Pricing a Home Remodel for Business Success

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Knowing how to price remodeling jobs can be tricky, even in the best of times. Prior to the 2008 meltdown, the residential remodeling business was going great guns. Back then, the budgetary bottom line and quick job completion were the biggest factors to a builder’s remodeling success. Today’s successful builders need to be people-smart as well as money-savvy.

In the leaner, meaner years since then, effective budgeting and planning is the bare minimum a builder needs if they are to succeed. Fortunately, there is a growing inventory of cost-estimator software available that accurately generates detailed bids more quickly than working by hand with educated guesswork. Scopewell, a contractor consulting company in Pennsylvania, has developed a revolutionary platform that connects homeowners with contractors and manages the pricing process from estimation and bidding all the way through to contracting and escrow.  The cost estimation of remodeling work has gotten a lot faster, which leaves time for builders to master the skills that really matter: people-skills.

Building relationships with clients is just as important as building value into their homes. It’s important to understand that people’s emotional investment in their homes is just as deep as their financial one, so responding to the homeowner’s emotional needs is key. If the remodel your clients want is far out of their budget, be ready to suggest cheaper alternatives that include the client’s input. Explain how the remodel has both short-term and a long-term value, and emphasize that the work is an investment in their future. Make sure to prioritize projects which need to take place immediately over ones that can be pushed further down the line.

Builders also need to re-think how they approach the planning process. Most homeowners no longer have large masses of disposable cash to invest in a huge remodel. But they can certainly afford a series of smaller home improvements that add up to a nice big remodel. Instead of scheduling one large project that takes place over several months, break the remodel down into smaller projects that can be completed within a few weeks’ time apiece, scheduled over a course of years, and can be paid for independently of each other. This allows a builder to have frequent income from the smaller jobs and greater job security, and to become the go-to professional for the client’s future needs.

Florida’s Multifamily Housing Boom

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Florida is returning to pre-recession levels of employment, immigration, and construction. As HBW subscribers already know, many of the state’s major housing markets have a strong base of younger people earning mid-level salaries, who are more interested in the simplicity of renting than in the complexity of home ownership. Just because they prefer to rent doesn’t mean that this market will be satisfied with basic, no-frills apartments. They demand quality and comfort in a space that feels like home. Florida’s residential home building firms catering to the multi-family sector can expect to add value through innovative design, nicer fixtures, pre-installed T-1 broadband, and higher-quality appliances in order to capture this market.

Miami’s latest offering in quality multifamily rentals is the Melo Group’s Melody Tower, a 36-story high-rise ideally situated in the downtown arts and entertainment district. Miami has seen a bumper crop of high-rise new luxury condominiums spring up in the heart of downtown over last few years, but they are overpriced for the young professional looking to rent a home near pedestrian-friendly downtown Miami. Adjacent to the Adrienne Arsht Center for the Performing Arts, Melody Tower will feature retail space and dining on the ground floor, making it a hub for the local community as well as a premiere residential space.

Metro-area Orlando’s multifamily development market is really heating up. The sale of multifamily buildings is down 14% and the supply of multifamily residences is rapidly shrinking. Two developers have eagerly responded to the increased demand. One exciting new development catering to rental-savvy young professionals is the Crescent Gateway apartment community being built in Altamonte Springs by the Crescent Communities Company.  Pollack Shores Real Estate Group is currently building The Princeton at College Park, a 3.3-acre apartment complex catering to single and newlywed professionals as well as empty-nester retirees who seek high quality at a more reasonable price point than is currently available in the area.

The multifamily boom in Miami and Orlando reflects nationwide trends for multifamily housing. Multifamily construction is the hottest sector in US construction right now, having increased 39.6% over the last year, and much of the construction is for apartment complexes rather than condominiums. To learn more about the how the multifamily building boom in Florida can help your business, contact HBW today!

 

First Quarter Roundup: Texas and Georgia Edition.

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Hello, all, I’m Dave Taylor of HBWeekly. From time to time I like to check in with our clients and their customers by contributing to the HBWeekly blog. Today I want to share the results of our Building Trend Activity Report for Residential Construction for two of our biggest markets: Georgia and Texas.

In the state of Georgia, construction is up 24% over the first quarter of 2013. The greatest growth has occurred in four counties that are part of the Atlanta metro area. Paulding county has had a staggering 257% increase in residential construction over the first quarter of 2013, as it is now the leading choice for your professional commuters and their families. The next highest increase of 127% has happened in Barrow County. Henry county, famous to NASCAR enthusiast for its Atlanta Motor Speedway, has seen a 111% increase in residential homebuilding. Clayton County has experienced a 104% increase in residential homebuilding over 2013, and with a projected job growth rate of 29% over the next ten years, it’s not hard to see why.

Texas has experienced a 21% increase in the number of new homes built over the first quarter of 2013. The metropolitan area of Dallas has experienced a 24% increase, with the biggest gains coming from Tarrant and Ellis counties. Tarrant has had a 56% increase over last year, and Ellis has experienced a 48% increase in that time. The Houston area has experienced moderate growth in comparison to Dallas, with a 16% increase for Q1 of 2014. Harris County has had an 18% growth in residential home building, and Fort Bend has had a 23% increase. The metro area with the highest rate of growth is Austin, which has seen a 27% increase in residential construction over 2013. The 38% increase found in Hays County is typical for the area. One exception is Williamson County, an area known for its progressive attitudes and embracing of transparency in local government, which has experienced a whopping 123% increase in residential homebuilding.

HBW serves builders in Alabama and Florida, and we’ve recently expanded our data reporting operation into 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. 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!

Green, Energy- Efficient Cooling for New Homes

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Although summer traditionally begins on June 21, most Americans begin to feel the heat long before then. But ever-increasing energy costs and concerns over environmental pollution have left some reluctant to crank up the A/C, leaving their homes stifling and uncomfortable. As home builders forge ahead into the construction season, it’s a good time to think about what energy-efficient air conditioning and green cooling options are available for the homes they are building. There are four good alternatives to central air conditioners.

Perhaps the most conventional is the whole-house fan, or the “attic fan” as my dad calls his. Whole-house fans use 90% less energy than an a/c unit, and can be run instead of the a/c during the evening, when the outside air is cooler.

Another alternative is the ductless mini-split system, which pairs an external, wall-mounted condenser connected to a series of wall- or ceiling-mounted indoor evaporators via refrigerant lines. Each room can be cooled separately, and the system eliminates wiring, noise, and cumbersome energy-inefficient attic duct work while offering at least 30% in energy savings.

Perfect for warmer climates with low humidity, central evaporative coolers (also called “swamp coolers”) are a good option. Costing about 50% less than conventional air conditioners and consuming about 75% less energy, the evaporative cooler exploits the science fact that evaporating water cools the surrounding air.

Geothermal “heat pump” systems can also be used for wintertime home heating and heating your water year-round. They use about 30%-60% less energy than a typical air conditioner. Geothermal systems rely on the circulation of fluid to transfer heat from your home into the ground beneath, and US homeowners can get a 30% tax credit on geothermal systems thorough 2016.

If budget constraints make these options unpractical for your clients’ home, there are still ways to make conventional climate control more energy efficient and environmentally friendly. One strategy is to install tinted windows to reduce the amount of light and heat that get into the house. Adding extra insulation to the attic will reduce the amount of heat that gets in and keep temperatures inside the house lower. When paired with classic a/c, the humble ceiling fan boosts the circulation of cool air, meaning that the air conditioner can run for shorter periods of time and at higher thermostat settings, saving at least $30 per month on the electric bill.

Welcome Updates to the ACI 318 Structural Concrete Code

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After decades of near-unintelligiblity, the ACI- 318, the guide for structural concrete used in design and construction, has been revised and reorganized to make it more useable for building code enforcement in the construction industry. Many see the current update as the most dramatic changes since 1971. Whereas the entire industry had previously seen ACI-318 as a ponderous document that was tedious to read and difficult to understand, the current edit, which streamlines several chapters, rearranges key information, and simplifies the language being used, is a welcome change.

The changes to the code have come about in response to the improved knowledge of innovation in concrete materials, of how structural concrete behaves, and of increased sophistication in structural concrete technology. The latest changes, however, give a new, clearer, context for that information. According to award-winning structural engineer Cary Kopczynski, the current revisions “revolve mainly around the organization of the code requirements, shifting the focus from a “force-based” to “element-based” format.” For example, instead of organizing the document according to the different forces that affect concrete such as shear and flexure, the new code addresses how concrete performs when it is used in particular building elements such as slabs, columns, and beams.

In older versions of the code, builders had to flip back and forth madly between chapters, piecing together the code for a given structure. In the newly updated code, the structure being built has everything you need to know about the proper code compiled cleanly together in a single chapter. In cases where a complex design incorporating multiple elements is being built, take rebar bends, for example, the information will be published in a “toolbox chapter” that will avoid needlessly repeating information by referencing the previous chapters.

It was clear to the committee that further updates are needed as soon as possible, but the need to both update and reorganize the information was a daunting and time-consuming task. Many vital updates have been postponed until the 2017 update. The current edition isn’t a simpler or condensed version of the structural concrete building code, but it is a clearer and more user-friendly one that designers and builders will be very happy to see.

The building code committee of the American Concrete Institute updates ACI-318 every three years. The ACI standardization procedure mandates that the draft of these changes be made available for public review for a period for 45 days before the update is submitted to the International Code Council. To review the new code, visit the ICC website.

Make the Most of Building Safety Month

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On April thirtieth, 2013, President Barak Obama proclaimed May to be the national Building Safety Month. The proclamation comes in response to the need for greater vigilance in building safety, combined with a need for the private sector take the lead in partnering with civil organizations and governmental agencies to make our nation’s construction sites safer and more productive. The proclamation states that “[a]s Americans, our spirit is strong and resilient, and our buildings should match that spirit … let us work to keep structures sound and up to code. By doing so, we can conserve energy, protect the environment, and help communities withstand the impacts of natural disasters and climate change.” Sponsored by the International Code Council, the theme for 2014’s Building Safety Month is “Maximizing Resilience, Minimizing Risks.”

Cities all over the country are hosting events in conjunction with Building Safety Month. Amarillo, Texas kicked off Building Safety Month by creating an informative display in City Hall that demonstrates each of the themes, and then hosting a hot dog roast during the first week where everyone could stop by for dinner and learn more about the importance of building safety. Oklahoma City partnered with Lowe’s to sponsor the “Build and Grow” event, where families would learn more about the permitting, plan review, and inspection process while building a wooden backyard project. Winter Park, Florida, celebrated Building Safety Month by issuing a mayoral proclamation in support of efforts to promote building safety, and followed it up by launching a public awareness campaign based on the safety issues highlighted by the monthly themes of Building Safety Month.

Truthfully, the idea of needing safe buildings seems like such a no-brainer that people take for granted all the things that must happen to construct and maintain safe buildings. To help us remember the different aspects of building safety, each week has a different theme. The themes for this year focus on the role of code officials in keeping buildings safe.

May 5-11, 2014—Code Officials: Keeping Fire in its Place

May 12-18, 2014—Code Officials: Helping Homeowners Weather the Storm

May 19-25, 2014—Code Officials: Surround Your House with Safety

May 26-31, 2014—Code Officials: Building A Brighter, More Efficient Tomorrow

To learn more about how building codes protect us, or to find out about Building Safety Month events in your area, check the International Code Council website.

 

 

 

 

 

 

 

 

 

 

Texas Construction Trade Show Preview- Summer 2014

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Summer is one hot season to grow your building business. Between June and August 2014, the great state of Texas will play host to three major construction and building expositions. Check out what’s on offer this season:

Build Expo, Houston, June 11 & 12, 2014

This business-to-business trade show is an investment in your professional success. Engineers, designers, realtors, subcontractors, general contractors, architects, developers, and municipal agencies are among the different professions represented at the Build Expo. The impressive exhibition floor shows everything from granite countertops and photovoltaic roofing to CAD systems and cement mixing trucks. There are AIA accredited sessions and over 30 workshops on green building, construction, law, web marketing, LEED, construction finance, and much more. Keynote speakers include Tom Woodstock presenting on negotiation tactics, Bradford Spelbring talking about how tradesmen can improve their bidding and find work, and Trona Trodsen advising about how to lower workers’ comp costs. Cost to attend: $0. Build Expo is the only show in the industry that is free to attend and offers free seminars.

The Sunbelt Builder’s Show, San Antonio, July 23-12, 2014

Specializing in residential construction and technology, the Sunbelt Builder’s show has been an industry staple for years. More than 2,500 leaders in single- and multifamily home building, management, renovation, and financing attend this conference each year, making it one of the première opportunities for networking in the region. Targeted specifically for professionals in the building trades, the Sunbelt Builder’s Show is a great place to showcase your brand, generate leads, and introduce new clients to what you have to offer. You’ll also see an expertly curated complement of innovative, cost-saving new products that will help your business prosper. Cost to attend: Show Pass is $50 at door and includes admission to the sales and marketing workshop.

Fort Worth Home & Garden Show, DFW August 16-17, 2014

There is always something fantastic at a Texas Home and Garden Show. You’ll find dozens of money-saving ideas for every area of the home, alongside the latest technological innovations and design trends. Tens of thousands of products from vendors who serve every aspect of residential home building and remodeling will be featured for your perusal. The show also boasts a large, skilled, squad of experts in home construction, remodeling, and design to help you figure out what works for you, and how to cut costs so that your money works harder for your business. If you want to mingle with your customer base and see what’s new in the industry, check out this show. Cost to attend: tickets are $10.00 at door.

Labor Shortage a Tradesman’s Goldmine

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The Construction Education Foundation reports that average age of a skilled craftsman is 49, and the average age for stonemasons is 69. In the next ten years, an estimated 20% of the skilled laborers in the construction industry will be retiring. Opportunities abound in the construction industry—and are only going to get better. Those looking for home building permit information and residential construction job leads in Florida, Texas, Oklahoma, Alabama, and Georgia need look no further than HBW. It’s a great time for independent contractors to gain a foothold in the building business.

Between January of 2007 and today, over 2.2 million construction jobs disappeared. But since 2011, residential building permit applications have increased 31% nationwide, and construction spending across all sectors has increased 14%. Yet as the economy improves and the construction industry grows stronger, those 2.2 million out-of-work tradesmen are nowhere to be found.

During the bust, many workers retrained in other fields like truck driving, or took jobs in manufacturing. When America’s energy industry began to heat up, even more of them migrated to work in the oil fields and coal mines. Those job sectors remain strong and stable, and few workers will be lured back into the building business. The jobs that are currently open will remain open until filled by new workers, and many other jobs are being added every day. The issue has gotten so serious that some outfits are poaching workers directly from other job sites.

The more prominent labor shortages are in framing, roofing, plumbing, carpentry, general labor, and equipment operator positions. It’s generally agreed that the most serious labor deficit is in journeyman-level professionals, but even entry-level drywall installers are back up to earning the pre-bust rate-per-sheet of $5.

To meet the need for workers with both skill and experience, many firms are partnering up with state and local agencies to provide specialized training, apprenticeships, and internships. Many states are implementing construction education initiatives to meet the demand for skilled labor. States like Florida and Texas are actively recruiting skilled and experienced professionals who are willing to relocate.  If you’re a trades professional looking to move to those areas, make HBW your first stop for building permit information and residential construction job leads in those markets.

 

 

 

Old Town Tulsa Gets New Lease On Life

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In the 1920’s, Tulsa’s art deco masterpieces were built to house the companies and entrepreneurs who birthed the city’s oil boom. Almost 100 years later, those buildings are being revitalized to accommodate the waves of young professionals who have been flooding into the city seeking an affordable lifestyle and strong entrepreneurial opportunity. Unlike previous generations who sought suburban grandeur, these professionals prefer to live downtown, with their workplaces and social spaces only a short walk away. Remodeling and renovation efforts have sprung up alongside new construction projects as downtown developers race to meet the demand. This activity means that construction job leads for both residential and commercial projects downtown are plentiful, with dozens of high-dollar building permits being issued each month.

Built in 1927, the renowned Tulsa Club Building at 5th and Cincinnati spent decades as THE place for Tulsa’s wealthy oil executives to wine, dine, and entertain their guests and clients. Developer Josh Barrett bought the property in 2013. For the past year, Barrett has been planning extensive renovation, remodeling, and restoration work in the building which will begin in the summer of 2014. The new and improved Tulsa Club will be a mixed-use commercial and residential property of the sort that young Tulsa professionals have been clamoring for.

In the boom years, the social highlight for many Tulsa families was getting dressed up and visiting Vandever’s Department Store at 16 E. Fifth Street. The Vandever building’s ornate red brickwork and intricate windows are fine examples of classic art deco design, and this is what attracted Macy Snyder Amatucci of Brickhugger, LLC to acquire the site. Renovations are underway to completely remodel the interior of the building and to update its electric, plumbing, and T-1 infrastructure.  The revitalized Vandever building will be home to 40 residential lofts.

For those who prefer ultra-modern design, there has also been a massive spike in new residential development in downtown Tulsa. 100 Boulder, a cutting-edge 18-unit luxury condominium development between First and Second Streets, will feature wall-to-ceiling glass windows, hardwood floors, washer/dryers, and stunning views of the Deco District. Geared toward young professionals working in the neighborhood, many of the units have already been sold.

These and many more projects are currently underway in downtown Tulsa. Check out HBW for more information on these developments and construction job leads for similar projects in the Tulsa area. Business is booming and the opportunities abound.

Alabama’s Building Boom Labor Shortage

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The Alabama homebuilding business is booming, and growing much faster than the construction employment sector. Over the past year, the state has seen a 13.6 percent increase in new home sales. Birmingham, Huntsville, and Mobile have performed even more solidly, with a 17 percent spike in each city over the previous year’s numbers. There have been 600 home building projects added since March, and the median price for a new home is $225,104. The residential homebuilding market, like the rest of the construction market in Alabama, is officially in a growth phase. If the new home construction market is on the increase, why haven’t the construction jobs in Alabama followed suit? As it turns out, the problem isn’t the availability of jobs, but the availability of skilled labor. The building permit activity in Alabama indicates that there are plenty of jobs, but many of them aren’t being filled.

According to Alabama Construction News magazine, the reason that construction employment numbers aren’t matching those of the state’s prosperous auto manufacturing industry is that, “if we’re making more cars, that means more people are going to be hired at the assembly plants and more people are going to be hired at the suppliers, so right now the automotive group and others in manufacturing are doing better for that reason.” Of all the available jobs, people are choosing to work in the manufacturing sector rather than the construction sector, even though there are plenty of jobs to be filled in the building trades.  As it turns out, the reason someone would choose assembly and manufacturing over construction is that they simply don’t have the right training.

Beginning in 2005, the state of Alabama began to realize that it would face a serious shortage of skilled building tradespeople in within a decade. With an aging experienced workforce and only one person entering a building trades apprenticeship for every four professionals who retire, something had to be done. That something resulted in the Go Build Alabama program. Since 2010, the state of Alabama’s Construction Recruitment Institute has been working to provide scholarships for training and apprenticeships for entry-level workers and to correct misconceptions about careers in the building trades and construction industry. To find out more about the Go Build Alabama program, check out their website. If you’ve completed a program and you’re ready to work, visit HBW and check out our building permit reports for construction job leads in the Alabama market.