builders outlook 2012-10

7/30/2019 Builders Outlook 2012-10

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Builders utlookyears

E L PA S O

BUILDERS A S S O C I A T I O N O F

B U I L D I N G E L PA S O S F U T U R E S I N C E 1 9 4 6 www.elpasobuilders.com www.epbuilders.org

2012/10

By Kelley Beaucar Vlahos Published November 07, 2012 FoxNews.com

The economy, according to theRepublican playbook, was supposed tomake Barack Obama a one-termpresident. But with Obama winninganother four years in last night'selection, analysts say he was evidentlyable to mitigate the fallout of a meagerrecovery and even use smallimprovements in recent months to hisadvantage.

"A lot of people thought the economywas the big barrier to Obama's re-election, but they ignored theprospective element of the economy,"offered Darrell West of the BrookingsInstitution. "With the economy gettingbetter, there wasn't the barrier theythought there would be."

And the economy was foremost on

voters' minds -- according to early exitpolling, 61 percent of voters in thebattleground of Pennsylvania said itwas the most important issue affectingtheir vote; in New Hampshire it was 59percent; in hotly contested Ohio, 59percent.

Obama's better-than-expectedshowing in the battleground states --he won virtually every one of themexcept for North Carolina, with Floridastanding as the only contest yet to becalled -- indicated that Americans arewilling to give the president anotherchance to pull the country out of one ofthe worst recessions in recent history.

Some conservatives warned againstbroad-brushing the results, sayingTuesday night that Obama's slimmargin of victory in the popular votewas "no mandate" going forward.

Nevertheless, in an election seasonthat brought the oft-repeated adage"it's the economy, stupid" to newlevels, analysts had predicted thenational unemployment (just under 8percent as of Friday) and slowrecovery numbers would be Obama'sAchilles' heel. Poll after poll hadindicated a sour mood in America withmajorities believing the country was onthe "wrong track."

But a combination of silver-liningeconomic statistics released last Friday(gas below $4 a gallon; 171,000 new

jobs), plus positive reporting about thefederal government's response toHurricane Sandy, a lauded "groundgame" and an opponent who was

unable to capitalize on the uncertainfiscal landscape, combined to give thepresident the boost he needed in the11th hour, analysts told FoxNews.com.

"First of all, he ran a very goodcampaign -- and Romney did not run avery good one," said Terry Madonna,who directs the Franklin & MarshallCollege Poll in Pennsylvania. He saidhe personally believes Obama shouldhave lost based on economic factorsalone, but Romney was unable to usethat to the Republicans' advantage.

"President Obama was potentiallythe weakest among working class

voters between Scranton and DesMoines, but Romney did not have theability to really appeal to them," saidMichael Brendan Dougherty, nationalcorrespondent for The AmericanConservative magazine, citingRomney's comments before a privatefundraiser about "the 47 percent" andthe constant "upper-managementcaricature that these voters detest" ascontributing to his lack of more tractionwith this demographic.

"Romney was defined early as awealthy 'one percenter' who didn't careabout the middle class, who ran abusiness that put people out of work,shipped jobs overseas, made millionson it and won't tell us what he did withthe money," said Madonna. Unfairly ornot, it stuck, he added.

This gave Obama some space toappeal to workers via the auto industrybailout and to divorce himself from the

roots of the crisis, said Dougherty.Exit polls Tuesday night indicatedthat many Americans are still unwillingto blame Obama for the crisis and arestill looking back at the last presidentin that regard. For example, 51 percentof Ohio voters polled said George W.Bush was responsible, not Obama, forthe current economic climate.

"I think voters did understand thatObama came in during challengingeconomic circumstances, and perhapsthey don't necessarily see that as anexcuse, but Mitt Romney never soldhimself as a man who understands or

was in solidarity with the people mosthurt from the downturn and economiccrisis," Madonna said.

Madonna said this was a problemfrom the start, that Romney was hardto define. "Was he the moderate Mitt orwas the Tea Party Mitt? The Obamacampaign played early on the flip flops,asking, 'who is he?'"

Meanwhile, Obama has beencredited with having the better groundoperation, put into place during the2008 election. It's been enhanced andexpanded since, concentrating on the

states that required it. According toreports last week, Obama had 800local field offices, compared with 300for Romney, with the difference in theswing states quite "stark," said writerMolly Ball, pointing out that they wereextremely active in registering newvoters and taking advantage ofelaborate data-based direct marketing.

But much of the outcome could havebeen helped along by recent eventsover which neither man had control.

"I think the hurricane was decisive,"West said. "During natural disasterseveryone is a liberal, they wantassistance and they want help andthey look to the federal government.Romney was out of the news for threeor four days and he did not have ananswer when asked about disasterrecovery and the role the federalgovernment should play."

After the press accused Romney of"dodging" questions about the FederalEmergency Management Agency(FEMA), he told reporters that he doesnot plan to abolish FEMA, but wantsthe states to take the lead role indisaster response. With thousands stillwithout power and displaced onTuesday, the recovery has beengrinding along, and the coming daysmay bring more tension and fresh

complaints over how FEMA is handlingthe response, but Obama has alreadybenefited from his opportunity to lookpresidential. Meanwhile, Romney wasforced to tone down the campaignduring a critical week in which he wasactually gaining momentum in thepolls, said Madonna.

Analysts are also pointing toObama's much-needed boost fromRepublican Gov. Chris Christie, whosebear hug to Obama went viral despiteChristie later noting he was stillstrongly in support of Romney.

"The point with Republicans ... isthat it would have been one thing tosay 'thank you, New Jersey is reallygrateful," said Madonna. "It's anotherto thing to have that hug, to use allthose superlatives, walking arm in armwith (Obama) and having that tape runfor a day."

In the end there are no silver bullets,but a lot to consider in the upcomingdays, about what Obama did right, andwhere Romney went wrong, he added.

"The post-mortem will go onendlessly -- they always do."

Analysis:Hope in economic recovery helped boost Obama


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2 Builders Outlook 2012/10


3/16

We are in the last quarter of the year, and the market in El Paso hasshown to be remarkably resilient. Markets ahead of us are Houston,Dallas and San Antonio yet we have been in the race. The Lone StarState is certainly flexing its housing muscles. A great new home marketis not possible without job growth. Again, Texas is a leader in attractingnew business and creating the type of atmosphere for business to growand thrive. While the national economy is still in recovery mode and wehear rumors of possible QE3, we should give thanks for what we havehere. There have been times in the past when the country was doingwell and Texas was down in the dumps, especially in the late 80s. Wewill take this existing market anytime over those days. Remember that

membership is everyones responsibility, do your part to help yourindustry.

Presidents Message |

El Paso Disposal

772-7495

32012/10 Builders Outlook

FrankArroyosPresident,El Paso Associationof Builders


4/16

As frustrating as it is to run abusiness it is equally frustrating whenyou are on the other side of thecounter. Over the years I have becomeincreasingly unwilling to patronize aplace that gives bad service, inferiorquality, or refuses to acknowledge mypatronage. Everyone reading thisprobably has example after examplethat they can share but maybe you andI have had the same experience at thesame places. Not being totally crazy at

this point I wont name names as far asbusinesses, but some experiencesmay just remind you of a particularplace.

Scenario number one.I have been eating at a national chain

known for its breakfast offerings,sometimes slamming you with specialdeals. This particular spot has gottenmy business for the better part of twodecades at least once every twoweeks, sometimes more often. Thewait staff knows me well enough tobring coffee and water nearly as fast asI sit down. There is a manager at thisrestaurant who has seen me frequenthis place for years, yet not once hasthis guy come over and asked how mymeal is, or ask how Im doing. No he

prefers to look at you without looking atyou, getting stulled if you know what Imean. I had excused him simplybecause I thought this guy was abuffoon and all buffoons need to beignored. That is until recently when hemade a disparaging remark to one ofhis wait staff about her going to vote.He proclaimed out loud that he proudlydidnt vote and he hadnt voted inyears. Really? And hes proud of this?Well I decided this was it. This guy

doesnt get my money anymore, andwhile itll be the wait staff that loses thetips this guy will one day realize that hiscustomers include those of us who votebecause of a scared trust. Hissnubbing his nose at me was one thing,snubbing those who sacrificed for ourrights is a whole lot different. Not onlyam I not going back I wont ever hold ameeting there, recommend the placeand will drive right by. I took one otherstep. I wrote his district manager to lethim know.

Number two.Working with volunteers has its

rewards and it also brings out somesecrets. Some people love joining forsome reason, and then forget that

joining is the easy part. Its the

commitment to that volunteerism that isthe real proof of commitment within anorganization. Anyone who hasvolunteered to lead an event, put on ashow, or promote the organizationsoon realizes that not everyone keepstheir word or commitment. Such is thecase when you see hands go up at theannouncement of something, theleaders count the hands, and thenwhen its time to put up the handsdisappear. For example the group

decides to put on an event and theyseek commitments of money and time.In the group individuals raise theirhand. Oo-oo, Im in they say, andthen just a few days from the eventneither the money nor theircommitment is honored placing unduestress on the entire event and itscoordinators. Unfortunately we allhave those and you probably know afew yourself. At some point thequestion is whether or not there reallyis a commitment, and you know not tocount the chicken until the eggs allhatch.

ThreeMy third scenario is about faith. For

some of us faith is real and a part of ourdaily lives. For others the search

continues. Im not talking aboutreligion necessarily, Im talking abouthaving faith that gets you through theday and welcomes you in the morning.It can be the faith of knowing thattomorrow has promise and despite howwe might mess up today the mere factof having another chance is welcomed.Its the faith of knowing that you have apurpose and meaning. Its faith inknowing that you can overcomeobstacles, bad calls, or adverse

conditions. Its faith in knowing thatfamily and friends really can be therefor you. Its faith to know that there arepeople that really care withouthesitation or payment; withoutdemands or restitution. Faith to knowyour faith really does exist. I canttolerate those who have lost all faithbecause of some incident, accident orfailing. Blame has three fingerspointing back for the two pointingoutward. Faith is knowing that you canput up with scenario one and two andstill come back for more. Keep the faithfriends.

It really is there for you.

Perspective |

Ray Adauto,Executive

Vice PresidentEPAB


Customer no longer king but faith still persists


5/16

Sparked by rising home pricesacross much of the nation, thehousing recovery is now under way,

but fiscal uncertainties and otherchallenges could result in a bumpyride in the coming months, accordingto economists participating inyesterdays National Association ofHome Builders (NAHB) webinar onthe construction and economicoutlook.

Were seeing a more robusthousing sector than many otherparts of the economy, said NAHBChief Economist David Crowe. Oneof the reasons is we have finallybegun to see on a national scale thathouse prices are picking up again.

Crowe cited a number of otherfactors that are carrying the housingmomentum forward. These include:

Pent-up household formations Rising consumer confidence Increasing builder confidence in

all three legs of the industry:remodeling, multifamily andsingle-family construction

Growing rental demand More than 100 metros currently

on the NAHB/First AmericanImproving Markets Index

However, Crowe offered severalcautionary factors that continue toput a drag on housing activity at thistime including builders who areexperiencing difficulties in obtainingproduction credit, qualified buyerswho are unable to obtain mortgageloans, inaccurate appraisals,seriously delinquent mortgages thatare at least 90 days late or inforeclosure, and a limited inventoryof developed lots in certain markets.

Other causes contributing touncertainty in the marketplaceinclude the looming fiscal cliff thatwill trigger mandatory budget cutsand tax increases at the beginning of

next year, pending Dodd-Frank Actregulations that are making financialinstitutions hesitant to lend sincethey dont know how the new ruleswill affect them, tax reform, and thefuture role of Fannie Mae andFreddie Mac in the nations housingfinance system.

NAHB is forecasting a 21 percentincrease in single-family starts thisyear to 528,000 units and a further26 percent climb to 665,000 units in2013.

Multifamily housing starts areexpected to rise 26 percent this yearto 224,000 units and 6 percent in2013 to 238,000 units.

Optimistic Housing OutlookExpressing a more bullish outlook

on housing and economic growth,Mark Zandi, chief economist forMoodys Analytics, forecast thatGDP growth will range in the 2percent range this year and next anddouble that growth closer to 4percent in 2014 and 2015. At thesame time, he expects job growth togo from two million per year to closerto 3 million in 2014 and 2015.

A big part of this optimism is the

housing market, said Zandi. Iexpect 1.1 million total housingstarts in 2013, 1.7 million to 1.8

million in 2014 and over 1.8 million in2015.

Zandi noted a range ofassumptions behind this rosyforecast, including the expectationthat mortgage rates would remainvery low, the availability of housingcredit will improve as privatemortgage lending begins to pick up,and the job market gains traction aspolicymakers work to resolve fiscalissues, which will ease marketuncertainties.

Specifically, Zandi cited threecritical fiscal policy concerns:

The fiscal cliff. If policymakers donothing, the combination ofpending tax increases andspending cuts set to take effect inJanuary could produce a fiscaldrag of four percentage points,Zandi said, which would throwthe economy back intorecession. Hiring will remainweak until this is resolved, hesaid.

Treasury debt ceiling. By lateFebruary or early March, theTreasury is expected to hit itsdebt ceiling. A failure to raise theceiling would prevent the U.S.government to borrow to meet itsexisting legal obligations,including the issuance of monthlySocial Security checks.

Achieve fiscal sustainability.Zandi said that federalgovernment expenditures as apercentage of GDP is 24 percentand revenues is 17 percent. Hesaid this seven-point gap needsto be slashed to closer to twopercentage points of GDP. Weneed spending cuts and tax

revenues to narrow futuredeficits, he said. If we cant dothat, bad things will happen.

Acknowledging that thesechallenges wont be easy, Zandi saidhis forecast is based on theassumption that Democrats andRepublicans will eventually strike adeal on these contentious issuesbecause each side has much tolose. Democrats, he said, dont wantto see tax cuts for the wealthiestAmericans and Republicans dontlike the defense cuts mandated bysequestration.

If the nation has the political will toaddress the fiscal issues in areasonable way, I think we will be offand running, said Zandi.

A Gradual Climb to NormalDelving into the state statistics

behind the national numbers, RobertDenk, NAHBs assistant vicepresident for forecasting andanalysis, cited a range of differencesamong the states in the amount ofpain suffered during the recessionand the progress that is being madein recovering.

The hardest hit states -- such asArizona, Florida, California andNevada -- bottomed out the furthest

during the downturn and still havemuch ground to make up.

Meanwhile, several energyproducing states North Dakota,Texas, Oklahoma, Montana andWyoming will be back to normal

levels of housing production by theend of 2014.

On a national basis, housing starts

are projected to get back to 55percent of normal production by theend of next year and 70 percent ofnormal by the end of 2014, Denksaid.


Road to RecoveryHome Price Appreciation Helps Housing Move Forward


6/16


Sales of newly built, single-familyhomes rose 5.7 percent to a seasonallyadjusted annual rate of 389,000 units inSeptember, according to newlyreleased figures from HUD and the U.S.Census Bureau. This is the fastestsales pace recorded since April of 2010.

Combined with consistent, positivereports on housing starts, permits,prices and builder confidence in recentmonths, todays data provides further

confirmation that a gradual but steadyhousing recovery is underway acrossmuch of the nation, said BarryRutenberg, chairman of the NationalAssociation of Home Builders (NAHB)and a home builder from Gainesville,Fla. Consumers who have been on thesidelines during the past few years aredeciding now is the time to go forwardwith a new-home purchase, assumingthey can qualify for a good mortgageunder todays exceedingly stringentguidelines.

New-home sales this year have

consistently and significantly out-pacedtheir year-ago levels as favorableinterest rates, rising prices andimproving consumer confidence havedriven demand higher, noted NAHBChief Economist David Crowe.Meanwhile, despite a small increase inthe inventory of new homes on themarket in September, the number ofcompleted new homes for sale is now atan all-time low and the months supplyis at its tightest since October 2005.This is an indication that builderscontinue to have a tough time obtainingconstruction credit, even as demand fornew homes increases.

Three out of four regions registeredsubstantial gains in new-home salesthis September, including theNortheasts 16.7 percent increase, theSouths 16.8 percent increase and theWests 3.9 percent increase. TheMidwest was the exception to the rule,with a 37.3 percent decline.

Meanwhile, the inventory of newhomes for sale inched slightly upward toa still-low 145,000 units in September,which is a 4.5-month supply at thecurrent sales pace.

New-Home Sales Rise 5.7Percent in September


7/16

Real Estate WealthSupports TexasEconomyBy David S. Jones, Senior Editor, RealEstate Center at Texas A&M University

COLLEGE STATION, Tex. (RealEstate Center) Texas is wealthy, andreal estate is a big reason.

Texas 2011 real estate wealth wasvalued at $1.6 trillion or $65,432 worth ofreal estate for every Texan, regardless ofage. Thats up 86.7 percent from the$35,055 in 1997.

Dr. Ali Anari, research economist withthe Real Estate Center (REC) at TexasA&M University, monitors the relativeimportance of the states real estateindustry and the resulting wealth itcreates. His latest article, TexasTreasure, is in the October issue ofTierra Grande magazine, RECs flagshipperiodical.

Real estate is the states secondlargest industry. According to Anari, the2011 Texas real estate industryaccounted for 8.4 percent of the statesgross domestic product (GDP). Onlymanufacturing at 14.7 percent of GDP islarger.

Real estate wealth comprises single-family residences, multifamily residences,commercial properties, industrialproperties, mineral real estate, utilitycompany properties, rural acreage andvacant lots, he said.

More than half (56.3 percent) of thestates real estate treasure is in single-family housing. Texas 2011 single-familyresidential wealth totaled $945.1 billion.Multifamily residential wealth was $85.1billion. Total 2011 commercial real estatewealth amounted to almost $279 billion.

Also in the 2011 state treasure chest:industrial real estate ($95 billion), mineralreal estate ($106 billion), utility companyproperties ($50 billion), rural acreage($80.3 billion) and vacant lots ($39.5billion).

Including the self-employed, 521,684Texans worked in real estate in 2011,some 3.6 percent of total statewideemployment. The largest proportion ofself-employed Texans are in real estate.In 2010, the four largest Texasmetropolitan areas accounted for amajority (81.4 percent) of real estateemployment.

Anari says that every $1 million ofTexas real estate revenue generates:more than $500,000 in revenueelsewhere in the state economy; 5.2 realestate jobs; and five jobs in otherindustries.

Taxes paid by the real estate industryaccounted for 14.8 percent of total Texasbusiness taxes in 2009, said Anari.Texas property tax revenue that yearwas more than $40 billion or 47.8 percentof state tax revenues; school districtslevied $21.7 billion in property taxes, 54.4percent of the total.

By David S. Jones, Senior Editor, RealEstate Center at Texas A&M University

Texas GushingOver Oilfield Jobs

COLLEGE STATION, Tex. (RealEstate Center) Texas has been amajor beneficiary of increased oilfieldemployment, and that continues tohave a positive impact on many ofthe states real estate markets.

Its no secret that the oil and gassector has been one of the few brightspots in the U.S. economy during the

past few years, said Dr. Harold Hunt,research economist with the RealEstate Center at Texas A&MUniversity.

A recent PricewaterhouseCoopers

(PWC) report estimates the oil andgas industry supports about twomillion direct and indirect Texas jobsthat power 24 percent of the stateseconomy, he said. As a result,Texas residential and commercialreal estate markets are largelyoutperforming those in the rest of thecountry.

Although employment gains reachwell beyond the oil patch, some ofthe biggest effects have been inareas at the heart of drilling activity.Hunts research shows the significantimpact oil and gas activity is havingon some of the most active countiesin the Permian Basin and Eagle Fordand Barnett shale regions, referred toin oilfield jargon as plays.

Negative oil and gas job growth inthe Eagle Ford before 2008 andstrong positive growth since 2010shows the dramatic difference inoilfield activity before and after shalediscoveries, said Hunt. The rate of

year-on-year job growth exceeded 90percent in June 2011.Positive oil and gas employment in

the Permian held up much longerthan the other two plays and Texasas a whole, said Hunt. The Permianhas traditionally been an oil play, andoil prices in excess of $100 per barrelthroughout much of 2008 helpedextend positive job growth there.

The assumption that crude priceswill remain relatively high whilenatural gas prices remain low isdriving a number of significantchanges that will affect Texas realestate, said Hunt.

Hunt noted the large projectedincreases in a closer and moreaffordable supply of natural gas liquidis driving companies to expandcapacity at their facilities. Othersectors benefitting from low naturalgas prices include electrical powergenerators and manufacturers ofpaper products, plastic products,cement, fertilizer and fabricatedmetals.

Hunt said manufacturing along theTexas-Mexico border may benefit aswell. For example, Brazils SantanaTextiles is constructing a $180 milliondenim plant in Edinburg. Companyofficials said low natural gas costsplayed an important role in thedecision to locate in Texas ratherthan Mexico.

PWC reports that inexpensivenatural gas could help U.S.manufacturing save more than $11billion per year and create 500,000new jobs by 2025.

The lure of cheap natural gas israising expectations for areindustrialization of America, saidHunt. Texas is well positioned totake advantage of low-priced energy.This is good news for the states realestate markets.

To read more about Huntsresearch, including the effect of rigcounts on private employment, theoutlook for oil and gas prices, andthe benefits of low natural gas prices,read Crude Awakening; Oil, GasJobs in Play on the Centerswebsite.



8/16

View more photos on our facebook page: elpasobuildersassociation

Builders utlook on the scene |

City of El Paso Development Servicesbrought information on the latest infillproposal to the association members at ameeting October 31. Matthew McElroyled the discussion on the proposal andshowed a power point presentation andtook questions from members. The asso-ciation will have additional suggestions inupcoming meetings.

City of El Pasoexplain infillprogram

The EPAB has been trying to offer a concealed handgun license class for a whilenow and finally on October 27 the event took place. Five candidates attended theclass given by certified instructor Colonel (retired) Benny Steagall. The Colonelhas 30 years of serving in the US Army and is a pilot on helos, from the Apache toChinook, and continues to serve as an Army civilian employee at Biggs Field.Colonel Steagall has taught gun safety and training to a variety of military and civil-ians including SOCOM and Delta military training and many El Pasoans. Hisadventure with the group from the EPAB brought all his talents to the challenge.The Course consisted of the required Texas mandated eight hours classroom plusproficiency at the range. The students all qualified the written exam and the shoot-ing proficiency test with flying colors. As one participant said it was a long timecoming but this group effort was the way to go. All five candidates must now passa background check through the Texas DPS. Future classes depend on therequests from members. All in all the time spent learning was quite an experienceand something the association has had numerous requests for.

Members complete Certified HandgunLicense training


9/16

2012/10

UTEP Mens basketball head coach Tim Floydtold a sold out crowd at the General Meeting thatthis years team would be challenged and fun towatch. The crowd was amused with those con-trasting statements since it sounded familiar, justlike what Coach Haskins would have said adozen years ago. I have to tell you that CoachFloyd reminds me so much of Haskins, down tohis quick wit and stories, said SamShallenberger, a friend of both. The crowd wasvery enthusiastic about having Floyd visit and noone more so than Edgar Montiel. Coach and Ifished at his Mississippi home just this summer,Montiel told the Outlook. We had a great timeand I have to tell you that Coach is genuine, hecontinued. The meeting was hosted by WindsorDoor LLC, Inc..

General meeting featuresUTEPs Floyd


10/16

List of ImprovingHousing MarketsExpands to 125 inNovember

The number of U.S. housing marketsshowing consistent improvement in

three key measures of strengthexpanded by 22 in November to a totalof 125, according to the NationalAssociation of Home Builders/FirstAmerican Improving Markets Index(IMI), released today. This marks a thirdconsecutive monthly gain for the index,which now includes representativesfrom across 38 states as well as theDistrict of Columbia.

The index identifies metropolitanareas that have shown improvementfrom their respective troughs in housingpermits, employment and house pricesfor at least six consecutive months.Markets added to the list in Novemberinclude such geographically diverse

locations as San Diego, Calif.;Gainesville, Ga.; Omaha, Neb.;Louisville, Ky.; and Charlotte, N.C.

Not only did 22 additional marketsqualify for the improving list inNovember, but the geographicdistribution of included metrosexpanded from 33 states to 38 (plus theDistrict of Columbia), while 97 out of 103markets retained their spots on the listfrom the previous month, observedBarry Rutenberg, chairman of theNational Association of Home Builders(NAHB) and a home builder fromGainesville, Fla. This shows that ahousing recovery is firmly taking rootand helping generate needed jobs andeconomic growth across much of thecountry -- though we know that thisexpansion could be even stronger wereit not for ongoing challenges includingoverly tight lending conditions anddifficult appraisals.

The solid increase in the number ofimproving housing markets this monthillustrates the degree to which thehousing recovery has gainedmomentum since we initiated the IMIlast year, noted NAHB Chief EconomistDavid Crowe. Compared to the 30markets that made the list as ofNovember 2011, we now have 125,which is about one-third of all themarkets surveyed for this index.

This new high point for the Improving

Markets Index provides the latestevidence that housing has turned acorner due to rising demand fromconsumers who are increasinglyconfident about the direction of localhome values, said Kurt Pfotenhauer,vice chairman of First American TitleInsurance Company.

The IMI is designed to track housingmarkets throughout the country that areshowing signs of improving economichealth. The index measures three setsof independent monthly data to get amark on the top improving MetropolitanStatistical Areas. The three indicatorsthat are analyzed are employmentgrowth from the Bureau of LaborStatistics, housing price appreciationfrom Freddie Mac and single-familyhousing permit growth from the U.S.Census Bureau. NAHB uses the latestavailable data from these sources togenerate a list of improving markets. Ametropolitan area must seeimprovement in all three measures for atleast six consecutive months followingthose measures respective troughsbefore being included on the improvingmarkets list.

A complete list of all 125 metropolitanareas currently on the IMI, and separatebreakouts of metros newly added to ordropped from the list in November, isavailable at www.nahb.org/imi



11/16


For over a century, the energyindustry has been a tremendoussource of jobs, and a major driverof economic growth in Texas. Ithas retained its place in the Texaseconomy because of continuedinnovation, which has resulted inenergy production evolving fromsimply drilling a hole in the groundand watching the oil gush towardsthe sky to a very complex operationthat utilizes advanced technologiesto extract each barrel from theground. This continued innovationhas enabled areas of matureenergy production to have a newlease on life and continueproducing energy - and preserving

jobs that would otherwise nothave been produced. It has alsoenabled production in areas that

you simply couldnt produceenergy from previously.

One of the most significantinnovations in energy productionhas been hydraulic fracturing,commonly referred to asfracking. Fracking is a processthat is used to release oil or naturalgas by cracking underground rockformations, and provides access tooil and gas in areas that do noteasily produce them or whereconventional methods havehistorically failed. Its been in usesince the 1940s, and recenttechnological advancements indrilling technology have caused itto become one of the primarymethods for retrieving natural gas

particularly within the PermianBasin and Eagle Ford Shale herein Texas.

The result of this technologicalinnovation has been lowered costsfor American families, the creationof good-paying American jobs, andprogress towards the goal ofAmerican energy independence.When it comes to lowering costsfor American families, according toa report issued by the YaleGraduates Energy Study Group,

increased shale gas productionenabled consumers to enjoy over$100 billion in savings on the priceof goods and services in 2010alone. On the job creation front,Moodys Analytics recentlyestimated that shale gasproduction has created one million

jobs since 2002. And, furtheringthe goal of American energyindependence, Citigroupeconomists and analysts issued areport estimating that frackingcould cause U.S. oil production toclimb by more than a third by2015.

One million jobs, over $100billion in savings, and oilproduction increased by a thirdsounds like results of a successfulenergy policy to most Americans,but not to the ObamaAdministration and theirenvironmental extremist allies.Rather than embrace this source ofenhanced energy production and

job creation here in the UnitedStates and Texas, PresidentObamas environmental extremistallies want a wholesale federaltakeover of fracking regulations,replacing the conventional state

regulators, and want to shut downfracking in the name of watercontamination prevention.However, there is simply not the

justification for such a takeover.The current system of letting statesregulate fracking is working,despite the rhetoric one mighthear. Even President ObamasEnvironmental Protection AgencyDirector Lisa Jackson agrees, asshe testified in a May 2011hearing in the United State Senatethat she wasnt aware, of anyproven case where the frackingprocess itself affected water.

As the representative of Texas23rd District, I want to see more

jobs and more energy productioncome to the Permian Basin andEagle Ford Shale. Thats why Ivefought so hard against the ObamaAdministrations anti-Americanenergy agenda. We need topursue proven energy policies thatallow Texas to continue producingenergy and creating jobs, not thosethat gamble with taxpayer moneyon investments in companies likeSolyndra.

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Protecting Energy Production Innovation, Jobs

Guest Column

Francisco CansecoTexas Congressman


12/16

In the weeks leading up to thenational elections, supporters andopponents of the Affordable Care Act(ACA) have contributed new researchand analysis to support theirrespective points of view on healthcare reform. A Commonwealth Fundstudy documents a 10-year slide inhealth coverage provided by small

businesses 58 percent of smallbusiness workers were affordedaccess to coverage in 2003 vs. 49percent in 2010. However, theCommonwealth Fund argues that theACAs tax credits for small businessesand subsidies for low-income workerswill help offset the trend. In contrast,Forbes reviewed available research toshow how the ACA will impactconsumers in eight key swing states such as Minnesota, Ohio, andWisconsin. The articles conclude thatthe ACA will drive up individual healthcare premiums significantly as of2014.

STATeSCALIFORNIA: The California Health

Insurance Exchange received 33letters of Intent from health insurerswho are interested in participating inboth the Small Business HealthOptions Program (SHOP) andindividual exchange, includingcommercial carriers as well asMedicaid managed care plans. Fivebidders proposed statewide coverage,and there were no fewer than sixbidders for each area of California.Eight carriers bid for the SHOPexchange in the metropolitan areas,with no less than four carriers in the

most rural part of the state. Staffpublicly acknowledged that AnthemBlue Cross, Kaiser Foundation HealthPlan, Blue Shield of California andHealth Net have all submitted non-binding letters. Other carriersrequested that they not be disclosedpublicly at this time.

CONNECTICUT: The Office of

Health Reform and Innovation hasproposed rules to implement thestate's all-payer claims database(APCD). The rules include reportingrequirements, data element standardsand timelines for the reportingprocess. A hearing is scheduled forNovember 19, and public commentswill be accepted until November 29.Regulations will likely be finalized andadopted by the end of February 2013.The state received about $6.6 millionin funding for the APCD from Healthand Human Services (HHS) as part ofthe states Level Two exchange grant.The funding will finance the APCD

through 2014. The state expects tobegin hiring staff, including anexecutive director, in December andissue an RFP for a data managementvendor in early 2013.

ILLINOIS: Voters this week arebeing asked to amend the stateconstitution by approving a proposedamendment that would require asupermajority 3/5 vote of the GeneralAssembly or local unit of governmentto authorize pension or retirementbenefit increases and a 2/3 vote tooverride a gubernatorial veto. Undercurrent law, it takes a simple majorityvote in the House and Senate to

increase pension and retirementbenefits (including medical benefits)for workers and a 3/5 majority tooverride the governor. This changewould impact both state governmentand local units of government, such asschool districts, cities, and counties.

MICHIGAN: Two bills that wouldtransform Blue Cross Blue Shield of

Michigan (BCBSM) into a nonprofitmutual disability insurance companyowned by policyholders and regulatedby the same rules that govern otherinsurers under the ACA are movingquickly. The Senate passedamendments to the original bills onOctober 17, and hearings will takeplace in the House November 13-19.The administration wants the House toact before year-end. Proposed by thegovernor in early September, the billswould end BCBSMs status as thestates insurer of last resort and beoperated under a separate statuteallowing both the attorney general and

Insurance Department to oversee theiroperations. As part of the governorsproposal, BCBSM would be requiredto make a contribution of $1.5 billionover a period of 18 years to the healthof Michigans people. The bills are ofgreat concern to consumer groups, theAttorney Generals Office and insurers.With BCBSM maintaining 70 percentmarket-share, Aetna is working toensure the final law includes a ban onthe use of "most-favored nation"clauses in provider contracts to helpmake the market more competitive.

NEW HAMPSHIRE: TheDepartment of Insurance brought

together health plans last week todiscuss issues related to ACAimplementation and informed themthat the state does not intend to makea declaration to HHS by the November16 deadline regarding a federal-stateexchange partnership. The DOI alsoreviewed other areas of the law thatrequire state and federal law to be

aligned. The Department intends tosubmit legislation for the 2013legislative session to implement ACAmarket reform provisions related torating changes, open enrollment andconformance with essential healthbenefits categories of coverage.

VERMONT: In a memo issued lastweek to over 2,100 state employees,Governor Peter Shumlin isencouraging employees to enroll theirchildren in the states CHIP programand to drop them from their stateemployee health plan coverage. Thestate has estimated that if half of theeligible employees took this option, the

state would save a minimum of $5million. Vermont is not the only stateencouraging state employees to enrolltheir children in CHIP to garner thehigher reimbursement rates. Thehealth insurance exchange modelbeing built will be the only place whereindividuals and small businesses willbe able to acquire health insurancestarting in 2014.

ResourcesHealth Reform ConnectionAmerica's Health Insurance PlansAetna 2011 Annual Report

The U.S. real estate recovery thatsgained strength this year faces asetback from flooding and propertydamage inflicted by Hurricane Sandy,the biggest tropical gale to hit theAtlantic seaboard.

The storm battered homes inEastern coastal states that account forabout one out of every five U.S. real

estate sales and threatened inlandareas with flooding and blackouts.Lenders put transactions on hold andcompanies like Coastline Realty inCape May, New Jersey, pulled in theirfor-sale signs to prevent the wind fromturning them into projectiles.

Well definitely see lower numbersin new sales and new applications,said David Stevens, president of theMortgage Bankers Association. Wedo expect to see lenders put a freeze

on properties across the northeast onthe shoreline until they can beinspected and assessed for damages.

Sandy, about 1,000 miles wide,prompted warnings of life- threateningstorm surges from Virginia toMassachusetts, emptied the streets ofthe nations largest cities, paralyzedmass- transit systems and lashed the

area with gales, rain and even snow.U.S. airlines grounded 9,500 flights,U.S. stock trading is closed throughtoday in the first back-to-backshutdowns for weather since 1888.Losses may total as much as $20billion, with $5 billion to $10 billion ofthat insured, according to Eqecat Inc.,an Oakland, California-based providerof catastrophic risk models.

Property DamageAlmost $88 billion of homes in seven

states are at risk of damage, accordingto a report by CoreLogic Inc., amortgage software and data firm inIrvine, California. New York has $35.1billion of property in harms way, NewJersey has $22.6 billion, Virginia has$11.3 billion, and Massachusetts has$7.8 billion. Maryland, Delaware andPennsylvania have a combined $11

billion of property at risk, CoreLogicsaid.A fire tore through more than 50

homes in a Queens beach communitythat suffered heavy flooding, the NewYork Times reported. On 57th Street inManhattan, a crane on a 90-storyresidential building under constructionpartially collapsed and was danglingover the street. The storm hasaccounted for 16 deaths, according tothe Associated Press.


Guest Advice

Joe Bernal

Employee Benefits of El Paso

HeALTHCARe ReFORM:

Plan will driv up cost of car as arly as 2014

By Kathleen M. Howley, JohnGittelsohn, and Heather PerlbergBloomberg News

Storm Sandy to severely affect housing market say experts


13/16

The El P so associ tion o Buildersnnounced the sl te o directors nd

o icers or 2013. In nnouncing thenomin tions President fr nk arroyospr ised the selection nd o eredencour gement to the members. asmy term comes to n end soon s with

ny outgoing President the responsibili-ty o pl cing new bo rd members is op r mount concern. The executivenomin tions committee h s t ken thist sk to he rt nd is recommending nexcellent crop o new bo rd members

nd endorsing those who h ve notherye r le t on their term, arroyosexpl ined. We re p rticul rly proud

th t we h ve not run into the problemth t h s pl gued other loc l nd st tegroups o h ving to recycle presidentsbec use no new c ndid te stepped up,he continued. We re very proud toh ve Edg r Montiel step up nd o erhis le dership, fr nk continued.

The nomin tions committee h s pro-posed Edg r Montiel rom P lo VerdeHomes s the next member on theexecutive l dder. Edg r will serve sSecret ry Tre surer or the EdmundoDen dministr tion. fr nk Torres romGMf Homes will serve s VicePresident. Current President fr nkarroyos nnounced th t his business

will t ke him into South Tex s more thiscoming ye r nd he will not be ble to

ully serve s immedi te P st President.Greg Bowling, currently serving th tc p city will continue or one more ye r.

The ollowing is the list o c ndid testh t will be voted on this November ndwill be inst lled on December 6 t theEl P so Country Club. Tickets or theinst ll tion re on s le now.

Proposed 2013 El PasoAssociation of Builders

Board of Directors and Officers areas follows:

Executive Board 2013President:Edmundo Den , (accent Homes)

Vice President:fr nk Torres (GMf Homes)Immedi te P st President:Greg Bowling (Tropic n Homes)associ tes Ch ir:S m Sh llenberger (Western Wholes leSupply, Inc.)Sec/Tre surer: Edg r MontielExecutive O icer: R y ad uto

Board of DirectorsJu nit G rci (Icon Custom Homes)S mir Gonz lez (Edw rds Homes)W lter Luj n (D wco Construction) *

C rlos Vill lobos (Pointe Homes) *Don R ssette (R ssette Homes) *Beverly Clevenger (autom ted Division6) * fr nk Spencer (aztecContr ctors) *K thy P rry (Hunt Communities) *S l M soud (Del Rio)Edg r G rci (Bell Vist CustomHomes) *Robert L. foster (South West L nd)*Leti N v rette (Custom Dre m Homes)*Lind Troncoso (TR-Engineering)L nce V nDem n (JDW) *John Ch ney (P ss ge Supply)Joe Bern l (Bern l Insur nce)Ken W de (El P so BuildingM teri ls)Ruben Orquiz (MTI Re dy Mix)K thy C rrillo (Pioneer B nk) *Henry Tin jero (B nk o the West)P ul Z cour (Z cour & assoc.)Chuck G briel (C rpets West)*Ted Escobedo (Sn ppy Publishing)*

Womens Council:Lorr ine Huit (C rdel Design)Green Council:J vier Ruiz (Senercon)*indic tes new 2 ye r term

Membership News

Thanks to ourOCTOBER

SODA SPONSOR:Del Rio Engineering

SODA SPONSOR

years

E L PA S o

BUILDERS A S S o C I A T I o n o F

B U I L D I N G E L P A SO S F U T U R E S I N C E 1 94 6

11395 James Watt, Suite A-11 79936915-633-8002


www.elpasobuilders.comwww.epbuilders.org

UPCOMING EVENTS |

RENEWALS |Bell Homes

Boise C sc deC rpet W rehouse

Cimm ron Mortg ge C pit lCMf Enterprises

J ck White Building Speci ltiesJB L min tes

Lorett Bl nkenshipMcCoys Building Supplies

Mount in Vist Re lty

Pointe Homes/LupoDevelopment Corp.

Stew rt Title Gu r ntySun City Spr y fo mThe Herit ge Group

Time W rner C bleTropic n Homes

Tropic n PropertiesVill gi Homes LLC

NOVEMBER 12IMG CUP

Sun Country PGa GolTourn ment

P inted Dunes GolCourse

NOVEMBER 14BOaRD MEETING

12 NoonEPaB O ice

DECEMBER 6EPaB GaLa

INSTaLLaTIONaND aWaRDS

BaNQUETEl P so Country Club

Association names upcoming Board and Officers for 2013


14/16

One thing about our Associatemembers that really impresses meis the support they give to theassociation. Throughout thehistory of the Association wevehad members who really take onthe responsibility of helping events,sponsoring or advertising with theassociation. Such is the case withthe Pro Am golf tournament. I wantto thank all of you that have given

us support this year. It hasnt beeneasy and sometimes it appearsthat we are always asking forsomething. Truth of the matter isthat nowhere else can you as asupplier, vendor or builder memberdo more to ensure that ourmessage gets out. That messageis about new home constructionand its importance to the localeconomy. We as a trade group

provide jobs, provide a great taxbase for government and providefor so many families. We have thisassociation to remind the publicand politicians of that. So next timewe ask you to participate step uplike those fellow members whoyoull see advertising or playing inour Pro Am. These are folks whotake membership to that next level.Thank you all for doing so.

Showroom:2131 Missouri

915 533 6045 fax 533 6096Thomas R. Brown, Owner


Sam ShallenbergerWestern Wholesale Sup ply

Associates Council

Associates move forward and support EPAB

Jaimes Courier Service,Inc.

Jaimes Courier Service,Inc.

915-549-4533 or

915-478-2404

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15/16

execuTive oFFicerSF ank A y s - P s d ntCisco Homesed nd D na - v P s d nt

Accent HomesF ank T s - S ta y/T as GMF Custom HomesSa Shall nb g - Ass at s c n lWestern Wholesale Supply

G g B wl ng - i d at Past P s d ntTropicana Homesray Ada t - e t v P s d ntEl Paso Association of Builders

couNciL/commiTTee cHAirS

Aff dabl B ld s c n lBobby Bowling IVAss at s c n lSam Shallenberger B ld PAcRandy BowlingD s t G n B ld ng c n lJavier Ruiz

ind st y P t nsGreg BowlingLand us c n lVacant

Y ng D s gn Awa dJohn Chaneyr d l s c n lRudy Guelm b sh p DMike SantamariaF nan c ttKathy Carrilloed at n c ttFrank Spencer

ADviSorY To THe BoArDJ. Crawford Kerr, Attorney, Firth, Johnston

& Martinez

BoArD oF DirecTorS

Joe Bernal, Joe Bernal Insurance

Doug Borrett, Karam Co.

Kathy Carrillo, Pioneer Bank

John Chaney, Passage Supply

Sergio Cuartas, BIC Homes

Ted Escobedo,Snappy Publishing

Art Garcia, El Paso Door

Juanita Garcia, ICON Custom Home Builders,LLC

Samira Gonzalez, Edwards Homes

Lorraine Huit, Cardel Design Group

Walter Lujan, Dawco Home Builders

Sal Masoud, Del Rio Engineering

Bruce Meyer, JDW Insurance

Edgar Montiel, Palo Verde Homes

Kathy Parry, Hunt Communities

Javier Ruiz, Senercon & Border Solar

Frank Spencer, Aztec Contractors

Henry Tinajero, WestStar Bank

Linda Troncoso, TRE & Associates

Ken Wade, El Paso Building Materials

Paul Zacour, Zacour & Associates

2011 B ld m b of Th Y a Greg Bowling

Tropicana Homes

20110 Pat c Awa dKathy Parry

Hunt Communities

2011 Ass at of Th Y a Sam Shallenberger

Western Wholesale Supply

J hn S hatz an Awa dBob Bowling III

Tropicana Homes

ePAB Sp al Awa dRudy Guel

Guel Construction

H n a y L f m b sBrad Roe

Cliff AnthesWayne Grinnell

Chester LoveladyDon Henderson

Anna Gil

Past P s d ntsc tt d t S

ePAB m ss n Stat nt:The El Paso Association of Builders is afederated professional organization representingthe home building industry, committed toenhancing the quality of life in our community byproviding affordable homes of excellence andvalue.The El Paso Association of Builders is a501C(6) trade organization.

2012 Builders Outlook

is published and distributed for theEl Paso Association of Builders

by Snappy Publishing240 Thunderbird Suite C

El Paso Texas 79912 915-820-2800

6046 Surety Dr. El Paso, TX 79905915-778-5387 Fax: 915-772-3038

Kelly SorensonMark Dyer

Mike SantamariaJohn Cullers

Randy BowlingDoug SchwartzRobert Baeza

Bobby Bowling, IVRudy Guel Anna Gil

Bradley RoeBob Bowling, III

E. H. BaezaHershel Stringfield

TAB STATe DirecTorS

Doug Borrett, Karam Co., Life Director

Randy Bowling, Tropicana Homes

NATioNAL DirecTorS

Bobby Bowling IV.

Demetrio Jimenez

NATioNAL ASSociATioN oF

Home BuiLDerS

(800) 368-5242

TexAS ASSociATioN oF

BuiLDerS

(800)252-3625

years

E L PA S O

BUILDERS A S S O C I A T I O N O F

B U I L D I N G E L PA S O S F U T U R E S I N C E 1 9 4 6

www.elpasobuilders.comwww.epbuilders.org

Builders utlook


16/16

builders outlook 2012-10

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