Builders

utlook

www.elpasobuilders.com

2015: issue 2

Housing Markets Continue to Make

Modest Gains
NAHB
Markets in 63 of the approximately
350 metro areas nationwide returned
to or exceeded their last normal
levels of economic and housing
activity in the fourth quarter of 2014,
according to the National Association
of Home Builders/First American
Leading Markets Index (LMI),
released today. This represents a
year-over-year net gain of 11
markets.
The indexs nationwide score
moved up slightly to .90, meaning
that based on current permit, price
and employment data, the
nationwide average is running at 90
percent of normal economic and
housing activity. Meanwhile, 69
percent of markets have shown an
improvement year-over-year.
The markets are improving at a
consistent pace, said NAHB
Chairman Tom Woods, a home
builder from Blue Springs, Mo. A
growing economy and rising

consumer confidence should help

drive the release of pent-up demand
in 2015.
Baton Rouge, La., continues to top
the list of major metros on the LMI,
with a score of 1.41 or 41 percent
better than its last normal market
level. Other major metros leading the
list include Austin, Texas; Honolulu;
Houston; and Oklahoma City.
Rounding out the top 10 are San
Jose, Calif.; Los Angeles; Salt Lake
City; Charleston; S.C.; and Nashville,
Tenn.
The encouraging news is
employment, where the number of
metros that reached or surpassed
their norms rose by 23 in a year,
said NAHB Chief Economist David
Crowe. However, single-family
permits are only at 44 percent of
normal activity, and remain the
sluggish component of the index.
More than 80 percent of all metros
saw their Leading Markets Index
increase or hold steady over the
quarter, a strong indicator that the

overall housing market is making

headway, said Kurt Pfotenhauer,
vice chairman of First American Title
Insurance Company, which cosponsors the LMI report.
Looking at smaller metros, both
Midland and Odessa, Texas, have
LMI scores of 2.0 or better, meaning
their markets are now at double their
strength prior to the recession. Also
leading the list of smaller metros are
Grand Forks, N.D; Bismarck, N.D.;
and Casper, Wyo., respectively.
The LMI shifts the focus from
identifying markets that have recently
begun to recover, which was the aim
of a previous gauge known as the
Improving Markets Index, to
identifying those areas that are now
approaching and exceeding their
previous normal levels of economic
and housing activity. More than 350
metro areas are scored by taking
their average permit, price and
employment levels for the past 12
months and dividing each by their
annual average over the last period

of normal growth. For single-family

permits and home prices, 2000-2003
is used as the last normal period,
and for employment, 2007 is the
base comparison. The three
components are then averaged to
provide an overall score for each
market; a national score is calculated
based on national measures of the
three metrics. An index value above
one indicates that a market has
advanced beyond its previous
normal level of economic activity.
Editors Note:
In calculating the LMI, NAHB utilizes
employment data from the Bureau of
Labor Statistics, house price appreciation
data from Freddie Mac and single-family
housing permits from the U.S. Census
Bureau. The LMI is published quarterly
on the fourth working day of the month,
unless that day falls on a Friday -- in
which case, it is released on the
following Monday. For historical
information and charts, please go to
nahb.org/lmi.

Spring 2015 Parade of Homes at Rio Valley

Get ready for the 2015 Spring Parade of Homes at Rio Valley, a Winton Subdivision
located on the beautiful Westside Upper Valley. Six Builders, Palo Verde, BIC,
Pointe, Flair, Rio Valley and Mark Winton Homes will present some outstanding
homes filled with ideas and love. Preview Party is April 17 (tickets on sale soon)
and then we start our two week run on April 18.
Open Tuesday to Sunday. For information log onto
www.elpasoparadeofhomes.com or contact our office, 915-778-5387

Builders Outlook

2015 issue 2

2015 issue 2

Builders Outlook

Presidents Message
Edgar Montiel
President,
El Paso Association
of Builders

Here we are two months in to the year,

and boy what a whirlwind. I had heard
that being on the Associations Ladder
was busy, but I never imagined we
would be doing so much in a short
amount of time. Here is an update of
happenings and of what we have done
so far in 2015 for our members.
Our first General Meeting of the year
was an overwhelming success. We had
more people show up than tables
available. This is awesome, because
this shows that our members want to be
involved. Roberto Coronado from the
Federal Reserve Bank of Dallas was
gracious enough to be our guest
speaker at this event. He provided us
with a lot of pertinent local and national
economic information including what
exactly the Federal Reserve Bank is and
does. One of the questions that he
answered, that I am sure is on
everyones mind, was how the falling oil
prices were going to impact the
economy. Though there may be
negatives, overall, the outlook is that the
falling oil prices will be a net overall
positive for the economy. I would again
like to thank Mr. Coronado for taking

2015 already a whirlwind at the Association

time out of his busy schedule to meet

with our association.
As many of you already know, our
Association has been working hard with
the City of El Paso to work thorough the
adoptions of the 2015 IRC and Energy
Code. We were relieved to find out that
all new code adoptions have been
placed on hold for the moment. This
doesnt mean that our work is done, as
we will be calling on a select number of
Builder and Associate members to help
up review the proposed changes and
provide feedback to the city in a timely
manner. I would like to personally thank
Ron Roth and Victor Morrison Vega for
providing us with a summary of all of the
codes that are being considered and
allowing us to provide them with our
industrys feedback.
Our committees continue to impress
me with their energy, ideas, and output.
Kathy Parry, Ray Adauto, and I have
been hard at work increasing our social
media footprint on Facebook. In less
than a week, we more than doubled the
amount of followers we had, and posts
are at an all-time high. We will continue
working on improving upon our current

content and activity. We invite you to

LIKE our Facebook Page and to invite
friends and family to do the same.
I am very excited to have Patrick Tuttle
chairing our Membership Committee. He
is truly interested in wanting to find out
what our members want out of their
association. At our first general meeting,
he collected a survey that delved in to
what our members would like to get out
of their membership. One of Patricks
ideas is to create a series of brown bag
lunch presentations/roundtables with
topics based on input he received from
his survey. We are planning on having a
membership drive this year, and could
really use volunteers to help us organize
and run it (*cough* Mike Santamaria
*cough*). Please let us know if this is
something that you would be interested
in helping us with.
I am also pleased that we reinstated
our meetings with our Finance
Committee, made up of Henry Tinajero,
Kathy Carillo, Randall Smith, Ray
Adauto, and myself. Who better to have
looking at the books that those whose
business it is to put together and
analyze financial data. The plan is to

meet monthly just before our Executive

Board Meeting throughout the year.
It was incredible to see just how many
associate and builder members showed
up at our first Speed Networking Event
of 2015. It was by far the best attended
Speed Networking event we have had.
The feedback from the builders and
associates was amazing and you can
bet that we will have another event later
in the year. Upcoming events include
Rally Day in Austin (March 4th), the
Spring Golf Tournament (April 10), and
the EPAB Spring Parade of Homes
(April 18 through May 3rd) at the Rio
Valley Subdivision by Scott Winton.
In closing, I believe that 2015 will be
better, even though new construction
closings were down in January, as there
is a lot of activity going in to the spring.
Investors are starting to leave the
market as resale prices are picking up,
and 2015 new construction closings are
expected to be up about 5%. I believe
that the continuing low interest rates,
loosened
lending
requirements,
reduction of the MIP, and lower down
payment options will lead to a better
2015 for all of us.

Builders Outlook

2015 issue 2

Perspective
Ray Adauto,
Executive
Vice President
EPAB

Time to get housing in gear

Id like to start my column with a huge

thanks to our participating Associate and
Builder members who came to the Speed
Networking event on February 18. It was
one of the most interesting mix of returning
members mixed with first timers. The two
hours were active and busy. Noisy too as
more than one participant had to escape to
the kitchen to avoid a headache. Sorry, but
thats part of the buzz during one of these
and frankly if it was quiet it wouldnt be
good. With the front door open to help cool
the building down the noise could be heard
out to the sidewalk as attested to by Chuck
Gabriel. It was noisy, and I knew it had to
be good, he told me. Cant wait to do this
again so stay tuned. Read the story in this
issue.
Its been an interesting year already. Like
all businesses there are ups and downs in
the trade association game. First of all the
news out of NAHB IBS was mixed and
honestly a little encouraging. Markets

seem to want to break out of slow housing,

and frankly theres a real need for this.
However we are keenly aware that there
are issues with qualifying under the current
rules and those rules need changes in
order to help jump start the engine. Inaction
by the national administration and congress
has left the Fed in an uneasy position. They
cant really move on something when they
dont have direction. I have a dire warning
for this administration: dont wait for the
2016 election season to move on housing.
It will be too late and too many small to
medium size companies will suffer closer or
downsizing. Its a message that seems the
Congress and the Administration seem to
be ignoring. Our lobby team at NAHB
keeps saying this to them but things can
get really sticky if they dont listen.
Its time for you to write to
Congressman ORourke
https://orourke.house.gov/contact/email-me

Our Senators:
Ted Cruz
http://www.cruz.senate.gov/?p=email_senator

John Cornyn
http://www.cornyn.senate.gov/public/index.cfm?p=Contact
Form .

I want to also welcome our new intern

Ana Guillen from Southwest University. She
will be with us for six weeks as part of her
graduation requirement. Ana has been
busy calling members, updating out listings,
and will soon be contacting you for
advertising on our new websites. We are
putting Ana to work while we have her. By
the way shell be looking for a permanent
job and hopefully you might have
something for her.
Speaking of which we should have our
new www.elpasobuilders.com website up
and running by the time you read this. Also
we hope that www.neeuhomes.com is up
and running as well. Weve been anxious
to get both of these done. I think youll
appreciate both and visit them often.

2015 issue 2

Builders Outlook

Industry News
New Home Sales
Hold Steady in
January
Sales of newly built, single-family
homes dropped 0.2 percent in January
to a seasonally adjusted annual rate of
481,000 units from an elevated
December reading, according to newly
released data by the U.S. Department of
Housing and Urban Development and
the U.S. Census Bureau.
The fact that January sales numbers
maintained the gains we made in
December is encouraging news,
especially considering harsh weather
affecting certain parts of the country,
said Tom Woods, chairman of the
National Association of Home Builders
(NAHB) and a home builder from Blue
Springs, Mo.
In a promising sign, new home sales
have been trending at post-recession
highs for the past two months, said
NAHB Chief Economist David Crowe.
As the economy strengthens and
mortgage rates remain low, we can
expect continued upward movement in

the housing market this year.

The inventory of new homes for sale
was at 218,000 in January, which is a
5.4-month supply at the current sales
pace.
Regionally, new home sales rose 19.2
percent in the Midwest and 2.2 percent
in the South. Sales dropped 0.8 percent
in the West and 51.6 percent in the
Northeast, most likely due to adverse
weather conditions in that geographic
area.

Boomerang
Millennials A
Promising Sign for
Housing
A recent study of Boomerang
Millennials who move out of their
parents home only to move back in may
have important implications for this key
demographic and what it means for the
housing market.
The National Association of Home
Builders (NAHB) examined recent
research conducted by Judith Dey and

Charles Pierret using data from the

National Longitudinal Study of Youth
1997. The examination found higher
incidence of re-launch for Millennials
with a Bachelors degree compared to
those with a lower education attainment
and higher incidence of re-launch for
Millennials from higher parental income
household compared to lower parental
income households. A re-launch occurs
when a young adult moves out, returns
to the parental household, and then
leaves again.
Understanding the makeup of those
who return home could shed light on the
timing of the release of what we know is
quite a bit of pent-up demand, said
NAHB Chief Economist David Crowe.
The data may indicate that while this
age group is delaying what we think of
as typical milestones, the combination of
resources and education and what we
have found about their preferences
suggest growing housing demand in the
years ahead.
Ninety percent of those born between
1980 and 1984 left home before the age
of 27 but then more than half returned
to their parents homes. Of that group,

those with a Bachelors degree or higher

had the highest share of returning to the
parental home at 55.5%. Meanwhile,
those born between 1980 and 1984 with
a high school degree had the lowest
share returning to the parental home at
42.1%. When looking at parental income,
the research reveals that parents in the
top half of the income distribution
experienced a higher occurrence of
boomerang children than those in the
bottom half.
Another important difference is gender:
Twelve percent of men in this age group
never left the parental home, whereas
7.6% of women stayed. And although
women are more likely to boomerang,
they are also more likely to leave again.
Studies continue to show that the
desire to own a home remains strong for
these Millennials. Despite data showing
that the age group is delaying household
formation, they remain a key
demographic in the housing market, and
the pent-up demand is expected to
translate into housing growth in the
coming years.

Midwest Pushes
Housing Starts Down
2 Percent in January

A W A R D E D

TEXAS BUILDER OF THE YEAR

2013

We build so you can GROW

Nationwide housing starts fell 2

percent to a seasonally adjusted annual
rate of 1.065 million units in January,
according to newly released data from
the U.S. Commerce Department. This
drop was mainly due to a 22.2 percent
decrease in the Midwest.
Single-family housing production fell
6.7 percent to a seasonally adjusted
annual rate of 678,000 in January while
multifamily starts rose 7.5 percent to
387,000 units.
These numbers are consistent with
our recent surveys and are primarily due
to severe weather hitting the Midwest
and other parts of the country, said
NAHB Chairman Tom Woods, a home
builder from Blue Springs, Mo.
After a strong single-family report in
December, it is not surprising to see
some pull back in January, said NAHB
Chief Economist David Crowe. With
continued job creation and a growing
economy, single-family production should
make gains in the year ahead.
Regionally in January, combined
single- and multifamily housing
production increased 6.5 percent in the
South. Total starts fell in the Northeast,
Midwest and West, with respective
losses of 3.5 percent, 22.2 percent and
3.4 percent.
Overall permit issuance was down 0.7
percent in January to a rate of 1.053
million. Single-family permits decreased
3.1 percent to 654,000 units while
multifamily permits rose 3.6 percent to a
rate of 399,000 units.
Regionally, permits were mixed in
January. The Northeast and West
registered gains of 29.5 percent and
16.8 percent, respectively, while the
Midwest and South dropped 16 percent
and 8.7 percent, respectively.

Builders Outlook

2015 issue 2

The Economy

Tax Reformless
The combination of ongoing weak
GDP growth and a steep rise in
corporate inversions designed to
reduce US
corporate tax
liabilities has
again brought
the perennial
idea of tax
reform to the
fore. Done right
tax reform is a
winner. By
closing loopholes
and lowering
Elliot Eisenberg
marginal rates
the economy can better perform and
GDP growth can be raised. That said,
despite the positive rhetoric coming out
of Capitol Hill, dont count on it soon.
Moreover, the sharp, and short-lived
seven day brawl about scaling back tax
breaks for 529 college savings plans is
painfully instructive and illustrative as
to why.
In his State of the Union address,
President Obama proposed doing
away with the tax-free treatment of
capital gains in 529 college savings
plans. Instead, he proposed increasing
the size of the American Opportunity
Tax Credit, available only to families
with pretax incomes of less than
$180,000, from $1,000/year to
$1,500/year and to allow it to be used
for five years, up from four.
Looked at in isolation, the economics
behind this particular policy is pretty
solid. First, there is limited evidence
that tax breaks designed to increase
savings actually do so. Rather, the
evidence generally finds that tax
breaks reward individuals who would

have saved anyways. Worse, the tax

incentives dont seem to increase the
total amount of savings either!
Second, most of the tax shelter goes
to higher income households.
According to the White House, 70% of
the benefits from 529 plans go to
households with incomes greater than
$200,000, while a GAO study from
2010 found that 47% of families with a
529 plan had incomes above
$150,000. A recent College Savings
Foundation study found that not quite
10% of 529 account holders have
household income below $50,000. In
short, these plans give tax breaks to
wealthier households who already send
their kids to college and would have
saved as much with or without the
plan. By contrast, giving all
households with incomes below
$180,000 slightly more money for
college might raise the percentage of
kids from middle- and lower-class
households that attend college.
More concerning is that be it via 529
plans, the American Opportunity Tax
Credit, guaranteed student loans and
now increasing student loan
forgiveness, government, through the
tax code and elsewhere, heavily
subsidizes college costs, and in the
process dramatically inflates the cost of
college tuition. Real tax reform would
scrap these inflationary subsidies and
implement a more coherent and more
focused approach.
But here is the rub, taking away the
advantageous tax status of 529 plans
created an instant coalition of three
powerful groups that rolled the
administration. The groups included
parents with kids bound for college

ElPasoDisposal

772-7495

fearful they were about to lose a

valuable tax break that they
deserved, higher education that was
concerned it was losing a subsidy and
the financial industry which feared
losing the billions in fees associated
with administering a huge $250 billion
program.
While everyone claims that they want
a simpler tax code with lower rates and
bereft of deductions, loopholes and
credits, taking any of these away
creates winners and losers. And while
the winners may be numerous, what
they stand to gain is nebulous and

ome
Your New H va

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distant. By contrast, losers quickly

organize themselves and make
themselves heard. If doing away with
something as small as this was
impossible, good luck with larger tax
issues that touch deeper pockets. t
rising interest rates.
Elliot Eisenberg, Ph.D. is President of
GraphsandLaughs, LLC and can be reached
at Elliot@graphsandlaughs.net. His daily 70
word economics and policy blog can be seen
at www.econ70.com

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Association of
Builders and
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market!

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Showroom:
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915 533 6045

fax 533 6096

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This issue will include:

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Unique dual language layout
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Call Margaret today at 778-5387

2015 ISSUE 2

Builders

Builders Outlook

utlook on the scene |

Business gets
done at EPAB
Speed Networking
By Ray Adauto, EPAB
The setting was the same but the vibe
was different. It was something that is
unusual in this day and age of electronic
everything, a throwback if you will. The
room was buzzing because our first Speed
Networking event of the year was about to
kick off. It was buzzing because many of
the participants didnt know what to expect
and that added to heightened anticipation.
The sold out event even had a waiting list,
something that left some previous attendees
waiting in the wings unable to get a table.
For some of our builder members this too
was a first, not sure what to expect but
hoping that they made a good decision to
come and find out. All those doubts were
immediately erased as the room was
electrified by the sound of business. If
youve not heard that sound in a while then
you missed this event. It was loud and it
was an experience. Most of all it was good
business done in a quick friendly way.
Comments from our Associate members
were very positive, even from those whove
been participating for years. We got a
chance to see and visit with builders we
hadnt had an opportunity to for whatever
reason, said Sam Shallenberger, chairman
of the Associates council. It was fun, and it
was awesome, said one of our newest
members Montez Love of Love Engineering.
I didnt know what to expect but this was a
great way to start my membership, a real
plus, he to the Builders Outlook.
From the builder side the same theme
carried out. We didnt know what to expect
but it was great to find some new vendors,
or at least find out whats out there, said
Chris Hakes of Hakes Brothers. Hakes
came in from Las Cruces not knowing what
to expect but finding that this event is a
great time saver, an opportunity that makes
business sense. You wont believe this but
I got to see some vendors that I rarely get
to simply because we are moving around
town so much its hard for them to visit me,
said Rudy Guel, Guel Construction, an
NAHB Certified Remodeler.
This event reminded the participants what
can be done in a couple of hours of
concentrated business can accomplish.
Simply put this is a great starting point to
introduce your business and get an
appointment. Theres just enough time for
that as the two hours go by quickly. Were
already making plans for the next Speed
Networking event, but fair warning: Theres
only 20 tables for show and it will sell out
quickly. Stay tuned for information
regarding that and other events where
members do business with members.
Thanks to the following Associates for
participating:
Haskins Electric; Acme Brick; Goodman
Group; Builders Source; First National
Bank; StrucSure; Love Engineering;
Sarabias Porta Jons; Morrison Supply;
Interceramic; Sherwin Williams; Home of
Texas; HUB International; Mechanical
Technologies; Morrison Bath & Fixtures;
Labor Max; EP Mass Media; Patrick Tuttle
RE/Max; Reverse Funding; and ADT
Security.
Our Builder members who came out:
BIC Homes; Dawco Builders; Tropicana
Homes; Palo Verde Homes; Accent Homes;
Mountain Vista Builders; GMF Homes;
Cisco Homes; Basiq IDIQ; Carefree Homes;
Pointe Homes; D. R. Horton; Rassette
Homes; Hakes Brothers; Santana Custom
Homes; Custom Dream Homes; Guel
Construction; R. C. Baeza and Edwards
Homes.
Thank you one and all.

Builders Outlook

2015 issue 2

Mortgage Notes
Borrowers, who have steady income and good credit, but
not much money in the bank, will find that it recently
became easier to buy a home.
By Mark Fahey
@CNNMoney
Down payment requirements, which
rose after the subprime mortgage crisis,
are easing again as lenders and
mortgage backers try to draw in new
buyers.
"It's one of the things that's inhibiting
first-time homebuyers," said Rob
Chrane, president of Down Payment
Resource. "There are a lot more people
who can qualify for a home that don't
realize that they can."
FHA cuts insurance costs
The Federal Housing Administration
has long backed loans for borrowers
with lower credit scores and with down
payments as low as 3.5%, but until this
year it also required hefty insurance
payments.
FHA annual insurance premiums
dropped dramatically at the beginning of
2015. The change, from 1.35% to only
0.85%, will make FHA loans a better
choice for some borrowers after years of
prohibitively high premiums, said
Anthony Hsieh, chief executive officer of
LoanDepot, one of the largest FHA
lenders in the country.
"We're starting to get back to what's
reasonable," said Hsieh. "The crisis has
shaken the market so much that there is
no doubt there was an overreaction."
Fannie and Freddie
Fannie Mae and Freddie Mac
guarantee more than half the country's
mortgages. At the end of 2014, the two
government-backed companies
announced plans to slash minimum
down payments from 5% to 3%.
The new program from Fannie Mae
went into effect in December, and the
one from Freddie Mac will begin in
March. Both are for first-time
homebuyers or those refinancing their
mortgage, and the Freddie Mac program
is restricted to low-income borrowers.
Loans backed by the two mortgage
giants still require private mortgage
insurance for down payments below
20%.
And just because Fannie and Freddie
are willing to buy loans with looser
requirements doesn't mean the lenders
themselves will change their standards.
"It's a phenomenon of the postrecession where lenders learned their
lesson," said David Stevens, president
of the Mortgage Bankers Association.
"They learned that simply because the
investor will allow it, the lender may still
not feel comfortable doing it."
"Rural" and VA loans
Other types of low-down payment
loans have also become far more
popular since the recession.
Despite its name, loans from the
Department of Agriculture are available
to borrowers in many locations that are
hardly rural, and they include no-moneydown financing. To be eligible for USDA
loans, a borrower must have
dependable income and decent credit,
and can't already own a home, exceed
certain area median income thresholds
or live within certain urban areas.

Department of Veteran Affairs loans

are also booming, coming close to
outnumbering FHA loans. Although
not available to the average American
homebuyer, VA mortgage backing
allows veterans and surviving
spouses to purchase property with no
money down, no outside insurance
and limited closing costs.
Average VA interest rates are lower,
and credit and income requirements
are also more flexible than
conventional loans.
A return to easier credit
The shift toward loans with lower
down payments has drawn criticism

from some politicians -- after all, easy

loans with little money down
contributed to the crisis that led to the
Great Recession.
Stevens said that new rules for
qualified mortgage loans and more
diligent underwriting by lenders will
protect the lending market.
"Down payment has become the
single largest barrier to home
ownership," said Stevens. "Quite
frankly, it's going to be a lot safer and
sounder this time than it was in the
past."

EPAB hires first

intern
We would like to welcome Ana Guillen
from Southwest University as our first
official intern. Ana came highly
recommended by the University as
outgoing, business savvy and ready to
work. Her time with the Association is
to allow her to complete the
requirements of her studies. She will
graduate upon completion of this
internship, or externship as the
University calls it. She is assigned to
the EPAB for only six weeks at which
time she will need full time employment.
We encourage members to get to know
Ana and look to see if you have a
position for her upon her completion
with us. If youd like to schedule a visit
simply contact Ray at the office, 7785387.

2015 issue 2

Builders Outlook

Housing News
Black Applicants More Than
Twice as Likely as Whites to be
Denied Home Loans

Latest Zillow analysis shows minority

groups struggle to access credit, and
home values in minority neighborhoods
were disproportionately affected in
housing boom and bust
- In 2013, 27.6 percent of blacks and
21.9 percent of Hispanics who applied
for a conventional mortgage were
denied, while only 10.4 percent of white
applicants were denied.
- Nationwide, home values in
predominantly Hispanic neighborhoods
fell an average of 46.3 percent from the
pre-recession peak to the bottom of the
market. Over the same period of time,
home values fell by 32.1 percent in
largely black communities, by 23.6
percent in largely white areas, and by
19.2 percent in mostly Asian areas.
- Home values in both black and
Hispanic communities nationwide also
have farther to climb before getting
back to peak levels, while home values
in white and Asian neighborhoods have
returned or nearly returned to their peak
levels.
-- Black and Hispanic homeowners
have a harder time securing a home
loan[i] and face a steeper climb to a full
housing recovery than white and Asian
homeowners[ii], according to Zillow's
latest
analysis
of
race
and
homeownership data.
Zillow's updated analysis of housing
value[iii] and federal mortgage denial
data by race reveals persistent housing
performance and access-to-credit
issues for racial and ethnic minorities
across the country. For the first time,
Zillow studied this important data on a
metro level.
"While many of the disparities
between the experiences of white
communities and minority communities
during the housing boom and bust can
be explained by plain differences in
finances and geography, it's clear that
the housing playing field remains
strikingly unequal in this country," said
Zillow
Chief
Economist
Stan
Humphries. "Black and Hispanic
applicants for conventional home loans
make roughly $20,000 less per year
than white applicants, resulting in much

higher denial rates. Similarly, black and

Hispanic communities are clustered in
areas that saw huge run-ups in home
values prior to the recession, and even
larger drops during the crash. But there
are some reasons for optimism. Home
values in black and Hispanic
communities are expected to rise faster
over the coming year, and the data
shows
that
Federal
Housing
Administration-backed loans have
proven to be a viable and critical source
of financing in minority communities."
The discrepancy is most intense in
some of the nation's most volatile
markets. Home values in both black
and Hispanic communities in the Los
Angeles area remain more than 20
percent below their pre-recession
peaks, while homes in L.A.'s Asian
communities have appreciated beyond
those peaks and homes in white
neighborhoods are almost at peak
levels.
Some of the patterns revealed in the
data can be explained by geography.
For
example,
many
Asian
neighborhoods are on the West coast,
in some of the country's hottest housing
markets, which can help explain why
home values in Asian communities
have risen faster and further than in
other neighborhoods. Similarly, many
Hispanic-dominated communities are
located in volatile housing markets in
the Southwest and Southern California,
which can explain their rapid
appreciation during the boom and steep
fall during the bust.
The disparity in loan approvals is
likely tied to a number of factors,
including income. Applicants who
belong to racial minority groups fare
better when they apply for governmentbacked FHA loans than conventional
loans.
The homeownership rate in the U.S.
is 63.5 percent overall[iv]. The rate
among whites is 71.1 percent; Asians,
57.8 percent; blacks, 41.9 percent; and
Hispanics, 45.2 percent.

For All Your Electrical Needs

Residential Specialists
Tract Homes Custom Homes

Total Customer
Satisfaction

915-208-9313
602-708-7560

10

Builders Outlook

2015 issue 2

National News
Majority of U.S.
Homes Qualify For
Down Payment Help
Irvine, Calif.According to its newly
released report, RealtyTrac found that
87 percent of all U.S. single-family
homes and condos would qualify for a
local down payment program based on
the maximum price requirements for
those programs and the estimated
value of the properties.
For this joint analysis with Down
Payment Resource RealtyTrac looked
at 2,290 down payment programs from
Down Payment Resources
Homeownership Program Index. At
least one down payment program is
available in all 3,143 U.S. counties,
and more than 2,000 counties have
more than 10 down payment programs
available to prospective home buyers.
Down payment assistance amounts
across all counties averaged at
$11,565.
Many homebuyers, especially
Millennials, havent fully investigated
their home financing options because
they are pessimistic about qualifying
for a mortgage. Our Homeownership
Program Index highlights the wide
range and availability of down payment
programs available to todays

homebuyers. In fact, 91 percent of the

2,290 programs in our registry have
funds available to lend to eligible
buyers. Plus, income limits vary
depending on the market and
programs extend beyond just first-time
homebuyers, said Rob Chrane,
president and chief executive officer of
Down Payment Resource. Its
important for buyers to research down
payment programs as part of their loan
shopping process.
Fifty-four percent of programs are
Community Seconds, a second
mortgage issued by an HFA or
nonprofit organization with a very low
or no interest rate. The payment on the
second mortgage may be deferred or
forgiven incrementally for each year
the buyer remains in the home. In a
typical scenario this could reduce the
amount of cash needed to close from
$20,000 to $200.
Historically low homeownership
rates across nearly every age
demographic have led to a public
policy push to lower the barrier to
homeownership through down
payments as low as 3 percent, but the
fact is that the barrier to
homeownership is often much lower
than even that 3 percent for borrowers
who take advantage of one of the
myriad down payment help programs
available across the country, said
Daren Blomquist, vice president at

RealtyTrac. Prospective buyersor

their agentswilling to put in a few
minutes of time to find out what
programs are available to them will put
themselves in a much better position
to successfully purchase a home.
By Robin Nathanson, Associate
Editor, multifamlyhousing.com

New Standard to
Affect More Water
Heaters

Give your customers

the option of the sun
Now more than ever,
El Paso home buyers
are planning for the
future.

Border Solar can help

you oer your
customers solar power
as a sensible
alternative.

Crossing to Clean Energy

7365 Remcon Circle

El Paso, TX 79912
(915) 6134168

www.bordersolar.com

The future starts

today.
follow us on twitter and
facebook:
BorderSolar

As NAHB reported in 2014, new

energy-efficiency standards are going
into effect for residential water heaters
produced after April 15.
The changes will affect nearly all
types of water heaters being produced.
Smaller water heaters of 55 gallons
and less, the most common capacity
water heaters, will see an increase in
size to account for more insulation
necessary to make the higher
efficiency.
That means many suppliers will
introduce new models, some with
diameters that are 2 inches wider and
some that may be 2 inches taller.
These increased dimensions may
require additional installation
clearances and may be a problem for
closet installation replacements.
The standards will have their biggest
impact on the design and installation of
gas and electric heaters larger than 55
gallons in capacity about 10% of the
residential water heater market. For
these larger units, electric water
heaters must use a heat-pump design
and gas water heaters will need to be
a condensing combustion type to meet
the new efficiency requirements.
Heres a more detailed explanation.

Most manufacturers including A.O.

Smith, Rheem, Bradford White and
State Water Heaters are getting the
word out on the impending changes.

Fewer dollars up
the chimney with
DOEs proposal for
gas fireplaces

Proposed new standards for gas

fireplaces may make a cozy night in
front of the fire a little cheaper. For
decorative hearth products, the little
blue flame that stands ready to light
your gas fireplace at a moments
notice can account for about 40% of
the total annual energy consumed.
Standing pilots lights are on 24/7,
continuously burning small amounts of
gas and sending dollars needlessly up
your chimney. A proposed rule issued
by the Department of Energy (DOE)
yesterday would eliminate this waste
with new energy-saving standards.
But dont fretwith the energysaving technology, youll still be able
start up your romantic, cozy, or moodsetting fireplace with the press of a
button or turn of a knob.
DOE estimates that the proposed
standards would net the average
consumer $165 in savings over the life
of the product. On a national level,
hearth products meeting the new
standards sold over 30 years would
reduce natural gas consumption by
about 7 billion therms, which is
equivalent to the annual natural gas
consumption of 10 million US
households, and net consumers up to
$3 billion in savings. Over the same
period, the standards would reduce
CO2 emissions by 37 million metric
tons, an amount equal to the annual
emissions of more than 3 million US
homes
The proposed standards, the first for
hearth products, apply to all vented or
ventless hearth products including
space heating hearth products,
decorative products, gas logs, gas
stoves, and outdoor hearth products.
The standards would require
manufacturers to eliminate the
continuously burning pilot light. Many
products already use electronic
ignitionsimilar to what is used on gas
ranges and ovenseliminating the
need for wasteful pilot lights.
A final rule is expected in December
2015 with an expected effective date
five years later.
By Marianne DiMascio, Outreach
Director, Appliance Standards Awareness
Project (ASAP)

2015 Issue 2

11

Builders Outlook

www.elpasobuilders.com
www.epbuilders.org

Membership News
UPCOMING EVENTS |
APRIL 8
BOARD MEETING
11:00
GENERAL MEETING
12 NOON
EL PASO CLUB
CHASE BANK BLDG. DOWNTOWN

APRIL 10
SPRING GOLF TOURNAMENT
SHOTGUN AT 10:00 AM
HORIZON GOLF CENTER

APRIL 18 MAY 3
PARADE OF HOMES
RIO VALLEY SUBDIVISION

HOMES BY DESIGN
THE HERITAGE GROUP
SU CASA MAGAZINE

C & L PLUMBING
PERFORMANCE GLASS & ALUMINIUM
MAJESTIC REALTORS

PELLA WINDOWS
METRIE
INTER NATIONAL BANK

GILS SYSTEMS
CONTACT: CARLOS GIL
250 QUINELLA
SUNLAND PARK, NM 88063
915-820-9254

HARRIS REAL ESTATE GROUP

CONTACT: LANE HARRIS
7100 WESTWIND, STE. 260
EL PASO, TX 79912
915-443-8423

SUN WEST WINDOWS & GLASS

CONTACT: ERNIE HERNANDEZ
15089 GLENDIVE DR.
EL PASO, TX 79928
915-383-2201

ALL PRO GRANITE & MARBLE

CONTACT: MANUEL LOPEZ & JOE
CORONA
3625 GATEWAY WEST
EL PASO, TX 79903
915-307-8833

G & C MECHANICAL, LLC

CONTACT: PABLO GOMEZ
720 HERMOSA DR.
CHAPARRAL, NM 88081
575-824-407

RE/MAX REAL ESTATE GROUP/TTi

PROPERTY MANAGEMENT
CONTACT: PATRICK TUTTLE
5915 SILVER SPRINGS, BLDG. 5
EL PASO, TEXAS 79912
915-231-9994

SMART HOME SOLUTIONS

CONTACT: GUSTAVO GONZALEZ
13917 DESERT SONG
EL PASO, TX 79928
915-256-6651

MARCH 11
BOARD MEETING
12 NOON
EPAB OFFICE

RENEWALS |
CASTILLO ELECTRIC
CEMEX
CASTLE & COOKE MORTGAGE, LLC

NEW MEMBERS |

BEASLEY, MITCHELL& CO., LLP

CONTACT: BRAD BEASLEY, CPA
509 S. MAIN, STE. A
LAS CRUCES, NM 88001
575-528-6700

VELASCO BROS. ELECTRICAL CONTRACTORS

CONTACT: DAVID VELASCO
14004 SANDY POINT
EL PASO, TX 79938
915-204-1240

CONDOLENCES |
Our deepest condolences to Gregg Davis from first light federal
credit union on the loss of his wife, Marian Davis.

Jaimes
Courier
Service,Inc.

BASIC IDIQ, INC.

CONTACT: EDDIE LINSS
1100 MONTANA, STE 213
EL PASO, TX 79902
915-757-6875

USA GENERAL CONTRACTORS, INC.

CONTACT: JAVIER OLMOS
1302 GAIL BORDON PL., STE. A-1
EL PASO, TX 79935
915-633-3339
LOVE ENGINEERING, INC.
CONTACT: MONTEZ LOVE
11708 MONTANA AVE.
EL PASO, TX 79938
702-658-2587

SODA SPONSOR

Thanks to our FEBRUARY SODA SPONSOR:

GMF HOMES

915-549-4533
or
915-478-2404
Bonded, insured for
your peace of mind.

SPRING GOLF TOURNAMENT

Friday, April 10, 10 am
Presented by

Great Sponorship Opportunities

Still Available.
Call 778-5387 for info. today!

12

Builders Outlook

2015 issue 2

Associates Council

Sam Shallenberger
Morrison Supply

Builders

As you know the Associates make up

a majority of the membership at our
organization. That was clear with the
overwhelming response to our recent
Speed Networking event where 20 of
our
lucky
Associate
members
participated in the best Speed Net of
the year. I would venture to say that a
lot of business got done, is going to be
done because of the event. Thanks
goes out to our builder members, a lot
of them who had never been to the
Speed Networking event. From talking
with them the whole deal was super.

Thanks to Ray and Margaret for the

hard work. I would also like to welcome
our new intern Ana Guillen. She comes
from Southwest University the school
across the street from my office. Im
seeing them grow and grow and with
some more growth coming soon. Ray
says the process has been easier than
he thought it would be but its nice to
see us associated with Southwest
University.
Some notes on the Spring Golf
Tournament sponsored by Haskins
Electric. We need you to fill out a team

utlook on the scene |

February General
Membership
Meeting
The first General meeting of the year took
place at the Marriott El Paso on February 11
with our special guest Roberto Coronado
from the El Paso branch of the Dallas Fed.
Over 70 members and guests were in
attendance. The meeting was the first for
our new president Edgar Montiel and for the
newly installed board of directors. At the
meeting the crowd listened intently to what
Mr. Coronado was speaking on.
Coronado is assistant vice president in
charge and senior economist at the El Paso
Branch of the Federal Reserve Bank of
Dallas. In this capacity, Coronado serves as
the Dallas Fed lead officer and regional
economist for West Texas and Southern
New Mexico.
Coronado works closely with the branchs
board of directors and provides leadership
and oversight for the operating and
administrative functions of the El Paso
office. He oversees the branchs outreach
activities
through
publications,
presentations and speeches, public
conferences and economic education. His
research focuses on issues pertaining to the
Mexican economy, the U.S.Mexico border
economy, and the maquiladora industry.
Coronado has written articles for various
Federal Reserve publications and academic
journals in both the United States and
Mexico.
I think that so long as we have a strong
dollar the Borderplex will continue to
prosper from the manufacturing standpoint.
I also know that a strong dollar will not be
good for the retailers since it will cost more
for the Mexican buyer to buy in the United
States, he told the group. Coronado also
told the audience that the El Paso economy
has been good over the last few years,
growing while not extending itself too far out
there. I always warn my audience that the
one thing that always is a concern is that
government employs nearly one out of four
in our region, so any loss of funding has a
significant impact on the local economy, he
continued.
Coronado currently serves as the
president of the Rio Grande Economics
Association, the El Paso chapter of the
National
Association
for
Business
Economics. He is also a clinical assistant
professor at the University of Texas at El
Paso, where he teaches in the Master of
Science in economics program. He obtained
his PhD in economics from the University of
Houston and holds a BBA in accounting and
economics and an MS in economics from
the University of Texas at El Paso.
The next general meeting will take place
April 8 and more information on the site of
the meeting will be posted as we near the
date.

entry and or at least sponsor a tee box.

The tournament will sell out as we have
only about 9 spots left and a month and
a half to go. Dont wait. Ill also be
asking our Associate members to help
us with the Parade of Homes that starts
on April 18. If you would like to
volunteer to take tickets call Margaret
at the office.
Thanks to all and see you soon.

Builders

utlook

www.elpasobuilders.com
www.epbuilders.org
6046 Surety Dr. El Paso, TX 79905
915-778-5387 Fax: 915-772-3038
execuTive oFFicerS
edgarmontiel,President
Palo Verde Homes
carlosvillalobos,vicePresident
Pointe Homes
Donrassette,Secretary/Treasurer
Rassette Homes
SamShallenberger,Associateschair
Morrison Supply

TABSTATeDirecTorS
Randy Bowling
Greg Bowling
Sam Shallenberger
NATioNALDirecTorS
Bobby Bowling IV.
Demetrio Jimenez
NATioNALASSociATioNoF
HomeBuiLDerS
(800) 368-5242

FrankTorres,immediatePastPresident
GMf Homes
TexASASSociATioNoF
rayAdauto,executivevicePresident
Executive Vice President
JayKerr-Attorneyofrecord
Firth, Johnston, Bunn & Kerr
couNciL/commiTTeecHAirS
Associatescouncil
Sam Shallenberger
BuildPac
Randy Bowling
Landusecouncil
Linda Troncoso
YoungDesignerAward
John Chaney
remodelerscouncil
Rudy Guel
membershipretentiion
Patrick Tuttle
Financecommittee
Kathy Carrillo
Henry Tinajero

ADviSorYToTHeBoArD
Jay Kerr, Firth, Johnston, Bunn & Kerr
James Martinez, Law Office of James Martinez

BuiLDerS
(800)252-3625

2014BuildermemberofTheYear
FrankTorres
GMf Homes
2014PatcoxAward
BretThompson
foxworth Galbraith Lumber
2014AssociatedofTheYear
JoeBernal
Employee Benefits Of El Paso
2014JohnShatzmanAward
Cindy Bilbe, Stewart Title
HonoraryLifemembers
Mark Dyer
Wayne Grinnell
Don Henderson
Chester Lovelady
Cliff C. Anthes
Anna Gill
Brad Roe
Rudy Guel
E H Baeza
PastPresidents
committedtoServe
Greg Bowling
Bobby Bowling, IV
Kelly Sorenson
Rudy Guel
Mark Dyer
Anna Gil
Mike Santamaria
Bradley Roe
John Cullers
Bob Bowling, III
Randy Bowling
Edmundo Dena
Doug Schwartz
Hershel Stringfield
Robert Baeza
Pat Woods

BoArDoFDirecTorS

Antonio Cervantes, BIC Homes

Beverly Clevenger, Automated Div. 6 Builders
Bret Thompson, foxworth Galbraith Lumber
Bud foster, Southwest Land Development Servises
Dan Ruth, Millienium Homes
Henry Tinajero, West Star Bank
Joe Bernal, Employee Benefits Of El Paso
John Chaney, Passage Supply

ePABmissionStatement:
The El Paso Association of Builders is a
federated professional organization representing
the home building industry, committed to
enhancing the quality of life in our community by
providing affordable homes of excellence and
value.
The El Paso Association of Builders is a
501C(6) trade organization.

John Dorney, Dorney Security

Kathy Carrillo, Pioneer Bank
Kathy Parry, Hunt Companies
Leti Navarette, Custom Dream Homes
Linda Troncoso, TRE & Associates
Robert Najera, Joseph Homes
Ruben Orquiz, MTI Ready Mix
Walter Lujan, Dawco Builders

2015 Builders Outlook

is published and distributed for the
El Paso Association of Builders
by Ted Escobedo, Snappy Publishing
ted@snappypublishing.com
El Paso Texas 915-820-2800

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