FREDERICKSBURG - STAFFORD - SPOTSYLVANIA - CAROLINE - KING GEORGE - ORANGE - CULPEPER
February 2023
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FREDERICKSBURG AREA BUILDERS ASSOCIATION
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Volume 7: Issue 2 February 2023
New Home Sales Up But Market Weakness Remains
While new home sales posted a modest gain in December, elevated mortgage rates and higher construction costs continue to hinder housing affordability and dampen consumer demand. Sales of newly built, single-family homes in December increased 2.3% to a 616,000 seasonally adjusted annual rate from a downwardly revised reading in November, according to newly released data by HUD and the U.S. Census Bureau. New home sales were down 16.4% in 2022 compared to the previous year. A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the December reading of 616,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory remained elevated at a 9 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced. The count of homes available for sale, 461,000, is up 18.5% over last year. The median new home sale price in December was $442,100, down 3.7% from November. But it is still up 7.8% compared to last year due to higher construction costs. Regionally, on a year-to-year basis, new home sales fell in all four regions, down 8.2% in the Northeast, 22.1% in the Midwest, 13.0% in the South and 23.5% in the West.
$1.2 Billion for Strict Energy Codes The Biden administration has launched several federal initiatives to reduce greenhouse gas emissions through programs designed to encourage state and local governments to update their building energy codes. Embedded in two recent pieces of legislation – the Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 – was $1.2 billion in incentives specifically for states to update their energy codes for new homes.
New WOTUS Rule Muddies the Waters The Biden administration on Dec. 30, 2022, announced a final rule that will dramatically expand the definition of "waters of the United States" (WOTUS) under the Clean Water Act (CWA). The final rule continues to rely upon a confusing theory of CWA federal jurisdiction known as the "significant nexus test" to potentially assert federal control over isolated wetlands, features that contain water only in response to rainfall events, and ephemeral streams that affect many activities.
NAHB Criticizes Biden Rental Plan The White House on Jan. 25 announced a plan to "protect renters and promote rental affordability," but NAHB called it "the wrong strategy" to confront the nation's housing affordability crisis. NAHB criticized the White House plan for focusing on rental protections instead of market solutions that will ease the nation's housing and rental affordability crisis by spurring production of badly needed affordable housing. NAHB believes policymakers should instead strengthen successful programs like the Low-Income Housing Tax Credit.
New Radon Rules for Some Multifamily Properties The Federal Housing Finance Agency recently announced enhanced radon testing requirements for Fannie Mae and Freddie Mac multifamily properties with loan applications received after June 30, 2023. The enhanced testing at Fannie and Freddie-backed multifamily properties will include: Increasing the amount of required testing from 10% of ground floor units to 25% of ground floor units; requiring an environmental professional to oversee radon testing; and requir- ing the environmental professional to notify tenants of radon testing. BUILD-PAC Enjoys Success In Competitive Races BUILD-PAC, NAHB's bipartisan fundraising arm, enjoyed real success in helping to ensure the new Congress supports pro-housing and pro-business policies. Increased investment from NAHB members allowed BUILD-PAC to disburse a total of $2.8 million to federal candidates and committees for these elections. BUILD-PAC contributed to 376 candidates, and remained active in 100 competitive or toss-up House and Senate races. Thanks to the PAC's involvement, 92% of supported campaigns won their races on Nov. 8.
Remodeling Sentiment Weaker in Q4, But Still Positive
The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 66 for Q4 of 2022, a decline of 17 points compared to Q4 of 2021. The survey asks remodelers to rate five components of the remodeling market as “good,” “fair” or “poor”. Each question is measured on a scale from 0 to 100, where a number above 50 indicates that a higher share view conditions as good than poor. The Current Conditions Index is an average of three components: the current market for large remodeling projects, moderately sized projects and small projects. The Future Indicators Index is an average of two components: the current rate at which leads
The Cost of Rising Mortgage Rates As the Federal Reserve fights inflation, mortgage rates have increased rapidly, starting 2022 at 3% and rising above 7% before dropping back to roughly 6.5%. How does this affect affordability? The difference between a slightly more than 3% mortgage rate and a 7% mortgage rate adds roughly an additional $1,000 mortgage payment to a typical, new median-priced single-family home and prices 18 million U.S. households out of the market for the home. A mortgage payment on a $450,700 home would have increased from $1,925 in January 2022 to $2,923 in late October when mortgage rates topped 7%.
Fewer Planning Home Purchase The share of adults planning a home purchase in the next 12 months dropped to 13% in the final quarter of 2022, down from 15% in the previous quarter. The drop is not surprising, given that housing afford- ability worsened during this period, as mortgage interest rates surpassed 7% and reached levels not seen in nearly 20 years. The share of adults with plans to buy a home within a year changed unevenly across regions from the third to the final quarter of 2022, dropping in the Northeast (15% to 11%) and West (20% to 14%), staying flat in the South (at 14%), and edging up in the Midwest (9% to 10%).
and inquiries are coming in and the current backlog of remodeling projects. The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicators Index.
NAHB Toolkit Provides Water Management Resources
As water costs continue to rise across the country, and some areas face droughts, aridification and water supply constraints, water efficiency strategies in residential construction can play an important role, and provide multiple benefits for builders and consumers alike. “Conservation is the No. 1 technique – finding ways to use less water,” said Craig Karn, principal at Consilium Design in Denver and vice chair of NAHB's Sustainability and Green Building Subcommittee, “And the secret to conservation is building awareness.” One way in which NAHB is working to build awareness is through NAHB’s recently released “A Builder’s Toolkit for Water.” The toolkit explores water management issues and provides case studies that highlight how different areas of the country have tackled key issues such as water conservation, flooding and more. The toolkit also includes tips for builders to share with home owners to help them improve their own conservation efforts. “We must learn to live better using less water,” Karn added. “We can help consumers be better water stewards by educating them on everything from the drip irrigation system to how they can best use their smart water meter.”
Upcoming Meetings & Events
March 7th Education Committee Presents Your FABA Membership FABA Board room 11:30-1:00 March 8th Associates Committee Meeting, 9:00-10:00AM FABA Office or Zoom March 8th Membership Committee Meeting,10:30-11:30AM FABA Office or Zoom March 15th Membership Drive Kickoff Party FABA office, 5:00-6:00 March 16th Hard Hat Networking Sponsored by Truist March 22nd Community Service Committee Meeting, 2:00-3:00 FABA Office or Zoom
Calendar at a Glance
Membership Committee
The Membership Committee brings builder and associate members together to focus on recruitment of new members and retention of current members. This committee hold a hybrid meeting (in-person or zoom) every 2nd Wednesday at 10:30AM.
Our spring membership drive is kicking off March 15th at the FABA office. Come out and learn how to play in this year's drive
Chair - Mike King, miketheknyfe@gmail.com
Every Third Thursday of the month, join us for our networking Hard Hat Events from 5:00-7:00 PM.
The Associates Committee plans member events to promote doing business with members. These volunteers coordinate networking and social events for business connections. Stay tuned for new and exciting changes coming to this committee. This committee has a hybrid meeting (in-person or zoom) every 2nd Wednesday at 9:00AM.
Chair- Teressa Taylor- Griffs . teressa@ttgva.com
Associates Committee
Registration is open for Spring Golf. Don't let this winter weather get you down, reserve your spring foursome today and start counting down the days until May 8th.
Associates Committee Hybrid Meeting Zoom Link: Second Wednesday of each month at 9:00 AM
Click here to register
Spotsylvania Bi-monthly Zoom April 3rd, 3:00PM Legislative Zoom March 23rd, 8:30AM
Legislative Committee
Upcoming County Zoom Meetings
Developers Council The working mission of the Council is to stay on top of land development issues affecting local builders and developers in our region and work together to advocate for our positions as needed. The Council is open to Builder and Developer members of FABA. Jeh Hicks, Jarrell Properties , Inc., is the chairman of the Developers Council. This group meets every other month. For more information contact Mark Snesavage at Mark@FABAVA.com
Chair - Jeh Hicks, jeh@jarrellinc.com jeh@jarrellinc.comjeh@jarrellinc.comjeh@jarrellinc.com
The Legislative Committee meets monthly to discuss the status of local and state level legislation that affects the building industry. For more information from each county, plan to attend the Legislative Committee meeting. This committee meets virtually every third Thursday at 8:30AM.
General Assembly:Several FABA members have asked about specific legislation impacting our industry. Here are a few priorities that are still alive in the legislature: HB 1665 - Extension of Local Land Use Approval: Extends the validity of plans, permits, and other local land-use approvals to July 1, 2025, provided that such approvals were valid as of July 1, 2020. Currently, those plans, permits, and approvals are set to expire July 1, 2023. These bills continue the statewide extensions enacted by the legislature in 2020 and 2022. SB 1213 - Universal License Recognition: Allows DPOR to recognize licenses and certificates issued by another state and establishes a uniform process for transferring licenses and certificates into the state to expedite the process for contractors. HB 1628 - In-Lieu Fee Mitigation for Wetland and Stream Impacts: Legislation and budget amendment seek to implement the state’s “In-Lieu Fee” program, known as the Wetland and Stream Replacement Fund. The Fund, which was created in 2013 but never implemented, allows developers to mitigate wetland/stream impacts by providing funds to DEQ.
The FABA Community Service Committee is proud to support"The Coldest Night of the Year" The Friends of FABA was a part of MICAH raising 278% of their goal this year! Thank you to those who walked, donated and help spread the word for this wonderful cause!
Interested in joining the Community Service Committee? Send us an email at Admin@fabava.com to join the email list
Chair - Greg Schmidt, greg@pestsolutionsva.com
The Community Service committee seeks to increase civic engagement among the members of FABA and utilize professional skills to actively benefit the Fredericksburg area. We are always looking for new ways to get help and support the community. If you are interested in submitting an idea for the community service committee feel free to join us!
Community Service Committee
This committee holds a hybrid meeting (in-person and virtual/zoom) every 4th Wednesday at 2:00PM.
Lauren Bruning , Topside FCU. Lauren.Bruning@topsidefcu.org
The Education Committee coordinates workshops and virtual learning opportunities focused on industry safety, marketing, and personal growth. Stay tuned for upcoming educational opportunities.
Nathan Dobbins ndobbins@dobbinsrealty.com
Education Committee
Young Professionals Committee
To join the FABA Young Professionals committee email Meghan@fabava.com
Young Professionals committee is for individuals in the 21-40 age group to connect, and provides opportunities for professional development, social networking, mentoring, and personal growth for our members. Stay tuned for updates in 2023
The Education Committee Presents: Your FABA Membership Teacher - Michael Pollaci Topics: FABA bucks, what they are, how to get them and how to use them. Membership benefits of HBAV and NAHB and how to log into each portal. Membership drives and how to be a good Spike.
As a Cornerstone benefit for Partner, Platinum and Diamond levels they are able to contribute educational content to the newsletter each month. Check out this month's contribution from Contractors Websites Plus
Need some help setting goals for your website? Contact Contractor Websites Plus for a Builders Brand Schematic and we’ll help you create a plan for your website and brand.
info@contractorwebsitesplus.com
Member Contributions
Customer Complaints Customer complaints is one of those subjects most contractors don't spend much time thinking about. We know why. First, you believe in what you do and that you do it well. In fact, you believe you do it so well, there should be no reason for a customer to complain. What you’re forgetting is they feel there’s a reason. That's all that matters. In your customer’s mind there is something wrong and they want it corrected. Secondly, if a customer complains about something, you’re confident you can handle it on the fly with on-the-spot thinking. There are three goals people generally have when they complain and they’re all easy fixes. They want the problem fixed, they want to be compensated, or they want an apology. The problem is complaints always seem to pop up at the worst of times when you’re too busy or you don’t have the manpower to address it. Then you forget about it, and it festers.
But, if you can handle complaints in a calm, well thought out, and productive manner, you become a rock star and can create raving fans instead of complaining customers. Need some help planning your response to customer complaints? Contact us for a Builders Brand Schematic and we’ll help you create a brand and website to dominate your market and a plan to communicate with your customers like a rock star!
Did you know as a part of your Cornerstone benefit, at the Platinum Level or higher, you can submit monthly content for the newsletter? Submit your artical to Meghan@fabava.com
2023 FABA Board of Directors
President Marc Simes Tricord Homes 1st Vice President Jeh Hicks Jarrell Properties 2nd Vice President Mike King Ray's Siding Secretary Tim Hall Tricord Homes Treasurer Jeremiah Horstick CORELOT Immediate Past President Scott Hine Union Home Mortgage Associate Vice President Teressa Taylor-Griffs TTG and Associates Executive Officer Maria Moore FABA Legal Counsel Charlie Payne Hirschler NAHB State Representative Dan Sandoval Republic Home Builders HBAV State Representative Scott Hine Union Home Mortgage Builder Director Michelle Hall J. Hall Homes Builder Director Allen Harrison Battlefield Homes Builder Director Steve Flanagan Built Right Homes Builder Director Dan Sandoval Republic Homes Associate Director Sara Fila Legacy Engineering Associate Director Rick Furnival Sullivan, Donahoe & Ingalls, PC Associate Director Emily Hall Spotsylvania Career & Tech Center Associate Director Allen Harrison Battelfield Homes Associate Director Greg Schmidt Pest Solutions Life Builder Director Sean Halsey Halsey Homes Life Builder Director Dan Sandoval Republic Home Builders
FABA has been working with our exclusive, private partner, Small Business Growth Partners (SBGP) to help our members reach maximum growth and potential through their one of a kind BPA Process. This has been refined for over 10 years of working exclusively with Builders, Remodelers & HBA Associate Members. As an exclusive FABA member benefit, we are offering you the chance to register for and redeem your 2021 Business Diagnostic & Plan of Actions. An annual BPA is included 100% with your FABA Member Benefits (A $2,200 value).
Learn More Here