AUGUST 2021 NEWSLETTER To promote, educate and advocate for the Residential Building & Remodeling Industry; providing resources that benefit industry professionals and consumers in the communities we serve. With 38 teams in place and over 20 volunteers on the course the show still went on and was enjoyed by all! They ate, they played, it rained, they played, it rained, they played and returned for dinner, prizes and more fun. Herschel’s family enjoying lunch before hitting the links for our annual event: Jerry & Jan Geolat, Lance, Garrett & Courtney Johnson WHATS INSIDE Upcoming Events Sep 17 - All Aboard with the Board Nov 4 - HBR Trivia Night Feb 25, 26, 27 2022 Home Show UPDATES: Framing/Mechanical Rough in & Roofing Completed Herschel E. Johnson Golf Classic pictorial Remodeling Excellence Awards Application Membership Renewal Updates NAHB Eye on the Economy News NAHB NOW NAHB International Builder Show 2022 Senator Plummer calls for Administration’s Unemployment Program Audit Illinois Policy Institute: IL ranked 48th in US for new single family home permits over last decade Page 1
Page 2
Page 3
Prospective Buyers Continue to Turn into Active Buyers BY ROSE QUINT ON JULY 30, 2021 Of the 17% of American adults considering a future home purchase in the second quarter of 2021, 61% have moved beyond planning and are already actively trying to find one to buy. This share of active buyers has increased for six straight quarters, a trend that began after the final quarter of 2019 when it stood at 43%. In the… Read More › Housing Nearly 17% of GDP BY ROBERT DIETZ ON JULY 29, 2021 Thanks to a surge in residential investment during 2020, housing’s share of GDP remains elevated compared to recent years. Last year’s market conditions involved a renewed focus on the importance of home, an evolving geography of housing demand, and a lack of for-sale inventory. Housing will continue to expand in 2021, although as the rest of the economy recovers, the… Read More › Federal Reserve and Housing: No Taper Talk yet BY ROBERT DIETZ ON JULY 28, 2021 Today’s Federal Open Market Committee announcement did not provide an explicit reference to an expected tapering of purchases of Treasury ($80 billion a month) and mortgage-backed ($40 billion a month) securities. In addition, as part of its ongoing accommodative policy stance, the Fed held its benchmark target rate near zero percent. In Chairman Powell’s press conference remarks, he stated, “The… Read More › Page 4
Page 5
Check out the latest videos as key trade partners share the process of Building the HBR Showcase Home FRAMING: WALLS FRAMING: ROOF ROOFING FIRESTOPPING FRAMING & MECHINICAL INSPECTION Page 6
All inside booths are 10’ x 10’ with exception of booth # 103 and include rear curtain, side rails and 110v electric. Tables and chairs are included in booth investment. $800 for HBR members $950 for non-HBR members. 2022 All Outside booths are 10’ x 10’ with 110v electric, a table and chairs included. Outside booths do not include any curtains. $250 for HBR members $350 for non-HBR members. NEW FRIDAY 25 2pm—8pm Floor Plan Facility Improvements & Management SATURDAY 26 10am—7pm SUNDAY 27 11am—4pm Page 7 200 S Belt E, Belleville IL Interactive floorplan www.hbrmea.org/ home-show FEB FEB FEB
Page 8
Page 9
New census data shows Illinois ranked 48th in the U.S. for new single-family home permits during the past decade. Real estate markets in the U.S., including Illinois, have been on fire as low mortgage rates, pent-up demand and low inventories have sent sales prices skyrocketing during the past year. One reason why inventories have been particularly low in Illinois is the state builds new homes at a slower rate than virtually any other state. Since 2009, when single-family home building permits bottomed out during the Great Recession, Illinois has only issued 102,010 new single-family home permits, according to recently released U.S. Census Bureau data. When adjusted for population in the state, Illinois’ new home construction ranks 48th in the nation, above only Connecticut and New York. The Chicago-Naperville-Elgin metropolitan area, the state’s largest real estate market, has been no exception when it comes to population decline and slow, single-family home construction. The Chicago metro area has built fewer single-family homes per 1,000 residents than the 10 most populous metropolitan areas, except for Los Angeles and New York. Chicago has built 8.1 new single-family homes per 1,000 residents from 2010-2020, one of the slowest rates among major metropolitan areas. Meanwhile, major metros that are growing their populations rapidly have been building new homes at a much faster pace. Houston, Dallas, Phoenix and Atlanta have all built more than 35 new homes per 1,000 residents from 20102020. Not only has Chicago continually built single-family homes at a slow pace, the area has been one of the slowest to recover since the Great Recession for new home builds. Since new home construction bottomed out in 2009, Chicago’s new home construction recovery has been fourth-slowest among the 10 most populous metropolitan areas in the nation. Single-family home construction permits in Chicago are up 85% since national lows in 2009 during the Great Recession. The only major metropolitan areas to perform worse were New York, Philadelphia, and Washington, D.C. Likewise, major metros with fast-growing populations have seen a more significant recovery. New single-unit home construction in Atlanta is up over 400% since 2009, while construction in Phoenix and Miami has seen permits increase well over 200%. When families are looking to plant roots and make long-term investments in a given area, demand for housing increases. New home construction permits can be a valuable economic indicator of larger macroeconomic trends. Barring a change in land use regulations, slow growth in new home construction is an indicator that future demand for new housing is expected to be low. Because the demand for new housing is closely linked to labor market performance, new home building can be an indicator of the availability of employment opportunities and the health of the local economy. Unfortunately, Illinois labor market performance has persistently lagged the rest of the region and population has fallen in many Illinois regions. Despite low interest rates nationwide, a decline in public investment coupled with higher taxes have raised costs of owning a home and living in Illinois. Higher housing costs, which lower demand for housing relative to neighbor states, hurts new investment in housing. This is because when the returns to housing investments fall, investors find fewer investment projects worthwhile. As such, these results don’t come as much of a surprise in Illinois. Similar to the two worst-performing states on both the per capita and total permit metrics – Connecticut and New York – Illinois and Chicago have been experiencing population decline in recent years. Employment growth has also been lagging in Illinois for decades. Illinois and Chicago’s population decline in driven entirely by people moving out, and while the Census Bureau has had some trouble pinpointing the exact magnitude of the decline, the most recent official census count confirmed the phenomenon. The major reasons Illinoisans are choosing to leave the state are for better housing and employment opportunities, both of which have been made worse by poor public policy decisions. Nearly half of Illinoisans have thought about moving away, and they said taxes was their No. 1 reason. As more and more Illinoisans leave the state, there is less incentive for builders to construct new homes. The lack of new inventory also contributes to rising housing costs, exacerbating the problem. Another major reason why buying – or living – in Illinois hasn’t made sense for an increasing number of families is high property taxes, which make housing even more unaffordable. Illinois is home to the second-highest property taxes in the nation. The taxes are so high that property taxes are the equivalent of nearly seven additional mortgage payments annually for new homeowners. These taxes aren’t going to amenities that improve the value of communities for homeowners. In the past two decades, less than 50 cents of every additional dollar paid in property taxes went to pay for services. Statewide, only 20% of the increases in property taxes collected for municipal police and fire departments went toward protective services. The bulk of new tax collections went to pensions. This is because growth in pension costs statewide has exceeded Illinoisans’ ability to pay those bills. All else equal, when rising property tax dollars do not go to valuable current services, Illinois housing becomes less desirable and the exodus worsens. Pension reform can shore up state and local government finances, protect core services and reduce housing costs for Illinois homeowners. All of which would make the state a more desirable destination for would-be residents, helping to reverse outmigration and bring new home construction back to Illinois. Page 10 Jobs & Growth Bryce Hill
Page 11
Page 12
Page 13
Senator Jason Plummer criticizes Pritzker, calls for full audit of his Administration’s unemployment programs On July 28 the Auditor General released a financial audit of IDES that detailed the Pritzker Administration’s failures regarding the Pandemic Unemployment Assistance (PUA) Program. While the audit covered only seven weeks of the multi-month program, its findings were stark. “This audit is official documentation of Governor Pritzker’s ongoing failure to lead,” said Sen. Plummer. “It proves that even as countless hard-working Illinoisans were forced into desperate situations due to Governor Pritzker's unilateral decisions, his Administration was completely unresponsive to their needs and left the door to fraud wide open.” Key findings from the report included: • The Pritzker Administration failed to validate the identities of over 4,500 claimants before paying them $41,697,272. • The Pritzker Administration paid PUA benefits to 164 claimants who were between the ages of birth and 13 years of age. These children received unemployment payments of more than $1,500,000. • The Pritzker Administration’s failure to accurately document eligibility resulted in potentially ineligible claimants receiving benefits worth almost $155,000,000. • The Pritzker Administration paid benefits to dozens of deceased claimants, costing the state hundreds of thousands of dollars. • The Pritzker Administration, according to its own records, paid benefits to individuals who have yet to be born. “As fraud and identity theft overwhelmed unemployment claims, the Pritzker Administration sat idly by and IDES’s offices remain closed. That’s not leadership,” said Sen. Plummer. “For months, Senate Republicans have been voicing our concerns about the unprecedented levels of fraud within Illinois’ unemployment system. Yet our calls have gone unaddressed, leaving thousands of Illinoisans victims to a system that should never have been allowed to fail them at their most vulnerable point.” On July 29, Sen. Plummer filed a Senate resolution calling for a full performance audit of the issues within IDES. The state had been warned. In April 2020, the federal government recommended that Illinois implement additional fraud-prevention tools. That warning fell on deaf ears in the Pritzker Administration, which failed to act. “Governor Pritzker was warned about the dangers ahead, but he chose to ignore common sense solutions. Now, and for many years going forward, the people of this state will pay the price," said Sen. Plummer. "It's unacceptable and grossly negligent. The findings of this partial audit demonstrate that we need a complete audit of the governor’s management of the state’s unemployment program.” The full audit can be found at: https:// www.auditor.illinois.gov/Audit-Reports/Compliance-AgencyList/Emp-Sec/FY20-IDES-Fin-Full.pdf. Page 14
RENEWING MEMBERS Archway Cooling & Heating - 38 years AUTCOhome Appliances - 11 years Authorized Appliance - 3 years Bank of Hillsboro - 10 years Belfor Property Restoration - 4 years BOS - 6 years Busey Bank - 27 years C. A. Jones, Inc. - 26 years Carrollton Bank - 2 years Closet Factory - 12 years D&F Home Builders - 22 years Electro Door Systems, Inc. - 40 years Fairway Independent Mortgage Corp. - 5 years First Mid Bank & Trust - 5 years Heneghan and Associates, P.C. - 3 years Jacob Sunroom & Exteriors - 39 years Klein’s Brand Source - 20 years Lantz Jones - 4 years Madison County Planning & Dev. - 5 years Metro Marble & Granite - 4 years Negwer Materials, Inc. - 21 years New Tradition Homes - 17 years O’Fallon Electric Company - 34 years Osborn Homes, Inc. - 19 years Pass LLC - 29 years St. Clair Stairs - 1 year Timmermann Concrete - 1 year Town and Country Bank - 3 years REMODELERS COUNCIL RENEWALS Ambassador Floor Co. Henges Interiors J.T. McDermott Remodeling PROFESSIONAL WOMEN Drake Construction, LLC IN BUILDING COUNCIL Southwestern IL Council of Mayors started up their monthly meetings, this month was in O’Fallon at Bella Milano with over 80 participants including 20+ Mayors from the Metro East territory. HBR was represented by our President, Ryan Butler; Past President, Jeff Schmidt & EO, Tracy Butler that stole a moment with Mayor Roach, his lovely wife Nancy and Colonel Chris Robinson (pictured below) Page 15
At NAHB’s Urging, White House Holds Supply Chain Summit NAHB’s efforts to engage the White House to convene a home building materials supply chain summit seeking out solutions to end production bottlenecks that have resulted in soaring material prices has borne fruit. This afternoon, NAHB, along with a diverse group of stakeholders, participated in a virtual discussion hosted by the White House regarding current challenges across the home building supply chain, its implications for the broader housing market, and possible solutions. Administration officials participating in the event included Commerce Secretary Gina Raimondo, HUD Secretary Marcia Fudge, Assistant to the President and Director of the National Economic Council Brian Deese, Assistant to the President and Director of the Domestic Policy Council Ambassador Susan Rice, and Chair of the Council of Economic Advisers Cecelia Rouse. Thanks to our ongoing efforts, the issue of rising material prices and supply shortages has been brought front and center to the Biden administration. NAHB stressed at this meeting that it is imperative that lumber mill producers boost production in order to meet rising demand. A Year-Long Effort This meeting was the culmination of a year-long effort where NAHB has been in the forefront of educating the public and policymakers about how rising lumber and building material prices are harming home builders, home buyers and the economic recovery. NAHB leaders have appeared on CBS This Morning and numerous times on Fox Business News. We have also been featured in Bloomberg, CNN Business, Fortune, CNBC and scores of local media outlets across the nation calling for action to address rising prices and supply shortages. In the policy arena, NAHB has reached out to virtually every member of Congress on this issue and held talks with top White House officials and Cabinet leaders. Thanks to the outreach of NAHB’s grassroots membership, several House and Senate leaders have openly raised the issue of soaring lumber prices and housing affordability with Secretary Raimondo and U.S. Trade Representative Katherine Tai. These efforts helped pave the way for today’s meeting. In fact, Secretary Raimondo addressed the NAHB Leadership Council on June 28 and said that “supply chain disruptions are at the top of my mind.” Moving Forward In another positive development, many in the residential construction industry may have seen media reports about the recent sharp drop in lumber prices. While this is good news, the lumber crisis is far from over. Most builders have not been able to take advantage of this development because producers are still selling off lumber that they purchased from mills when prices were at their peak. Moreover, sawmill output continues to lag. During today’s meeting, NAHB underscored that if supply does not increase fast enough to meet demand, we may find ourselves in the same situation as last November, when lumber prices posted a similar steep reduction only to reverse course and move to recordhigh levels. And while lumber prices have just recently begun to move downward, the price for other building materials such as oriented strand board continue to soar. While today’s White House meeting was a step forward, we are not out of the woods yet. Looking ahead, we will remain laser-focused on not only lowering lumber prices and increasing supply, but also keeping pressure on policymakers to improve supply chains for all building materials in order to protect housing affordability. NAHB will continue to work relentlessly on all fronts to find solutions that will ensure a lasting and stable supply of lumber and other building materials for the home building industry at a competitive price. Learn more about what NAHB is doing to resolve the lumber crisis by visiting our lumber page at nahb.org. Page 16
Page 17
OFFICERS P L A T I N U M President, Ryan Butler Remington Properties 1st Vice President, Mike Lippert Liese Lumber 2nd Vice President, Mike Needles C.A. Jones, Inc. Associate Vice President, Mindy Shafer Wells Fargo Home Mortgage Treasurer, Scott Gruber First Mid Bank & Trust Secretary, Jerry Yaekel Yaekel & Associates, Inc. Immediate Past President, Aaron Klemme Klemme Construction DIRECTORS G O L D S I L V E R Allen Roofing & Siding B R O N Z Page 19 Jason Klein - Ameren Illinois Barry Buchman - Arrowhead Building Supply Matt Warren - Carrollton Bank Coy Mullenix - CMI Construction Michelle Rauk - Eagle Flooring Mark Fulford - Fulford Construction John Snapat - Fulford Home Remodeling Steve Macaluso - Halloran Construction Jon Edler - Henges Interiors Robert Dee, Jr. - Homes by Deesign, Inc. Scott Blumberg - Huntington Chase Ken Diel - Kerber, Eck & Braeckel Mike Lippert - Liese Lumber Josh McDermott - J.T. McDermott Remodeling Contractors Derek Brandmeyer - Light Brite Jason Huelsmann - New Tradition Homes David Padgett - Padgett Building & Remodeling Ron Padgett - Padgett Building & Remodeling Scot Lehr - Quality Installation & Home Improvement Jeff Schmidt - RLP Development Sue Schultz - Sandberg Phoenix & von Gontard P.C. Mike Rathgeb - Spencer Homes Mark Vogt - Vogt Builders, Inc. Jim Vernier - Village of Shiloh
6100 West Main Street Maryville, IL 62062 Phone: 618-343-6331 E-mail: tbutler@hbrmea.org Web: www.hbrmea.org
1 Publizr