Friday, May 4, 2012

Jack Hough: Why U.S. house prices won't recover

An article by Jack Hough at opines that when taking into account the rate of inflation, U.S. house prices are at 1895 levels and will not return to pre-2008 levels.  He also reports that housing is still a good investment historically.

"But consider: After subtracting for inflation, prices are also back to 1986 levels. And 1955 levels. And 1895 levels.

"That’s because the natural rate of price appreciation for houses is zero after inflation. Prices will eventually stop falling. They’ll resume rising. But over the long term, they’re unlikely to resume rising faster than inflation.

"That’s why prospective buyers should stop focusing on the vague hope that house prices will jump from here and focus instead on the functional value houses provide for the money. In most markets, they provide enough of that to make buying a good deal."

Quality and Value Driving Growth in the Green Building Market

Energy efficiency efforts become commonplace in new construction and remodeling projects, while remodelers place high value on waste management and sustainable materials.

McGraw-Hill Construction, part of The McGraw-Hill Companies (NYSE: MHP), today released its latest SmartMarket Report: New and Remodeled Green Homes: Transforming the Residential Market at the National Association of Home Builders’ (NAHB) National Green Building Conference and Expo. The report includes McGraw-Hill Construction’s estimate that the green homes share of the construction market was 17% in 2011, equating to $17 billion, and expected to rise 29%-38% by 2016, potentially a $87–114 billion opportunity, based on the five-year forecast for overall residential construction.

The report reveals that two of the key factors driving this market growth are the fact that green homes are seen as having higher quality and that they save consumers money.

“In the current residential market, there is an enormous need to differentiate your homes for consumers,” says Harvey Bernstein, Vice President of Industry Insights and Alliances at McGraw-Hill Construction. “When builders are able to offer homes that not only are green, but also offer the combination of higher quality and better value, they have a major competitive edge over those building traditional homes.”

This report, produced by McGraw-Hill Construction in conjunction with the NAHB and Waste Management, is designed to provide key insights into product and market opportunities in the single-family home building and remodeling industries. It is backed by proprietary research surveys and the power of the McGraw-Hill Construction Dodge database.

“NAHB builder and remodeler members were surveyed on their green building practices, which allowed us to shine a light on the state of the green market in this new report,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “The results highlight the tremendous growth in green building, and the potential market opportunities that lie ahead. As more projects seek green certification, NAHB and the NAHB Research Center stand ready to meet the demands of this exciting and ever-changing market.”

Factors driving the growth in the green home building and remodeling market include:
  • Higher quality for both new home builders and remodelers. For those doing a high volume of green homes (at least 60% of the homes they build), its importance is magnified, with 90% who regard higher quality as an important trigger for building green, compared to 72% of builders overall. 
  • Customers are strongly value-driven—around two-thirds of builders and remodeler respondents state that customers request green homes or remodeling projects in order to lower their energy use or save money, more than twice any other factor. 
  • Higher first costs for building green are noted by a much lower percentage of builders as an obstacle now than they were reported in 2008.
The study also reveals the key practices and technologies taking over in the residential marketplace as a result of the shift toward green:
  • More than 80% report that energy efficiency is making today’s homes greener compared to two years ago. Use of energy-efficient features is pervasive in the market—the top practice by nearly all surveyed builders and remodelers, regardless of their level of green building activity.
  • Indoor air quality is growing in importance and focus for home builders. 60% of home builders believe that efforts to improve indoor air quality make homes greener than they were two years ago, and 95% of high volume home builders report including features that impact air quality.
  • More than half consider durable materials one of the most important features in their homes today. In particular, remodelers emphasize this key aspect of their projects. Durability and better materials are key reasons why green homes and remodeling projects are considered of higher quality.
“These findings confirm the shift we’ve seen in the market,” says Jim Halter, Vice President, Construction Solutions for Waste Management. “Builders and remodelers are placing more emphasis on energy efficiency, increases in sustainability focused waste management practices and more products made from post-consumer materials. These important factors are pushing our industry forward.”

The key findings from the study were presented by McGraw-Hill Construction on May 1 at a plenary session at NAHB’s National Green Building Conference and Expo in Nashville, Tenn., followed by a panel of industry experts discussing its impact on the market. For a copy of the report, visit:

The Mungo Companies receive Green Building Advocacy Award from NAHB

NAHB announced that The Mungo Companies has been awarded the Builder Advocate of the Year award in the Green Building Advocacy category.  The award was presented at the National Green Building Conference in Nashville last month.

Thursday, May 3, 2012

About "Builders for" emails from NAHB

HBA members have been receiving emails from NAHB in recent weeks titled "Builders for" followed by the name of a candidate for President of the United States.  The most recent email was from NAHB member Ron Jones on behalf of Builders for Obama.  Another this year came from Builders for Romney.

First, a little bit about membership in your Home Builders Association, just in case you are unsure.  As a member of the Home Builders Association of Greenville, you also become a member of the National Association of Home Builders and the Home Builders Association of South Carolina.  A portion of your dues are paid to the national and state organizations, which focus primarily on national and state government matters.

NAHB does not endorse nor otherwise support candidates for President of the United States.  It does support candidates for Congress through the national BuildPAC political action committee.

However, to insure that members are educated about candidates for the Office of President of the United States, NAHB initiated a program that allows "Builders for" groups, made up of HBA members, to send an email to HBA members around the country about their favorite candidate.  These emails are infrequent and informational.  NAHB has not sold your email address to any third party, including any political campaigns.  The "Builders for" emails are being sent by NAHB on behalf of HBA members who support a candidate for President.

You have the option of opting out of the "Builders for" emails without opting out of other e-communications from NAHB.

Eisenberg: on jobs and foreclosures

by Elliott Eisenberg, PhD.

Banks currently own 450,000 houses, 2 million are in foreclosure, and 1.7 million more have not had a mortgage payment made on them in 90 days. This adds up to 4.15 million houses. The problem is that the economy has lost 5.2 million jobs since the start of the recession in January '08. Absent those job losses, the foreclosure problem vanishes. That's why robust job growth is so critical.

Wednesday, May 2, 2012

CEOs rank South Carolina 7th best state in which to do business

Chief Executive magazine ranked South Carolina the seventh best state in which to do business, an improvement of one spot from the 2011 survey.

The top states include:

  1. Texas
  2. Florida
  3. North Carolina
  4. Tennessee
  5. Indiana
  6. Virginia
  7. South Carolina
The bottom states include:

   44. Connecticut
   45. New Jersey
   46. Michigan
   47. Massachusetts
   48. Illinois
   49. New York
   50. California

The survey asked 650 CEOs to rate states in the areas of tax, regulation, quality of work force, and living environment.  According to the report, most of the top 20 states are right-to-work states.

Business Insider: Tight lending standards are #1 reason housing recovering is slow

In a report by David Zervos of Jeffries & Co., the number one reason for the continued sluggishness in the U.S. Housing Market is tight lending standards.  Specifically, in addition to very stringent credit standards, Zervos cites the larger than normal spread between what bank's pay for funds and what they charge for home loans.

Read more at by clicking here.

Tuesday, May 1, 2012

Gallup: Homeownership rate now just 62 percent

A recent poll by Gallup, the national polling firm, found that the homeownership rate in the U.S. has sunk to just 62 percent, down from 73 percent in Gallup polls conducted in 2006 and 2007.  The poll asked respondents whether they own their own home.

At one time Presidents Clinton and Bush advanced initiatives to increase homeownership to 70 percent, but according to U.S. Census data, the actual homeownership rate peaked at 69.2 percent.

The Census Bureau puts the homeownership at 66.4 percent at the end of 2011.

Read more at by clicking here.

Monday, April 30, 2012

HBA Member Drop In set for May 31 at 2012 Southern Living Showcase Home

HBA of Greenville Past President Tom Dillard and the Dillard-Jones team will host a drop in for HBA members and guests on Thursday, May 31, at the 2012 Southern Living Showcase Home in River Reserve Phase Four. Mark your calendars and make plans to attend this special event for all members and guests of the HBA of Greenville. Watch this newsletter and the HBA website for details.

Click here to register.