National, State & Local Building Industry News 2017: Issue 11
www.elpasobuilders.com
Predictions for the 2018 housing market Slower home price growth, continued inventory issues and evolving design trends ahead by Marian McPherson Staff Writer, Inman News
If only we could stare into a crystal ball to see exactly what 2018 holds for the housing market. More inventory? Yes! Slower home price growth? Absolutely! Oprah giving everyone a free house? That would be a dream come true. For now we have forecasts from top economists and housing experts. And Zillow chief economist Svenja Gudell offered hers on behalf of Zillow. “We’re on the other side of the housing recovery, and the real estate market looks quite different than it did 15 or even five years ago,” Gudell said in a statement. “We have a huge generation entering the market. They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options.” “Builders won’t ignore this hungry market, and we’ll start to see a rise in new construction at the more affordable end, instead of all the luxury buildings we’ve seen lately,” she added. “However, builders are also facing high costs, so instead of adding density in cities where zoning laws and land costs often preclude affordable building, we’ll see the suburbs grow and expand outward.” Here are the six things Gudell expects to happen in 2018: 1. Inventory shortages will drive the housing market. Gudell says low inventory will continue to push up home prices and serve as a barrier for firsttime homebuyers who struggle to save for a down payment. Furthermore, this demographic
of buyers will struggle to compete against more seasoned buyers who have profited from a home sale and know how to negotiate their way to the top. Lastly, Gudell says there are 12 percent fewer homes to choose from nationwide than there were a year ago, and 51 percent of forsale properties are in the top onethird of home values, which are out of reach for first-time buyers. 2. Builders will turn their focus to entry-level homes. Economists have said over and over again that increased residential housing starts, especially at the starter home level, are the key to bringing home prices down. Housing starts have been well below the 50-year average of 1.2 million, but Gudell expects builders to finally hearken to the call of first-time and lower- to middle-income buyers yearning for more affordable options.
3. Millennials will move to the suburbs. It’s no secret that the majority of millennials would rather live in urban centers with
access to a plethora of entertainment and shopping options and robust tech-centered job opportunities. But most millennials, especially those without help from parents, can’t afford to live in these areas. Gudell says 25- to 34-year-olds will begin moving to the ‘burbs in search of more affordable home prices.
4. Many homeowners will remodel rather than sell. In addition to higher housing starts, experts have said more homeowners selling their homes would help alleviate low inventory issues. Well, homeowners, despite having high confidence about being in a seller’s market, will continue to stay still, says Gudell. Instead of buying a new home, homeowners will invest in remodeling efforts to make their current homes feel and look brand new.
5. Baby boomers and millennials will drive home design. Baby boomers and millennials are driving the housing
market, so it’s no surprise that Gudell says they’ll be driving home design trends in 2018, too. New starts and renovated homes will feature designs that appeal to both millennials and baby boomers, such as wide hallways that can accommodate both strollers (for young families) and/or wheelchairs (for aging boomers). Furthermore, homes will also be built using frameworks that make it easy to add elements later, including extra support beams behind shower walls to which grab bars can be added as older generations age in place. 6. Homes prices will continue to grow, but at a slower pace. 2017 has been full of recordbreaking home price growth, with economists calling it nearly “unstoppable.” Gudell says home prices are expected to climb 4.1 percent in 2018 — 1.1 percentage points higher than the “normal” annual appreciation closer of 3 percent, but slower than the current annual pace of 6.9 percent.
2
Builders Outlook
GIVE THANKS FOR MOMENTS LIKE THESE. Home is where traditions begin and memories are made, and a natural gas home is instantly more attractive to potential buyers. Natural gas kitchens sell themselves, and natural gas furnaces, water heaters and clothes dryers offer greater efficiency and lower operating costs than their electric counterparts. Let us help you plan for natural gas right from the start. For more information: ElPasoNewBusiness@TXGas.com William Nieves: 915-496-6126 Jorge Sejera: 915-680-7216 Please continue to direct service line and meter set requests to the Texas Gas Service Builder Hotline at slimgas-metroElPaso@onegas.com or 1-866-206-9587.
2017 Issue 11
2017 Issue 11
President’s Message
3
Builders Outlook Don Rassette
President, El Paso Association of Builders
TAB Fall meetings wind up year on a successful note
I hope this finds everyone doing well, especially as we go into a very special time of the year. I just got back from Austin after attending our fall TAB meetings. As usual it was informative, energizing and good fellowship with many area leaders from across the state. In one of the early meetings, the Government Relations Committee gave a brief overview of the recent 85th Legislative Session. It was reiterated that TAB was six for six on passage of our priority bills and none of the bills that we opposed were passed. Expectations were more than exceeded and probably will never be obtained again to this high of a degree. Congratulations to the TAB staff, as again we are not burdened or encumbered with more regulations at both the state and LOCAL levels. Up next on the agenda was a working lunch meeting for the local President’s Council. The biggest agenda item was for next year’s membership drive. The drive will be facilitated by the Oliver Group who will work to increase and retain members.
Projected dates are: April 9 -13 Training April 16 – 20 Training May 23rd and 24th – 2 Day Drive Sponsors will be needed for the kickoff party, food and drinks for the 2-day drive, wrap-up party ideas, PRIZES and incentives for new members. This Drive is of special importance as EPAB’s retainage rate has been a high priority and center of a lot of discussion at the State and Local levels. For the record, this year in El Paso we had an 82.8% retention rate for members, which was the fifth highest in the state and well above the state average of 73%. Congratulations to Ray and Margaret and all our members! Let’s not rest with this but move forward to bigger and better. The 2018 Leadership Conference will be March 21, 2018, with the TAB winter meetings to be held on March 22-23, 2018 at the Driskill Hotel in Austin. Next, we shared our areas biggest successes and challenges of this year. The successes of each area were very consistent throughout the state: Government Relations
strengthened, Home Building Institutes started, Young Designers seminars/contests grew in participation, high school trades classes starting and resuming, homepacs grew, build-pacs grew, and speed networking/sales events were held once a quarter. One success that everyone loved was from here in El Paso, which was our monthly breakfast between the El Paso Building Department and our EPAB officers and Ray. Other associations will be looking to implement this in their area. Kudos to us! The last meeting for Thursday was the Codes and Standards Committee, where issues such as the TAB Model Safety plan, TAB Storm Water Program, TCEQ Storm Water Permit Renewal, TDLR State Electrical and Mechanical Code Updates, Code Enforcement in the ETJ’s and Silica Rule. Depending on how the TAB staff does with each one of these areas in the future, will determine how encumbered or burdened with additional expenses, we will have in the building industry. On Friday morning we started again. First up was
the Multifamily Council. Next, was the Town Hall Meeting and then the area caucuses meetings. In these caucus meetings, positions were filled including GRC-Builder and Alternate, GRC-Developer and Alternate, HOMEPAC Representatives, Area Vice President, Area Associate Vice President, TAB Committee Assignments and Recommendations. Congratulations to Sam Shallenberger, for retaining area 5’s associates voting representative on the Sunbelt Show Committee!! Then after lunch were the executive committee meeting and Board of Directors meetings. Concluding our fall meetings on Friday evening was the Texas Housing Hall of Honor and Excellence in Leadership Dinner. Congratulations to Randy Bowling, as he is now on the TAB Executive Officers ladder and will be the 2020 TAB President!! Follow your passions, Happy Thanksgiving and be PREPARED TO SUCCEEED!
4
Executive’s Message Ray Adauto, executive Vice President ePAB
PRINT & INTERNET PUBLISHING
* * *
SoCiAl MeDiA & WeBSiTe ConTenT MAnAgeMenT e-MAil neWSleTTeRS CoMMUniCATion STRATegY eDiToRiAl SeRViCeS
innovative design & desktop publishing since 1984
ted escobedo
ted@snappypublishing•com talk & text: 915•820•2800
Get Creative. Make it Snappy. www.snappypublishing.com
Builders Outlook
2017 Issue 11
November: Time to turn over a new leaf
i’d like to congratulate the incoming board of Directors who were voted into their spot at the november board meeting. The list includes some returning as well as several new board members. As an organization the challenge sometimes is finding people to lead and in our case we seem to find the right people at the right time. We will install them at the December 8 banquet along with the new executive leadership. edmundo Dena will take on the role of President, Don Rassette moves to Past President, Sergio Cuartas will be VP and edgar garcia will fill the Secretary spot. Congratulations to all of you. We’ll feature the installation party in the December issue. The month of november is a special month for me as i share the month with two siblings for birthdays. Sadly, it starts my dear sister Cecilia’s on the 5th, sad because she passed
away about nine years ago. She and i have a special bond because she was like a second mom to me. i miss her. My birthday is the 12th, and as a kid i used to tell everyone that the banks would be closed in my honor since we celebrate Veteran’s day so close to it. My youngest older brother Hector is on the 15th. He’s a new octogenarian joining my oldest brother Alex in that group. i joined the Medicare oldsters, turning 65. let me warn you that getting to 65 is a little bit victory and a little bit fearful. There are “new” rules as you reach that age, starting with signing up for Medicare and Social Security benefits. i found out that planning for those two things is vital if you want to get a handle on them. i ran into a problem with social security as they had me listed as being born in 1951 rather than my actual 1952. i have been working since i was twelve, so
you’d think that since they have been taking out SS payments that my information would or should be correct. Don’t take that for granted friends. it took calls and visits to the SS office as well as getting a certified copy of my birth certificate before they believed what i’ve known all my life. Just for your information applying for benefits can start 3 months prior to your birthday month, your birthday month, and 3 months after your birthday month. if you miss those months you will permanently lose some of your potential payouts. Stay aware, look for the changes that come with time, and allow yourself the time to do it right. And get a good Medicare specialist to help you get the right supplement. it’s confusing and trying if you don’t. i hope you get to experience it someday.
D n
o
A
c T T P
National Builder News
2017 Issue 11
New Home Sales Rate Reaches 10-Year High
n Sales of newly built, single-family homes in October rose 6.2 percent to a seasonally adjusted annual rate of 685,000 units from a downwardly revised September reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since October 2007. Year-to-date, new home sales are 8.9 percent above their level over the same period last year. “The October report shows strong sales growth at entry-level price points,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “In markets where builders are able to provide homes for families with different household budgets, they can fulfill a growing demand for housing.” “There is solid growth in the number of sales contracts signed before construction has begun, a strong indicator that new single-family home production should continue to grow as we look ahead to 2018,” said NAHB Chief Economist Robert Dietz. The inventory of new homes for sale was 282,000 in October, which is a 4.9-month supply at the current sales pace. New home sales increased in all four regions. Sales rose 30.2 percent in the Northeast, 17.9 percent in the Midwest, 6.4 percent in the West and 1.3 percent in the
South.
Multifamily Developer Confidence Weakens
n The Multifamily Production Index (MPI), released today by the National Association of Home Builders (NAHB), dropped 10 points to 46 in the third quarter of 2017. This is the lowest reading since the second quarter of 2011. The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse. The MPI provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums. Two of the three components decreased in the third quarter: market-rate rental units and for-sale units both fell 17 points to 43 and 40, respectively, while low-rent units edged up one point to 54. The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, increased three points to 41, with lower numbers indicating fewer vacancies. After peaking at 70 in the second quarter of 2009, the MVI first improved dramatically, then edged back up, and has been fairly stable since 2013. “We’re starting to see various markets across the country become oversupplied with multifamily construction, so builders and developers are pulling back a bit,” said Dan Markson, senior vice president of The NRP Group in San Antonio, Texas, and chairman of NAHB’s Multifamily Council. “Multifamily production had been quite strong, although it slowed down in the past three months,” said NAHB Chief Economist Robert Dietz. “And with approximately 600,000 units in the pipeline, builders and developers are taking a cautious approach until they see how the market absorbs these units when they come online.” For data tables on the MPI and MVI, visit www.nahb.org/mms.
Housing Starts Up Sharply, Near PostRecession High
n Nationwide housing starts rose 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million units after a slight
Builders Outlook
upward revision to the September reading, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. This is the highest housing production reading since October 2016, when total starts hit a post-recession high of 1.33 million. Single-family production rose 5.3 percent in October to a seasonally adjusted annual rate of 877,000. Year-to-date, single-family starts are 8.4 percent above their level over the same period last year. Multifamily starts jumped 36.8 percent to 413,000 units after a weak September report. “This uptick in housing production is aligned with our reports of strong builder confidence,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “Our members are optimistic about the future of the housing market, even as uncertainties remain and they continue to face supply-side issues.” “We are seeing solid, steady production growth that is consistent with NAHB’s forecast for continued strengthening of the single-family sector,” said NAHB Chief Economist Robert Dietz. “As the job market and overall economy continue to firm, we should see demand for housing increase as we head into 2018.”
Regionally in October, combined single- and multifamily housing production rose 42.2 percent in the Northeast, 18.4 percent in the Midwest and 17.2 percent in the South. Starts fell 3.7 percent in the West. Overall permit issuance in October was up 5.9 percent to a seasonally adjusted annual rate of 1.297 million units. Single-family permits rose 1.9 percent to 839,000 units while multifamily permits fell 9.5 percent to 458,000. Permits rose in all four regions. They increased 13.0 percent in the West, 4.1 percent in the Northeast, 3.8 percent in the Midwest and 3.0 percent in the South.
Chairman Granger MacDonald on Senate Tax Reform Plan
n Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas, today issued the following statement on the House passage of The Tax Cuts and Jobs Act: “The Tax Cuts and Jobs Act is a bad deal for hard-working American families. It provides a huge windfall to major corporations paid for in large part by millions of working class home
5
owners, who will see their housing tax incentives severely diminished. The bill effectively renders mortgage interest and property tax deductions unusable for middle class home buyers and home owners. By threatening the value of the largest asset held by most Americans, these changes will hurt the middle class by lowering household wealth. “The House bill also severely diminishes the effectiveness of the Low-Income Housing Tax Credit (LIHTC), which is essential to spur the production and rehabilitation of affordable rental housing. With the nation already in the midst of an affordability crisis, undermining the LIHTC will deal a crippling blow to keep housing affordable and available for those citizens who are most in need. And the bill will make it far more difficult for small businesses to compete and thrive because it disproportionately benefits corporations. “Given the major shortfalls in the House tax reform bill, NAHB will look to the Senate to craft a better package that meets the needs of middle class families and the small business community.”playing field with large corporations.”
6
Los Angeles Takes Top Spot as Nation’s Least Affordable Housing Market San Francisco, which has been the nation’s least affordable housing market for nearly five years, was supplanted by Los Angeles in the third quarter of 2017, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today. In all, 58.3 percent of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $68,000. This is down from the 59.4 percent of homes sold that were affordable to median-income earners in the second quarter. “Though builder confidence remains strong, they continue to deal with the longterm repercussions of this devastating hurricane season, which has exacerbated chronic labor and lot shortages and put upward pressure on material and home prices,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “Solid economic growth, along with ongoing quarterly job gains and rising household formations, are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “Tight inventories and a forecast of rising mortgage interest rates through 2018 will keep home prices on a gradual upward path and slowly lessen housing affordability in the quarters ahead.” The national median home price rose to $260,000 in the third quarter from $256,000 in the second quarter of 2017. Meanwhile, average mortgage rates inched up two basis points in the third quarter to 4.1 percent from 4.08 percent in the second quarter. For the fourth consecutive quarter, Youngstown-Warren-Boardman, Ohio-Pa., was rated the nation’s most affordable major housing market. There, 90.1 percent of all new and existing homes sold in the third quarter were affordable to families earning the area’s median income of $54,600.
Builders Outlook
Meanwhile, Wheeling, W.Va.-Ohio, was rated the nation’s most affordable smaller market, with 94.7 percent of homes sold in the third quarter being affordable to families earning the median income of $56,100. Rounding out the top five affordable major housing markets in respective order were Syracuse, N.Y.; Scranton-Wilkes BarreHazleton, Pa.; Indianapolis-CarmelAnderson, Ind.; and Wilmington, Del.-Md.N.J., which tied for the fifth spot with Cincinnati, Ohio-Ky.-Ind. Smaller markets joining Wheeling at the top of the list included Lima, Ohio; Davenport-Moline-Rock Island, Iowa-Ill.; Bay City, Mich.; and Mansfield, Ohio, which also posted a fifth place tie with Binghamton, N.Y. Los-Angeles-Long-Beach-Glendale, Calif., assumed the mantle as the nation’s least affordable major housing market. There, just 9.1 percent of the homes sold during the third quarter were affordable to families earning the area’s median income of $64,300. San Francisco-Redwood City-South San Francisco, Calif., which stood as the nation’s least affordable major housing market for the past 19 consecutive quarters, fell to No. 2. Other major metros at the bottom of the affordability chart were located in California. In descending order, they included AnaheimSanta Ana-Irvine; San Jose-Sunnyvale-Santa Clara; and Santa Rosa. All five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Salinas, where 11.3 percent of all new and existing homes sold were affordable to families earning the area’s median income of $63,100. In descending order, other small markets at the lowest end of the affordability scale included Santa Cruz-Watsonville; San Luis Obispo-Paso Robles-Arroyo Grande; Napa; and San Rafael. Please visit www.nahb.org/hoi for tables, historic data and details.
Issue 11
Insurance developed for builders. Developed for builders with the backing of the strongest insurance carriers serving the Texas building industry, our insurance program offers flexible coverage options and rates that are more competitive than ever. As an authorized member of Builder Agent Network©, we’re dedicated to providing builders and contractors with the best-in-class insurance programs, pricing, underwriting, resources and service. Product Portfolio Highlights t “A” rated carriers, several available t (- PêFSJOH Doverage for property damage that results from faulty, defective, or poor workmanship in your work. t (- -JNJUT PG VQ UP . . . Bvailable t Expanded policy form for commercial projects t Builder’s Risk master policies, monthly reporting, annual and one shots t Workers’ Comp - Two highly cost-effective programs t ExDFTT -JBCJMJUZ GPS $PNNFrcial (eneral Contractors t $PNNFrcial Umbrella El Paso, Permian Basin and Surrounding Area HUB International Insurance Services -VJT 3PTBT 915-206-6047 www.hubinternational.com
www.builderagentnetwork.com
2017 Issue 11
Economic Forescast
Elliot Eisenberg Economic & Policy Blog With the possibility of tax reform and tax cuts right around the corner, it is important to understand how the proposed doubling of the standard deduction will impact households and will essentially render the mortgage interest deduction irrelevant for almost all US home owners! The current Republican plan raises the standard deduction from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married couples filing jointly. While the much larger standard deduction looks very advantageous, the new tax plan eliminates the personal exemption, which is currently $4,050/person. This means that the increase in tax-free income rises by just $1,600 ($12,000 - $6,350 -$4,050) for single filers and by $3,200 ($24,000 $12,700 - $8,100) for married couples filing jointly. While these sums are not trivial, they are also not as large as advertised. The Unified Framework developed by the White House and the Republicans also proposes eliminating all itemized deductions except for mortgage interest and charitable donations, and state and local property taxes up to a cap of $10,000. While this appears to largely maintain the status quo, think again. Traditionally, tax filers added up mortgage interest,
Builders Outlook
The Late Great Mortgage Interest Deduction charitable donations, state and local taxes, and healthcare expenses. If those deductions (the most commonly used) collectively exceeded the standard deduction, itemizing would make sense and one’s tax burden would decline. Now, not only is the standard deduction almost doubling, but the deductibility of state and local income taxes and healthcare expenses is being eliminated. This means that to itemize, the sum of mortgage interest paid, charitable contributions, and property taxes must exceed $24,000. Few married couples hit that threshold. I estimate that no more than 6 percent of all households will itemize under the proposed plan compared to about 27 percent today. Moreover, the deductions of those who will still itemize will be worth less than before. This is because the tax advantage of itemizing depends entirely upon how much one’s itemized deductions exceed the standard deduction and one’s marginal tax rate. Given the increase in the size of the standard deduction, the amount by which one’s now smaller itemized deductions exceed the newer, higher standard deduction will necessarily fall. And, as lowering tax rates is a part of this plan, the after-tax tax savings from itemizing will necessarily decline as well. As for the mortgage interest deduction, I estimate that the percentage of households that currently own their home and will still be able to deduct mortgage interest will fall from the current level of about 33 percent to about 7 percent. Here is an example to show why. Suppose a husband and wife have $20,000
Expert Advice
Tax Strategies
by Ruth Rivera, VP Bukaty Financial
Taxes are all the talk right now but that's not why we're reaching out to you. Yes, there are major proposals being batted around to adjust tax code. This could be the most comprehensive tax reform since 1986 when Ronald Reagan was President and a smart phone could only be described as a regular phone with a picture of Isaac Newton stapled to it. We will let our opinions be known as soon as these tax proposals become the law of the land, but until then, we will leave all pontifications on the matter to the swamps of Washington. We do, however, want to reach out to you today to make you aware of tax-optimizing strategies that may be of relevance and need to be acted upon before the clock strikes midnight on the year 2017. Many tax strategies only need to be acted upon before the April 15th tax filing deadline of the following year, but here are several important considerations that require attention before the New Year's revelry. They are: Maximize funding to Employer-Sponsored Contribution Plans (401k's, 403b's, etc.)While each employer-sponsored contribution plan may have slight underlying differences, traditionally every employee can contribute $18,000 per year to their company retirement plan while workers aged 50 and older can contribute an additional $6,000, for a total contribution of $24,000. It is important to contribute to these tax-friendly plans throughout the year but it is a prudent decision to review balances before the end of the calendar year to see if you have additional assets available to contribute that will correspondingly reduce your taxable income. Charitable Gifting Part 1 - For those over
70.5 years old who are forced to take required minimum distributions (RMD's) from their IRA accounts, Congress recently made permanent a fantastic tax advantaged way to donate to your favorite charity. If you were born in 1947 or earlier, you can contribute directly to a charity of your choice and reduce tax consequences at the same time. If you fit the parameters above and make sizeable contributions to a qualified charity, this is unequivocally the best option at your disposal. Charitable Gifting Part 2 - Donating appreciated assets (like stocks and mutual funds) in taxable accounts is a great way for anyone at any age to fund their charitable preferences. The current tax code encourages charitable contributions by allowing donors, in most cases, to reduce their taxable income by the amount of any gift. For example, a donor in a 40% combined federal and state tax bracket generally receives $4,000 in tax savings from a $10,000 charitable contribution. A donation of appreciated long-term capital gain assets can offer even greater tax benefits because gifts are deductible at full fair market value - up to 30% of the donor's adjusted gross income. Since the securities are donated rather than sold, the donor will not incur any capital gains taxes from selling the securities. The more appreciation the securities have, the greater the tax savings will be. This is also a great way for our team to be able to rebalance your taxable portfolios without incurring tax consequences. PLEASE NOTE: Charles Schwab has set a deadline of Friday, December 1, 2017 for mutual fund gifting, and Friday, December 15, 2017 for stock. Please notify us of your intentions so that we may get necessary paperwork to you for
in itemized deductions including $8,000 for state and local income taxes, $2,000 in charitable donations, $2,000 in property taxes, and $8,000 for mortgage interest. By itemizing now, that couple can reduce their taxable income by an additional $7,300 ($20,000 minus $12,700, the current standard deduction). If in the 25% tax bracket, the tax savings on that additional $7,300 are $1,825. But, as state and local income taxes will no longer be deductible, this couple would then only have $12,000 in deductible expenses. As that is lower than the $24,000 standard deduction, they would not itemize despite paying $8,000 in mortgage interest. This inability to deduct mortgage interest, despite it being technically deductible, will make home ownership slightly less appealing, and that will reduce the demand for home ownership, thus lowering house prices. To be specific, house prices are likely to fall by between 5 percent and 10
completion prior to these deadlines. Funding 529 College Education Savings Accounts - Every individual state has their own laws in place, but most provide excellent opportunities via 529 College Education Savings Accounts to allow parents, grandparents, or whomever to contribute (for example, Kansas is $6,000 per child beneficiary). This amount can be deducted from state income taxes. These contributions then grow tax-free with no future capital gains consequences as long as the assets are used for qualified education expenses (tuition, books, etc..) Pre-Payment & Additional Payment Plans - Again, if you're blessed enough to have a little extra money laying around at the end of the year, it is a prudent choice to pre-pay or make additional payments where available. Making an extra payment on your mortgage or if you make estimated quarterly tax payments getting these payments in before
7
percent, with the decline increasing the more expensive the house and the higher the bite taken by both state and local income taxes. By nearly doubling the standard deduction and doing away with several key itemized deductions, the proposed Republican tax plan will, if it becomes law and that is still a big “if” - reduce the value of itemizing and the mortgage interest deduction even though mortgage interest will remain deductible. And that will lower house prices. Have a wonderful Thanksgiving, a merry Christmas and a happy 2018 and see you in January! (Remember, I will not be writing an article in December).
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70-word economics and policy blog can be seen at www.econ70.com. You can subscribe and have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.
the end of calendar year 2017 may provide extra tax related benefits. The above list is not all-encompassing and more importantly, needs to be discussed with your tax professional. We do not hold ourselves out as tax professionals, and we recommend consulting with your tax expert based upon your particular circumstances. In our opinion, tax advice and investment advice should come from separate sources. The only thing worse than Bernie Madoff managing your money would have been Bernie Madoff managing your taxes as well. However, our job as your dedicated investment team is to manage your investments well and optimize efficiencies. These are important discussions to have and we would not be doing our job if we failed to encourage you to put the puzzle pieces of your financial life in to the correct tax positions.
EPAB ON THE SCENE
Young Designers
The school year is about four months old and our participants in the Young Designer Contest are busy vying for scholarships. The students from the El Paso Independent School District’s CTTE program took field trips to visit construction sites with Loyalty Homes. The students were broken up into two groups, Juniors and Seniors, due to the large number of participants. “We had to do a two-day excursion because we’ve had really good interest in the YD,” Cecilia Orozco, instructor, told the Outlook. When contacted about hosting the students there was a quick response from Gus Loy, President of Loyalty Homes. “I’ve done the presentations with the student’s numerous times and I love having them come out and ask questions, see the work, and more importantly understand the complexity of building a home,” Gus Loy said. For the students it’s a hands-on opportunity the helps them visualize the problem they are working on. One student from Austin High School told us that this trip really makes their drawings “come to life”. Others agreed that it is important to see the site, look at the steps it takes to construct a home and the hidden parts that consumers don’t see. “I think that it is important to know how much goes on behind the walls,” a student from El Paso High told us. The students were treated to donuts out at the site by John Chaney, Chairman of the Young Designer Scholarship Contest. “We get the kids to go out and learn from what they see, then hopefully they will continue in the industry and be a professional in some part of what we do,” he told us. “I try to give them some advice and hope that they understand this is a great industry that needs them for sure,” Chaney concluded. The students were then brought to the EPAB office to have pizza and pop. All of the students were grateful for the experience and the food. “This is my second time and I told the first timers how much fun and learning we’d get from this. Tell the members thanks” one student told us. The contest will not be decided until April as the students complete the problem and work to present some outstanding plans and designs.
u
CELEBRATING EPAB THE BEST OF EPAB EL PASO ASSOCIATION OF BUILDERS
INNOVATION u DESIGN u EXCELLENCE u ACHIEVEMENT
ENTRY INFORMATION COMING SOON
AWARDS CEREMONY SPRING 2018
2017 Issue 11 Concerned about health coverage? Premiums increasing again this year? NOW YOU HAVE A CHOICE.
Introducing a program exclusively for members of the El Paso Association of Builders.
EPAB Health Program
Administered through
As a member of the El Paso Association of Builders you may qualify for the extremely valuable benefits offered by the EPAB Health Program. Call today to get information about the new HUMANA association medical coverage to see how you can qualify for outstanding coverage at a premium designed for you.
(915) 542-0900 (888) 269-0626 Hablamos EspaĂąol
11240 Vista del Sol, El Paso Texas 79936
10
Builders Outlook
2017 Issue 11
FIXED RATE 15 YEAR
COMMERCIAL REAL ESTATE LOAN PURCHASE OR REFINANCE
COMMITTED TO HELPING YOUR
RATES AS LOW AS
%
BUSINESS GROW 5.00
6068 Gateway East El Paso, TX 79905
Kathleen Carrillo www.pioneerbnk.com
915.782.2420
Interest rate will be determined by credit worthiness. Any individual or entity with ownership of 25% or more will be required to guaranty the line. Lowest credit score of guarantors will determine interest rate. Rate is valid beginning 8/1/2017. Opening fee of $775. Applicant authorizes Pioneer Bank to obtain an investigative or consumer report from a credit bureau or a credit agency and to investigate the references given on any other statement or data obtained from applicant. The sole purpose of the information we request is for verification of eligibility, criminal background and fraudulent activity. Loan to Value (LTV) based on the lesser of cost to build, if new, purchase price or appraised value. Rates may vary based on competition within an indivudual market. Loan is only availabl as a 1st lien position. Normal financial documentation and underwriting guideliines apply according to the Commercial Loan Policy. Pre-payment penalty applies from 2-3 years. Loan is available for owner-occupied and non-owner-occupied.
In Texas anyone with a truck and a hammer can call themselves a builder. Protect your biggest investment by choosing a Real Texas Builder, a member of the El Paso Association of Builders. A Real Texas Builder is a professional who invests in our community and works hard to build you the best home money can buy . Real Texas Builders are genuine, legitimate, educated and committed to the advancement of the home building industry.
Visit www.elpasobuilders.com for a list of our ‘Real Texas Builder’ members
© 2017 El Paso Association of Builders • 6046 Surety Drive • El Paso • Texas • 915-778-5387
2017 Issue 11
11
Builders Outlook
nahb.org/MA
12
Builders Outlook
EPAB Membership Builder members as of June 1, 2017
AT Architectural Designs Elsa Taracena Accent Homes Mark Dyer Bain Construction Scott Bain Bella Homes Leti Navarrete Bella Vista Custom Homes, Inc. Edgar Garcia BIC Homes Antonio Cervantes
Blue Star Construction, LLC. Carlos Villasana Carefree Homes Richard Aguilar Casas De Leon, LLC Nick Bombach Classic American Homes Priscilla Hernandez Crown Heritage Homes Lydia Mlouhi Cullers & Caldwell Builders John Cullers Cullers Homes Jason R. Cullers Custom Dream Homes Leti & Javier Navarrete D. R. Horton Homes Jaime Gonzalez Dawco Home Builders Walter O. Lujan Deal-2-Deal Homes dba Deal-2-Deal,LLC Delton Deal Del Rio Engineering, Inc. Sal Masoud Diamond Homes, LLC Valerie Baquera Donald Ward Builder, Inc. Donald Ward E. Valencia Land Development LLC Eddie Valencia Edward's Homes, Inc. Eduardo Fernandez EPT Land Communities David Bogas Everest Homes Edmundo Dena, Jr. Fortune Custom Homes Javier Andrade Gaddy Construction Charles Gaddy GMF Custom Homes, LP Frank Torres Guel Construction Rudy Guel Hakes Brothers LLC Chris Hakes Hanson Asset Management, LP Russell Hanson Homes by Design Leslie Driggers Hoard Hunt Communities, LLC Kathy Parry Icon Custom Home Builder, LLC. Carlos Garcia Industrial Realty Group Incorporated Brent D. Harris JER Custom Homes, LLC Jorge E. Rodriguez Kayton Lee Residential, Inc. Brianna Barnes LMJ Construction Co., LLC Mike Lopez Loyalty Homes Gustavo Loy M A Builders & Design, LLC Mustafa Ali Metro Homes, Inc. Fernando Torres, Judith Arrunada, Millennium Homes Dan Ruth New Horizon Builders Georgiana Garcia Pacifica Homes, Inc. Juan Jose Vasquez Palace Homes, Inc. Robert Diaz Palo Verde Homes Edgar Montiel Pointe Homes Carlos Villalobos Porter Homes Albert Porter R.C. Baeza & Associates Robert C. Baeza R.E. Welch Contractor Gordon Welch
2017 Issue 11
Updated every month, here is a list of the 2017 EPAB Membership. Remember to please do buinsess with fellow members.
Rassette Homes, Inc. Donald Rassette Santana Custom Homes Fernando Santana Southwest Land Development Serv. Doug Schwartz The Heritage Group David Bingham Trejo Construction Co. Juan Trejo Tropicana Building Corp. Bobby Bowling IV Tropicana Development Greg Bowling Tropicana Homes Randy Bowling Tropicana Properties Demetrio Jimenez Villagi Homes, LLC Kristi Eddings Will Harvey Development Will S. Harvey Winton/Flair Homes Herschel Stringfield Associate Members as of November 30, 2017 2-10 Home Buyers Warranty Michael Elman 84 Lumber Ernie Chavez 915 Siteworks, LLC Dan Guevara ABC Supply Co., Inc. Larry Eck Acme Brick Company Vanessa Rocha; Steve Bush Adams Moulding & Lumber Tom Swahlen Area Iron & Steel Works, Inc. Fred L. Edmonston Jr. Atrium Homes Ricardo Bocardo Jr. Bank of Texas Ray Owen Barnett & Bennett Construction Ben Trzyna Baron Supply David Trammell Barragan & Associates Benito Barragan Barrett Airworks Alexandro Castro Beasley, Mitchell & Co., LLP Brad Beasley BMC Select Jaeson Iovinella Boise Cascade Mike Flores Bonded Builders Home Warranty Grp. Bill Deal Border Solar Javier Ruiz Builders Source Appliance Gallery Kathy Rose, Sandra Lucero C. D. Lee/Britton Insurance & Bonding Anthony Landavazo; Lisa Daniels Cabinet Masters Mike Robles Cardel Design Group Lorraine Huit Casa Ford & Casa Nissan Luke Lowenfield CEA Engineering Group Jorge L. Azcarate Central Texas Metal Roofing Supply Co.,Inc. Ben Garza, III Chaparral Materials, Inc. Kevin Fortin City Bank Texas Bob Kotarski City Lights Thomas Brown Cognent, Inc. Martin Paredes Commercial Insurance Brokers, Inc. Ken Foster Conde, Inc. Conrad Conde CQC Testing and Engineering, LLC Jaime Rojas Dal-Tile Joseph Cepeda Delek US dba 7 Eleven Sonja Scanlan Demcon Disposal Management, LLC Maria Elena (Nena) Gomez Dempsey, Cooper & Lane, Llc Richard T. Dempsey Desert Quest Plumbing Hector Gonzalez Dunn Edwards Paints Nathan Gordon
Dorney Security John Dorney DWS Building Supply Sabrina Voorhies E.F. Building Materials, Inc. Efren Fraire Eagle Roofing Products Scott Aguilar El Paso Building Materials Ken Wade El Paso Disposal Irma Parsons El Paso Mortgage Bankers Association Randi Cabrera El Paso Star Ready-Mix Concrete Inc. David Armendariz El Paso Times Jose Molina El Paso Truss Luis Mendiola El Paso Winnelson Rene Goldfien Ferguson Enterprises Inc. Albert Holguin First American Bank Luis Sauceda,
First Light Federal Credit Union Lorenzo Revelez First National 1870 Haley Merritt Firth, Johnston, Bunn & Kerr Jay Kerr Foxworth Galbraith Lumber Dan Villarreal Franklin Building Materials Ricardo Aguilar; Cristina Sheldon G2 Ram Electric Luis Cano GCC Sun City Materials, LLC Victor Tito Marquez GECU- Greater El Paso Credit Union Brenda Aguirre Greater El Paso Chamber of Commerce Richard Dayoub GEPAR-Greater El Paso Assoc. of Realtors Sharron Ramirez Hardware Specialties Jeff R. Paxton Harris Real Estate Group Lane Harris Haskins Electric Charles B. Haskins, Jr. Home of Texas Mark Smiley Home Performance Testing Fernando Garcia/Ray Gonzales HUB International Luis Rosas Insight Mortgage Company Shawn Weeks Interceramic Tile & Stone Gallery David Holguin Inter National Bank Natalie Ojeda J & H Concrete & Post Tension Jorge Herrera James L. Ellis, CPA, PC Jim Ellis Jimmy Garza Emergency Water Removal Veronica Buchanan Jobe Materials, LP Charlie Tellez Joe Bernal Insurance & Financial Services, Inc. Joe M. Bernal L & P Building Supply Denise McConnell Legacy Real Estate Services /TTi Prop. Management. Patrick Tuttle Lennox Industrie Sharon Horton Lone Star Title Co. of El Paso Sam Trimble Love Engineering, Inc. Montez Love Majestic Realtors Patti Musshorn MAK Roofing & Construction Felix Vizarreta Masco Contract Services dba Gale Insulation Tom Harmon McCoy's Building Supplies Julie Reyes Mechanical Technologies Jaime Zubiate Mingo’s Painting & Remodeling Erik Chavarria
Morrison Supply Sam Shallenberger
MTI Ready Mix, Inc. Tony Mullen Neeuhome.com LLC Walter Pichardo New American Funding Brenda Trillo New Era Foam George Tollen Passage Supply John Chaney Patriot Mortgage Randy Bowling Pella Windows Jason Bates Performance Glass & Aluminum Hector Hernandez Pioneer Bank Kathy Carrillo Prewire of El Paso, Inc. Steven Drury Post Tension Dennis Moore Powerfoam Insulation: Metlspan NCI Group, Inc. Arnie Pederson RAC Doors Unlimited, Inc. Charles Foxx Randall Smith, CPA Randall Smith Real Estate Weekly Newspaper Riley Stephens Rebath of El Paso/Las Cruces Lisa Walling Remcon Self Storage Will Harvey
Richman Group Affordable Housing Corp. Kevin Hoffman Rocky Mountain Mortgage Company Dean Inniss Roe, Brad Bradley Roe Rudolph Chevrolet Art Smith Saldivar Electric, Inc. Martin A. Saldivar
Sarabias Blue Sanitation Monica Brown Saguaro Corporation dba EP C & D Recycling Sean Gillespie Senercon Javier Ruiz Sherwin Williams Paint Cruz Lopez Sierra Title Company/Lawyers Title Angelique Roman Simpson Strong-Tie Company, Inc. Ken Donham Snappy Publishing, LLC Ted Escobedo Solar Smart Living Larry Perea Southwest DĂŠcor El Paso Corporation Chris Matthews Spectrum Technologies Miled Daou Stewart Title of El Paso Cindy Bilbe StrucSure Home Warranty Scott Whisenant Su Casa Magazine Bob Skolnick Sun City Winnelson Dean Moore Texas Gas Services Mica Short Texas Title Company Steve Raney TFCU Yolie Melendez-Estrada The Dorian Group/Ocean Gallery USA Miguel Angel Mercado The Home Systems Heating & Cooling, Inc. Jesus Chain Trane Residential Solutions Robert Meske/ Kathleen Chacon TRE & Associates Linda Troncoso Trim Team Juan & Kris Hernandez USA General Contractors Javier Olmos Vision Consultants, Inc. Kelly Sorenson WestStar Home Loans Cinco Houghton
WestStar Bank David Osborn WestStar Title Janette Coon
Association News & Events
2017 Issue11
DECEMBER 8 INSTALLATION MARRIOTT HOTEL DECEMBER 14 ORIENTATION EPAB OFFICES
If you have an event or meeting that you would like to share with EPAB members, please submit your information to: margaret1@elpasobuilders.com
UPCOMING EVENTS
JANUARY 9-11 INTERNATIONAL BUILDERS SHOW ORLANDO, FLORIDA JANUARY 18TH BOARD MEETING EPAB OFFICES
Condolences to the family of Scotty Clark on the loss of his mother Phyllis, November 21, 2017
CONDOLENCES
13
Builders Outlook
Condolences to the Joseph Mullings family on the death of Haskell Monroe, past President of UTEP. College Station, TX November 1, 2017.
Connect to the El Paso Association of Builders: www.elpasobuilders.com
s e m o h new for el paso... e r e h d n u o f y il eas February 2017 •
FREE
el paso builders
Introducing
El Paso New Home Builders magazine & website oMoves.com for
...
more information
Visit www.ElPas
• Part of Homes of El Paso magazine • Mailed monthly to thousands of local homes • El Paso Airport distribution • Stand alone magazine each quarter
Call Martha today for more information at (915) 204-7017. Another Mesa Publishing Publication, serving El Paso Home Buyers for 25 years. www.MesaPublishing.com
www.ElPasoNewHomeBuilders.com
SODA SPONSOR JOE BERNAL INSURANCE
The material that builders have used for thousands of years is brick. Time tested, time honored. Your homes should be made with ACME Brick.
S h o w ro o m :
9400 Gateway East El Paso, TX 79907 (915) 593-1301 (800) 356-9546 www.efbmi.com
# & ' ) " '% * '
- - & ! (%$ ) &' & $ ( " ( "%%& $ " '' "% !
14
EPAB Member News
Builders Outlook
2017 Issue 10
Fall Tournament: A great day for Golf!
The EPAB held its fall golf tournament on November 1 at Vista Hills Country Club. The event was the second fun tournament of the year as the format changed from a pro-am to all comers tournament. The field was full of enthusiastic golfers and wannabees as the shotgun went off. Our host professional Terry Jennings worked with golf Chairman Sam Shallenberger to bring out a great day of golf. Predictions of cold or windy/rainy weather were once again dismissed as the day turned out beautiful. Our presenting Partner Haskins Electric had a terrific day of sponsorship. “We look forward to helping the Association with the tournament, something that we really like to do,� said Chuck Haskins. Breakfast sponsor HUB International provided breakfast burritos, coffee, juice and an opportunity to network before the event. Lunch was sponsored by partner HUNT Communities. Kathy Parry told the Outlook that she really enjoyed the day out on the course. “This is a blast for us and we (HUNT) enjoy partnering for it.� A special $10,000 hole in one was sponsored by Joe Bernal Insurance and HUMANA our new partner for the Association Health Plan. Unfortunately, no one hit the money. Morrison Supply teamed up with Electrolux and Kohler to bring some great gifts for the drawing. First the Kohler commodes were set up on the course and required players to tee off while sitting on one. It was a hilarious way to break up the game and more than one player had something to say about it. “I have to say that my drive was remarkably well hit from the sitting position,� Sam Trimble told the Outlook. One of his teammates Patrick Tuttle even took to Facebook Live to record and present the shot. “We all had fun teeing off from the commode,� said Patrick. Our thanks to chairman Sam Shallenberger and to staff Margaret Adauto for putting this event on. We would like to thank all the members who bought tee box signage, brought goodies for the bags, or volunteered time on the course. Our next golf outing will be in the spring so keep an eye out for the announcement.
! " " " " " " & " $ % ! " #
"#
Builders Outlook
2017 Issue 11
6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038
■ExECuTiVE OFFiCERS PRESiDENT Don Rassette ViCE PRESiDENT Edmundo Dena SECRETARY/TREASuRER Sergio Cuartas ASSOCiATES ViCE PRESiDENT Sam Shallenberger ExECuTiVE ViCE PRESiDENT Ray Adauto PAST PRESiDENT Carlos Villalobos
■TAB STATE DiRECTORS Randy Bowling - Life Director Sam Shallenberger Edmundo Dena
Honorary Life Members Mark Dyer Wayne Grinnell Don Henderson Anna Gill Brad Roe Rudy Guel
Finance Committee Kathy Carrillo Henry Tinajero
Past Presidents Committed to Serve Edmundo Dena Edgar Montiel Frank Torres Frank Arroyos Greg Bowling Randy Bowling Bobby Bowling Iv Doug Schwartz John Cullers Robert Baeza Mark Dyer Kelly Sorenson Rudy Guel Brad Roe Herschel Stringfield Bob Bowling Iii Pat Woods
■ADViSORY TO THE BOARD Jay Kerr, Firth, Johnston, Bunn & Kerr ■BOARD OF DiRECTORS
Metro Homes West Star Bank Firth, Johnston,Bunn & Kerr Employer Benefits Ep Passage Supply Dorney Security Pioneer Bank Hunt Companies Bella Homes/Custom Dream TRE & Associates Homes By Design Southwest Land Dev. Services Dawco Builders Bella Vista Custom Homes Cullers Homes Icon Custom Homes DRE Development Snappy Publishing Legacy Real Estate Services Lone Star Title Hub International Deal -2-Deal Homes Pacifica Homes
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. © 2017 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Ted Escobedo, Snappy Publishing, LLC ted@snappypublishing.com El Paso • Texas • 915-820-2800
2016 Builder Member Of The Year Carlos Villalobos Pointe Homes  
 
 
772-7495
â– NATiONAL DiRECTORS Bobby Bowling, IV Demetrio Jimenez Leslie Driggers Hoard -Alternate Antonio Cervantes - Alternate
â– COMMiTTEE CHAiRS Membership Ted Escobedo Patrick Tuttle
Fernando Torres Henry Tinajero Jay Kerr Joe Bernal John Chaney John Dorney Kathy Carrillo Kathy Parry Leti Navarette Linda Troncoso Leslie Driggers-Hoard Robert Foster Walter Lujan Edgar Garcia Jason Cullers Samira Gonzaelz Sal Masoud Ted Escobedo Patrick Tuttle Sam Trimble Luis Rosas Delton Deal J. J. Vasquez
El Paso Disposal
 
2016 Associate Of The Year StrucSure Home Warranty  
C
C
L
B
Residential Specialists Tract Homes • Custom Homes Total Customer Satisfaction
W
Now more than ever, El Paso home buyers are planning for the future.
F
J B
S
915-208-9313 800-853-3996
Give your customers the ‘option of the sun’
D
 
For All Your Electrical Needs
Baeza
R
Border Solar can help you offer your customers solar power as a sensible alterna ve.
 
Crossing to Clean Energy
facebook.com/stewarttitleelpaso www.stewart.com/el-paso Open Saturdays
7365 Remcon Circle El Paso, TX 79912 (915) 613•4168
The future starts today. follow us on twi er and facebook: BorderSolar
3529,,',1* (/ 3$62 $ 62/,' )281'$ $7 7,21 72 %8,/' 21 )25 29( (5 <( ($56 56
/2 20$ 9( 9(5'( (/ 3$6 62 7( (;$6 (; :: :: : 07 7,5( ($'<0 0,; &20