Friday, September 13, 2013

NAHB: More Buyers Purchasing Homes Still Under Construction

In a recent Eye on Housing blog entry, NAHB's economists describe a significant shift in the marketplace whereby greater numbers of buyers are purchasing homes that are still under construction or not yet started versus newly completed homes that are part of a builder's inventory.

The experts attribute this emerging trend to several factors, including, for example, smaller inventories of completed homes (which have limited buyers' choices in that area) and also builder credit constraints that have led to a surge in construction-to-permanent financing. In any case, our economists note that the recent shift has been quite dramatic.

Whereas completed homes were half of all new-home sales in 2008, by mid-2013, that average had fallen to just 29 percent. In the same period, the share of homes sold but not yet started went from 21 percent of sales to 37 percent and the share of homes sold that were under construction went from less than a quarter of the total to more than one-third currently.

One likely explanation for what seems to be a long-term trend in favor of sales of unfinished homes is the rise in concentration of larger building companies, which can hold an inventory of models and available lots for buyers to choose from without having to risk building ready-to-occupy homes that might not fit buyers’ preferences.

Greenville housing market improves for 32 consecutive months

A total of 291 metropolitan areas across the country now qualify as improving housing markets, according to the National Association of Home Builders/First American Improving Markets Index (IMI) for September, released today. This reflects a gain of 44 markets from August and marks the index’s highest level since it was initiated two years ago.

The Greenville MSA, which includes Pickens, Laurens, and Greenville counties, has been included on the Improving Markets Index since June 2011, and has seen increases in permits, jobs, and home prices for 32 consecutive months, one of the longest consecutive stretches of improvement in the country.

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. In September, 242 housing markets retained their existing positions on the IMI while 49 new markets were added and five were dropped from the list. Recent additions include such geographically diverse locations as Macon, Ga.; St. Cloud, Minn.; Brownsville, Texas; Spokane, Wash.; and Milwaukee, Wis.

“Just over 80 percent of the 361 metros tracked by our index are showing consistent growth in three key measures of housing market strength – prices, permits and employment,” explained NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographic areas.”

“The dramatic increase in markets qualifying for the IMI in September was partly due to a recent improvement in the way that Freddie Mac measures home prices, which resulted in stronger gains than previously reported,” noted NAHB Chief Economist David Crowe. “Even so, the broadened list of metros on the IMI continues to demonstrate the slow but steady gains that individual housing markets are making to bolster the national outlook.”

“With every state now able to claim at least one county that’s part of an improving metro, and 23 states having charted at least one new entry in September alone, prospective home buyers have good reason to be encouraged by this news,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

A complete list of all 291 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in September, is available at

Builders: build a house for a customer who wants to burn it down

Home Builders, have you have wanted to build a house for a client who wants to burn it down?

The S.C. Fire Marshal's Office has requested a house plan of 1600 sf to 1800 sf.  They plan to use the plan for a request for proposals to build the house so that they can burn it  as a training tool.

If you are interested in assisting by furnishing the plan, contact Mark Nix.

New rules for E-Verify are effective September 9

The new Form I-9 document (expiration date March 31, 2016) used to verify the identity and work authorization of all new hires includes an optional entry line for employees to provide their email addresses. The voluntary electronic verification program, E-Verify, which can be used in addition to, but not replace the Form I-9 process, has a new data field that asks for the employee’s email address. When the employee provides an email address on Form I-9, employers who use E-Verify are required to enter it into E-Verify. In the event of an information mismatch, E-Verify will now send e-mail notifications to those employees. This new email notification does not replace the current process. Employers are still required to notify employees of the mismatch and their right to contest.

Effective Sept. 9, E-Verify has combined the Tentative Nonconfirmation (TNC) Notice and Referral Letter into the new Further Action Notice, which appears when an employee receives a TNC. The employer must select the language of the notice (English or Spanish), print and give the notice to the employee. The Further Action Notice explains the reason for the TNC and the employee’s right to contest it.

If the employee decides to contest the TNC, the employer must print and issue the new Referral Date Confirmation Notice that informs the employee of the date by which they must initiate contact Department of Homeland Security (DHS) or the Social Security Administration (SSA) to begin resolving the TNC. For employees who have provided email addresses, E-Verify will also provide an e-mail notice informing the employee of the date by which contact must be initiated with DHS or SSA to resolve the TNC.

When first accessing E-Verify after Sept. 9, 2013, E-Verify users must complete a short tutorial and knowledge check about these changes.

Wednesday, September 11, 2013

Remembering September 11

It has been 12 years since terrorists hijacked four airliners and launched an unprecedented attack on America.  Nearly 3,000 Americans were killed in one morning.  Please join your HBA staff today in remembering those who lost their lives, and the families they left behind.  Click here for a timeline of events on September 11, 2001.

Monday, September 9, 2013

GSA Business: South Carolina tied for second among states for business development

According to Area Development, a magazine specializing in site selection and facility planning, South Carolina and Georgia are ranked second in the country of top states for conducting business.  Texas ranks first.  Click here to read more at GSA Business.

NAHB: proposed 20 percent down rule eliminated

NAHB and home buyers across the land, six federal regulatory agencies on Aug. 28 released a revised proposed rule to implement the credit risk retention provisions of the Dodd-Frank Act. The proposed rule would eliminate a 20 percent downpayment requirement and other onerous underwriting criteria that NAHB opposed. In an official statement, NAHB Chairman Rick Judson said that “this proposed, updated rule is a positive step toward ensuring that creditworthy home buyers have a better chance at securing affordable mortgage loans.” The agencies will seek public comment for 60 days (NAHB will weigh in) before holding a final vote on the new rule

Frequently Asked Questions about the Affordable Care Act

UPDATE (September 9, 2013):
Any employer with at least one employee and $500,000 in annual revenue must notify all employeess by letter about the Affordable Care Act's health-care exchanges.  Failure to comply may result in fines up to $1,000 per day.  Click on the links below for important information about this requirement for employers.
Do not expose your company to a fine.  Comply with this employer mandate by informing your employees of their coverage option in the Health Insurance Marketplaces (Exchanges). 

About the Affordable Care Act
Originally scheduled for Jan. 1, 2014, the Employer Shared Responsibility provisions of the Affordable Care Act will now go into effect on Jan. 1, 2015. The White House announced the one-year postponement on July 2, 2013. Your HBA fought for this delay to give businesses more time to adjust to the new rules. In a letter to the Treasury Department, NAHB said "the employer community needs additional time to properly analyze their workforce and negotiate their plan designs. This is especially true for the small business community, which often lacks access to the human resources staff and technology available to larger businesses." The delay will provide employers additional time to plan and to adapt their employee health coverage policies to meet the still-to-be determined requirements of the law. The final rules regarding implementation have yet to be published, and it may be six months or more before the new rules are promulgated by the U.S. Treasury Department and the Internal Revenue Service (IRS).

Frequently Asked Questions:

Which employers are subject to the shared responsibility provisions?
All employers who employ at least 50 full-time employees, or who employ an equivalent combination amounting to 50 full-time positions of full- and part-time employees, are subject to the shared responsibility provisions.

A full-time employee position is defined as 30 hours per week. Employers with less than 50 full-time employees are not subject to the shared responsibility provisions.

Will subcontractors be counted as employees?

No. Independent contractors are not employees, and are not to be considered in the determination of the 50 full-time employee threshold.

Are employers required to offer their employees health insurance?

No, but large employers (50 employees or more) who do not offer health insurance coverage to their full-time employees will likely be subject to the shared responsibility penalty. To avoid the penalty, these employers must offer health insurance coverage to substantially all full-time employees (95% or more), but not part-time employees.

What is an Employer Shared Responsibility penalty?

It is a non-deductible excise tax that will be imposed after Jan. 1, 2015 on employers who do not offer affordable health care insurance with minimum coverage levels to full-time employees, and when at least one of their full-time employees receives a tax credit for purchasing coverage through an Affordable Insurance Exchange.

If one of my full-time employees declines my offered health insurance, and purchases coverage through an Affordable Insurance Exchange, will I be subject to the employer shared responsibility tax?

No. As long as you offer qualifying affordable health insurance, you will not be subject to the tax penalty.

What is the amount of the tax for employers who do not offer health insurance?

The tax payment (or penalty) is $2,000 for each full-time employee, minus 30 employees. An example: the calculation for 50 full-time employees would be 50-30 = 20 x $2,000 = a penalty of $40,000).

What qualifies as an affordable health care plan with minimum coverage levels?

Under safe harbor provisions, offered health insurance coverage is affordable if the cost to the employee does not exceed 9.5% of the yearly wages paid to the employee by the employer. The minimum coverage level is met by offering a group health plan or group health insurance coverage that is either:
  • A governmental plan
  • Any other plan or coverage offered in the small or large group market within a state
  • A grandfathered plan offered in the group market
I understand that a qualifying health insurance plan must also provide minimum value to avoid the penalty. What is “minimum value?”
A plan fails to provide "minimum value" if it pays for less than 60% of covered health care expenses. A minimum value calculator will be made available by both the IRS and the Department of Health and Human Services to assist employers in their calculations.

Is the health insurance plan that I currently offer to my full-time employees sufficient to avoid payment of the employer shared responsibility tax?

Most health insurance plans that existed on March 23, 2010 are eligible for grandfathered status, provided that the plan is not subsequently changed to:
  • Significantly reduce benefits or coverage
  • Raise co-insurance charges
  • Significantly raise co-payment charges
  • Significantly raise deductibles
  • Significantly increase the employee’s share of the premium
  • Decrease annual payment limits, or impose new limits
Where can I get more detailed information?

The IRS Question and Answer page will be an excellent resource once it has been updated. NAHB will monitor the progress of the proposed regulations, and will add information to this FAQ when it becomes available concerning the implementation of the Affordable Care Act components. We will also post a more definitive FAQ when the final regulations are published.

View the NAHB-submitted comments on the act, and the additional comments made by NAHB as a member of the Coalition to Promote Independent Entrepreneurs.