From time-to-time we like to run messages from other associations in the state. Here is a recent note from Central Oklahoma Home Builders Association president Kurt Dinnes to his members.
Good Morning COHBA Members,
I had a great time at the IBS Show and the NAHB Board and Leadership meetings this week. Although it was one of the busiest, and informative weeks I have had in quite some
time, it was very much an honor to represent our association as your President at those meetings. The "IBS time," is an exciting time, with almost 900 exhibitors and educational seminars, too numerous to mention.
The unofficial theme this year seemed to be, "It's About Surviving The Downturn".
The Chairman of NAHB, Bob Nielsen's opening remarks to the Presidents' Council started with the statement that although there are signs the housing market is improving, 2011 was the worst year for new housing starts since he could remember. Chairman Nielsen went on to state that even with the positive moves in existing home sales and improved new home permits in the 2nd and 3rd quarter, that 2011 was still worse than 2010 on a national level.
These statements were quickly followed-up by information that included the following positive trends,
new home permits were up in the last half of 2011 and are showing good signs for the first quarter 2012
builder confidence has improved for four consecutive months in a row
60 plus cities were added to the NAHB's Emerging Markets Index making the total just short of 100
Chairman Nielsen, concluded that the housing slump may have bottomed-out in 2011 and based on the current trends and the economist's reports that we should see a heathy improvement in several areas including new home starts in 2012.
At the NAHB Board of Directors meeting, economist, David Crow concurred that 2011 was worse than expected with new home permits significantly down over 2010. He followed-up with some improvement signs that included the fact that unemployment is down, consumer confidence is up, single family new home starts are up, sales of existing single family homes are on the rise, and home prices are moving toward a more normal level. These indicators and others lead him to believe we will see steady growth in the housing market for 2012, and by year-end 2013 he projects, as a national average, we should be back to between 60% to 65% of the norm for home building in the US. On an even more positive note, Oklahoma is one of the top five states leading the home building recovery, projected to be between 75% to 80% of normal by year end 2013.
The NAHB leadership recognizes that there are still many challenges that lie ahead. These challenges include; foreclosures and short sales of existing homes, poor appraisal policies and practices, and over-reaching, burdensome lending restrictions, as well as the preservation of the mortgage interest tax deduction. These primary challenges along with keeping home ownership in the forefront of our congressional leaders, are the biggest factors with respect to turning the US economy around and will certainly be the NAHB'S primary focus for 2012.
Association Membership at the national, state and local levels is also a major concern for the NAHB Federation. Last year membership was down another 7%. This has forced the NAHB to operate at a significant financial loss for 2011 and a projected greater loss for 2012. Unfortunately, the 2012 projected financial loss comes after broad sweeping budgetary cuts at all levels and a reduction of 30 more staff. These budgetary decisions were made in a manner as to have the least effect on member services.
With that being said, the NAHB estimates that, through its advocacy efforts on behalf of the home building industry and it's membership, approximately 5.7 billion dollars was saved to the benefit of its membership. If you put it in perspective, that means the approximately $22 million in national dues collected, equates to a very high rate of return on the dues investments. Simply put, membership is more important and valuable than ever.
At the IBS show this year we had the privilege of having Federal Reserve Chairman, Ben Bernanke address the membership. Although Chairman Bernanke shared similar views, his added perspective included a reminder that there are approximately 1.75 million unoccupied homes still on the market, that REO's and short sales still make up about 30% of home sales and that foreclosures will continue for a while, some of which factors will have a positive affect on rental markets in some areas of the country. On a more positive note, Chairman Bernanke reconfirmed the Federal Reserve's commitment to continue to work with the mortgage lending industry to correct the unnecessary restraints on mortgage credit and the excessive underwriting standards. He further and perhaps most importantly, confirmed that the Federal Reserve recognizes how central the housing recovery is to the overall US economic recovery. It is our hope that this type of recognition will positively affect lawmakers on the Hill in Washington. If so, when bills are introduced which could affirmatively make a difference in the home building recovery, such awareness could promote quicker consideration and passage. On the flip side, such recognition could help prevent bills such as the elimination of the mortgage interest tax credit and other harmful bills from being heard or, at least help them be voted down.
This has been a amazing week, I have learned so much, I have made new friends and visited with many great people from all over the US. I hope you will find the information and experiences I gained through this great opportunity representing our association, to be helpful and encouraging.
If I could leave only one important message from my experience at IBS and the NAHB meetings it would be this: That in every meeting I was involved in, from those meetings on a national level, to our Area 11 Caucus and visiting with other Association Presidents around the country, there is truly no better place to be in the home building business than in Central Oklahoma.
P.S. Our 2011 building permits where up over 2010, I do not know if we will be able to keep that a secret!
Respectfully your 2012 President,