FREDERICKSBURG - STAFFORD - SPOTSYLVANIA - CAROLINE - KING GEORGE - ORANGE - CULPEPER
September 2022
BUILDERS FRAMEWORK
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FREDERICKSBURG AREA BUILDERS ASSOCIATION
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Volume 6: Issue 9 September 2022
In a further sign that the housing market continues to weaken, new home sales in July fell to their lowest level since January 2016. The tepid sales pace matches declining builder confidence since the beginning of the year. The industry continues to grapple with supply chain disruptions that are delaying new home building projects and raising housing costs as mortgage interest rates increased. Sales of newly built, single-family homes in July fell 12.6% to a 511,000 seasonally adjusted annual rate from a downwardly revised reading in June, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New home sales are down 29.6% from a year ago. 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. New single-family home inventory remained elevated at a 10.9 months’ supply, up 81.7% over last year, with 464,000 available for sale. However, only 45,000 of the new home inventory is completed and ready to occupy. The remaining have not started construction or are currently under construction. The median sales price rose to $439,400 in July, up 5.9% compared to June, and is up 8.2% compared to a year ago.
July Single-Family Starts Fall to 6-Year Low
Law Will Bring Stricter Energy Codes President Biden on Aug. 16 signed into law the Inflation Reduction Act (IRA), a broad measure that seeks to address climate change, lower prescription drug prices, and reduce inflation. The law includes a $670 million grant program designed to pressure state and local governments to adopt more stringent energy codes. The practical effect will be to raise housing costs even further while doing very little to provide meaningful energy savings for residential homes and apartments.
Materials Prices Up Slightly in July The prices of building materials rose 0.4% in July (not seasonally adjusted) as softwood lumber prices increased 2.3%, according to the latest Producer Price Index (PPI) report. Prices have surged 35.7% since January 2020, although 80% 
of the increase has occurred since January 2021. The PPI for ready-mix concrete (RMC) gained 2.5% in July, while the PPI for gypsum products held steady and steel product prices decreased 3.7%.
Registration Open for 2023
Builders' Show in Las Vegas The National Association of Home Builders (NAHB) officially opened online registration on Sept. 1 for the 2023 NAHB International Builders’ Show® (IBS), the largest annual light construction trade show in the world. IBS will take place in person at the Las Vegas Convention Center, Jan. 31-Feb. 2, where it will again co-locate with the National Kitchen & Bath Association’s (NKBA) Kitchen & Bath Industry Show® (KBIS) for the 10th Annual Design & Construction Week® (DCW). The two shows are expected to host more than 1,300 exhibiting brands spanning over 985,000 net square feet of exhibit space. 
Construction Labor Market
Cools Down in June The construction labor market is cooling off as economic activity slows in response to tighter monetary policy, according to the latest job openings data from the Bureau of Labor Statistics. As forecast over the last two months, the count of open construction jobs is now falling, declining from 405,000 in May to 334,000 in June. The construction job openings rate ticked down to 4.2% in June, after reaching a data series high of 5.5% in April.
Affordability Falls in 2nd Quarter Rising mortgage rates, high inflation, low existing inventory and elevated home prices contributed to housing affordability falling to its lowest point since the Great Recession in the second quarter of 2022. According to the NAHB/Wells Fargo Housing Opportunity Index (HOI), just 42.8% of new and existing homes sold in the 2nd quarter were affordable to families earning the median income of $90,000. This is a sharp drop from the 56.9% of homes sold in the first quarter that were affordable to median-income earners.
Celebrate PWB Week, Sept. 12-16 NAHB proudly celebrates women in our industry each year during Professional Women in Building Week. Follow along on nahb.org/pwbweek during the week of Sept. 12-16, 2022 to help raise awareness of the opportunities that pursuing a career in home building provides. NAHB’s PWB Council honors the achievements of women in the industry and the work being done to promote, train, advance and add more women to the field, efforts that help address the industry’s ongoing labor shortage and remain vital to meeting our nation’s housing needs. Each day find activities for individuals and home builder associations to join the celebration.
During the second quarter of 2022, credit became both tighter and more costly on loans for acquisition, development & construction (AD&C) according to NAHB’s Survey on Financing. The average effective rate (based on rate of return to the lender over the assumed life of the loan taking both the contract interest rate and initial fee into account) increased

substantially from the prior quarter on all four categories of loans tracked in the AD&C Survey: from 6.32% to 8.19% on loans for land acquisition, from 7.85% to 9.55% on loans for land development, from 7.38% to 8.48% on loans for speculative single-family construction, and from 7.90% to 8.63% on loans for pre-sold single-family construction.
Big Quarter in For-Rent Starts Multifamily for-rent housing starts surged in the second quarter of 2022 to 142,000 units, according to NAHB analysis of Census data. It was the largest quarter for rental multifamily construction since the second quarter of 1986. The market share of rental units of multifamily construction starts bounced back to 96%. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period. For the second quarter, there were just 7,000 multifamily condo starts.
Home Builders Experiencing Tighter, Costlier Credit
As major metro areas look to boost housing supply, existing structures might be part of the solution. According to Spectrum News New York 1, the Real Estate Board of New York estimated “converting 10% of the more than 100 million square feet of potential office space would lead to 14,000 apartments." And Washingtonian reported that "nearly 4 million square feet of outdated office space in downtown D.C. is already being converted or is under evaluation for potential transformation." The results can be stunning. Take, for example, Prospect Yard — a 2020 Multifamily Pillars of the Industry finalist — and its reinvention of the historic Stuyvesant Motor Company, a 1917 mixed-use building in downtown Cleveland.



Developers utilized the existing features,
such as the brick façade, steel sash windows and stone sills, to create a cool, industrial-looking 42-unit affordable housing community. Office buildings aren't the only existing- structure options for increasing supply either. Creative development can be done with vacant hotels, churches, old factories, and other structures.
Using Existing Structures to Increase Housing Supply
Upcoming Meetings & Events
October 5th Education Committee Lunch Site Plan 101 - FABA Office October 12th Associates Committee Meeting, 9:00-10:00AM FABA Office or Zoom October 12th Membership Committee Meeting,10:30-11:30AM FABA Office or Zoom October 25th Culpeper County Spotlight Luigi’s Restaurant October 18th Fall Clay Shoot 
Shady Grove October 8th Community Service Day - 516 Project October 20th Hard Hat Sponsored by
610 Merchant Services Renatos October 26th Community Service Committee Meeting, 9:00-10:00AM 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.
October is membership drive month!
Chair - Marc Simes, msimes@tricordinc-va.com
Every Third Thursday of the month, join us for our networking Hard Hat Events from 5:00-7:00 PM. Hard Hat (5:00 - 7:00 PM) is Thursday, October 20th sponsored by 610 Merchant Services
The Associates Committee plans member events to promote doing business with members. These volunteers coordinate networking and social events for business connections. This committee has a hybrid meeting (in-person or zoom) every 2nd Wednesday at 9:00AM. Will we see you at the annual meeting? Grab your tickets now for dinner at Renatos along with your favorite FABA friends! Click the link below to register.
Chair- Mike King- Rayssiddingcompany@gmail.com
Rays Siding, Co.
Associates Committee
Register here
Associates Committee Hybrid Meeting Zoom Link: Second Wednesday of each month at 9:00 AM
Spotsylvania County Bi-Monthly Meeting Zoom October 3rd, 3:00PM City of Fredericksburg Bi-monthly Meeting Zoom October 7th 9:00AM Stafford County
Bimonthly Meeting Zoom October 10th, 9:00AM King George County 
Quarterly Zoom October 21st, 9:00AM Orange County 
Quarterly Zoom October 28th, 1:00AM
Legislative Committee
Upcoming County Zoom Meetings
Fall Golf was a great success! Thank you to the legislators and representatives who were able to join us.
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 - Bruce Reese, bruce@legacy-eng.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.
2022 Nominating Committee Jeh Hicks Marc Simes Scott Hine
Save the date for our Fall work day 516 Project for October 8th!
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!
Find a drive near you
Community Service Committee
Help support the Fredericksburg Area by giving blood at an upcoming drive. Click the link below to find a drive near you
Sign up today!
This committee holds a hybrid meeting (in-person and virtual/zoom) every 4th Wednesday at 2:00PM.
Check our these educational opportunities Site plan 101 - October 5th FABA Board Room, 11:30-1:00 Contracts with Jeh Hicks Blower door training Impact to work place, support after Covid - January 2023
Meghan Butcher - FABA Staff Meghan@FABAVA.com
The Education Committee coordinates workshops and virtual learning opportunities focused on industry safety, marketing, and personal growth. Stay tuned for upcoming educational opportunities.
Sean Halsey - Halsey Homes
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. Watch this page for upcoming Young Professionals committee events.
Next meeting October 11th FABA Office 3:30-4:30
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
info@contractorwebsitesplus.com
The FABA Community
I was sitting at my desk researching topics to write about and all I found was the doom and gloom of the economy and the predicted collapse of the housing market. This time in history just plain sucks. I started thinking about the friends I have made through FABA. Those builders and contractors who ride the waves of the economy and what their struggles may look like in just a few short months. Also, the associates and the struggles we may face in the upcoming months and possibly years. Then I thought of FABA itself. At the beginning of the last national crisis, the pandemic, FABA lost a noticeable number of members. But, out of that loss, FABA became stronger. Stronger because the members who stayed doubled down on their commitment to that association, the industry, and their colleagues. The great benefits of being a member of FABA are the community, the support, and the camaraderie. Yes, some of us will probably get hurt by the upcoming downturn but we can find comfort in knowing others may be facing the same struggles and together we can come out on top. The housing industry will no doubt survive but some of us may have to reinvent ourselves and what we are doing to get through. We can do that with the support of our friends in FABA. If you need some help figuring out your next move, reach out to me or any fellow FABA member – we’d all be glad to help. If you need anything for your brand or website let me know – it would help me.
Member Contributions
Cornerstone 2021
2022 FABA Board of Directors
President Scott Hine Union Home Mortgage 1st Vice President Marc Simes Tricord Companies 2nd Vice President Jeh Hicks Jarrell Properties Secretary Michelle Hall J. Hall Homes Treasurer Jeremiah Horstick CORELOT Immediate Past President Stacey Lampman Spaces Design Studio Associate Vice President Michael King Ray's Siding 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 Tim Hall Tricord Companies Builder Director Allen Harrison Battlefield Homes Builder Director Steve Flanagan Built Right Homes Builder Director Teressa Taylor-Griffis FTTG & Associates, LLC Associate Director Sara Fila Legacy Engineering Associate Director Rick Furnival Sullivan, Donahoe & Ingalls, PC Associate Director Emily Hall Spotsylvania Career & Tech Center Associate Director Bruce Reese Legacy Engineering, PC 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