 0 0 30 13 62 397 5 1 358 543 4 115 31 1568

Single Family Units^ LEAVENWORTH COUNTY Basehor 4 Lansing 14 Leav. County 0 Leavenworth 2 Tonganoxie 0 20

WYANDOTTE COUNTY Bonner Springs Edwardsville KCK/Wyandotte Co MIAMI COUNTY Louisburg Miami County Osawatomie Paola Spring Hill

October 2012

M-F Units Sale%

M-F Units Rent

Total Units

S-F Units YTD

M-F Sale YTD

M-F Rent YTD

Total Units YTD

0 0 0 0 0 0

4 14 0 2 0 20

30 15 11 16 11 83

0 0 0 0 0 0

30 15 11 16 11 83

2 0 42 44

0 0 0 0

2 0 42 44

17 2 89 108

0 0 0 0

0 0 377 377

17 2 466 485

0 6 0 1 0 7

0 0 0 0 0 0

0 6 0 1 0 7

2 18 0 1 3 24

0 0 0 0 0 0

2 18 0 1 3 24

331

265

608

2736

1271

4027

Comparison of Single Family Totals 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

2006 750 833 1066 899 971 761 772 874 677 672 609 500

2007 353 475 824 687 677 616 546 515 397 597 385 313

2008 221 262 353 441 231 260 311 293 264 314 167 115

2009 96 129 131 184 189 204 196 207 219 226 192 182

2010 137 145 252 228 213 239 180 243 173 279 173 209

2011 90 121 180 210 230 262 204 205 202 205 185 207

2012 188 182 270 277 293 268 288 260 379 331

Annual Total*

9384

6385

3232

2155

2471

2301

2736

*Annual totals may not match seasonally adjusted numbers.

Comparison of Permits By Units Issued Year to Date* 2006 -2012 2006 2007 2008 2009 2010 2011 2012

S-F Units

8275 5687 2950 1781 2089 1909 2736

M-F Units

2879 1292 1506 650 253 600 1291

Total Units

11154 6979 4456 2431 2342 2509 4027

*Annual totals may not match seasonally adjusted numbers. ^The Single Family number is now units and includes both attached and detached units. %Multi-Family units are in buildings with 5 or more units and are divided by sale/rent. # 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.

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December 2012

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Volume 18 â&#x20AC;˘ NO. 12

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