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Volume 44 Issue 8 October 2014 "Like Us" on Facebook • Important Change for Underground Electric Service for New Residential Customers of Public Service Company of New Mexico You Could Buy Your Workers’ Compensation Coverage Anywhere . But when you buy your workers’ comp. from Builders Trust you have the added value of knowing that you are also supporting your community and the construction industry. Legislative Advocacy Home Builders Association Support Participant Scholarships for International Builders Show Scholarships for Children of Injured Workers Call your Independent Agent for a Quote Today! For more information call 505-345-3477 or 1-800-640-3369 www.builderstrust.com Official Publication of the You Could Buy Your Workers’ New Mexico Home Builders Association NMHBA Office Staff Compensation Coverage Anywhere . New Mexico Home Builders Association 505-344-7072, Toll Free 1-800-523-8421 FAX: 505-344-3103 E-mail: [email protected] or Website: www.nmhba.org Special Features Executive VP & CEO, Jack C. Milarch, Jr. But when you buy your workers’ comp. from Builders Trust you have the added Governmental Affairs Director, Melanie Lawton 9 Important Change for Underground Office Manager, Nancy Barron Electric Service for New Residential value of knowing that you are also supporting your community and the Bookkeeper/Bonding/Meeting Admin, Melinda Bolivar Receptionist/Membership, Kami Showalter Customers of Public Service construction industry. Company of New Mexico NMHBA 2014 Senior Officers Legislative Advocacy President, Ray Gee Past President, Pat Casey, 1st VP/President Elect, Skip Mead Regular Features Home Builders Association Support Associate Vice President, Diana Lucero Secretary Treasurer, Pat Bellestri-Martinez Participant Scholarships for International Builders Show 2 Membership Statistics 2014 Local HBA Presidents 3 Message from the President - Scholarships for Children of Injured Workers HBA of Central New Mexico, David Newell South Eastern New Mexico HBA Challenges/Opportunities Face HBA of Eastern New Mexico, Andy Cordova Custom Builders in New Mexico Call your Independent Agent for a Quote Today! Las Cruces HBA, Kimball Hakes Lincoln County HBA, Shirley Schenk For more information call 505-345-3477 or San Juan County HBA, Kathy Hogan 4 Message from the Executive Vice Santa Fe Area HBA, Bill Roth President and CEO - Keep Your 1-800-640-3369 BCA of Otero County, Gerald Matherly www.builderstrust.com Southwest NM HBA, Pat Casey "Edge"! Have Fun! Never Stop NAHB Representatives Learning! National Associate Director, Diana Lucero 11 State Representative, Peter Merrill Residential Building Permits National Director, Skip Mead NAHB BUILD-PAC Trustee, Skip Mead 12 Calendar Affiliated Organizations Association Services Corporation dba New Mexico License Bonding Phone: 505-344-7277 Fax: 505-344-3103 About The Cover This new home was built by Builders Trust of New Mexico Polston Construction and is Workers’ Compensation Insurance located in Anasazi Estates in Phone: 505-345-3477 Fax: 505-344-7245 San Juan County. The site is Executive VP & CEO, Jack C. Milarch, Jr. on the edge of an arroyo and COO, Randy Akin drops off sharply to the east and Chairman, Kevin McGinley north. The end result is a modern New Mexico Home Builders Political Action Fund southwest two-story home with a NMHB PAF Chair, Mike Buechter walk-out basement. Graphic Design - The Graphics Station Photo by Derald Polston 505-480-8687 Printing - Marketing Strategies 505-883-5400 Membership Statistics July Aug NOTICE TO ALL NMHB Central New Mexico 626 621 PAF MEMBERS Eastern NM 98 98 If you have contributed to New Mexico Home Builders Political Action Fund in 2014 and are South Eastern NMHBA 92 91 interested in participating on the NMHB PAF committee, please contact Nancy Barron @ Lincoln County 117 117 [email protected]. Las Cruces 306 312 NMHBA will hold its Annual Meeting of the Membership Southwestern NMHBA 47 47 on Saturday, November 8, at 1:30 pm. This meeting will take place during the NMHBA San Juan County 158 167 Board of Directors meeting at Albuquerque Marriott. NMHB PAF board members will be Santa Fe Area 461 465 ratified at this meeting. Otero County 109 108 Please contact NMHBA office with any questions. Total 2014 2026 2 NMHBA Housing Journal/October 2014 This slow growth in membership causes me great concern. When I was initially interviewed by the Nominating Committee in 2012, I expressed my concern about the future of our industry for small custom builders. Two and a half years later, New Mexico’s small custom builders still are not recovering from the recession. I think there are a lot of possible reasons for this, but lack of affordability is one of the most important. Building science and sustainability are improving the way Ray Gee we build houses, but they also add cost to the product. The costs of material and labor are also rising and have risen dramatically in areas where recovery has taken hold. The Challenges/Opportunities Face use of building codes to accomplish public policy goals can Custom Builders in New Mexico also add to the cost. The cost of being in business is going up. Compliance As I near the end of my term as President of NMHBA, requirements with federal regulations have been steadily I’d like to update you on the condition of NMHBA in increasing and all indications are that they will escalate even three areas. The first is the Leadership Ladder. We have more in the near future. Proposed regulation of silica will filled the position of Secretary Treasurer for 2014 with the have a profound cost impact on the construction industry. appointment of Pat Bellestri-Martinez and she has already contributed positively during our Senior Officer meetings. All of the above add cost at the same time that income Also, Steve Hale has agreed to run for the Secretary inequality is increasing and wage growth has been Treasurer position for 2015. So, for the first time in a few essentially flat for 30 years. New job creation is generally years, the Leadership Ladder is complete. considered to be at the lower end of the wage scale, so even falling unemployment does not mean a growing market The second area is our financial health. As some of that can afford new homes. It seems likely that these trends you may remember, we developed a 5-year Cash Flow have been going on for quite some time, but the sub-prime Projection spreadsheet in 2013. That tool was essential lending and mortgage debacle allowed them to remain in evaluating the ongoing depletion of cash reserves. We hidden until the crash. Demographic changes are also have updated the spreadsheet and are now utilizing it altering the market for new homes. Millennials are said to during our budget preparations to project five years out be delaying family formation and home purchases. They from the current budget year. The assumptions used in the are also renting rather than buying in order to stay flexible projections have also been updated and are generally more for relocation purposes. Another demographic factor is conservative than those initially used. None the less, the that Generation X is considerably smaller than the Boomer projected outlook is considerably better than that in 2013. generation and they reached prime home buying age during It now shows NMHBA reaching break even early in 2016 the recession. Even if the economy recovers, the number and thus halting the depletion of cash reserves. of potential buyers will not match that of the Boomers until Generation Y buyers hit the market. The third area is membership. Through the first nine months of our fiscal year, our membership has grown at a There is a legitimate question here in New Mexico about rate of 3%. When evaluated year/year from July to July, whether we are seeing the typical lag in recovery that we the growth rate is about 3.5%. We are currently assuming are familiar with or whether the lack of recovery is due to a 3.5 % growth in membership for the 2014 fiscal year, as some of the factors mentioned above. As a state, we are not well as for 2015. At the recent NAHB Fall Board meeting competing favorably with our neighboring states and new it was announced that the national growth rate was about jobs and businesses are in short supply. Many of our rural 3.6%. That rate is lower than NAHB had budgeted, and counties are seeing population loss and our larger cities may our current assumption of 3.5% is less than the 5% we had lack the infrastructure and amenities that demographers say originally budgeted for 2015. are needed to support growth. continued on page 5 NMHBA Housing Journal/October 2014 3 by far the best part is the place is right next door to the convention center. You will be spending minimal time in your room anyway! It’s Las Vegas!!! If you do stay at the Westgate you can go out the sports book door and into the convention center back door in under ten minutes. Many of us dash back to the hotel for the lunch buffet – it’s that close. It’s also directly on the strip’s monorail line. I know many of you have your favorite place to stay in Las Vegas, and of course that’s OK too. It’s not about where you sleep – it’s about the show! Jack C. Milarch, Jr. Counting this coming show, IBS will be held in Las Vegas for two more years, then move to Orlando again for the Keep Your "Edge"! Have Fun! following two years. Las Vegas is certainly easier for us Never Stop Learning! to get to, but Orlando is a great place to visit in January.
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