August Marks Increase in Private Residential Spending

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While the signs of a market slowdown for new residential construction have begun to surface, the construction spending numbers for August were still high enough to offset the effects of the slowdown. According to the Federal Savings Bank, Americans increased their spending for residential construction in August.

However, The U.S. Census Bureau’s Construction Spending Report, issued October 1st, the seasonally adjusted annual spending rate for August was $961 billion. This is an 8% decline from July’s $968.8 billion in residential construction spending. Reuters Corp. economists had expected a 5% uptick in spending for August. Unfortunately, private non-residential spending dropped significantly, which leveled out to a 1.4% reduction in construction spending totals.

But compared to the $915.3 billion in residential construction spending totals for August 2013, there has been a 5% increase overall. The first 8 months of 2014 saw an 8% increase in spending over the same period in 2013. So while there has been a month-to-month drop in spending, the overall spending trend for the year has been an increase over last year.

August’s total private residential construction spending fell .7% from July’s numbers. Although the projected earnings for the last quarter were not realized as analysts had hoped they would be, builders still spent money in the private residential sector. The minor decrease isn’t expected to affect the recovery and growth of the housing market, because 2014’s August numbers are still 3.7% higher than they were in 2013. August also saw builders increase their investments in the construction of single-family and multi-family properties.

In August, construction spending for single-family structures rose .7% over July’s amount and 8.3% over August 2013. Multifamily housing saw a 1.4% increase over July’s spending rates, and a staggering 34.9% increase over the multifamily construction spending in August 2013. The yearlong improvement trend that shows America’s construction market improving over last year extends to home sales as well, because the sales of newly constructed homes have also risen.

Q3 2013’s harsh financial climate dampened 2014’s start-of-year economic strength. However, the economy started to recover in the second quarter, largely due to the improvements in residential construction. After 2 straight quarters of reductions, residential construction reached an 8.8% gain over 2013. The economic stimulus of increased construction is expected to continue throughout 2014.

Tulsa Area Home Construction Falters in August

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Both monthly and yearly numbers for local home construction in Tulsa slipped in August. 215 homes broke ground last month. This number is slightly lower than the 271 homes breaking ground in July and the 231 homes that broke ground in August 2013. Tulsa’s current year-to-date total of 1,907 new homes built is 4.1% lower than the same total from this time last year.

This decline is reflective of a national slowdown in the housing market. According to the U.S. department of Housing and Urban development and the U.S. Census Bureau, 643,000 single-family homes have been built thus far in the United States in 2014. Single-family housing starts have dropped 2.4% nationally from last year’s numbers.

Even so, National Association of Home Builders Chairman Kevin Kelley chooses to remain optimistic in spite of the slowdown. Kelley states that “Our members are telling us that traffic to new model home sites and sales expectations are on the rise,” said “Despite the monthly blip, single-family starts are still 8 percent above last year’s level.”

Home Builders Association of Greater Tulsa president Brandon Jackson offers some insight into possible causes of the slowdown. Jackson suggests that “people were anticipating interest rates were going to rise, and now they haven’t, that may have cut off enthusiasm for a new home.”

Veteran contractor Phill Rhees, of BMI Next Generation Builders, thinks that the slowdown might be a good thing. “We don’t want to overbuild,” he said. “The economy is recovering, but we don’t want to get too far ahead of the recovery.” Despite stronger economic recovery, homebuyers are still cautious of the housing market, and this caution is keeping the market numbers down.

According to Rhees, some areas in Tulsa have already become overbuilt. “We’re seeing some parts of town where we’re having a hard time finding land to develop on, such as Jenks east of the river,” he explains. Upscale areas in Broken Arrow and South Tulsa featuring homes costing $500,000 or more have exceeded their saturation point in the market. The lack of available land that is well-situated and easily developed is also a stumbling block to the residential construction market in Tulsa.

Q3 Brings a Sliding House Market

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The Bureau of Labor Statistics reported a Q2 GDP estimate of 4.6% last week, which seems to indicate a definite long-term economic recovery, but the faltering housing market indicates that our economic health is still precarious. Homes.com recently released their local market index and revealed that 15 fewer housing markets registered an increase in their three-month averages.  It is expected that the national housing market will continue its slide.

Only 166 of the nation’s mid-sized housing markets reported an increased three-month average, which is 20% fewer than had been expected. of the top 300 American housing markets, only 109, or 36%, have reached a full home price recovery. When comparing this year’s growth to the three-month averages and market gains of Q2 2013, it is clear that the housing market is slowing down. 2013’s gains of 2.5-3% have tumbled, with modest gains of .5% reported for Q2 2014.

The Standard & Poor Case-Shiller National Home Price Index issued last week confirmed that a housing market slide is immanent. Nationally, single-family home prices for July 2014 gained 5.6% over July 2013, a drop of .14% from the June 2014 rates. 19 of the 20 cities Case-Shiller tracks posted lower annual gains for July. As double-digit price increases had become the norm from 2013-2014, this percentage decrease is unexpected and unwelcome news.

The jump of 18% in new home sales for August 2014 is actually an aberration in the current trend, according to S&P Chairman of the Index Committee David M. Blitzer. Blitzer explains that, “However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales–which are not covered by the S&P/Case-Shiller indices–is a welcome exception to recent trends.” Sales of existing homes dropped 1.8% in August, during which time pending sales also dropped 1%.

New Upscale Residential Community Slated for Forsyth County

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HBW subscribers keeping up with the Atlanta area’s residential building permit activity trends have known about the major housing developments that are currently underway in Forsyth County. Last Friday, another winner was added to the mix. This October, SunBelt Atlanta & Cummings I LLC will begin building an upscale residential community in the Forsyth County town of Cumming. The 143-acre tract was purchased this week from NASCAR Hall-of-Famer Bill Elliott for $120 million. Located off of Matt Highway/State Route 369, the development will host 300 homes priced in the $350k-$500k range.

SunBelt confirms that it will be working with local home builders to construct these dynamic upscale residences in the town of Cumming, a small resort community located on Lake Lanier. This development will be the first of ten projects which SunBelt plans to build over the next two years in the Cumming area. SunBelt Atlanta/Cummings I LLC have retained the legal firm of Boling Rice, LLC, and the engineering firm of Southeastern Engineering, Inc for the project.

According to SunBelt, the project will generate an economic impact of over $200 million and will create at least 900 new jobs. SunBelt Managing Director Gary Allen says that “our vision for this project extends far beyond the mere construction of new homes. It is about building communities in Forsyth County and spurring job creation and growth in the metro Atlanta region.”

As the home buying and residential construction industries have strongly rebounded in the areas north of Atlanta, SunBelt recognized a lot of development potential. This development benefits greatly from the lack of undeveloped “A-grade” real estate locations near Atlanta. The project will also receive a significant boost from the Go Build: Georgia construction trades workforce development program, one of a handful of such programs in the nation working to increase the number of people entering the building trades professions.

This housing development is the second major residential construction project to come to Forsyth this year. In April, development titan Lennar proposed a $280-million community just west of Cumming along Chamblee Gap. Lennar’s development, Mountain Crest, will feature 572 single-family homes and 124 townhomes, along a trail network connecting to the Big Creek Greenway, which will be completed in multiple phases by 2022.

Strong, Sustainable Cement- The Easy Way

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Cement has long been a construction industry staple, and it is by far the most widely used construction material in the world. Unfortunately, cement is also one of the most environment-damaging materials in the world, producing 1/10th of the construction industry’s greenhouse gas emissions. But recently, researchers at the Massachusetts Institute of Technology have found ways to cut those emissions in half, making a stronger, more durable cement.

Typical cement is made my cooking calcium-based and silica-rich materials such as limestone and clay at temperatures of 1,500 degrees celsius to create “clinker,” a hard mass that is then ground into powder. The heating of the cement causes a decarbonation of the limestone, and this decarbonation process causes the output of greenhouse gas.

New materials analysis done by the MIT labs has revealed that a different ration of calcium-to-silica not only cuts those emissions in half, but also creates stronger cement. These findings, made by MIT senior research scientist Roland Pellenq, et al. were recently published in the Nature Communications journal and presented at this year’s CNRS conference in Marseille, France.

Pellenq explains that the standard calcium-to-silica ratio is 1.7, but can range anywhere from 1.2 to 2.2. The molecular structures of these ratios have gone untested until Pellenq and his colleagues built a database of all the different ratios and formulations and then compared them. The discovered that as the ratio varies, the molecular structure progresses from a tight, orderly crystalline lattice to a randomly distributed glassy matrix.

They then found that “a magical ratio” of 1.5 achieves “two times the resistance of normal cement, in mechanical resistance to fracture, with some molecular-scale design.” As the material becomes more glassy, the mechanical strength improves, and “no residual stresses in the material, so it would be more fracture-resistant.” A decrease in the amount of limestone translates to a lowering of carbon emissions from the cement-making process.  This 1.5 ratio is the most ideal for cutting down on carbon emissions while strengthening the cement.

Having estimated the usage of cement to be three times that of steel, Pellenq says that “Cement is the most-used material on the planet,” adding that “there’s no other solution to sheltering mankind in a durable way — turning liquid into stone in 10 hours, easily, at room temperature. That’s the magic of cement.”

Tornado Threat Means Major Business in Moore

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In March of 2014, Moore became the first city in America to adopt a tornado-specific building code to ensure homes can withstand storms of EF-2 or greater. Within months of the 2013 disaster, hundreds had begun to rebuild their homes and their lives. Unfortunately, this desire to quickly move on and recover meant that their homes were not built according to the new, tornado-resistant building code. As a result, the Moore housing market is primed to support a massive tornado retrofit industry.

Rather than rush into a frenzy of tighter regulations immediately after the storm, Moore took the time to develop codes to address specific inadequacies that needed to be amended. According to Elizabeth Jones, Moore’s community development director, “In an ideal situation, you would be able to have the time directly after the event to come up with all of these things so everyone can be build back stronger and safer.” The research period was essential, Jones adds, because “we don’t want to make codes just for the sake of making codes. We want to be able to address real problems that exist out there and try to make them better.”

Of the 600+ building permits issued for rebuilding efforts in the storm-damaged areas, only 152 are being built to the new standards. This leaves more than 400 homes built to the older standards. In a perfect world, these homes would last 50-60 years. But as Tim Marshall, civil engineer for the Dallas-based Haag Engineering that consulted on the new code explains, “they’re going to last 50, 60, 80 years or until the next tornado comes along.”

However, all is not lost for new homeowners whose houses were built to the old standard. Tornado retrofitting will help make the structure and exterior finish tornado-resistant. Impact-resistant windows and reinforced doors, especially reinforced garage doors, can really make a difference when a home gets battered by storms. Door portal frames should be well-anchored and well-bolted. Gable walls should be braced to withstand high winds. The vertical attic joists should be reinforced with horizontal 2”x4”’s secured with 3” wood screws. Metal “hurricane strap” anchor plates and bolts will keep the walls together and anchored to the roof. The entire house should have a well-sealed sheath to keep moisture and debris out. Tornado retrofits are relatively straightforward, if time-consuming, and the increase durability brought by retrofitting will pay dividends during the next major tornado.

Meritage Homes Moves to Cypress Waters

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In a move that immediately reflects the growth and potential of the DFW real estate market, Meritage Homes will be relocating its regional headquarters to the Billingsley Company’s new Cypress Waters development. This Arizona-based building firm specializes in developing master-planned communities for single-family homes in a variety of price ranges. Meritage has leased 15,760 square feet of the multi-tenant Offices at Cypress Waters complex, located at 8840 Cypress Waters Boulevard. The Offices building, which comprises 165,000 square feet, is currently under construction. Meritage will take possession of their new regional office in FQ15.

The move comes in response to the incredible growth Meritage Homes has experienced in recent years. it is believed that the move will position Meritage to more effectively reach their growth goals. According to Marijke Lantz, senior vice president of investments and build-to-suits for Billingsley Co., “Location and on-campus amenities really moved the needle in their decision to go to Cypress Waters.”

The Offices at Cypress Waters are build-to-suit spaces with a lakeside setting. The Offices building is situated within a mixed-use development featuring over 400,000 square feet of retail amenities and restaurants and more than 10,000 multi-family living units.

Meritage also purchased 90 acres of homesites from Billingsley as a part of their regional headquarters leasing deal. The homesites are currently a part of Billingsley Company’s Austin Ranch development, a small planned community of 202 single-family homes. Austin Ranch was designed for completion in two stages, with Meritage now slated to complete both stages of the development. Previously, Billingsley had planned to build a multifamily complex of 525 units on the acreage.

2014 NATIONAL ELECTRIC CODE ADOPTED IN 12 STATES

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For over a century, the IEEE Standards Association’s National Electrical Safety Code has been keeping America’s communications and electrical infrastructure safe, steady, and efficient. 2014 is ushering in the latest round of code revisions to the Code to reflect upon recently developed technology, standards, and best practices in the industry. As of august, 12 states have adopted the 2014 version of the code, with another 11 states set to adopt the codes by January 2015.

Many of the Code’s new and revised requirements will affect commercial, industrial, and residential electrical and communications installations. One set of major changes involves expansion of the AFCI and GFCI protection for indoor installations. Best practices in fire and shock protection features for residential electrical systems have been updated to include the needs of “smart homes” supporting heavy electrical and HVAC automation. New to this addition is advice for first responders dealing with homes equipped with photovoltaic electrical systems.

The 2014 Code also includes comprehensive articles on increasingly popular technologies. Low Voltage Direct Current Distribution systems, Modular Data Centers, Fire Resistive Cable systems, and Energy Management systems are all be given significant coverage in the 2014 edition.

The National Electrical Safety Code is updated every 3-5 years, with the next edition slated for 2017. From September 1, 2014- May 1, 2015 the NESC is holding an 8-month open commentary period, which will allow members of the public and industry professionals to affirm the new code, suggest additional changes, and make alternate proposals for the 2017 code. Definitions of equipment, clearance rules, eliminating certain exemptions, and OSHA harmonization initiatives will be foregrounded in the 2017 code.

Renovation Gives Alabama Landmark New Lease On Life

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The Federal Reserve building in downtown Birmingham has been purchased for renovation and development by Harbert Realty Services. The $1.3 million purchase was motivated by a desire to capitalize upon the revitalization of downtown that has occurred with the influx of millennial homebuyers to the area. This landmark property was built 1926 to host the Atlanta Federal Reserve bank branch, and an annex was added later.

The property sat fallow for years until The Stewart Studio, LLC optioned the property. Robert and Susan Stewart, the company’s owners, had planned to renovate the property into retail space, an event venue, and a boutique hotel. When their option expired in April, Harbert Realty snapped up the building.

The possibility of turning the historic property into a mixed-use space is still in play. “All of those options are available – mixed-use, retail, office, hotel,” Tynes explained, adding that the Stewarts might still be involved in the process, because “We’re open to work with anybody who has great ideas and a good vision that aligns with ours.”

Harbert Realty has partnered with Capstone Real Estate Investments to finish developing the historic property. According to Harbert Realty vice president, Norman Tynes, “We have a branch bank who has already approached us about this (building) – the 1927 building in particular.” The historic stature of the property means that the redevelopment is carefully proceeding according to Alabama Historic Commission standards.

Harbert Realty expects that Alabama’s historic redevelopment tax credits will aid in redeveloping the property. Of the Commission’s involvement, Tynes says, “They have guidelines we have to adhere to, and we’ve got to submit our vision in hopes that they agree with our vision.”

Harbert Realty is already well underway to making their vision a reality. Demolition crews have already torn the interior completely down, leaving a structurally sound historic shell.  “The options are wide open,” says Tynes, “It’s like a clean, new canvass.” Regardless of the final plans, the building’s electrical, mechanical, and plumbing infrastructure will be completely modernized to meet the demands of 21st-century tenants. Nonetheless, a few of the interior surface features will remain, because “You can’t replicate [them] and have it be remotely cost-effective.”

Joel Blackstock with Williams Blackstock are the architects of record for this ambitious project. Architectural renderings of the new building will be available within the next month.

 

Keeping Your Home Strong on Shaky Ground: Seismic Retrofitting

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While California is certainly famous for its earthquake activity, the rate of seismic activity has been drastically increasing of late in Oklahoma, Kansas, and even New York. While most homeowners in these states shouldn’t expect massive earthquakes any time soon, it’s important to know that a succession of frequent, low-intensity quakes can cause nearly as much structural damages as the big ones. To best protect their investment, homeowners in areas prone to low-intensity-quakes should consider retrofitting their homes.

There are three different ways that earthquake forces can affect a home. The lateral, or shear,  forces cause a home to move from side to side in what is called a racking motion. Shear forces can also cause a house to slide right off of its foundation. Uplift forces, which are vertical forces that push a house up, causing it to crash back down, can cause a house to lift off the foundation altogether and overturn.

Regardless of the force or affect, the structural region of the house which are most prone to earthquake motions is the area between the first-floor joists and the foundation. Most seismic retrofitting involves creating a continuous load path between all the elements of the house.  This involves three basic types of structural reinforcement: bracing, bolting, and attaching.

Bracing the cripple walls, or the walls sections between the foundation and the first floor, will keep them from collapsing and dropping the house directly onto the foundation. Brace the cripple walls with sheets of plywood.

It’s also important to bolt the reinforced cripple walls to the foundation. This will keep the house from sliding off of the braced cripple walls and overturning.

The house floor should also be attached to the cripple walls, in order to keep the house from sliding off of the cripple walls. Bolting the floor to the cripple walls will keep the house from sliding off of them and overturning.

To learn more about seismic retrofitting, check out the Institute for Business & Home Safety’s seismic retrofit guide. If you’re interested in encouraging your local government to participate in a seismic retrofit incentive program, take a look at this FEMA resource.