Builders Outlook 2015 Issue 1

8/9/2019 Builders Outlook 2015 Issue 1

1/16

Builders utlookwww.elpasobuilders.com 2015: issue 1

International Show hits the mark in Vegas

The 2015 International Builders

Show/KBIS was held in Las

Vegas January 20-22. The

combined show brought over 65,000

industry professionals and press into

the Las Vegas Convention Center.

Several El Paso area members

attended the show or participated in

the events leading up to it. While the

displays of materials and new

fandangos is what most people go to

each year there is a serious education

side to the event as well as election of

officers and changes to bylaws forNAHB. This year was no different as

the education started up on the

Saturday before the exhibits did.

The 2015 NAHB International

Builders Shows (IBS) theme was

All Homes Start Here, and thats

precisely the message attendees

heard throughout the three-day event.

From the Opening Ceremonies to IBS

Live! And from show floor

conversations to education sessions,

building industry professionals were

reminded time and again that it all

starts with them. Home is the

foundation of family life, communities

and economic growth.

This year over 3,700 exhibitorsacross five shows made up the

second Design & Construction

Week (DCW). Here are just a few of

the many highlights:

Keynote speaker Jon Gruden kicked

off IBS with the message to take the

momentum of the uptick in housing

starts and do great things!

NAHB and NKBA announced that

they have agreed to co-locate IBS

and KBIS and continue Design &

Construction Week through 2020!

Attendees were inspired by the

many details found in the Design &

Construction Week Concept

Kitchen, where designer Jonas

Carnemark, CKD, created a kitchenfocused on full-family livability from

products supplied by this years

sponsors, Thermador, Caesarstone,

Fabuwood, Brizo, Mohawk & Daltile

and Berenson Hardware.

Thousands of building professionals

attended more than 100 education

sessions that were available on

topics that included 50+ housing,

sales and marketing and technology

to name a few.

Talks at IBS Live!, demonstrations,

Tech Forums and celebrity

appearances were hot-spots

throughout the show bringing

innovative ideas and information to

all in a lively, entertaining manner.

The 2015 New American Home

the 32nd edition of NAHBs show

home welcomed thousands. This

years home integrated the most

cutting-edge building technology,

products and materials into a

production community.

Each day, many new solutions werediscovered through networking

breakfasts and coffee chats at each

of the six IBS Centrals.

Nighttime events included the

Official IBS House Party, Best in

American Living Awards and the

Young Professionals After Hours

Party.

Closing out the show, iconic trio ZZ

TOP performed during Thursday

evenings IBS Spike Concert.

El Paso members included Leti and

Javier Navarette from Custom Dream

Homes and Rudy and Moni Guel from

Guel Construction. Leti said that the

show overwhelmed her and Javier.

There was so much to see that youcant do it all in just a day, you

definitely need at least two days on

the exhibits, she told the Outlook.

Rudy Guel on the other is an old hand

at these events and said that he

particularly enjoyed the Kitchen and

Bath Show. When I do remodels the

customer sees something in a

magazine or on HGTV and wants us

to install it, Rudy said. Here I got to

see some of the items that will be

used in homes in the next decade,

and I got to see them demonstrated,

Guel continued.

When it comes to giant sized shows

this isnt your regular home show as

Ray Adauto pointed out. First of allyou have these massive displays that

take up football field sizes of the

convention center, and having

experience with home shows I know

these exhibits must cost a fortune,

Ray told the Outlook. As an example

Ray mentioned the water features

area of the KBIS. You cant imagine

the work it took to set up these water

displays, and the beauty of what they

put up is first class, he continued.

Pictures just cant capture the reality

of this International show. And by the

way, this isnt just a name; its a reality

calling it International. Take for

instance Christopher Makumbo, a

builder from Africa. The Outlook

asked him why he had traveled so far

to visit this event. I must tell you that

many of the things I get to see here

will not be available to us in the near

future, but I will have the advantage of

knowing about it before my peers,

Makumbo told us. A special welcome

to the International visitors was

posted at the IBS International

welcome center. All sorts of

languages was heard at the show and

inside the Builder Books store where

the El Paso Association of Builders

was represented by Ray Adauto,identified as an official Ambassador.

My opportunity to welcome folks from

all over the world always amazes me,

and they are hungry to learn, meaning

they came here to find materials and

books to take back home, Ray said.

Each visitor to the book store during

Rays time there got them a 10%

discount on purchases made there

and if they were members of NAHB

they got free shipping. What is cool

is that visitors also got a chance to

win a free registration for next years

show returning to Las Vegas in mid-

January, 2016, Ray continued.

Of course not all the visit was

strictly on the showroom floor. Many

events were held at the various hotels

and centers. One event, the Texas

Association of Builders party,

sponsored by Morrison Supply and

StrucSure went over very well

according to the reports. I think we

couldnt of fit one more person in the

place without a shoe horn, said Sam

Shallenberger. That was echoed by

Scott Whisenant of StrucSure. The

venue was outstanding as was the get

together, hopefully one we can do

again next year, Scott added.

The 2015 NAHB InternationalBuilders Show was nothing short of

extraordinary! IBS and Design &

Construction Week return to Las

Vegas next year, January 19-21,

2016. You wont want to miss it!

More photos from IBS>page 7


2/16

2 Builders Outlook 2015 issue 1

HEAT UP YOUR SALES

WITH NATURAL GAS.Nothing is more attractive to homebuyers than the right mix of comfort and value. Natural

gas homes can provide both.

Natural gas furnaces are more efficient than their electric counterparts, and natural gas

dryers can dry two loads of laundry for the cost of drying one load in an electric model.*

For more on how to use natural gas to turn your prospects into buyers,

contact Eduardo Lucero at [email protected] or (915) 680-7216.

*Source: Council for Responsible Energy


3/16

First and foremost, I would like to

wish everyone a prosperous 2015. I am

excited at the opportunity of serving our

association as President. I am coming

in bright eyed, bushy tailed, and ready

to work. The incoming Executive Board

is hitting the ground running as we have

already held an associates open house,

had our first board meeting, approved14 new members, and created new

committees and elected chairs to run

them.

There are several opportunities that

we will be facing this year, but none are

greater than the upcoming 2015 IRC

adoptions. We are currently workingwith the City of El Paso to determine

what will and will not be adopted from

the 2015 IRC. The biggest impact that I

see is the Energy portion of the IRC as

this will surely impact affordability and

the way many of us are building homes.

Other opportunities include increasing

membership and raising association

awareness.

I would like to personally extend an

invitation to join the El Paso Association

of Home Builders to all non-member

area home builders and contractors,

especially those that we have lost touch

with over the years. We, members andnon-members, are all an integral part of

our economy, and united we can

accomplish many great things that will

benefit our industry. For those members

that have not renewed, I invite you to

contact me so that we can see if there

is an opportunity to unite once again.One of my goals for the year is to

have our committees meet, set goals,

and implement any changes that may

be needed to improve our association.

Committees include:

Membership (Chair: Patrick Tuttle),

Assessment/Bylaws (Chair: Greg

Bowling), Finance (Chair: Henry

Tinajero), Installation (Chair: Letti

Navarrete), and Social Media (Chair:

Kathy Parry).

I am open to evaluating other

committee recommendations, so do not

hesitate to let us know if there is

something else that we should beconsidering. I will be meeting with each

committee individually in the coming

weeks to establish goals for the year. If

anyone would like to participate on one

of our committees, please send me an

email expressing your interest,

[email protected]. Wedefinitely need members to help out

with each of the committees, and we

will try organizing them in the least time

consuming manner possible.

As a reminder, our first General

Meeting will be on February 11, 2015 at

noon (Location TBD). We are putting

together an informative guest speaker

line-up that will be sure to please

everyone. Our first speaker will be Mr.

Roberto Coronado, Assistant Vice

President in Charge and Senior

Economist of the

Federal Reserve Bank of Dallas, El

Paso Branch. Mr. Coronado will beproviding insight in to our industry, the

local economy, and Texas economy. I

invite you to no miss this exciting

opportunity to learn from and interact

with one of our regions leading

economists.

I challenge each of you to join theassociation and if you are already a

member I challenge you to bring in one

new member in 2015. May God bless

each of your companies, employees,

customers, and families.

32015 issue 1 Builders Outlook

Edgar MontielPresident,El Paso Associationof Builders New year brings many challenges, opportunities for association

Presidents Message


4/16

The year has just started and wereon our way to a good year. Edgar

Montiel from Palo Verde Homes wasinstalled in December and took officeJanuary 1. I wish Edgar much

success and have a word of advice forthis young gungo! Theres nothinglike enthusiasm from a new president

to get things riled up and moving. Itsgratifying that this enthusiasm ismixed with youth and gives the EPAB

a look into the future of what allassociations are headed. The bottom

line is that we are fortunate to havebuilder members who come fromoutside the normal route of working asa sub and moving into building. No

these young men and women comefrom a varied background, sometimegood, sometimes not so much. Some

have not been through the ups anddowns associated with this industryand may find the downs too hard to

handle, but they have other skill setsthat makes them a little more bulletproof. The new executive team is

already going and getting newmembers, involving new members andlooking for the opportunity to serve.

Congratulations on the upcoming year.

A new year also brings the IBS, theindustrys big showcase held this year

in Las Vegas. Amazing, huge,incredible, awesome, wowallsuperlatives associated with this show.

I hope that youll make plans for the2016 show again in Las Vegas. Makeyour plans now because youll miss

out if you dont go.Edgar talks about the need for you

to keep up with the new codes coming

to home construction. Im one of thosegrowing numbers that asks the

question why do we need new codes?I laid out my views in the last issue butIm here to tell you that nothing haschanged from then. Matter of fact Im

more convinced than ever after the tripto IBS that codes need to beupgraded when they make sense, not

just to change codes. My questionstill is this: Does the new code makesense and does it really do something

good? I cant get that answered byofficials but its become more of atopic within the industry. Do I propose

we have NO codes? Absolutely not, aswith all things leaving it up to somethey would build helter skelter. Safety

is paramount but changing things just

for change and additional cost just

doesnt make sense anymore. Thechallenge for housing is to keep costsreasonable while building a safe,

affordable home. I think this can bedone without making changes just forthe sake of an ISO rating.

Finally make plans to join us in

Austin for Rally Day March 4th. Get

your flights now because they keepgetting more expensive on a dailybasis. If you plan on staying the night

we will be headquartered at the Driskilldowntown. Reservations are goingfast.

Perspective

Ray Adauto,

Executive

Vice President

EPAB


All indications show 2015 looks promising

Rally Day 2015

March 4

Austin, TX


5/16


New Home SalesRise 11.6 Percent

Sales of newly built, single-family homesrose 11.6 percent in December to aseasonally adjusted annual rate of 481,000units, according to newly released data bythe U.S. Department of Housing and UrbanDevelopment and the U.S. Census Bureau.

This uptick is in line with what ourbuilders are telling us in surveys and onthe ground that they are seeingincreased traffic and more serious buyersin the market for single-family homes, saidTom Woods, chairman of the NationalAssociation of Home Builders (NAHB) anda home builder from Blue Springs, Mo.

After a slow start to 2014 precipitated bybad weather conditions, new home saleshave ramped up in the second half of theyear, said NAHB Chief Economist DavidCrowe. We can expect this momentum tocontinue into 2015 with the release of pent-up demand, particularly as existing homeowners are trading up.

The inventory of new homes for salerose to 219,000 in December, which is a

5.5-month supply at the current sales pace.Regionally, new home sales rose 53.6

percent in the Northeast, 17.7 percent inthe South and 3.1 percent in the West.Sales dropped 11.5 percent in theMidwest.

Nations HomeBuilders Elect

LeadershipMembers of the National Association ofHome Builders (NAHB) elected four SeniorOfficers to top leadership positions withinthe federation during the associationsInternational Builders Show in Las Vegas.

With more than 800 affiliated state andlocal home builders associations and morethan 140,000 members across the country,NAHB represents the interests of thenations housing professionals throughadvocacy, education and research.

Taking the helm as NAHBs Chairman ofthe Board this year is Tom Woods, aMissouri builder with more than 40 yearsof experience in the housing industry.Woods is president of Woods CustomHomes. He has developed scores of

communities and more than 1,000 homesin the Greater Kansas City area.

To keep housing and the economy onan upward trajectory, this year NAHB willurge the White House and the Republican-controlled Congress to work together in abipartisan spirit to advance comprehensivehousing finance reform and immigrationreform, along with other policies thatpromote homeownership, rental housingopportunities and job growth, said Woods.

Also moving up on the associations

leadership ladder during NAHBs LasVegas board meeting was Ed Brady, aBloomington, Ill.-based home builder. Hewas elected as the 2015 First ViceChairman of the Board. Brady is presidentof Brady Homes, a company founded in1962 by his father, William Brady Sr.

One of the largest home building firms incentral Illinois, Brady Homes hasdeveloped 20 residential communitiesthroughout the state, building more than1,800 single-family homes, 2,000apartment units and more than 100,000square feet of light commercial property.

Granger MacDonald, a Kerrville, Texas-based builder and developer with 40 yearsof experience in the home buildingindustry, was elected as Second Vice

Chairman of the Board. MacDonald ispresident of the MacDonald Companies, a

diverse development, construction, andmanagement enterprise with more than 35neighborhoods completed throughoutTexas.

Randy Noel joined the NAHB leadershipladder with his election as Third Vice

Chairman of the Board. A Louisiana-basedcustom home builder with more than 30years of experience in the home buildingindustry, Noel is president of Reve Inc., acustom home building firm that hasdeveloped more than 1,000 custom homesin the greater New Orleans area.

2014 NAHB Chairman Kevin Kelly, fromWilmington, Del., remains on theleadership ladder as Immediate PastChairman. Kelly is president of Leon N.Weiner & Associates, Inc. and is asuccessful builder and developer withseveral decades of experience in landdevelopment, multifamily and single-familyhome building, and property management.

Rounding out the associationsleadership is NAHB Chief Executive

Officer Jerry Howard, from Washington,D.C. Howard heads up a professional staffof more than 230 working out of theNational Housing Center in Washington.He has served as the associationsCEO/EVP since February of 2001.Previously, Howard was NAHBs chief taxcounsel.

NAHB ProfessionalWomen in BuildingHonors EO Fawcet

Executive Officer Dottie Fawcett of theHome Builders Association of Bucks andMontgomery Counties has been named

EO of the Year by the ProfessionalWomen in Building, a council of theNational Association of Home Builders(NAHB).

Professional Women in Buildingmembers work in all aspects of thebuilding industryas owners, builders,remodelers, architects, suppliers,marketing experts, designers and infinance and real estate. The HBA of Bucksand Montgomery Counties, like otherProfessional Women in Building councilsthroughout the country, offers networking,education and advocacy opportunitiesthrough the HBA and through state andnational events.

Fawcett was nominated by Amy Martino,the 2014 PWB council chair of Bucks and

Montgomery Regions. Martino saysFawcett was instrumental in the formationof the council. Dottie not onlyspearheaded our Board of Directorsapproval of our PWB charter last year, butshe was one of four founding chartermembers, she said. She is our biggestsupporter.

Through Fawcetts support, her localPWB chapter has grown in membershipand continues to be a vital part of theassociation because of her efforts. Fromthe inception of the local chapter in late2013 with only four members, the councilnow stands at 21 members and isexpected to grow under Fawcettsguidance and leadership.

Dottie understands the importance ofthe PWB council, and we applaud herinitiative of starting a chapter at her localassociation, said 2014 NAHB PWB ChairCarol Morgan, who presented the awardduring the NAHB International BuildersShow in Las Vegas. Through her hardwork, the newly-formed chapter is alreadythriving. We hope Dotties efforts will serveas inspiration for others who are thinkingabout forming a PWB council at the locallevel.

TEXAS BUILDER OF THE YEAR

A W A R D E D

We build so you can

GROW

Industry News


6/16

Looking at 2015, the domestic

economic landscape finally looks solid

if unspectacular. Unemployment rates

should keep

falling, house

prices are likely

to rise by 5%,

and despite poor

global economic

conditions, the

American

economy will

strengthen.

Moreover,

despite a deep

partisan divide in Washington, the

government will not close down nor will

it fail to pay its bills. In addition, the

ongoing improvement in household

balance sheets, the improving fiscalhealth of state and local governments,

and the likely rise in capital

expenditures by firms, albeit not very

large, all but insures better economic

growth. The only serious domestic

problems are weak wage growth and

inflation that is a bit low.

With this in mind, I expect full-year

2015 GDP to come in at no less than

2.85%, a healthy rise from the

expected 2.4% GDP growth

experienced in 2014, and the strongest

since 2005. As for new housing starts,

they should rise by about 14%, with

total starts coming in at 1.14 million.For all of 2015, single-family starts

should total 750,000 up from 640,000,

while multifamily starts should hit

390,000, up from 350,000. Housing

sales should rise by about 5% and end

the year at 5.6 million. Housing

inventories should rise by about

200,000 units, to 5.5 months of

inventory up from 5.0 months now.

Given the improving labor market,

expect net new monthly job growth to

average roughly 220,000/month, which

while down from 240,000/month in

2014, is excellent given the shrinking

size of the working age population. As

a result, the unemployment rate should

steadily fall from 5.8% today to 5.2%

by year end and possibly lower,

depending upon the behavior of the

labor force participation rate (LFPR). If

the LFPR rises, and that would be a

good thing, unemployment may end at

5.3%, but if the LFPR falls, an

unemployment rate of 5% would not be

out of the question.Inflation will remain completely

benign, with overall inflation possibly

drifting lower, while core inflation

(which excludes food and energy)

shows modest upward drift. The

combination of anemic growth in

Europe and Japan and declining oil,

gas and commodity prices will keep the

CPI essentially where it is now, slightly

below 2%. Add to this declining import

prices due to the rising US dollar and

slow wage growth, and core personal

consumption expenditure inflation, the

Feds preferred inflation measure, will

not exceed 1.7%, well below their 2%target. This will give the Federal

Reserve ample time to slowly raise the

federal funds rate from where it is now,

between 0% and 0.25%, to 1% by year

end, with the first rate rise probably

occurring in June. The thing to keep in

mind is that this rate rise, the first in a

decade, is likely to be accompanied by

some stock and bond market volatility.

As a result of faster GDP growth in

2015, 10-year Treasuries will end the

year at 2.7% and 30-year mortgage

rates will probably hover around 4.5%

as the yield curve flattens due to faster

rising short-term rates. But a

combination of slightly easing credit

market conditions and increasing

consumer spending due to increased

employment and rising wages will keep

the economy and the housing market

on track despite mildly rising interest

rates. Finally, I put the chances of a

recession in 2015 at 5%. So look

forward to steady economic activity in

2015 and fear not rising interest rates.

Elliot Eisenberg, Ph.D. is President of

GraphsandLaughs, LLC and can be reached

at [email protected]. His daily 70

word economics and policy blog canbe seen

at www.econ70.com


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The Economy

Economic Forecast for 2015: Sunny Days with Occasional Cloudy Periods

Elliot Eisenberg

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7/16

72015 ISSUE 1 Builders Outlook

Builders utlook on the scene |

IBS

Las Vegas

2015

By Ray Adauto, EPAB

Welcome to 2015. When I was a kid, as mygrandchildren say in the last century, I couldntwait to get to the 21st century to see the wizbang things that would make life easier if notcheaper. The flying car, the automatic transport,TV on your wrist, giant screens filling you withinformation, travel to the moon and back justlike regular thing. Well as you see today notmuch of this is real. A few things like the wristTV are here but not some of the really coolthings like the flying car. During my visit to theIBS in Las Vegas there were a number ofnotable items that get close to that really coolidea. One of them is the removable windowscreen that allows you to project any picture orvideo right onto you current windows. Its anelectronically charged polymer screen that youcan cut to size and stick right onto the glass.By turning it on you make the screen opaque

thus allowing you to use it to view the picturesor videos. Or you can use the screen to shieldout the outside, kind of like a modern windowcovering. Quad Smart Film out of Las Vegaswill turn clear windows into an opaque piece ofglass, stopping anyone from seeing in or seeingout. Privacy at the flick of a switch. Others dothis by creating glass with the feature insidelayers, but this application can be applied to anyglass, window or glass door, cut to size andready.

The other really cool item I saw was a simple(why didnt I think of this) way to charge yourelectronic devices without the need for aspecific charger. You know that every chargingdevice for your phone or tablet has a USBcable, and you hook that cable to yourconverter, then plug the converter into the wallsocket. Well this little charging box lets you

have conventional plugs on top, while givingyou a USB slot on the bottom side, all modular.In other words you can interchange the type ofslots you need according to your needs, not themanufacturer. This little device also has a builtin power surge protector so no need to worry.These smart wall sockets are easy to use, easyto change out and make charging yourelectronics so much easier. Designed andpatented in China, the product is just beginningto make itself known.

This was just a couple of innovative productsthat were on display at the 2015 IBS. Makeplans to attend the 2016 IBS in Las Vegas nextJanuary.


8/16

The new Mesa Park Drive overpass is denoted here by a green arrow. The new interchange will provid-

ed access to the Aldea El Paso project on the West Side. (Schematic: City Council Agenda)

el paso development news

The developer of the future AldeaSmartCode project in West El Pasoreceived a Chapter 380 incentivesagreement for construction of a free-way overpass adjacent to the proper-

ty.A new overpass is planned at

Interstate 10 for Mesa Park Drive, themain thoroughfare that will take I-10commuters into and out of the 196acre Aldea development. Mesa Parkwill cross I-10 about three quarters ofa mile north of Executive CenterBoulevard.

The agreement provides Geltmore,LLC, the developer, with incentives in

the form of rebates on the City's por-tion of sales and use tax. The incen-tives could total between $3.7 millionand $4.7 million, depending on thecost of construction. The rebates will

be calculated on sales by retailerswithin the Aldea development.

According to the agreement, thecurrent estimated cost of the projectis $22.6 million, with the TexasDepartment of Transportation, theCity of El Paso, and Geltmore all con-tributing to the ultimate cost.

The agreement states that con-struction must begin by April 1, 2016and must be completed within three

years, or in mid-2019. In 2013, theCamino Real Regional MobilityAuthority approved a frontage roadand overpass agreement between allstakeholders. (Story: Aldea Seeks

Frontage Road & OverpassAgreement)

The new agreement will be the sec-ond Chapter 380 package provided tothe developer, which also has anagreement for construction of thedevelopment itself. It's also the firstmajor news regarding the project,which received a 12-month extensionfrom the City in May of 2014. Thismeans that construction must begin

by May of 2015, based on the latestamendment. (Story: SmartCodeProject Requests 12-MonthExtension)

Aldea El Paso will be one of the

largest SmartCode developments inthe city and is located immediatelysouth of the Montecillo SmartCodeproject already under construction. Itwas first unveiled in 2012.

City Council approved the agree-ment at its December 16, 2014 meet-ing.

Aldea Developer Seeks Incentives Agreement for I-10 Overpass

H&M opened its second El Paso store this month at Cielo Vista Mall on the

East Side. The popular apparel retailer opened an outlet store earlier this yearon the West Side at the Outlet Shoppes at El Paso.The new Cielo Vista store is a larger, 29,000 square foot location which

occupies two levels next to Macy's on the mall's east end.H&M's new store opened on Thursday, December 18, 2014, just in time for

the final Christmas shopping rush.

H&M Opens at Cielo Vista Mall


9/16

The City of El Paso has unveileddetails on the planned 31-acre transit-oriented mixed-use project slated forthe former Northpark Mall site inNortheast El Paso at the corner ofDyer Street and Diana Drive. The pro-posal, submitted by HuntDevelopment Group, was approvedby Council on December 2, 2014.

Renderings of the project, which iscalled Metro 31 in several places

within the development agreement,show buildings laid out in an urbanfashion with little to no setbacks fromstreets. Structures are of varyingheight and scale, with some apart-ment buildings rising four stories.

The property's uses can roughly becategorized into three areas, thelargest being the residential sectionthat takes up nearly the eastern halfof the development. The central areaand southwest corner contain mainlyretail and office uses, and the north-west corner is dedicated to transit andincludes a Sun Metro terminal.

According to site plan data, theproject includes 135,115 square feet

of retail space and approximately100,000 square feet of office space.Included in the retail area is a 50,000square foot grocery store.

In addition, the development willinclude 373 market-rate apartmentunits, 79 affordable units, and 43live/work units.

Parks and plazas are sprinkledthroughout including a central squarewith a small concert stage. Multiple"public greens" are located in different

spots on the site plan.Parking spaces are spread through-

out the development, including wide-spread street parking, larger surfacelots, and parking structures. Onegarage will be located within a resi-dential block, with apartment buildingslining each side of the structure. Thisparking garage will rise 4.5 levels andinclude space for 472 cars.

The development documents also

include a phasing plan, indicating theproject will go up in five phases.Phase 1 includes building streets,parks, and other infrastructure; Phase2 will see the construction of themajority of market-rate apartmentbuildings as well as the transit facility;and Phase 3 involves construction ofthe grocery store.

Phase 4 includes construction ofthe retail/office structures, some ofwhich will include loft apartments onthe upper floors. And Phase 5 will seeconstruction of the affordable housingapartments.

Vertical construction may not beseen for a few years, according the

development agreement's timeline.Completion of Phase 1's infrastructureis tentatively scheduled for June of2017. However, the agreement alsostates that phases may be completedin any order and concurrently if need-ed.

The ultimate design of the projectmay also change, with final designdocuments due on September 1,2015.

The City is entering into a Chapter

380 incentives agreement with Huntin order to move forward with the proj-ect. The incentives amount to $13.7million in sales and use tax rebates,and property tax rebates (of the City'sportion).

The City of El Paso purchased theproperty years ago and demolishedthe Northpark Mall complex that had

stood mostly empty for many years.The property, which is also known asNorthgate, has remained vacant whilethe City has looked for solutions forthe relatively large plot of land.

In recent years, the City beganseeking proposals for redevelopmentof Northgate, receiving some withinthe last year.

The estimated cost of the proposeddevelopment is $112 million.

Builders Outlook Issue 1 2015

Content provided byEl Paso Development Newsvisit: elpasodevnews.com

This is Metro 31:City Reveals Northgate SmartCode Project Details


10/16


COBRA Basics

Expert Advice

Joe Bernal

Employees

Benefits of

El Paso

COBRA, the Consolidated OmnibusBudget Reconciliation Act of 1985, allowsqualifying people formerly covered by anemployers group plan and their dependentsto temporarily continue health coverage atgroup rates. Employers who dontunderstand their COBRA obligations canface penalties.

Certain employer-sponsored health plansmust offer COBRA continuation coverage toemployees who undergo a qualifying eventthat causes them to lose group healthcoverage.

Which employers must comply withCOBRA?

An employer must offer COBRA continuingcoverage if it had 20 or more employees inthe prior year and offers a group health plan.Please note that COBRA will apply to someemployers that do not have to comply withthe Affordable Care Act because they havefewer than 50 employees. As long as youhave 20 or more employees and offer groupcoverage, COBRA applies. Each part-timeemployee counts as a fraction of a full-timeemployee, with the fraction equal to thenumber of hours that the part-time employeeworked divided by the hours an employeemust work to be considered full-time. If youemploye a lot of part-time employees buthave fewer than 20 employees on yourhealth plan, COBRA rules still apply to yourplan.

Which employees are eligible forCOBRA continuation benefits?

An employee must have had coverageunder the group health plan on the daybefore a qualifying event occurs.Qualifying events include:

Termination of employment, unless it isfor gross misconduct, or a reduction inhours worked (e.g., from full-time to part-time) that causes loss of benefits.

An employees death, divorce, legalseparation or eligibility for Medicare.

A change in status of a covered

dependent or spouse. Under theAffordable Care Act, children can remainon a parents plan until age 26. Thisapplies regardless of whether they are astudent, dependent or even married.

Being called up for active military duty.Types of coverage.

Employers must offer COBRAbeneficiaries the same coverage andcoverage choices (such as during openenrollment periods) as they do to non-COBRA beneficiaries. Any benefit changesfor active employees will also apply toCOBRA beneficiaries. Length of coverage.COBRA provides for up to 18 monthscoverage for qualifying events such as jobtermination or a reduced work schedule.Certain qualifying events, or a second

qualifying event during the initial coverageperiod, may extend coverage to a maximumof 36 months. Cobra coverage begins on thedate that benefits would otherwise havebeen lost because of a qualifying event. Anemployer may terminate coverage if abeneficiary does not pay premiums on time,or if the employer stops offering any grouphealth plan.

Notification and election. In the case ofdivorce, legal separation or a dependentschange of status, such as turning 26, aqualified beneficiary has 60 days to notifythe plan administrator. The administratorthen has two weeks to notify the personentitled to COBRA benefits, who must decide

within 60 days whether to electcoverage. Keep in mind that though an

employee may choose coverage onbehalf of all other qualified beneficiaries,each beneficiary has the right toindependently elect COBRA coverage.For example, if an employee has a familymember with an illness at the time he isterminated, that person alone can electcoverage, should he choose.

Cost of coverage. In most cases, thebeneficiary pays the full cost of theinsurance premiums. In fact, employersmay charge up to 102 percent of thepremium and keep the extra two percentto cover administrative costs. COBRAbeneficiaries must make the initialpremium payment within 45 days afterthe election date, and employers canterminate COBRA coverage if payments

are late.Special rules apply to reservists called

up for military service. If military serviceis for 30 or fewer days, military members

and their dependents can continue theircoverage at the same cost they were

paying before their short service. Ifmilitary service is longer, the employercan require reservist and dependents topay as much as 102 percent of the fullpremium for coverage. However, theState law. Most states have lawsconcerning the continuation of benefits.Some cover all employers, includingsmall employers, so your organizationmight be subject to a state law even ifyour company is exempt under thefederal COBRA law. To find out moreabout your states laws regardingcontinuation of coverage, contact yourhealth insurance broker or anemployment law professional. Be sure toinquire about the types of benefit planscovered, eligibility rules, what constitutes

a qualifying event, notificationrequirements, length of coverage andhow coverage may be terminated.militarys health plan should cover a

family in this situation.In our next issue, well cover COBRA

audits and how they can save youmoney. If youd like more information onadministering your COBRA obligations inthe meantime, please contact us

The information presented andconclusions within are based upon ourbest judgment and analysis. It is notguaranteed information and does notnecessarily reflect all available data. Webaddresses are current at time ofpublication but subject to change. Thismaterial may not be quoted orreproduced in any form withoutpublishers permission. All rightsreserved. 2014 The Insurance 411. Tel.877-762-7877.http://theinsurance411.com.


11/16

As Millennials begin to enter thehome buying market in larger numbers,homes will get a little smaller, laundryrooms will be essential, and hometechnology will become increasinglyprevalent, said panelists during an

International Builders Show press

conference on home trends andMillennials home preferences held lastweek.

NAHB Assistant Vice President ofResearch Rose Quint predicted that the

growing numbers of first-time buyerswill drive down home size in 2015.Three million new jobs were created in2014, 700,000 more than the previousyear and the most since 1999, Quintsaid. At the same time, regulators have

reduced downpayment requirementsfor first-time buyers from 5 percent to 3percent and home prices have seenonly moderate growth.

All these events lead me to believe

that more people will come into the

market, and as younger, first-timebuyers, they will demand smaller, moreaffordable homes, Quint said. Builderswill build whatever demand calls outfor.

Quint also unveiled the results of twosurveys: one asking home builderswhat features they are most likely toinclude in a typical new home this year,and one asking Millennials whatfeatures are most likely to affect their

home buying decisions.Of the Top 10 features mentioned by

home builders, four have to do withenergy efficiency: Low-E windows,Energy Star-rated appliances and

windows and programmablethermostats. The top features: a masterbedroom walk-in closet and a separatelaundry room.

Least likely features include high-endoutdoor kitchens with plumbing and

appliances and two-story foyers andfamily rooms. Consumers dont likethem anymore, so builders arent goingto build them, Quint said.

When NAHB asked Millennials whatfeatures fill their most-wanted

shopping list, a separate laundry roomclearly topped the list, with 55 percent

responding that they just wouldnt buy anew home that didnt have one. Storageis also important, with linen closets, awalk-in pantry and garage storagemaking the Top 10 along with EnergyStar certifications. In fact, this group is

willing to pay 2-3 percent more for

energy efficiency as long as they cansee a return on their power bills.

If they cant quite afford that firsthome, respondents said theyd behappy to sacrifice extra finished space

or drive a little farther to work, shopsand schools, but are unwilling tocompromise with less expensivematerials.

A whopping 75 percent of thisgeneration wants to live in single-family

homes, and 66 percent of them preferto live in the suburbs. Only 10 percentsay they want to stay in the central city.Compared to older generations,millennials are more likely to want to

live downtown, but its still a small

minority share, Quint said.Panelist Jill Waage, editorial director

for home content at Better Homes andGardens, discussed Millennialsemphasis on the importance of outdoor

living and that generations seamlessuse of technology, and how those twotrends play into their home buying andhome renovation decisions.

Because they generally dont have asmuch ready cash or free time as

older home owners, Millennials seekless expensive, low-maintenancechoices like a brightly painted frontdoor, strings of garden lights, andlandscaping that needs less watering

and mowing, like succulent plants andlarger patios.

Theyre also very comfortable withtheir smartphones and tablets, andincreasingly seek ways to control theirheating and air-conditioning and

security and lighting as well aselectronics like televisions and soundsystems from their phones. They wantto use their brains for other things, notfor remembering whether they adjustedthe heat or closed the garage door,

Waage said.


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12/16

January existing homesales come in flat

compared to December2015 sales expected to pick upwhere 2014 left offTrey Garrison, Housingwire.com

Auction.com projects that existing homesales for January will fall betweenseasonally adjusted annual rates 4.9-5.21million annual sales, with a targetednumber of 5.06 million.

This suggests that January sales will beup from one year ago and essentially flatcompared to December sales.

Theres nothing pointing towards aquantum leap in January home sales, saidAuction.com Executive Vice President RickSharga. Demand continues to be tepid,reflected by the relatively weak search

activity that were tracking in GoogleTrends data. And inventory levels ofavailable homes continue to fall, whichmeans that even if demand picks up, theremight not be enough homes to meet it.

On January 23rd, the NationalAssociation of Realtors released its existinghome sales data for December, reportingthat home sales increased to 5.04 millionunits following Novembers unexpectedlyweak performance.

One month prior, the Auction.com RealEstate Nowcast predicted that existinghome sales for December would be 4.98million, providing the market with anaccurate picture of December sales activitywell in advance of publically available salesdata.

According to the latest Auction.com

Nowcast, the housing market is likely tolevel out this month, rather than repeatDecembers impressive month-on-month

improvement.The existing home sales pace of the

past several months shows that housinghas shaken off the weakness itexperienced in 2013 and early 2014, saidAuction.com Chief Economist Peter Muoio.But difficult mortgage conditions, stagnantwages and lingering wariness abouthomeownership benefits have kept annualsales right around 5 million units, wheretheyve been for the past few years.

Muoio also cited potential fallout fromweaker economies in the oil producingstates, particularly Texas, as a concern forthe housing market in 2015. White-hotsales growth in Texas has well outpacedU.S. existing home sales growth over thepast three years, pushing the Texas shareof U.S. existing home sales up to a near-record 6.2%, he said. Low oil will cool theTexas economy and likely with it homesales within the state, exerting a drag onU.S. sales in 2015.

The Auction.com Real Estate Nowcastcombines industry data, proprietarycompany transactional data and Googlesearch activity to predict market trends asthey are occurring weeks before thefindings of other benchmark studies arereleased.

Building upon the groundbreaking workby Google Chief Economist Hal Varian, theNowcast model extends a traditionalautoregressive-forecasting model toincorporate contemporaneous informationthat provides significantly enhancedaccuracy.

Freddie Mac: HybridARMs are hot

Annual Adjustable-RateMortgage Survey shows impactof low interest ratesBen Lane, Housingwire.com

Hybrid adjustable-rate mortgagescontinue to be the most popular ARM loanproduct offered by lenders and chosen byborrowers, according to the 31st AnnualAdjustable-Rate Mortgage Survey of primeloan offerings from Freddie Mac.

According to Freddies survey, which wasconducted from Jan. 5 through Jan. 8,nearly all of the ARM lenders participatingin the survey offered a hybrid.

The 5/1 hybrid, a five-year fixed-rateinitial period before the rate resetsannually, was by far the most common,

followed by the 7/1, 3/1 and 10/1, Freddiesaid.Far less popular among the survey

participants are ARMs where the repricingfrequency is fixed for the life of the loan,such as a one-year adjustable; a 3/3 ARM,which adjusts once every three years; or a5/5 ARM, which adjusts every fifth year.

According to Freddies survey, thecurrent low rate environment is contributingto the popularity of ARMs, with currentARM initial-period rates down over 2014srates.

For a one-year, 5/1 or 10/1 Treasury-indexed ARM, the average initial rate was2.39%, 2.98%, and 3.71%, respectively,down 0.2 percentage points for the one-year and 5/1 products and 0.3 percentagepoints for the 10/1 ARM, Freddie said.

Borrowers chose a hybrid ARM becauseof the substantial payment savings duringthe initial years of the loan, Freddie said.In early January 2015, the interest ratesavings for the 5/1 hybrid ARM with a 30-year term -- the most common ARM offeredin today's market -- compared to the 30-year fixed-rate mortgage amounted to 0.75percentage points, Freddie said.

For a $250,000 loan, the monthlyprincipal and interest payment on a 5/1hybrid would be about $103 less than onthe 30-year fixed-rate loan over the firstfive years of the loan, Freddie added.

And the savings can be even greater ona loan with a high initial balance, accordingto Frank Nothaft, Freddie Macs vicepresident and chief economist.

Because consumers who choose anARM often are taking out a higher-balanceloan, their payment savings can add upover the first few years of the loan, Nothaftsaid.

The average loan size for aconventional ARM for home purchase wasmore than $400,000 during 2014 and aboutdouble the size of an average fixed-rateloan, according to data from the FederalHousing Finance Agency. On a $400,000loan, a family would save about $9,000during the first five years of a 5/1 hybridcompared with a 30-year fixed-rate loan,based on interest rates collected in oursurvey.

Nothaft also predicts that the expectedrise in interest rates in 2015 could lead to

an increased interest in ARMs."Today's low mortgage rates will not bearound forever. Even a majority of theFederal Reserve's policy-making committeeexpect interest rates to rise by year-end,Nothaft said. Higher rates on both ARMand fixed-rate products, and further gainsin home values, could lead more borrowersto opt for an ARM.

According to Nothaft, ARMs comprisedabout 10% of home-purchase loans in theconventional market, in 2014, citing datafrom the FHFA. If fixed-rate loans becomemore expensive and home values rise

further, we expect more consumers to takeanother look at ARMs and project the ARMshare rising to 12% of the conventional

home-purchase market in 2015," Nothaftsaid.

California settlement putsOcwen on a leashProhibited from acquiring California

MSRs without states approval

Ben Lane, Housingwire.com

It appears that the frustrating skirmishbetween the State of California and OcwenFinancial (OCN) over Californias threat tosuspend the mortgage license is over, atleast for now.

In a filing with the Securities andExchange Commission, Ocwen confirmedthat it reached a settlement agreement withthe California Department of Business

Oversight, which was threatening to suspendOcwens mortgage license because thecompany failed to turn over documentationshowing that it complies with the stateslaws.

Under the terms of the agreement, inaddition to the previously disclosed $2.5million fine Ocwen must pay California,Ocwen is also prohibited from acquiring anyadditional mortgage servicing rights for loansin California until the CDBO is satisfied that(Ocwen-subsidiary) Ocwen Loan Servicingcan satisfactorily respond to the requests forinformation and documentation made in thecourse of a regulatory exam.

Perhaps most importantly though, thesettlement only covers Ocwens failure toprovide the documents to the CDBO, not

what the documents contain.The consent order addresses and

resolves the examination disputes betweenthe CDBO and OLS, and does not involveany accusation or admission of wrongdoingwith regard to OLSs servicing practices,Ocwens SEC filing states.

In a statement, Ocwen said it is ready tomove past this situation.

This allows us to get down to thebusiness of doing our job for consumers anddetermining if Ocwen has followed the law,said Owens spokesman, Tom Dresslar.Were pleased this frustrating skirmish overwhat should have been a routine matter isfinally resolved.

Under the terms of the agreement, theCDBO will choose an independent third-party

auditor, who will be tasked with assessingOcwen Loan Servicings compliance withlaws and regulations impacting Californiaborrowers for a period of at least two years.

The auditors examination of Ocwenscompliance may be extended at thediscretion of the CDBO, Ocwens SEC filingstates. Also, Ocwen is required to pay allreasonable and necessary costs for theauditor.

The auditor will report back to the CDBOperiodically with updates on Ocwensservicing practices, and Ocwen will berequired to submit a written action plan toaddress and implement corrective measuresand address any deficiencies identified bythe auditor.

According to the SEC filing, if Ocwen failsto meet the requirements of the settlement, it

could be subject to additional regulatoryaction by the CDBO.

The Department is committed tosupporting a fair and secure financialservices marketplace for all Californiaconsumers, Jan Lynn Owen, Californiascommissioner for business oversight, said ina statement to the Los Angeles Times. Thissettlement allows us to move forward andensure that Ocwen is meeting its obligationsunder the law.


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The Associates Council is looking forwardto making 2015 a banner year for the EPAB.Our focus this year is to have fun, provideeducation and raise money. Theres amisconception that the association cansurvive on the dues we all pay, but thereality is that it takes a lot more to open thedoors and represent us. Thats why you seethings like our upcoming Speed Networking,Golf Tournament and Parade of Homes.Lets start with Speed Networking. This isan opportunity for associates to go one onone with builders in a two hour event.Litterally you sit in front of decision makerswho are ready to buy your product if itssomething they have been wanting orlooking for. We offer only 20 tables so its

pretty exclusive. The cost is minimal, only$100 for the table and a $50 gift card thatsraffled to the attending builders. Its fun andit goes quickly. From our personalexperience we want to be included becauseit gives us business, really some plusbusiness with builders we already have insome cases. The association makes a littlebit of income from this and it all helps. Ourgolf tournament is scheduled for April 10 atHorizon and is presented by HaskinsElectric. Chuck, we appreciate youstepping up and sponsoring the golf. Its alot of fun and teams are already signing up.Ray and Margaret will be sending out signup sheets and some advertisingopportunities you can get involved with.

HUNT and Morrison Supply will make sureyou have a delicious lunch and FoxworthGalbraith will make sure youre not thirsty.Thanks to all. This is a major fund raiser forthe association and important to our annualbudget. Again we have fun while raisingmoney. We will announce some otherevents and education classes soon. Dontforget to join us in Austin for Rally DayMarch 4. This one is an education you cantake back with you as you see what we dofor our members at the Capitol. I would saythis trip can permanently change yourperspective of the EPAB. See you soon.

Sam ShallenbergerMorrison Supply

Associates Council

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Builders Outlook 2015 Issue 1