WE’RE HERE FOR THE LONG HAUL.
2016 RAM 3500 TRADESMAN® LOAD-LEVELING REAR AIR SUSPENSION 1
MAXIMUM 31,210 LB TOWING 2
IMPRESSIVE 7,390 LB PAYLOAD 3
Home builders face a demanding work site—and they demand the most from their work vehicles. That’s why we build Ram trucks to always be ready for the big job and never buckle under pressure. To help your business go the distance, FCA US LLC offers NAHB members, employees and family members a $500 cash allowance on select FCA US vehicles. Stack this offer with our On The Job program to get game-changing cash allowances on vehicle upfit and service. Use your NAHB membership to get the dependable power of Ram trucks and give it everything you need to get your job done. Whether your big job is next month or years away, trust the longestlasting pickup trucks4 to finish strong.
GE T A
$500 CASH ALLOWANCE
MOS T N ATION A L A ND LOCA L
INCENTIVES
ON MANY FCA US LLC VEHICLES.5
UP T O
$1,000 ADDITIONAL VEHICLE BENEFITS6
No-Extra-Charge 2-Year Gas/Diesel Lube-Oil-Filter Allowance
Up to $1,000 Commercial Equipment/Upfit Allowance
Up to $1,000 Commercial Graphics Program Allowance
$300–$1,000 Allowance on Select Mopar® Service Contracts
Visit NAHB.ORG/FCA for more details. FCA US LLC IS A PROUD AFFINITY PROGRAM PROVIDER FOR THE NATIONAL ASSOCIATION OF HOME BUILDERS.
1 Available feature. 2 Available Cummins® Diesel when properly equipped. 3 Payload based on available 6.4L gas V8. 4 Based on IHS Automotive VIO registration data for all brands of GVW 1-3 pickup trucks continuously sold in the U.S. since 1988, Dodge and Ram have the highest overall percentage still on the road. 5 Family members must reside in member’s same household. See dealer for allowance and eligibility requirements. 6 Upfit bonus must be used in conjunction with On The Job program. See dealer for On The Job eligibility requirements and offers. ©2017 FCA US LLC. All Rights Reserved. Chrysler, Dodge, Jeep and Ram are registered trademarks of FCA US LLC. FIAT is a registered trademark of FCA Group Marketing S.p.A., used under license by FCA US LLC. Cummins is a registered trademark of Cummins Inc.
BUILDER north coast building industry association
Table of Contents On the Cover
NEWSLETTER
North Coast Building Industry Association (NCBIA) BUILDER newsletter is the official newsletter of the NCBIA and is published monthly by the NCBIA. The NCBIA is an affiliate of the Ohio Home Builders Association (OHBA) & the National Association of Home Builders (NAHB).
Cover Story: It’s Time for the Golf Outing
14
NCBIA Office
5201 Waterford Dr., Sheffield Village, OH 44035 Ph: 440.934.1090 Fax: 440.934.1089 info@ncbia.com www.ncbia.com
NCBIA Staff Executive Officer - Judie Docs judie@ncbia.com Promotions, Marketing & Creative Director - Kelli Moss kelli@ncbia.com
2017 NCBIA Officers
President - Chris Majzun Jr., Majzun Construction Co. Vice-President - Jeff Hensley, Lake Star Building & Remodeling Associate VP - Liz Schneider, Dollar Bank Treasurer - Steve Fleming, Shamrock Development Secretary - Jeremy Vorndran, 84 Lumber Company Immed. Past President - Mary H. Felton, Fidelity National Title
2017 NCBIA Board of Directors
4
Letter from the President Welcome New Members and
9
Thank You For Renewing
9
OHBA Update
5
WOTUS Update
7
Who are the NAHB Associate Members?
10
Executive Officer’s Report
11
Age of Construction Workers
13
Mortgage Rates Fall
16
Spike Update
19
Young Professionals Membership Drive
21
Membership Cookout Photo Gallery
26-27
2017 NAHB & OHBA Directors These are our members who represent our local industry in Washington DC and Columbus.
Ashley Caruso-Noe, Caruso’s Cabinets Mark Craig, Mark F. Craig, Esq. Chris Husted, Prete Builders Sara Majzun-Garwood, BCT Alarm Services, Inc. Keith Martin, MBD Homes Timothy McLaughlin, CFP®, Wells Fargo Advisors, LLC Shannon Niebes, Integrated Restoration Michelle Nowlin, First Federal Savings of Lorain Tom Sear, Ryan Homes Tyler Yost, Dale Yost Construction
2017 NAHB Directors
NCBIA Life Directors
OHBA Past Presidents
Mary H. Felton, Fidelity National Title Jeff Hensley, Lake Star Building & Remodeling
NAHB Alternate Director
Tom Caruso, Caruso’s Cabinets
Sr. NAHB Life Director & Ohio’s State Rep. to NAHB
Tom Caruso, Caruso’s Cabinets Mary H. Felton, Fidelity National Title Tom Lahetta, Tom Lahetta Builders, Inc. Chris Majzun Sr., Majzun Construction Co. Chris Majzun Jr., Majzun Construction Co. Randy Strauss, Strauss Construction Bob Yost, Dale Yost Construction
Randy Strauss
Strauss Construction
1975
Dan Strauss
Strauss Construction
1996
Dan Strauss 1975
Randy Strauss 1996
2017 OHBA Trustees Mary H. Felton Liz Schneider Keith Martin
Fidelity National Title Dollar Bank MBD Homes
OHBA Alternate Trustee Advertising Policy - The North Coast Building Industry Association reserves the right to reject advertising in the Builder newsletter based on content. Acceptance of advertising does not imply endorsement of the product or service advertised.
june 2017
Tom Ostrander Tom Lahetta
84 Lumber Company Tom Lahetta Builders & Remodelers, Inc.
OHBA Area 2 Vice-President Mark Zolllinger
www.ncbia.com
Zollinger Builders
page 3
A Letter from the President by Chris Majzun, Jr., Majzun Construction Co.
When you add the dollar value of NAHB service and advocacy victories you get an average of $5,950 per housing start for a typical home builder. That number demonstrates just how much value NAHB delivers for members, in addition, NAHB continues to focus on several issues, including:
housing finance system but maintain a limited federal backstop to the nation’s housing finance system.
Regulatory Reform. On average, nearly 25 percent of the cost of a single-family home is attributable to government regulation. Equally disturbing, the cost of regulation in the price of a new home is rising twice as fast as the average American’s ability to pay for it. NAHB firmly believes that efforts to further regulate the housing industry must: o Be subject to greater oversight o Allow for increased public participation in the process o Be based on sound data o Only be undertaken after a careful consideration of the costs and benefits as well as the potential effects on small businesses.
Labor Shortage/Immigration Reform. NAHB supports comprehensive immigration reform that will: o Safeguard our borders; o Establish a fair employment verification system; and o Create a market-based visa system that will allow more immigrants to legally enter the construction workforce as the housing industry gains momentum and the demand for workers increases.
Tax Reform. NAHB supports housing incentives in the tax code, including the deductions for mortgage interest and state and local property taxes. These incentives largely benefit the middle class, particularly younger households and larger families, by making homeownership more affordable. NAHB also supports the Low-Income Housing Tax Credit, the primary tool for financing construction of new, affordable rental housing. The LIHTC is currently producing approximately 75,000 new apartment homes annually. Housing Finance Reform. NAHB is a strong proponent of housing finance reform that would increase the role of private capital in the U.S.
Federal support is particularly important in continuing the availability of the affordable 30-year fixed-rate mortgage, which has been a staple of the U.S. housing finance system.
Environment. NAHB supports a common sense, scientific approach to safeguarding the environment that reasonably balances protection of endangered species, clean air and clean water, with the need to allow local communities to grow and thrive. Appraisals. Flawed appraisals remain a major problem for home buyers and home owners. The inappropriate use of distressed and foreclosed sales as comparables in determining new home values
continued on page 6
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june 2017
NAHB Members Benefit with Houzz
OHBA Update
25,000+ NAHB members are taking advantage of the strategic alliance with Houzz to showcase their work, build their brand, and reach new clients. Are you?
by Vincent J. Squillace, CAE, OHBA Exec. VP
PREPARING FOR OUR SUMMER MEETING Later this month we will convene our midyear meeting, better known as the summer Board of NAHB Member Benefits Include: Trustees. This is the second of three meetings • Free access to Houzz Concierge Service for one-on-one support where our trustees meet. All members are welcome to attend and hear about the events at state • Exclusive discounts on local advertising to reach homeowners in government which impact you in some way. As your area usual, a number of important items are under discussion. • Shop Houzz product discounts for you and your clients The biggest issue before the legislature is the multi-billion-dollar state budget. The House has passed its version now the Senate is reviewing it. The Senate will likely finish its review in time for a conference committee to work out the final details before the current fiscal year ends, June 30. The governor then has a few days to sign it, line item veto parts or just veto the whole thing. At this point we are not sure just what will happen. Otherwise a number of issues are on our watch list: a bill to require all builders to register with the state; a bill to require licensure of commercial roofing contractors. The later bill would also prohibit roofers from using subcontractors on the job; a bill to license home inspectors, a bill to conform appraisers to federal laws and a bill to limit the use of cognovits notes in lending agreements. This is just a partial list. We will also update all on the current actions at the Ohio Residential Code advisory Committee. And last, OHBA Past President Bill Sanderson has been appointed to the Ohio Housing Finance Agency. That’s it for now, hope to see you in Dayton for our summer meeting on June 28th.
Construction financing made easy!
Create your professional profile today or learn more at houzz.com/nahbmembers.
WE’RE HERE FOR THE LONG HAUL.
RAM® 3500
Home builders face a demanding work site— and they demand the most from their work vehicles. Use your NAHB membership to get the dependable power of Ram trucks—and give it everything you need to get your job done.
• The process is identical to applying for any home mortgage. • Mortgage amounts up to $1 Million. • Make interest only payments as each construction phase is completed. • Only one closing. Your construction mortgage will automatically convert to a permanent mortgage with the same low rate.
GET A
$500 CASH ALLOWANCE
ON MANY FCA US LLC VEHICLES.1
UP TO
$1,000 ON THE JOB BENEFITS
2
M O S T N AT I O N A L A N D L O C A L
INCENTIVES
Visit NAHB.ORG/FCA for more details.
Mortgage Experts are around the corner! Liz Schneider NMLS# 728176 Senior Mortgage Representative 440-242-5858 · eschneider187@dollarbank.com
FCA US LLC IS A PROUD AFFINITY PROGRAM PROVIDER FOR THE NATIONAL ASSOCIATION OF HOME BUILDERS.
Equal Housing Lender. Member FDIC. Copyright © 2017, Dollar Bank, Federal Savings Bank.
MOR025_17
1 Family members must reside in member’s same household. See dealer for allowance and eligibility requirements. 2 Upfit bonus must be used in conjunction with On The Job program. See dealer for On The Job eligibility requirements and offers. ©2017 FCA US LLC. All Rights Reserved. Chrysler, Dodge, Jeep and Ram are registered trademarks of FCA US LLC. FIAT is a registered trademark of FCA Group Marketing S.p.A., used under license by FCA US LLC.
NAHB Member Advantage Discounts
NAHB Member Advantage gives members an easy way to reduce expenses, maximize profits and increase efficiency. Through agreements with leading national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family. In the past year, members have saved over $17M through Member Advantage. For the most up-to-date information about which companies are offering discounts as well as detailed information on how to access the savings, please visit www.nahb.org/ma.
june 2017
www.ncbia.com
page 5
Letters from the President (continued from page 4) is needlessly driving down home prices and impeding a housing and economic recovery.
emissions reduction initiatives. On May 4, NAHB hosted the Regulatory ReFORUM, where industry representatives and issue experts discussed ways to reduce regulatory burdens in the labor, environment, resiliency and green building arenas.
As a result, many home owners seeking to refinance and take advantage of today’s low interest rates are unable to do so. NAHB continues to work with all major stakeholders to institute major reforms in appraisal On the congressional front, NAHB is working with lawmakers in the practices and oversight to ensure that appraisals accurately reflect true Senate to advance three regulatory relief bills that cleared the Senate market values. Homeland Security and Governmental Affairs Committee last month. o The Regulatory Accountability Act of 2017 (S. 951) would add NAHB has submitted comments to the EPA recommending that the greater transparency in the rulemaking process, improve costagency revise regulations governing wetlands, storm water and leadbenefit analysis and provide for meaningful retrospective review based paint. of rules. NAHB also urged EPA to amend regulatory guidance documents directing state activities under the Clean Water Act. In addition, NAHB will submit comments to HUD about which of the agency’s regulations should be repealed, replaced or modified by the agency’s June 14 deadline. Earlier this spring, NAHB Senior Officers met with EPA Administrator Scott Pruitt to discuss steps to reduce regulatory burdens that are raising housing costs for home builders and home buyers. Specifically, talks centered on the Clean Water Act’s waters of the U.S. rule, lead-based paint requirements, storm water permitting and
page 6
o The Regulations from the Executive in Need of Scrutiny (REINS) Act 2017 (S. 21) would restore meaningful congressional oversight authority to the rulemaking process. o Finally, the Small Business Regulatory Flexibility Improvements Act (S. 584) would ensure rulemaking agencies consider the true impact of rules on America’s engine of economic growth, small businesses. As you can see NAHB continues to strive to protect the American Dream of housing opportunities for all, while working to achieve professional success for its members who build communities, create jobs and strengthen our economy.
www.ncbia.com
june 2017
Improved WOTUS Rule Should Bring Stability, Panelist Says
Finance Changes Shaping the Housing Market
Speakers at the Environmental Law Institute’s National Wetlands Awards panel discussion May 17 know there are challenges ahead as the Trump administration launches its efforts to fix the flawed Obama-era “waters of the United States” (WOTUS) rule, including how it may affect wetlands mitigation banks.
GDP growth continues to be slow and steady. However, despite modest economic growth, the labor market continues to be tight, risking inflation. For this reason, the Federal Reserve will continue to raise the short-term federal funds rate, with the next rate hike expected in June. Furthermore, after years of quantitative easing (bond purchases intended to lower rates), the Fed will this year begin gradually unwinding its $4.5 trillion balance sheet, $1.8 trillion of which consists of mortgage-backed securities. While mortgage interest rates can expect a small increase due to the change, the impact on housing demand will be minor.
NAHB member Vince Messerly, president of the Stream and Wetlands Foundation and a 25-year veteran of the mitigation banking industry, was one of the industry experts who spoke.
Other finance changes will shape the housing market as well. Builder AD&C loan growth continues, although those growth rates have slowed over the last two quarters. Household debt continues to expand, returning to its pre-recession peak, but the composition of that debt has changed: Compared to the previous cycle high, consumer debt is up 35%, auto loans have grown 44% and student loans have risen 120%. Mitigation banks are sites where wetlands have been established These changes are net drags on housing demand. or restored to replace other wetlands being developed to build homes, businesses and infrastructure. Each bank provides credits And during the first quarter of 2017, multifamily developer sentiment that developers, state agencies and others can purchase to satisfy fell below the key breakeven threshold to a level last seen in the final compensatory mitigation requirements. quarter of 2011. This measure is consistent with the NAHB forecast calling for a leveling off of multifamily construction, as more momentum While some mitigation bankers fear that a rollback of the WOTUS rule shifts to the single-family market. will hurt the mitigation industry – that is, if fewer waters are federally regulated, fewer features will require mitigation – Messerly brought a –NAHB Chief Economist Robert Dietz unique perspective to the panel. “The real concern we have with the delay of an update to the WOTUS definition is that the uncertainties associated with the existing regulations will continue to cause unnecessary confusion for permit applicants,” said Messerly. “Hopefully, a reasonable WOTUS definition can be achieved soon to help improve predictability for permit applicants and the regulatory agencies.” Messerly noted that home builders and the Stream and Wetlands Foundation share a common vision with the Environmental Law Institute – one of a healthy environment, prosperous economies and vibrant communities founded in the rule of law. The nonprofit foundation was established by the Ohio Home Builders Association in 1992 to create a pool of available credits for builders and developers whose impacts to certain waters require compensatory mitigation under the Clean Water Act. “Without bank credits, many projects either can’t proceed or face significant permitting delay,” said Messerly, who manages six banks across Ohio and North Carolina. “Working with builders and the development community, our foundation helps protect valuable ecosystems and allows for construction of much needed safe, affordable homes.” For more information about mitigation banks, contact Owen McDonough.
june 2017
www.ncbia.com
page 7
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www.ncbia.com GK ads for NAHB FINAL.indd 2
june 2017 12/10/15 12:01 PM
Welcome New Members
Thank You for Renewing Your Membership Cassell Builders & Remodelers, Ken Cassell
William Butchko Butchko Electric 440-985-3180 Sponsored by: Chris Majzun Jr., Majzun Construction
Howard Hanna, Linda LaFleur J.L. Reichert, Inc., Jeff Reichert Kopf Construction Corp., Bucky Kopf
Victoria Caruso-Myers Caruso Cabinets 440-937-9363 Sponsored by: Ashley Caruso-Noe, Caruso’s Cabinets
Lorain County Recorder, Judy Nedwick Lorain Glass Company, Inc., Kevin Sofranko Maranatha Custom Homes, Inc., Jim Tipple Moen, Inc., Neal Dickinson
Terry Fraley Coates Brothers Roofing LLC (440) 731-6100 Sponsored by: Jeff Lugar, ABC Supply
Sliman Lumber Company, David Sliman Strauss Construction, Inc., Randy Strauss
U.S. House Says ‘No’ to EPA Land Grab
Kelsey Manning L.E. Scott Electrical (440) 356-7450 Sponsor: Larry Scott, L.E. Scott Electrical
NAHB commended the House for passing legislation that would prevent the Environmental Protection Agency and the U.S. Army Corps of Engineers from vastly increasing jurisdiction over the nations waterways and wetlands without going through the proper rulemaking process. “This legislation would prevent a federal land grab that would raise housing costs and harm conservation, water quality, job growth and economic development” said NAHB Chairman Tom Woods. Approved by a bipartisan vote of 261 to 155, H.R. 1732, the Regulatory Integrity Protection Act, would require EPA and the Corps to withdraw their proposed rule and develop a new plan in consultation with state and local governments and other affected stakeholders, including the small business community.
june 2017
www.ncbia.com
page 9
Who Are NAHB’s Associate Members? BY CARMEL FORD from NAHB’s Eye on the Economy Every year since 2008, the NAHB has conducted a member census in order to better understand the composition and characteristics of the people who belong to its organization. In 2016, 68 percent of NAHB’s members were associate members—those indirectly involved in home building. The remaining 32 percent were builder members—those directly involved in home building. Last month we gave readers an indepth look at NAHB’s builder members, and this month we are going to focus on associate members. Of the 81,512 associate members, 41 percent are primarily subcontractor/
specialty trade contractors, 13 percent have a professional specialty, 11 percent are retail dealerships or distributorships, 9 percent are in financial services, 5 percent are wholesale dealerships or distributorships, and 20 percent have some other type of primary activity (Exhibit 1). In 2016, associate members had a median of 10 employees on payroll, unchanged from 2015, but higher than the median of 9 employees in 2013 and 2014. Six percent of associate members had 1 employee, 18 percent had 2 to 4 employees, 22 percent had 5 to 9, 36 percent had 10 to 49, 6 percent had 50 to 99 employees, and 10 percent had 100 or more employees. One percent had no payroll at all. The median revenue of NAHB associate members in 2016 was $2.4 million, down slightly from the median of $2.5 million in 2015, but still much higher than the median revenue in 2014 ($2 million) and in 2013 ($1.8 million). In 2016, the median age of NAHB associate members was 55. The median age of associate members has been on a steady, upward trajectory: in 2008, it was 50 and reached 55 in 2015 and 2016. Fifty-one percent of associate members have a college or advanced (graduate) degree; and half of associate members have belonged to NAHB for at least 10 years.
Exhibit 1. Share of Associate Members by Primary Business Activity – 2016 (Percent of Respondents)
For more details about NAHB associate members and a profile of each type of member, please visit housingeconomics.com
NEW HOME BUYERS LIMITED WARRANTY BOOKS NOW AVAILABLE Warranty book Updated and Available FOR ONLY $20 EACH! In a binder so you can include other walkthrough documents, warranties, etc.
Email your order to kelli@ncbia.com or call the NCBIA Office at (440) 934-1090 page 10
www.ncbia.com
june 2017
Executive Officer’s Report
by Judie Docs, CSP, MCSP, MIRM, CMP, CGP
It’s a part of my job to make sure that you, our members, know everything you know about the benefits that are available to you. We provide that knowledge to you through many different outlets, not the least of which is our monthly newsletter. So read below the latest rundown of how we can help you save money! Benefits Available through the Ohio Home Builders Association (OHBA) As a member of the North Coast BIA, you are also a member of OHBA which represents home builders and associates in a legislative capacity on a statewide basis. It is an affiliate of the National Association of Home Builders (NAHB).
• Disability Income • 401K Administration/Testing • Long Term Care Insurance • Medicare/Medicaid Planning • Dental/Vision • Life • Property/Casualty • AFLAC For more information or to receive insurance needs assessment and no-obligation quote, please contact Molly Kane or Mike Dove at 855.368.3467 or visit them at www.dovetailins.com.
OHBA serves its membership by promoting proactive involvement on state issues and legislation impacting the residential building industry such as wetlands, affordable housing, workers’ compensation, comprehensive insurance programs and the Ohio Member Rebate Program. Workers Comp Program CareWorksComp is proud to be the administrator of the Ohio Home Builders Association’s workers’ compensation premium savings programs. The OHBA’s more than1,100 members participating in the group and group retrospective rating programs are projected to save millions in workers’ compensation premiums via group reductions and retro premium rebates. The NCBIA has 75 companies participating in this group rating program and they have saved $240.234.00.
No one likes to leave money on the table. So, what would you think if you could get a rebate for your loyalty to many of the nation’s leading Manufacturers? Well, now you can! The Member Rebate Program is a free member benefit available to all active Builder & Remodeler members that increases your bottom line. For the minimal effort of informing us about the products you use and when you complete a residential address, you’ll be putting money back in your pocket. Both Builder & Remodeler companies, no matter how large or small, qualify for the program. They send quarterly rebate checks all for just remaining loyal to the leading manufacturers you already us in your homes, remodels, or multi-family units. Approximately 70% of the builders and remodelers who participated last year nationwide made MORE back in rebates than they spent on their dues to their local association.
For more information, or for a no-cost, no-obligation quote of your potential premium savings, contact Bob Nicoll, the Ohio Home Builder’s representative at: 1.800.837.3200, ext. 58595, or visit www. careworksconsultants.com/groupratingapplication/ohba Comprehensive Insurance Program They are NOT just another insurance agency. DoveTail Consulting is the endorsed agency for the OHBA. Working with members to make sure that they have the right coverage for all of their insurance needs. They have experts working along with us that can provide you with savings and the knowledge of the products that you invest in. They offer: • Builders Risk and Bonding • Group Health • Individual Health Insurance june 2017
They do all the paperwork and mail you a quarterly rebate check directly. You don’t have to change how your purchase anything and don’t have to submit receipts. It couldn’t be any easier! For more information contact Kim Klein, Member Rebate Program, 732612-3865 or visit www.hbarebates.com. Utilizing these benefits and discounts, along with the many others available through NAHB and National Purchasing Partners will save you thousands!
www.ncbia.com
page 11
Age of Construction Workers
A scarcity of labor remains an important headwind for home builders and and Vermont (+3). the entire construction industry. NAHB analysis of the most recent 2015 American Community Survey (ACS) data reveals that the median age of The ACS data also permit an examination of median age by occupations. construction workers is 41, which is the same as the median age of the The medians are presented by occupations below. overall labor force. Construction occupations with younger workers include helpers, roofers, As home building continues its recovery, there are significant labor market developments. Unfilled jobs in the construction sector have been on a generally rising trend. Moreover, while the residential construction sector has been adding net jobs, nearly 714,600 more positions since the low point of employment after the Great Recession, home builders continue to cite labor shortage as a top business challenge. The median age of construction labor shows regional and equipment operators. Older workers are concentrated in managerial patterns. The color coding in the map above tracks the median age of positions such as inspectors, construction supervisors and construction construction workers. States with older construction workers are in the managers. Northeast and parts of the Midwest. Given ongoing labor access issues in the industry, attracting the next For example, the median age of construction workers is 47 in the state generation of construction workers will be a challenge the sector will of Vermont, followed by 46 in Rhode Island, and 44 in Connecticut, face in the coming years. New Hampshire, New Jersey, and Pennsylvania. Construction workers are younger on average in the central part of the nation. Half of all construction workers in Nebraska, and Idaho, North Dakota, South Dakota, Utah, and Wyoming are under 38 years of age. The second data series mapped above is the difference between the median age of construction workers in each state and the median age of the overall workforce. These estimates are reported as the numbers mapped on each state. A positive number indicates that on average, construction workers are older than a typical worker in the state labor force. Rhode Island is the state where the median age of construction workers is 4 years higher than the overall median, followed by Kentucky
june 2017
www.ncbia.com
page 13
SPO
! T U ! O E L D B L A O L S I A S I V GOLF RE STILL A A S P I H S R O NS
Mortgage Rates Fall Following 4 consecutive monthly increases, results from the Mortgage Interest Rate Survey (MIRS) released by the Federal Housing Finance Agency (FHFA) indicate that mortgage rates fell in April 2017, its second consecutive month of declines. Over the month, contract rates on mortgages used to purchase single-family newly constructed homes declined by 10 basis points to 4.02 percent. Despite the decline, rates remain above the low of 3.54 percent in October 2016.
declining. The figure above illustrates how the decline in mortgage rates have tracked the decline rates on the 10-year Treasury note.
In the context of the last 6 months, contract rates are higher. However, over the past 35 years, rates are lower. In April 1982 mortgage rates reached 15.13 percent. In the following decades rates have been steadily
Previous posts (here, here, and here) illustrated the impact of mortgage rate changes on homeownership. However, some research has established a causal link in the opposite direction. Researchers at the Federal Reserve Bank of Atlanta and Princeton University, seeking to understand the impact of demographics on the overall economy, have shown how the connection between population aging and economic growth could be reflected in the response of homeowners to interest rate changes. Using examples of the interest rate changes in Japan, the analyst starts by noting that “Many researchers have found that an aging population tends to put downward pressure on real interest rates”. The analysts then cite research by Arlene Wong “suggesting that homeownership is a big reason why younger people react more strongly to interest-rate changes than do older people. Younger people generally carry larger mortgages because older people have typically had more years to pay down their home loans. Because they owe more money, younger people have more reason to refinance their mortgages when interest rates drop. And among those who refinance when rates fall, consumption rises much more than among those who don’t refinance, according to Wong.” The ideas explored by the researchers could have important ramifications for our understanding of housing’s role in the economy. Indeed, analysis by researchers at the Federal Reserve Bank of New York found that, among mortgaged homeowners, the proportion of borrowers above 60 years of age nearly doubled between 2006 and 2016, from 15 percent to 27 percent while the proportion of mortgaged homeowners under 45 fell from 42 percent to 31 percent. However, as the researchers note, “Demographics is just one of many forces that determine growth and interest rates.” Understanding the role played by these “other forces” could further improve our understanding of the link between homeownership and interest rates.
page 16
www.ncbia.com
june 2017
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Make CommStar Credit Union Your Call for Lending Needs
Y DA LS E ON OVA R APP
CommStar Credit Union is a local lender meaning a exible underwiting and decision process, with FAST turn-around times in as few as 14 days for construction loans! First Mortgages up to 95% LTV! Fixed Rate and Variable Home Equity Loans up to 100% LTV Construction/Portfolio/Jumbo Loans Home Affordable Reenance Program (HARP Loans) with no LTV restrictions Government Loans (FHA/VA/USDA/Reverse Mortgages) Low consumer costs structure If you are currently doing business with CommStar we thank you, and look forward to continuing to build our relationship in the future. If you have not experienced our dedicated and experienced staff, we look forward to doing business with you soon! 5609 West Erie Avenue 832 Cleveland Street Lorain, OH 44053 Elyria, OH 44035 36500 Detroit Road Avon, OH 44011 By member’s choice, your deposits are insured up to $250,000 per account by American Share Insurance. This institution is not federally insured.
Members’ accounts are not insured or guaranteed by any government or government sponsored agency.
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www.ncbia.com
june 2017
THANK YOU SPIKES!
STATESMAN SPIKE (500-999 SPIKE CREDITS) Bob Yost.......................Dale Yost Construction............................ 599.75 SUPER SPIKE (250-499 SPIKE CREDITS) Mary H. Felton...........Fidelity National Title............................. 354.50 Terry Bennett...............Bennett Builders....................................... 297.75 ROYAL SPIKE (150-249 SPIKE CREDITS) Jack Kousma...............Kousma Insulation................................... 231.00 Chris Majzun Jr. .........Majzun Construction............................... 224.00 Bill Perritt....................Perritt Building Co................................... 220.50 Bucky Kopf..................Kopf Construction Corp......................... 189.50 Randy K. Strauss........Strauss Construction............................... 174.50 Bill Comerford............Hovey Kaiser Insurance Associates...... 173.00 Jeff Hensley.................Lake Star Building & Remodeling......... 158.75 RED SPIKE (100-149 SPIKE CREDITS) Tom Lahetta................Tom Lahetta Builders.............................. 132.00 Chris Majzun Sr..........Majzun Construction............................... 101.00 GREEN SPIKE (50-99 SPIKE CREDITS) Patrick Shenigo...........ShenCon Construction, LLC.................. 94.50 Thomas Caruso...........Caruso’s Cabinets.................................... 91.75 Tom Sear......................Ryan Homes............................................. 89.75 Mike Lapos..................Lapos Construction................................. 74.00 Tim Conrad.................Graves Lumber......................................... 67.00
Chris Mead..................Maloney & Novotny, LLC...................... 63.50 Aaron Kalizewski.......Grande Maison Construction................. 53.50 Sara Garwood.............BCT Alarm Services................................. 51.50 Ray Allen Thom..........Thom Concrete ........................................ 50.00 LIFE SPIKE (25-49 SPIKE CREDITS) Jason Scott...................North Star Builders.................................. 35.50 Steve Schafer...............Schafer Development.............................. 30.50 Jeremy Vorndran........84 Lumber................................................. 29.50 BLUE SPIKE (6-24 SPIKE CREDITS) Liz Schneider..............Dollar Bank............................................... 18.50 Ken Cassell..................Cassell Construction................................ 13.50 Jason Higgins..............Sunnyside Chevrolet............................... 14.00 Michelle Nowlin.........First Federal Savings of Lorain.............. 10.50 Tom Ostrander............84 Lumber Co........................................... 10.00 Tami Lanphere............Town Money Saver.................................. 10.00 Jeff Lugar.....................ABC Supply Co........................................ 9.0 Keith Martin................MBD Homes............................................. 9.0
Our SPIKES are Our FOUNDATION
Single-Family Home Size Continues to Trend Down By Robert Dietz After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the start of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, including growth for townhouses, typical new home size is expected to decline. According to first quarter 2017 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was slightly lower at 2,389 square feet. Average (mean) square footage for new single-family homes declined to 2,628 square feet. On a less volatile one-year moving average, the recent trend of declines in new home size can be seen on the graph above, although current readings remain elevated. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,624 square feet, while the median size is 14% higher at 2,402 square feet. The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit june 2017
constraints, return to the housing market in relatively greater proportions. This pattern was exacerbated during the current business cycle due to market weakness among first-time homebuyers. But the recent declines in size indicate that this part of the cycle has ended and size will trend lower as builders add more entry-level homes into inventory. In contrast to single-family patterns, new multifamily apartment size is down compared to the pre-recession period. This is due to the weak forsale multifamily market and strength for rental demand
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AD&C Financing Standards Continue to Ease Over the first quarter of 2017, builders and developers reported easing credit conditions for acquisition, development, and singlefamily construction (AD&C) loans and the pace of easing quickened. Historically, results from the NAHB’s AD&C Financing Survey have tracked quarterly changes in bank-held residential construction loans.
The overall net tightening index based on the AD&C Financing Survey was -25.0 in the first quarter of 2017. The index is constructed so that negative numbers indicate easing of credit and positive one’s signal credit tightening. Compared to an index value of -7.3 in the fourth quarter of 2016 and -13.3 one year ago, credit standards on AD&C lending have eased.
To date, the index based on the AD&C Financing Survey has tracked quarterly changes in bank-held residential construction loans. In the figure above, the index (blue line) is flipped so that negative values mean net tightening and positive values indicate net easing. The red bars are the quarterly percentage change in residential construction loans held by FDIC-insured banks. The FDIC did not begin to collect data on residential construction loans from banks until 2007.
As shown by the figure above, declines in residential construction loans coincided with a tightening of credit standards and the pace of tightening lessened as the contraction in residential construction loan volume began to shrink. Similarly, eased lending standards have coincided with The pace of easing over the quarter took place across all forms of AD&C growth in the volume of residential construction loans held at banks. The loans with the largest changes occurring on loans for land development latest index reading suggests that the stock of residential construction and single-family construction. Similarly, credit standards on each of loans continued to grow over the first quarter of 2017. land acquisition, land development, and single-family construction loans eased over the past year as well, with standards on land development While the two series track each other, some features are important to loans recording the largest change in net easing. point out. First, the NAHB’s AD&C Financing Survey documents trends in originations while FDIC data refers to outstanding loans. Second while the history includes one economic cycle, it is still a short time series. Third, the graph suggests some disagreement around the inflection points of loan growth. In 2007, the index indicated that standards were tightening on net while the stock of loans was growing, and in 2012, the index signaled net easing but the stock of loans was still falling. This may be a benign characteristic or it may reflect a lag between when builders and developers believe credit standards have “flipped” and when the change in credit standards is reflected in the growth of the loan stock.
Results from a previous iteration of the Survey found that commercial banks remain the primary source of credit for AD&C by a wide margin. In the fourth quarter of 2016, 89 percent said commercial banks were the primary source of loans for land development, 84% for single-family speculative construction, 80% for land acquisition and 79% for singlefamily pre-sold construction.
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june 2017
Come BUILD With Us!
MARKETING GUIDE 2017
Build a customized marketing plan with this complete guide to North Coast BIA sponsorships, events and activities. ncbia.com North Coast Building Industry Association 5201 Waterford Dr., Sheffield Village, OH 44035 (440) 934-1090
2017 NCBIA Marketing Opportunity Guide - Come Build With Us American Flag Sponsorship - sponsor the flag that flies in front of the North Coast BIA Offices $150 - Your company will be recognized & thanked on all NCBIA Media outlets. BUILDER Newsletter - Monthly 4-color, online publication (print upon request) (based on 12 month commitment) o See separate Rate Card for ad sizes, prices and specifications TOUCH Program (based on 12 month commitment) o Only 1 spot remaining - Your company logo will appear on over 4,000 touches to our members each year - (letters, postcards, emails sent monthly) - $600 Membership Directory - Quarterly online publication (print upon request) (based on 12 month commitment) o See separate rate card for ad sizes and specifications Enhanced Online & Mobile Membership Directory Listing (based on 12 month commitment) Company Logo linked to your website o Enhanced Listing $100 Home and Remodeling Show - 2018 Dates and Location to be determined o Presenting Sponsor - $1,000 - Sponsors the entire event. Local radio station(s) will be broadcasting live at the event. This sponsorship level includes one 10-minute, on air interview, mic time during the event, 4 presenter sessions, mentions on the pre-show announcements, booth space, signage at the event, logo and note in BUILDER newsletter on the event photo page. o Supporting Sponsor - $500 - (with purchase of a booth) -- Local radio will be broadcasting live at the event. This sponsorship level includes one 10-minute interview, 2 presenter sessions, signage at the event, logo and note in BUILDER newsletter on the event photo page. o Patron Sponsor - $250 - (with purchase of a booth) -- Local radio will be broadcasting live at the event. This sponsorship level includes one 10-minute interview, logo and note in BUILDER newsletter on event photo page. General Membership Meetings - 3 general meetings per year - Your logo on Registration; promotion in BIA Media in print & online o Two Remaining Meetings (June and October) $280 o June 2 (Membership Cookout) $150 o October 18 (Election Night) $150 Sales & Marketing Committee Educational Offerings - Scheduled throughout the year; promotion in BIA Media in print & online o SMC Educational Offering Sponsor $50 Young Professionals Committee Social Events - Scheduled throughout the year; promotion in BIA Media in print & online o YP Social Event Sponsor $50 **All pricing subject to change without notice.
Company Name: __________________________________________ Contact: ________________________________________________ email address/phone: ______________________________________
2017 NCBIA Marketing Opportunity Guide - Come Build With Us Virtual Parade of Homes - online 24/7 (based on 12 month commitment) o Grand Sponsor $1,000 o Sustaining Sponsor o Home Sponsor $500 o Patron Sponsor
$250 $150
Golf Classic - August 4, 2017 - Sweetbriar Golf Course o Presenting Sponsors (1-sold) $1,500 o Breakfast Sponsor $300 o Hole-in-One Sponsor $1,300 o Photo Sponsorship (1-sold) $300 o Golf Cart Sponsor $1,000 o Skill Prize Sponsors (4 available) $250 each o Dinner Sponsors $550 o “Pink” Ball Sponsor $200 o Awards Sponsor $500 o On-Course Sponsors $150 o Hors d’oeuvres Sponsor $500 Clambake Committee - October 7, 2017 o Presenting Sponsors o Raffle Board Sponsors (2 available) o Patron Sponsors
$599 $199 $99
Sponsor this event NOW and HOLD 2016 Pricing for YOUR Company!
Economic Forecast Conference - November 2, 2017 - Four Associations in ONE Location o Table Top Display (includes 1 dinner) $400 Best of Ohio - Statewide Award Program o Supporter of OHBA Best of Ohio Homes Awards $500 Includes: Your company logo on signage and acknowledgment of your company in front of industry peers; your logo on the OHBA web page --ohiohba.com; your logo in all Best of Ohio display signage at OHBA Fall Board Meetings; your logo in the opening slides during the Awards Banquet. o Bronze Sponsors of OHBA Best of Ohio Homes Awards $1,000 Includes: All the benefits described in Supporter package PLUS inclusion of your logo in no fewer than three Best of Ohio Homes Awards promotional emails to industry leaders; your logo in a directmail promotion to thousands of members and supporters; become the named sponsors of a specific award category and enjoy a moment in the spotlight presenting the most prestigious award to the winner on stage. o Gold Sponsors of OHBA Best of Ohio Homes Awards $5,000 Includes: All the benefits described in Bronze Sponsor package PLUS: 2 tickets to the Best of Ohio Homes Awards Banquet during OHBA Fall Board meetings; logo recognition as a Gold Sponsor in all Best of Ohio Homes Awards Promotional materials including marketing, direct-mail promotions, slide shows, and on-site signage; prominent display of your logo on tent cards placed on dining tables at the Awards Banquet; Acknowledgment from the podium during the Awards Banquet and an opportunity to be scripted briefly into the Banquet program to address the attendees; you are invited to ramp up the fun by branding the events with custom glasses or a similar item; table center piece will include your company’s logo; “Best in Show” Awards Presenter; Receive a free exhibit tabletop and program advertising.
TOTAL SPONSORSHIP COMMITTMENT ____________________ Payment plans available upon request. Contact Judie at the NCBIA Office at (440) 934-1090 or judie@ncbia.com.
June Membership Cookout - June 2, 2017 - Pogie’s Clubhouse on Jefferson
Thanks to our Cookout Sponsors All Construction Services Dollar Bank First Federal of Lakewood
...and our Table Sponsors Luxury Heating & Air Conditioning and ReMax Crossroads Gary & Kelly Post
June Membership Cookout - June 2, 2017 - Pogie’s Clubhouse on Jefferson
We’re in the offering NAHB members up to $1,000 business.
2017 Chevrolet Low Cab Forward 3500HD
2017 Chevrolet Silverado 2500HD
2017 GMC Sierra 1500
2017 Chevrolet Express 2500 Cargo Van
NAHB MEMBERS BENEFIT FROM THESE SPECIAL OFFERS. Members of the National Association of Home Builders (NAHB) can now enjoy a private offer1 of up to $1,000 toward the purchase or lease of most new Chevrolet, Buick and GMC vehicles. Choose an eligible vehicle at your local dealer and present your NAHB proof of membership. You can add on incentives from the National Fleet Purchase Program2 and Business Choice3 to get the best value on vehicles that run your business. For private offer details, visit nahb.org/gm.
Example offer for NAHB members who are business owners purchasing a 2017 Chevrolet Express 2500 Cargo Van. Up to
$1,000 Private Offer1
Up to
+
$4,000
National Fleet Purchase Program (FVX)2
Up to
+
$1,200
Eligible Accessory Cash Allowance3,4
Up to
=
$6,200 In Potential Value
1 Private offer amount varies by model. Up to $500 offer for retail deliveries and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2016 and 2017 model year vehicles. Customer must take delivery by 1/2/18. Not compatible with other private offers. Not valid on prior purchases. Compatible with many current incentives. Incentives are subject to change without notice. Offer excludes Chevrolet Bolt, Camaro, Chevy SS, Corvette, Sonic, Spark, Trax, Volt, Buick Cascada, Lacrosse, Regal, Verano and all Cadillac vehicles. Additional GM models may be excluded from time to time at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers. Not compatible with some other offers. Take delivery by 12/31/17. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/non-business-related transportation purposes. Must provide proof of business. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties, and ordering, consult your dealer or visit gmbusinesschoice.com. Take delivery by 1/2/18. 4 Not eligible on associated accessories from third-party independent suppliers. Not available with some other offers. Take delivery by 1/2/18. See dealer for details. ©2017 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates, or licensors.