A MESSAGE FROM OUR PRESIDENT, LINDA BERNASKI

May/June -

Dear Members,

It is a rare gift that we as an association can continue to come together to promote programs, participate in industry functions and maintain the level of quality and strength in bringing new homes to New Jersey. There have been many bright spots in our recent past and many more that will be shedding light in our near futures, which I am happy to bring forth in this month’s message.

First and foremost, I would like to introduce and welcome Gina Woolley, the new Executive Officer of the SBACNJ. Gina has been both an employee of Shore Builders and a participating member of our association for fifteen years and has been active on several committees, including Golf, Boxing and BPAC Golf. She was also chair of Member Services, Programs and Education Committee for the SBACNJ. Her experience in the industry and knowledge of the SBACNJ will be huge assets to our future goals as an association and the programs that we offer. I am excited to work with Gina and the team at SBACNJ, Christine Boyle and Jacki Rible, who dedicate themselves to the betterment of our association and industry.

Back in March the SBACNJ presented the “Friday Night at the Golden Gloves” event, which took place at Monmouth University. Over 100 members attended and over 250 general admission tickets were sold to this exciting venue. Thank you to the SBACNJ Boxing Committee, whose tireless efforts to make this event a success were greatly rewarded. I’d also like to thank all of the companies who sponsored this event, including A.O. Smith, Ferguson Enterprises, Palatial Homes, FWH Associates, PA, Eastern Shore Homes, Robertson Douglas Group, Mr. John Portable Sanitation, C & L Sweeper Service and G & M Trophy. One of the most fun and exciting parts of the night was meeting boxing great, Jerry Cooney, who was on hand for photos and autographs. It was a great night and a huge success for our association.

More recently, the action was down in Atlantic City at the 2009 Atlantic Builder’s Conference, which despite the current economic climate, was very well attended and hugely successful. Kicking off the convention was the SAM Awards gala event, held at the beautiful Borgata Hotel and Casino, which drew over 400 builders, developers, associates and colleagues. It was a night to remember with many awards, much laughter and fun for all who attended. The convention itself was very busy and the abundant educational opportunities were a timely and wise investment for the costs of attending. This event continues to be the largest in our area for our industry and always draws the best of the best.

Another upcoming event for SBACNJ, the 52nd Annual Golf Outing, to be held at the Jumping Brook Country Club in Neptune on June 8, 2009 is a fun and favorite event for many of our members. Sign up early, as there will be a limited number of foursomes. Also be sure to take advantage of our sponsorship and marketing opportunities, as they are an inexpensive way of advertising your company to a great number of our members. Keep checking our newly updated website for additional information on this and many other programs and events that SBACNJ is planning.

I’ve been told that in every life, a little rain must fall. The past year has felt more like torrential downpours to most of us and I’m happy to say that there is much news and information that has come to light in the past two months that leads me to believe that the clouds are clearing and the sun will be shining upon us sooner than we think. The NAHB Public Affairs has been hard at work providing information and tools for homebuilders and has recently published a report based on Housing’s role in the economy. There are so many positive points on the report that I wanted to share with you some excerpts of the key items that I believe are important to keep in mind as we forge into brighter territories.

President Obama unveiled a $75 billion plan to limit foreclosures, which USA Today said "should get the ball rolling." A stock market rally and better-than-expected retail sales sent the media on a treasure hunt for a silver lining. By mid-month, The New York Times was wondering: "Was that the bottom we just hit?"
Although NAHB's Housing Market Index remained at nine for a second month, housing starts rose 22.2 percent on a surge in volatile multifamily activity, building permits rose 3 percent, existing home sales were up 5 percent and new home sales rose 4.7 percent. The stock market had its biggest monthly gain since 1987 and mortgage rates dropped to record lows.

Network news took note of improved housing numbers during the week of March 23. "One part of the economy that's given investors some hope this week: the housing market," reported NBC Nightly News. "There are signs of a thaw in the housing market," said CBS Evening News. The Wall Street Journal noted three consecutive days of good news from the housing sector, a "contrast to the drumbeat of bad news in recent months." On CNN, chief business correspondent Ali Velshi reacted to record low mortgage rates and positive news on housing and durable goods by calling the developments "very, very significant. It's having quite an impact on consumer sentiment and it could be...a turning point."

By the end of March, a change of tone was evident in the headlines. The Washington Post saw "early stirrings of hope," The Wall Street Journal speculated that the "trough is finally in sight," and Bloomberg cast a horrendous 6.3 percent drop in GDP as a "possible turning point." Even declining corporate profits, growing unemployment and lower consumer spending were seen as evidence of bottoming, although economists remained wary, according to the Associated Press.

The S&P Case-Shiller Index was released on March 31, showing home-price declines accelerating to new lows in January, and The Conference Board simultaneously found consumer confidence mostly flat in March. However, some coverage called for "cautious optimism" that improved housing affordability could attract more buyers and signal a rebound in the market. "The upshot for home buyers is that for the next several months, homes are likely to remain more affordable than they have been in the past several decades, and mortgage rates are near historic lows," reported The Wall Street Journal, which also cited the $8,000 first-time home buyer tax credit as helping to drive sales.

In addition to the better news in the media, NAHB Public Affairs utilized it’s resources and issued many press and radio releases as part of a media outreach highlighting the current opportunities for Homebuyers and the importance of a healthy housing market to economic recovery.
Public Affairs issued a press release on the languishing HMI noting that builders are hopeful that the recent economic stimulus package, and particularly the first-time home buyer tax credit that it included, will have a positive impact on consumer behavior and home sales as the prime home buying season gets underway. NAHB also expressed concern about how tight credit conditions continue to impact the housing market. NAHB economist Bernie Markstein was interviewed by Bloomberg TV and Dow Jones Marketwatch on the HMI, which was covered in nearly 80 online and print news articles.

The next day, Public Affairs explained the volatility of multifamily housing starts to give some context to the huge jump in February statistics, but allowed that "builders did pull a larger volume of single-family permits in February, suggesting a glimmer of hope for the prime home buying season, which is near at hand," in a press release. Dave Crowe was interviewed by NPR, AP Radio, ABC Radio and CNN Money on the numbers.
In a press release on new home sales, Joe Robson said, "This is an encouraging sign that the market may finally be reaching a bottom. Consumers are beginning to take advantage of the first-time home buyer tax credit, historically low mortgage rates, very affordable home prices and the great selection of homes they have to choose from in the midst of a real buyer's market. For those with good credit and job security, the stars are all aligned to buy a home at this time." Dave Crowe was interviewed by Bloomberg TV, ABC Radio, CNN Radio, The Associated Press and The Washington Post on the latest new home sales data. The AP article was picked up by more than 60 other media outlets.

Public Affairs continued to drive media coverage of NAHB's Web site, www.federalhousingtaxcredit.com, which was featured in more than 30 media outlets this month alone. In a March 5 press release, Joe Robson said, "We are very pleased and encouraged that so many people are visiting our informational Web site. The spike in traffic is a strong indication that the tax credit will help get some fence sitters into the market and will help breathe some life back into the depressed housing market." In addition, Public Affairs worked to publicize the availability of new residential energy-efficiency tax credits through HBAs and members and generated a feature story in the Chicago Tribune.

The third part of the report detailed NAHB’s effort to work through the 2009 Legislative Conference to convince leaders on Capitol Hill to Put the Focus On Housing, which was the message America’s home builders took to the Hill.

As part of its ongoing advocacy activities on AD&C lending coordinated with Housing Finance and Government Affairs staff, Public Affairs issued a press release to highlight Joe Robson's testimony before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. Robson told Congress that the housing sector is still being significantly affected by the upheaval in the financial and mortgage markets that started in 2007, and there is deep concern that these financial dislocations will increase the depth and length of the housing downturn. The release noted that coordinated regulatory efforts among federal and state agencies are necessary to ensure prudent lending practices and effective consumer protections while facilitating efficient operation of the residential mortgage markets. Coverage included numerous mortgage industry news outlets and trade press plus The Oklahoman.

Finally, Elliot Eisenberg was quoted this month in nearly 15 media outlets throughout the country on the positive economic impact of home building in local economies.

The NAHB has also put much effort into the promotion of the federal tax credit through outreach and social media. They conducted a free teleconference for builders and sales and marketing professionals on how to market the first time homebuyer tax credit to prospective buyers. Over 900 association members called in for the presentation, which is available as an audio version at www.nahb.org/teleconference. There are many resources available to our association from the NAHB and many members have taken the available information and have used it in creative ways to help their sales effort. Here are just a few:
An "$8,000 Home Buyer Tax Credit" Facebook profile was created on March 9, with information posted including videos, fact sheets, photos and more. By the end of the month, more than 1,200 people had joined as "fans," including the HBA of Lake County in Florida, who left the comment, "Great to see NAHB on Facebook. HBA of Lake Co. FL applauds your outreach efforts."A Twitter account, http://twitter.com/FTHBtaxcredit, was established in March as well. The tax credit resources to help HBAs and members promote the tax credit continued to be enthusiastically received and utilized.

NAHB has compiled several resources to help builders market the new tax credit. They can be found at www.nahb.org/taxcreditmaterials.
I would also like to share with you a few other important points from the report that outline the long term outlook for our industry, which are too good and too positive to leave out:
o Despite the serious problems we are facing today, it’s also important to keep your eye on the big picture.
o Home builders are resilient. We’ve weathered bad storms before and we will again.
o Looking at the market over the long-term, the U.S. is definitely on a growth path.
o Our population will rise by about 35 million over the next 10 years. All of those people will need someplace to live. Consider these facts:
o America currently has about 110 million occupied housing units.
o About 75 million of those are owner-occupied. The other 35 million are rental units.
o Total equity (value of homes minus any mortgage debt) amounts to nearly $8 trillion.
o More than one-third of all home owners own their home outright, with no mortgage debt.
o And for those who have mortgages, nearly 90 percent are making their payments on time every month.
o Housing affordability has improved markedly in many metro areas since 2006.
o Home values will ultimately bottom out and start edging back up.
o Once we turn the corner on the housing downturn, the longer term housing outlook is promising.

I would be remiss if I did not mention the hard work and dedication that our members bring to the table every day and would like to encourage all SBACNJ members to do business with other members. It is good to do business with a member! Our industry depends on all of its members to sustain and strengthen us as a whole. As you have seen in the compiled NAHB Public Affairs reports, membership is not just about paying a fee and receiving emails and notices every so often. It’s about commitment, dedication, support of each other and knowing that our association is defending our best interests so that we might all continue to survive and prosper as we start to see the clouds clearing and abundant sunshine in our future.

Linda Bernaski
Palatial Homes, Inc.
President, SBACNJ