November 2022
Builder Confidence Declines for 10th Straight Month
In a further signal that rising interest rates and building material bottle- necks are weak- ening the housing market, builder sentiment fell for the 10th straight month in October and traffic of prospective buyers fell to its lowest level since 2012 (excluding the two-month period in the spring of 2020 at the beginning of the pandemic). Builder confidence in the market for newly built single-family homes dropped eight points in October to 38—half the level it was just six months ago—according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the lowest confidence reading since August 2012, with the exception of the onset of the pandemic in the spring of 2020. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/ Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Materials Prices See Slight Decline Led by a decline in softwood lumber and steel mill prices, overall building material prices fell in Sep- tember with the notable exception of ready-mix concrete, which continues to grow at a rapid clip. And while gypsum prices edged lower last month, they are up more than 20% over the past year. In tandem with a slowing housing market and economy, the prices of building materials decreased 0.3% in September (not seasonally adjusted) according to the latest Producer Price Index (PPI) report.
Builders' Show and DCW Just Keep Getting Better The opportunities for construction and design professionals continue to grow in conjunction with the 2023 Builders’ Show in Las Vegas with the addition of another co-dated wholesale buying event to Design & Construction Week (DCW). Las Vegas Market will co-date with DCW, which features the NAHB International Builders’ Show® (IBS) and the NKBA Kitchen & Bath Industry Show (KBIS). Las Vegas Market is the leading home furnishings and gift market in the western U.S. IBS takes place Jan. 31-Feb. 2, 2023. Register now. Newsletter Focuses on Workforce Development Is your association leading workforce development initiatives locally or planning for future events? Try the Workforce Development Champions Corner, a bi-monthly e-newsletter about promoting skilled trades. It provides workforce development advocates the latest resources, including marketing materials, activity ideas and notifications for future opportunities to connect with peers and share best practices. Complete the e-newsletter subscription form on nahb.org to subscribe.
New Independent Contractor Rule On Oct. 13, the U.S. Department of Labor (DOL) issued a proposed rule that will change the way DOL determines whether workers should be classified as employees or as independent contractors under the Fair Labor Standards Act (FLSA). If finalized, the proposal will replace the current standard, one that NAHB supports because it gives regulated employers and small businesses, including home builders and specialty trade contractors, a clearer and simpler federal test for determining worker status.
NAHB Webinars Look at IRA Impacts The Inflation Reduction Act (IRA) has spurred many questions within the home-building industry regarding the number of new energy tax incentives and updates to many tax provisions. NAHB has conducted two webinars about it. One looked broadly at how the IRA may affect housing. The second webinar focused on the IRA’s energy tax incentives. Watch replays of both webinars. home-building industry regarding the number of new energy tax incentives and updates to the many long-standing tax provisions it has created. NAHB has conducted two webinars to inform members of potential impacts of the bill. One webinar looked broadly at the IRA and the provisions that may affect housing. The second webinar focused on the IRA’s energy tax incentives. Replays of both webinars are available on nahb.org..
Builder Businesses Grew Significantly in 2021
Parents Like Skills Training The Madison Area Builders Association worked with the Boys & Girls Clubs of Dane County to provide a summer program full of engaging skilled trades activities for local students. Nearly 100 elementary, middle and high school students participated in job site tours, building projects and hands-on activities. Parents also expressed enthusiasm for the well-rounded program. Many parents told the BGC that they want their child to participate in skilled trades activities next summer. To learn more about NAHB's partnership with the Boys & Girls Clubs, visit the partnership page on nahb.org.
The business of the typical NAHB builder grew significantly between 2020 and 2021, according to results from NAHB's latest member census. The 2021 NAHB census shows that the median gross revenue of an NAHB builder in 2021 was an all-time high of $3.3 million, up 26.9% from the previous year. NAHB reinstated its member census during the industry-wide downturn of 2008, when median annual revenue of builder members was only around $1 million. Although their median revenue has increased recently, most NAHB builders remain relatively small businesses by conventional standards. According to the 2021 NAHB census: 14% of NAHB's builder members reported a dollar volume of less than $500,000, 13% reported between $500,000 and $999,999, 38% reported between $1 million and $4.9 million, 15% reported between $5 million and $9.9 million, 6% reported between $10 million and $14.9 million, and 13% reported $15 million or more. In comparison, the Small Business Administration's size standards classify most types of construction businesses as small if they have average annual receipts of less than $39.5 million.
Remodeling Index Sees Decline The National Association of Home Builders (NAHB) released its NAHB/Westlake Royal Remodeling Market Index (RMI) for the third quarter, posting a reading of 77, declining 10 points compared to the third quarter of 2021. An index number above 50 indicates that a higher share of remodelers view conditions as good than poor. Twenty-three percent of remodelers said the market had gotten worse in the third quarter of 2022, compared to only 10% who said it had gotten better. After a decline in 2022, NAHB expects a small increase in remodeling activity in 2023.
Strategies to Recession-Proof Your Business
As many builders learned during the previous downturn, weathering a recession often requires embracing lean business processes. But finding ways to deliver value on essential services while eliminating waste is easier said than done. NAHB members Robert Carroll, owner of Carroll Construction, and Jake Harris, CEO of BuildWallet, shared some lean-business strategies during a recent presentation as part of NAHB’s Young Professionals Week. The webinar covered a wide range of stra- tegies businesses can use during uncertain financial times. "Recessions are pivotal times to focus on business fundamentals, particularly during these periods of high inflation and rising interest rates," Carroll said. "Businesses that are prepared will have the best chance of succeeding and maximizing opportunities to grow." One of the methods discussed during the presentation focused on member-to- member collaboration. "What I love about the NAHB Federation is the collective knowledge that is shared among the membership," Harris said. "This is a community full of proven, talented professionals who can offer real-world solutions. The members who take advantage of that can drive real value for their businesses."
Our inaugural full day event took place with over 50 CSL holders obtaining 6 hours of required in-person Continuing Ed credits.Vendors had the opportunity to provide information and valuable discount/rebate programs to attendees and, of course, there was ample sustenance and networking throughout the day. Thanks to all who attended and our wonderful sponsors!
Home Builders & Remodelers Association of Massachusetts 62nd Installation & Awards Banquet November 2nd, The Barn at Gibbet Hill, Groton, MA Three of our members were recognized and honored as Legends of the Industry at this lovely event. Bill Laplante, Laplante Construction and Rob and Bob McPhee, McPhee Associates each received this special award, and a peer member introduced each one and provided details on their contributions to the building communities they serve. Congratulations all! Also, our own Mike Duffany was sworn in as President elect and will take the office next year.
Conserva Irrigation of Cape Cod Contact: Scott Souza Phone: (508) 834-9797 Website: http://conservairrigation.com Email: scott.sousa@conservairrigation.com Conserva Irrigation of Cape Cod focuses on installation of residential and commercial irrigation systems using the latest technology to save water while irrigating efficiently. We also maintain and repair existing systems. Looking to upgrade and improve water efficiency? We offer free inspections of systems, too! Pro Exterior Awnings Contact: Chris Noyes Phone: 866-225-5776 Website: ProExteriorAwnings.com Email: proexteriorcleaning@comcast.net We are a full-service awning shade company specializing in retractable awnings, screens and shelters. We sell and install motorized pergola systems (the roof louvers open and close with a handheld remote as desired) and provide a complete line of high-quality open-air cabanas and screen rooms for restaurants, spas, patios or poolside. Complete shade solutions for your next building project or renovation.
Please welcome our new members when you see them at our events or around town. It’s great when members do business with other members!
Membership Minute Sponsored By:
Jason Goldstein Photography Contact: Jason Goldstein Phone: 339-364-0411 Website: https://www.jasongoldsteinphotography.com/ Email: JasonGoldsteinPhotography@gmail.com My name is Jason Goldstein and I am a Professional Photographer based on Cape Cod. A little bit about myself, I live in Sandwich with my wife, 7 year old daughter, 1 year old son, and 2 year old pup. I pride myself on my flexibility and client satisfaction. I am your go to guy for before and after images of your work including aerial drone shots and 3D interactive walkthroughs. I also specialize in portraits including headshots, branding, family, high school seniors, and more.Contact me anytime to discuss any of your photography needs!
News You Can Use
Shepley Wood Products and Cape Cod Coffee are excited to introduce Civic Roast, a Coffee for a Cause. Civic Roast is a bright, smooth, and perfectly balanced blend that combines Cape Cod Coffee’s passion for roasting exceptional coffee with Shepley’s charitable philosophy. Their goal is simple – bring our community together and pay it forward to our neighbors with every cup. A portion of the proceeds from this specialty blend go directly to support affordable housing programs on Cape Cod with Habitat for Humanity and Housing Assistance Corporation. Civic Roast is available in 16 oz bags and in c-cups online at capecodcoffee.com and in-store at their 10 Evergreen Circle & Mashpee Commons locations. Enjoy Civic Roast and pay it forward with every cup! Member request: Please Like our Facebook page and Follow Us on Instagram.If you do so, you will get regular updates on upcoming events and info sessions.Don’t miss the chance to stay informed.
Got anything you would like to share with fellow members? Are you working on a great build or remodel?Let us know and we will give you some free press!Send info to: candice@capecodbuilders.org