Builders Urge Congress to Restore Flow of Credit to Housing

Restoring the flow of acquisition, development and construction (AD&C) lending that has been choking off credit for home builders and impeding job growth took center stage today as 500 builders from across the country converged on Capitol Hill for the annual NAHB Legislative Conference.

"Our message to Congress is simple and straightforward," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Unless we resolve the ongoing credit problems for home builders – the vast majority who are small business owners who employ less than 10 workers – the industry will lose even more jobs, resulting in longer-term economic damage."

Also, NAHB members who were unable to attend the day-long conference participated by calling the Capitol Hill offices of their representatives and senators to deliver the same message.

In the current economic climate, lenders have basically stopped making AD&C loans and many are calling existing loans, even when the borrower's payments are current. Financial institutions are also requiring additional equity for existing loans, and are refusing to modify loans to give borrowers an opportunity to regroup.

Overly conservative appraisals are presenting further challenges by limiting home sales and refinancing opportunities and exacerbating pressure on outstanding mortgage and housing production loans. Lenders are often citing regulatory requirements or pressure from bank examiners to reduce AD&C loan exposure as the rationale for their actions.

"As a result of this regulatory pressure, the home building industry is having extreme difficulty in obtaining credit for viable projects," said Nielsen. "In short, the credit window seems to have been slammed shut for builders all over the country."

Builders visiting with their lawmakers urged their members of Congress to become an original cosponsor of legislation crafted by Rep. Gary Miller (R-Calif.). The measure proposes a legislative fix to specific instances of regulatory excess to allow the banking industry to restore lending for viable home building projects and discourage lenders from curtailing or calling construction loans where payments are current.

In 250 individual meetings with their representatives and senators, builders also called on Congress to enact comprehensive reform legislation regarding the future of government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac that ensures the federal government continues to provide a backstop for a reliable and adequate flow of affordable housing credit in all economic and financial conditions.

On the issue of tax reform, NAHB urged lawmakers to oppose any changes to the tax code that would increase taxes on home owners, renters or home builders. Curtailing or eliminating the mortgage interest deduction, the capital gains exclusion, the deduction for property taxes, the Low Income Housing Tax Credit and other housing tax incentives would further depress home prices, leaving countless more home owners owing more than their homes are worth and triggering a new wave of foreclosures.

Annual Upstate Housing Market Forecast Will Feature NAHB Chief Economist David Crowe

Each year your Home Builders Association of Greenville hosts the Upstate Housing Market Forecast Luncheon. This is one of our most popular and well-attended meetings. We invite an economics professional to brief the housing industry about expectations in the housing market for the coming year. Since 2008 HBA members have relied on this meeting to help them plan their businesses for the coming year, and the information presented has been especially valuable in the recent down economy.

This year we have invited NAHB’s Chief Economist, Dr. David Crowe, to be our speaker. Dr. Crowe is already expressing optimism about our local market, so you don’t want to miss what he will have to say.

To Register for the Upstate Housing Market Forecast, click here.

About David Crowe:

David Crowe is Chief Economist and Senior Vice President at the National Association of Home Builders (NAHB). Dr. Crowe is responsible for NAHB’s forecast of housing and economic trends, survey research and analysis of the home building industry and consumer preferences as well as microeconomic analysis of government policies that affect housing.

Dr. Crowe is also responsible for the development and implementation of an innovative model of the local economic impact and fiscal cost of new home construction, which has estimated the net impact of new housing in over 500 local markets. Past research has concentrated on home ownership trends, tax issues, demographics, government mortgage insurance, local land use ordinance impacts and the impacts of housing on local economies.

Before becoming NAHB’s Chief Economist, Dr. Crowe was NAHB’s Senior Vice President for Regulatory and Housing Policy. Prior to NAHB, Dr. Crowe was Deputy Director of the Division of Housing and Demographic Analysis at the U.S. Department of Housing and Urban Development.

He has served on federal advisory committees to the Census Bureau and to the U.S. Department of Housing and Urban Development.

Dr. Crowe holds a PhD in Economics from the University of Kentucky.

Learn how to design and build with SIPs at the SIPA Annual Meeting in Greenville

Builders and architects interested in improving the energy efficiency of homes and commercial buildings can learn about structural insulated panel (SIP) construction with free educational seminars offered by the Structural Insulated Panel Association, March 23, 2011 in Greenville, South Carolina.

SIPs are a prefabricated panelized building system composed of a core of insulating foam between two structural facings, such as oriented strand board (OSB). Building with SIPs can cut home energy use by 50 percent or more when combined with other energy-efficient systems. SIPs also help builders reduce framing time and labor costs.

Two seminars will be offered the morning of March 23 at the Hyatt Regency hotel at 220 N Main Street in Greenville.

SIP Builder Training
9:30am – 12:30pm
FREE
The SIP Builder Training course will be taught by Al Cobb, an experienced SIP installer and Director of the SIPschool, the only SIP-specific training facility in the U.S.

Introduction to SIP Design
9:30am – 10:30am
FREE – AIA CES credits available
Don Jahnke of Energy Panel Structures will lead the Introduction to SIP Design course. Jahnke is an experienced SIP builder and certified HERS rater.

Attendees are encouraged to register in advance of the seminars at www.sips.org.

About SIPA
The Structural Insulated Panel Association (SIPA) is a non-profit association representing manufacturers, suppliers, dealer/distributors, design professionals, and builders committed to providing quality structural insulated panels for all segments of the construction industry. Learn more at www.sips.org.

Greenville in the top 100 markets for remodeling

Greenville South Carolina is ranked 82 in the Top 100 Markets list for remodeling, according to Remodeling magazine. The Top 100 Markets list is based on the Residential Remodeling Index, a metric developed by Hanley Wood Market Intelligence. The index measures the overall level of remodeling activity in 366 metropolitan statistical areas nationwide.

Also making the top 100 are Charlotte (8), Columbia (39), Atlanta (40), Augusta (62), and Charleston (76).

To read the Top 100 Markets article in Remodeling, click here.

Rasmussen: Just 44 Percent Expect Their Homes to be Worth More in Five Years

Homeowners are more pessimistic about the short-term housing market, but now fewer than half the nation's homeowners expect the value of their homes to go up in the next five years.
The latest Rasmussen Reports national telephone survey of 720 Homeowners shows that just 19 percent of homeowners believe their home's value will go up over the next year, down slightly from last month. But 30 percent expect its value to go down in that time, tying the highest level of pessimism in two years of surveying. Roughly half (49 percent) think their home's value will remain about the same over the next 12 months as it is now.

Feelings about further down the road are getting gloomier, too. Only 44 percent believe their home's value will go up in the next five years. That's down six points from last month and is just three points above the lowest level measured in almost two years. In 2010, the number of homeowners who expected values to increase in five years ranged from a low of 41 percent in August to a high of 55 percent in April.

Sixteen percent now expect the value of their home to go down in the next five years, the second-highest finding in two years. Thirty-three percent predict their home's value will remain about the same.

The survey of 720 Homeowners was conducted on March 15-16, 2011 by Rasmussen Reports. The margin of sampling error is +/- 4 percentage points with a 95 percent level of confidence.

To read the entire report, click here.

Builders Support Five-Year Extension of National Flood Insurance Program

The National Association of Home Builders (NAHB) today voiced strong support for congressional efforts to extend the National Flood Insurance Program (NFIP) for an additional five years to provide ongoing flood insurance protection for property owners and ensure the nation's real estate markets operate smoothly and without delay.

Testifying before the House Financial Services Subcommittee on Housing and Community Opportunity, NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla., said that the home building industry depends upon the NFIP to remain available, affordable and financially sound.

"A strong, viable national flood insurance program helps ensure the members of the housing industry can continue to provide safe, decent and affordable housing to consumers," said Rutenberg. "We are pleased to see the subcommittee propose a five-year extension of this important program."

The federally-backed flood insurance program suffered unprecedented losses stemming from the devastating 2004 and 2005 hurricane seasons, with combined claims from these two years exceeding the total amount paid during the previous 37-year existence of the NFIP program.

As Congress moves to reform the NFIP to ensure its financial stability, Rutenberg urged lawmakers to proceed with care, noting that it is not simply about flood insurance premiums and payouts, but also a comprehensive program that guides future development and mitigates against future loss.

"While a financially-stable NFIP is in all of our interests, the steps that Congress takes to ensure financial stability have the potential to greatly impact housing affordability and the ability of local communities to exercise control over their growth and development options," he said.

During the past several years, the NFIP experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain flood insurance for a mortgage. In other instances, builders were forced to stop or delay construction on new homes due to the lack of flood insurance approval, adding unneeded delays and job losses.

To improve the solvency of the program and its attractiveness to potential policyholders, NAHB supports a number of reforms designed to allow the Federal Emergency Management Agency (FEMA) and the NFIP to better adapt to changes in risk, inflation and the marketplace:

• Increasing coverage limits to better reflect replacement costs would provide more assurances that the legitimate losses will be covered and benefit program solvency by generating increased premiums.
• Creating a more expansive "deluxe" flood insurance option, or a menu of insurance options from which policyholders could pick and choose, could provide additional home owner benefits while aiding program solvency.
• Raising the minimum deductible for paid claims would provide a strong incentive for home owners to mitigate and protect their homes, thereby reducing potential future losses to the NFIP.
  

Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage.

More than 20,000 communities nationwide participate in the insurance program, which currently covers about 5.5 million policyholders.

Upstate sees 6,600 new jobs and $1.85 Billion in Capital Investments in 2010

The Upstate SC Alliance has released its year-end results for 2010, including more than $1.85 billion dollars in planned capital investments and the addition of more than 6,600 new jobs for the Upstate region. In 2010, the S.C. Department of Commerce reported 20,453 new jobs recruited along with $4.1 billion in capital investment.

"We've forged a compelling strategy that has generated substantial benefits for our 10-county area," said Upstate SC Alliance President/CEO Hal Johnson. "This performance demonstrates the success of teamwork among our private and public partners in marketing the Upstate to a global audience."

In 2010, Upstate SC Alliance was part of the team, led by the Greenville-Spartanburg International Airport, that successfully recruited Southwest Airlines - a decision considered a "game changer" for the Upstate economy. With the first flights scheduled to arrive later this month, airport officials say the impact of Southwest could be over $150 million to the Upstate area.

You can read the complete Upstate SC Alliance 2010 report by clicking here.