News-Leader Editorial: 'Home building news cause for joy'

Following Tuesday's page 1A news story on signs of life in the building industry, the Springfield News-Leader editorialized Wednesday on what great news that would be for the community and local economy. The editorial follows below, or can be read directly on the News-Leader site by clicking here.

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Our Voice

November 4, 2009

Experts say the growth rate can be foundation for future prosperity.

For now, it's just a ray of optimism for home builders.

But it's a bright ray.

Battered by sour economic news month after recent month, a headline Monday could be a harbinger of better days on the horizon.

"Increase in spending on home building spurs hope" were the words atop a 1A News-Leader story Tuesday.

It told how the U.S. Commerce Department is reporting that September showed the biggest increase in private residential building in six years.

Of course, no one's anywhere close to declaring an end to lean times. But the latest numbers have spurred a positive buzz that the housing market is rebounding.

It's sunny in the Ozarks this week, with temperatures approaching balminess. It's a good time for a reprieve from the bleak and the dire.

Take a minute or two to bask in these latest numbers and allow yourself a rosy glance forward.

Economic experts say a return to health for the housing industry will support economic recovery overall.

Cautions about overreacting abound, but one thing is clear: this growth -- a 3.9 percent rise in residential construction -- was not expected. Analysts had been predicting an overall decline in total construction spending, which includes public building projects.

Locally, experts say an upturn could soon create demand for more new homes, because the current inventory has shrunken. These might be smaller homes, perhaps built with evolving, green technology, but at least a demand is predicted.

Builders in Greene and four other nearby southwest Missouri counties also received other soothing news recently.

A market research company -- reporting an analysis of census information, building permits, lot supply vs. demand, the historical rate of demands for new homes and other data -- concluded the Southwest Missouri housing market "is moving in a healthy direction."

Among the key factors noted: a projected 7 percent population growth over the next five years; a "relatively healthy employment picture"; and an economic resilience not enjoyed in other parts of the nation.

Builders had essentially stopped constructing homes due to the downturn. Deciding which kind to build as the market surges back is undoubtedly the kind of problem they'd be glad to tackle.

Hopefully, September wasn't an anomaly.

There's nothing like the sounds of industry -- hammers, nail guns, concrete trucks -- to complement another beautiful, fall day in the Ozarks.

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This editorial is the view of the News-Leader Editorial Board.

News-Leader: 'It's a good time to build'

On Monday, October 19, Springfield News-Leader reporter Cory de Vera had this report from the weekend HBA Home Remodeling Expo:

'It's a good time to build'

Remodeling expo attracts fewer,

but more serious patrons this year.

For Battlefield residents Judy and Jerry O'Dell, the Home Builders Association Home Remodeling Expo was the place to be over the weekend.

After living in their home 33 years, Judy O'Dell said she's ready for some upgrades.

"I'm looking at remodeling the bathroom, the kitchen, the living room," she said. "I'm wanting wood floors, granite tops. I'm wanting marble in my bathroom."

Matt Morrow, executive director of the HBA, estimated that this year's show at the Ozark Empire Fairgrounds drew about 4,500 people Friday through Sunday, fewer than the 5,000 to 7,000 that the show has drawn in years past.

But, vendors told him, those who did come seemed to have definite plans for projects. In other years, the show may attract higher numbers of people who come for entertainment.

"They did say the show helps create a few jobs that will help get them through to the next construction season," Morrow said.

If the Remodeling Market Index is an accurate measure, business has been picking up from when the index hit a low point in December 2008.

The RMI is an economic indicator created by the National Association of Home Builders based on a survey that goes out every quarter to 2,000 remodelers around the country. The survey asks questions about the current demand for remodeling for projects under $25,000 and for projects over $25,000.

A second portion of the survey calculates an index number quantifying future expectations of remodelers, based on responses to questions about topics like their calls for bids and their backlog of work.

In December 2008, the index number measuring future expectations hit a low of 18.6, but that climbed to 30 after the first quarter of 2009 and to 34.2 after the second quarter. The index numbers reflecting actual contracts showed the same trend.

Still, those numbers are a far cry from when the indexes were over 50 in 2003 and 2004.

Morrow said anecdotally, he has heard that business for remodelers had been picking up locally, but there isn't an easy way to get hard data for the area.

"A lot of municipalities and most counties in this part of the state don't issue permits (because) they don't have building codes," said Morrow. "So you can't just go down to the courthouse and say, 'How many remodels have we had?' You can for a particular permitting jurisdiction that they happen to track, but you can't do it for all of southwest Missouri."

One trend Morrow has seen is that as demand for new construction has decreased, builders have moved into major remodeling projects instead.

That was true for builder Sam Bradley.

"Almost all the calls that I get have been for remodeling this year, up until about three or four weeks ago," Bradley said.

"Then just this last month I've had five calls for new homes. That's why I think new construction is coming back."

Springfield residents Gary and Tish Orrick came to the show because they are planning to build a new home, starting in the next 30 days.

"It's a good time to build," Gary Orrick said. "With the economy being bad, all of the subs and all of the people who furnish materials for you have lowered their prices."

Judy O'Dell, who was planning major remodeling, said she was spotting good deals, too.

Remodeling appeals to her more than buying a new home because she likes where she lives, she said. In the long run, she believes remodeling will cost less.

"And when you remodel you can do it one room at a time," she said. "You can save your money, do one room, rather than dishing out all the money at once. ... Nowadays with the economy, you have to save for each project."

Pearson Park Highlights Need to Block 'Cap and Trade' Legislation

HBA builder Richland Homes recently broke ground on the area's first 100% ENERGY STAR subdivision. Richland Homes president Brian Willaby has begun work on the first three homes in Pearson Park subdivision, which will require ENERGY STAR certification for all new homes as a part of the subdivision covenants.

Just when home building is showing signs of life (and as the free market is embracing energy efficiency and green building), the U.S. Senate prepares to take up the most restrictive environmental legislation in U.S. history. The controversial "Cap and Trade" bill passed this summer by the House of Representatives by all estimates would drive up the cost of utilities exponentially. The bill also includes costly and unnecessary code requirements for new construction nationwide. The ill-conceived legislation would place potential home buyers in a no-win situation: they can't afford to stay where they are, but they also can't afford to buy a newer, more efficient home.

With the nation's economy still reeling from economic recession with the housing industry virtually on life support, home builders, realtors and other housing advocates are urging Senators to reject the House bill.

In conjunction with the launch of Pearson Park, local news outlets drew the connection between the good intentions of government and the resulting negative impact on today's energy efficient home building options. KY3, KOLR, KSFX, KSPR and the Springfield News-Leader all covered the story. Part of that coverage is available to view and read below.

KY3: Builders worry cap and trade will stifle green growth

KOLR: HBA Builder Richland Homes Launches Area's First ENERGY STAR Subdivision

Springfield News-Leader:

Local Green Subdivision is First of Kind

Developer: Cap-and-trade would hamper project

Didi Tang

News-Leader

The first Energy Star subdivision of Greene County is under construction to demonstrate the feasibility of energy-efficient homes .

But such private, market-driven efforts will be in jeopardy if U.S. senators approve cap-and-trade rules to control carbon emission, said the developer of the 155-lot Pearson Park northeast of Springfield.

"To me, it's cap-and-tax," said Tom Barr, who has stipulated in the subdivision covenant that all homes at Pearson Park must be built to the federal Energy Star standards.

On Friday, Barr and his colleagues in the local building community showcased three energy- efficient homes being built at the 64-acre Pearson Park development.

They seized the opportunity to criticize the proposed cap-and-trade system, contending the new rules would not only hamstring consumers' financial ability to purchase energy-efficient homes but also make construction of such homes more expensive, putting them further out of the reach of American homeowners.

"The new regulations will paralyze the market," said Matt Morrow, executive director of the Home Builders Association of Greater Springfield.

In his opening remarks, Morrow noted the residential home market -- after 22 months of continuing decline -- is finally showing signs of recovery and warned against any regulations that would put the industry back in a lull.

The cap-and-trade system, approved by the U.S. House of Representatives in June, is heading to the Senate this fall.

At the heart of the debate is the eventual cost to businesses and consumers.

On Friday, Morrow said the system has been estimated to raise an average family's utility expenses by more than $1,700 a year.

The cap-and-trade system also would place onerous regulations on construction of energy- efficient homes, making them less affordable, Morrow said.

Barr said market studies have shown homebuyers are willing to purchase energy- efficient homes if they can see tangible monetary savings.

He said green homes are more expensive to build and consumers are less likely to pay extra for some of the environmental benefits that come with a green home.

A green home not only is energy- efficient but also must meet certain standards in other environmental issues such as recycling and material sustainability, Barr said.

Brian Willaby of Richland Homes is the builder of the first three homes at Pearson Park, and Willaby has been working with local contractors and supplies to rein in costs .

An energy- efficient home doesn't necessarily cost more to build because the extra dollars spent on insulation, for example, can be offset by savings in the heating and air-conditioning system, Barr said.

One of the homes, estimated to use only 52 percent of the energy a standard house consumes and the most energy- efficient of the three, costs slightly more to build, Barr said.

Probably half a percent, said Willaby.

"It's a minute percentage," the builder said.

Final cost figures will be tallied when the homes are built, Barr said.

On a price-per-square-foot basis, the homes at Pearson Park will be comparable to non-Energy Star houses, Barr said.

One house, for example, has an asking price of $189,900 with about 1,800 square feet.

An Energy Star home must meet strict guidelines for energy efficiency set by the U.S. Environmental Protection Agency, according to the official Web site of the federal program.

These homes are at least 15 percent more energy- efficient than homes built to the 2004 International Residential Code, and include additional energy-saving features that typically make them 20 to 30 percent more efficient than standard homes.

Springfield News-Leader: Local Contractors See More Projects

The Springfield News-Leader reported Tuesday (August 4) that construction spending is up nationwide. Specifically, spending on private residential construction is up, both nationwide and locally. HBA of Greater Springfield CEO Matt Morrow is interviewed for the story, along with Springfield Contractors Association President Dave Robertson, commercial contractor Lowell Thomas (Rich Kramer Construction) and Missouri Department of Transportation spokesperson Bob Edwards.

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August 4, 2009

Local contractors see more projects

Rising construction spending part of national trend.

Didi Tang

dtang@news-leader

Construction spending nationally rose for the second time in three months fueled by increases in residential building and government-funded infrastructure projects.

The report provides evidence the housing sector may be recovering, while the rise in government spending was partly due to the Obama administration's $787 billion stimulus package, economists said.

The Commerce Department said Monday that construction spending increased by a seasonally adjusted annual rate of 0.3 percent in June, defying analysts' estimates of a 0.5 percent drop. May construction spending was revised up slightly to a 0.8 percent decline. Still, June's $965.7 billion in spending was 10.2 percent below the year-ago level.

In Springfield, contractors are beginning to see more projects up for bid, after the industry saw little activity in late 2008, said Lowell Thomas, who is in charge of sales and marketing at Rich Kramer Construction.

"There are some government-funded projects available," Thomas said. "And there is a pickup in locally-funded projects."

For example, area school districts and O'Reilly Auto Parts have recently sought bids for their building projects, Thomas said.

"I think people are more optimistic about the economy," Thomas said.

The federal stimulus plan has quickened many transportation and military projects in the area that had been scheduled for coming years, said Dave Robertson, president of Springfield Contractors Association.

The Missouri Department of Transportation, for example, expects to receive $525 million from the American Recovery and Reinvestment Act.

In southwest Missouri, about $66 million worth of road projects are slated for stimulus funding.

All the projects must be under contract by June 2010, said Bob Edwards, a MoDOT district spokesman.

One of the major projects is the widening of U.S. 65 to six lanes between Interstate 44 and U.S. 60 in Springfield, and it has been recently bid out for $26.9 million, Edwards said.

In addition to road projects, local contractors are seeing more projects from regional military bases, such as Fort Leonard Wood, Robertson said.

In Springfield, the AVCRAD facility for the Missouri Army National Guard has recently solicited bids for improvements, Robertson said.

For the first seven months of this year, the city of Springfield issued 3,952 permits, down from 4,980 for the January-July period of 2008, but the monthly gap appears to be closing.

In residential construction, the local market appears to follow the national trend, said Matt Morrow, executive director of the Homebuilders Association of Greater Springfield.

After seeing 22 consecutive monthly drops in housing starts, Greene County issued more residential permits for both May and June than for the same months a year earlier, Morrow said.

"There are two straight increases," Morrow said. "That's a good sign."