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Builders Outlook
ISSUE 12 Building El Paso’s tomorrow today
Plunging Home Prices Fuel Property Tax Appeals
Swamping U.S. Cities, Towns
By Jeff Green and Tim Jones –
Bloomberg.Net
A fiscal flood that threatens to swamp
local government budgets across the U.S.
overflows from file cabinets in the office of
Patty Halm, chair of the Michigan Tax
Tribunal.
The backlog of cases from taxpayers
seeking to lower property-tax bills of more
than $100,000 shot up to 14,236 this year
from an annual average of about 6,000
during the past decade. The backlog of
smaller claims was at 28,558 at the end of
September, eight times higher than a decade
ago, according to records at the tribunal, a
Lansing-based administrative court.
From Los Angeles to Atlantic City, the
New Jersey gambling resort whose credit
rating Moody’s Investors Service cut by
three levels last month, property owners are
demanding lower taxes after real-estate
values plunged. The disputes over billions in
dollars come as municipalities are already
slashing services such as police and fire
protection and may depress revenue further
as communities try to recover from the
longest recession since the 1930s. In
Michigan, Governor-elect Rick Snyder has
warned that hundreds of towns face financial
crises.
“We’re just getting swamped,” said Halm,
54, who was appointed in 2003. “We’re
constantly buying new file cabinets to hold
all the cases. We even have six surplus file
cabinets in the courtroom.”
U.S. home prices are 30 percent below
their peak of April 2006, according to the
PERMIT NO. 429
U.S. POSTAGE
EL PASO TX
PRSRT STD
PAID
seasonally adjusted S&P/Case-Shiller index
of property values in 20 cities. They may
drop 10 percent more, Greg Lippmann, a
founder of New York-based LibreMax
Capital LLC, said Dec. 2 at the Hedge Funds
New York Conference hosted by Bloomberg
Link.
Appeals Upon Appeals
Meanwhile, the Moody’s/REAL
Commercial Property Price Index of U.S.
commercial property is 43 percent below its
October 2007 peak.
“If we look into the future, assessments
will have to reflect the market value, and two
years out, property-tax receipts will have to
be coming down,” Michael Pagano, dean of
the College of Urban Planning and Public
Affairs at the University of Illinois at
Chicago, said in a telephone interview. “If
the appeals are largely successful, they will
generate a lot more appeals.”
In Michigan, seven judges and 15 hearing
officers are clearing the backlog. Five
additional staff members are crammed into
cubicles in hallways and a library space, said
Halm, who is also one of the judges. More
than a dozen mismatched file cabinets line
the hallway outside the tribunal, among
about 50 that have been added for the
overflow.
Amid the Cabinets
This week a chief clerk sat surrounded by
them on the floor, sorting files to get ready
for hearings. Bins held even more folders.
Oakland County, the Detroit suburb with
Michigan’s second- highest median income,
didn’t previously pay much attention to Tax
Tribunal cases because any losses were
covered by new construction gains, said
Robert Daddow, deputy county executive.
Now, about $3.9 billion in taxable value, or
5 percent of the county’s tax base, is under
review, he said.
Cities and towns across Michigan had
property-tax collections plunge as much as
20 percent in the past year, the steepest drop
since a 1994 rewrite of state levies, forcing
scores to decide whether to borrow to pay
bills or risk default on bonds.
Municipal budgets “tend to lag economic
conditions” by 18 months to several years,
according to a National League of Cities
report in October that Pagano co-wrote.
“The full weight of the decline in housing
values has yet to hit the budgets of many
cities and property tax revenues will likely
decline further in 2011 and 2012,” the report
said.
Already Struggling
Douglas Roberts, Michigan’s former
treasurer, said in a telephone interview from
East Lansing that the impact of property-tax
appeals “could be significant” because cities
are already struggling with rising pension
and health-care costs and declining revenue.
Settlements are likely to increase across
the state through 2013 as the backlog is
worked through, compounding other
revenue shortfalls, Daddow said.
“In some of these instances, probably
most of them, local governmental units have
not been setting money aside for this,”
Daddow said. “That will be huge. That will
be another big headache coming down the
pike.”
In many states, property-tax appeals are
handled primarily at the local level.
Clark County, Nevada, which includes
Las Vegas, had 8,300 appeals last year, an
increase from 6,000 the year before and
1,900 in 2008, according to Rocky Steele,
assistant director of assessment services.
“It was a big year, the biggest we’ve ever
had,” Steele said in a telephone interview.
Losing Hand
Clark County’s taxable real-estate value
fell to $184 billion for the 2010-11 fiscal
year from $263 billion the prior year and the
record $320 billion in 2008-09, according to
Steele. The one-year reduction will cost the
county a projected $514 million in lost taxes.
Almost all the hotel casinos and major
property owners received reductions, Steele
said.
In Atlantic City, where 11 casinos account
for 74 percent of the property-tax base, the
city has exhausted a reserve for tax appeals
that in 2006 held $26 million, according to a
Nov. 4 Moody’s report on the rating cut. The
company reduced the credit to Baa1, three
levels above speculative grade, from A1.
All Atlantic City casinos have pending
property-tax appeals, Moody’s said. Since
their valuation is based on gambling
revenue, which has declined more than 11
percent this year, appeals may continue, the
rating company said.
Resort Under Pressure
“The city’s negative fund balance
position, outstanding tax casino credits and
the significant number of remaining
unsettled casino tax appeals will continue to
pressure the city’s financial position,”
Moody’s said in the report.
New Jersey homeowners filed 18,147
property-tax appeals in Tax Court during the
fiscal year ending June 30, up from 10,067 in
fiscal 2007, according to a report by the state
judiciary.
Moody’s today cited continuing tax
appeals when it lowered the rating on about
U.S. home prices are 30
percent below their peak of April
2006, according to the seasonally
adjusted S&P/Case-Shiller index
of property values in 20 cities.
They may drop 10 percent more,
Greg Lippmann, a founder of
New York-based LibreMax
Capital LLC, said...
$3.7 million in outstanding debt for the
Borough of Roseland, New Jersey, to fourth-
highest Aa3 from Aa2. A reserve fund for tax
appeals in the town about 20 miles (32
kilometers) east of New York City may fall
to $600,000 this year from $3.5 million in
2007, and the borough may issue bonds to
handle future appeals, Moody’s said in the
report.
‘Overloaded’ in L.A.
Across the country, the situation is similar.
“We’re just overloaded,” said Khanh
Nguyen, chief of assessment appeals in Los
Angeles County, whose more than 10
million residents make it the nation’s largest.
The county expects “a few thousand”
more than the 42,000 applications last year,
Nguyen said. That’s quadruple the 9,353 in
2007, she said. The appeals are rising as the
overall tax rolls declined by $18.5 billion, or
1.67 percent, to $1.089 trillion in 2010.
The phenomenon is not universal. In
Miami-Dade County, which is Florida’s
largest municipal borrower, 2010 tax
appeals, due in September, dropped 27
percent from 2009, to about 105,000, said
Robert Alfaro, Value Adjustment Board
manager. In Illinois, pleas for relief arrive
every week on the desk of Louis Apostol,
executive director of the state Property Tax
Appeal Board.
‘Heart-Wrenching’ “These letters are
heart-wrenching. I’ve got drawers and
drawers of them,” Apostol said in a
telephone interview from his office in Des
Plaines.
Illinois may have 19,350 property appeals
this year, 10 percent more than in 2009, he
said. The backlog is about 35,000, to be
processed by a staff of 21. Fifty-four people
handled roughly half the workload in 2003,
he said. More than 80 percent come from
homeowners and the board approves an
average of 30 percent of them, he said.
Determining the impact could take two
years, he said. In the meantime, Apostol will
continue receiving letters of complaint
forwarded by Governor Pat Quinn. “I
respond directly,” Apostol said. “I also
include my phone number and tell them how
they can appeal their taxes.”
2 DECEMBER 2010 Builders Outlook
3 Builders Outlook
President’s Message
Greg
Bowling
President,
El Paso Association
of Builders
The end of the year is coming and with it
comes the busiest time of year for all of us
personally, as well as for your Association.
Your Executive Officer Ray Adauto and his
staff have been working hard to prepare for
the December 14th Installation dinner at the
Camino Real. We’ll be installing your new
EPAB leadership as well as handing out our
yearly awards to our members that have
gone of above and beyond in their
commitment to our industry. It should be a
fun night and I hope everyone can attend.
Also on December 4th your EPAB Board
members held a long range planning retreat
at the Inn of the Mountain Gods in Ruidoso,
New Mexico. Kristi Sutterfield, former
Executive Officer of TAB, and former
NAHB Executive Officer of the year agreed
to come in and put on this event for us. At
this planning session we discussed the
Association’s mission statement, strategic
plan, and bylaws. We also had open
discussions on setting a path for EPAB over
the next 2 to 3 years, where we want to
spend our energy as an Association, and
how we will be in sync with the outside
world.
On the home building front remember
starting January 1, 2011 the 2009
International Residential Code comes into
effect for all residential construction in the
city of El Paso. This code will be phased in
throughout the year with the schedule that
the code inspectors agreed to. EPAB has
already held a Saturday training session in
conjunction with the City of El Paso
Building Services Department to discuss
some of the changes that will come into
play. Another one of these training sessions
is scheduled for Saturday December 10, but
check with the office to confirm. We had
over 40 attend our first session so if you
would like to attend the second one, make
sure to schedule with Ray Adauto as soon as
possible because space is limited. Also look
forward for more training sessions in 2011
for the different trades that will be affected
such as electrical, plumbing, and HVAC.
Lastly, I’d like to wish everyone Happy
Holidays and give a special thank you to all
you who’ve volunteered your time,
resources, and energy to EPAB and the
Home Building industry as a whole
throughout 2010. I’d like to name each
person individually, but due to the fact that
we are so fortunate as an association to have
so many give so much-I’m afraid there isn’t
room! I look forward to serving you as your
Association President for 2011 and I hope
for your continued support of EPAB.
4 DECEMBER 2010
Perspective
Ray Adauto,
Executive
Vice President
EPAB
I believe, I really do.
I am often asked if the Christmas season
is my favorite time of year and my answer
sometimes is met with a strange response.
The Christmas that I love is the one of my
childhood, the one where I personally
didn’t have to worry about presents,
ornaments, trees, lights, visitors or the
weather. Nope it was those times when
nothing mattered more to me than to go up
to the Santa at Sears and proudly
announce my wish list, always
remembering to ask for that battery
powered something or another, or later on
asking for that Cushman scooter in the
Sears catalog. Nothing gave me more joy
than to see the mailman drop off that huge
Sears catalog. I mean it was like reading
the best novel, or enjoying a movie over
and over again as I looked at all the neat
stuff in that book. Yep that book would be
tattered and dog-eared by the time I was
done with it, and it was missing a few
pages because I’d torn them out to make
sure my mom and dad knew the exact
item I wanted. Yes sir I was not willing to
Builders Outlook
Christmas past, present, and future
take chances that they would end up over
at the Winn’s five and dime instead of ‘Nothing gave me more joy than
going to Sears for the official gift. It was
to see the mailman drop off that
also a time when we would ride the bus
downtown to see the wonderful winter huge Sears catalog. I mean it
scenes at the Popular, The White House, was like reading the best novel,
or go round and round the Kress toy or enjoying a movie over and
section. Nothing will ever replace those
days for me. They were happy days. over again as I looked at all the
It will be eleven years this Christmas neat stuff in that book. That
Day that my dad passed away and eleven book would be tattered and
years this New Years Day that my mom
died. Yes both died a week apart. For me
dog-eared by the time I was
as a kid it was the fact that my parents done with it...’
loved the season so much, taking time to
decorate the house, string lights, and have
parties. No one could party better than my
mom and dad. They had learned to really
enjoy life while living through the
depression and a couple of wars. Not only
did they survive those times they
prospered and never went for wanting, or
at least that’s the story they told. They plums and dreams, of trains and dolls, and willing to say otherwise, so pardon my
never felt like they needed something wii’s and laptops and give thanks for frankness if I insist on saying it. It
since they enjoyed the closeness of family reminding me why I should love this time wouldn’t be any special time of year if it
and friends. Their friends during those also. But frankly it just isn’t what it used weren’t for a time of rejoicing and
dark days remained friends through the to be. I am older and starting to get into proclaiming. My family understands my
“golden years”, even though dad would the painful years. I’m finding out I’m not sentimental bag about the time of year. I
say getting old wasn’t goldenjust painful. a kid anymore. hope that you will also. But always know
But God has a strange way of reminding I don’t like to say it’s a “holiday that because of my most precious gifts of
you what this season should be about. season”; I rather call it what it is, family and friends I still believe in Santa
With my two grandchildren how can it Christmas. That’s what it is and always Claus. I believe and always will. Merry
ever be otherwise. I see them with sugar will be for me. I’m neither ashamed nor Christmas and Happy New Year!
 Builders Outlook
Guest Perspective
Chente Quintanilla
State Representative
Some of you may have read an article
about a bill that I filed relating to
manifiestos. Manifiesto is a document
which is used to refund sales taxes in Texas
paid by foreign nationals.
The United States Constitution prohibits
state and local entities from collecting taxes
on items which are exported. It is key to
remember that a product is not exported
unless it has reached its destination country.
Your EPAB Membership can make stocking your office cheaper!
Members of the El Paso Association
of Builders enjoy many exclusive
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New bill limits sales taxes from being improperly refunded
There is no question that the sales taxes on
items, whether wholesale or retail, that are
taken to a foreign destination cannot be
legally collected by local governments. Our
current laws leave a gaping loophole
allowing the sales tax to be refunded but
without the product being taken outside of
the United States.
Currently, any foreign national, including
our friends in Mexico, can purchase items,
pay the sales tax but collect the refund on the
tax before returning to their home. Texas is
the only state in the union that allows such
an arrangement.
There is no requirement by state law that
these international travelers must prove the
items purchased reached a foreign
destination. In place instead is a law which
requires a purchaser to "state the foreign
county destination" and to "state the date
and time the property is expected to arrive in
the foreign country destination."
That is quite the honor system if you ask
me. This system has seen the State of Texas
refund over $500 million in sales taxes
during the period between 2004 and 2009.
Locally, the average amount of city sales
taxes over that time is over $1.2 million per
year; the county taxes averages out to
$688,000 per year.
While the entire $1.2 million of tax
refunds may not have been refunded
improperly, any amount that was costs you
and me more in the long run. Since the city
collects 1% on the retail price of
merchandise sold, it would take $120
million in sales to produce the $1.2 million.
This is a ton of money refunded based on
an honor system. Can we implement a
similar honor system where local property
owners state their own appraisals?
I am certain from anecdotal comments that
there is abuse in the system. There is no way
to know how much because the only thing a
customs broker has as evidence that the item
has been exported is the good faith statement.
DECEMBER 2010 5
I believe it is a fiscally responsible action
to have definite proof the item has been
exported. That is the intent of the bill I filed.
You can read the bill by Google-ing HB 344
by Quintanilla.
I am certain the actual bill which is heard
in committee will be different from this
initial draft. My office continues to research
the best means by which we prevent sales
taxes from being improperly refunded.
It is not my intention to harm commerce.
But, it is not the responsibility of Texas
taxpayers to subsidize any commerce. It is
the responsibility of lawmakers, including
myself, to bolster the confidence of
taxpayers that sales taxes refunded to
foreign nationals are confirmed to be for
products "exported" outside the United
States.
6 DECEMBER 2010 Builders Outlook

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 Builders Outlook
Big deficit of new single-family homes will
need to be addressed as economy improves
Annual single-family housing production
in 2008 and 2009 fell about one million
units short of the housing that would be
needed in a normally functioning economy,
suggesting that builders will have a lot of
catching up to do as the economy improves
and household formations return to trend
levels, according to a special study by
economists at the National Association of
Home Builders.
The report, "Extent of Underbuilding in
the Single-Family Housing Market," finds
that there was an excessive amount of
single-family building from 2003 through
2005, but overbuilding largely ended by
2006 and the subsequent downturn was
severe enough to more than offset those
annual surpluses. This year is likely to add
to the growing deficit of single-family
homes by another one million units, the
report finds.
"The single-family housing market in the
U.S. currently finds itself in a significantly
underbuilt state," said NAHB Chairman
Bob Jones, a home builder from Bloomfield
Hills, Mich. "Pent-up demand for housing
will at some point need to be worked off,
pushing single-family production in a
positive direction. In the meantime, the
deficit continues to grow as builders remain
cut off from the credit they need to begin
developing and building new housing."
The analysis compares levels of single-
family permits in recent years with the long-
term trend that would be seen if housing,
labor and credit markets were functioning
normally and generating a normal rate of
household formations.
Permits were used instead of housing
starts because they are based on a much
larger sample and provide more geographic
detail, which enabled the study to be
extended to the state level. (A building or
zoning permit represents housing units that
are authorized to be built. According to the
Census Bureau, all but a small percentage of
permits become starts. A start is when
ground is first broken for the foundation of
the building.)
Single-family permits plunged to a trough
of 441,000 in 2009, their lowest level since
World War II. The previous post-war low
occurred in 1981, when 550,000 single-
family permits were recorded. Adding to the
magnitude of the recent downturn,
multifamily starts and permits last year fell
below 150,000 units, an historic low,
compared to about 400,000 units annually
during the early 1980s.
"Moreover, the population and stock of
housing in the U.S. have continued to
expand," the report says. "In 1980, there
were roughly 226 million people and 88
DECEMBER 2010 7
million housing units in the country. By
2009, these numbers had increased to 307
million people and 130 million housing
Showroom:
units, so in that year the U.S. added a record
low number of new housing units to a
population and housing base that was larger
2131 Missouri
than it had ever been before."
From 1988 through 2003, the U.S.
population was growing at a fairly steady
average annual rate of 1.15 percent and
varied only between 0.90 percent and 1.35
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percent. During the recession, household
formations slowed markedly below this Thomas R. Brown, Owner
pace, delaying two million household
formations. The deficit in new single-family
homes can continue as long as household
formations remain depressed.
Over the 1988-2003 period — which goes
right up to the housing boom years of 2004
and 2005 and can be considered a fairly
normal one for housing — the number of
single-family permits issued was increasing
at an average of about 36,000 per year,
consistent with a growing population that
needs housing and an expanding inventory
of older homes that need to be replaced.
Projecting that trend past 2003, single-
family permits should have hit 1.4 million
by 2005, 1.5 million by 2008 and around
1.56 million in 2009, the report finds.
Instead, permits were well over 1.4 million
in 2003 and pushed past 1.6 million in both
2004 and 2005, "a period of serious
overbuilding."
Subsequently, however, permits dropped
to under 1.4 million by 2006 — already
slightly below trend — and continued to fall
through last year.
Single-family surpluses occurred from
2002 to 2006 and they were well over
Give your customers
200,000 annually in 2004 and 2005.
Deficits, which began to materialize after
2005, reached about a half a million units in
2007 and one million every year since then
the ‘option of the sun’
as single-family permits dropped below
500,000 — more than a million units per
year below trend.
Accumulating annual surpluses peaked at
493,000 single-family units in 2005, and
that was worked off entirely by the end of
2007. Depressed levels of single-family Now more than ever,
housing production resulted in a cumulative El Paso home buyers
deficit of 2.17 million units by 2009 and will are planning for the
likely grow to 3.28 million by the end of this
year. future.
The study also found that there are now
single-family housing deficits in most of the
states. This includes the states that had the
hottest markets during the boom: Arizona,
with a deficit of 144,500; California,
49,500; Florida, 112,600; and Nevada,
75,600.
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 DECEMBER 2010

EPAB ON THE SCENE
November Board of
Directors Meeting
November Board meeting draws good
attendance. A full house greeted interim
President Greg Bowling as the group
met for the first time since the change in
leadership. Topics discussed included
the upcoming events and a report from
several committees. The next scheduled
Board Meeting will be held after the
International Builders Show in January.
Please note the new time for the Board
Meeting as listed in the calendar of
events in this issue.

City Code Training

City brings code training to packed
house. Saturday’s are normally a day
when nothing goes on at the association,
but on this particular day the house was
full of supervisors and city staff. This
was the first presentation on the upcom-
ing International Building Codes ver-
sion 2009 that the City of El Paso will
be enforcing. Presenting the City side
was Albert Melgar who along with Ron
Roth gave those in attendance a compre-
hensive three hours of information. The
next code seminar is scheduled for
Saturday, December 18 at 9 a.m. at the
EPAB offices. Seating is limited.
 Realtor Association Installation
The Greater El Paso Association of Builders recently
held their installation dinner and awards banquet at the El
Paso Country Club. A good crowd was on hand to cele-
brate the accomplishments of GEPAR over the last year.
While many realtors did go through difficult times clearly
the theme at the installation was one of optimism and
hope. Installed as President for 2011 was Linda Bastraw.
Our new rep will be Angela Ochoa from Success Realty.
Dan Olivas added commentary and swore in the new
directors. Leading the EPAB delegation was President
Greg Bowling.

Risk Management Class

Risk Management class just not about steel toes. Builder
Agent Network in association with the Texas Association of
Builders and the Bush Firm, Attorney’s and Councilors from
Fort Worth, presented a risk management course to a group of
association builders. The 90 minute seminar revolved around
ensuring that builders clearly define the roles each subcontrac-
tor plays in the building of a house. Using the correct terms and
having signatures on the contracts was demonstrated by
Attorney James Rudnicki from the Bush Firm. Joining James
in the presentation was Kacey Birley from the Builder Agent
Network. Hosting them was Bruce Meyer from JDW
Insurance. Our thanks to all three companies for providing this
informational to our members.

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10 DECEMBER 2010 Builders Outlook

NAHB NEWS

Housing Remains Highly

Affordable For Seventh
Consecutive Quarter
Housing affordability remained near its
highest level nationwide for the seventh
consecutive quarter as interest rates dipped
below 5 percent for the first time since the
series was first compiled nearly two
decades ago, according to the National
Association of Home Builders/Wells Fargo
Housing Opportunity Index (HOI) released
today.
The HOI indicated that 72.1 percent of
all new and existing homes sold in the third
quarter of 2010 were affordable to families
earning the national median income of
$64,400. The index for the third quarter
almost equaled the record-high 72.5
percent set during the first quarter of 2009
and marked the seventh consecutive
quarter that the index rose above 70
percent. Until 2009, the HOI rarely topped
65 percent and never reached 70 percent.
"With interest rates remaining at
historically low levels, and house prices
starting to stabilize, homeownership is
within reach of more households than it has
been for almost 20 years,," said NAHB
Chairman Bob Jones, a home builder from
Bloomfield Hills, Mich. "While these
favorable conditions are beginning to draw
home buyers back into the market, builders
continue to have major problems in
obtaining credit for new-home
construction, and this obstacle must be
overcome if builders are to respond to
improving demand moving forward."
Indianapolis-Carmel, Ind., was the most
affordable major housing market in the
country, regaining the top ranking it held
for nearly five years after being edged out
by Syracuse, N.Y., last quarter. In
Indianapolis, 93.3 percent of all homes
sold were affordable to households earning
the area's median family income of
$68,700.
Also near the top of the list of the most
affordable major metro housing markets
were Youngstown-Warren-Boardman,
Ohio-Pa.; Grand Rapids-Wyoming, Mich.;
and Dayton, Ohio, and Wichita, Kan.
Among smaller housing markets, the
most affordable was Kokomo, Ind., where
96.1 percent of homes sold during the third
quarter of 2010 were affordable to families
earning a median-income of $61,400.
Other smaller housing markets near the top
of the index included Mansfield, Ohio;
Lima, Ohio; Monroe, Mich.; and Bay City,
Mich., respectively.
New York-White Plains-Wayne, N.Y.-
N.J., continued to lead the nation as the
least affordable major housing market
during the third quarter of 2010. In New
York, 22.6 percent of all homes sold during
the quarter were affordable to those
earning the area's median income of
$65,600. This was the 10th consecutive
quarter that the New York metropolitan
division has occupied this position.
The other major metro areas near the
bottom of the affordability scale included
San Francisco; Bridgeport-Stamford-
Norwalk, Conn.; Los Angeles-Long
Beach-Glendale, Calif.; and Santa Ana-
Anaheim-Irvine, Calif., respectively.
Santa Cruz-Watsonville, Calif. was the
least affordable of the smaller metro
housing markets in the country during the
third quarter. Other small metro areas
ranking near the bottom included San Luis
Obispo-Paso Robles, Calif.; Santa
Barbara-Santa Maria-Goleta, Calif.; Ocean
City, N.J; and Napa, Calif.
 Builders Outlook
INDUSTRY HEADLINES
From Bloomberg Financial News
Existing Home Sales Fall
Sales of existing homes fell more than
forecast in October as foreclosure moratoriums
and a lack of credit disrupted the U.S. housing
market.
Purchases decreased 2.2 percent to a 4.43
million annual rate from 4.53 million in
September, the National Association of
Realtors said today in Washington. Economists
projected sales would decline to a 4.48 million
pace, according to the median forecast in a
Bloomberg News survey. The median price fell
0.9 percent from a year earlier.
An overhang of distressed properties and an
unemployment rate hovering near 10 percent
may restrain home sales, while concerns over
faulty foreclosure proceedings threaten to
further delay the mending process. At the same
time, mortgage rates near record lows may help
limit the damage.
“There are still going to be quite a bit of
homes up for sales that have come from
foreclosures,” said Ryan Wang, an economist at
HSBC Securities USA Inc. in New York.
“There is little improvement.”
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NOVEMBER 2010 11
Estimates of the 71 economists surveyed by Month’s supply would need to drop to Foreclosures are mounting as out-of-work
Bloomberg ranged from 3.85 million to 4.7
million. In July, sales ran at a 3.84 million
around eight months in order to stabilize home
prices, the group has said in the past.
Americans can’t meet monthly payments while
growing numbers of homeowners, seeing their
annual rate, the weakest in a decade’s worth of Distressed sales, which include foreclosures home prices slide to less than their mortgage
record- keeping by the Realtors group. and short- sales in which the bank agrees to values, also default.
More Growth take less than the full amount of the mortgage, Unemployment forecast to average 9.3
accounted for 34 percent of total sales, about percent in 2011 is another reason why any
Another report showed the U.S. economy
the same as in prior months. recovery in housing may take years to evolve,
grew at a 2.5 percent annual rate in the third
The drop in sales last month “may be partly even with mortgage rates near record lows.
quarter, more than previously calculated, as
due” to the temporary foreclosure moratoriums, Housing starts declined in October for a
consumer spending and business investment
NAR Chief Economist Lawrence Yun said in a second consecutive month and were 77 percent
grew. The revised increase in gross domestic
press conference. A lack of mortgage lending is below the three-decade peak of 2.27 million
product compares with a 2 percent estimate
also preventing buyers from entering the reached in January 2006.
issued last month and a 1.7 percent rise in the
market, offsetting any benefit from lower D.R. Horton Inc., the second-largest U.S.
second quarter, figures from the Commerce
borrowing costs, Yun said. homebuilder by revenue, expects 2011 to be
Department. Corporate profits grew last quarter
The Fed’s second round of quantitative “challenging” for the industry as consumer
at a slower pace and an increase in employee
easing will probably be “not that meaningful” confidence and employment remain weak,
wages in the prior three months was almost
in pushing interest rates down much more, he Chief Executive Officer Donald Tomnitz said
twice as much as initially reported.
said. on a Nov. 12 earnings conference call. The
Stocks held earlier losses on mounting
tensions between North Korea and South Foreclosure Moratoriums spring selling season, the strongest for builders,
Korea, and concern grew Europe’s debt crisis Foreclosure moratoria at JPMorgan Chase & may fail to bring the traditional boost in
Co. and other banks, along with government demand, he said.
will spread. The Standard & Poor’s 500 Index
investigations into faulty paperwork, threaten By Timothy R. Homan in Washington at
fell 1.2 percent to 1,183.04 at 10:18 a.m. in thoman1@bloomberg.net
New York. Treasury securities rose, sending the to further delay a recovery as houses slated for
yield on the benchmark 10-year note down to repossession take longer to come to market.
2.74 percent from 2.80 percent late yesterday.
Compared with a year earlier, existing home
sales were down 28 percent before adjusting for
seasonal patterns.
Regional Breakdown
Sales last month fell in all four regions,
today’s report showed, led by a 3.4 percent
drop in the South.
The median price decreased to $170,500 last
month from $172,000 in October 2009.
Purchases of single-family homes fell 2
percent to a 3.89 million annual rate in October
from a month earlier, the group said.
The number of previously owned homes on
the market fell 3.4 percent to 3.86 million. At
the current sales pace, it would take 10.5
months to sell those houses, compared with
10.6 months in September.
12DECEMBER 2010 Builders Outlook
Builders Outlook
Membership News
UPCOMING EVENTS
December 14
EPAB Installation and
Awards Banquet
Camino Real Hotel
January 5
Associates Council Meeting
TTBD EPAB Office
January 19
Board Orientation 3:00
Board Meeting 3:30
EPAB Office
NEW MEMBERS
Texas Electrical
Contractors, LLC
Contact: Julian Carrizal
14100 Wagon Trail
El Paso, Texas 79938
915-478-0966
Alon Brands
Contact: Sonja Scanlan
2002 N. Piedras
El Paso, Texas 79930
915-342-0099
RENEWALS
AVX Wholesale
Circle H Homes, LP
Del Rio Engineering, Inc.
El Paso Times
EPT Land Communities
Foxworth Galbraith Lumber
Massey Johnson Associates
New Home Showcase
SODA SPONSOR
Jaime’s
915-549-4533
Bonded, insured for your peace of mind.
DECEMBER 2010 13
January 12-14
NAHB Winter Board
Meetings
and
International Builder’s Show
Orlando, Florida
January 21-23
Spring Home Show
El Paso Convention Center    
MEMBER ADVISORY:
Beto Loya Trim Co.
Contact: Roberto A. Loya The El Paso Police Department on behalf of Chief Greg
107 Chalk Mountain Ct. Allen would like to wish all our citizens and visitors a Happy
Santa Teresa, NM 88008 Thanksgiving and Holiday Season. The following are some
915-820-1680 holiday safety tips we would like the public to remember.
At Home:
• NEVER LEAVE YOUR CHILDREN ALONE
• Be sure to lock your doors and windows when you leave
your home.
• Do not display holiday gifts where they can be seen from a
window or doorway.
• Leave some lights on
• Leave a radio on
• Leave drapes/curtains in a normal position
• Mark your valuables with your driver’s license number
• Pickup mail and newspapers
Patriot Mortgage • Never give information about your home over the tele-
phone
Rocky Mountain Mortgage
•Always call police to report any suspicious activity
Company
Saratoga Homes, Inc. While Shopping:
• Always keep your children close to you
The Taft Company
• Do not shop alone
Zacour and Company • Never take more money than you need to make your pur-
chases
• Do not flash your money when paying for items
• Pay with a check card or credit card
Thanks to our  • Be aware of you surroundings
DECEMBER • Do not leave any purchases or purses unattended
SODA SPONSOR: • Do not overburden yourself with packages
Builder’s Source • Carry your purse close to your body
Your car:
• Lock your vehicle
Courier • Use any antitheft devices
• Do not leave any packages or values inside the vehicle
• Approach you vehicle with your keys out and ready
Service, Inc. • Park in well lighted areas
• Keep your vehicle in proper working order
• If something seems wrong, get help from security or call
or 915-478-2404 the police
14 DECMBER 2010
6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038
Council Reports
Land Use Council
Linda Troncoso
By Linda Troncoso
The Land Use Council is actively inThe
City of El Paso continues to peak the
attention of the Land Use Council. A few
weeks ago, the City Manager and City
Council of El Paso discussed the possible
implementation of Smart Code within the
City and possibly the ETJ. Council gave
staff direction to begin a study to evaluate
the means and ability to implement the
Smart Code. This is based upon the City of
El Paso’s continued quest towards “New
Urbanism.” Currently City Planning and
Engineering staff are in the process of
receiving training and certification in new
urbanism development methodology. The
basis of their certification includes the
book New Urbanism: Best Practices Guide,
Fourth Edition which includes alternative
roadway sections, density requirements,
setbacks, water harvesting methods, etc.
This is a valuable reference tool for all
developers dealing with the City of El Paso
in order to understand the basis of some of
AssociatesCouncil
Eric Lowenberg,
Emser Tile
Just a short message to all the El Paso
Association of Builders Associate
members: Thank you! Thank you all so
much for your participation and
involvement in our great association.
We have seen our share of ups and
downs this year, but I think we can be a
stronger association because of it. We
wish the best to those who have left us,
and offer our support to those coming to
join us.
As we look to a new year, the
Associates Council is pushing hard for
Builders Outlook
www.elpasobuilders.com
■ execuTive officerS ■ TAB STATe DirecTorS ALTerNATeS (A)
Greg Bowling, President
Tropicana Homes
Doug Borrett, Karam Co.
Randy Bowling, Tropicana Homes
Frank Torres, GMF Homes (A)
Del Huit, vice President
Cardel Design Group
■ NATioNAL DirecTorS
Bobby Bowling IV.
eric Lowenberg, Associates council 
Emser Tile Randy O’Leary
Greg Bowling
Kelly Sorenson, immediate Past President
Dakota Homes, Inc.
Sal Masoud
ray Adauto, executive vice President NATioNAL ASSociATioN of
El Paso Association of Builders Home BuiLDerS
(800) 368-5242
■ couNciL/commiTTee cHAirS
Affordable Builders Council Greg Bowling
Associates Council Eric Lowenberg
TexAS ASSociATioN of
the City’s recent requests on development Build PAC El Paso Bobby Bowling IV
BuiLDerS
projects. Desert Green Building Council Javier Ruiz
In addition, this month, City Council (800)252-3625
Government Affairs Council Pat Woods
also took action revise the zoning Industry Promotions Kelly Sorenson
conditions placed on property along Land Use Council Linda Troncoso
Transmountain Road east of I-10, which is Sal Masoud
scheduled to be effective in March 2011, Golf Committee Kathy Carrillo
pending the receipt of environmental Eric Lowenberg 2009 Builder member of The Year
documents. This change should clear the Jim Sorenson
Young Designer Award John Chaney
Classic American Homes
way to begin the Transmountain Road
widening and reconstruction project, which ■ ADviSorY To THe BoArD 2009 Pat cox Award
is scheduled to receive approximately $80 Tony Guel, El Paso Electric Company Doug Borrett
million in State funding. This is important J. Crawford Kerr, Attorney, Firth, Johnson The Karam Company
because as the availability of state funding & Martinez
2009 Associate of The Year
continues to dwindle, if this construction Alfred Moreno, Texas Gas Service Kathy Carillo
project does not move forward, funding Pioneer Bank
might not be available at a later date. ■ BoArD of DirecTorS
The Land Use Council would like to Danny Andrus, Trinity Homes
wish everyone a happy and safe holiday John Arranda, Southwest Securities Bank, FSB Honorary Life members
Joe Bernal, Joe Bernal Insurance Wayne Grinnell
season, and we look forward to everyone’s Cindy Bilbe, Stewart Title Don Henderson
participation Land Use Council Meetings David Bogas, EPT Communities Chester Lovelady
at the start of a new year. Happy Holidays! John Chaney, Passage Supply Cliff C. Anthes
Justin Chapman, Hunt Communities Anna Gill
Sergio Cuartas, BIC Homes
Edmundo Dena, Accent Homes Past Presidents
Ted Escobedo, Snappy Publishing committed to Serve
Art Garcia, El Paso Door
Juanita Garcia, ICON Custom Home Builder,LLC
Danny Gerard, Desert Agave Builders, LLC Mark Dyer Bobby Bowling, IV
Nathan Gordon, Dunn –Edwards Wellborn Paints Mike Santamaria Rudy Guel
Miguel Herrera, Simply the Best Custom Homes John Cullers Anna Gill
Lorraine Huit, Cardel Homes Randy Bowling Bradley Roe
Bob Kotarski, City Bank of El Paso Doug Schwartz Bob Bowling, III
Walter Lujan, Dawco Home Builders Del Huit Pat Woods
Yolie Melendez-Estrada, Teacher’s FC Union Herschel Stringfield EH Baeza
Robert Najera, Joseph Homes Robert Baeza
Kelly O’Leary, Desert View Construction
Jose Ortiz, Foxworth-Galbraith Lumber ePAB mission Statement:
Kathy Parry, Hunt Communities The El Paso Association of Builders is a
Bob Paschich, Oeste Homes federated professional organization representing
Donald Rasette, Rassette Homes the home building industry, committed to
maximum participation from our Ruben Rivera, the Taft Company enhancing the quality of life in our community by
members. We will be very active in the Kathy Rose, Builders Source providing homes of excellence and value
goings on of the EPAB and will do all we David Samaniego, Ferguson
Regina Sanchez, Compass Bank The El Paso Association of Builders is a
can to succeed in all that we do. I urge Sam Shallenberger, Western Wholesale 501C(6) trade organization.
all of you to participate in our meetings, Frank Spencer, Aztec Contractors
join our committees, take part in our Frank Torres, GMF Homes
networking activities and jump into a Linda Troncoso, Gray-Jansing & Associates
© 2010 Builder’s Outlook
leadership role where ever you think you Javier Veloz, Zia Homes
is published and distributed for the
feel comfortable. Lorraine Wardy, El Paso Sanitation Systems
El Paso Association of Builders
Merry Christmas and Happy Paul Zacour, Zacour & Associates
by Snappy Publishing
Holidays to you all as we look forward to 240 Thunderbird • Suite C
a prosperous 2011! El Paso • Texas • 79912 915-820-2800
915-778-5387