Annual Reports

Beginning in 2008, the national homebuilding industry took center stage in news reports and stories across the United States. The impact that housing has on the economy was beginning to be realized in most every city, suburb and small town in the country. Nationwide, homeowners became reluctant to put their houses on the market and purchase new ones. A widespread loss in consumer confidence was taking its toll in many areas. By October, dinner table discussions revolved around the national economic crisis, the banking industry, Wall Street and an unprecedented federal bailout plan. 2008 proved to be a year where economics and politics were on the minds of everyone. Here in Greater Louisville, HBAL rolled up its sleeves to represent the facts about the local home building industry, demonstrating the ability of its nearly 2,500 members to work together.



HBAL represents an industry that had included more than 20,000 people locally who contribute tens of millions of dollars to the local economy. With the downturn in new home sales and the increase of inventory on the market, many HBAL members and other industry partners have experienced a decrease in business, but locally, the market has been a lot more stable than in other parts of the country.
HBAL began the year with efforts to inform the media and captive home buying audience of the differences between the national market and the one here in Louisville. Armed with figures from Property Valuation Administer Tony Lindauer’s office, HBAL, along with its industry partners, the Greater Louisville Association of Realtors (GLAR) and the Mortgage Bankers Association of Louisville (MBAL), held a press conference to publicize the fact that area home values rose 4 percent in 2007, which was in stark contrast to many other parts of the country. That effort began a yearlong PR initiative to reinforce the differences between Greater Louisville and the national housing market. Face-to-face meetings were held with local television news directors, in addition to The Courier-Journal’s and Business First’s publishers and executive editors. Through personal meetings, phone calls and emails, HBAL worked to position the association as a trusted resource for the media. 2008 also saw the debut of a new segment on Louisville’s Best New Homes, entitled “Heading Home with Chuck Kavanaugh,” which features HBAL’s own executive vice president offering viewers information on key issues surrounding the local housing industry.
Dispelling misleading headlines and reports that lumped the local market in with national reports wasn’t the only PR that HBAL was involved in. Louisville was placed in the national spotlight via Elite Homes and the Extreme Makeover - Home Edition television show, which reinforced the uniqueness of the local community and the generosity and passion of the local building industry. Executive vice president Chuck Kavanaugh acknowledged that the Extreme Makeover coverage was a great way to start off the year. “We were very proud of what Elite Homes and its partners were able to do for the Hughes family. More than 3,000 individuals played an important role in this effort. People nationwide had a chance to see that despite a slowdown in housing that the homebuilding industry in Louisville is one that puts aside its own challenges and focuses on making a positive difference in people’s lives ,” he said.
While highly fluctuating markets such as Las Vegas, California and Florida have experienced the brunt of the housing downturn, Greater Louisville hasn’t escaped the side effects of the loss of consumer confidence. “There’s no doubt that builders here are hurting. It’s not as bad as the rest of the country, but for Louisville, which has historically been a stable market, we’re not overlooking the fact that what has happened nationally has affected us,” Kavanaugh said. He acknowledged efforts of HBAL members who “stormed the Hill” in May in Washington, D.C. to express their support and concern that Congress take actions to help the industry regain strength. “For the past year, our local members and colleagues at NAHB have been in the forefront in pushing for legislation to address the turmoil in the financial and housing markets and to bolster the nation’s faltering economy,” he explained. 



Just after President George Bush signed the Housing and Economic Recovery Act of 2008 (H.R. 3221) into law this summer, HBAL held a press conference with Congressman John Yarmuth and began tenacious efforts to promote the advantages of the bill for homeowners, particularly the temporary $7,500 tax credit offered to first-time homebuyers. HBAL staff and leadership spoke to various groups within the community to educate consumers of the benefits offered by this legislation. HBAL once again partnered with GLAR and MBAL to aggressively promote the tax credit in a variety of media outlets.

Communication with officials paid off in 2008
Continued efforts to address sanitary sewer issues took on a major momentum in 2008, according to HBAL President Rocky Pusateri, Elite Homes. Numerous meetings were initiated between HBAL representatives and decision makers at Metropolitan Sewer District (MSD) and the state’s Division of Water. “We’re still working on resolving sewer capacity issues, but we have made great strides to free up capacities and allow for development. We’ll continue to address short-term capacity issues and focus on long-term planning to ensure sewer capacity in high growth areas for years to come,” he said.
This year a copper theft task force was created to work with the Louisville Metro Police Department to address the recurring problem of copper theft in the area. In mid-July, Pusateri spoke at a press conference on community safety, which was hosted by Mayor Jerry Abramson. He discussed the impact that copper theft has on the building community, emphasizing the additional costs associated with the crime. Working in conjunction with the police department, builders and suppliers began utilizing  micro-encryption technology that helped identify stolen copper from job sites. In addition,  an ordinance that requires scrap dealers document whom they’re buying from was passed this summer, which was helpful in identifying thieves. As a result, copper theft dropped dramatically, proving that communication between the building community and local officials can make a difference. “Our homes haven’t been hit in four or five months as a result. That demonstrates that taking a proactive approach to preventing this type of crime really pays off. Having to have a driver’s license to sell scrap metal is a major deterrent, “ Pusateri said.

Additional Representation Expands Voice of HBAL
As HBAL worked to expand its messages within the local community, it also gained a broader voice by the establishment of the new commercial council, which welcomed approximately 90 commercial development representatives in 2008. The purpose of the council is to give the local industrial, office, commercial and retail building industry a unified voice. “The commercial council adds an additional major focus for our association. Job growth affects residential growth, so by supporting the commercial industry, we’re paving the way for potential new jobs,” Kavanaugh explained. “The people who’ve joined this council are the top industrial developers in the area. In addition, we’ve got John Cosby working with the group and in 2009 he’ll serve as chairman of the board of directors of the Kentucky Association for Economic Development, a state wide organization. That’s a feather in our cap and will position us to make sure our voice is heard,” he said.
In addition to the commercial council, HBAL initiated the formation of a green build committee that evolved from a task force comprised of representatives from the Lexington, Louisville and Northern Kentucky HBAs, which had been charged with determining how the statewide green build initiative would be coordinated in Kentucky. The initiative was originally formed as a proactive approach to positioning Bluegrass builders ahead of the curve on potential requirements associated with green building. Here, locally, the association has offered classes to educate builders on the criteria involved in the statewide requirements. “This committee will continue to be involved on the state level and will offer our members first-hand information as it becomes available,” Kavanaugh said.

Within the Association
Internally, HBAL has added more opportunities for members to be involved and informed. In addition to activities, behind-the-scenes efforts within the association should help members be better positioned when the market changes. “The new website is up and running with the main objective of better connecting buyers with our members. We’ve created a site that’s consumer-oriented, where visitors can learn about products, issues, events, read our publications and are able to search for specific services provided by our members,” Kavanaugh explained. The website, he said, is also a key tool that members can use to get more out of their membership. Increased efficiency of member services is anticipated with the new website, which will give HBAL staff better opportunities to more effectively and expeditiously communicate with members. With the ability to register for classes online, make purchases and access committee information, members can save time and improve productivity within their own businesses. In addition to educating potential buyers, the site will greatly enhance the ability to market new homes to the general public. An additional feature of the site will be the ability to search for new homes built by Registered Builders through the Greater Louisville Association of Realtors.
According to Pusateri, his experience at the helm of navigating the currents of the local new homes market in 2008 was eye opening. “It was great to work with HBAL staff and leaders who are as engaged and committed as they are. We’re fortunate to have such an excellent staff and so many people who volunteer their time and efforts by sitting on committees and working on behalf of our industry,” he said.

Events



As in years past, HBAL events showcased the talents and creativity of HBAL members. Starting off the year was the Trend Appliances Home, Garden & Remodeling Show, which ushered in spring fever despite the snowdrifts that anchored the doorways of the Kentucky Expo Center. A major highlight of the event was the 1.5-story, 2,415 square foot Energy Star home built by Dogwood Homes. Expanded Show space and the addition of the new sustainable living and aging in place designated areas also added to the event. Mother Nature continued making its impact on the association’s Tour of New Homes, which began with heavy rainstorms the first weekend of the event. Drawing a record number of participants, the Tour continued to offer prospective homebuyers an ideal, timesaving opportunity to tour newly built homes in the area. The Tour has established a growing reputation as an event people can look forward to each year. Homearama welcomed thousands of people to Locust Creek to experience incredible craftsmanship and design of 11 outstanding homes. By the end of the two-week event, eight were already sold. As in years past, the annual Tour of Remodeled Homes in August offered an ideal opportunity to remind consumers of the value of making home improvements and the need to search out trusted professionals. The Tour of Remodeled Homes included 15 projects and served as a popular venue for record crowds of people interested in remodeling.

Looking Ahead to 2009
The housing industry is still in the process of changing, and as a result so are the buying patterns of today’s prospective homebuyer. Just as builders have re-evaluated how they conduct business, buyers in 2009 won’t use the same house-hunting processes they’ve relied on in the past. Experts say the American dream of homeownership is still alive and well, but the paths toward achieving that will be different. Now, more than ever before, homebuyers are doing their research and are taking more time to closely evaluate their housing options. HBAL realizes that the housing industry has to change to meet the needs of today’s buyers, and it’s doing everything it can to make sure its members are prepared.
How businesses communicate with those consumers will most certainly make a difference in closing deals. Having laid the groundwork for an updated website that promotes its members in ways consumers are and will be wanting is one step toward reaching those communication goals. (See Member Benefit story on the benefits of the new website for more.; pg. 22) Another step is investing in the redesign of Louisville’s Best New Homes television show and its web presence. According to Kavanaugh, establishing a more interactive online dialogue with consumers will build upon the popularity of the show and enable participants to get their messages heard in more ways than one. In addition, an update of the graphic elements will keep the show current in the minds of today’s consumers.
How consumers build may also change. In the coming years, the familiar adage, “less is more,” may ring true when it comes to square footage. “Energy efficiency is expected to continue its momentum and will soon be one of the first questions homeowners ask when considering a new home,” Kavanaugh said. “Buyers will demand more for less, and builders will continue to be challenged to sharpen their pencils and polish their final products so they offer homeowners what they expect, where they want and at a price that makes them feel they’re making a smart investment. The staff and leadership at HBAL realize the challenges ahead, which is why there’s no slowdown in planning and researching ways to assist members in adapting to current market situations and preparing for future demands,” he added.
Being informed will certainly be key for the building community as the market regains momentum. HBAL encourages members to take advantage of upcoming general membership meetings, in addition to sales and marketing council meetings, as well as national resources, such as the International Builders Show. Staying informed on current issues, locally, statewide and nationally will be paramount for members in the months ahead. Louisville Builder and HBAL’s other communication vehicles will continue to highlight opportunities to position businesses for this new housing landscape, but it’s up to individual members to dig deep into ways they can contribute and help sprout new growth in the industry. The seeds sown now will most certainly reap rich rewards in days to come.
With a determined effort to give consumers what they need during a national economic crisis, homebuilding in Louisville has the potential to be a catalyst for sunnier days ahead. With a continued enthusiasm for the resilience of the local market, a renewed pride in the Greater Louisville community as an ideal place to live, the local market is positioned to succeed.
Incoming HBAL President Richard Miles, Dogwood Homes, described the ambitions of HBAL to educate and support builders in 2009. “We know that many builders are hurting and are searching for their place in this changing market. Our main focus will continue to be on services to support the builder members and do everything possible to show the public that there has never been a better time to buy a new home,” he said. Miles recognized that the market is going to be much different than it was before. “The type, size, price and energy components of new homes will be much different than we have all grown accustomed to in the past. We as builders have to re-evaluate our business model and ensure that it matches the changing market. And, as an association we have to change the way we educate and support the builders. If we get in front of the curve, we have the ability to get this market started again, before many other parts of the country,” Miles added.
Kavanaugh echoed Miles’ enthusiasm regarding Louisville’s position as it faces another year of uncertainty. “The hard work and perseverance of HBAL members who have faced the challenges of an uncertain economy will eventually pay off. There’s no doubt that 2009 brings with it many changes on the national landscape, politically and economically. Here at home, we’ll be ready for those changes. And with the incredible work ethic and tenacious drive to succeed, our members will be ready,” he added.