Builders Outlook 2016 Issue 4

8/17/2019 Builders Outlook 2016 Issue 4

1/16

Builders

Outlook

“Builders remain cautiouslyoptimistic about market

conditions,” said NAHB ChiefEconomist Robert Dietz. “2016

should be the first year since theGreat Recession in which the

growth rate for single-familyproduction exceeds that of

multifamily. And we see single-family growth accelerating in 2017

as the supply side chain mendsand we can expand production.”

Steady job growth has bolsteredconsumer confidence and

rekindled housing demand.Nationally, payroll employment

has surpassed its pre-recessionpeak by a modest margin and

only a small number of states lag

behind pre-recession levels.

The ForecastLooking at the forecast, single-

family production is expected to

post a 14 percent gain in 2016 to812,000 units and rise an

additional 19 percent to 964,000units in 2017.

Using the 2000-2003 period asa healthy benchmark when single-

family starts averaged 1.3 millionunits on an annual basis, NAHB is

projecting that single-familyproduction, which bottomed out at

an average of 27 percent ofnormal production in early 2009,

will rise to 64 percent of normal bythe fourth quarter of this year and

climb to 77 percent of normal bythe end of 2017. Single-family

production currently stands at 58percent of normal activity.

“Consumer surveys suggest theultimate goal of millennials is to

purchase a single-family home in

the suburbs,” said Dietz. “We seegrowth for single-family looking

ahead. The recovery continuesand is dictated by demand side

conditions and supply sideheadwinds.”

On the multifamily side,production ran at 395,000 units

last year, above the 331,000 ratethat is considered a normal level

of production. Multifamily startsare expected to decline 4 percent

to 379,000 units this year and rise6 percent to 402,000 units in

2017.Residential remodeling activity is

expected to increase 3.3 percentin 2016 over last year and rise an

additional 1.3 percent in 2017.

The Best Year Since 2006Len Kiefer, deputy chief economist

at Freddie Mac, cited severalfactors that should make this

year’s home sales the best in adecade:

Household formations areprojected to accelerate. Between

2008 and 2014, the slowdownresulted in 5.1 million fewer

household formations thannormal.

Purchase applications showsolid home sales that match

demographics.More owners are current on

their mortgages, with fewerdefaults and less foreclosures.

Solid job gains include risingsalaries and wages.

House prices are rising about 6percent annually and appear

roughly in line with incomes andrents.

“Demographic tailwinds are

helping to propel the housingmarket forward,” said Kiefer.

Freddie Mac is projecting 5.9million total home sales this year,

the highest level since 2006, and6.2 million in 2017.

Regionally, Kiefer said thathouse price growth is the

strongest in the South and West,with Nevada, Oregon,

Washington, Colorado and Floridaall posting double-digit statewide

house price appreciation betweenDecember 2014 and December

2015.

Back to BasicsAlso looking below the national

numbers, NAHB senior economist

Robert Denk said that housingmarket conditions are improvingacross the nation, but the pace of

the recovery continues to vary bystate and region.

“A common theme hasemerged,” said Denk. “The

progress of market recovery is nolonger a function of the boom and

bust cycle marked by pricebubbles, excess supply and

foreclosures. The key driver of thehousing recovery is now back to

the underlying housing marketfundamentals of population and

job growth.”The hardest hit areas during the

downturn included the “bubble”states of California, Arizona,

Nevada and Florida, wherehousing market excesses were

the greatest, and the industrialMidwest, where the longer-term

decline in U.S. manufacturing wasexacerbated by the recession.

Marked by solid job growth,

housing markets in the bubblestates are on the mend while the

Midwest continues to languish dueto an ongoing sluggish

manufacturing base.The states with the strongest

housing market recoveries arealso among the leaders in payroll

employment gains since the endof the recession. The strongest

housing recoveries to date are inMontana, North Dakota and Utah,

all with robust energy sectors,which helped push them near or

beyond full recovery in housingproduction. The next tier of

leaders includes Texas,Oklahoma, Louisiana and Alaska

– again, all with prominent energy

sectors.While the collapse in oil prices

since mid-2014 will undermine the

strength of the economies in thesestates as their energy sectors

contract, the extent of theweakening will depend on the

diversity of the economy. “Thebasic principle remains the same,”

said Denk. “A strong economy,whether helped, hindered or

unaffected by the energyeconomy, will be a key factor

driving housing recoveries goingforward.”

In another way of looking at thelong road back to normal, by the

end of 2017, the top 20 percent ofstates will reach at least 102

percent of normal single-familyproduction levels, compared to the

bottom 20 percent, which will stillbe below 65 percent.

National, State & Local Building Industry News2016: Issue 4

www.elpasobuilders.com

Single Family Sector

Leads Housing to

Higher Ground

Steady job growth, affordable home prices,attractive mortgage interest rates and pent-updemand will help the housing market continue on agradual upward trajectory in the year ahead,

according to economists who participated inyesterday’s National Association of Home Builders(NAHB) Spring Construction Forecast Webinar.However, supply side headwinds led by a shortageof construction lots and labor, along with tightaccess to acquisition, construction anddevelopment (AD&C) loans, continue to hamper amore robust recovery.


2/16

2 Builders Outlook 2 16 issue 4

STAY SAFE.

CALL 811 BEFORE YOU DIG.If you have digging or excavation work to do, remember to call 811 at least

two business days in advance.

Natural gas and other utility lines may be buried beneath the surface. By calling

811, utility crews can mark locations of underground lines at no charge. The

markings are done in paint and will eventually wash away. Marking line locations

can help prevent you from accidentally damaging a natural gas line or another

utility line.

Always call 811 before you dig. It can help keep you and your construction crew

safe, and failing to do so can result in a fine.*

* Texas Utilities Code 251.201 Civil Penalties


3/16

We had a great meeting this monthwith Guest Speaker Mayor OscarLeeser, who shared some veryencouraging news about El Paso.

First and foremost he informed usthat El Paso has created around8,800 jobs in the last year droppingthe unemployment rate to around4.4% in February, well below thenational unemployment rate of 4.9%.Mayor Leeser said that hisadministration has been very focusedon bringing new jobs to the El Pasothrough an active courting of differentlarge corporations. He has teamedup with Juarez Mayor EnriqueSerrano and they have gone to visit

businesses in several states andinvited them to visit our great city.

“We are looking for long termpartners, not just businesses trying tocreate a job today” said MayorLeeser. This strategy has provenquite successful as businesses suchas ADP are investing heavily in ElPaso to the tune of $82M and 2,400new, high paying jobs. This is exactlywhat we need.

I’ll leave you with a quick analysisof a report prepared by our friends atGEPAR prepared for the month ofMarch 2016:

1. Active Listings down from4,761 a year ago to 3,910: Thisrepresents an 18% decrease inactive listed inventory, this is verypositive since it means less inventory

and less downward pressure onhome prices.

2. Average Listing price up to$191K from $184K a year ago:Another positive measure, averagelisting price up 3.8%, which mighthave a little (or a lot) to do with homeinventories being down.

3. Months of inventory down to 9months from 12 months a year ago:No explanation needed here.

4. Average Listing price persquare foot up to $99 / SF from $92a year ago: This is very importantinformation. Last year about 4,250used homes were sold in El Paso,since we’re not building any more

“old homes”, the inventory is fixedand limited. It is natural that thehomes in better condition and pricedcorrectly will move quicker, makingtoday’s used home inventory lessattractive and less affordable than ayear ago. It is way easier for newhomes to compete with $99/SF thanwith $92/SF.

So all of this is good news for ourindustry as we breeze through thespring season. Last but not least,don’t forget to mark your calendarsfor June 24, 2016 for our own Paradeof Homes at Enchanted Hills.

Thank you to our members for all ofyour support,

32016 issue 4 Builders Outlook

CarlosVillalobosPresident,El Paso Associationof Builders

l Paso market looking good

President’s

Message

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4/16

I’d like to take time to thank thepartners we had on our spring golfouting. We quit calling it atournament when the scores beingturned in were new course records,so instead we adopted the name“Pachanga” or party in Spanish slang.Much more appropriate and frankly alot more fun. Our title partner once

again was StrucSure Home warrantyand our friend Scott Whisenant whoput it all together for us. Our hostclub was Painted Dunes, a specialthanks to Anthony and his crew.Great job overall. More on the golfPachanga in pictures a few pagesdown.

If you’re a builder or supplier andaren’t aware of the new IECC energyCodes for 2015 you may be in for ashocker. The Texas Association ofBuilders sponsored a training on April28 and it was great. The City of ElPaso will be enforcing the new codesin September, so if you haven’t been

thinking about them you should. Asanyone building in California orFlorida will tell you these are codesthat have been in effect there for acouple of decades but now the wholecountry is required under theinternational energy code council.Get up to speed or find yourself withan unsellable house because unless

you do the new code you won’t passinspection. The association will beworking to bring another training sothat we can cover more of you. Keeplooking in your email for notices ofupcoming training.

I’m really glad that we are going tofinally see Alamo Drafthouse open.I’ve been going to them in the Austinarea forever and could not wait tohave them come to El Paso. What I’mreally waiting to see is thosehabitually late movie goers get ashock when the Alamo tells them theycan’t be seated after the movie starts.I also can’t wait to see them kick out

those who ruin the movie experienceby texting during the show. Oh yeah,they’ll be gone as well. Frankly I’m amovie going buff and nothing spoilsthe atmosphere more than peoplewho are rude. We went to see TheJungle Book recently at Bassett Placeand dang if a couple of peoplewalked in halfway through the movie

and then wouldn’t shut up. They ofcourse sat right in front of me, so Ireached down and told them to bequiet. Like two year olds they didn’t,and since one or both of them werehard of hearing the talking kept going.That shouldn’t happen at Alamo, andmaybe that will give the othermovieplexes “permission” to dowhat’s right and remove rude peoplefrom the theater. Yeah, sure. I betterget a yearly pass to Alamo.

Those wonderful changes keepcoming. The new 22 story hotel-apartment complex to be built behindCoronado Tower is really important

for the city. While the NIMBYS willtry to stop it the association standsfirmly behind its construction. Wheninvestors are willing to drop millionsinto a project like this it’s no time forthe citizens to get all up in arms.

Think of it this way: the empty lot isnot generating much tax revenue andit isn’t getting any jobs. Like all

growth but particular commercialgrowth this investment is critical tothe progress of making El Paso a“big” city again. Our congratulationsto the Myers Group for such forwardthinking, and to the city leaders whoare open to the complex. This willcreate long term jobs in the city,construction jobs and supplier jobs.And that creates the other jobs likethe grocery jobs, day care, retail andrestaurants plus many more tomention. Join us in the support of theproject. Like we say, “Buildingtomorrow today!”

Ray Adauto,ExecutiveVice President

EPAB

4 Builders Outlook 2 16 Issue 4

Spring brings more growth to El Paso

Executive’s

Message


5/16

GINDILB

El P

soSIN 0951E

52016 issue 4 Builders Outlook

Remodeling Market IndexDips in First Quarter The National Association of Home

Builders’ (NAHB) Remodeling Market Index(RMI) posted a reading of 54 in the firstquarter of 2016, dipping four points belowthe previous quarter but remaining inpositive territory above 50.

An RMI above 50 indicates that moreremodelers report market activity is higher(compared to the prior quarter) than reportit is lower. The overall RMI averagesratings of current remodeling activity withindicators of future remodeling activity.

“Remodelers were solidly booked for jobs in the first quarter of 2016 but callsand appointments for work slowed down in

comparison to the end of 2015,” said 2016NAHB Remodelers Chair Tim Shigley,CAPS, CGP, GMB, GMR, a remodeler fromWichita, Kan. “Volatility in the financialmarkets during the first quarter may haveimpacted consumers’ readiness to committo projects.”

The RMI’s current market conditionsindex stands at 55, decreasing by a singlepoint from the previous quarter. Among itscomponents, major additions andalterations continued gains from theprevious quarter, rising to 55 from 54. Thesmaller remodeling projects componentdecreased two points to 54, and the homemaintenance and repair component of theRMI decreased two points to 56.

At 53, the RMI’s future market conditionsindex decreased six points from theprevious quarter. Among its fourcomponents, calls for bids decreased to 51from 58, the amount of work committed fellto 52 from 57 and appointments forproposals dropped to 52 from 60.Meanwhile, the backlog of remodeling jobsdecreased only three points to 58 from theprevious quarter’s reading and high-watermark of 61.

“Minor declines in the small additionsand maintenance categories coupled with aslight uptick in major additions resulted in aflat outcome for current market conditions,”said NAHB Chief Economist Robert Dietz.“While the future market conditions of theindex dipped slightly, we still anticipatemodest growth in the remodeling industryover the course of 2016.”

Sales of newly built, single-family homes

fell 1.5 percent in March from an upwardlyrevised February reading to a seasonallyadjusted annual rate of 511,000 units,according to newly released data by theU.S. Department of Housing and UrbanDevelopment and the U.S. Census Bureau.“Builders are slowly raising inventory asthey remain cautious about the housingrecovery,” said NAHB Chairman Ed Brady,a home builder and developer fromBloomington, Ill.

“Though sales were flat this month, theyare running modestly higher on a year-over-year basis,” said NAHB ChiefEconomist Robert Dietz. “We expect thesales pace to rise through 2016, givenongoing low mortgage interest rates andhealthy job creation.”

The inventory of new homes for sale

rose to 246,000 in March, which is a 5.8-month supply at the current sales pace.The median sales price of new houses soldin March was $288,000.

Regionally, new home sales rose 18.5percent in the Midwest and 5 percent in theSouth. Sales were unchanged in theNortheast and fell 23.6 percent in the West.

National

Builder News

“Remodelers were solidlybooked for jobs in the firstquarter of 2016 but calls andappointments for workslowed down in comparisonto the end of 2015,”

New Home Sales Relatively Unchanged


6/16

There exists concern among manythat should another recession comesoon, the government will have few, ifany, tools to bring the economy backtowards growth and prosperity

because interest rates are alreadynear rock bottom. As a result, it isfeared that our economy could quitepossibly remain in the doldrums forsome time. Fortunately, this is simplynot true. There remain numerous toolsat the disposal of the Fed and of theCongress. Below are some ideas thatare surely being considered shouldmore intervention become necessary.

To begin, the central bank couldonce again ramp up its purchases of

Treasuries and mortgage-backedsecurities (MBS) through anotherround of quantitative easing. Butrather than sticking to just Treasuriesand MBS, this time the Fed could buya much broader range of assets,including high-yield bonds, stocks, andeven real estate to get asset prices upand markets out of the doldrums.

Another step the Fed could take is topush interest rates into negativeterritory, meaning i t would startcharging, yes charging, banks to keepmoney on deposit rather than payingthem the current rate of 0.5%. Whilethis seems preposterous, at present

central banks in Denmark, Japan,Sweden and Switzerland, along withthe European Central Bank are doingprecisely this. The aim would be toencourage banks to lend by penalizingthem to hold cash. In a similar vein,the Fed could alternatively pay banksto lend money to borrowers. Thispolicy is less harmful than usingnegative interest rates, as it does notreduce bank profits nor does it

encourage banks to charge theirdepositors to keep deposits on hand torecoup the money paid to the Fed.Paying banks is akin to using a carrot,lower rates; a stick.

In addition to the above, the Fedcould also promise to keep mortgagerates at or below a certain level for anextended period of time with theexplicit aim being to boost lendingactivity by enabling more people toqualify for a mortgage. This wouldboost home sales and residentialconstruction activity.

Another way to boost spending andinflation is for the government to

announce a tax cut and issue bonds tofinance it. But, rather than selling thebonds to private investors (which takesmoney out of circulation), the Fedwould buy the bonds. This “Helicoptermoney” (HM) named in honor of MiltonFriedman and which fuses fiscal andmonetary policy, is as close as you canget to raining cash from the clear bluesky like manna down on households.While HM is not to be rushed into, in a

deep recession or global crisis, it mightwell make sense. And, if it werecoordinated by a group of richcountries, all the better.

Lastly, the Congress could surpriseus and use fiscal policy and passstructural reforms. Fiscal policy suchas large tax cuts or spending on largeinfrastructure projects would giveprivate sector firms more confidenceabout future demand and thus make arecovery more likely. Structuralreforms could include tax reform andincreased deregulation.

In short, the government is far frombeing out of policies that could be

employed to jump-start the economy inthe event of a recession in the nearfuture. While some policies willundoubtedly work better than others,the key will be to implement a numberof them at once.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at

[email protected]. His daily 70 word

economics and policy blog can be seen at

www.econ70.com.

6 Builders Outlook 2 16 Issue 4

Financial

Perspective

Elliot Eisenberg

Economic & PolicyBlog

Policies can jump start economy

U.S. services

sector expandsstrongly asorders,

employmentrise

The vast U.S. services sectorexpanded in April as new orders andemployment accelerated, bolsteringviews that economic growth wouldrebound after almost stalling in the firstquarter.

The growth outlook was, however,dimmed by other data on Wednesdayshowing private employers hired thefewest number of workers in threeyears in April.

The Institute for Supply Managementsaid its nonmanufacturing index rose1.2 percentage points to a reading of55.7 in April.

A reading above 50 indicatesexpansion in the services sector, whichaccounts for more than two-thirds of theU.S. economy. Services industry activitywas last month buoyed by a 3.2

percentage point surge in new orders.A gauge of services sector

employment rose to 53.0 last monthfrom a reading of 50.3 in March.

That strong increase should offsetconcerns about the labor market, whichhad been stoked by the ADP NationalEmployment Report showing privatepayrolls increased 156,000 last month,the smallest gain since April 2013, afterrising 194,000 in March.

The ADP report, which is jointlydeveloped with Moody's Analytics, waspublished ahead of the government'smore comprehensive employmentreport for April due on Friday.

According to a Reuters survey ofeconomists, nonfarm payrolls likelyincreased by 202,000 jobs in April afterrising 215,000 in March. The

unemployment rate is forecast holdingsteady at 5.0 percent.

The labor market has so farweathered the sluggish economy, whichhas been slammed by weak exports asa result of a strong dollar and tepidglobal demand. Growth has also beeneroded by relentless aggressivespending cuts in the energy sector inthe aftermath of last year's plunge in oilprices, as well as efforts by businessesto reduce an inventory overhang.

The economy slowed to an annualgrowth pace of 0.5 percent in the firstquarter after expanding at a 1.4 percentrate in the fourth quarter.

The ADP report showed employmentin the goods-producing sector droppedby 11,000 jobs in April, withmanufacturing payrolls declining by

13,000 positions. The constructionindustry added 14,000 jobs last month.Services industry employment

increased by 166,000 jobs in April,down from 189,000 in March.

The dollar rose against a basket ofcurrencies on the reports. Prices forU.S. government debt fell.

In a second report, the CommerceDepartment said the trade deficit fell13.9 percent to $40.4 billion in March,the smallest since February 2015 asimports of goods plunged to their lowestlevel since 2010. Goods exports alsofell.

The lingering impact of the dollar'spast rally and soft global demand have

hampered exports, but there are signsthat some of the drag is starting to fade.The Institute for Supply Managementreported on Monday that a gauge ofexport orders received by U.S.manufacturers rose in April for a secondstraight month, reaching its highestlevel since November 2014.

WASHINGTON | By Lucia MutikaniREUTERS

HOMEO F T E X A S


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10/16

By Crissinda Ponder • Bankrate.com

When you and your significant otherhave made a commitment, you maythink you're ready to share everything -

- including a mortgage. It's a romanticnotion that can collide with this coldfinancial reality: Applying for amortgage with another person can berisky, especially if one of you has anotably lower credit score.

Wait, what?

When you apply for a mortgage withone or more other borrowers, thelender will pull 3 credit scores -- basedon credit reports from each of the 3major credit reporting bureaus -- andbase the loan application on the lowestmiddle score among the applicants.

Let's say you and your spouse jointlyapply for a mortgage, and let's sayyour own credit scores stand at:

685699705

But your spouse's scores are:701717725

The lender would look at the 2middle scores -- 699 and 717 -- and tiethe mortgage terms to the lower ofthose: 699.

The rule may not be commonknowledge to many consumers, but it'sbeen around for decades, says PavaLeyrer, chief operating officer atNorthern Mortgage Services inGrandville, Michigan.

"There aren't very many constants inour business, but that's a constant,"she says.

Risk is a key factor

You might be wondering: Whywouldn't a lender go with the highermiddle score? Seems fair, right?

It's all comes down to risk, saysJohn Stearns, senior mortgage bankerat American Fidelity Mortgage Servicesin Milwaukee.

"If you're going to look at the overallrisk, the safest thing to do would be totake the lower middle score," Stearnssays.

The good news is that there's roomfor a lower credit score to improve.

"When they start making paymentson time their score should go up,because your mortgage is your biggestmonthly payment," he says.

Is a joint application necessary?In a Bankrate survey, nearly 4 in 10

Americans said knowing someone'scredit score might make them thinktwice about dating that person. But youdon't have to be quite so exclusive toavoid a higher-cost mortgage.

The easiest way to get around therule when you're in a relationship is tohave one person apply for a mortgage,though that person would need to havea strong enough application that wouldallow them to qualify alone.

But as a recent Washington Postarticle points out, there are coupleswho have sentimental reasons forapplying jointly. Even if your name isn'ton the mortgage, you can still benamed on the title policy, Stearnsexplains.

"That gives you equal ownershipwith the person who has the loan," hesays.

Another thing to keep in mind is thatwhen you're not on the mortgage andthe borrower makes a late payment,your credit won't take a hit.

Do a credit checkupBefore you decide to jointly apply for

a mortgage with someone else, reviewyour credit reports. Get a free creditreport today at myBankrate.

"Having knowledge of your basereport, even without a score, isextremely beneficial," Leyrer says.

Take that information to a mortgageprofessional and get some guidanceon how to move forward. Additionally,be sure to find out what your co-borrower's credit scores are.

"Know the importance of addingsomebody to a mortgage with apotentially lower score," Stearns says.


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11/16

11 16 issue 4 Builders Outlook

El Paso Development News

The Far East El Paso area is getting yetanother Cinemark movie theater as part

of a large shopping center developmentat the corner of Eastlake Boulevard and

Gateway West. It will be the theaterchain's fourth location in the East El Paso

area.The Cinemark theater will anchor a

new shopping center named EastlakeMarketplace in an area just outside of ElPaso's city limits, west of Horizon City.

A site plan for the development showsthe theater located along Gateway West

with the majority of retailers on thenorthern side.

Another large anchor is shown on thesite plan, listed at nearly 190,000 square

feet. It shows a possible related fuelisland.

The East Side of El Paso alone has

three Cinemark locations already, at CieloVista Mall, at Las Palmas Marketplace,

and on Montana Avenue at Rich BeemBoulevard. The West Side locations are

at Sunland Park Mall and at RemconCircle.

Smaller shops and restaurants will belocated nearer to Gateway West and

Eastlake Boulevard, similar to what isseen in the plans for West TowneMarketplace.

Few other details are availableregarding Eastlake Marketplace, which is

being developed by River OaksProperties of El Paso.

No official announcement has beenmade for the new Cinemark, which has

been made public by a sign at thedevelopment. A construction completion

date has not been disclosed.

An upcoming commercial projectwill add a "village-style" retail centerto West El Paso and will includeshops and restaurants in a "heavilylandscaped" atmosphere.

That's according to plans for TheSubstation which will be built at thecorner of Doniphan Drive and SunsetRoad near El Paso's Upper Valley,south of North Mesa Street.

The center will include 24,000square feet of total space for bothrestaurants and retail uses amid

"heavy landscaping" and outdoorseating areas.

According to the site plan andrenderings of the site, buildings willbe clustered at slight angles alongDoniphan and Sunset, with themajority of parking placed behind thebuildings. There will also be streetparking along Sunset.

A "landmark tower" will addarchitectural interest to theintersection, with a small pedestrianmall and seating area behind it.

The retail center has been in theworks for a few years with EPRiverbend Developmentspearheading the project.

"The Substation concept brings aunique approach to retail and diningin a 'village' approach on a site longoverdue for redevelopment," thedeveloper states on the projectwebsite.

"The project will incorporate avintage look and feel throughuncommon 'nostalgic' design

elements within the facades andbuilding materials. The village will beheavily landscaped and utilizeconnected walkpaths, a pedestrian

A page at the site lists two tenantsso far, 2Ten Coffee Roasters and TheOld Yellow Bus, a children's boutique.

According to the website, plans areto open the center in summer of2016.

For more information, visitwww.substationep.com.

Builders Outlook 2016 Issue4www.elpasodevnews.com

New Cinemark Theater to Anchor 'EastlakeMarketplace' near Horizon

'The Substation' Brings VillageStyle Retail Center to Westside

One of the main features at The Substation retail center in West El

Paso will be a pedestrian mall and meeting area, shown in this

rendering. (EP Riverbend Development)


12/16


Preview Party June 24Enchanted Hills Subdivision Development by: Southwest Land Development

Beautiful Homes by:BIC, Pointe Homes, DR Horton, CTU Metro Homes, Pacifica Homes,

Deal 2 Deal Homes, Trinity Homes and Edwards Homes

Conu YvSer

enienceurt Y

ing

Downtown

w Bean, Suite D

rt, Suite A-2

d Drive, Suite 101

eet Str

days of serving you.than 500 Satur

es mor. That’dayopen on Satur

of being the only title company

e celebrating 10 yearse arW

oodr4712 W

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estsideW

rawoo i i2244 T

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stewart.com/el-paso8200-225-519

9:00 am to 1:00 pm.days All branches open on Satur

Whole house remodels andadditions are regaining market shareaccording to a survey of remodelersreleased by NAHB Remodelers, theremodeling arm of the NationalAssociation of Home Builders (NAHB).The survey, released today to kick offNational Home Remodeling Month inMay, revealed the most commonremodeling projects in 2016, comparedto historical results of the survey.

“While bathroom and kitchen

remodels remain the most commonrenovations, basements, whole houseremodels and both large and smallscale additions are returning to levelsnot seen since prior to the downturn,”said 2016 NAHB Remodelers ChairTim Shigley, CAPS, CGP, GMB, GMR,a remodeler from Wichita, Kan.“Clients want to add more space, butremodeling a significant portion of thehome is no easy feat. That’s why it isimportant to work with a professionalremodeler who has the integrity andexpertise to take on these largeremodeling jobs.”

In the survey, remodelers reported

that the following projects were

more common than in 2013:

• Whole house remodels increased by10 percent

• Room additions increased by 12percent

• Finished basements increased by 8percent

Bathroom additions increased by 7percent

Bathrooms topped the list of most

common remodeling projects for thefifth time since 2010. Eighty-onepercent of remodelers reported thatbathrooms were a common remodeling

job for their company while 79 percentof remodelers reported the same forkitchen remodels. Window and doorreplacements decreased to 36 percentfrom 45 percent in 2014.

of

OPEN JUNE 25 JULY 10


Larger Remodeling Projects Trending Up


13/16

13016 Issue 4 Builders Outlook

Association

News Events

MAY 11

BOARD MEETING

12:00 NOON

EPAB OFFICE

MAY 26

SPEED NETWORKING

2:00-4:00 EPAB OFFICE

JUNE 8

BOARD MEETING

11:00

GENERAL MEETING

12 NOON

MARRIOTT HOTEL

UPCOMING

EVENTSNEW MEMBERS

SODA SPONSOR

DORNEY SECURTIY

Connect to the El Paso

Association of Builders:


EL PASO J. A.G., INC.

CONTACT: PATRICIA CASTRO

230 CHELSEA STREET

EL PASO, TEXAS 79905

915-533-8607

DIAMOND HOMES, LLC.

CONTACT: VALERIE

BAQUERA

373 ESCALANTE

EL PASO, TX 79927

915-448-9044

If you have an event or meeting that you would like to share with

EPAB members, please submit your information to:

[email protected]


14/16

Builders Outlook 2 16 issue 4

Give your 401(k) plan a little routine

care and maintenance to avoid

compliance problems!

A compliance review will help you

catch any plan errors or overlooked

updates that might affect the

retirement income of one or more of

your company’s employees or subject

your company to regulatory penalties.

Here’s a quick run-down of how to

check under the hood of your

organization’s 401(k) plan:

• Laws related to retirement plans

change quite frequently, and the

IRS generally establishes firm

deadlines for adopting these changes.

Update your calendar tickler to remind

you when amendments must be

completed. Maintain regular contact

with the company that sold you the

plan to ensure you’re getting the latest

updates.• Perform a review of

compensation definitions and provide

training for the person or people in

charge of determining

employee/participant compensation.

This will help you make sure your

plan’s definitions of compensation are

correct for deferrals and allocations.

• To ensure you make employer

matching contributions correctly for

all eligible employees, review your

plan document to determine the

correct matching contribution formula

and compare that to what’s being

used. Ensure that your plan

administrator has adequate and

sufficient employment and payroll

records to make the calculations.

• Initiate an independent review to

determine if highly compensated and

non-highly compensated employees

are properly classified. This will help

you satisfy the actual deferral

percentage (ADP) and actual

contribution percentage (ACP)

nondiscrimination tests.

• Review payroll records to extract

the total number of employees, birth

dates, hire dates, hours worked and

other pertinent information to ensure

all eligible employees identified are

given the opportunity to make an

elective deferral. Also inspect W-2

and state unemployment tax

documents to see if employee counts

are accurate. If an employee was not

provided the opportunity to make an

elective deferral, make a qualified

non-elective contribution (QNEC) to

the plan on the employee’s behalf.

• Provide your plan administrator

with sufficient payroll information

and inspect deferral amounts for plan

participants to make sure elective

deferral distributions do not exceed

amounts allowed under IRC section

402(g) for the calendar year ($18,000

in 2015 and 2016, plus an additional

$6,000 if the employee is age 50 or

older).

• To ensure timely deposits of

employee elective deferrals,

coordinate closely with your payroll

provider to determine the earliest date

the deferral deposits can reasonablybe segregated from general assets,

then set up procedures to ensure

deposits are made by that date.

• If your 401(k) plan is determined

to be “top-heavy,” make employer

contributions of up to three percent on

behalf of all non-key employees still

employed on the last day of the plan

year. A plan is top-heavy when, as of

the last day of the preceding plan

year, the aggregate value of the plan

accounts of key employees exceeds

60 percent of the aggregate value of

the plan accounts for all employees

under the plan.

• Reacquaint yourself and plan

administrators with hardship

provisions designed to help

employees who are facing immediate

or heavy financial need. Share

information between plan

administrators and payroll offices

regarding hardship distributions made

from the plan.

• Ensure timely filing of Form

5500 (Annual Return/Report of

Employee Benefit Plan) ERISA, and

Summary Annual Report (SAR) to all

plan participants annually. Don’t

assume someone else is filing these

forms. Each plan may have a number

of individuals providing service to the

plan, including your CPA, the TPA,

benefits attorney, auditor, inside

auditor, human resource employees,

banker, and financial advisor. The

plan administrator should have the

responsibility for making certain the

return is properly filed.

Finally, if you have any questions or

concerns, opt for an independent

review of your plan administration.

Then develop communications

protocols to make all relevant parties

aware of changes on a timely and

accurate basis.

For more information on 401(k) plan

administration or setup, please

contact us.

For a review of your financial situation

and assistance in developing your financial

plan, please contact us.

Employer Benefits of El Paso

(915) 542-0900

[email protected]

w.employeebenefitsofelpaso.com

Joe BernalEmployer Benefits of El Paso

El Paso Disposal

772-7495

Expert

Advice

It’s Time for a 401(k) Tune-Up

14

Jaime’s Courier

Service,Inc.

Jaime’s Courier

Service,Inc.

915-549-4533or

915-478-2404

Bonded, insured for

your peace of mind.


15/16

EXECUTIVE OFFICERS

PRESIDENT

Carlos Villalobos

VICE PRESIDENT

Don Rassette

SECRETARY/TREASURER

Kathy Parry

ASSOCIATES CHAIR

John Dorney

ECECUTIVE VICE PRESIDENT

Ray Adauto

PAST PRESIDENT

Edgar Montiel

Membership Retentiion

Patrick Tuttle

Finance Committee

Kathy Carrillo

Henry Tinajero

ADVISORY TO THE BOARD

Jay Kerr, Firth, Johnston, Bunn & Kerr

James Martinez, Law Office of James Martinez

BOARD OF DIRECTORS

Antonio Cervantes, BIC Homes

Leti Navarrete, Dream Homes/Bella Homes

Robert Najera, Joseph Custom Homes

Bud Foster, Southwest Land Development Services

Walter Lujan, Dawco Home Builders

Fernando Torres, CTU Metro Homes

Leslie Driggers-Hoard, Homes By Design

Edgar Garcia, Bella Vista Cutom Homes

Mark Winton, Mark Winton Homes, Inc.

Jason Cullers, Cullers Homes

Samira Gonzalez, ICON Custom Homes

Sal Masoud, DRE Development

Joe Bernal, Employer Benefits Of El Paso

Linda Troncoso, TRE& Associates

Bret Thompson, Foxworth Galbraith Lumber

Ted Escobedo, Snappy Publishing, LLC

Patrick Tuttle, Legacy Real Estate

Sam Trimble, Lone Star Title

Luis Rosas, HUBInternational

Gilbert Pedregon, GECU

Gregg Davis, First Light FCU

TAB STATE DIRECTORS

Randy Bowling

Greg Bowling

Sam Shallenberger

NATIONAL DIRECTORS

Bobby Bowling IV.

Demetrio Jimenez

2015 Builder Member Of The Year

Edgar Montiel

Palo Verde Homes

2015 Associate Of The Year

Interceramic Tile

2015 John Shatzman Award

Bradley Roe

Honorary Life Members

Mark Dyer

Wayne Grinnell

Don Henderson

Chester Lovelady

Cliff C. Anthes

Anna Gill

Brad Roe

Rudy Guel

E H Baeza

Past Presidents

Committed to Serve

EPAB Mission Statement:

The El Paso Association of Builders is

a federated professional organizationrepresenting the home building

industry, committed to enhancing the

quality of life in our community by

providing affordable homes of

excellence and value.

The El Paso Association of Buildersis a 501C(6) trade organization.

© 2015 Builder’s Outlook

is published and distributed for the

El Paso Association of Builders

by Ted Escobedo, Snappy Publishing, LLC

[email protected]

El Paso • Texas • 915-820-2800

6046 Surety Dr. El Paso, TX 79905

915-778-5387 • Fax: 915-772-3038

Greg Bowling

Kelly Sorenson

Mark Dyer Mike Santamaria

John Cullers

Randy Bowling

Doug Schwartz

Robert Baeza

Bobby Bowling, IV

Rudy Guel

Anna GilBradley Roe

Bob Bowling, III

Edmundo Dena

Hershel Stringfield

Pat Woods

NATIONAL ASSOCIATION OF

HOME BUILDERS

(800) 368-5242

TEXAS ASSOCIATION OF

BUILDERS

(800)252-3625

For All Your Electrical Needs Residential Specialists

Tract Homes • Custom Homes

915-208-9313

602-708-7560

Total Customer

Satisfaction

15

Builders

Outlook

2 16

Issue 4

Give your customersthe ‘option of the sun’

Now more than ever,

El Paso home buyers

are planning for the

future.

Border Solar can help

you offer your

customers solar power

as a sensible

alternave.

The future starts

today.Crossing to Clean Energy

7365 Remcon Circle

El Paso, TX 79912

(915) 613•4168

follow us on twier and

facebook:

BorderSolar


16/16

Documents

Builders Outlook 2016 Issue 4