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Chuck Miller GMB CGB CGP MIRM CMP MCSP CSP

Building an energy-efficient home in Boise, Idaho

The 2010 AVID Home Design Driver Research Survey showed that the majority of home buyers rated energy efficiency as a "Must Have" for their new homes. Although Boise and southwestern Idaho have some of the lowest power rates in the nation, home buyers still want their new homes to be energy efficient.

How do you build an energy-efficient home in Boise, Idaho and how much more does it cost? The U.S. Department of Energy's Building America Program has shown that new homes can be both energy efficient to live in and cost effective to build. In fact, the energy consumption of new houses can be reduced by 40% or more with little or no impact on the cost of ownership.

Building America works with members of the home-building industry to produce quality homes that use less energy without costing more to build. The goal is to develop cost-effective solutions that dramatically reduce the average energy use of housing while improving comfort and quality. This is accomplished through a systems engineering approach to homebuilding.

Systems engineering

The systems engineering approach considers the interaction between the building site, envelope, and mechanical systems, as well as other factors, throughout the design and construction process, It recognizes that features of one component in the house can greatly affect others and it enables builders to incorporate energy-saving strategies at no extra cost . Systems engineering allows builders to identify improvements to the design of a home that will ultimately save money. For example, the design might incorporate advanced framing systems that require less wood and labor. The saving on lumber and framing labor can then be reinvested in improved insulation or high-performance windows. Controlling building envelope leakage by tightening the building envelope enables builders to install smaller, less expensive heating and cooling systems. These savings can then be reinvested in higher-efficiency equipment..

Other examples of systems engineering cost-saving trade-offs include:

Proper placement of heating and cooling systems allowing shorter duct runs saving material and installation costs.

Locating ducts in the interior, conditioned space of a home (as opposed to in exterior walls or unconditioned attic spaces) eliminates loss of conditioned air to the exterior allowing the use of smaller, less expensive heating and cooling systems.

Future articles will discuss each of these cost-effective solutions in more detail.

Next, Advanced Framing.

Chuck Miller GMB CGB CGP MIRM CMP MCSP CSP President / Builder - Chuck Miller Construction Inc. (208) 229-2553 or (208) 571-0755 chuck@chuckmillerconstruction.com

DO YOU HAVE YOUR NIKES ON?

DO YOU HAVE YOUR NIKES ON?

by Darcy Keith

When running in the race of life, what kind of shoes is on your feet? Are they high-heeled stilettos, loafers, house slippers, or tennis shoes? While we may be concerned with what is on our feet and how comfortable they are in the situation, if we don't have the right type of shoes on, we may not succeed.

I mean, a runner doesn't wear a pair of wrestling shoes if he is running a marathon. He wears the most appropriate running shoe that will go the distance. When you prepare to run, one of the first things you do is stretch to warm your muscles. If not, your body isn't prepared for what you are about to do.

But what about the race of life? There are many things, which come up for which we may not be prepared. You may be stressed out, suffering, and not know how to handle the situation. But, there is HOPE. Hope that you can overcome whatever you are facing and be victorious.

As my pastor, Randy Gilmore, says, "Hope is confidence in present resources and ultimate good." The word, Nike, is Greek for 'victory' or 'overcoming'. In the race of life, I want to have my Nikes on. For those of you who have heard one of my motivational presentations and me talk about my "shoe issues", when I tried out for the girls' basketball team in eighth grade (I couldn't find shoes big enough to fit me in the women's section, so I had to go the men's shoe area to find a pair), guess what tennis shoes I picked out? A new white pair of Nike high-tops with a red swoosh. Though I didn't know if I would make the team, I had hope in wearing my Nike tennis shoes as I was prepared to do my best.

In the middle of life's storms where you may feel stretched, stressed out, are suffering, or something else may be going on in your life, Hope lifts our spirits as we go though the storm. God has generously provided a way to carry you through it. Having hope protects our minds, like a helmet.

Hope provides us a way out of our struggle and shields us, like an umbrella. Hope lifts our spirits from the storms in life, which may be dampened. Hope is having your Nikes on when facing your situation, as we are overcomers and victorious. There is power in hope!

Here are three thoughts to keep in mind when running in the race of life:

1. Look for hope in your present resources.

2. Surround yourself with friends and family who support you.

3. Seek guidance and assistance from others who can help you along your journey to reach the finish line.

Be victorious and have your Nikes on!

ABOUT THE AUTHOR

Darcy Keith is a national award-winning professional speaker and author, and is an expert on overcoming challenges. She has presented before various corporations, associations, service organizations, churches, and universities, as well as being featured on various television and radio venues including ABC, CBS, and FOX. Visit her website, www.DarcyKeith.com, or to contact Darcy, eMail her at Darcy@DarcyKeith.com

Story courtesy of...

Your friends at AsAManThinketh.net

http://www.AsAManThinketh.net

All of us in the housing industry are hoping for a better year. But what are we doing to prepare. Do we have the right "shoes"? The BCASWI Sales and Marketing Council is offering NAHB's Institute of Residential Marketing Course IRM 1 - Understanding Housing Markets and Consumers on February 16th and 17th in Boise, Idaho. In this 2-Day course, you will learn how to find the information that's critical to success in building and selling new homes. You'll gain knowledge of the demographic, economic, and psychographic factors that affect housing supply and demand. You'll also learn to employ a model that projects opportunities for specific local markets. As a graduate of this course, you will be able to:

•· Affirm the importance of market research to new home sales marketing and sales programs.

•· Recognize the essential elements of market research.

•· Use an absorption model to predict potential new housing demand and absorption rates in a defined target market area.

Some of you have already taken the course and/or earned your MIRM designation. If you'd like a refresher, you are invited to attend for just $30 - the cost of lunch for the two days - or bring your own lunch and pay nothing. I ask all of you, whether you have take the course or not, to share this with your associates. We have reduced the fee for this 2-day course to $325 which includes lunch both days. The course is approved by the Idaho Real Estate Commission for 16 hours of CE credit so the cost is less than $20 per credit. Because times are challenging, we are implementing an "Education Stimulus Package" to help with the cost. We need 8 paid registrations to breakeven. Attendees can save up to $110 on your registration by promoting the course to your friends and co-workers. The registration fee will be reduced for everyone for every paid registration over our minimum of 8. With 20 paid registrations, everyone receives a $110 discount on their registration fee. That's $215 for the 2-day, 16 CE credit course. That's less than $12 per CE credit.

For more information and to register, contact Mercedes at 377-3550.

Here's to a GREAT 2010

The Business of Building - Part 1

Welcome to the first in my series of blog posts on the Business of Building. Let's start with a quiz.

In a normal market, what is the average Net Profit for a Builder? Is it

•A. 21% to 30%

•B. 17.3% to 20.9%

•C. 3.7% to 8.7%

•D. -5% to 0%

It has been my experience as a home builder that most home buyers have a real misconception regarding what percentage of the price of a new home is the Builder's profit. The correct answer is C, 3.7% to 8.7%. The range reflects the differences between Builders who built exclusively on their customer's land, Builders who built on land they developed or purchased, and Builders who built on both.

Type of Builder

Gross Profit Margin

Net Profit

All Builders

17.3% to 19.0%

3.7% to 5.4%

Small-Volume Builders (1)

16.8% to 19.5%

3.2% to 5.5%

Production Builders (2)

18.5% to 20.9%

5.4% to 8.7%

Notes:

(1) Builders who build 25 or fewer single-family homes per year

(2) Builders who build 26 or more single-family homes per year

Source: NAHB Cost of Doing Business Study

The difference between the Builder's Gross Profit Margin and Net Profit is the Builder's expenses which include his or her General and Administrative Expenses, Financing Expenses, and Sales and Marketing Expenses. General and Administrative Expenses range from 8.3% to 12.9% and include employee salaries; payroll taxes, insurance, and other benefits; office expenses; vehicle expenses; taxes; general liability insurance; accounting and legal service fees and expenses, and depreciation. Financing expenses range from 0.3% to 0.9% and include interest lines of credit and construction loans; and closing costs. Sales and Marketing expenses range from 0.9% to 3.8% and include commissions, website hosting and maintenance, and other advertising and promotion expenses.

The Net Profit is what enables the Builder to continue to operate when business is slow and revenues are down. It's what enables them to perform warranty and maintenance services on their finished homes.

According to BuildIdaho.com, the average sales price for new homes is approximately $190,000 in Ada County and $145,000 in Canyon County. For a small volume builder in a normal market, the average net profit on that new home in Ada County would be somewhere between $6,080 and $10,450. Considering that new home takes approximately 90 to 150 days to build, that equates to $1,216 to 3,483 a month.

Are you waiting for the price of that new home you'd like to build to drop further? I wouldn't.

Chuck Miller GMB CGP CGB MIRM CMP MCSP CSP

President / Builder - Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

The End of the McMansion – I Think So

The median size of new homes in the U.S. increased from just over 1,500 square feet in 1973 (the first year the Census Bureau began tracking new home size) to 2,309 square feet at its peak in 2007. The median size has declined almost 10% since then. Will the trend to smaller-sized homes persist?

While it is unlikely that new homes will continue to decline, I think we have seen the end of the McMansion.

NAHB's Chief Economist David Crowe, although he didn't proclaim the end of the McMansion, believes that the trend to smaller homes may last longer than in past recoveries.

Baby-Boomers, although they might wish to downsize, might be unable to do so due to their inability to sell their existing McMansions because of an oversupply these larger homes and downward price pressure coupled with their recently decimated wealth. However, immigrant households with their lower incomes while they may be unable to afford new larger homes, might be able to purchase the Baby-Boomers existing homes allowing the Baby-Boomers to downsize into smaller new homes.

Gen X'ers could be driven to purchase smaller, more affordable homes due to affordability barriers combined with the more stringent lending standards and fewer mortgage options resulting from the subprime mortgage fiasco.

The sheer number of Gen Y households projected to increase by between 2.0 million and 3.4 million should keep the demand for smaller starter homes strong for the next 10 years.

The trend to single-person households and women as heads of households should also support the trend to smaller-sized homes.

While the rising cost of energy could also drive some buyers to purchase smaller homes, this may not be enough to drive the trend to smaller homes.

The information presented in this series of blogs appears to support a continuation of the trend to smaller homes and the end of the McMansion. However, all real estate is local and the impact of the changes I have discussed will vary by market. Each market will experience these changes to varying degrees and at varying times, but it is reasonably certain that they will experience them.

The National Association of Home Builders Institute of Residential Marketing (IRM) courses will teach you how to do market research so that you understand your local housing market and your potential customers. The BCASWI Sales and Marketing Council is offering IRM I - Understanding Housing Markets and Consumers on February 16th and 17th in Boise, Idaho. In IRM I, you'll gain knowledge of the demographic, economic, and psychographic factors that affect housing supply and demand and learn to employ a model that projects opportunities for specific local markets. For more information and to register, contact me or the BCASWI.

Chuck Miller GMB CGP CGB MIRM CMP MCSP CSP

President / Builder - Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

The End of the McMansion? The Impact of Rising Energy Costs

The median size of new homes in the U.S. increased from just over 1,500 square feet in 1973 (the first year the Census Bureau began tracking new home size) to 2,309 square feet at its peak in 2007. The median size has declined almost 10% since then. Will the trend to smaller-sized homes persist? Let's consider the rising cost of energy.

The depth of the downturn may, for the first time in at least 40 years, reduce real median household incomes while the cost of energy is predicted to grow faster than incomes in the coming years. Some experts argue that because smaller homes cost less to heat and cool, this alone should continue to support the trend to smaller homes. I respectfully disagree.

I have been building energy-efficient homes since for the past 10 years. Through programs like the U.S. Department of Energy's Building America Program, we learned how to increase the energy-efficiency of any new home regardless of size by 30% to 50%. Energy-efficiency is a major component of all green building programs and because of the increased emphasis on green building fueled in part by the International Energy Conservation Code® (IECC) and the growing popularity of programs like NAHB Green, building products manufacturers are improving their existing products and developing new products to improve the energy-efficiency of the homes being built.

But what about home buyers. Based on my own experience over the past 10 years, while energy-efficiency might make it onto a homebuyers list of priorities, rarely is it at the top of the list.

In the spring of 2007, RCLCO (Robert Charles Lesser & Co., LLC) conducted a national survey of homeowners to gain an understanding of their attitudes toward green residential products. Among the questions asked were:

• Are "green" features and amenities important in your next home purchase?

• What "green" features and amenities are important to you in your next home purchase?

• Would you be willing to pay more for a "green" home, if so, how much?

The results of the survey revealed that only 21% of home buyers were interested in saving energy and realizing lower utility bills. Those in this group are most interested in energy-efficient and energy-saving features. Among this 21% of home buyers, 75% indicated they would be willing to spend more for an energy-efficient home provided their investment paid them back over time. If their investment might not pay them back over time, that percentage drops to 18%.

So I don't think rising energy costs will drive the trend toward smaller homes.

Chuck Miller GMB CGP CGB MIRM CMP MCSP CSP

President / Builder - Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com