Save the Date –  Housing Market Forecast Will Be February 9th

Save the Date – Housing Market Forecast Will Be February 9th

The Home Builders Association of Greenville will once again partner with the Greater Greenville Association of Realtors and the Upstate Mortgage Lenders Association in order to produce the Upstate Housing Market Forecast. Save the date, February 9, for a day of educational classes and a luncheon featuring the National Association of Home Builders’ Chief Economist. This event is sponsored by BNC Bank, and vendor table sponsorships are still available. Contact Crystal for more details.

Your HBA Won “Best HBA Partnership/Coalition” Association Excellence Award

Your Home Builders Association of Greenville has won the Association of Excellence’s 2015 Best HBA Partnership/Coalition Award for its partnership with the Greater Greenville Association of REALTORS and Upstate Mortgage Lenders Association in producing the Housing Market Forecast.

The annual Forecast is the preferred source of information about the housing market in the Upstate of South Carolina. Each year an economist discusses the housing market trends in the Upstate, with the 2015 speaker being National Association of Home Builders Chief Economist David Crowe.

The award, granted by the National Association of Home Builders, is part of an annual program designed to recognize outstanding accomplishments of state and local Home Builders Associations and executive officers in the field of association management.

HBA of Greenville Chief Executive Officer Michael Dey will recieve the plaque and recognition at the 2016 Association Leadership Institute, taking place in San Antonio in July.

You can see all of the winners in the winner database.

The Importance of Sales and Marketing

The article below details the importance of constantly improving your sales and marketing skills and consistently evaluating the housing market of your area. If these are skills you are looking to improve on, consider joining the Sales and Marketing Council of the Upstate, a council under your Home Builders Association. If you’d like current information on the Greenville housing market, look no further–every year your Home Builders Association of Greenville partners with GGAR and UMLA to host the Housing Market Forecast, where a national economist explains the figures of the current market in Greenville and shares their forecast for the upcoming year. That data is then compiled by your Home Builders Association and the shared with our members. You can find that document here.

Many economists and industry pundits agree that for the foreseeable future, the housing market will continue to improve. But, there’s no doubt that home builders will still have to navigate fierce competition and deal with cautious buyers.

David Levitan, MIRM, CSP, CMP, and CEO of Levitan & Associates, said that although most housing markets are now performing well (compared to recent years), he has been asked to evaluate several communities across the country that are still not performing up to par.

What he found — almost across the board — was home builders and developers who have been doing business in their markets for years without having conducted any market research or developed a marketing strategy.

“The reason for the lack of sales was crystal clear, and not surprisingly, consistent throughout most of these communities,” he said.

Among the greatest offenses:

  • Stale home designs that had not been changed for the past five years or more;
  • Product lines that failed to provide a full spread of designs, styles and pricing;
  • Less-than-ideal, non-competitive locations;
  • Communities built within a short distance of four or more competing builders/developers with almost identical product offerings and more attractive incentives;
  • Sales and marketing staff who had no training and minimal management support or supervision over the years;
  • Outdated advertising, promotional strategies and budgets (e.g., referencing a 10-year-old budget, creating only minor changes to the company website, making feeble attempts at social media).

Because today’s market conditions and buyers are completely different, he said, leaning on the same old strategies has hindered their ability to grow, prosper and be profitable. To get back on track, Levitan recommends the following five steps:

Step 1: Do your research. For every new community you plan to build, analyze the market and determine the local economy and market conditions, examine site conditions, and investigate current and future competition. Doing this type of analysis helps define the playing field, and from there a realistic sales and marketing strategy for success can be developed, Levitan said.

Ask yourself the following questions: What is the quantifiable demand for the location, design and price? What portion of the demand is already being met? What is happening with the resale market – remember it is an integral component of the demand quotient. Where are the holes in the market?

Step 2: Review your own properties, products, company and brand identity. What are the comparative strengths and weaknesses of your location? How does the marketplace perceive your company? What impact do those perceptions have on your ability to do business? Have you created an identifiable unique selling proposition that is meaningful to the consumer? If not, you are simply another seller of the same product, probably offered at similar or higher prices.

Step 3:
Use your research and review or SWOT analysis, to develop housing products that satisfy the needs of the market and are noticeably better in some way than competition.

Step 4: Create and implement a sales and marketing strategy for every new community BEFORE development starts. Use tools that will get your message to your target market in a cost-effective way.

Step 5: Take Step 4 further and create a new sales and marketing strategy that reflects current market conditions for every existing community you have in your portfolio.

While it may take a little time and effort to properly create a development and marketing strategy that will maximize sales and profitability, Levitan believes that the value of doing so is immeasurable.

Professional Women in Building Shows Impressive Growth

After last week’s Annual Membership Meeting, Carol Morgan discussed the merits of starting a Professional Women in Building (PWB) committee locally with the Home Builders Association of Greenville. Those who attended the panel were very interested in starting this prestigious group, and we wanted to see if there was a similar interest among our members who could not make the Annual Membership Meeting.

Please look out for information on an interest meeting that will most likely take place at our Housing Market Forecast in February. The interest meeting will be free and does not require registration, but if you would like to attend the Forecast please register here.

Want to learn more about the PWB? Read the article below from NAHB profiling the HBA of Metro Denver’s PWB council.

NAHB Professional Women in Building (PWB) is the Federation’s fastest growing council, and there’s a reason why.

When the group laid out its strategic plan in the fall of 2013, the roster listed fewer than 900 members. Council leadership made it a goal to reach 1,000 members in the first year, and increase that figure by 10% each year.

“It was a lofty goal to start and we didn’t know if we were going to hit it or not,” said Carole Jones, CAPS, CGB, CGP, PWB chair, and licensed builder and associate broker from Bloomfield Hills, Mich. “But we far surpassed it and are still going strong.”

Membership in the council has grown by 57% over the past three years – from 872 members in 2012 to 1,374 members today, according to PWB Executive Director Sheronda Carr. This year alone, the council started four new chapters, and three more are slated to launch in time for the 2016 International Builders’ Show.

“PWB is seeing an organic evolution of women at the grassroots level making the necessary strides to fuel the next generation of female building professionals through industry support, professional development, and leadership training opportunities,” Carr said. “Our members are not just the builder’s wives anymore, but accredited, licensed and certified professionals representing all facets of the residential construction industry.”

A shining example of this trend is the Denver PWB. Chris Presley, president and founder of of Epic Homes, and the first female president (in the 73-year history) of the Home Builders Association of Metro Denver, said that establishing an avenue for women in the profession to connect and engage was a top priority for her.

Starting with just six women in October 2014, the council has now grown to 179 members, and steadily continues to increase.

“Our goal was just to get 20 to 40 members in the first year,” Presley said. “We actually had to cut off registration for the kickoff event. Over 180 people RSVP’d; the initial reservation was only for 50 people.”

One of the things that surprised her most, she said, was the number of people who showed up that were not members of the HBA.

“I was astounded. There must have been a real need in Denver,” she said.

To that end, the council has wasted no time providing the valuable programs, activities and services that industry professionals are seeking from such an organization.

Presley said they offer members a quarterly luncheon, a monthly informal happy hour in a no-selling environment, education and professional development series, mentoring, and community service opportunities.

In general, where most professionals find PWB valuable is in the opportunities it affords to find other people, programs and projects locally that can help them reach their career goals, Jones said.

For example, Random Acts of Coffee, which is a fun and unique way to get members to meet someone new – has been wildly successful for members of the Denver PWB.

At luncheons, individuals place their name in a hat and while they’re eating they’re randomly matched with another member with whom they are expected to meet for coffee and chat. Presley said that it has led to a number of business relationships that may not otherwise exist.

Jones firmly believes that PWB has become the fastest growing council in the Federation because members understand the value that being involved brings to their business, and they share their thoughts and experiences with their peers, social and business networks.

The value isn’t hard to see. Findings from a recent NAHB survey of women in the home building industry showed that current membership in a PWB Council correlates with higher company earnings.

The median dollar volume members expected in 2014 was $2.9 million, about 22% higher than the $2.4 million expected by those who had never been a council member, and about 12% higher than the $2.6 million expected by past members of the council whose memberships expired.

The survey also provided some evidence that more women are seeking out careers with the construction industry. According to survey results, women represent about 40% of most companies’ workforce. Twenty-two percent of respondents said that women make up 80% of their companies’ workforce.

Anecdotally, Presley shared that one of her male peers, a division head of one of the largest home building companies in the country and one of the top five builders in Denver, said he started attending the PWB luncheons to seek out help on how to elevate women, since they’ve become such a large part of his organization.

“It’s good feedback because it allows us to tailor our professional development and education programs and provide more coaching and training to address those skills and qualities that tend to be less common in women,” Presley said, citing the confidence and willingness to ask and go after what they want in a business environment as one example.

Housing Market Forecast

Save the date! The Home Builders Association of Greenville will be hosting its own Housing Market Forecast on February 9. The guest speaker will be Lawrence Yun, Chief Economist at the National Association of Realtors.

Steady employment and economic growth, pent-up demand, affordable home prices and attractive mortgage rates will keep the housing market on a gradual upward trend in 2016. However, persistent headwinds related to shortages and availability of lots and labor, along with rising materials prices are impeding a more robust recovery, according to economists who participated in the NAHB Fall Construction Forecast Webinar on Oct. 21.

“This recovery is all about jobs,” said NAHB Chief Economist David Crowe. “If people can get good jobs that pay decent incomes, the housing market will continue to move forward.”

The good news, Crowe added, is that total U.S. employment of 142 million is now well above the previous peak of 138 million that occurred in 2008.

The one caveat is that job growth has been concentrated heavily in the service sector, which tends to pay lower wages than goods producing jobs. Meanwhile, home equity has nearly doubled since 2011 and now stands at $12.5 trillion.

“The single biggest asset in most people’s portfolio is the home they own,” said Crowe. “That’s important because the primary purchasers of new homes are the sellers of existing homes. The more equity they have, the more comfortable they feel about purchasing a new home.”

And while mortgage interest rates are expected to rise over the near-term, averaging 4.5% in 2016 and 5.5% in 2017, Crowe said this is not expected to have an impact on the housing recovery. “As the economy gets better, job and wage growth should keep pace. So even though mortgage rates will rise, they will still be low by historical standards and very affordable.”

Supply Headwinds

Crowe noted several factors that are hindering a more robust recovery. Citing an NAHB survey of its members, 13% of builders reported the cost and availability of labor was a significant problem in 2011 and that concern jumped to 61% in 2014.

About one-fifth of builders shared the same concerns regarding lots in 2011 and that ratio shot up to 58% in 2014. Concerns over building materials stood at 58% among builders in 2014, up from 33% in 2011.

Single-Family Continues to Post Gains

Turning to the forecast, NAHB is projecting 719,000 single-family starts in 2015, up 11% from the 647,000 units produced last year. Single-family production is projected to increase an additional 27% in 2016 to 914,000 units.

On the multifamily side, production ran at 354,000 units last year, slightly above the 331,000 level that is considered a normal level of production. Multifamily starts are expected to rise 9% to 387,000 units this year and post a modest 3% decline to 378,000 units in 2016.

Residential remodeling activity is forecasted to increase 6.8% in 2015 over last year and rise an additional 6.1% in 2016.