Builders Outlook 2017 Issue7

www.elpasobuilders.com

7

EL PASO

National, State & Local Building Industry News 2017: Issue 7

BUILDERS A S S O C I AT I O N O F

Home Buying a Strong Boost to Overall Economy NAHB economists studied the U.S. Bureau of Labor Statistics Consumer Expenditure Survey to help quantify the wave of activity – and cash – spent to install new refrigerators, buy couches and make other improvements as new owners personalize their homes.

“While construction jobs are the most obvious impact of new homes on the economy, it’s important to realize that it doesn’t stop there,” said NAHB Chairman Granger MacDonald, a home builder and developer in Kerrville, Texas.

“It’s the architects, the heating technicians, the lumber suppliers. And it’s the mom-and-pop owners at the local furniture or appliance store who are helping these buyers make their house a home,” he said.

During the first two years after closing on the house, a typical buyer of a newly built single-family home tends to spend on average $4,500 more than a similar non-moving home owner.

A previous NAHB study based on 2004-2007 data collected during the housing boom showed somewhat higher spending by home owners overall. But the tendency of buyers to outspend non-moving owners on appliances, furnishings and home improvements was similar.

In the aggregate, most of the demand for appliances, furnishings and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.

But new owners’ impact is noticeable – and vital, MacDonald said. “The health of housing – and new home buying – is key to the overall state of our economy.”districts.

See the study page 8-9

A

new consumer spending analysis from the National Association of Home Builders (NAHB) highlights another reason why home building helps drive a healthy economy: In their first year of ownership, new home buyers spend about $10,601 on appliances, furnishings and home improvement projects – 2.6 times as much as other home

‘Paseo de Casas’ set to open this month

’The work on the upcoming el Paseo de Casas is progressing with a flurry of activity on the site. Seven builders are presenting our first ever affordable parade type event on the eastside at Horizon Hills Estates off Eastlake and Rojas. The site was acquired with cooperation of Metro Homes who generously offered the EPAB an opportunity to have this event. “We think that we can showcase very nice affordable homes to the public in the hottest area of town,” said Fernando Torres with Metro Homes.

Joining Metro Homes in the showcase are Loyalty Homes, Pacifica Homes, Rassette Homes, Pointe Homes, Carefree Homes and Diamond Homes.

“We think that joining in el Paseo is one of the best ways to show El Paso what kind of builder we are,” said Valerie Baquera of Diamond Homes. “I agree that we all have very nice homes in a price range that the working people are looking for,” said Laura Loy of Loyalty Homes.

The homes are priced from $160,000 to $220,000 in what has become the sweet spot for the workforce looking at new homes. The Horizon Hills Estates area is the hottest zip code for new sales. These seven homes will allow the public to see what is available from each of the builders.

Franklin Building Materials is the Presenting Partner for el Paseo de Casas. “I asked Ray the minute I

heard about this parade for the opportunity to be the Presenting Partner,” Rick Aguilar told the Outlook. “we see it as a great opportunity to show the public, especially those in the eastside, that we’re here to be their supplier as well as to the builder,” he continued.

In addition to Franklin the el Paseo de Casas will welcome these workforces’ free admission to the event. Loyalty Homes welcomes First Responders (EMS, Sheriff, Police, DPS) Builders Source Appliance Gallery welcomes Military active and veterans WestStar Home Loans welcomes Educators/school employees of schools, colleges and universities GECU and GECU Mortgage welcomes Healthcare/Medical employees All of these groups simply need to show their work I D to get in free. Otherwise the show is $5 for adults 13 and over. Children 12 and under are free accompanied by an adult.

The event starts with an industry preview party on August 25, and is open to the public August 26 to September 10. Admission is open from 4-7 pm Monday – Friday; 10-7 Saturday and Sunday. The EPAB is asking for volunteers for the ticket booth. Call us or send us and email if you’d like to help.

August 26 to September 10 4-7 pm Monday – Friday; 10-7 Saturday and Sunday

PREVIEW PARTY ON AUGUST 25 CALL 778-5387 FOR TICKETS Presented by

2

Builders Outlook

WE’RE PROUD TO SERVE THOSE WHO’VE SERVED US ALL.

2017 Issue 7

2017 Issue 7

President’s Message

3

Builders Outlook Don Rassette

President, El Paso Association of Builders

TAB fights for our interest, EPAB promotes our industry locally

As many of this year’s articles have started from me, this month is no different. Being an odd-numbered year, our state legislature was in session. I have previously mentioned and given details on specific bills of interest that TAB was either for or against. There were some that I didn’t mention, as their importance or evolution took longer to get on our radar. TAB was proud to have been involved with preventing the passage of the following unfavorable issues to our building industry: • Mechanic’s Liens, a shift on who would be obligated • Mandated fire sprinklers, in some areas and populations • De-regulation of title insurance, amended to allow a “file and use” system • Mandated Workers Compensation, mandated coverage • County Zoning Authority, some counties would have more authority • Mandatory sales price disclosure,

sales price inclusion for filing or recording of conveyance • Adjustment to minimum wage, counties/cities could adopt rates higher than state minimum • Municipal impact fees, would allow TXDOT to be more involved • Corrugated stainless steel tubing, conformity to 2008 IRC • Solid materials tax, authorization to counties to impose a new tax on mining of “pits” • Bond election requirements for MUDs, quorum minimums for election • Low Income Housing Tax Credit, state representative’s letters as a higher priority • Revocation of Certificate of Convenience and Necessity, extended process and modified the amount of compensation Some of these, would affect our industry every day and in substantial ways. Others could be hit and miss on timing, but definitely would bring additional expenses, over time. Hats off for a job well done to our TAB

staff and the countless communications sent to our state representatives and senator.

To help with creating a bigger state machine and one with even more financial clout, TAB is having a statewide membership drive in the spring of 2018. Bringing back the Oliver Group from 2007, expectations are high. In 2007, 2400 members were added in just 2 days. This was an increase of 21% to state membership. More information will be forthcoming.

The 2017 Sunbelt Builders Show is happening now. This is a great time to see new products on the exhibit room floor, to get updated information on the next 2 years TAB contracts and to network with old friends and to start new relationships. This also serves as our summer TAB Committee and Board of Director meetings. I hope to see you there.

In our backyard EPAB staff and many others have been busy with planning meetings, event organization details and social

events. Here is a sampling: • TAB meetings and Sunbelt Show • August 7th Finance Committee meeting • August 9th EPAB Board and general meeting • el Paseo de Casas August 26th to September 10th.

• Breakfast with staff of the El Paso Building Department • Parade of Homes in 2018, February in Artcraft Estates subdivision And the list goes on.

And as life goes on, we need to remember those with recent losses.

Our deepest sympathies, our thoughts and our prayers are with you.

In closing, BE PREPARED TO SUCCEED

4

Executive’s Message Ray Adauto, Executive Vice President EPAB

“We must join together and collectively fight for what we’ve earned over the last few years. We must stand up and fight for those who fight for us, and make sure we educate the new council to be wary of those who wish to come and create havoc for us.”

Builders Outlook

2017 Issue 7

New City Council, personnel shortages bring challenges The City of El Paso has just experienced a nearly complete change in leadership with the new city council and Mayor. Some would say this is good, some wouldn’t agree more. For the EPAB it is going to be a challenge once again to teach and learn how to interact with each one of the rookies.

Only Mayor Dee Margo really knows who and what we are as he was a long-standing member of the association while running J.D. Williams company. The company was sold and continues membership under HUB International but Dee is not affiliated anymore. But what about the rest? Good news bad news for us. First most if not all come into office without a preconceived prejudice about development and home construction. It allows for a clean sheet with few misconceptions.

It is a challenge that will take months or years to educate them on why we exist. The problem as I see it is that because of their newness the resurrection of some not so good bureaucrats can and probably will rise from their ashes assuming that this is a great time to come back.

I have heard rumors of some of

those phoenix like creatures posturing for a comeback, as well as some of old political foes trying to groom the newcomers. I can’t think of anything worse than that happening to our members because I want you to recall how difficult it can be to be outcasts. Some of the issues we will deal with won’t be fun because our opponents are smelling an opportunity. We must be vigilant, careful, and determined not to return to those dark days. It will mean that you will be asked to help in the upcoming fight because make no doubt about it that is what is going to happen.

We have just as much an opportunity to share our mission and importance to these new reps as the bad guys do. We must join together and collectively fight for what we’ve earned over the last few years. We must stand up and fight for those who fight for us, and make sure we educate the new council to be wary of those who wish to come and create havoc for us.

As of this writing the Planning and permitting department is down fourteen employees, critical to the plan review and permits you seek.

Key positions have been lost to better pay, better conditions, and respect for what they do. It is a clear indicator that the City of El Paso is woefully losing experienced people due to lack of pay. It should be clear to the new City council that this department is crucial to all other departments since it approves the growth that grows the tax base. It earns the money that the city uses to fund most of the costs of government. Why would you let this happen to a critical department? That is a question I am raising with each member of council and it’s one you should worry about even if you’re not a builder or developer. When the city can’t do the job then everyone is affected. If you know the new folks on council then it is important you let them know you’re a member and you want this fixed.

Over the next six months we will see more clearly where this council is going. Mayor Margo and mayor Pro Tem Noe are aware, but we need that awareness to stretch to the others. We cannot afford to take three steps back.

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

915 - 585 - 3330

www.rassettecommunities.com

• Large Lots • Semi-Custom Homes • 3 Car Garage • RV Parking Available

www.builderagentnetwork.com

National Builder News

2017 Issue 7

Texas Developer Joins Federal Home Loan Bank of Dallas Board

n The Federal Home Loan Bank of Dallas (FHLB Dallas) announced the election of G. Granger MacDonald to FHLB Dallas’ Board of Directors (Board). Mr. MacDonald was elected by the Board to fill an independent director seat that was vacated in April. He will serve out the remainder of the term for that seat, which expires December 31, 2017.

The current chairman of the National Association of Home Builders, Mr. MacDonald is also the chairman and CEO of three multifamily property management and development companies based in Kerrville, Texas: MacDonald Property Management, LLC, MacDonald & Associates, Inc. and G.G. MacDonald, Inc. Mr. MacDonald has developed over 50 multifamily apartment communities throughout Texas during four decades in construction and development.

“I am deeply honored to be appointed to this position at the Federal Home Loan Bank of Dallas,” said Mr. MacDonald. “The programs offered by FHLB Dallas have benefited communities across the District, and I hope to use this opportunity to work closely with member institutions to provide financial products and services that will expand affordable housing opportunities for hardworking American families.”

Mr. MacDonald is a founding member of the Texas Affiliation of Affordable Housing Providers, and he holds memberships in the Texas Association of Builders, the Hill Country Builders Association, Greater San Antonio Builders Association and the Home Builders Association of San Angelo. Mr. MacDonald also currently serves on the board of trustees for Schreiner University.

5

Builders Outlook

“It is our pleasure to welcome Granger MacDonald to the FHLB Dallas Board,” said FHLB Dallas President and CEO Sanjay K. Bhasin. “His commitment to affordable housing and the knowledge and experience he brings to the Board will benefit members throughout our District.”

Mr. MacDonald holds a Bachelor of Business Administration degree in Real Estate and Finance from the University of Texas McCombs School of Business. He and his wife, Kathy, live in the Texas Hill Country.

NAHB and House Panel Reach Agreement on Flood Insurance Bill ”

n The National Association of Home Builders (NAHB) today reached an agreement with leaders of the House Financial Services Committee to craft a viable, long-term flood insurance reauthorization bill that will keep the National Flood Insurance Program (NFIP) fiscally sound and enable home builders to

BUILDING

provide safe and affordable housing to consumers.

“NAHB commends House Financial Services Chairman Jeb Hensarling and Housing Subcommittee Chair Sean Duffy for their leadership in working with us to produce a bill that will preserve rate affordability, shore up the NFIP and address the concerns of the housing community,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “With the NFIP set to expire on Sept. 30, we urge the House to pass this bill quickly.”

NAHB and the committee leadership have worked together to provide a five-year reauthorization of the NFIP that: • Eliminates a provision that would have ended NFIP coverage of new homes constructed in the 100-year floodplain; • Ensures that “grandfathering” will remain available for all policyholders if their risk changes, which will enable home owners to have continued access to affordable flood insurance; and • Sustains affordability by raising the annual premium floor for rate hikes from its current 5 percent level to 6.5 percent instead of the proposed rate of 8 percent.

“As a builder who knows first-hand how flood insurance rate increases can hurt home owners, businesses and communities, I am pleased that the House Financial Services Committee has made such important progress on reauthorizing the NFIP,” said Randy Noel, a home builder from LaPlace, La. and NAHB first vice chairman. “This bill is critical to allow more borrowers to be covered by flood insurance and ensure that we can continue to provide safe and affordable housing in Louisiana and across the nation.”

El Pa aso

New Home Sales Edge Up 0.8 Percent in June n The Sales of newly built, single-family homes in June inched up 0.8 percent to a seasonally adjusted annual rate of 610,000 units from a downwardly revised May reading, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Although we saw modest gains this month, new home sales have risen nearly 11 percent since the start of 2017,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “Our members remain optimistic as the single-family housing market continues to recover.”

“The month’s sales report is consistent with our forecast, and we should see further gains throughout the year as the labor market continues to strengthen,” said NAHB Senior Economist Michael Neal. “While new home inventory rose slightly in June, it remains tight as builders face lot and labor shortages and increases in building material costs.”

The inventory of new home sales for sale was 272,000 in June, which is a 5.4-month supply at the current sales pace.

Regionally, new home sales increased 12.5 percent in the West and 10 percent in the Midwest. Sales were unchanged in the Northeast and fell 6.1 percent in the South.

SINCE 1950

6

Economy News Briefs

Builders Outlook

Issue 7

Debt Debate

The upcoming required legislative increase in the debt ceiling may be a nasty battle. Republicans will require Democratic support which will be legislatively costly, all but guaranteeing a bill that won't be "clean" or void of concessions. To that end, Trump's budget proposal that cuts billions from discretionary non-defense spending will probably be in play, and Democratic resolve to at least maintain roughly current spending levels will be very strong.

Seattle Slew

Seattle raised its minimum wage from $9.47/hour to $11/hour in 2015 and $13/hour in 2016. While the first increase had minimal employment impact, the second damaged low-wage workers. At $13/hour, the number of low-wage hours worked declined by a whopping 9%, while wages rose just 3%. As a result, low-wage worker income fell on average by $125/week! Small increases are manageable, large increases incentivize employers to bypass lowwage employees.

Super Seoul

Despite a growing nuclear threat from North Korea, Korean stocks are up 18% YTD. Improved earnings, a better domestic economy, diminished political uncertainty, and the spectacular performance of Samsung (which accounts for 25% of the index and is now more profitable than Apple), are partly why. But, so is dismissal of political risk from Pyongyang by investors both domestic and foreign due to increasing habituation to the situation over time.

Employment Exceptions

Rhode Island is the latest state to finally see total employment exceed its pre-recession level. That leaves just Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio, and Wyoming with employment levels in 6/17 below what they were in 2008 or before. By contrast, in five states, including Arkansas, California, Colorado, Tennessee, and Washington, the unemployment rate in 6/17 was at an all-time low and employment was at an all-time high.

U.S. freezes assets of Venezuelan President Maduro

The Treasury Department announced Monday it has frozen the assets of and sanctioned Venezuela President Nicolas Maduro for undermining democracy in going ahead with elections on Sunday for a new legislative assembly. "Yesterday's illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people," said Treasury Secretary Steven Mnuchin in a statement. Under the sanctions, U.S. banks are prohibited from dealing with Maduro.

White House wants to get tax reform bill through Congress by November, Short says

The Trump administration is seeking to get a taxreform bill through Congress by November, White House legislative affairs director Marc Short said Monday. Speaking at an Americans for Prosperity event, Short said the goal is to get a bill through the House in October and the Senate in November.

"That I think is an aggressive schedule, but that is our timetable," Short said. Last week, congressional leaders and the White House issued a joint statement on tax reform, dropping the socalled border adjustment tax and saying they wanted to reduce tax rates "as much as possible."

The financial and housing market rescue left many Americans behind

Federal Reserve policies and new regulations may have strengthened the financial system, but they’re making it harder for many Americans to access homeownership and gain a foothold in the middle class, according to a new paper from a Washington financial policy consultancy

2017 Issue 7

7

Builders Outlook

Editors Note: Within the past few weeks there have been a number of deaths that have deeeply affected members of our association. In this column, Ray Adauto offers his perspective.

“These deaths are stark reminders for many of us to examine ourselves internally as well as externally”

By Ray Adauto The truth is that we live in a circle of life. That circle sometimes is cruel, sometimes relieving, sometimes unexpected. As a human, it is one of the most unfortunate realities knowing that at some point death will visit us and all those around us. The topic is not an easy one to talk about or in some cases even think about. The truth of death is that it comes and there’s not much we can do about it.

We have experienced death in our personal lives as well as in our professional lives. The older we get the more death visits us in one form or another. Sadly, it comes to us in droves sometimes and that’s when it seems to stick out. My father and mother in law were laid to rest this month just a couple of weeks from each other. Margaret’s mom Rumalda died from complications of dementia early on a Saturday morning while at home

in her sleep. Armando Margaret’s dad had to endure that loss while suffering himself from cancer. He passed away a week or so after we buried Rumalda. His life was full and both were surrounded by family and friends. They were married 73 years so it was accepted as fact that neither could or would want to stay apart for long.

During this time, we also got word of the tragic death of Ricardo Aguilar’s daughter Vannesa, a bright loving young woman of 22.

Her life was taken by a hit and run driver. Vannesa was living her dream of music engineering in Las Vegas. A loss of a child, no matter what age, is never something anyone should have to endure. We continue to pray for Ricardo and the family.

Past President John Cullers lost his mother Dorothy. She was the grandmother to Jason. Her life was full of energy and love for her

family and her husband Elmer. Our prayers continue for the family.

And just a few days ago Past President Frank Arroyos and brother Andy lost their 46-year-old sibling Marty unexpectedly. The visit of death surrounded us this month once again. To the Arroyos family we continue to pray.

These deaths are stark reminders for many of us to examine ourselves internally as well as externally. While nothing is certain in this life except death (and taxes) a death in the family or of a friend or neighbor reminds us of mortality.

And that is the reality of our existence. You see death is why we live, by that I mean it’s why we live for today and tomorrow. We are propelled into our lives because we simply don’t know when or where it will end. Death is in fact a reason for living.

There is nothing I can say or write to soothe the pain of death especially unexpected and tragic

deaths. How can you console the inconsolable? You simply can’t.

To those of who experienced death in a family or someone you know our deepest condolences to you and yours. To those who reached out to all of us please know that it means a lot to us to hear your words or read those thoughts. Past President and great fried Mike Santamaria gave me these words: “You can’t be sad when you know they are in heaven” talking about my in-laws. I would add this for all of us: “and in your heart”.

Ray Adauto, Executive Vice President EPAB

Cover Story:

Spending Patterns of Home Buyers: Appliances, Furnishings and Property Alterations

Home buying typically generates a wave of activity as people who purchase homes spend money on improving their homes, installing new appliances, buying furnishings, and other items.

Consumer spending data from 2012-2014 shows that home buyers outspend otherwise similar home owners who do not move.

During the first two years after closing on the house, a typical buyer of a newly built singlefamily detached home tends to spend on average $4,500 more than a similar non-moving home owner. Likewise, a buyer of an existing singlefamily detached home tends to spend over $4,000 more than a similar non-moving home owner, including close to $3,700 during the first year.

Special Studies, July 5, 2017

By Natalia Siniavskaia, Ph.D. Report available to the public as a courtesy of HousingEconomics.com

This article updates a previous study based on 2004-2007 data. The earlier data, collected during the housing boom, showed somewhat higher spending by home owners overall. But the tendency of home buyers to outspend non-moving owners on appliances, furnishings, and home improvements was similar.

The Data The standard source of data on consumer spending in the United States is the Consumer Expenditure Survey (CES) conducted by the U.S. Bureau of Labor Statistics (BLS). The CES does not only detail consumer expenditures, it also allows relating this spending to household characteristics such as income, sociodemographic characteristics, and, essential to this analysis, whether these households recently purchased homes. Compared to some other government household surveys, the CES sample is not particularly large - it collects spending data from 6,000 to 8,000 households every quarter – nor is it specifically designed to capture home buyers.

To create a meaningful sample of home buyers, this study merges 13 quarters of CES spending data, from the first quarter of 2012 through the first quarter of 2015.

This time frame coincides with the period when the housing sector emerged out of a deep recession and new single-family starts and sales were at suppressed and historically low levels. To expand the universe of new home buyers, all homes that were built in 2012 or later are defined as new homes.

The created sample roughly reflects the national share of home buyers as captured in the 2015 American Housing Survey (AHS). According to the AHS, less than 1 percent of all single family detached home owners bought a new home in 2014-2015 (even though the AHS new homes category includes a broader group of

homes - units built in 2010-2015) - and 6.5 percent bought an existing house (see Fig. 1). To analyze spending pooled over several years, all expenditures and income are inflated to 2015 dollars using the Consumer Price Index.

The study highlights some of the differences in spending behavior among the three groups of single-family detached home owners: buyers of new homes, buyers of existing homes and non-moving owners. The numbers are based on average annual spending on various appliances, furnishings and property alterations.[1] During the first year after closing on the house, home buyers tend to spend considerably more on these items compared to non-moving owners. Buyers of new homes spend most: $10,601, outspending non-movers 2.6 times. Buyers of existing homes spend $8,233, twice as much as non-moving owners.

Nevertheless, in the aggregate, most of the demand for appliances, furnishings, and remodeling projects in a given year is generated by non-moving home owners, because they outnumber home buyers by such a wide margin.

Appliances Total appliance spending is highest for new home buyers: $3,094, compared with $1,889 for existing home buyers and $1,182 for non-moving owners. The biggest outlay in the appliance budget of new home buyers are clothes washers/dryers, lawnmowers/other yard equipment, and computer hardware/systems.

Coincidentally, new home buyers outspend existing home buyers and non-moving owners on all these appliances. They also outspend non-moving owners on such bigticket items as refrigerators/home freezers and televisions.

The high level of spending by new home buyers may seem surprising considering that many new homes come with installed appliances, but suggests that these purchases are nevertheless more frequent among these households. The Builder Practices Survey conducted by the Home Innovation Research Labs shows that two-

thirds of new homes built in 2015 came with no clothes washers and dryers and 36 percent had no installed refrigerators. At the same time, virtually all new homes came with cooking stoves, ranges, or ovens. This shows that, on average, new home buyers spent nothing on cooking stoves, ranges, microwave ovens or built-in dishwashers. Rather, new home buyers spent most on items that are less likely to be included in the price of new homes.

The most expensive appliances in the budget of existing home owners are refrigerators/home freezers, followed by clothes washers/dryers, televisions, computer hardware/systems, and lawnmowers.

Furnishings New and existing home buyers spend even more on furnishings than appliances.

During the first year after buying a home, new home buyers spend $3,778 on furnishings, outspending old home buyers 70 percent and non-moving owners 530 percent. The differences are not only large but also most consistent when comparing expenditures on furnishings. Compared to non-moving owners, new home buyers spend more on every single item the CES counts as furnishings with the exception of infants furniture and other furnishings. They also outspend existing home buyers on nearly all furnishing items with the exception of office furniture, dinnerware, and infants equipment.

A home purchase, especially when it is a new home, has a particularly large effect on expenditures on living room chairs/tables and dining room/kitchen furniture. During the first year after moving, new home buyers spend $687 on living room chairs and tables, outspending nonmoving owners and existing home buyers 12 and 5 times respectively. The average spending by new home buyers on dining room and kitchen furniture is $345. This is 12 times higher than the amount spent by non-moving owners and exceeds the respective spending of existing home buyers nine times.

The differences in spending patterns are

similarly large when comparing spending on window coverings. New home buyers outspend non-moving owners 10 times ($215 compared to $21), while existing home buyers (with an average annual spending on window covering of $78) outspend non-moving owners 4 times.

The biggest ticket item for new home buyers is sofas, with an average spending exceeding $700 during the first year after moving. This is 60 percent higher than the amount spent by buyers of existing homes and 6.4 times higher than what non-moving owners typically spend on sofas per year.

The largest furnishings outlay for buyers of existing home and non-moving owners is bedroom furnishings, including mattresses and springs. Non-moving owners spend $151 on bedroom furnishings in any given year. During the first year after moving, old home buyers spend $519 on these items.

For buyers of new homes, this expenditure goes up even higher to $634 during the first year after moving. This is not surprising, considering that the number of bedrooms in new single-family detached homes has been on the rise. In 2016, three, four and more-bedroom houses accounted for 91 percent of all new singlefamily detached homes compared to only 75 percent in 1985, according to the U.S. Census Bureau.

Property Repairs and Alterations Buyers of existing homes spend $4,085 on property alterations and repairs, compared to $3,729 spent by new home buyers, and $2,232 spent by non-moving owners. Considering that new home buyers move into new homes, it might be surprising that they spend almost as much on property alterations and repairs as buyers of existing homes, but the specific types of remodeling projects are quite different across the groups.

Considering that many new homes come with warranties, it is not surprising that new home buyers spend virtually nothing on various repairs and replacements. At the same time, existing home buyers spend more than new home buyers on every single item the CES lists as a repair or

2017 Issue 7 replacement, with the exception of HVAC repair. They also outspend new home buyers on kitchen/bathroom addition or remodeling, and purchasing and installing new items such as HVAC, plumbing, electrical and security systems, paneling, flooring, siding, windows and doors.

Average spending of new home buyers on most of these items is close to nothing, suggesting that new home buyers rarely spend on these items during the first year after moving.

However, when it comes to outside additions and alterations, including a new driveway, walk, or fence, new home buyers outspend existing home buyers and nonmoving owners by far.

Non-moving owners outspend home buyers on most replacements, as well as repairs of doors, windows and skylights.

Statistical Analysis This clearly illustrates that there are substantial differences in how much home buyers and non-moving home owners spend on appliances, furnishings and property alterations. However, these differences in spending patterns cannot be fully attributed to a home purchase. Home buyers and non-moving owners might have different income, education, tastes, preferences, and other socio-demographic characteristics that could potentially explain

differences in their spending behavior.

There are indeed differences between home buyers and non-moving owners.

Home buyers tend to be larger households with children, and on average wealthier, better educated and concentrated in urban areas. Any of these factors could potentially contribute to higher spending on appliances, furnishings and remodeling.

To control for the impact of household characteristics on expenditures, a statistical model was used.

The analysis confirmed that household characteristics influence spending levels on furnishings, appliances, and remodeling. It also proved that a home purchase alters spending behavior of home owners and that otherwise similar home owners spend more across all three categories during the first year after buying home compared to non-moving owners (for readers interested in technical details, the statistical output is presented in the appendix of the article).

The analysis also showed that the higher level of spending on furnishings tends to persist for two years after households move into an existing home. In case of buyers of newly built homes, spending on appliances, furnishings and remodeling tend to come back to normal level after the first year in a new home.

To illustrate the impact that a home purchase has on spending and to control

for differences in socio-economic characteristics of home buyers, the statistical estimates can be used to predict spending levels of identical households that differ in only one way: one household buys a home and the other stays put in a house they already own.

The study includes estimates for households that have socio-demographic characteristics typical of a new home buyer. The spending levels of the “typical” new home buyer who buys a new home, and the second column contains estimates for an identical home owner that stays put.

The last column captures differences in spending levels attributed to the purchase of a new house, controlling for differences in the household characteristics.

The differences are largest on furnishings, close to $2,500 during the first year after closing on a new house. A typical new home buyer is also estimated to spend $1,258 more on appliances during the first year. In case of property repairs and alterations the differences are smallest: $714. Overall, during the first year after purchasing a new home, a typical new home buyer tends to boost spending on appliances, furnishings, and property alterations by additional $4,455 as a result of buying a new home.

Over the two years after the move, the “typical” buyers of an existing home tend to increase their spending on remodeling, furnishings, and appliances by over $4,100, compared to otherwise identical home owners who do not move. Remodeling projects account for half of this extra spending and mostly occur during the first year after closing on the house. Only the additional spending on furnishings tends to persist beyond the first year.

A legitimate question is whether a higher level of spending on furnishings, appliances and property alterations is achieved by home buyers by economizing and cutting their spending on other items, such as entertainment, apparel, transportations, travel, food at home, restaurants meals, etc. The identical statistical model was used to test this hypothesis. The statistical analysis showed that while income and socio-demographic characteristics help explain household spending on other items, a home purchase does not suppress spending on entertainment, apparel, transportation (including spending on new and used cars and trucks), food at home and restaurant meals. Overall, a home purchase does not have a significant effect on other spending outside of the added property alterations, appliances, and furnishings. Thus, home buyers do not in general seem to pay for the three considered categories by economizing in other areas of spending.

It is important to keep in mind that the averages reported are averages for all households in the group regardless whether they purchased a certain item/service or not. Thus, these averages are considerably lower than the expenditure by those households that actually purchased the item. The less frequently an item is purchased, the greater the difference between the average for all households in the group and the average of those purchasing.

The particular technique is called Tobit regression analysis. This technique was selected because there was a large number of zero expenditures in the sample corresponding to households that reported no spending on either appliances, furnishings, or remodeling projects. In such cases, the traditional regression analysis (OLS) is known to produce biased estimates. To capture the effects of the CES sample design, the Tobit regressions were run within the balanced repeated replication (BRR) framework where target statistics are repeatedly re-estimated using half-sample replicate weights.

For more information about this item, please contact Paul Emrath at 800-3685242 x8449 or via email at pemrath@nahb.org.

10

Builders Outlook

2017 Issue 7

HOW W THE NAT ATION’SS BEST BUILDER B RS PROTEECT THEEIR BUYERS ONE-YEAR WORRKMANSHIP AND MATTERIALSS; TWO-YEAR WIRING, PIPING, G, AND DUCTWORK; & 10-YEAAR STRUCTURAL HOME WARRANTIES

Coontact Yoour Local Risk Managemennt Expert to Learrn How Yoou Can Join tthe Nation’ss Best Builders as a Mem mber of StrucSure Home Warranty.

SCOTT WHISENANT Vice President of Sales Centr t al & Soutthw h estt Te Texas (210) 232-3947 swhisenant@strucsure.com www.strucsure.com

Home Photo Courtesy of Stru ucSure Home Warranty Member, Tropicana ana Homes

2017 Issue 7

11

Builders Outlook

Expert Advice

by Ruth Rivera, VP Bukaty Financial

Private sector workers have to build resources to support themselves after working year. Most workers can only save through employer sponsored plans. Because retirement readiness is a concern for the government, policy makers are considering government sponsored plans. To have some insight on this, consider the efforts of Obamacare for a health savings program through the government.

Consider how the government sponsored program would be like, whether through online marketplaces or multiple employer plans—or looking to set up state- or city-sponsored individual retirement account (IRA) plans that automatically enroll private sector workers who do not have access to workplace plans. If this is not a mandate you want to be subjected to or required to do, consider reviewing your options.

Many companies feel that they are obligated to make a match, that a retirement plan is very expensive, very complex and very regulated. If those items were not an issue, does it make sense to have a corporate retirement plan?

Absolutely!!!!!!

Consider reviewing a retirement benefit that fits your company and employees. Benefits come in all shapes and sizes. Most company costs center on health insurance which is designed to take care of immediate needs while retirement savings is a commitment for future financial needs. Build a retirement program that works for you and your employees. Come learn how to start a corporate retirement plan for as little as $2000 annually on August 16th.

Even if the company is not able to commit in matching, having an employer retirement plan provides the following benefits: • $500 tax credit for the next three years • Competitive edge in the market • Retirement specialist consultation at no charge A retirement plan for your employees which they would not have otherwise

For example, Employees can contribute 3% for 20 years till retirement with hypothetical 7% Annual Average Return $40,000: Approximate Total Retirement Income: $62,998 (Approximately $25 weekly) $30,000: Approximate Total Retirement Income $55,123 (Approximately $18 weekly) $25,000: Approximate Total Retirement Income $39,373 (Approximately $15 weekly)

UPCOMING SEMINARS: AUGUST 16TH 8:00 AM Learn how to start your Company Retirement Program

s e m o h new for el paso... e r e h d n u o f y il eas February 2017 •

builders

AUGUST 16TH 11:00 AM-5:00 PM Independent consulting: Appointment Only

EL PASO BUILDERS RETIREMENT PROGRAM is designed to provide the following: • Retirement Readiness.

• Manage your plans confidently and properly…so that the lawsuits are not a concern.

• Provide overall benefits that outweigh the challenges.

• Assistance and resources to help your employees meet their retirement savings goals.

Introducing

El Paso New Home Builders

AUGUST 16TH 5:00 PM Analysis of Auditors: Learn how to document due diligence of fees and services

AUGUST 17TH 9: AM – NOON Independent consulting: Appointment Only

FREE

el paso

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

The El Paso Association of Builders presents

Featuring Homes by: * Carefree Homes

* Diamond Homes

6 2 T S U G U A 0 1 R E B M E T P SE

* Loyalty Homes * Metro Homes

* Pointe Homes

ys 4-7PM Weekda 10-7PM ds s: Weeken Page for update s

* Pacifica Homes

-Casa ook r Faceb aseo-de Visit ou ook.com/El-P b ce www.fa

* Rassette Homes In East El Paso’s Horizon Hills Presented by

Call 778-5387 for more information or

www.facebook.com/El-Paseo-de-Casas

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

2017 Issue 7

Updated every month, here is a list of the 2017 EPAB Membership.

Remember to please do buinsess with fellow members.

R.E. Welch Contractor Gordon Welch 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 June 1, 2017

2-10 Home Buyers Warranty Michael Elman 84 Lumber Ernie Chavez 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 Capital Bank, SSB David Ortwein 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 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 Firth, Johnston, Bunn & Kerr Jay Kerr Foxworth Galbraith Lumber Dan Villarreal Franklin Building Materials Ricardo Aguilar; Cristina Sheldon 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 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 Houghtoni WestStar Bank David Osborn WestStar Title Janette Coon

Association News & Events

2017 Issue 7

UPCOMING EVENTS

AUGUST 9 BOARD MEETING 11:00 GENERAL MEETING 12:00 EL PASO CLUB

If you have an event or meeting that you would like to share with EPAB members, please submit your information to: margaret1@elpasobuilders.com

NEW MEMBERS

AUGUST 2-3 SUNBELT SHOW HILTON ANATOLE DALLAS, TEXAS

13

Builders Outlook

THE HOME SYSTEMS HEATING & COOLING, INC. CONTACT: JESUS CHAIN (915) 858-4141 12309 ROJAS DR STE A7 EL PASO, TX 79928

Advertise your business Builders Outlook to the S home building industry www.elp

asobuil

www.elpasobuilders.com

m

State & Local Bu ilding Ind ustry New s 2015: Iss ue 10

2016: H ousing Recover y to pick up steam a challeng mid es

“This reco NAHB Chi very is all abo ut jobs,� ef said people can Economist Dav id Crowe. they hav get goo incomes e, “If , the hou d jobs that pay about purc the more comforta dec sing mar to move hasing a ble they ket will con ent forw feel new hom And whi tinue le mortgag The goo ard.� e.� expecte d news, e interest d to total U.S Crowe add . employm averaging rise over the nea rates are ed, is that well abo ent 4.5 perc r-term, of 142 mill ve the prev percent ent in 201 Single-Fam ion is now in 2017, that occ ious pea 6 and 5.5 ily Continu urred in Cro k exp of 138 mill we said ected to Turning 2008. es to Pos The one this is not ion have an to the fore recovery cav projecting imp cast, NAH t Gains eat act been con is that job . “As the 719,000 B is cen econom on the housing and wag 2015, up single-fa y gets bett sector, whi trated heavily growth has e growth mily star 11 percent in the serv er, job sho even thou ts produce than goo ch tends to pay gh mortgag uld keep pace. d last yea from the 647,000 in lower wag ice ds producin will still So r. Sing prod e units rate uction is be es s g jobs.

Meanwh projecte le-family very affo low by historical will rise, they addition d to incr doubled ile, home equity rdable.� stan al 27 ease an dards and percent sinc has units. in 2016 $12.5 trilli e 2011 and now nearly to 914,000 on.

Supply stands at On the mul Headwi “The sing tifamily side le biggest 354,000 Crowe note nds people’s , prod units last asset in d several uction ran portfolio hinderin 331,000 year, slig most factors at is ga said Cro level that htly abo we. “That’s the home they NAHB surv more robust reco that are ve the level of own,� primary producti is considered a importa very. Citin ey of its purchas on. Multifam normal builders expecte ers of new nt because the sellers of reported members, 13 perc g an sam d to rise ily starts homes are the existing labor was 9 ent of this yea e concern homes. r and pos percent to 387,000 are the a significa cost and availab The mor that con t ility of that ratio sho s regarding lots decline nt problem units e equity cern to 378,000 a modest 3 perc in Concern t up to 58 percent 2011 and ent About one jumped to 61 perc in 2011 and unit Res s in idential in 2014.

-fifth of buil ent remodeling 2016. at 58 perc s over building forecasted ders sha in 2014. mat ent amo activity is red the from 33 ng builders erials stood over last to increase 6.8 percent in 2014, perc year and in 2011. up No doubt percent rise an add ent in 2015 in 2016. itional 6.1 ideas that that the home brought really mad together that muc e the sho h of actually more interesting. wcase home Continu The proc ed Page setting up piecing the walls ess 6 together the floor The ann , a wall or and the ual Fall in the ceil all that goe brought Home and the faint ing is not thousan s on Garden ds of peo hearted. somethi Judson show ple ng for Habitat “We wer Will for e asked show kick iams Convention into the by could from Humanity to don ed ate people wer off October 9. Center as the this wha build, and t could,� Torr The thro I’m prou we ngs of presente e greeted by a d that we the showca es told the Out very nice d show look. The complim ly produce ents waiting for se was quickly rest of r Show Technology of the take Antonio. parts that some of the fram n to a lot out of San e could be The sho waste. used so and other w Ove to not go showcase featured a spe showcase rall a very bea to ctac utifu Metro Homhome by new buil ular for years home that will con l green der mem to come. tinue to was mad es. The design ber give e of The Fall site in orde to be partially con the display Home and show of structed Garden its established r to meet the time off some time center was kind this year sinc was the only lines for the ,� said Ass that eve e the civic taken ove Sam Sha Bowling ociates n with that show. “I have to r for the llenberg Chairma Cha tell hustled addition Men’s er. and exh to make al time we you center turn mpionship (AB ibitors and “We had new n bring to C). sure we product disp have.� the that was had a grea really complet ed into a large bow The civic to show,� a nice thin lays what’s hot consumer bec e with t said CTU Met ling alle state Fernan ause g to The pres run into in the wor ro said. situations of the art lanes. y enting attra ld of wal I know staged the Homes. Beautifu do Torres of Wiz center or like this ls,� Santos “We ard, Bria ction was l and eleg when the halls we n Santos Our sinc the show house became the Wall antly demons civic that can use are the favo who winning trati did and all the ere thanks to CTU the fit rite of ons duri several Best of efforts. “I really Show for of Show our shows,� said only ones “We love com ng the three day Acosta Reasuppliers and the Metro Homes Technology the Tommy off our mod are excited to ing so many event.

Mantini flexible but to El Pas be able . “We hav folk of gratitud l Estate. We also staff of David to show estate age els to the public the Outlook s for the first time o and seeing e to the we would then again I kno e to be owe a and to the nts becaus civic cen exhibito . “The El w that this ,� have pen market and real e we’re rs who fille debt Builders ter with showed Paso Ass Brian told t up dem year new to the we think goo has thin d the duri d and ocia product help gs prod ng we have and it for the visit tion ed me get this eve other ass ucts and to What imp nt.� ociation or to see lots of other gigs of Home and continued. offer the consum a very good s recomm . Our Spr with aisles and ressed many was er,� Torr endation,� and I’m grateful ing 11-13, 201 Garden Show is es for the who has he continu on comforta the amount of roomthe carpeted authored reach pote 6. Don’t miss this for March ed. San bly mov to and is an several e around. was one “how to� tos, inventor Technologyntial customers. opportunity to of the nice “I thought boo com and Visi ks this st shows today at panies innovato t Show www we’ve had r for sev relationship including Home eral info .showtechnolog in Depot. y.co rmation “My Depot and with Rubber Mai on the Spr m to get d and Hom Lowes is ing show. really a great thin e g to See Mor e Photos Page 8

Fall Hom e and Garden Show attracts thousand

s

AUGUST 26 – SEPTEMBER 10 EL PASEO DE CASAS HORIZON HILLS

Connect to the El Paso Association of Builders:

ders.co

teady em ploymen t demand , affordab and economic gro le mortgag wth, pente rates wi home prices an gradual d attractiv up ll keep the upward e trend in headwind 2016. Ho housing market s related on a wever, and labor, to shortag es and av persistent along wi impedin th rising ailability ga material of lots s prices to econom more robust rec are overy, ac ists who cording participa ted in a Nationa of Home l Associa Builders tion (NAHB) Constru ction Fo Fall recastW ebinar.

National,

The Builders Outlook is the official publication of the El Paso Association of Builders. Our award winning monthly newspaper is the only publication to target El Paso home builders and related businesses.

Widely distributed throughout the city and available to readers online, the Builders Outlook is an important advertising medium for any business that want to reach this valuable market.

7 7

EL PASO BUILDERS A S S O C I AT I O N O F

Call 778-5387 today for more information

SODA SPONSOR METRO HOMES

Congratulations on your 70th Anniversary.

We were here when you started back in

S h o w ro o m :

9400 Gateway East El Paso, TX 79907 (915) 593-1301 (800) 356-9546 www.efbmi.com

ACME BRICK CO. 325 N. Americas Ave. El Paso, Texas 79907 915-859-9171 Brick * Stone * Pavers * Granite * Slate * Flooring * Glass Block

14

Appraisals

Hot Topic

Builders Outlook

The recent turmoil in the housing and credit markets brought greater focus to the importance of fair and accurate appraisals.

In response to criticism that lax appraisals contributed to the financial crisis, tighter appraisal policies have been implemented by lenders, the Federal Housing Administration, Fannie Mae and Freddie Mac. However, the pendulum has now swung too far and reports of homes failing to appraise at the sale price, or even construction cost, have become prevalent.

Inaccurate appraisals remain a major impediment to the housing recovery, and therefore, finding solutions to these problems continues to be a major priority for NAHB. Policy Statement NAHB believes that fundamental appraisal system reform is essential to

restore confidence in the residential real estate market and to establish a foundation for sustainable economic growth. To address shortfalls in the appraisal process, appraisers must develop realist valuations based on sales that are truly comparable and lenders need to use appraisers who are knowledgeable and experienced in appraising specific property types located in a given market. Regulators, appraisers, lenders and all of the stakeholders in this debate must come together to establish regulatory guidelines for appraisers that acknowledge the reality of today’s marketplace.

Why It Matters Flawed appraisals are harming new home values and killing sales in many markets because they do not accurately reflect the value of the home. Some

Tropicana Building has been awarded over $17 million in tax credits from the state of Texas's housing agency (TDHCA).

The credits will provide 70% of the financing for Tropicana's 2 latest developments--Alameda Palms (at the corner of Alameda and Loop 375) and Vinton Palms (in the Village of Vinton).

These 2 new awards are Tropicana's 31st and 32nd tax credit developments in El Paso County. Since Tropicana's entry into the Low Income Tax Credit development business in 2001, Bobby Bowling IV has been awarded over $300

million in 9% tax credits, providing most of the funding for just under $500 million of construction work on apartments in El Paso County. No other developer in the state of Texas has been awarded as many 9% tax credits in that period of time, making Bobby and Tropicana one of the largest 9% new construction tax credit developers in the United States over the past 17 years.

Tropicana also owns and operates all of its tax credit developments along with other units in the El Paso area. When the new developments are complete, Bobby

Member News

$# .

/-"/( ,+ ..-%,* ,-!

me o H w e N r You a Nueva '+/&*.-/)

/)+*-(3 #24&2 340 (12'14$ +31340/., 42.3403,3 0/)+131 4!*4"3,/ .2-%34-.

Coming Soon: All-new Edition in Spring 2017

e e best tim NOW is th w home ne ur yo to buy in El Paso el tiempo Ahora es prar para com El Paso nueva en una casa e Informat

Reserve your advertising space today!

ion

ión de Informac s Hipoteca

View New

This is not only unfair and unreasonable, but it hurts home owners and home buyers alike. Many home owners seeking to refinance and take advantage of today’s affordable low interest rates are unable to do so because their house appraisals are coming in too low. A move-up buyer is out of luck if the appraisal on their existing home comes in below what they owe on their current mortgage. Likewise, many prospective home buyers have been left out in the cold because their dream house was appraised below the sales contract price.

Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers.

Tropicana Building Achieves Tax Credit Awards

Su Cas

Mortgag

appraisers are improperly using distressed properties – many of which have been neglected and are in poor physical condition – as comparables in assessing the value of brand new homes without accounting for major differences in condition and quality.

2017 Issue 7

Homes on

line

Advertise in The New Edition of Your New Home/Su Casa Nueva A homebuyer’s guide for English or Spanish Readers

Specially developed content offers home buying advice in both English and Spanish!

• Helpful advice for buyers • Unique, easy to use glossary of real estate terms • Available all over town • Ideal way to reach first home buyers Call Margaret today 778-5387

Bowling IV, Randy Bowling, and Demetrio Jimenez (Pictured in order above) will own

and operate 3,284 apartments in the El Paso area in conjunction with their various Tropicana entities.

Tropicana Properties is a management company dedicated to offering affordable housing low income families since 1999. IT has been growing continuously due to the commitment to the community and it’s tenants.

For more information about Tropicana Properties, visit www.tropicanaproperties.org

Builders Outlook

2017 Issue 7

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

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

 

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. Š 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 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

/ĹśĆšĆŒĹ˝ÄšĆľÄ?Ĺ?ĹśĹ? ƚŚĞ d DĞžÄ?ÄžĆŒ ZÄžÄ?ĂƚĞ WĆŒĹ˝Ĺ?ĆŒÄ‚Ĺľ tŚĂƚ Ç Ĺ˝ĆľĹŻÄš LJŽƾ ƚŚĹ?Ŝŏ Ĺ?Ĩ LJŽƾ Ä?ŽƾůĚ Ĺ?Ğƚ Ä‚ ĆŒÄžÄ?ĂƚĞ Ä¨Ĺ˝ĆŒ Baeza Ç‡Ĺ˝ĆľĆŒ ůŽLJĂůƚLJ ƚŽ žĂŜLJ ŽĨ ƚŚĞ ŜĂĆ&#x;ŽŜ͛Ć? ůĞĂĚĹ?ĹśĹ? ŚŽƾĆ?Ĺ?ĹśĹ? Ĺ?ŜĚƾĆ?ĆšĆŒÇ‡ DĂŜƾĨĂÄ?ĆšĆľĆŒÄžĆŒĆ?Í? tĞůů͕ ĹśĹ˝Ç Ç‡Ĺ˝Ćľ Ä?ĂŜ͊ tÄžÍ›ĆŒÄž ŚĂƉƉLJ ƚŽ Ĺ?ĹśĆšĆŒĹ˝ÄšĆľÄ?Äž ƚŚĞ d DĞžÄ?ÄžĆŒ ZÄžÄ?ĂƚĞ WĆŒĹ˝Ĺ?ĆŒÄ‚ĹľÍ• Ä‚ Ä¨ĆŒÄžÄž žĞžÄ?ÄžĆŒ Ä?ĞŜĞĎƚ͕ Ä‚Ĺ?žĞĚ Ä‚Ćš Ĺ?ĹśÄ?ĆŒÄžÄ‚Ć?Ĺ?ĹśĹ? Ç‡Ĺ˝ĆľĆŒ   Ä?ŽƊŽž ĹŻĹ?ĹśÄžÍ˜ &Ĺ˝ĆŒ ƚŚĞ ĹľĹ?ĹśĹ?žĂů ÄžÄŤĹ˝ĆŒĆš ŽĨ Ĺ?ĹśÄ¨Ĺ˝ĆŒĹľĹ?ĹśĹ? ĆľĆ? Ä‚Ä?Žƾƚ R ƚŚĞ Ć‰ĆŒĹ˝ÄšĆľÄ?ĆšĆ? LJŽƾ ĆľĆ?Ğ͕ ĂŜĚ ƚĞůůĹ?ĹśĹ? ĆľĆ? Ç ĹšÄžĹś LJŽƾ Ä?ĹŻĹ˝Ć?Äž ŽŜ Ä‚ ŚŽžĞ Ĺ˝ĆŒ Ć‰ĆŒĹ˝ĹŠÄžÄ?ƚ͕ LJŽƾ͛ůů Ä?Äž ƉƾƍŜĹ? žŽŜĞLJ Ä?Ä‚Ä?ĹŹ Ĺ?Ĺś Ç‡Ĺ˝ĆľĆŒ ƉŽÄ?ĹŹÄžĆšÍ˜ tŚĞŜ LJŽƾ Ć‰Ä‚ĆŒĆ&#x;Ä?Ĺ?ƉĂƚĞ Ĺ?Ĺś ƚŚĞ d DĞžÄ?ÄžĆŒ ZÄžÄ?ĂƚĞ WĆŒĹ˝Ĺ?ĆŒÄ‚ĹľÍ• ÄžÇ€ÄžĆŒÇ‡ ŚŽžĞ LJŽƾ Ä?ĆľĹ?ĹŻÄš Ä?Ä‚Ĺś ÄžÄ‚ĆŒĹś LJŽƾ ĆŒÄžÄ?ĂƚĞ Ä?ŚĞÄ?ĹŹĆ?ÍŠ ZĞžĞžÄ?ÄžĆŒÍ• Ä?ŽƚŚ ĆľĹ?ĹŻÄšÄžĆŒĆ? E ZÄžĹľĹ˝ÄšÄžĹŻÄžĆŒĆ? ƋƾĂůĹ?ĨLJ Ä¨Ĺ˝ĆŒ ƚŚĞ d DĞžÄ?ÄžĆŒ ZÄžÄ?ĂƚĞ WĆŒĹ˝Ĺ?ĆŒÄ‚ĹľÍ˜ &Ĺ˝ĆŒ ĹľĹ˝ĆŒÄž Ĺ?ĹśÄ¨Ĺ˝ĆŒĹľÄ‚Ć&#x;ŽŜ ĂŜĚ ƚŽ ĆŒÄžĹ?Ĺ?Ć?ĆšÄžĆŒÍ• Ç€Ĺ?Ć?Ĺ?ƚ͗

Ç Ç Ç Í˜, ĆŒÄžÄ?ĂƚĞĆ?͘Ä?Žž 'Ğƚ ^ĆšÄ‚ĆŒĆšÄžÄš dŽĚĂLJ͊

Border Solar can help you oer your customers solar power as a sensible alterna ve.

Crossing to Clean Energy

7365 Remcon Circle El Paso, TX 79912 (915) 613•4168

The future starts today. follow us on twi er and facebook: BorderSolar