Builders outlook June 2011 by Ted Escobedo

www.elpasobuilders.com

Builders Outlook Issue 6 2011

Building El Paso’s tomorrow today

Housing AffordAbiLity risEs to rEcord LEvEL tight financing continues to constrain sales El Paso makes the top ten least affordable markets NAHB Washington, DC- Nationwide housing affordability during the first quarter of 2011 rose to its highest level in the more than 20 years it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released in May. The HOI indicated that 74.6 percent of all new and existing homes sold in the first quarter of 2011 were affordable to families earning the national median income of $64,400. This eclipsed the previous high of 73.9 percent set during the fourth quarter of 2010 and marked the ninth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent. "With interest rates remaining at historically low levels, today's report indicates that homeownership is within

reach of more households than it has been for more than two decades," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "While this is good news for consumers, home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales." Syracuse, N.Y., was the most affordable major housing market in the country during the first quarter of the year. In Syracuse, 94.5 percent of all homes sold were affordable to households earning the area's median family income of $64,300. Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Indianapolis-Carmel, Ind.; Warren-Troy-Farmington Hills, Mich.; and Toledo, Ohio. Among smaller housing markets, the

most affordable was Kokomo, Ind., where 98.6 percent of homes sold during the first quarter of 2011 were affordable to families earning a median income of $61,400. Other smaller housing markets near the top of the index included Monroe, Mich.; Cumberland, Md.-W.Va.; Elkhart-Goshen, Ind.; and El Paso, Texas. “It continues to amaze the Association that year after year the economic well being of the housing market in El Paso is threatened with new fees and costs,” said Ray Adauto, Executive Vice President of the El Paso Association of Builders. “For years we have tried to point these statistics to the local governments, especially the City of El Paso, without much response other than to raise fees for construction and infrastructure,” said Greg Bowling, President of the EPAB. “The bottom line is that independent analysis done by the respected authority on affordability for housing in a market backs

10 Least Affordable Metro Areas 1. New York-White Plains-Wayne, NY-NJ 2. San Francisco-San Mateo-Redwood City, CA 3. Los Angeles-Long Beach-Glendale, CA 4. Honolulu, HI 5. Santa Ana-Anaheim-Irvine, CA 6. San Jose-Sunnyvale-Santa Clara, CA 7. Bridgeport-Stamford-Norwalk, CT 8. Nassau-Suffolk, NY 9. San Diego-Carlsbad-San Marcos, CA 10. El Paso, TX

up our concerns and frustrations,” Bowling continued. El Paso is now in the company of cities like San Diego, Honolulu and San Francisco on affordability according to the latest statistics.

buiLdErs to congrEss: Maintain federal role to ensure healthy mortgage market

PRSRT STD U.S. POSTAGE PAID EL PASO TX PERMIT NO. 429

NAHB Washington, DC - With some members of Congress actively pushing to abolish Fannie Mae and Freddie Mac and end the federal backstop for housing, the National Association of Home Builders (NAHB) told Congress that maintaining an appropriate level of government support is absolutely essential to preserve financial stability.

Testifying before the Senate Banking Committee, NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla., said that absent a federal role to help reassure mortgage market investors, the cost and availability of mortgage credit would be subject to unpredictable volatility. “The historical track record from the 1998 Russian crisis to the tragedy of Sept. 11 clearly shows that the private sector is not capable of providing a consistent and adequate supply of housing credit without a government backstop,” said Rutenberg. “Therefore, as the private market transitions to assume a greater responsibility, there must be a predictable, permanent federal role in order to ensure a consistent supply of mortgage liquidity and to allow rapid and effective responses to market dislocations and crises.” While NAHB strongly supports efforts to modernize the nation’s housing finance system, it is critical that any reforms be wellconceived, orderly and phased in over time. NAHB opposes legislation pending in the House and Senate that would effectively wind down the operations of Fannie Mae and Freddie Mac without offering a clear vision for the future housing system and a nondisruptive transition to a new secondary market framework. Similarly, NAHB believes that more than a dozen short-term legislative proposals offered by House Republican lawmakers to reduce the support Fannie Mae and Freddie Mac provide to the mortgage markets represent a piecemeal approach to reform that would disrupt the housing market and could push the nation back into a deep recession. New legislative efforts would take a very

different tack from these proposals. Recent bipartisan legislation (H.R. 1859) introduced by Reps. John Campbell (R-Calif.) and Gary Peters (D-Mich.) would replace Fannie Mae and Freddie Mac with five private companies that would issue mortgage-backed securities that have government backing. Legislation currently being developed by Rep. Gary Miller (R-Calif.) would also include a predictable government role in the secondary mortgage market to preserve financial stability in the market and maintain a stable housing sector. “NAHB views the introduction of H.R. 1859 and Rep. Miller’s draft legislative proposal as very positive developments as debate on the future of the housing finance system moves forward in Congress,” said Rutenberg. “Maintaining a continuing and appropriate level of government support is necessary to promote investor confidence and ensure liquidity and stability for homeownership and rental housing.” Absent a federal backstop for housing, Rutenberg warned that the 30-year, fixedrate mortgage, the major housing finance tool for most Americans, would become increasingly scarce and much more costly, pricing many creditworthy borrowers out of the marketplace. Similarly, the availability of financing for multifamily housing would fall woefully short of the growing need. Qualified Residential Mortgages Also of great concern to NAHB are proposals unveiled in late March by six federal agencies that would establish a “Qualified Residential Mortgage” (QRM) standard featuring a minimum 20 percent downpayment on a home loan. Requiring 20

percent down would keep homeownership out of reach for most first-time home buyers and middle-class households. About 62 percent of first mortgages taken out to purchase a home would not have qualified under the proposed QRM standard because they had down payments of less than 20 percent, according to LPS Applied Analytics, a mortgage data firm. NAHB estimates that it would take 12 years for a typical family to save enough money for a 20 percent down payment on a median-priced single-family home and other research has found it would take even longer. “If buyers are denied access to affordable housing credit, the shadow inventory of foreclosed homes will not be drawn down, a housing recovery will not take hold and economic growth will stall,” said Rutenberg. Moreover, low-down payment home loans have been originated safely for decades and are not what drove the housing lending crisis, added Rutenberg. “Subprime, no-doc and other alternative mortgage products crashed our economy,” he said. “We believe the Administration and regulators must acknowledge this fact and offer a new plan that ensures a safe and healthy mortgage market and keeps homeownership affordable for working American families.

2 JUNE 2011

Builders Outlook

President’s Message Greg Bowling President, El Paso Association of Builders

By the time most of you read this the Association would have had it’s first general meeting in Las Vegas. The planning for this has been going on for months and it’s been an interesting adventure for the guys working on it. First let me thank Sam Shallenberger my Associates Chairman for coming up with a novel idea of mixing fun with work. His conspirator of course is Ray Adauto and between both of them we owe a round of applause for actually having this come through. I’d also like to thank all of the

members who looked at this trip as a way to break out from the daily routine, enjoy a visit to Las Vegas, and experience the first ever foray into a meeting somewhere other than El Paso. With our really good turnout I think we have a future trip or two to look forward to in 2012 and beyond. While Las Vegas is always fun since I love to play golf while I’m there, I still have another trip for the Association later this month to Houston. Ray and I will be leading our delegation to the Summer TAB board meetings in Houston June 22-24. The main topic of discussion will be the results of the Texas Legislative year and how we did as an organization. TAB is our main lobbyist for issues pertaining to housing in the Texas legislature, and I’m proud to say that we have an excellent group of lobbyists working for us. In addition there are a lot of TAB members who routinely go to Austin to speak for and against legislation including many of our own from El Paso. The teamwork shown has paid dividends for all of the Texas builders and Associates. The preliminary reports from TAB indicate

that the legislation that was on TAB’s radar went in our favor, overwhelming favor actually. I will present you a full report during our late June Board meeting to be held after the TAB meetings. While I’m thanking folks I’d really like to thank Frank Spencer from Aztec Construction who took on the education Czar position this year. He has presented some very timely and informative seminars and coordinated other with some of our specialty members, like our fall prevention training given by A & E Environmental and Safety Consultants. Well attended and presented. The book keeping seminar also brought the members some great information on how to get your financials in shape. The number one complaint we hear from our financial members is that some of us are not ready to present a financial statement or proposal to a bank or credit union for consideration. Things are tight enough without having the right tools in your tool box. Thanks Frank. I look forward to more education for our members.

Finally as you already know the association is saying goodbye to our Vice President Del Huit, who has decided to move onto bigger and better things. He stepped into the VP position at a time of need within the Association. He is a Past President with a love of our organization and a caring hand where ever we need him. Del has a couple of very well regarded inventions that he is marketing and he is finding success doing so. Our best wishes and our sincere thanks for another job well done. That means that Frank Arroyos will serve as VP for the next six months, and then take the office of President for 2012. By that time Frank will have served as treasurer and VP for nearly 16 months, a good enough amount of time to get him ready to be President. We will name our selection to serve as Secretary Treasurer at the upcoming board meeting. So with that I wish you all good sales and a safe summer.

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4 JUNE 2011

Builders Outlook

Perspective Ray Adauto, Executive Vice President EPAB

Seven percent. That’s the number that was reported as the voter turnout in city elections for council districts. Seven percent. It’s no wonder that politicians do what they want in this community. No one is going to worry about “answering to the People” if only seven percent actually care enough to vote. Standing in front of council is almost pointless given the fact that only seven percent of the constituency is engaged. Why should a politician, at any level, feel compelled to execute the will of the people when only a few of the people actually elect them? What fear would you have as a politician if you only needed 1,000 votes to be elected to a four year term, controlling and doling out hundreds of millions of taxpayer dollars and controlling the future of a city? If you said none, you are right. NONE. Imagine the insaneness of having that politician dictate YOUR future indebtedness, tax rate, fees, etc. with the “mandate” of the voters? What mandate? “I am so proud that I have won the hearts of minds of my constituency but most importantly that I am the overwhelming voice of the people” politicians are heard to say on election night. Really? I mean,

Pitiful voter turnout allows politicians to take control of our city can you sleep well at night knowing that 93% of the voters didn’t even show up? Are you really that significant? Or are you so insignificant that only seven percent voted. Seven percent over the two weeks of voting. “I just didn’t have time” is a favorite excuse of those who don’t vote. Sorry, it doesn’t make any sense. Now days you don’t even need an “excuse” to vote early. While you’re out buying the next great sneaker, why not step over to vote? Too easy. Too darn easy. So shame on you who didn’t exercise your blood given right to vote. (Yeah, Freedom isn’t free you know.) Shame on the politicians that think they have a mandate with 51% of seven percent. So when it’s all said and done, and brother you are done, well done (as in “crispy” done), don’t fret. Our next election could have a whopping thirteen percent participate. Instead of just millions of dollars think trillions of dollars because it will be a national election for President and Congress. Change the numbers any way you want this is still awful. “Welcome to Scottsdale, Texas. Home of High taxes & higher fees; with low income and lower voting turnout. No accountability wanted here.” Yes sir, the politicians dream come true. Strange weather patterns have been showing up this year here and in other areas of the country. The high winds, dust, and all that it brings us is nothing compared to the destruction suffered in

the South and Midwest. Tornadoes are natures sledge hammer, bringing destruction and death to the areas that they touch down onto. Texas, Oklahoma, Kansas, Missouri, and tornado alley are somewhat used to this, and people’s lives are on edge every year around this time. You have seen the horrible destruction that happened in Mississippi and Alabama earlier this year, then the horrific loss of so much of Joplin, Missouri. Seeing the pictures and videos will never fully impact us the way that the witnesses and victims have been impacted. Survivors always seem to live with the guilt of surviving such a devastating event. Why is one house standing while neighbors around them aren’t? Why am I alive yet so many aren’t. During these events heroes emerge from the rubble. Ordinary people put in extraordinary circumstances reacting to that event in an unselfish way. That’s what seems to be coming out of this latest tragedy. It includes the story told on NBC news about a young couple who ran into the bathroom to escape the furry of the tornado; with the young husband placing his body over his wife’s to protect her. In the fleeting minutes it took for the tornado to destroy their house this young husband lay dead from a punctured lung that debris from the storm had penetrated. He gave his life protecting her and in turn gave the rest of us a love story of courage, strength and commitment. I don’t recall his or her

name frankly because I starred at the TV mesmerized that such a story was even possible. This wasn’t a movie or a novel; here it was in real life. Dozens of stories like this one have been written or are on some future page of history. While all of the storms leave devastation I also think of the one thing that will also emerge from it: hope. You see, in the following weeks, months and years our industry will give that community and the people in them some hope as the wreckage is cleared, the piles of debris cleared. That hope will come in the sound of hammers and saws, trucks rolling in with timber and concrete. Hope will shine through as the walls of a home, a business or a church go up one at a time. With each will come a call to the future of the community that life really does go on, through the pain and through the misery of it all hope is the faith we rely on at times like this. Through tragedy comes opportunity for healing and for newness. With prayer and commitment all things rise again. It is clear from the pictures we see now that those communities have both.

Send us your comments. E-mail to: ray@elpasobuilders.com

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Builders Outlook

JUNE 2011

6 JUNE 2011 Guest Perspective

Chente Quintanilla State Representative Every session there seems to be a particular ‘bill de jour’ as the French would put it. Also, there are bills that address problems that don’t exist. This year, it would seem the prize goes to the same issue: elections. A quick count showed that in excess of 60 bills were filed having some impact on elections and voting. Based on most of the testimony, the problem centered on voters of Hispanic heritage. Most of the testimony repeatedly referred to the south Texas elections or the massive wave of undocumented immigrants who vote en masse at election time. There may be some justification for the concerns by the members who filed the bills. After all, the growth of the number of legal Hispanic voters has far overshadowed the growth of any other ethnic group. It is never easy to surrender supremacy. It is too bad that the biggest problem with Hispanic voters is that turnout at elections is dismal; not that the majority are voting illegally.

Builders Outlook

Election legislation focuses on non-existent problems Perhaps the most visible bill de jour was the voter id bill. In working elections for decades, I do not recall ever seeing election workers allowing individuals to vote without confirming their eligibility. By all the public comments, you would think there was actual evidence that election workers were conspiring with voters (let us be honest, the voters seem to be Democrats that are the center of attention) and passing unlawful voters to the ballot machine. That is just not the case. The testimony by the Attorney General's office confirms that. After investigating over 20 million votes over several years, the final count of those indicted was less than the number of days in a month. None of the actual convictions were confirmed to be based on identity theft; which the voter id bill was supposed to fix. The other bills addressing election "problems" included fixing absentee voting, assisting absentee voting, entering false information on a registration form, various behaviors by election workers or judges or being a non-citizen and voting. The most ambitious bills included criminal penalties or elevation of the violation degree (misdemeanor to felony). The most prolific filer happened to be in the Rio Grande Valley representative who decided that the Democratic Party was not the place for his best interests. It almost seemed as if he was trying to outconservative the long time Republicans. The thing about his bills, some of which passed the House floor, is that evidence from state agencies confirmed that a problem did not exist. The Legislative

Budget Board released a criminal impact statement on one bill, which is descriptive of most of the other bills, that stated "…less than five individuals were arrested, and less than five were placed under misdemeanor community supervision for providing false information on an application for an early voting ballot. For this analysis, it is assumed the number of offenders convicted under this statute would not result in a significant impact… FIVE OFFENDERS? Is that evidence of widespread fraud? There are a couple of ways of interpreting the proliferations of election bills filed. One is that there is evidence of

problems. Since the elections were so tilted to the right, one might question whether the conservatives were legally voted into office. The other thought is not so easy to dismiss. Some may consider the effect of these bills is intended to send a message that ultimately causes voter intimidation. Some honest voters, election workers and poll judges may be intimidated by the slew of attempted law changes. That is a dangerous outcome to an effort to solve problems that, based on evidence, do not exist.

Builders Outlook

JUNE 2011

The Lending Crisis The Decline of AD&C Lending The nation’s home builders know that lending for acquisition, development and construction (AD&C) purposes is restrictive. Even in areas of the country where home prices are stable or growing and demand exists for new construction, the lending environment is challenging, which constrains residential construction’s traditional role of leading the economy out of recession. Lending for residential construction purposes is significantly more restrictive than loans for commercial construction activities, and these facts are at odds with reporting from certain surveys of financial conditions. Data from the FDIC’s Statistics of Banking, graphed below, confirm the anecdotal evidence from builders of tight AD&C lending conditions. Since the first quarter of 2008 peak of AD&C lending for residential construction (1 to 4 unit properties), the total volume of loans is down from $203.8 billion to $56 billion – a decline of $147.8 billion or 73%. Since early 2008, the stock of home building AD&C loans held by FDIC-insured institutions has declined on average 10 to 11% every quarter, with the decline equal to 10.9% for the first quarter of 2011. All other construction and development loans, including commercial and 5+ unit residential properties, are down 45% since the peak in the third quarter of 2008. This decline, while large, is still considerably smaller than the decline for residential AD&C loans. It is worth noting that some sources, such as the Federal Reserve Senior Officer Loan Survey, suggest that business lending conditions are improving for real estate loans. The following chart graphs the Fed survey results for reporting of net tightening for commercial real estate loans. The most recent survey indicates a greater percentage of respondents reporting net loosening of credit

availability for the first time since the Great Recession began. However, NAHB survey data of home builders and the FDIC data reported above continue to indicate that AD&C lending conditions remain restrictive for home building nationwide. Impeding Availability of FHA Financing Would Be a Setback for Home Buyers, NAHB Tells Congress At a time when qualified home buyers are experiencing difficulty in obtaining mortgages because of overly restrictive underwriting requirements, the federal government needs to ensure that a reliable and adequate flow of housing credit is available through the Federal Housing Administration (FHA), according to the National Association of Home Builders (NAHB). "If we look to the dramatic increase of FHA's market share over the past few years, we can see how essential the program is for our nation's economic recovery," NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla., told the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity. In 2006, when private lenders boasted a healthy market presence, FHA's market share was at an all-time low of 2 percent. During the past two years, with the private mortgage market vanishing in a bad economy, FHA insured nearly 30 percent of the single-family mortgage market. "This striking shift is evidence that FHA is performing its mission of providing the federal backstop to ensure that every qualified American home buyer has access to a stable mortgage product," said Rutenberg. As Congress looks for ways to reform the FHA, he urged lawmakers to proceed carefully in order to avoid consequences that could harm

home borrowers. For example, NAHB is concerned that increasing the downpayment from 3.5 percent to 5 percent -- as called for in a draft legislative proposal -- would create a substantial burden for all American home buyers, particularly younger buyers and those with strong credit profiles who lack the necessary funds to make the higher downpayment. "Research has shown that requiring a higher downpayment does little to reduce risk of default but causes home buyers to use more of their reserves for the downpayment," said Rutenberg. "Sound underwriting is the key to minimizing foreclosures and defaults, not higher downpayments. This is demonstrated by current FHA foreclosure reports on loans made to borrowers with sound credit profiles, which have significantly improved." Absent congressional action, the current limits for FHA insured loans and Fannie Mae and Freddie Mac mortgages are scheduled to be reduced on Oct. 1. Meanwhile, the same legislative blueprint that would increase FHA downpayment requirements would impose additional reductions in loan limits for a significant number of areas throughout the country, a development that Rutenberg warned could leave a large number of first-time home buyers without a key source of mortgage financing. "Counties across the country would see their loan limit reduced by tens of thousands of dollars, placing further downward pressure on home prices and impairing the ability of borrowers to use FHA-insured mortgages to purchase new homes," said Rutenberg. To keep FHA, Fannie Mae and Freddie Mac loan limits at their current levels, NAHB called on Congress to support H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, a bipartisan measure sponsored by Reps. Gary Miller (R-Calif.) and Brad

Sherman (D-Calif.). Meanwhile, the draft legislative proposal, which has not yet been formally introduced, would remove the limit on the annual mortgage insurance premiums on single-family home loans, even though the agency has already implemented a three-step premium increase and the strong performance of recent loans made under revised underwriting criteria makes a compelling case that a further acceleration of program premiums is not warranted. "FHA's capital resources are stabilizing and recovering. Allowing further, unlimited increases in the insurance premiums now would put unnecessary additional financial strains on potential home buyers," said Rutenberg. The legislative plan would also transfer rural housing programs within the Rural Housing Service (RHS) from the Department of Agriculture to the Department of Housing and Urban Development. NAHB opposes this proposed move because the RHS programs are uniquely structured to address the housing credit needs of low- and moderate-income persons in rural areas, which are very different from those found in urban and suburban areas. "If the RHS single-family and multifamily programs were consolidated into existing HUD programs, it would make it more expensive for persons living in rural areas to obtain an affordable mortgage to purchase a home and more difficult to finance small properties in rural areas because HUD does not have a program that meets this need effectively," said Rutenberg. "As Congress looks to improve the FHA and RHS, these programs cannot be separated from the larger discussion of reforming the complex housing finance system, including future reforms to Fannie Mae and Freddie Mac," he added.

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JUNE 2011

EPAB ON THE SCENE EPT LAND Smart Growth Groundbreaking Richard Aguilar and his partners looked on with pride as their newest Westside development was unveiled. The public event was the office ground breaking for Montecillo, a Smart Growth plan involving high density design with upscale urban settings. The property is located off of Mesa Street between Executive Boulevard and the old Jaxsons restaurant. The execution of the plan required the removal of a mountain on the west side of Mesa that took several months to complete. Primary engineering was done by Conde Engineering while CF Jordan is the projects primary contractor. The event drew a large crowd to the viewing area as wind played havoc with the tent and presentation. David Bogas acted as master of ceremonies while three city council representatives along with the director of planning also spoke. The first phase includes four multistory units with townhouses on the second floors up on three of the buildings while the first floor is dedicated to retail stores. The ongoing project will continue for several years as the large development grows.

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Young Designers vie for scholarship The El Paso Association of Builders announced that three local high school students won the 2011 El Paso Association of Builders Young Designer competition. The three will share $4,000 in scholarship money. The top three finishers in this years competition are Ismael Olivares, winner of $2000 scholarship; Caitlin Lambing, winner of $1200; and Gustavo Pena, winner of $800 scholarship. The top two were only separated by less than 5 points in total, showing how competitive the work is. All of the students attend the El Paso ISD Center for Career and Technology Education (CCTE). The instructor is Cecilia Orozco. Entries were also received from Socorro ISD through Ms. Lynn Cordova, instructor. In a statement from Greg Bowling, President of the El Paso Association of Builders (EPAB) the three students competed in a judged event that began when school started. “It is gratifying to see the work that all the students who entered into the competition did, and frankly it’s tough to judge,” Bowling said. “We have had this scholarship award now for a number of years and it continues to be a significant contribution to the future education of the winners,” he continued. The EPAB Young Designer Chairman is John Chaney of Passage Supply Company in El Paso. His dedication to the scholarship was also applauded by Mr. Bowling. “John is the driving force from our standpoint, and he has worked hard to ensure that students can move to higher education and continue to look at a professional career in the home building trades.” For his part Mr. Chaney is grateful for the experience. “Every year it gets better and better, but without the support of our educators, especially like Ms. Cecilia Orozco and Lynn Cordova from Socorro High, none of this would happen,” Chaney said The next contest will be announced for the 2011-12 school year. “We will be looking for some great talent next year,” John Chaney said. “It’s a challenge that has a great outcome,” he continued.

10 JUNE 2011 News from the

Texas Real Estate Center recenter.tamu.edu Texas is main gate for Mexico freight Texas leads the nation in freight with Mexico and has for at least 15 years. Even during the height of the recession, when freight traffic dipped overall, Texas still ranked first. In August 2010, Texas became the first state to record more than $10 billion in surface trade with Mexico in one month. Texas also was the first state with more than $100 billion in surface trade with Mexico in a single year. In all, Texas-Mexico surface trade accounted for $114.5 billion worth of goods, up 33 percent from $86 billion in 2009, according to the U.S. Bureau of Transportation Statistics. California was a distant second in 2010 with Mexico surface trade at $47.6 billion. Of the top U.S. ports, Laredo ranks No. 1 in North American trade volumes in all modes, including ship and air, crossing 13.2 percent in 2010, according to the U.S. Transportation Department. Six Texas ports rank among the top 17 U.S. ports for North American trade. After Laredo, they are El Paso (No. 5), Hidalgo (No. 7), Houston (No. 10), Eagle Pass (No. 12) and Brownsville (No. 17).

Texas GDP up 3.7 percent in 2011 Texas’ gross domestic product is expected to grow by 3.7 percent in 2011, propelled by the state’s top job creation and higher energy prices, according to BBVA Compass’ second quarter economic outlook report. The state’s energy sector has benefited from technological advances, including new drilling methods, as well as output growth in times of high oil prices. Among the areas of expected growth is the state’s industrial concentration. Texas is home to 22,803 manufacturing companies that collectively employ 1.16 million workers. Meanwhile, Texas’ retail sales are up about 4 percent as of January. Overall, the report gives the U.S. an outlook of 3 percent GDP growth in 2011, but cites that the labor market will still lag behind that growth, creating just 1.3 million new jobs in the last 12 months.

Builders Outlook

JUNE 2011

Police identify top collision intersections EL PASO, TEXAS – The El Paso Police Department has identified the top collision intersection locations for April 2011 and YTD 2011. The top intersection collision locations are as follows: APRIL 2011 1. Airway & Montana 10 collisions 2. Joe Battle & Montana 10 collisions 3. Montwood & Zaragoza 8 collisions 4. Mesa & Shadow Mtn/Sunland Pk 7 collisions 5. Artcraft & Upper Valley 6 collisions 6. Gateway E. & Lomaland 6 collisions 7. Gateway West & Yarbrough 6 collisions 8. Mesa & N. Desert 6 collisions 9. Doniphan & Sunland Park 5 collisions 10. Fred Wilson & Gateway N. 5 collisions

2011 YTD Top Collision Intersections: 1. Joe Battle & Montwood 2. Gateway West & Yarbrough 3. Airway & Montana 4. Alameda & Americas 5. Gateway West & George Dieter 6. Global Reach & Montana 7. Gateway West & Lee Trevino 8. Montwood & Zaragoza 9. Gateway East & Lee Trevino 10. Mesa & N. Desert

45 collisions 26 collisions 24 collisions 20 collisions 20 collisions 20 collisions 20 collisions 20 collisions 19 collisions 19 collisions

Drivers are always encouraged to observe all traffic laws and to use extra care upon approaching all intersections.

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12JUNE 2011

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 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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Plumbing Supply Source in El Paso 4 3 0 0 R o s a S t. E l Pa s o, T X 7 9 9 0 5

( 9 1 5 ) 5 32 -3 9 1 7 • Fa x : ( 9 1 5 ) 5 32 -3 9 1 9

■ board of directors 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

Builders Outlook

JUNE 2011

Bowl-A-Thon! Tuesday, July 19 at Bowl El Paso 11144 Pelicano Registration at Noon Bowling starts at 12:30 4 man teams $25.00 per person includes lunch and shoes We need raffle prizes (gift cards etc.) Lane sponsors Call 778-5387 Today Daddy-O!

Membership News www.elpasobuilders.com

6046 Surety Dr • 915-778-5387

UPCOMING EVENTS June 11 General meeting Las Vegas, Nevada

June 23-25 TAB Board meetings Houston, TX

AAA Glass

DWS Building Supply

All Precision Sheetmetal Works

Emerald Earth Lighting

Dean Olson P. O. Box 13612 Chandler, AZ 85248 602-318-1712

Bock & Associates Cemex

SODA SPONSOR Thanks to our JUNE SODA SPONSOR: Pioneer Bank

July 13 Associates Council meeting TBD - EPAB

July 19 Bowl-a-thon at Bowl El Paso 11144 Pelicano

RENEWALS

NEW MEMBERS Eyesite Surveillance, Inc.

June 28 Board meeting 12:00 TBD

Cimarron Mortgage Capital Dempsey Appraisal Service Inc.

Environmental and Safety Solutions First National Bank Fortune Custom Homes

Guel Construction Home Builders Insurance Services Karam Company

One Source Federal Credit Union Pat Montgomery, CPA Pioneer Bank Presidential Homes

McClintock Self Storage

Real Estate Weekly Rudolph Chevrolet

Morrison Supply Company New Horizon Builders

CONDOLENCES To Bruce Meyer on the loss of his Mother To John Cullers on the loss of his dad Elmer To the family of Hector Duenez To the family of Jerry Levy

CONGRATULATIONS To Javier and Maria Isabel Ruiz and big brother Sebastian On the birth of Carolina Isabel Born May 28, 2011 Weighing 6 lbs. 1 oz.

11395 James Watt, Suite A-11 79936 915-633-8002

14 JUNE 2011

Builders Outlook

Industry Reports Associates Council

Sam Shallenberger Western Wholesale Supply Viva Las Vegas! Just a few days left before we go to Vegas for our General meeting and a lot of fun. Ray has something special lined up for us for the meeting and I am sure everyone

will enjoy seeing this as it is something you don’t see every day. If you are missing this trip make sure to get ready for the one next year. We’d like to make this an annual event as a good way to get away from everyday routine into the world of glamour and fun. Thank you to all of you who are making the trip. By the time you read this we should be on the way home with great memories and hopefully a bag full of money. Don’t forget the Bowl– a- Thon coming up on July 19th ! Vicki Marcusse promises great

time will be had by all. Besides it will be hot outside and the refreshments will be cool inside. I can’t wait to see if I can break a hundred. It will be held at Bowl El PASO located between Lomaland and Lee Trevino at 11144 Pelicano. Register by calling Angie at the EPAB office 778-5387. Correction on the tailgate party: it will be held Thursday, September 29th starting around 4:00 pm. UTEP is playing Houston so it should be a great game . Remember we have a very special

caterer for this event not to mention very cold beverages. The weather will be great for this event, I promise. Our good friend Mack Rhodes is the AD at Houston and he promises that the Cougars will bring it on. All I can say is that our own UTEP Miners will be ready and anxious to do battle. Our tailgate is a great time for all. So don’t forget, mark the date on your calendar. I don’t want to waste all my energy on this column as I need to go practice my Blackjack. See you on Vegas!!!!!!

Mulching around plants is a great way to reduce water loss and cuts down on waterstealing weeds. Natural mulches include compost, bark chips, and pine needles. Organic mulches gradually break down and add nutrients to the soil. Inorganic material, such as landscaping paper, rocks, and pebbles, are a more permanent option.

6. Put thirsty plants together To save water, group plants into watering zones. Place the thirstiest plants near the house where they can drink roof runoff. Farther out, make a “transition zone” for plants that need supplemental drip irrigation. Farther still is a “natural zone” for native plants that can survive on rainfall alone. 7. Plant and water when it's cool New plants and transplants need far less water if you put them in the ground in early fall or early spring when it’s cooler. By summer, they’ll have established a deep, healthy root system that needs less watering. Water in the cool of the morning; where you’ll lose less water to evaporation than in the heat of the day. Resist watering at dusk; wet foliage during the night encourages fungus and mildew growth. 8. Do donuts Trees and shrubs need extra water during their first couple of years to help roots take hold. An efficient way to keep roots moist is to mound several inches of soil into a donutshaped berm. Make the berm the width of the tree--including branches. Use a hose or bucket to fill the donut dam to the top.

9. Follow the sun Before you plant, get to know how--and how long--the sun shines in your garden. Determine patterns of shade and sun. Use drysoil plants in sunny areas, and use plants that require more water in shady areas where evaporation is slower. 10. Create the illusion of water A good way to conserve water in the garden is to capture rain water from your roof in a rain barrel. During a moderate rainfall, a 25by-40-foot roof can shed 600 gallons per hour. All you’ll need is a capture system (roof gutters and downspouts), a storage system (large-capacity barrels) and delivery system (garden hose).

REALTOR/Builder Angela Ochoa GEPAR

10 Tips for Saving Water in the Garden By: Laura Fisher Kaiser

1. Choose native plants Native plants have had eons to adjust to the area’s normal rainfall, soil, and climate. Once established, they require little or no watering. 2. Don’t supersize plants The bigger the plant, the more water it might require. Before you buy research online how tall and wide mature shrubs will grow. Also, don’t overcrowd plants: Follow label planting instructions. Fewer plants require less water. And flora that looks sparse at first will fill the area in a few seasons. 3. Pile on the mulch

4. Make paths porous Garden paths made of porous material allow rainwater to seep into the ground and nourish plant roots, not run off into the street. Use gravel, pebbles, non-mortared concrete pavers, or spaced bricks. To keep down weeds, line the walk with landscaping paper (or even newspaper) before you pile on the porous material. 5. Lose the lawn A green lawn is a suburban ideal that drinks more than 20,000 gallons of water each year. You can keep those cool blades under your feet and save water by planting drought-resistant varieties. (Like: Bermuda and buffalo grass) Mow less often; and when you do, raise the height of your mower blade to 3 inches.

June Meeting: 6/10/11 from 12-2PM at the Greater El Paso Association of REALTORS®. Speaker will be Bella Homes. Their Education Topic will be New City Building Code Changes.

Land Use Sal Masoud

Linda Troncoso

BySal Masoud I would like to take this opportunity to express my disappointment with the lack of participation on the part of our land use members. I understand that the time we contribute is voluntary and will take away from your day to day activities. However, I feel that Linda and I as chairs for this land use council that we must continue to keep meeting on regular basis in order to remain a unit that can stand united against all the challenges we face dealing with the changes the city is imposing. We have not been able to hold a meeting since January due to lack of participation. I thank our staff members at the El Paso Association of Builders for their consistent effort sending meeting notices requesting RSVP’s well ahead of the meeting time. We were force to cancel meeting since we received no confirmations for meeting attendance. Our next meeting will be held on June 22, 2011. I hope that we can count on our members to register for attending the meeting so we can get back on track.

FEMA flood maps update: I would like to share with you the contents of a press release issued courtesy of the City of El Paso Engineering and Construction

Management Department. This press release is good news for the El Paso community which will allow builders and developers to continue with their plans in the near future. The additional time will also allow The USIBWC to complete the levees project and achieve full certification prior to the issuance of new maps.

Press Release: June 2, 2011-The public is advised that effective May 24, 2011, the Federal Emergency Management Agency (FEMA) has officially placed the preliminary flood insurance rate map project for El Paso County on hold until further notice. This temporary hold is necessary to allow FEMA the opportunity to revisit the modeling approach that was used to analyze communities that are impacted by levees that are not accredited. Since the preliminary flood insurance rate maps issued to the El Paso community on June 18, 2010 may be impacted by this modeling approach, the proposed maps will NOT be finalized until a new approach is completed by FEMA. A timeframe has not been specified, however, FEMA officials have indicated that they are working to create the new modeling method as soon as possible.

During this timeframe, property owners can continue to provide comments, or protests/appeals (require scientific or technical information) regarding the proposed maps to the local floodplain administration office. • To view the existing or proposed maps, property owners can continue to visit the City’s website www.elpasotexas.gov under News & Notices, FEMA Flood Zone Maps • Information may be submitted electronically at floodzones@elpasotexas.gov or mailed to the following address: Floodplain Administration 2 Civic Center Plaza-4th El Paso, Texas 79901 541-4200 • Individuals who reside outside city limits must contact their respective Floodplain Administrator (El Paso County, 5462015).

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Balance sheet and income statement class at EPAB Frank Spencer of Aztec Construction brought in his bookkeeper Kathryn Schobner to give an overview on the basics of financials and statements. The class focused on why Understanding Your Balance Sheet and Income Statement. In the construction and contracting fields, businesses are routinely asked to provide financial statements to lenders, bonding and insurance agents, tax reporting agencies...and the list goes on. While the Balance Sheet and Income Statement are required for official purposes, they can also be used on a regular basis by owners and managers as an up-to-date snapshot of financial standing. This workshop was designed for nonaccounting people who want a basic understanding of how to read a Balance Sheet and Income Statement. They examined how these statements are produced and the importance of maintaining accurate and timely records. After this workshop, business owners and managers should be able to properly interpret and generally understand the overall strength of their company's financial position by looking at the Balance Sheet and Income Statement.

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