The B&D Interview: Ed Brady
A second generation homebuilder, Brady serves as NAHB’s 2016 Chairman of the Board and president of Brady Homes Illinois, one of the largest homebuilding firms in central Illinois.
NAHB recently published a press release detailing the modest recovery of the housing industry. Are some areas recovering faster than others?
Ed Brady: Nationwide, the housing market continues to make steady progress and is running at 94 percent of normal activity based on current permit, price and employment data as measured by NAHB’s most recent Leading Markets Index. As you would expect, some markets are recovering faster than others. The quarterly index shows that markets in 117 of the approximately 340 metro areas nationwide had returned to or were exceeding their last normal levels of economic and housing activity in the fourth quarter of 2015. In general, the housing markets making the slowest return to normal are in the East North Central states clustered around the Great Lakes and In the states that suffered most during the downturn: Arizona, California, Nevada, and Florida. Markets in energy producing areas throughout the West and much of the Midwest are among those that have returned to normal or are exceeding their previous level of activity.
Now that we’re well into the new year, how can we expect to see home prices behave for the rest of 2016?
EB: Nationwide, we are expecting modest increases in new home prices this year. But it’s important to remember that all markets are local, and numerous factors can affect home prices. It’s not at all unusual for prices to spike in an area and remain virtually unchanged elsewhere in the state or region.
What can we expect to see in regard to single-family starts?
EB: On a nationwide basis, NAHB is currently projecting an increase of almost 15 percent in single-family housing starts in 2016 over last year. Total single-family starts were 712,000 last year; they are expected to increase to 817,000 in 2016.
Regarding multifamily, has demand increased or decreased thus far this year? Do you foresee it changing in the near-term?
EB: Multifamily has largely recovered from the downturn and has reached a long-term sustainable rate of production. For that reason, NAHB is projecting that multifamily starts will remain at current levels or increase only slightly in 2016.
And last, how do you see green playing a role in new homes for the remainder of 2016—a priority for builders or consumers? Or not so much?
EB: Like our culture and individual lifestyles, homes are evolving rapidly toward a greener and more sustainable future. Twenty years ago, it was rare for a person to take their own shopping bags to a grocery store. Today it’s commonplace. As a whole, our society has become more aware of the need for conservation and sustainability, and that awareness extends to our homes. To meet this need, many individual builders have included green features in their homes. Likewise, there are numerous rating systems and scoring tools operated by a variety of groups — including home builder associations — that facilitate builders’ use of sustainable and green building principles. Additionally, model code requirements are increasingly more rigorous, resulting in more durable homes.
NAHB supports the ICC 700 National Green Building Standard™ (NGBS), as the industry benchmark for residential projects designed and built for high performance. Certification to this voluntary above-code Standard is administered by our affiliate, the Home Innovation Research Labs. It provides independent, third-party verification that a home, apartment building, or land development is designed and built to achieve high performance in six key areas: site design, resource efficiency, water efficiency, energy efficiency, indoor environmental quality, and operation and maintenance.
This ANSI-approved standard has everything needed to design, construct, or remodel any residential project to the most current sustainable and green building criteria. Depending on the number of green practices successfully incorporated in its design and construction, a new green home can be awarded a Bronze, Silver, Gold, or Emerald certification level.
Certain aspects of green, especially energy conservation, have become an expected practice in the industry, and there is no indication that the market demand for increased sustainability will slow anytime soon.