Congratulations, Tim O’Brien Homes!

May 20, 2013 By Leave a Comment

Wisconsin home builder Tim O’Brien Homes was recognized in this month’s issue of Builder Magazine; making it into the rankings among the top 200 home builders in the country. Tim O’Brien, which was not in the ranks in 2011, made its debut at 167th. The ranking is based upon the number of home closings during the calendar year. During 2012, according to the report, Tim O’Brien Homes closed 124 new home sales. Tim O’Brien Homes is headquartered in Pewaukee, with offices in Madison.

The only other builder with a Wisconsin presence on the list is Illinois-based William Ryan Homes. William Ryan ranked 132nd on the list of volume builders, with 204 closings. In 2011, William Ryan Homes ranked 114th.

Filed Under: Executive Vice President, Industry News

Reasons You Should be Building Your New Home Now

April 4, 2013 By Leave a Comment
osb-pricing

1.  Housing Market is Stable again

Wisconsin has shown double digit gains in sales for 20 months straight per WRA statistics. Even the average sale price has been making small steady increases. https://www.wra.org/HSRJanuary2013/

2.  Lumber prices are climbing out of control.  

Prices on OSB have shot through the roof (literally) One look at this chart below shows you all you need to know.

 

 

 

 

 

3.  Other construction prices are fast on the rise

2×4′s have risen sharply since last year, as well as drywall which has increased at roughly $900 per home.  Asphalt shingles as well as masonry have shown modest increases as well.  What this means is pricing on new construction is going up and even new spec homes are going to cost more that ones that are currently on the market.  Expect to see less price flexibility and discounts from builders.

4.  Interest rates have climbed

Believe it or not interest rates have jumped.  About 2 weeks ago they went up a 1/4 point, (no big deal right?)  but then followed up with more volatility the following week.  Our historic low interest rate is probably a thing of the past but the current rate is still incredible and this is more proof that they are not going to last.  Especially if you are looking to build you should be securing your home as soon as possible before the rates jump again.  If you were hoping to hit the rock bottom, sorry, you are already too late.

Data for this Date Range

 
Feb. 14, 2013 3.53%
Feb. 7, 2013 3.53%
Jan. 31, 2013 3.53%
Jan. 24, 2013 3.42%

 

 
Jan. 17, 2013 3.38%
Jan. 10, 2013 3.40%
Jan. 3, 2013 3.34%

5.  Lot availability has dwindled

Not to long ago we were discussing a over supply of lots.  To some extent that is true in fringe and undesirable areas.  However, the reverse is true in solid growing markets.  The majority of good inventory has been gobbled up by savvy home buyers and builders looking for good speculation buys.  This problem is only going to get worse and worse over time since it can take years to replace developments.  This is going to push lot costs back up as demand is far greater than supply.  Developers are still struggling with obtaining financing on projects so many viable options remain shelved.  Also municipalities are struggling with approvals as many have not worked on new development if excess of 5 years so everyone is starting over in that regard.  There already is a demand for new lots for sale in premier areas.

6. Trading up is still beneficial

You may not fetch top dollar for your existing home but if you are trading up to a larger home you are still buying a great prices and can offset your loss plus some.  The longer you wait, however, the less of a gap there is due to rising prices and interest rates.

7.  Construction labor

This is a scary topic for builders as well.  As we all know many very talented tradesmen left the industry during the housing decline.  Carpenters both rough and finish, masons, even electricians and plumbers.  These are types of individuals that you cannot replace quickly or easily.  They have a wealth of knowledge and certain physical skill set and passed down knowledge that you cannot easily replicate.  Added to that is that the majority of high school graduates do not have as much interest in the trades and want to jump into college looking for a cushy desk job after they graduate.  (even though they there is a nearly 50% unemployment rate for those individuals)  We as an industry need to do a better job identifying individuals who are good candidates for the trades and show them that it is a good, well paying, rewarding job.

If we cannot get good new tradesman, it is only going to push the labor costs up for the experienced, well qualified individuals.  They are also going to have to hire more inexperienced people and mentor them up.  I could less smaller framing crews and more, larger carpentry outfits with multiple crews and one head foreman to meet the expanding demand.

8.  Lower Cost of Ownership

New construction is 30 – 40% more efficient than existing homes per a CNNMoney article. Plus there is no replacement cost for many years that you will have on a existing home.  In the Midwest the average savings is $462 per home.  If you have a Focus on Energy Certified home you can save well over $1160 over a code built home.  In the same article the average roof replacement was $18,000 and the average furnace replacement was around $3000.

9.  New Construction commands higher premiums among buyers

The CNN Money article state new structures tend 10 – 15% more than a similar used home.

10. A 2012 poll by BDX reported the top 10 considerations for a new home.  The following were factors were listed by buyers in terms of importance, most of which lean towards new construction:

                            Quality of Construction

                            Safer neighborhood

                            Better floor plan

                            Lower maintenance costs

                            Architecture

                            Ability to Customize

11.  Lack of good inventory

The existing home market inventory has dropped dramatically in the past 4-6 months and many reports out there is that there is not enough good homes available for sale.  Add to that companies coming in and purchasing homes for rental usage and there is definitely a shortage in good listings.  Agents have shifted back to taking listings and soliciting for properties to add to their inventory.

Filed Under: Industry News, Member Spotlight

UDC to meet April 3 on wall bracing

March 15, 2013 By Leave a Comment

More movement to report on the issue of current Wisconsin code language on wall bracing.

We have been informed by the Department of Safety and Professional Services (DSPS) that the Uniform Dwelling Code Council will be meeting on April 3 to discuss a major revision that WBA has offered to the current language on wall bracing.

This meeting continues to move the ball forward to address a major concern of members from across the state.  After the UDC Council meets to discuss the revisions we are hopeful that the next step will be the issuing of revised code language by DSPS to correct the current code.

WBA President Craig Rakowski will be on hand for the meeting along with a consultant who has been retained by WBA on the technical nature of the code change in addition to WBA staff professionals.

Finally, WBA has submitted the names of some WBA members who are interested in serving as members of the UDC Council, with any luck there may be some additional familiar faces as members of the UDC Council once they get together in April.

Filed Under: Advocacy, Industry News

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March 12, 2013 By Leave a Comment

Last week Representative John Jagler and Senator Paul Farrow turned in their bill draft to require the Uniform Dwelling Code (UDC) Council to review the UDC every six years to be formally introduced as companion bills in both houses of the legislature.

We are happy to report that 30 members of the legislature from both political parties signed on to coauthor the bill. This is a very strong showing of support that will be highlighted once the bills are introduced and have committee hearings.

Looking back a bit, the last bill to have more cosponsors that WBA was supporting was the Right to Cure bill during the 2005-2006 session that had the bipartisan support of 42 cosponsors.

Thank you for your efforts communicating to members of the legislature using the WBA Advocacy Action Network.  This is the best proof yet that legislators are listening to your support via e-mails from the Advocacy Action Network and with personal meetings on the matter during Business Day in Madison 2013.

Filed Under: Advocacy, Industry News

NAHB Member Advantage Program-Sign up Today!

February 28, 2013 By Leave a Comment

Your membership gives you access to a valuable discount program through the National Association of Home Builders (NAHB) called Member Advantage.  Discounts are available on products and services that you likely already use in your business from over a dozen national companies. 

In the market for a new vehicle?  General Motors offers a $500 exclusive private discount on most Buick, Chevrolet, and GMC vehicles.  

Need to upgrade your office?  Dell and Hewlett Packard both offer discounts on computers.  TransFirst (formerly Solveras) offers complete payment processing solutions with proven savings.  Office Depot offers a 10% discount on all delivery orders as well as free shipping on orders of $50 or more. 

Going on vacation?  Hertz, Avis, and Budget all offer discounts on rental cars.  Wyndham Hotel Group offers 20% off the best available rate at over 7,000 hotels and resorts and Endless Vacation Rentals offers a 10% discount on over 200,000 vacation rentals worldwide.

Not going on vacation?  Here’s how you can find savings in other areas of your business so that you can go somewhere fun.  FedEx offers discounts on shipping services.  Liberty Mutual offers discounts on auto and home insurance.  Omaha Steaks, FTD, and Lowe’s also offer discounts on their products and services.

A complete list of participating companies is available on NAHB’s website, www.nahb.org/ma, along with information on how to take advantage of these great discounts.

Filed Under: Business Tips, Industry News, NAHB

WI DNR: General permit now available for small projects impacting wetlands

October 9, 2012 By Leave a Comment

 

A general permit that streamlines and shortens the wetland permitting process for some residential, commercial and industrial projects impacting wetlands is now in effect, state wetland officials say.

The statewide general permit — or “GP” — is the first of its kind required under a new law passed earlier this year by state lawmakers. It enables people who have a project resulting in the unavoidable filling of up to 10,000 square feet of wetland — just under one-quarter of an acre — to get their permit decision more quickly if the project meets the standards and conditions in the general permit, according to Cami Peterson, Department of Natural Resources wetland policy coordinator.

“The general permit simplifies the permit process for projects that can’t avoid small amounts of wetland fill,” she says. “By avoiding and minimizing wetland impacts, and designing their project to meet the GP standards and conditions, a property owner can qualify and get their permit decision within 30 days.”

Previously, all landowners wanting to pursue projects that involve wetland fill were required to seek an individual permit and lengthier environmental review.

The general permit for smaller projects identifies the location, design, and construction standards and other conditions any project must meet to qualify for the general permit, and to ensure that minimal environmental effects occur. The general permit is valid statewide for 5 years. When property owners’ projects are covered under the general permit, DNR is required to issue a decision within 30 days.

Projects that involve more than 10,000 square feet of wetland fill or do not meet the GP standards and conditions continue to require a wetland individual permit, which has a longer process time, a higher permit fee, and require wetland mitigation and a higher level of environmental review, Peterson says.

The general permit, more information about eligibility for the permit and how to apply for coverage can be found by searching the DNR website for wetland permits.

FOR MORE INFORMATION CONTACT: Cami Peterson (608) 261-6400 at the DNR

Filed Under: Government Affairs, Industry News

Minnesota Creates a New Contractor Registration Program

July 23, 2012 By Leave a Comment

If your thinking of building in Minnesota there is now a new contractor registration program that will make it easier to become a licensed contractor.  Recently, the Minnesota Department of Labor and Industry has put in place this new construction contractor registration pilot project.  This new project will have been in effect since  July 1, 2012 under the Minn. Stat. 181.723.

The Minnesota Department of Labor and Industry stated, “Beginning July 15, 2012, building construction contractors not already licensed by the Department of Labor and Industry can begin registering by going to www.dli.mn.gov/register. We have created what we hope is a short and simple two page registration form that can be filled out quickly by construction contractors.”

The next step of this project will be the evaluation of the program itself.  If a success, we will hope to see other states, like Wisconsin, incorporating easy procedures for registration as well.

Filed Under: Industry News

3M’s LeadCheck is Approved In Wisconsin

July 9, 2012 By Leave a Comment

Recently, Wisconsin’s Department of Health Services (DHS) shared big news with 3M for the procedures taken while renovating.  3M has been working on receiving an approval of their LeadCheck for use by Lead Safe Renovators when working on projects within the scope of the EPA’s Renovation, Repair, & Painting (RRP) rule.  This new test can be a good thing for all of Wisconsin’s renovators.  Without this test a painted surface in a pre-1978 home or child occupied facility renovators would need to follow the extra lead-safe work requirements.  Although, now renovators can use the LeadCheck themselves and go by the slogan, “If it’s red, there’s lead’.

This can be a great thing for renovators, but there are some drawbacks.  The two concerns with this test are time and liability.  By doing the test yourself it will require a great deal of your own time.  This large amount of time is devoted to the testing of every coated surface that will be disturbed during a renovation.  When the testing has concluded the next step of the procedure is compiling the information into a lead testing report and delivering it to the client within 10 days of the completed renovation.  With the process of the testing complete there is still a concern of the heightened personal liability with doing your own testing. There isn’t only a chance of improper use of the test, but there is also a 5% chance that the LeadCheck will produce an inaccurate reading.  In all, this means that even though LeadCheck can be a handy tool for renovators, it also comes with its risks.

Check out more: LeadCheck

Filed Under: Industry News

A War Over Skilled Workers in Arizona

June 20, 2012 By Leave a Comment

We all know Arizona received one of the greatest hits during the housing industry downturn after the its peak in 2006 .  This area had an immense amount of home inventory with no buyers in site.  Once the prices repeatedly declined, investors rushed to purchase the homes bringing the home inventory down dramatically.  This in turn has prompted builders to start construction on new homes.  Good news right? Not entirely for the builders.  Preceding the housing downturn many skilled workers have left states, like Arizona, where work seemed almost impossible to acquire.  Now with the demand for new homes rising subcontractors are scrambling for these once abundant skilled workers.  Some companies are so desperate they are approaching workers on the job site and offering them a higher pay.  In Arizona the average hourly wage rate for construction workers has increased from $19.53 to $20.72.  What will come next is unknown, but everyone is hoping the demand continues.

Read the entire article: Arizona’s Homebuilding Revival Sparks Bidding Wars For Workers

Filed Under: Industry News

Report: Housing Market Recovery Has Officially Begun

May 17, 2012 By Leave a Comment
Photo by Annie Rubens

Reprinted from TIME.com by Christopher Matthews

It’s been a rough five and a half years for the American homeowner. Since the housing bubble reached its peak in early 2007, Americans have watched helplessly as $7 trillion in housing wealth evaporated. At many points during this ugly plunge, pundits have erroneously called the “bottom” of the housing market – saying things could finally get no worse. And then they got worse.

The American public can therefore be forgiven for eyeing the latest round of predictions that the market has turned a corner with skepticism.  Of course, the housing market will heal at some point, so perhaps the boy is crying about an actual wolf this time.

The best reason to shed your hard-won dubiousness is a report issued today by the The Demand Institute, a think tank jointly operated by the well-respected and non-partisan research organizations The Conference Board and Nielsen. The fifty-page study is definitively labeling 2012 the year of the housing bottom. It says:

“The double-digit increases in U.S. housing prices over the first half of the past decade proved unsustainable. But the freefall is over. The point has been reached where housing prices will start to climb, albeit at single-digit rates in most markets over the next five years.”

The report argues that the recovery will come in two stages. The first will be driven by rental demand. Over the past several years plummeting home prices have been coupled with rising rents, and this dynamic has made landlording  very profitable. This is evidenced by the recent rebound of the apartment-building business. According to the report, “The only segment of the home building sector now showing clear signs of recovery is multifamily housing,” noting that housing starts for multi-family units have increased 54 percent in 2011 over the previous year.

The Demand Institute also believes the dynamics buoying the multifamily market — rising rents, low interest rates, and cheap real estate — are starting to boost the single-family housing sector as well: “Investors attracted by high yields are buying up single-family properties that can generate rental income.”

So who are these investors? Lousie Keely, Chief Research Officer at The Demand Institute, says that there are range of different companies and individuals who are poised to take advantage of the situation. “In some regions of the country, rental management companies are moving into single-family homes,” she says. Though managing single-family homes isn’t as efficient as managing an apartment building, current prices are making the strategy attractive. Buyers will also include individuals looking for higher yields on their savings as well as investment vehicles like real estate investment trusts.

The second stage of the recovery will occur after this investor intervention causes prices to stabilize. Price stabilization is crucial for banks to loosen their stingy lending standards. When home prices are falling, it’s bad business to issue mortgages to all but the most credit-worthy borrowers. But in an environment of even slowly appreciating real estate, banks can afford to offer more generous terms.

Perhaps most crucial to The Demand Institute’s vision for a recovering housing market is evidence that Americans are still strongly attracted to the idea of homeownership. “The American Dream has not gone away,” says Keely, adding:

“The majority of Americans think that owning a home is a good investment; the majority of people who plan to move in the next six years plan to buy a house even if they’re not currently homeowners. There are several pieces of evidence that lead us to believe that we’ll see a rise back to home ownership levels that we saw in the mid ’90s and early 2000s.”

Though American consumers have too much debt and probably won’t see their incomes rise in real terms in the next few years, Keely argues that homeownership is still an achievable goal if lending standards loosen and if consumers stay disciplined about paying down debt and saving.

There are of course caveats attached to these predictions. The report relies on Conference Board forecasts which call for slow but steady growth and a similarly gradual decline in the unemployment rate. If the situation in Europe were to worsen significantly, or some other unforeseen event were to shock the American economy, then these forecasts will turn out to have been too optimistic. But even with such stipulations, The Demand Institute’s report is one of the most comprehensive and substantive arguments we’ve seen yet that the housing market is nearing the light at the end of the tunnel.

Filed Under: Industry News
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