Muskogee, OK’s Downtown Welcomes New Homes

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As the energy industry in Oklahoma continues to stay strong, smaller towns like Muskogee have begun to invest in making their downtowns more welcoming to young professional families that want to stay out of the big city.  Muskogee’s downtown has slowly been building its credibility as an arts and entertainment district, which is walking distance from new homes being built in the area.

In June, the Muskogee City Council awarded developers zoning support for the Muskogee Arts District Homes project. The project was awarded tax credits in November for its status as an income-qualified housing project consisting of the construction and rehabilitation of 36 residential units.

According to Debbie Hart of Housing Plus, LLC, a Springfield, MO- based firm collaborating in the development, eight of the units will be loft apartments on the second floor of the historic Severs Block Building. Each two-bedroom loft is being designed in consultation with a historic preservation consultant and an architect whose work with the state historic Preservation Office brought her to work with the building on previous occasions.

Single-family, three-bedroom homes will be built near the site of the new Muskogee Little Theater facility, just south of downtown. The houses will be built to LEED 2009 green building standards. “We are absolutely getting ready to do that,” Hart said about her company’s plans to move forward with the housing development. “We are pretty darn excited about it, too.”

With the development’s financing being distributed in stages, construction of the single-family houses will begin in April. After the foundations are poured and the sub-contractors have begun construction, work will being renovating the Severs Building Apartments. Hart and her company have reportedly worked round the clock with city staffers to ensure that permitting issues are handled in the best interests of Muskogee. The City of Muskogee will donate 19 lots to the project, holding a total value of $13,500. It will also realign traffic flow to accommodate construction, address the storm water drainage issues, and supervise water and sewer improvements worth over $14,500.

Free Tutorial Primer on LEEDv4

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As we here at HBW have blogged about before, the LEEDv4 standards are significantly more complex than the current LEED 2009 standards. The complexities are so significant that the USGBC extended its deadline for the standards changeover until 2016. One major change in the new rating system compels builders to account for life cycle, and environmental, and health impacts of the materials they use in order to maximize their LEEDv4 project credits.

The LEEDv4 certification program utilizes Life Cycle Assessment (LCA), Environmental Product Declarations (EPD) and Health Product Declarations (HPD) to ensure that buildings are healthier, greener, and more sustainable. HPD’s and EPDS give information about materials and contents related to health issues for buildings and for people. To aid with the overwhelming amount of new information that green building industry stakeholders must learn, GreenCE has created a series of tutorial primers on LEEDv4 standards to help make sense of those upcoming study sessions! GreenCE has mobilized an inter-disciplinary team of biologists, architects, and LEED experts to develop and deliver their cutting-edge primers.

According to Dr. Tara Blank, founder of Elixir Environmental, “design professionals now have the ability to make intelligent specification choices based on full disclosure of material content and potential hazards. The HPD is the most significant game changer for project specifications in decades. Building product manufacturers that embrace HPD early on will benefit greatly in the years to come.”

Dr. Blank’s predictions about the importance of the HPD requirement are echoed by Glen Phillips, GreenCE Director of Sustainable Education. “With the overhaul of the LEED programs, especially as they relate to the contribution of building products, it is important for manufacturers to review, and where necessary, update literature to make sure that references to LEED contributions are clear and align to the significant changes in LEED v4,” says Phillips.

Educating the sales force and marketing teams of manufacturing and construction firms about LEEDv4 is a major task for the coming year. This situation has motivated GreenCE to launch the industry’s first no-cost LEED exam Prep program. The program aims to educate stakeholders about the new green rating system through a series of 10 web-based modules ranging from three to 70 minutes in length. Videos, animation, and case studies are among the activities included in the modules.

GreenCE Media Director Brad Blank anticipates that there will be “a significant interest from building product manufacturers who are in dire need of training their sales force. If representative[s] can’t intelligently discuss [a] product in the context of LEED, they may lose out to their competitors. Our programs are designed to bridge the gap between building product manufacturers and design professionals.”

Over 100,000 industry professionals subscribe to GreenCE’s sustainable continuing education programs. In partnership with the U.S. Green Building Council and the American Institute of Architects, the GreenCE LEEDv4 program helps building product

 

Lennar’s Top 4 Trends for the 2015 New Housing Market

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In Kris Hudson’s rundown of Lennar’s predictions for 2015, there are four that really stand out. While there is good news for home buyers and the broader economy, news for industry investors is less optimistic. 2015 will be a year that the housing market’s course finally begins to self-correct, and the impact will be different for each set of stakeholders in the industry.

  1. The Houston Market Will Drop

The new construction market in Houston has redefined the concept of a “hot” real estate construction market. The energy boom created a lot of jobs and drew a lot of support industries to the area. But the new downturn in oil prices will eventually trickle down into the Houston housing market. KB Homes and Taylor Morrison Home Corp. haven’t yet noticed much drop off as of yet, but Lennar has registered a slight impact in Houston. The firm decided to factor this activity into its 2015 outlook. Lennar president Rick Beckwitt says that, “we haven’t seen a significant change in that market condition. We’ve seen a little, at the higher end, of a pullback. We’ve anticipated…that there will be further reconciliation in that marketplace.”

  1. Incentives for New Homeowners Will Rise

Lennar joins its competitors in raining incentives upon buyers of new homes in their luxury developments. Free upgrades and financial assistance with closing costs are two major types of incentives being offered by developers. What seems to be a profit cut has proven to be a persuasive sales strategy for new home buyers. According to Lennar, its 2014 Q3 incentives program increased the firm’s sales revenue 6.6% from Q3 2013’s 6.3%. KB Homes and D.R. Horton have also adopted similar incentives to convince homeowners to buy now.

  1. Slowing Price Gains offset by Rising Sales

Lennar’s 2014 Q4 average home prices increased 7.2% to $329,000 in 2013 Q4. But 2013’s average price had increased 17.6% over 2012’s numbers. The price slowdown is welcome news to home buyers, who are seeing the highest median new home prices in three years. The slowdown is largely attributed to the shift from high-dollar properties to budget-scaled developments. As lending standards begin to relax, job growth increases, and student load debt programs kick in, the barriers homeowners have faced in entering the new home market will lower, and they will be seeking out entry-level homes. Lennar will being building several entry-level communities in 2015.

  1. Shrinking Gross Margins

Home prices are still lower than the market should be, but materials costs are rising, labor is short, and the land prices are very high. Although builders like Lennar have posted high gross margins in recent years—historically high, to be honest—their success has come from focusing on the higher-end properties for affluent buyers who qualify for mortgages. As they scale back to accommodate budget-minded buyers seeking less expensive homes, their gross margins will grow slimmer. Lennar predicts a 24% gross margin in 2015, down from 25% in 2014.

 

D. R. Horton Moves In to Oneco, TX

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For a few decades, Bradenton has been the only town in the area where one could buy a house, be it an older home or a unit in one of the town’s numerous mobile home parks. Now that D. R. Horton has come to neighboring Oneco, things are going to change. The mega-developer has set its sights on a new bricks-and-mortar housing development with all homes priced below $200,000.

The Express Homes division of the Fort Worth-Based D. R. Horton has begun developing the Park Place neighborhood on 53rd Avenue East. Work began last week on the forested, 16-acre property located amidst an already dense development. The work finally brings development to a parcel which had been the object of a comparatively expensive bidding war prior to the housing market collapse in 2008.

Express Homes will build 58 single-family homes at Park Place. Compared to D. R. Horton’s typically upscale fare, the homes of Park Place will feature limited options. The Express Homes division focuses on building homes for an “entry-level” price range. Founded in April 2014, the Express Homes division has focused its development efforts in Texas and Florida. It is expected that the neighborhood will appeal to budget-minded home buyers, and unlike most of the developer’s other developments, park Place will not have neighborhood maintenance fees.

R. Horton spokeswoman Jennifer Hansen has high hopes for the development. “Given the limited supply of entry-level new home construction in the area, along with no CDD and low HOA fees,” she says, “we expect this project to be very attractive to potential homebuyers.”

The development fell together after D.R. Horton snagged the land at a deep discount. The acreage was purchased from Park Place investments for $834,500. In December of 2014. Park Place Investments had bought the land out of foreclosure from Rottlund Homes of Florida for $245,000 ago and immediately began the lengthy entitlement process. The land had originally sold for $2.4 million in 2005.

Park Place is currently working on the infrastructure elements, installing roads, power lines, and sewers. The final subdivision plat has yet to be submitted. Although there is much work to be done, D. R. Horton hopes to begin building the neighborhood’s first new homes by the end of the year.

Brasfield & Gorrie Talk Construction Industry Career Development

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As we set our production and profit goals for Q4 and the New Year, it’s helpful to take other industry leaders’ perspectives into account. In a recent interview with Bridget Bergin of Manufacturing.net, Brasfield & Gorrie’s Industrial Market Sector Leader Dan Parkinson had much to say about the construction industry’s employment rates, and career development in the American south.

When asked about the growth of the construction industry in the South, Parkinson says that regulatory conditions and lower expenses have drawn major developers and manufacturers to the region, Parkinson suggests that “right-to-work states, state tax incentives, and cheaper utility costs contribute to the attractiveness of southern states for manufacturing operations and new construction projects,” especially in comparison with the union-bound strongholds of the Northeast and Midwest. State officials in “South Carolina, Tennessee, Georgia, and Alabama are offering these factors as compelling reasons” for manufacturers to relocate, which brings developers around to provide construct and expand the facilities.

Citing the findings of a report from Boston Consulting Group, Parkinson says that “the outlook for new construction activity in the manufacturing sector is positive… an increasing number of U.S. companies are “reshoring” their manufacturing operations and bringing new construction back to the U.S. from overseas.” The report says that “approximately 20% of companies with annual sales of $1 billion plan to bring their operations stateside from China this year. The executives also indicated that they expect manufacturing in the U.S. will account for nearly half of their total production over the next five years.”

While it’s true that Southern states can expect to see an influx of workers to fill these manufacturing jobs, the number of construction trades professionals necessary to getting the work done may be lagging. According to Parkinson, “It is imperative that the construction industry connect with the next generation of workers by the time they enter high school, if not sooner.” One reason this hasn’t happened, Parkinson says, is that “the construction industry is challenged by an unflattering perception that our jobs are backbreaking and require non-skilled labor,” In reality, “today’s construction jobs rely greatly on technology, and incorporate the use of computers, smart phones, tablets, industry-specific software, lasers, drones, 3D modeling, GPS, and electronic blueprints, from start to finish,” as well as advanced math and science and technical training.

One unique benefit that today’s young workers bring to the workforce is an unabashed engagement with technology. “Our industry can benefit from the generation of workers who have grown up playing video games and understanding technology applications,” Parkinson says, “for example, the hand to eye coordination that many people have developed while playing video games may complement positions that require dexterity, such as mobile crane operators.”

Cloud-Based Construction Management Just Got Real

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Building lifecycle consulting company Trimble Buildings has its feet on the ground, but its head is definitely in the cloud. Last week, Trimble announced ProjectSight, “a cloud-based solution for construction field management that simplifies the creation, access and sharing of project information between the field and the office.” Distributed via the software-as-service model, this “new solution provides mobile workers with access to up-to-date project information and smart workflows for increased productivity and more informed decision making.” ProjectSight will lower contractors’ software costs while widening the availability of key documentation and information to all of the project stakeholders.

Easy-to-use and cost-effective, Trimble ProjectSight is a field management application designed for contractors and project managers. Accessible via computer or mobile app, ProjectSight features a clean, intuitive user dashboard interfacing with “smart, project-based workflows” that keep teams in sync. The centralized database offers up-to-date information related to critical project drawings, models, blueprints, information requests, material tracking, and issues reporting. Unlike other products, ProjectSight has robust offline functionality that allows information to remain available even during sessions that get disrupted with sudden disconnections.

ProjectSight is only the latest of Trimble’s offerings for managing construction project logistics, budgets, estimates, schedules, and coordination for 2d and 3D datasets. The new Trimble Connect collaboration environment serves as the primary platform for ProjectSight. Trimble Connect is the cloud-platform hub for the design, engineering, and construction firms working on a project. In conjunction with Project Sight, Trimble Connect allows teams to access and share project management data with all other users during the design-build-operate lifecycle.

Mark Sawyer, general manager of the General Contractor/Construction Manager Division of Trimble Buildings, explains that “effective project management is critical to the profitability of any construction project.” Trimble ProjectSight offers “a solution that addresses the core functions of project management in a very easy-to-learn, easy-to-use and easy-to-deploy system,” says Sawyer, adding that, “ProjectSight ensures workers have access to accurate, up-to-date information and it puts that information in the hands of highly distributed teams at very low cost.”

Trammell Crow Building 3 Mixed-Use Developments in Dallas

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As HBW subscribers in Dallas already know,  Trammell Crow will be very busy building mixed-use mega developments in Dallas throughout 2015. Last week, Trammell Crow finally revealed their majestic Uptown high-rise project. The 3-acre mixed-use project is being built in partnership with Metropolitan Life Insurance. Located on the north side of Klyde Warren Park, construction will soon begin at the Pearl Street and Woodall Rodgers Freeway intersection. This massive project will be built on the site of the Chase Motor Bank across the street from the Federal Reserve Bank of Dallas.

The location is a key part of the project’s market appeal. According to Trammel Crow Senior Managing Director Scott Krikorian, “We believe this is the best site in North Texas for a project of this kind. We are excited about working with MetLife and the City of Dallas to develop this site at the doorstep of our city’s signature park.” The development will be the largest retail/office/residential development in the Downtown or Uptown areas.

Park District, as the development is called, will be a 900,000-square foot office, retail, and residential property. The 19-story, 500,000 square-foot office tower will join a 255-unit, 32-story residential tower with 22,000 square feet of retail space in the lower levels. HKA Architects have created a sleek, modern look for the development, which features glass towers atop with low-glass facades for the restaurants and retail spaces. The Office tower, which will be the first section built, is located at the corner of Woodall Rodgers and Pearl, with the residential tower located on Olive Street.

Trammell Crow will be re-developing a parcel at McKinney Avenue and Bowen Street. The site is currently occupied by a single-story Café Express. Crow will replace the structure with a mixed-use residential tower and underground parking. According to the application on file with the City of Dallas, the 271-unit, 20 story tower would “primarily be multifamily residential, with some ground floor retail and restaurant space.” A new Café Express will be included in the retail space. The McKinney Avenue headquarters, barn, and museum for Dallas’ trolley line will be immediately adjacent to the development.

Trammell Crow has also joined with Northwestern Mutual real estate to build a 6-story mixed-use project in the Knox Heights neighborhood. The project will include 182 apartments and ground-floor retail space. The site, which is just over one acre in size, is currently occupied by a car wash, older homes, and a small apartment complex. The site is located between McKinney Avenue and North Central Expressway. The project is in the same neighborhood as the Sarofim Realty Advisors/Lincoln Property mixed-use project is being built, and it is just around the corner from Mills Creek Residential Trust’s 208-unit 6-story apartment building.

2015 Home Remodeling Trends

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Though the economy continues its upward climb, credit lending standards are still pretty tight, which means a lot of folks will be remodeling instead of buying new homes in 2015. With the growing number of folks looking to remodel, it’s good to be aware of some of the trends your clients may be asking for this year. There are three major trends shaping up to hit the remodeling industry this year: economy, sustainability, and health.

Economy

Now more than ever we will see remodeling done to increase home value and marketability. Per usual, bathrooms and kitchens offer the greatest return in investment. Last year saw bathrooms become sprawling home spas replete with steam rooms, spa tubs, gallery lighting, entertainment systems, and accessory furniture. For 2015, as many homeowners are ripping out the bathtub/shower combo to make way for a combination multi-head luxury shower and mini-steam room. If there is a tub, it will be a freestanding soak tub. Black tile and quartz countertops will be big for 2015. Gray is making a comeback in the bathroom, as is the darker, cooler color palette.

The 2015 kitchen will emphasize a low-maintenance quality. Kitchen cabinetry will eschew raised paneling for flat faces with clean, sleek lines and modern hardware. Granite is still a popular choice for countertops. Backsplashes will be made of glass and tile mosaic composites. Large, deep, single-bowl sinks are replacing the chrome double-sink trend. For kitchen fixtures, stainless steel is being replaced by pewter, nickel, polished chrome, and oil-rubbed bronze. Pull-out faucets/sprayers will replace the single faucet plus side spray in 2015. This year will see a continuance of the “open floor plan” design trend for both kitchens and bathrooms

Sustainability

In many homeowners’ opinion, greener is better. The trend towards sustainability runs from design materials all the way to alternative energy. Green framing and insulation, SIP’s, and locally sourced- construction materials are on the rise for remodel projects. Energy-star certified appliances and LEED-certified windows and doors are also in demand. Homeowners want passive design that beefs up insulation and improves ventilation to maximize airflow to make the space healthier and more energy-efficient. Installation of grid-tied solar power and LED fixtures to lower energy bills are also a big remodeling trend for 2015. Finally, eco-friendly, non-toxic paint, wallpaper, carpet, and flooring in lighter earth tones with deep blue and green accent colors are the décor trends that green-minded homeowners will seek out in 2015.

Many green-building remodel projects many be eligible for tax incentive programs. Alternative power remodels can net homeowners up to 30% in tax rebates.

Accessibility

The aging population has brought accessibility to our attention like never before. Aging homeowners seeking to remodel their homes are looking for designs that account for their future health needs. These sensibilities are perhaps best embodied by the Universal Design movement. Universal Design, based on principles of functionality, comfort, and safety for all ages and ability levels, is described by the National Association of Home Builders as “design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design.” No-step entries, one-story living, wide doorways, non-slip surfaces in floors and bathtubs, floor-flush thresholds, and good lighting are examples of the design considerations that aging boomers seeking to remodel their homes are looking for.

Construction Costs Rise

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The IHS and Procurement Executives Group just released the IHS PEG Engineering and Construction Cost Index. The index fell to 52.7% in December from 53% in November, putting the month’s total among the lowest for 2014. But don’t let these numbers fool you. December’s numbers notwithstanding, 2014 brought more cost increases than price drops.

The latest materials/equipment price index reached 50.2%, its lowest reading since June 2013, putting the rate a bit higher than flat prices. Around 50% of individual components registered neutral price ratings. Strongly performing subcomponents structural steel and ready-mix concrete were offset by falling freight costs. Although the majority of subcomponents are expected to strengthen, expectations for freight rates and copper wire/cable have fallen below the neutral mark. These decreases are the latest in a 3-month trend of falling price pressure in the subcomponent market.

However, the Index shows that the materials/equipment rate for 2014 overall was higher than past years. Steel-related products were the bellwether for shifts in the index last year. Especially important was alloy steel pipe, which suffered from a rollback in nickel production caused by political tensions in Indonesia and Russia.  According to Research Director for the  IHS Pricing and Purchasing service, “Prices for alloyed steel pipe and fabricated structural steel stayed stubbornly high throughout the year, with ready-mix concrete being another source of pricing strength,” he says, adding that, “on the flip side, copper-based wire and cable saw the highest frequency of falling prices of any component in 2014, driven largely by concerns over Chinese growth and a market surplus.”

Labor proved to be a major source of cost increase as well. The subcontractor labor index rose to 58.6% in December, a 5.2% gain over the previous month. The South continues to register the highest index ratings of all regions nationwide, with the Gulf Coast region being the tightest. Welders and pipefitters are the two most in-demand trades.

Residential Construction Outlook 2015

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Happy New Year from HBW! Dave Taylor here wishing you opportunity, industry, and success in the New Year. To get this year started right, let’s take a look at some of the trends that will be driving the U.S. residential construction industry. The Wells Fargo Economics Group recently released its 2015 Economic Outlook, and they’ve predicted that 2015 will mark a strong recovery for the home building market.

The two biggest contributors to suboptimal market conditions in the past decade are the high foreclosure rates and the low home prices. Wells Fargo reports that the home ownership, rate which reached peak levels ten years ago, has fallen 4.8% to 64.6%, which is the lowest ownership rate in 19 years. Foreclosures rose during the last decade, reaching peak levels four years ago.

But according to the Wells Fargo report, economists “expect this series to overcorrect because of tight mortgage credit, changing attitudes towards homeownership and household finances continue to be repaired.” As the economy improves and credit criteria loosen, attitudes toward household finances and home ownership also loosen, which creates conditions for a sharp uptick in new home construction and ownership for 2015 before the market evens out in 2016.

Sales of existing homes, which dropped 3.8 % for most of 2014, are expected to grow by 4.1% in 2015. Single-family starts grew only 6% in 2014 due to the tight lending standards, weak job market, and slow household formation are expected to strengthen. The percentage of single-family starts is expected to double the current rate, reaching to 13.7% in 2015.

HBW serves builders in Alabama, Georgia, Texas, Florida and Oklahoma as well. In addition to our Building Trend Activity for Residential Construction Reports, HBW can create a number of custom reports for any need you might have. We also offer exclusive White Paper Reports to help you market your business. White papers start by giving an overview of the trends in your area and then advice on how to turn your weekly building permit information subscription into successful business leads. If you need to access permit report data ASAP from a job site, try out our Cloud Search service! To show you how we can help your business succeed, HBW is glad to provide you with complementary building data report or one of our specialized White Paper Reports. Contact us today and start making your business more profitable!