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Builders Outlook Issue 5 2011
Building El Paso’s tomorrow today
NAHB supports legislation addressing housing lending crisis grave repercussions for job growth and the overall economy," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. The credit crunch has taken an enormous toll on the nation's economy, with job losses felt most acutely in the housing sector, where more than 1.4 million construction workers have been idled since 2006. Factoring in the effect of the housing plunge on industries that provide materials and services to home builders, the total impact of the housing slump has been the loss of more than three million jobs and $145 billion in wages in all housing-related industries. H.R. 1755, the Home Construction Lending Regulatory Improvement Act of 2011, would address specific regulatory obstacles to the credit needs of the nation's home builders. In a letter to fellow lawmakers seeking support for their bill, Reps. Gary Miller and Brad Miller said that "one of the major reasons for this lack of credit is the overly restrictive actions by banking regulators which have hindered federal and state chartered banks and thrifts' ability to make and maintain loans to qualified small home builders that have viable projects." To rectify this situation, the legislation would grant authority and guidance to federal and state banking regulators to ensure that financial institutions that provide financing to America's home builders are permitted to make loans, restore liquidity and provide stable financing to the residential housing sector. In other news Reuters correspondent Corbett B. Daly reports that a bill to create a
Brad Miller (D-N.C.)
Rep. Gary Miller (R-Calif.)
“One of the major reasons for this lack of credit is the overly restrictive actions by banking regulators which have hindered federal and state chartered banks and thrifts' ability to make and maintain loans to qualified small home builders that have viable projects."
new market for financing mortgages would help wean the $10.6 trillion U.S. mortgage market off government support advanced in the House of Representatives in early May. The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises approved the legislation on a voice vote. The bill, which the White House supports, would have to be approved by the full committee, the full House and the Senate before being sent to President Barack Obama for his signature into law. The bill aims to establish a market for covered bonds, which are securities issued by banks and backed by pools of loans. The loans underlying the covered bonds would remain on the issuer's balance sheet. That is different from the current U.S. mortgage system, in which lenders sell many of the loans they make to governmentsponsored Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), which then repackage them as securities for investors.
The government seized Fannie Mae and Freddie Mac in 2008 as losses on the loans they held spiraled. The government, through Fannie Mae, Freddie Mac and the Federal Housing Administration, now backs almost nine in 10 new mortgages. In Europe, covered bonds have long been in use. But they have failed to catch on in the United States. In a covered bond system, banks can borrow against the value of the underlying mortgages to obtain fresh capital to extend further loans. The bond investors have the right to those underlying assets in the case of a bank default. The Federal Deposit Insurance Corporation has warned that a covered bond system could put its bank deposit insurance fund at increased risk for losses because the investors would have seniority over the agency in the event of default. (For Reuters, Corbett B. Daly)
EPAB meeting set for Las Vegas
PRSRT STD U.S. POSTAGE PAID EL PASO TX PERMIT NO. 429
Editor’s note: The home construction industry has been suffering a serious problem with construction loan financing because of mixed signals from Federal Regulators. On the one hand local banks have ample supply of money to loan but regulators have been refusing to allow them to loan above a set quota in order to “maintain a preferred portfolio ratio”. Housing is a key factor in getting the recession fixed according to industry and financial professionals, yet the lack of AD & C credit has stifled growth and the economy. On August 10 the El Paso Association of Builders will host a general meeting with Larry Patton, President and CEO of Bank of the West and a member of the Dallas Federal Reserve as the speaker. Mr. Patton will provide insight into this topic and more during the luncheon at the El Paso Club. For information on that event contact the EPAB at 915-778-5387. The National Association of Home Builders (NAHB) applauded Rep. Gary Miller (R-Calif.), Rep. Brad Miller (D-N.C.) and 29 other original cosponsors for introducing bipartisan legislation aimed at restoring the flow of acquisition, development and construction (AD&C) credit to the housing sector to help spur job growth, support a recovery in the housing market and keep the economy moving forward. "We commend Reps. Gary Miller and Brad Miller for championing a legislative solution aimed at ending the freeze in housing production credit that has forced countless home building firms across the nation to shutter their doors, resulting in
Who:
El Paso Association of Builders What: General Membership Meeting Where: Las Vegas, NV When: June 10-12, 2011 Info: 778-5387
The El Paso Association of Builders is holding their June 10 meeting in Las Vegas, NV. and cordially invites all memebrs to join in on a fun filled weekend. “It’s designed as a get away with a mix of business as we come together for some good times away from the daily routine of running a business. We are using Sun Travel to book our trip which includes flying out on Southwest and then staying at the fabulous Paris Hotel, deep in the heart of the Vegas strip! The Paris is our headquarters but there’s a great selection from the Wynn to
Bellagio waiting for you! Just let Sun Travel know your preference,” said Executive Vice President Ray Adauto There’s a lot to do in Vegas and it was announced last week that Paul McCartney is in concert on Friday June 10 at the MGM arena. Now that’s going to bring a lot of folks into town for sure. If you’re not a McCartney fan, then maybe one of the dozens of regular shows like the Jersey boys, Elvis, or Cirque du Soleil is more your cup of tea. Great golf, and great dining, exceptional gambling. Our meeting is
scheduled for Saturday, June 11 at the Paris, place to be determined. We’ll have fun and some adventure but most of all we want you to be a part of this inaugural trip. With your help it could become an annual event! If you’re interested in finding out more contact Isabelle Caballero at Sun Travel, 747-3055. We’ll see you in Vegas June 10th!
2 MAY 2011
Builders Outlook
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Builders Outlook
President’s Message Greg Bowling President, El Paso Association of Builders
Springtime is here and for those of you who missed it our annual spring golf tournament was Tuesday April 10th. I’d like to thank our golf committee of John Chaney, David Bogas, Eric Lowenberg and Sam Shallenberger, and staff Ray Adauto, Angie De Luna and Margaret Adauto for putting on another top notch golf tournament again this year. I’d also like to especially thank our VIP Sponsors: All Precision Sheetmetal Works, Goff’s Appliance and TV, Interceramic Tile and Stone Gallery, and Tropicana Homes. Lastly I’d like to thank all those who
volunteered to help out and participated in the tournament. Together we met our goal for our Association budget. While fund raisers are not the reason for our existence they sure do help make it easier to pay the bills so we can focus on the issues that affect our industry. Speaking of issues that affect our industry, in the past month our City Council tried to implement a few so called “smart growth” changes that would have devastating impact on the future of home building in the City of El Paso. The particular items of concern was a front build-to line that was to be mandated on every subdivision plat, and a requirement for the garage to not be further forward than the front door of the house. These changes would have essentially made millions of dollars worth of floor plans owned by every builder in El Paso obsolete. It also would have made it impossible to build on cull de sac lots, and would have severely limited the building envelope on which a house can be placed on smaller more affordable lots. Luckily for us our Association was there. With the help of the Greater El Paso Chamber
Early voting is May 2nd-10th and Election Day is May 14th. I’d like to encourage everyone in our industry to vote, but most importantly I want to encourage everyone to listen to what the candidates are saying and get out and vote for candidates who support our industry of Commerce we were able to bring these issues to light for City Council and City staff, and fortunately we were able to get these items removed. Myself, Ray Adauto, and numerous others from our association banded together on these issues. This was a perfect example of the meaning of the EPAB and what we can accomplish when we work together. To list all the names of those who helped on this would take up too much space so I’d just like to send a debt of gratitude on behalf of our entire industry to all of you who chipped in on this effort. And I’d especially like to acknowledge our Government Relation Council – chaired by Edmundo Dena, and our Land Use Council – chaired by Linda Troncoso and Sal Masoud. Because of proposals like the one mentioned above, I’d like to remind everyone how important it is to vote in the upcoming City Council elections. Early voting is May
2nd-10th and Election Day is May 14th. I’d like to encourage everyone in our industry to vote, but most importantly I want to encourage everyone to listen to what the candidates are saying and get out and vote for candidates who support our industry. Lastly our Associates Council is setting up a trip to Las Vegas June 10-12! Don’t miss this opportunity to join us in Vegas for the first general Vegas meeting at the fabulous Paris Hotel on the strip. Sam and Ray have been working hard to make sure we all have a good time getting away from the daily drudge and enjoying great food, fun, and shows. Our travel agency is Sun Travel and you can book your trip through them by calling Isabelle at 915-747-3055 or Kathleen at 915-731-3222. Tell the ladies at Sun Travel you are looking to book the Builders Association trip. I look forward to seeing you there. Until next month have a great May.
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4 MAY 2011
Builders Outlook
Perspective Ray Adauto, Executive Vice President EPAB
Nothing is as important to our industry this month than getting out the vote for city council, school district or bond issues. It is your responsibility to vote and to ensure that the vote is for candidates that understand your industry and will work with us. Nothing is as damaging as having a city council who constantly fights growth, implements narrow sighted codes, or damages small business. We have had too many years of exactly that and it’s time for a change. For sure we will have at least two absolutely new city councilors on board in June, and there’s a potential that one more may come from the field. But nothing is certain because sometimes we seem to favor a candidate based upon whether or not they invite us to a cocktail party rather than to the table. Your vote is crucial to ensuring that homebuilding, and in turn the vendors, are working in El Paso. Go vote. Get your employees and family to vote. Do it for yourself, do it for your industry. It’s important. The news of the killing of Bin Laden rocked the world on Sunday night May 1. It was news that came after nearly 10
Changes in the world, our community underline the importance of voting years from the WTC towers destruction and the murder of thousands. It came after nearly 12 years after the USS Cole was blown up and dozens of sailors were lost. It came after a world campaign against this snake and his evil doers that has cost trillions of dollars and tens of thousands of lives both in the military and civilian camps. One individual represented evil to this generation much like Hitler did to my parent’s generation. No one can fully understand or comprehend the vile that such a serpent dispensed, all in a demonic call for holy war against the United States. By the time you read this perhaps more information on the how and when will come out about the actual details. This much we know as of this writing: Navy SEALS swept into a compound inside Pakistan with a pretty good idea that someone of high target value was inside. The two copters went over a large wall, one landed and the other had the SEALS drop in on a high speed drop line. All were met with gunfire and in the ensuing moments one of the choppers malfunctioned and crashed inside the compound. Apparently there were no casualties on the SEALS side while Bin Laden was killed by a bullet to the head while shielding himself with a woman. Bin Laden’s body was taken on board the
remaining chopper and all the SEALS boarded and extricated themselves out of the compound to a safe landing area, where one must assume other aircraft came in and safely moved the combined force and the body to awaiting ships. The firefight we have been told lasted 40 minutes. The planning was done over three days after nearly four years of intelligence gathering. Our hearts and prayers go out to the intelligence community and the entire military for their dedication and focus on ridding the world of such evil. We will never know the names of all who were involved but we send out gratitude for what you have done. It is without a doubt a proud day to call ourselves American’s and a great day to salute our heroes. Speaking of heroes let me just say a little something about some of our own heroes. Ironically on the weekend that Bin Laden is killed the EPAB participated in a build for Homesforour troops.org and Marine Corporal Dan Gasca. He had lost both legs in Fallujah, Iraq back in 2008 and even though he’s going through rehab he still calls El Paso home. Homesforourtroops.org organized the effort to build a home for the Gasca family over on the Westside of town. Contractor Omar Veliz of Veliz Construction is the GC and on Friday, March 29 there was a rising of the frame held at his new home. We had Cisco
Homes and Tropicana Homes provide some framers who joined about a hundred others in doing the work over the weekend. The organization still needs a number of items including more workers to work on interior and roofing. Now it can be said that there is a lot of need in this community as there is in any community. What’s important is that this project is already underway and needs help getting completed. Watching the hundred or so volunteers help on the project and listening to Omar Veliz give testimony as to why he’s committed to this effort really was heart tugging. I am asking all of you to look at giving an hour or two, or helping with your expertise or with your wallet, or simply offering prayer for our local heroes who go out and do extraordinary things everyday. You can log onto homesforourtroops.org and search El Paso for more information on the local project. Thank you once again to Veliz Construction, Cisco Homes and Tropicana Homes. Way to go.
Send us your comments. E-mail to: ray@elpasobuilders.com
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Builders Outlook
Guest Perspective
Silvestre Reyes US Congress Last month, I participated in several ribbon cutting ceremonies at Chihuahuita Community Center, Casitas del Norte Apartments, and Colonia Verde Park to celebrate the accomplishments that the federal Community Development Block Grant (CDBG) Program has made for the El Paso community. CDBG is one of the most important federal grant programs on which cities like El Paso depend on, because it provides funding that gives communities the flexibility to allocate resources to neighborhoods with the greatest needs. The program is administered by the U.S. Department of Housing and Urban Development (HUD). Projects funded under CDBG include parks, street and drainage improvements, public facilities,
MAY 2011
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Celebrating newly completed projects, funding still needed housing, and essential social service programs. Since 1975, over $347 million has been allocated to El Paso for community projects. This particular federal grant program is vital to our community because we do not have the same kind of property tax base that other cities of our size and larger have. Other cities like Austin, Houston, Dallas, or San Antonio have many corporations that pay millions in property taxes that can be used to fund local school districts, and community infrastructure like parks and centers. In El Paso, we do not have the same number of large companies that add to the value of our tax base, and as a result, the burden often falls on homeowners, and projects such as the Chihuahuita Community Center, Casitas del Norte Apartments, and Colonia Verde Park often get put aside and take years to materialize. The Chihuahuita Community Center is a key part of the Chihuahuita neighborhood that gives residents a positive place for recreational activities. With the help of federal CDBG funds, this center now has an expanded meeting room for the neighborhood with proper lighting, power and computer outlets, new ADA compliant restrooms and shower stalls, as well as
The Chihuahuita Community Center is a key part of the Chihuahuita neighborhood that gives residents a positive place for recreational activities.
modern air conditioning and heating systems. The Casitas del Norte apartments is a historic complex that was built in 1910. Sadly, as a result from the flood in 2006, this apartment complex was heavily damaged by the flood and destroyed many apartments. Thanks to federal CDBG funds, 43 units at Casitas del Norte Apartments have been renovated. These units are available to families at or below 60% of the area median income for the city of the El Paso. CDBG funds also helped restore Colonia Verde Park by extending an eight-foot pathway for walkers and joggers, added picnic tables with shaded canopies, and modified the park’s irrigation system. These improvements will benefit the estimated 3,700 people
that use the park’s services. Over the last 35 years, El Paso has received more than $347 million dollars - an average of $10 million per year - in CDBG funding that has been used to fund numerous projects like these. These are the kinds of programs that make a real difference in our neighborhoods that provide our kids with a safe place to play sports, a place to meet and to organize, and a place residents can feel proud of calling home. Unfortunately, right now in Congress, House Republicans want to balance the federal budget on the backs of those most in need, and are proposing to drastically cut funding for this important
6 MAY 2011 Guest Perspective
Chente Quintanilla State Representative The chairman of the redistricting committee released the proposed map of redistricting for the state of Texas. Although there were changes, the boundaries for the five El Paso House members remain relatively unchanged. Before going further on redistricting, I would like to commend Representative Pickett's office for handling the responsibility of drawing our maps. Eddie Miranda, the Chief of Staff, did most of the leg work tweaking maps after input from members. It was not an easy task but he did an excellent job of coordinating the drawing for Representative Pickett. With a lopsided majority, some were fearful that the Republican majority was going to draw maps that were unreasonable. Had there been the atmosphere of 2003 to 2007, the likelihood of an unreasonable map would have been
Builders Outlook
Redistricting maps released, discussed greater. Chairman Solomons allowed the delegations to design their boundaries. That resulted in very few concerns. As a matter of fact, before the map was released, there were comments from some of the more conservative members about the process being too generous with Democrats. In the redistricting process, there inevitably arises a situation where sitting members are placed into the same district. That is referred to as "pairing". There were eight districts drawn that resulted in pairings. Only one paired Democrats. The other fourteen members were Republican. The leadership put six newly elected Republican members swept in by the teaparty excitement into the pairing process. Of those, only two are guaranteed a district because the others are paired with incumbents. The proposed map also paired four long time members. One pairing of members in the panhandle won't be a contested race if the plan remains the same. There has already been an announcement by one of leaving the legislature. The other pairing of longtime members is not one that is easily called. The final pairing of Republicans involves one member who switched parties this past year. I will let you decide who has the advantage in that race. On Friday the fifteenth of April, the Redistricting Committee had its first hearing on the proposed boundaries. There were a few members who discussed concerns at the hearing. The members of the southern Rio Grande area and
members in a certain Houston area presented their concerns. The longest testimony was given by the Mexican American Legal Defense and Education Fund(MALDEF). Their concern was primarily creating more Latino districts. The map they presented also redrew the boundaries for the El Paso delegation. I was not very pleased with their El Paso County map. We have requested information from them to determine their reasoning. I think it is
important to address that issue because if MALDEF succeeded in court, El Paso County would not benefit. The five house members of the El Paso delegation contributed to the map proposed by Chairman Solomons. If MALDEF agrees to leave El Paso county with the boundaries in that map, then there will be no concerns if there is some litigation against the statewide redistricting.
Builders Outlook
MAY 2011
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Mortgage rates at lows for year Purchase-loan demand down 37% from a year ago Mortgage rates dropped for the third week in a row to their lowest point this year on signs of economic weakness, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. Rates on 30-year fixed-rate mortgages averaged 4.71 percent with an average 0.7 point for the week ending May 5, down from 4.78 percent last week and 5 percent a year ago. The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, and so far this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February. Rates on 15-year fixed-rate mortgages averaged 3.89 percent with an average 0.7 point, down from 3.97 percent last week and 4.36 percent a year ago. That's a new low for 2011, but well above the all-time low in records dating back to 1991 of 3.57 percent, set in November. Mortgage rates dropped for the third week in a row to their lowest point this year on signs of economic weakness, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. Rates on 30-year fixed-rate
mortgages averaged 4.71 percent with an average 0.7 point for the week ending May 5, down from 4.78 percent last week and 5 percent a year ago. The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, and so far this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February. Rates on 15-year fixed-rate mortgages averaged 3.89 percent with an average 0.7 point, down from 3.97 percent last week and 4.36 percent a year ago. That's a new low for 2011, but well above the all-time low in records dating back to 1991 of 3.57 percent, set in November. Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.47 percent with an average 0.6 point, down from 3.51 percent last week and 3.97 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November. Rates on 1-year Treasury-indexed ARM averaged 3.14 percent with an average 0.5 point, down from 3.15 percent last week and 4.07 percent a year ago. Looking back a week, a separate
survey by the Mortgage Bankers Association showed demand for purchase loans remained well below last year's levels. The MBA's Weekly Mortgage Applications Survey showed demand for purchase loans was up a seasonally adjusted 0.3 percent during the week ending April 29 compared to a week ago, and down 36.9 percent
from the same time a year ago. Requests for refinancing accounted for 62.7 percent of all applications. In an April 14 forecast, MBA economists said they expect rates on 30-year fixed-rate loans will climb to an average of 5.6 percent during the final three months of the year, and average 6 percent in the final quarter of 2012.
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MAY 2011
EPAB ON THE SCENE Senercon Meeting Senercon and Border Solar held a meeting at the EPAB to present the latest information on the new rules regarding Energy Star and the programs related to it. In the two hour presentation Senercon President Javier Ruiz gave an update on the recent changes and those proposed by the EPA and the Energy Department for recognition as and Energy Star builder or supplier. From the discussions came a myriad of questions on whether or not the current applications for Energy Star status will be enough to satisfy the future requirements. The answers were that the changes made and those proposed will make it much harder to qualify a home for Energy Star status, and that along with the changes come increased costs. Border Solar is the member who installed the ten solar panels at the El Paso Association of Builders offices, making the EPAB the first home builders association in the country to utilize the power of the sun to supplement electric consumption.
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Golf Tournament
The annual El Paso Association of Builders golf tournament was held at Painted Dunes Desert Golf Course in April. Twenty eight teams competed for bragging rites on the tournament. The event was coordinated by the golf Committee headed up by David Bogas, Sam Shallenberger, Eric Lowenberg, Ray Adauto and spearheaded by John Chaney. The wind died down on the day of play to present the golfers and volunteers some excellent weather. Traditionally the EPAB tournament signifies the start of Spring for the Association and a season of renewal. This year the great folks at Painted Dunes, including Anthony Bellows and Mark Gonzalez, gave the golfers a challenging course in pretty good shape. John Chaney was really excited about the turnout and grateful for all the volunteers. “This is one of the most traditional tournaments in the area and the benefits it gives the EPAB and Young Designer Awards goes on for the entire year,” Chaney said. “I’d like to thank all the folks who came out to support the event and provide us with a fun time once again,” he concluded. Greg Bowling, President of EPAB was eaqually grateful. “We turn out to this event every year, rain or shine, good times and bad, but this year it was extra special to see as many of our members and their guests come out,” he said. “I’d like to especially thank All Precision Sheet Metal, Interceramic, Goff’s and Tropicana Homes for their sponsorship, along with everyone else who bought carts, signs and hole sponsorships. This is a sign of commitment to the association and our Executive Board thanks you for that, “ Bowling continued. First place went to Aztec Construction’s team of Spencer, Forcada, Mora, Medrano, Jurado and Elgua. Second Place went to Tropicana Homes headed by Greg Bowling and third went to Texas Gas team with Captain John Reich.
10 MAY 2011 News from the
Texas Real Estate Center recenter.tamu.edu Texas Outperforms Nation in Job Growth By Bryan Pope, Associate Editor, Real Estate Center
COLLEGE STATION, Tex. (Real Estate Center) — When it came to creating jobs, Texas outperformed the rest of the country from February 2010 to February 2011. According to the latest Monthly Review of the Texas Economy published by the Real Estate Center at Texas A&M University, Texas gained 230,000 jobs during those 12 months. That’s an annual growth rate of 2.3 percent. Over the same period, U.S. nonfarm employment rose 1 percent. The state’s private sector posted an annual employment growth rate of 2.5 percent compared with 1.5 percent for the U.S. private sector. The state’s seasonally adjusted unemployment rate was 8.2 percent in February 2011, unchanged from a year earlier. Meanwhile, the nation’s rate decreased from 9.7 to 8.9 percent. All Texas industries except financial activities and information industries had more jobs, and all Texas metro areas had more jobs. Petroplexes Odessa and Midland ranked first and second, respectively, in job creation followed by Longview and Dallas-PlanoIrving. The state’s actual unemployment rate was 8.2 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, College Station-Bryan and San Angelo. Despite job growth, existing Texas single-family home sales in February were down 10 percent from a year ago. Just over 12,000 homes were sold this past February according to the latest Multiple Listing Services (MLS) data compiled by the Center. The median home price was up 3 percent from the previous year, at $145,800. There was a 7.2-month inventory. For more on the Texas economy, read the Center’s Monthly Review of the Texas Economy. It’s online at http://recenter.tamu.edu/econ/. The Center’s website also includes the latest housing data from 47 Texas MLS areas. It’s at http://recenter.tamu.edu/data/hs/.
Builders Outlook
Weak Home Sales Numbers Don’t Tell Whole Story, By Bryan Pope, Associate Editor, Real Estate Center
COLLEGE STATION, Tex. (Real Estate Center) — Home sales statistics are likely to paint a picture of a weakening market through the end of 2010 and the first half of 2011. While it’s tempting to attribute the bleak numbers to a deteriorating housing market, an economist with the Real Estate Center at Texas A&M University said that doesn’t tell the whole story. “The year-over-year decline in existing home sales will be the result of comparing months when there was no tax credit with those from a year earlier, when the tax credit was artificially increasing sales,” said Dr. Mark Dotzour, the Center’s chief economist.
The $8,000 tax credit for first-time homebuyers went into effect in January 2009 and was planned to expire in November 2009. Home sales gradually started to increase after the tax credit was announced, after bottoming out in January at an annual rate just above 4.5 million sales. Existing home sales gradually increased in 2009 as buyers and real estate agents became more familiar with the program. Sales topped an annual rate of five million in July 2009 for the first time since September 2008. As the tax credit deadline approached, home sales spiked in September, October and November 2009. November 2009 was the peak at an annual rate of almost 6.5 million. The tax credit was extended late in 2009 to include sales with contracts written until April 30, 2010, and closed by June 30 (extended to September 30). Initial homebuyer response to this extension was tepid, but sales picked up substantially in
March, April and May 2010, when sales were up 18 percent, 28 percent and 18 percent, respectively, over the same months in 2009. Then the process reversed itself. Pending home sales fell dramatically in May 2010, the month after the tax credits expired. This was followed by a significant drop in home sales in June and July. In Texas, July 2010 sales were down approximately 25 percent from July 2009. Dotzour said August figures may not be much better since many buyers purchased homes before the tax incentive expired. “When you ‘bring forward’ sales through tax incentives, sales will be lower after the tax credit ends,” he said. Unless Congress creates a new tax credit this fall, Dotzour said monthly sales for 2010 will likely exhibit significant variance from 2009, and a true reading of housing market conditions may not be possible until June or July 2011.
Builders Outlook
MAY 2011
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Builders Outlook
www.elpasobuilders.com 6046 Surety Dr. El Paso, TX 79905 915778-5387 • Fax: 915-772-3038
■ executive officers Greg bowling, President Tropicana Homes del Huit, vice President Cardel Design Group frank arroyos, secretary/treasurer Cisco Homes sam shallenberger, associates council Wholesale Supply Kelly sorenson, immediate Past President Vision Consultants ray adauto, executive vice President El Paso Association of Builders
NatioNal associatioN of Home builders (800) 368-5242
texas associatioN of builders (800)252-3625
■ couNcil/committee cHairs Affordable Builders Council Bobby Bowling IV Associates Council Sam Shallenberger Assoc. Co-Chair Lance Van Demon Build PAC El Paso Randy Bowling Desert Green Building Council Javier Ruiz Industry Promotions Kelly Sorenson Land Use Council Linda Troncoso Sal Masoud Adams Pro AM Committee David Bogas Young Designer Award John Chaney Code Committee Kelly O’Leary Home Show Sam Shallenberger Remodelors Rudy Guel Membership Drive Mike Santamaria Finance Committee Kathy Carillo Education Committee Frank Spencer ■ advisorY to tHe board J. Crawford Kerr, Attorney, Firth, Johnson & Martinez
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( 9 1 5 ) 5 32 -3 9 1 7 • Fa x : ( 9 1 5 ) 5 32 -3 9 1 9
■ board of directors Danny Andrus, Trinity Homes John Arranda, Southwest Securities Bank, FSB Joe Bernal, Joe Bernal Insurance David Bogas, EPT Communities Doug Borrett, Karam Co. Edmundo Dena, Accent Homes Ted Escobedo, Snappy Publishing Art Garcia, El Paso Door Juanita Garcia, ICON Custom Home Builder,LLC Lorraine Huit, Cardel Design Group Walter Lujan, Dawco Home Builders Bruce Meyer, JDW Insurance Robert Najera, Roberts Construction Kathy Parry, Hunt Communities Bob Paschich, Oeste Homes Kathy Rose, Builders Source Regina Sanchez, Bank of Texas Sam Shallenberger, Western Wholesale Frank Torres, GMF Homes Paul Zacour, Zacour & Associates
■ tab state directors Doug Borrett, Karam Co., Life Director Randy Bowling, Tropicana Homes
2010 builder member of the Year Mike Santamaria Mountain Vista Builders 2010 Pat cox award Randy Bowling Tropicana Homes 2010 associate of the Year Javier Ruiz Border Solar/Senercon John schatzman award Lorraine Huit Cardel Design Group
Honorary life members Brad Roe Cliff Anthes Wayne Grinnell Chester Lovelady Don Henderson Anna Gil
Past Presidents committed to serve Mark Dyer Mike Santamaria John Cullers Randy Bowling Doug Schwartz Del Huit Herschel Stringfield
Robert Baeza Bobby Bowling, IV Rudy Guel Anna Gill Bradley Roe Bob Bowling, III EH Baeza
ePab mission statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization.
■ NatioNal directors Bobby Bowling IV. Demetrio Jimenez
© 2011 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Snappy Publishing 240 Thunderbird • Suite C El Paso • Texas • 79912 915-820-2800
Builders Outlook
MAY 2011
13
Membership News www.elpasobuilders.com 6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038
UPCOMING EVENTS May 11 Board Meeting 3:30 pm EPAB Office
May 18 Education How to read Financials 1:30-3:30 EPAB Office $25.00
May 25 Land Use meeting 12 Noon EPAB office
Baron Supply Bella Homes Caldwell Electrical Contractors Dawco Home Builders El Paso Disposal
June 11 General meeting Las Vegas, Nevada
June 23-25 TAB Board meetings Houston, TX
NEW MEMBERS
RENEWALS Acme Brick Company
May 17 – 20 NAHB Spring Board Meetings Washington, DC
D. R. Horton Homes Inc. Contact: John Svajda 1821 N. Zaragosa, Ste. 207-308 El Paso, Texas 79936 915-503-0153
Romero Insurance Contact: John Romero 1121 Larry Mahan Dr., Suite A El Paso, Texas 79925 915-590-6400
Lake Section Water Company Contact: Bobbie Rosencrans-Wright 301 Paseo Real Drive Chaparral, NM 88081 575-824-4731
Crown Heritage Homes Contact: Lydia Mlouhi 6305 Montana El Paso, TX 79925 915-778-3022
El Paso Winnelson Gardner Turfgrass, Inc. Hardware Specialties Land-Mark Professional Surveying, Inc. Manantial Homes Remcon Self Storage Sherwin Williams Paint Snappy Publishing Western Wholesale Window World Zia Homes
SODA SPONSOR Thanks to our MAY SODA SPONSOR: Bank of the West 11395 James Watt, Suite A-11 79936 915-633-8002
14 MAY 2011
Builders Outlook
Industry Reports Associates Council
Sam Shallenberger Western Wholesale Supply Hi everyone, This year is really flying by, is it not? We just got through with the Annual spring golf tournament which was a huge success, and I would like to thank John Chaney and the golf committee for another outstanding job. But most importantly, I would like to thank all the members that supported us. I hope everyone had a good time. We are gaining on June 10th, the magic day for our departure to Las Vegas for our June General Meeting, and a weekend of fun and
relaxation from the daily grind of business. As you may or may not know, Sun Travel has put together a great, inexpensive trip, for us via Southwest Airlines and accommodations at the world famous Paris Hotel. Yes that is correct the one with the Effile Tower in front of it. I hope to see all of you there. We would like to make this an annual event full of fun and, of course, a general meeting. Anyone for bowling? This is always a popular event when the summer in El Paso is a 100 degrees and the beer is ice cold. Vicki Marcusse is heading this event up. It’s a great way to spend an afternoon with friends and associates. The EPAB Bowl-a-Thon will be held July 19th at Bowl El Paso. Details coming soon. We are in the planning stages for our EPAB Festival to be held in the parking lot of Compass Bank across the street from the EPAB office. If everything goes the way we
plan, we will have Booths for any of our members who want to show their Products or Services, an Arts and Crafts Show, and a Car Show. But the Big Event will be the Menudo and Chili cook off. This will be held on a Saturday when there is no UTEP football game. The next big event will be the UTEP Tailgate Party to be held on Saturday September 29th. It’s UTEP vs. The University of Houston, and it’s always a blast. This year promises to be our best ever. We are going to have a special caterer that has been and still is an old time El Paso institution in good eats. I don’t want to tell you who it is right now, but if you grew up here and ever went downtown when you were a kid you went to this place. Of course we will have sodas, bottled water, and a keg or two. Last but not least, our first University of Texas M. D. Anderson Cancer Center Fund
Raising Event. Being held on October 8th at Western Wholesale, this promises to be a special evening. There will be several Doctors attending the event who are world renown in the area of Cancer Treatment & Research. We will have three very special Chefs cooking in three separate kitchens at the same time. There will be a cocktail hour, and special wines to enhance the cuisine. For those of you that don’t know or remember, we have had quite a few members that have had to fight Cancer and are still with us today thanks to M.D. Anderson Cancer Center. Well, just writing this has worn me out, so if anyone wants to help out just, give Angie a call at the EPAB She will get you on the team. Remember this is YOUR Association, and YOU get out of it, what you put in to it. See you in Las Vegas!!!!!!
• How to put together an automatic sprinkler system • What to do when you are missing power in one part of your house • How to switch your heater to evaporative cooler and back • Calling the utility companies with 811 when you are getting ready to landscape your yards • How to put out a grease fire in the kitchen • How to turn on your gas fireplace • How to let out pressure in your gas water heater • How to fix a leak or running toilet These are a starting point for posting videos. You can also put up events with your pages for different open houses, REALTOR parties, Grand Openings, etc. With events, you want to create them for special occasions and refrain from putting your daily events.
Another item to put is a photo gallery of your model homes to allow potential clients to view your homes. This allows a client to view your homes with a free website. If you are not especially internet savvy, just ask your teenager to put your page together. They will have it done in no time. Facebook can be used to create interest and value with potential clients about your homes. It is a great avenue to advance your company image with free home owner education. A wonderful benefit is that if your “followers” or “fans” like your postings they can share them with their “friends.” Your videos and photo albums have the potential of not only being seen by your “fans” but also anyone who is “friends” with your “fans.” It’s as easy as sharing a link from a website. You can also post the videos in Spanish to reach the other half of our El Paso population.
LinkedIn is used for professional networking. This is a better place to recruit REALTORS, Subcontractors, Mortgage Companies, etc. In LinkedIn, you can post events that cater to the real estate community. Good luck with your pages, postings, and videos! I am eager to share your videos on my work Facebook page. May Meeting: 5/19/11 from 12-2PM at the Greater El Paso Association of REALTORS®. Speaker will be Carefree Homes. Their Education Topic will be HVAC and Building an Energy Star Certified Home. Fostering harmony amongst home builders, real estate professionals, and affiliate companies
and home. Frayed and damaged power cords on tools are the most common issue we see on construction jobs. • Power cords should be inspected regularly. Frequently, mishandling (such as pulling a plug from a socket by jerking the cord rather than removing the plug carefully by hand) causes the most significant damage to a cord over time, tearing the external protective sheathing or detaching it from the plug head and exposing energized wires. • Less obvious is the threat posed by missing ground prongs, the rounded third prong on electrical plugs. These ground
prongs often break off from mishandling or are removed intentionally to fit a plug into two-prong outlets.
REALTOR/Builder Angela Ochoa GEPAR
We’ve all heard about Facebook, LinkedIn, and more. But where do you start and what do you do? Try something simple. Put a small 2-5 minute video together to describe how to do small home fixes to teach the general public. Below are some suggestions to start with: • How to turn off your water in the case of a leak or pipe bursting. • What to do when you smell gas in the home
Safety on the job Lupe Alaniz A&E Environmental & Safety Consultants
May is National Electrical Safety Month. It is a great time to promote a healthy respect for electricity and increase awareness of electrical hazards around your work place
Regulations Related to Damaged and Ungrounded Power Cords • The Code of Federal Regulations (CFR 1910.303) states that electrical insulation shall be free from recognized hazards that cause death or serious physical harm to employees. • The Code of Federal Regulations (CFR 1910.334(a) (2) (ii)) requires damaged or defective power equipment to be removed
from service until repairs are made and tests show the equipment is safe. • Missing ground prongs are a violation of Occupational Safety and Health Administration (OSHA) regulations and the National Electric Code. As required by CFR 1910.334(a)(3)(ii), attachment plugs and receptacles may not be connected or altered in a manner which would prevent proper continuity of the grounding conductor. http://www.compliance.gov/formspubs/eresources/fastfacts_damagedcords.pdf 29 CFR 1910 Subpart S - Electrical
Land Use Sal Masoud
Linda Troncoso
By Linda Troncoso The City of El Paso is currently in the process of preparing a new Comprehensive Plan for El Paso. The City of El Paso has also pursued a parallel path to adopt new amendments to the City’s park, landscaping, sign, and parking requirements in order to incorporate walkable community principles. These changes have included the requirement for lots to front parks and provide pedestrian corridors for additional access, increases in the requirement of parkway and on-site landscaping for non-residential site
developments, and set maximum limits for off-street parking requirements for site developments. These are items that have come forth to Council in the past month after vetting to the commercial and residential development community. Members of the development community have continued to express the need to need for proper vetting by City staff prior to the adoption of new ordinances and requirements. City Council members have taken that message to heart and given specific direction to staff to reach out to the real estate
community in order to understand the impact of proposed requirements to all parties. We look forward to the continued opportunity to participate in these processes. New changes which impact our industry are occurring on a regular basis. As such, we encourage everyone to actively participate in the standing Land Use Council meetings on the fourth Wednesday of each month at noon at the EPAB offices. We hope to see you on May 25, 2011.
EPAB ON THE SCENE
General Meeting April 13 was the date and Vista Hills CC was the location for our bi-monthly general membership meeting. An overflow crowd gathered to share news about the industry and to visit with friends and competitors. A presentation by Paul Coleman, President of Sun Travel, on the upcoming Las Vegas trip gave the audience a glimpse of what to expect when one visits Sin City, Las Vegas, Nevada. Paul gave us tips on shows and events and how to make plans for those extra little things you might want to do while in Vegas. He shared some quick tips including making sure you get your reservation well in advance of your intended visit. Las Vegas shows are plentiful, but they are also very popular and those like Cirque du Solie or Jersey Boys sell out fast. Mr. Coleman also reminded us to book our trip with time so that you can take advantage of lower airfares. Recent increases in jet fuel are making flying more expensive and booking early is the only way to go. The pictures on this page show a sampling of who was at the event. We look forward to seeing you at the next general membership meeting in Las Vegas on June 11. For information on that trip see the ads in this issue.
Vegas Baby! Join the El Paso Association of Builders for our General Membership Meeting in Las Vegas, NV June 10-12, 2011
Call 778-5387 for more information Travel Arrangements by Sun Travel Isabelle Caballero 747-3055