A U G U S T 2020
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Bank of the Lowcountry
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EVENTS & EDU
Lighting Control Illuminated
Aug 12th | 9:00AM
ZOOM - Virtual Class
Certified New Home Sales Prep Course
Aug 17 - 19
GMM: Market Update
Aug 25th | 9:00AM
ZOOM - Virtual Event
In another sign that the housing market is rebounding from the COVID-19 pandemic, sales of newly built, single-family homes rose 16.6% to a seasonally adjusted annual rate of 676,000
units in June, according to recently released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The June rate is 6.9% higher than the June 2019 pace.
Inventory fell to a 4.7 months’ supply, with 307,000 new single-family homes for sale, 7% lower than June 2019. The current months’ supply is the lowest since 2016. Of the inventory total, just 69,000 are completed, ready to occupy. The median sales price was $329,200. The median price of a new home sale a year earlier was $311,800.
Regionally, year-to-date, new home sales were up in all four regions: 22% in the Northeast, 12.6% in the Midwest, 0.2% in the South, and 3.1% in the West.
IN THE NEWS
New Home Sales Reach Highest Level Since Great Recession
Sales of newly built, single-family homes rose to their highest level since the Great Recession, up to 13.8% to a seasonally adjusted annual rate of 776,000
Building the Future of the Lowcountry
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Builders are dealing with a number of supply-side concerns such as rising material costs, particularly lumber, which recently surpassed its 2018 price peak. But low inventory levels point to construction gains ahead.
Residential construction remains one of the bright spots amid the current coronavirus-caused downturn. Economic indicators suggest housing is poised to lead the nation’s economy back to full strength when the current crisis resolves.
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New Home Sales Reach Highest Level Since Great Recession
GMM: Market Update
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BIA of SC Conducts Building Materials Shortage Survey
2020 GMM: Market Update Sponsor
The Random Lengths Framing Composite Price hit $523 per 1,000 board feet for the week ending July 10, marking the first time prices have topped the $500 level since July 2018. Indeed, lumber prices have soared 50% since April 17, 2020.
The primary drivers of the price increase include:
Mills closed in the spring due to stay-at-home and social distancing measures enacted by state and local governments.
When prices fell between March and April as a result of the COVID-19 pandemic, mills projected that housing would be adversely affected and therefore anticipated a large drop in demand. Accordingly, mills that remained operational substantially decreased capacity utilization.
Producers did not anticipate the massive uptick in demand from do-it-yourselfers (DIY) and big box retailers during the pandemic.
Housing weathered the storm much better than most anticipated.
DIY demand has not abated much as states reopen and construction demand has far surpassed lumber mills’ projections.
The combination of all of these factors has caused a dislocation of the usual supply/demand equilibrium. Suppliers continue to catch up to orders to the point that, in some cases, builders and traders are being forced to place orders without a delivery date or price. Mills were taking orders to the end of July back in early-June, which may have been the driver of the large increase in lumber futures over the past few weeks.
NAHB’s 80,000 Associate members account for roughly two-thirds (68%) of total membership.
The largest share of Associate members – 43% – are subcontractors or specialty trade contractors, according to the 2019 annual member census conducted by NAHB’s economics department.
Roughly 13% of Associate members work in professional specialties such as legal services, accounting, and engineering. About 11% work in retail dealerships. Another 8% are employed in various financial services, including banking,
title companies and insurance, and 4%
work in wholesale dealerships or distributorships. Roughly 20% listed “other associate” as their primary activity.
The median annual company revenue among Associate members was $2.2 million in 2019, down from a median of $2.5 million in 2018. A quarter of Associates (25%) reported annual revenues under $500,000. The largest group (32%) reported incomes of $1 million to $4.99 million.
The median age of Associates was 56. More than half of Associate members (53%) have earned a bachelor’s degree or higher.
Subcontractors Largest Share of NAHB's Associate Membership
vastly underestimated demand. Producers did not anticipate the massive uptick in demand from do-it-yourselfers during the pandemic. And housing weathered the storm much better than most anticipated.
Lumber Prices Hit Two-Year High
The Random Lengths Framing Composite Price hit $523 per 1,000 board feet for the week ending July 10, the first time prices have topped $500 since July 2018. Lumber prices have risen 50% since April 17, 2020.
Several factors are driving rising prices. Some mills closed in the spring due to stay-at-home and social distancing measures. Mills that remained open
Products Used in Home Construction
sector, but about $6.1 billion was imported from other countries. Among the major product categories, new residential construction in 2019 used more than $11 billion each of “cement and concrete products” and “architectural and structural metals.” The analysis looked at 51 building materials categories.
NAHB analysis of government data indicates that new single-family and multifamily construction used about $94.9 billion in building products in 2019. The vast majority of that amount was produced domestically, supporting jobs in the U.S. manufacturing
NAHB, NAR Look at Sustainability
NAHB and the National Association of Realtors® have launched a joint initiative
to inform consumers about the high- performance home market.
Through the joint Home Performance Counts initiative, NAHB and NAR have come together to offer a comprehensive resource that informs consumers about the qualities and benefits of high-performance homes and facilitates communication on
home performance between buyers, builders and real estate agents.
Demand for high-performance homes has expanded in recent years, with the number of homes certified to the National Green Building Standard® increasing by more than 57% since 2017. These are homes that prioritize comfort, sustainability, wellness, resource efficiency and affordability.
Local governments use design regulations to ensure the health, safety and welfare of residents. But excessive regulations that price lower- and moderate-income families out of the market should not be prioritized over the need to address the housing affordability problem.
Examples of highly prescriptive design standards include prohibiting the use of exterior materials such as vinyl siding, mandating minimum roof pitch, and dictating the amount of surface area that must be dedicated to windows.
A new document from NAHB, “Residential Design Standards: How Stringent Regulations Restrict Affordability and Choice,” explains how these standards harm low- and moderate-income families, and suggests policy alternatives.
A New Look at Design Standards
Wade Confirmed as FHA Commissioner
The U.S. Senate voted on July 28 to confirm Dana Wade as the new FHA Commissioner. NAHB Chairman Chuck Fowke lauded Wade’s confirmation amid the challenges caused by the COVID-19 pandemic.
“NAHB looks forward to working with the new FHA commissioner to mitigate the effects of the outbreak on the housing community and to ease regulatory burdens exacerbating the nation’s housing affordability crisis," Fowke said.
IRS Extends LIHTC Deadlines
In a victory for NAHB and its members, the Internal Revenue Service recently announced temporary relief from certain requirements under Section 42 of the IRS code for Low-Income Housing Tax Credit (LIHTC) projects.
In general, under IRS Notice 2020-53, deadlines occurring between April 1, 2020, and Dec. 31, 2020, are postponed until Dec. 31, 2020. Agencies are not required to conduct compliance monitoring inspections during this time.
For a full list of life board members, visit our website hbacharleston.com
LIGHTING CONTROL ILLUMINATED ZOOM- Virtual Class Aug. 12th, 9:00AM
CERTIFIED NEW HOME SALES PREP COURSE CHBA Office Aug. 17th - 19th
GENERAL MEMBERSHIP MEETING: MARKET UDPATE ZOOM - Virtual Event Aug. 25th, 9:00AM
RESIDENTIAL BUILDERS LICENSE PREP COURSE: BUSINESS MGMT. & LAW CHBA Office Sept. 3rd - 4th
L&L: SECOND CHANCE JOBS CHBA Office Sept. 8th, 11:30AM
RESIDENTIAL BUILDERS LICENSE PREP COURSE CHBA Office Sept. 9th - 11th
If you have any questions, contact Ashley at email@example.com
President Trump Signs USMCA Trade Pact
In a positive development for the housing industry, President Trump on Jan. 29 signed the U.S.-Mexico- Canada Agreement (USMCA).
The U.S. residential construction and remodeling industries rely on tens of billions of dollars in building materials sourced from Mexico and Canada each year. By modernizing and strengthening free trade with our largest trade partners, the USMCA will boost U.S. economic growth and help keep the price of homes and home improvements low.
New App Offers Accessibility Guidance
NAHB unveiled the "Pocket Guide to the Fair Housing Act," a free app to help home builders, contractors and designers meet the accessibility requirements of the act, during the Builders' Show in Las Vegas.
“HUD welcomes the efforts of this important housing industry partner in working to meet the needs of persons with disabilities,” HUD Secretary Ben Carson told NAHB's Leadership Council.
EPA Announces Water Rule at IBS
EPA Administrator Andrew Wheeler announced a final “waters of the United States” (WOTUS) rule during the International Builders’ Show in Las Vegas.
“The Navigable Waters Protection Rule is a big win for states, municipalities, builders and developers, landowners and the American public,” Wheeler said in remarks to NAHB’s Leadership Council. “It will make it easier to understand where the Clean Water Act applies and, as importantly, where it does not.”
The EPA administrator noted the new water rule is good for the economy and the environment.
To better serve the needs of its members, industry partners and other key stakeholders, NAHB recently unveiled an all-new nahb.org website.
The site not only features a much more modern look, but also greatly improved search performance, enhanced content functionality and improved navigation for a better user experience.
Joint Employer Rule
In a win for NAHB, the Labor Department in January announced a final rule to provide a clearer method for determining joint employer status.
The rule will provide clarity and certainty regarding employers' responsibility to pay federal minimum wage and overtime for all hours worked over 40 in a week.
The new rule will take effect March 16. It includes a set of joint employment examples to further assist in clarifying joint employer status.