New home construction may not be as robust, but there are indications it, too, is gearing up for sustained growth.
Those are some of the trends so far this year,
according to the Home Builders Association of Northern Kentucky, the
eighth largest home builders trade group in the country, with 1,100
members representing some 15,000 workers in 12 counties.
“We are starting to see real glimmers of hope,” says
Brian Miller, the HBA executive vice president. “Especially in
remodeling. We have seen a trend for the last year that it is coming
back.”
Building Permits Up
For example, Miller cites figures from August of
this year showing the month had the highest level of building permit
applications in 10 years. They totaled 187 permits averaging $17,000 per
project over eight counties in Northern Kentucky.
The news for new homes starts in Northern Kentucky
is not as vigorous, but Miller thinks the trend has turned upward to
stay. He notes there were more residential home building permits in July
and August than in the summer of 2010. He says the numbers are
especially good for multi-unit and condominium permits.
Miller cites several reasons for what has been a
growing remodeling industry in Northern Kentucky. In some ways,
remodeling has remained steady because the home building and real estate
markets have been flat:
• People are choosing to change the house they are
in, rather than moving to another one, because of concerns they can’t
sell their current home.
• Lines of credit are becoming more available. “We
have again seen lines of credit opening up that are around the $75,000
to $100,000 range,” Miller says.
• Remodeling has been a steady slow burn business
because people are phasing in projects. The tentative economy means
people aren’t pulling the trigger on massive undertakings. As Miller
puts it: “Rather than do a huge addition, people may do a master suite
one year, a kitchen the next and a basement the next year. They are
saying, ‘If things are OK this year, we’ll do this.’”
• There are indications baby boomers are choosing to stay in their homes in the communities they love.
Builders and contractors who follow long-range
trends know that ultimately remodeling follows lifestyles. While the
economy can dictate the scale of projects, remodeling is driven by
life’s changes. “People have children, they get a job, they lose a job.
They retire,” says Miller. “As people’s lives change, their living needs
change.”
Registered Remodelers
The Northern Kentucky Home Builders Association has
positioned itself over the years to not only look after the needs of its
own members, but to be a consumer service as well.
HBA’s Registered Remodeler and Registered Builder
programs give customers a reliable list of craftspeople and contractors
who have the organization’s stamp of
approval for doing quality work.
“It is one of the best and most revered programs in
the country,” Miller says. “This is not something you can just put on
your signage by writing a check for membership. Registered Remodelers
have to follow a rigorous application process.”
Among the requirements, remodelers must carry a
minimum amount of workers compensation and liability insurance, pass
credit checks, complete a certain number of hours of continuing
education each year and agree to a conciliation process for disputes. In
the end, a peer review committee must approve an application.
“Our membership goes out and looks at projects and
the level of workmanship. They contact customers directly,” Miller says.
“There must be a 100 percent passing grade. In the end, the Registered
Remodelers are the cream of the crop in our community.”
Currently 46 companies have earned the Registered Remodeler designation; some 70 have been named Registered Builders.
Miller is also proud of the HBA’s dispute resolution
process, which includes peer review when a complaint is filed. Skeptics
might wonder why a consumer would seek a remedy from a group that
represents the builders. But Miller says the program has worked to the
consumer’s advantage, “since builders have a stake in maintaining the
integrity of our industry.”
“There has been great acceptance of the program,” he
says. “I can think of only one case where a person wasn’t satisfied and
went outside. It has been a benefit to consumers and saves them
attorney and court costs.”
The HBA also holds monthly meetings to share ideas
on new technologies or tools. It is one of the nation’s few home builder
associations that runs its own continuing education program for
apprentices with courses in carpentry, HVAC, electrical and facilities
maintenance.
“Members can send employees here at a discount rate
to become licensed apprentices on their way to a journeyman’s
certificate,” Miller says.
Miller himself is following in the family business.
A Villa Hills native, Miller’s father was a past
president of the state home builders group and his mother was a
president of the women’s council of the National Association of Home
Builders. Miller has worked home construction as a laborer and was a
real estate agent. He worked in Louisville with the HBA before moving
back to Northern Kentucky two years ago.
As for the recovery of the home building market,
Miller says observers know it’s no secret that there is pent- up demand
because of the recession.
The question becomes how quickly will that manifest itself in the housing market.
“We believe there are 3,000-4,000 home starts in
Northern Kentucky that never happened given the population growth. When
the demand comes back into the market, will it come back slowly or all
at once? I don’t think anybody really knows. Most economists say slow,
steady growth. I think we will get back to a realistic number in two or
three years.” ■