Issue 1 2014 - Home Builders Association of Michigan

Forecast 2014
Home building at the heart of a steady and sure recovery
Builder Profile
Silverado Custom Homes
International Builders Show Recap
TABLE CONTENTS
Tankless
With an AIAified Course.
VOLUME 22 • NUMBER 1
DEPARTMENTS
FEATURES
The U.S. Department of
Energy estimates that
approximately 20 percent of
a home’s energy costs are
spent heating hot water.
Forecast 2014
6
The economy is expected to continue a steady recovery in
4President’s Message
13 Association Spotlight
the coming year and housing is at the heart of it
International Builders Show
8
Michigan well represented at the IBS in Las Vegas
OF
Builder Profile
10
In spite of a tough economy, business is booming for
Silverado Custom Homes
Winter Board Meeting
12
Over 100 local HBA representatives convene in Lansing
Remodelers Council Chair
14
Tapping Pent-up Demand
ergy costs are going? Just turn the
ers don’t qualify for the federal Energy Star
pane tankless water heaters do. Not only can
l, they can also slash a home’s carbon footprint.
CEU credits: Take our AIA- and NAHB-certified
t buildwithpropane.com/training.
INTERNATIONAL
BUILDERS SHOW • PAGE 8
HBA Members Enjoying DTE
Michigan IBS Reception.
This Issue of Michigan Builder is brought to you by the underwriting support of the Michigan
Propane Gas Association (MPGA). The MPGA is a key partner of the HBA of Michigan and its
efforts to promote education and professionalism in the building industry. Go to buildwithpropane.
com/training to learn more.
PRESIDENT’S MESSAGE
HBA OF MICHIGAN
6427 Centurion, Suite 150B Lansing, MI 48917
Phone: (517) 322-0224
Fax: (517) 322-0504
www.HBAofMichigan.com
SENIOR OFFICERS
Rich Kogelschatz, CGB, CAPS – President
(616) 863-9313
Bill Benedetto – First Vice President
(517) 784-3654
Charles Thompson – Treasurer
(810) 672-8022
L.R. Swadley – Secretary
(906) 361-7801
Anthony Bosco, CAPS, CGP, CGA – Associate
Senior Officer
(989) 751-0090
Clyde Alcox – Immediate Past President
(517) 321-8200
HBA OF MICHIGAN STAFF
Diana Dixon
Special Projects Director
[email protected]
Dawn Crandall
Political Affairs Director
[email protected]
Pam Frankenberger, CMP, CMS, CTA
Director Affiliated Enterprises
[email protected]
Lee Schwartz
Executive Vice President for Government Relations
[email protected]
Greg McClelland
HBA of Michigan Legal Counsel
[email protected]
Tremendous Growth on the Way
Dear Readers,
his edition of Michigan Builder Magazine focuses on the near and
long-term economic forecast and housing outlook for our great state.
If your region of the state has not yet felt the positive change in home
values, remodeling and new construction activity, hold tight, it is coming
your way. Even in areas not seeing a great deal of building activity, we’re
seeing rising home values. The average sale price of an existing home has
had double digit increases across the state for the past couple of years.
And in markets like Jackson and other areas without lots of new construction in the past year, these communities are now starting to see larger than
average increases in existing home sale prices. This is a leading edge indicator that spells forthcoming positive building and remodeling activity. Don’t just take it from me
or from your state association. The University of Michigan and the State Department of Treasury
have all forecasted tremendous growth in the housing industry over the next several years. Read
the cover story in this issue, citing their projections.
As a result of all these positive trends, a whole new (but far more favorable) set of challenges
like workforce availability, capital access and the availability of development ready building sites
have arisen. I am pleased to report that your state association has these issues on its radar screen
and stands ready to assist you and/or your local HBA on these or any other regulatory problem you
may encounter. Don’t forget that we can assist you in both good times and bad. And, we can’t help
if you don’t make us aware of your problem.
The record chilling weather and start of 2014 has overshadowed much of the good that is coming
our industry’s way. But just as I can tell you that a beautiful spring and summer awaits our great
state, so too can I assure you that growth in the building and remodeling sector will continue
throughout 2014 and beyond. Hold onto your workers. Cultivate relationships that help you identify your next employee. And, be on the lookout for new development opportunities for your business now more than ever.
T
Sincerely,
Rich Kogelschatz
President
HBA of Michigan l
Robert L. Filka
Chief Executive Officer • [email protected]
PRINTCOMM STAFF
Publisher — Kevin Naughton
Managing Editor — Patricia Lynn
Graphic Designer — Jason Gabel
Advertising Sales Manager — Brenda Poe
Advertising Sales
(800) 935-1592 ext. 106
Advertising Sales Representative
Marsha Suwienski
Published by:
2929 Davison Rd., Flint, MI 48506
(810) 239-5763
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MICHIGAN BUILDER • ISSUE 1 2014
Interested in
Advertising in
Michigan Builder?
Call Marsha Suwienski
at 800.935.1592, ext.106.
MICHIGAN BUILDER • ISSUE 1 2014
5
Steady Growth Forecast
for Both Housing and Michigan’s Economy
I
t’s no longer hype and innuendo. Whether you look at the University
of Michigan, Census Bureau, Department of Treasury or the Home
Builders Association of Michigan’s recent forecasts all the hard facts and
figures point to a sustained period of growth for the building and remodeling sectors in Michigan. These projections extend well into the future. The
only question on how rapidly we will see this growth is whether the building sector is able to meet growing demand given the workforce and capital
access issues it will face in most markets across the state.
According to a recent University of Michigan forecast, nearly half of
all the lost jobs (from the lost decade of the 2000s) will be recovered
by the end of 2015. To quote them, “this pattern translates into gains
of 65,000 jobs in 2014 and 65,800 in 2015. These yearly gains would
exceed the average change of 57,000 jobs per year recorded from 1971 to
2000, prior to the extended downturn of the 2000s. The top job produc-
ers over the next two years are professional and business services and
the large trade, transportation, and utilities sector. And the most rapid
job growth is in construction. If our forecast proves correct, by the end
of 2015 the state would replenish about half (48 percent) of the payroll
jobs lost in the ten-year downturn ending in early 2010.” Other Michigan
economic statistics of note include:
• More than 220,000 new private sector jobs created since
December 2010
• Leading the nation in manufacturing job creation
• Personal income growing; tied for #1 in Great Lakes; seventh nationally (Q1-Q3 2013)
• Fourth in the nation for high-wage job growth; sixth for middle-wage
job growth
• Home sales and values on the rise
Trend Curves & Predictions
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MICHIGAN BUILDER • ISSUE 1 2014
The forecast for 2014 single-family home construction shows continued strong growth in permits, according to Bob Filka, CEO of the Home
Builders Association (HBA) of Michigan.
During 2013, Michigan saw 13,359 single-family home permits
recorded year-to-date, according to US Census Bureau data. This number
was up by 28 percent compared to the 10,459 permits issued in 2012.
From a trailing 12-month perspective, Michigan single-family home
permits exceeded the 13,000-permit threshold for the first time since
May 2008, when the residential housing market was nearing the end of a
nearly 5-year “free fall” that began in January 2005 and didn’t end until
October 2009.
Analysis of factors used in HBA of Michigan’s econometric model
reveal that 2013’s strong growth was attributed to several factors, most
notably over 91,000 more people employed this year compared to 2012
and a continued strong rebound in North American vehicle production.
Without question, the biggest contributor to the burgeoning housing
recovery was the rise in home sales, particularly the 12 percent increase
in average home sale values when comparing Michigan Association of
Realtors data from 2013 to 2012. Combined with continually decreasing
inventories, the result was an acceleration of new home construction.
Looking ahead at single family home permits in 2014, HBA of Michigan
forecasts a continued upward growth of nearly 20 percent, with a total of
15,966 single-family home permits expected to be issued in the coming
year. Filka noted that a similar projection of just under 16,000 homes was
projected by the Michigan Department of Treasury and House and Senate
Fiscal Agencies in their “Consensus Estimates. And accelerating faster
than our conservative estimates, they project that Michigan will have
nearly 30,000 new single and multi-dwelling starts by the end of 2016.
This past year these combined totals equaled 15,934. l
Six-Year Curve Forecast
(total single & multi-unit dwellings)
A Kick-off To Catch
The Great Lakes
Builders Show
Ford Field
March 3, 4, 5, 2015
For exhibitor information, call 517-322-0224
or go to www.greatlakesbuildersshow.com
MICHIGAN BUILDER • ISSUE 1 2014
7
International Builders Show
Draws More than 600 Attendees
from Michigan
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MICHIGAN BUILDER • ISSUE 1 2014
S
ome 600 Michiganders attended or
participated in the February International
Builders Show in Las Vegas. There was
a definite upbeat vibe not present in recent
years. A huge array of new products and
other building-related information was available to attendees. This year’s show included
the annual Kitchen and Bath Show and initial
reports suggested that more than 90,000 builders, remodelers and contractors were in Vegas.
In addition to the show, our national
association honored a number of individuals for their leadership throughout 2013. Of
particular note was an honor bestowed upon
HBA Michigan Senior Officer Tony Bosco.
Tony was named NAHB CGA of the Year.
Congratulations Tony!
Another key announcement at the show was
the formation of a new financing tool available only to members. NAHB’s Finance
Division identified a group of private investors who are interested in making acquisition,
development and construction loans to HBA
members. They will only make these funds
available to HBA members and the costs of
these non-recourse loans (i.e., members don’t
have to personally guarantee them) appear
quite competitive. In fact, most members
probably couldn’t get this type of loan from
a bank or other traditional lender right now.
The private firm is interested in projects
ranging from $1 million to as much as $10
million. If you are interested in learning
more about this financing option, contact Bob
Filka at 517-322-0224 or by email at bob@
hbaofmichigan.com.
HBA Members Enjoying DTE Michigan IBS Reception.
HBA Michigan Reception at
IBS Sponsored by DTE
A big thank you to Christine Cole and DTE
for the continued support of Michigan’s building sector. Our HBA Michigan reception at
IBS was hosted by DTE. It was held right
on the Strip at Margaritavilles adjacent to the
Flamingo Hotel. Nearly 200 Michigan attendees stopped by to say hello and share a story or
two about the show. l
MICHIGAN BUILDER • ISSUE 1 2014
9
BUILDER PROFILE
Silverado Custom Homes
Following a family legacy, business thrives for
Bob Tedesco thanks to his attention to detail
B
ob Tedesco of Silverado Custom Homes has nearly 30 years’ experience in the home building industry. Bob got his start in construction working for his father’s company, Meridian Homes.
At Meridian, Tedesco was able to try his hand working with their subcontractors on the job to learn the intricacies of building.
“It was a great experience,” Tedesco explains. “I spent a year working
with our carpenters, masons and cement contractors. I even spent a few
weeks following people around Greco Title Company to learn that end
of the business.”
In short, Tedesco affirms, “I pretty much tried everything.”
After earning a degree in Building Construction Management from
Michigan State University and 15 years on the job, Tedesco started
Interior design by Adamo Interiors of Rochester
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MICHIGAN BUILDER • ISSUE 1 2014
his own building company, Silverado Custom Homes. This second
generation builder has built over 250 homes in Oakland and Macomb
Counties and kept a family tradition of customer satisfaction and
commitment to excellence.
Keeping Up With the Times
Upon inception in 2000, Silverado’s business was predominantly
subdivision home building. In 2007, when this market began to falter,
Silverado committed all their attention to private, custom home building.
“It became obvious that the need for the product I was offering was
non-existent,” Tedesco said. “I had to change with the market or I
wouldn’t have survived.”
Custom homes remained the primary focus through 2011 when it
appeared that the market for subdivision production homes may finally
begin a comeback. At this point, Tedesco was given an opportunity to
market a community in Oxford Township where he had prior success.
“The timing was great. We were completing our last two custom
homes and I wanted to get back to building in a subdivision. I wanted
to take advantage of this opportunity and get ahead of the competition.”
Residents in Silverado’s Oxford community, Willow Lake, are the
recipients of the lessons learned during the years Tedesco spent building luxury custom homes. Tedesco’s experience during the recession
helped to solidify his approach to building production, semi-custom
homes today.
Offering Clients More than Just a House
Tedesco recognizes that when buyers are looking at the market, they
want more than just a house, they want a home. This is why Silverado
offers each client the ability to modify a stock home plan or draw a new
plan to fit their family lifestyle.
“We use our custom abilities that aren’t offered by the competition.
Not one of our homes are built the same,” Tedesco explains.
Tedesco realizes that location is also a component to building a family
lifestyle. Situated in Northern Oakland County, Willow Lake offers residents just that. Nestled in Oxford Township and on the Polly Ann Trail,
families can easily access the Village by bike or foot. The trail not only
connects local residents to town, it also provides miles of scenic trailway
and easy access to other recreational areas.
Thriving in a Tough Economy
Tedesco and Silverado Custom Homes have ridden out a tough period
in the building industry and came out on the other side thriving. Silverado
has faced down adversity and used this time as an opportunity to diversify and grow.
Silverado’s growth and sustained quality has not gone unnoticed.
In 2009 Tedesco was named Michigan Builder of the Year. In 2012,
Silverado’s Northport 2 Model in Willow Lake won a blue ribbon
award in the Home Builders Association of Southeastern Michigan’s
Parade of Homes.
Tedesco credits his membership in the state and local HBA as important factors for his success.
“My dad always encouraged me to get involved in our local association,” he said. “I joined both the state and local when I started Silverado. I
originally joined for the member discounts and the credibility it provides
builders. I soon discovered that the education, networking and the ability
to learn from the leaders in our industry were also tremendous benefits
to being a member.”
The HBA of Southeastern Michigan, where Tedesco currently is serving as a vice president, has also been able to offer him an opportunity to
help others.
In September of 2013, Michael Stoskopf, the CEO of the HBA of
Southeastern Michigan, reached out on behalf of Jennifer McLaughlin, a
single mother who had lost one of her legs after many surgeries and found
herself in need of an access ramp to her home. Tedesco, with the help of
other HBA members, Carpentry by Tony and Dillman & Upton, gave
both the time and the resources to build the job for the Oxford Township
woman. A great example of how the HBA and Tedesco actively support
the community.
Tedesco enjoys spending time with his wife of 12 years, Suzanne, and
their 10-year-old daughter, Jacklyn, in their very own Silverado Custom
Home in Rochester, Michigan. l
MICHIGAN BUILDER • ISSUE 1 2014
11
HBA Michigan Winter
Board Meeting
M
ore than 100 local HBA representatives from around the state met
at Lansing Community College in late January to review the state
association’s financial condition and to hear from speakers on
key workforce and regulatory issues that will be impacting the building
industry in the future. HBA Michigan also announced that it will hold
an industry-only trade show at Ford Field—March 3-5, 2015 called the
Great Lakes Builders Show. Special recognition was given to immediate
past president Clyde Alcox for several decades of service and Petoskeyarea remodeler Jeff Grantham was named 2013 Remodeler of the Year.
The Board of Directors also voted to eliminate one state meeting in 2015
and thereafter to reduce costs and redirect resources toward outreach and
more state participation in local meetings. l
Keynote Speaker and DEQ Director Dan Wyant answering
member questions.
Remodeler of the Year, Jeff Grantham.
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MICHIGAN BUILDER • ISSUE 1 2014
Left to right: Current
Michigan HBA
President, Rich
Kogelschatz; immediate
past president, Clyde
Alcox; Bob Filka.
Randy the CPR Guy
• 30+ Years of Experience
• Special Rates for HBA Members
[email protected]
www.randythecprguy.com • 989.330.2589
ASSOCIATION SPOTLIGHT
The Home Builders
Association of Barry County
C
The Barry County Home Builders Association
was established in 1976 and has been active
in the community ever since. Though small in
numbers, we are a very involved group. Bi-monthly
membership meetings provide a good basis for round
table discussions on the local business climate, trends
in the industry and general discussions on craft of
building and remodeling homes. We are fortunate to
have local industries that are involved in residential
construction and have frequently had them as guest
speakers. We are focused on education and all builder
members that attend our meetings will have their
continuing education requirement for State Licensure
met. We take pride that we are “hands-on builders” and
that we know our community. We often take it upon
ourselves to assist others that are in need, including
providing fundraisers and even building homes for
those that have been dealt physical misfortunes. We
have also built homes through the Habitat through
Humanity program. Please visit our website for more
information at barrycountyhba.com. l
Education event provided by the Barry County HBA
MICHIGAN BUILDER • ISSUE 1 2014
13
MESSAGE FROM REMODELER COUNCIL
CHAIR, JEFF GRANTHAM
Tapping Into
Pent-up Demand
L
et’s take a look at the good news
from NAHB and the recently released
American Housing Study and what it
means for Michigan Remodelers. 41 percent
of homes were built before 1969, meaning that
four in 10 homes are 45 years old or older, well
beyond the life expectancy of most building
materials. 71 percent are at least 20 years old
and 85 percent are at least 10 years old.
As remodelers we should see these statistics
as opportunities and capitalize on them; the
tree is ripe for the picking. This is a reminder
of the nearly endless supply of demand for our
goods and services; every house needs something done, either on the exterior or interior,
on the floors or the walls, in the attic or in the
basement. We need to be sure that we’re the
ones homeowners call when it’s that time.
We need to be sure we’re prepared to answer
the questions today’s home owners and home
buyers ask as they select their contractor.
As borrowing costs remain near historic
lows and lending standards are eased allowing
access to capital, more money will start to flow
into the market and remodeling will undoubtedly stay in the lead of the housing recovery.
One in three adults 18-34 lived with their
parents in 2011. No matter if you’re the child
or the parent, you probably wouldn’t put up
with that situation for too long, so that pent up
demand is awaiting our services, either the new
homebuyer when they need to modernize their
first home, or the empty-nester who is re-claiming their space as their own once again.
Trends toward urban housing in walk-able
communities, energy-efficiency upgrades and
sustainable materials are here to stay. Retiring
adults want these things. Young, forming
families want these things, too. We need to be
prepared to deliver when we’re called upon.
Think of your own needs in your home. When
you shop for a truck or minivan, you look at
mileage, you look at cargo space, you look
at conveniences, safety features, warranty,
costs of ownership and most of all you buy
from a trustworthy dealer. That’s no different
than a homeowner and their remodel; they
want something and you’re the one to call,
the trusted professional with the goods and
services to fit their needs.
“Let’s go build something!”
Announcements:
• HBA Michigan Remodelers is pleased
to announce that Michigan Propane Gas
Association is sponsoring our Professional
Remodeler Education Speaker Series
PRESS and Scott Sevon, CGR CAPS
GMB from MAW Chicago will be our
Professional Remodeler Speaker at summer
convention in July.
• HBAMR elected Jeff Tithof of Saginaw to
serve as Treasurer for 2014. Tithof joins
Chairman Jeff Grantham, CGR CAPS
GMB CGP of Little Traverse and ViceChair Tom Barber of the North Central
Lakes HBA.
• HBAMR donated $500 to the Emerging
Issues Fund and encourages you to each
individually consider a donation to support
ongoing legal and regulatory affairs.
• A statewide tour of local councils will be
underway this spring to establish and grow
our council membership across the state
and assist local councils in programming
and support.
• Watch for a catalog of goods and apparel
with the HBA Michigan Remodelers logo.
Our Mission:
To promote and enhance the professionalism
of our members and the remodeling industry. l
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