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Tax bill includes surprises

BY HBSDEALER Staff

In a government affairs report for members, Ken Dunham, executive director of the West Coast Lumber & Building Material Association (WCLB-MA), expressed concern over red tape surrounding a lumber tax.

He was referring to a bill, AB 2031, passed by the 2014 state legislature that updated the previously established Lumber Products Assessment. Now, retailers selling less than $25,000 of assessable lumber products can opt out of collecting the assessment, but the benefits of this may not be as straightforward as they seem, in Dun-ham’s view.

“Yes, any business that sells less than $25,000 in lumber products subject to the assessment may opt out of collecting the 1% assessment,” he wrote. “But that same business must continue to keep appropriate records to make certain their sales do not exceed $25,000 in a calendar year. The [State Board of Equalization] may audit lumber sales in their regular auditing process. No one yet knows how this might be done.”

Dunham added that under the new law, retailers wishing to opt out must notify customers that they are the ones who are responsible for footing the bill for the 1% assessment.

“You can only imagine the reaction of a customer when you sell them a product and then tell them they have to file with the state and pay the uncollected assessment,” Dunham writes.

Additionally, these retailers will no longer be eligible for the credit related to the assessment (up to $735).

To Dunham, it all seems like a lot of extra work, and a lot of misplaced resources for the state government.

“It seems that the BOE will have to monitor, collect and audit even these very small sellers of lumber products,” wrote Dunham. “So the BOE will likely have to spend hundreds, if not thousands, of dollars on each of these small retail [businesses] to collect, in some instances, less than $50 in lumber product assessment.”

For more on the topic, visit the West Coast Lumber & Building Material Association at lumberassociation.com.

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Same Ivy Zelman, a Better Message

BY HBSDEALER Staff

Housing industry analyst Ivy Zelman made a name for herself during the height of the housing boom by suggesting that the run couldn’t last forever. It was an unpopular message. But it was right.

But here in Las Vegas, at the 2015 BMC National Sales Meeting, Zelman’s latest market forecast and observations on the current economic climate were welcomed by the building industry audience.

Particularly welcoming for BMC was the Zelman & Associates status update of market conditions in those western states where BMC customers are most likely to live and build.

Most of these cities beat the U.S. average for overall home-building health as measured by Zelman’s proprietary index (see chart).

“Western markets are still seeing stronger-than-average population growth, because they are desirable places to live,” she said.

Zelman also offered some comforting analysis on a pair of topics that some consider to be bugaboos for the home-building industry — the attitudes of young home buyers, and, on a more serious note, the rising debt burden on college students.

Young adults enjoy city life, and they may claim a distaste for the suburbs of their parents, but the numbers consistently show a steady move to single-family dwellings as households are formed.

“Lifestyle dictates whether people will be in a single-family home or live in an apartment,” she said. “When you get to a certain age, 70% to 80% of the people are going to live in a single-family shelter, and we really do believe it has to do with love and marriage.”

The 20- to 34-year-old age group — representing two-thirds of all new households being formed — has seen strong job growth. This is also a key factor to household formation.

Zelman was more careful in describing the student debt issue. It’s commonly accepted that this debt is barring the young adult from entering the home market. However, a closer look reveals:

  • About a third of student debt is held by those 40 years old or older;
  • About 40% of student debt is related to graduate programs; and
  • Less than 5% of debtors hold more than $100,000, and more than 85% hold less than $50,000.

“We’re not diminishing the student loan debt crisis, but if you’re actually paying down your student debt, you’re actually buying more homes than those who don’t have a student loan debt.”

Price Point Pressure

Sure, home builders face all kinds of pressure, including the prices of sticks and bricks, Ivy Zelman said. She also predicted manufacturers will continue to raise prices.

But it’s no time to feel sorry for the home builders. Why? Their margins are doing just fine.

“Sorry, builders in the room,” she said. “Gross margins historically range from 18% to 22%. So builders in 2014 were averaging 24.5% margins. We have builders averaging 28% margins.”

Zelman expects 2015 to bring a return to a more normal range.

 

 

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The house that IBS built

BY HBSDEALER Staff

The industry converged on Las Vegas in January for the hallmark event in building materials. At no other trade show is there such an emphasis on residential components as the NAHB International Builders’ Show, where attendees are often treated to a look at the year’s most cutting-edge concepts in residential construction.

The size of the show — already international in scope — only expanded further in 2015. Not only could builders shuttle back and forth between IBS and KBIS (the Kitchen & Bath Industry Show), but this year, the events were co-dated with the International Window Coverings Expo, the International Surface Event and the Las Vegas Market.

Here are just a few standouts from the week’s building extravaganza.

 

Jeld-Wen Custom Wood Folding Window 

Open-concept walls have permanently left their mark on the building industry, but Jeld-Wen was on hand with a compelling middle ground. The Custom Wood Folding Window (pictured above) uses the same accordion-style design for a room-enlarging effect, but doesn’t take up an entire wall. (jeld-wen.com)

 

TimberTech Ashwood Composite Decking

TimberTech left no doubts as to what its best new offering was. Ashwood, a rustic new color option from the Legacy Collection, was on display in the form of a large deck at TimberTech’s booth. (timbertech.com)

 

Weather Shield Contemporary Corner Window

Weather Shield has been busy adding new product lines and innovations to its wares over the past couple of years. Among the most eye-catching is this corner window from the Contemporary Collection, which features a clear satin stain. (weathershield.com)

 

Kohler Touchless Flush

Kohler’s most exciting product wasn’t exactly one you could see — or touch. Touchless Flush comes as an intuitive retrofit kit to equip toilets with a motion-activated flush feature. (us.kohler.com)

 

Amerock Wall Plates

The latest in decorative coordinating products from Amerock came in the form of its new wall plates lineup, a series of 83 outlet, toggle, cable and blank wall plates in rich finishes like satin nickel and oil-rubbed bronze. (amerock.com)

 

Native Trails Farmhouse Sink

Rustic, homespun looks have hardly finished having their moment in residential design. Native Trails was a KBIS standout with its generous, artisan-crafted copper sinks. (nativetrails.net)

 

Schlage Sense System

Fresh from the official unveiling of the new Schlage Sense System at this year’s Consumer Electronics Show, the lock company was in full force at IBS. It touted benefits like key-free and voice-operated activation, as well as HomeKit compatibility and end-to-end encryption. (schlage.com)

 

Bedrosians Interlude Glass/ Stone Mosaic Blend Duet

“Mixed media” designs continued turning heads at this year’s Surfaces event. The Bedrosians take on this prevalent backsplash look included glass and stone components. (bedrosians.com)

 

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