Advanced framing techniques increase energy-efficiency

An effective building envelope – the first floor, exterior walls, and roof – is a key element for an energy-efficient home. Advanced framing techniques increase efficiency and comfort while decreasing costs.

 Most homes in Boise are framed with wood and wood loses or gains heat more quickly than insulation. In wood frame construction, studs, joists and rafters are placed at regular intervals throughout the building envelope. Standard construction practice places these framing members at 16 inches on center. The cavities formed by the framing members are filled with insulation. Standard construction practice at exterior corners and at the intersection of interior partitions and exterior walls creates pockets that are difficult or impossible to insulate and air seal. The unnecessary use of wood displaces insulation and degrades the thermal efficiency of the building envelope.

 By eliminating unnecessary framing members, advanced framing increases the thermal resistance of the building envelope without compromising structural integrity.  Advanced framing techniques include:

 In-line framing

 Wall studs, floor joist, and roof trusses are spaced 24 inches O.C. and aligned directly over top each other to promote thermally efficient walls, increase structural efficiency, reduce drywall cracking, and reduce wood waste.

 2 X 6 – 24 inch o.c. exterior wall framing

 2 x 6-inch studs set 24 inches apart instead of 2 x 4 inch studs set 16 inches apart are used to allow more room for insulation, reduce heat loss and heat gain due to thermal bridging through the studs, enhance the strength of the house, and reduce the overall amount of wood used in the construction of the home.

 Exterior corners and intersections of interior partitions and exterior walls

 Exterior corners and intersections of interior partitions and exterior walls are framed to allow space for insulation preventing uninsulated spaces in exterior walls and reduce heat loss and reduce the overall amount of wood used in the construction of the home.

 Insulated door and window headers

 In single story homes and in second floor walls of two-story homes, single-ply headers are used in load-bearing walls to allow for partial insulation. In non-load bearing exterior walls, headers are eliminated entirely to allow for full insulation. In two-story homes, a structural rim joist is used to eliminate the need for headers in first floor exterior walls allowing for full insulation.

 Raised heel roof trusses

 The heels of roof trusses where they bear on the outside walls are raised to allow for R-42 attic insulation to extend over the exterior walls reducing heat loss and improving attic ventilation.

 Engineered lumber

 Using engineered I-joists and beams, and OSB sheathing reduces problems associated with shrinkage and warpage, allows more flexibility in design, and reduces the impact on old growth forests.

 Benefits of advanced framing

 Improved comfort

 Increasing wall insulation and eliminating air spaces increases the overall R-value and integrity of the building envelope resulting in walls that are warmer in winter and cooler in summer. Approximately 40 percent of our physical comfort is due to the radiant heat exchange between our bodies and the surrounding interior surfaces. Advanced framing reduces this radiant heat exchange maintaining a more consistent level of comfort throughout a house.

 Reduced framing cost

 Advanced framing reduces the amount of lumber and labor needed to build your home – up to a 25 percent reduction in the amount of wood used. The cost savings are “reinvested” in additional energy-saving features such as increased insulation and high efficiency heating and cooling equipment.

 Lower utility bills

 By reducing the amount of heat and air that flows through the building envelope, advanced framing results in lower utility bills.

Chuck Miller GMB   CGP  CGB   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Posted in: Uncategorized

Leave a Comment (0) →

Building an energy-efficient home in Boise, Idaho

The 2010 AVID Home Design Driver Research Survey showed that the majority of home buyers rated energy efficiency as a “Must Have” for their new homes.  Although Boise and southwestern Idaho have some of the lowest power rates in the nation, home buyers still want their new homes to be energy efficient. 

How do you build an energy-efficient home in Boise, Idaho and how much more does it cost?  The U.S. Department of Energy’s Building America Program has shown that new homes can be both energy efficient to live in and cost effective to build.  In fact, the energy consumption of new houses can be reduced by 40% or more with little or no impact on the cost of ownership.

Building America works with members of the home-building industry to produce quality homes that use less energy without costing more to build.  The goal is to develop cost-effective solutions that dramatically reduce the average energy use of housing while improving comfort and quality.  This is accomplished through a systems engineering approach to homebuilding.

Systems engineering

The systems engineering approach considers the interaction between the building site, envelope, and mechanical systems, as well as other factors, throughout the design and construction process,  It recognizes that features of one component in the house can greatly affect others and it enables builders to incorporate energy-saving strategies at no extra cost . Systems engineering allows builders to identify improvements to the design of a home that will ultimately save money.  For example, the design might incorporate advanced framing systems that require less wood and labor.  The saving on lumber and framing labor can then be reinvested in improved insulation or high-performance windows.  Controlling building envelope leakage by tightening the building envelope enables builders to install smaller, less expensive heating and cooling systems. These savings can then be reinvested in higher-efficiency equipment..

Other examples of systems engineering cost-saving trade-offs include:

Proper placement of heating and cooling systems allowing shorter duct runs saving material and installation costs.

Locating ducts in the interior, conditioned space of a home (as opposed to in exterior walls or unconditioned attic spaces) eliminates loss of conditioned air to the exterior allowing the use of smaller, less expensive heating and cooling systems.

Future articles will discuss each of these cost-effective solutions in more detail. 

Next, Advanced Framing.

 

Chuck Miller GMB   CGB CGP   MIRM   CMP   MCSP   CSP
President / Builder – Chuck Miller Construction Inc.
(208) 229-2553 or (208) 571-0755

 

Posted in: building, cost of building, green building, home building

Leave a Comment (0) →

What do buyers want in a green home?

The 2010 AVID Home Design Driver Research Survey provides some insight into what features today’s home buyers equate with a green home. AVID Ratings is a a leading provider of enterprise-level surveys specializing in the home building industry. The AVID survey studied the preferences of nearly 12,000 North Americans who have built a new home in the past nine years. The survey participants were selected because, having been through the process of building a new home, they would understand the trade-offs and cost factors involved

The survey included six buyer segments, defined as

  • First Time Buyers – Growing families seeking initial homeownership and single/couples (no kids) seeking initial homeownership
  • Move Up Buyers – Single/couples (no kids) seeking larger/better home and growing families seeking larger/better home
  • Second Home Buyers – Professionals seeking secondhome (vacation home)
  • Displaced Buyers – Professionals relocating and families seeking a smaller home due to change in family situation
  • Empty Nester Buyers – Semi-retirees/retirees seeking age restricted communities or mixed-age communities
  • Custom Home Buyers – Seeking custom luxury homes

Survey participants were asked what they would choose if they were to build a new house today. Features were rated as

  • Must Have
  • Really Want
  • Might Be Nice If Affordable
  • Might Be Nice If Included
  • Not Important

Overall, survey respondents labeled 60% of the green features as “Must Haves.”

Paul Cardis, CEO of Avid, oversaw the report and says “The interest in energy efficiency surprised us.”

Energy-Efficiency was rated as a “Must Have” by all buyer segments. 74.2% of Custom Buyers, 63.9% of Second Home Buyers, 62.5% of Empty-Nesters, 57.7% of First Time Buyers, 52.6% of Displaced Buyers, and 51.6% of Move-Up Buyers rated energy efficiency a “Must Have”

What were the green features considered “Must Haves?”  Energy-effiency features like energy-efficient appliances, high-efficiency insulation, and high-window efficiency were rated as “Must Have” by the majority of the respondents in all but one buyer segment in one category.  With U.S. Displaced Buyers, high-window efficiency was considered a “Must Have” feature by 38.8% of the respondents while 42.5% rated it as “Really Want.”

All but one buyer segment rated Recycled/Synthetic Materials as “Might Be Nice If Affordable.” 35.5% of U.S. Empty Nesters rated it as “Really Want” while 33.9% considered it “Might Be Nice If Affordable.”

Chuck Miller GMB   CGP  CGB   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Posted in: building, green building, home building, marketing, real estate

Leave a Comment (0) →

May is National Remodeling Month

Did you know that May is National Remodeling Month?  Since the downturn in new residential construction that began in 2007, the media has been focusing on the number of new starts as the key indicator of the health of the residential construction industry.  But focusing on the number of starts ignores an increasingly important component of residential construction – remodeling.

Not only is May National Remodeling Month but, according to David Crowe, Chief Economist for the National Association of Home Builders, depending upon how you measure it, remodeling has taken over first place in total residential construction expenditures.

There are two measures of remodeling activity.  The U.S. Census Bureau measure or residential construction spending only counts improvements to owner-occupied homes.  In January 2010, that component accounted for 48% of all residential construction spending.  Prior to the recent mid-decade construction boom, improvements to owner-occupied homes accounted for approximately 25% of all new-residential construction spending.  During the boom, it fell to 21%.  But improvements to owner-occupied homes have exceeded new-single family construction value since February 2009.

The U.S. Department of Commerce’s Bureau of Economic Analysis which measures the U.S. Gross Domestic Product includes within its residential construction spending accounts for residential remodeling of rental, vacant, and second homes in addition to owner-occupied homes. In 2008, this broader measure of residential improvement expenditures accounted for 42% of all residential construction,  In 2009, it is expected to top 50%. Prior to the mid-decade construction boom, this broader measure of residential improvement expenditures averaged around 30% of all residential construction spending.  It fell to 25%.  But improvements to owner-occupied homes have exceeded new-single family construction value since February 2009.

Professional remodeling activities are concentrated in the 85 million homes that are 25 years old and older.  About one-fifth of the owners of these homes spent and average of $11,400 on professional remodeling in 2007.

There are two primary drivers – the energy tax credits and the Baby-Boomers who are choosing to remain in their existing homes.

Improvement to increase the energy-efficiency of your home and remodeling for Aging-in-Place to allow you to live in your home independently regardless of age or ability are two of our specialties.  To learn more, visit our website www.chuckmillerconstruction.com.

 Chuck Miller GMB   CGB   CGP  MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553  (208) 571-0755

chuck@chuckmillerconstruction.com

Posted in: Remodeling

Leave a Comment (0) →

Inflation Trends and Building Material Prices

For the past five months (September 2009 through January 2010), the Consumer Price Index (CPI) has risen 0.2% per month. Building materials prices are an exception to general inflation trends, which appear to be tame.

On a year-over-year basis, the Consumer Price Index (CPI) is up 2.6%. Excluding food and energy, the index is up 1.6% from a year ago. A broader measure of inflation used by the Federal Reserve — the price index for personal consumption expenditures excluding food and energy — rose 1.6% in the fourth quarter at a seasonally adjusted annual rate and 1.5% from fourth quarter 2008.

However, an index produced by the Bureau of Labor Statistics that tracks building material prices for builders of single-family homes and multifamily structures has now risen three months in a row.

Although on a year-over-year basis, the single-family index is up only 0.3% and the multifamily index is up a slight 0.2%, in January, both measures jumped 1.0% from December. Chief contributors to the recent rise are lumber, fuel products (gasoline and diesel), plumbing fixtures and copper products.

With a number of countries around the world on the expansion path, building material prices are likely to continue to rise in coming months.

The recent earthquake in Chile will disrupt supplies of some imported building materials — in particular, moldings and door frames. These items can be, and likely will be, replaced by items from other countries, but at a higher price. But Chile is also a major exporter of copper, and although the mines escaped direct damage, operations and shipping will likely be delayed as the country recovers. So far, copper prices on the COMEX are up about 4% since the quake.

Are you waiting for the price of that new home you’d like to build to drop further?  I wouldn’t.

Chuck Miller GMB   CGB  CGP   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

chuck@chuckmillerconstruction.com

Posted in: building, building material prices, cost of building, home building, real estate

Leave a Comment (2) →

Construction Worker Rated the 8th Worst Job

The headline read “Construction Worker Rated the 8th Worst Job.”  Being a Builder who started out as construction worker, I just had to investigate further.  Here is what I found.

The headline referred to JobsRated.com’s 2010 Jobs Rated report which the website says “offers a comprehensive analysis of 200 different jobs giving each a unique ranking based on factual analysis and hard data, not guesswork.”

The report compares and contrasts careers across a multitude of industries, skill levels and salary ranges using five key measurement criteria – stress, working environment, physical demands, income and hiring outlook – and sorting them into a definitive list of jobs that can be called “worst” and “best.”  Jobs receive a score in each individual category, and when these are added together, the career with the best overall score is ranked 1st, while the one with the worst overall score is ranked 200th.  They noted that, in compiling the list of highly-ranked jobs for 2010,  researchers sought to find careers that are likely to provide a positive experience for a majority of employees, not just the uniquely talented. The top careers in the report “are the jobs that offer the greatest chance of enjoying a combination of good health, low stress, a pleasant workplace, solid income and strong growth potential.”

Of the 200 different jobs, 22 or 11% were construction related careers.  Here is how they ranked.

Rank Job
33 Civil Engineer
48 Architectural Drafter
71 Mechanical Engineer
86 Architect
110 Construction Foreman
119 HVAC Mechanic
120 Surveyor
141 Glazer
145 Realtor
150 Plumber
153 Electrician
159 Painter
164 Drywall Installer / Finisher
167 Construction Equipment Operator
169 Carpet/Tile Installer
170 Plasterer
171 Carpenter
173 Bricklayer
179 Roofer
187

Sheetmetal Worker

193 Construction Laborer
198 Ironworker

 For the Construction Laborer job which was the topic of the headline, the article listed both the Pros: Good income potential with overtime, opportunity to become an independent contractor and start your own business; and the Cons: Extreme, physically demanding labor in all weather conditions, risk of injury or death, poor hiring outlook in a struggling economy, seasonal layoffs.

In fact, it appeared that the poor hiring outlook was a big factor in most of the construction-related jobs.  Understandable considering that unemployment in the construction industry is currently 23.7%.  But regardless of the current outlook, I believe it is important to note that according to the U.S. Department of Labor, as the economy recovers and construction returns to normal levels, there will be a need for an additional 1.1 million construction trades people.  This figure does not include construction management positions.

What I found interesting were the rankings of some of the non-construction related careers.  Teacher ranked 116. Physician ranked 128.  Commercial Airline Pilot ranked 129.  Senior Corporate Executive ranked 133.  Surgeon ranked 136.

So what was the Top Rated Job? Actuary – someone who interprets statistics to determine probabilities of accidents, sickness, and death, and loss of property from theft and natural disasters.

I think I’ll stick with construction.

Chuck Miller GMB   CGP  CGB   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Posted in: building, home building, real estate, Remodeling, Uncategorized

Leave a Comment (0) →

The Business of Building – Part 2

Welcome to the second in my series of blog posts on the Business of Building. We started Part 1 with a quiz. I asked what the average Net Profit for a Builder is in a normal market. The correct answer was C. 3.7% to 8.7%. That was based on the National Association of Home Builders 2004 Cost of Doing Business Study. Here is today’s quiz.

In 2008, what was the average Net Profit for a Builder? Was it

A. 11.0% to 20.0%
B. 14.4% to 15.1%
C. 0.0% to 4.4%
D. -3.7% to -1.4%

The correct answer is D. -3.7% to -1.4%. It should be no surprise that the results for 2008 vary considerably from the results for 2004 especially if you are a Builder. As with the 2004 Cost of Doing Business Study, the range reflects the differences between Builders who built on land they developed or purchased and Builders who built exclusively on their customer’s land. Builders who built exclusively on their customer’s land were the only Builders who made a profit.

As noted in Part 1, the difference between the Builder’s Gross Profit Margin and Net Profit is the Builder’s expenses which included his or her General and Administrative Expenses, Financing Expenses, and Sales and Marketing Expenses. General and Administrative Expenses ranged from 5.8% to 13.1% and include employee salaries; payroll taxes, insurance, and other benefits; office expenses; vehicle expenses; taxes; general liability insurance; accounting and legal service fees and expenses, and depreciation. Financing expenses ranged from 0.4% to 3.4% and include interest lines of credit and construction loans; and closing costs. Sales and Marketing expenses ranged from 0.5% to 8.1% and include commissions, website hosting and maintenance, and other advertising and promotion expenses.

One thing that didn’t vary considerably between the 2004 study and the 2008 study was the Cost of Sales, which includes the land cost, the direct costs (the sticks and bricks and labor), and the indirect costs (permit fees, temporary utilities, etc.) In 2004, the Cost of Sales ranged between 79.1% and 83.2%.
In 2008, the Cost of Sales ranged between 80.1% and 90.6%.

As I cautioned in my last post, if you are waiting for the price of that new home you’d like to build to drop further? I wouldn’t.

Chuck Miller GMB CGP CGB MIRM CMP MCSP CSP
President / Builder – Chuck Miller Construction Inc.
(208) 229-2553
www.chuckmillerconstruction.com

Posted in: Uncategorized

Leave a Comment (0) →

Are You Waiting to Buy or Build? Don’t Wait Too Long.

For the 80 percent of home buyers who need a mortgage to buy a home, the two major factors that determine affordability are mortgage interest rates and house prices.  It appears that many buyers have been waiting for home prices to fall further while hoping that mortgage interest rates will remain at their current lows hovering around 5%. 

The key catalyst for interest rates in 2010 will be the end of a Federal Reserve program that buys a sizable chunk of mortgage-backed securities issued by firms such as Fannie Mae and Freddie Mac. That program succeeded in immediately pushing mortgage rates well below the 6 percent mark when it was announced in 2008.

But the Fed has committed to winding down the program by March. The deputy chief economist at Freddie Mac said interest rates are bound to rise to 6 percent by the end of 2010 because private buyers will demand a higher rate of return on the securities than the Fed did. Lenders will have to raise the rates they charge to home buyers in order to make that happen.

According to the Federal Housing Finance Agency, the average purchase price of homes in November 2009 was $247,300.  The average loan amount was $182,000 or 73.6% of the purchase price and the average interest rate was 5.09%.  As you can see from the table below, a one-quarter percentage point change in mortgage interest rates has about the same impact on affordability for the average priced  home as a 2% change in the purchase price or a 2.7% change in the loan amount.

 As interest rates rise, home buyers who wait thinking that house prices will fall further will need to see up to another 7 percent decline in prices to maintain the same level of affordability. 

And if you follow the Recent News posting on my website www.chuckmillerconstruction.com , you know that the cost to build a new home is not declining.

Chuck Miller GMB   CGB  CGP   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

chuck@chuckmillerconstruction.com

Posted in: Uncategorized

Leave a Comment (0) →

The Business of Building – Part 1

Welcome to the first in my series of blog posts on the Business of Building.  Let’s start with a quiz.

In a normal market, what is the average Net Profit for a Builder?  Is it

  1. 21% to 30%
  2. 17.3% to 20.9%
  3. 3.7% to 8.7%
  4. -5% to 0%

 

It has been my experience as a home builder that most home buyers have a real misconception regarding what percentage of the price of a new home is the Builder’s profit.  The correct answer is C, 3.7% to 8.7%.  The range reflects the differences between Builders who built exclusively on their customer’s land, Builders who built on land they developed or purchased, and Builders who built on both.

Type of Builder Gross Profit Margin Net Profit
All Builders 17.3% to 19.0% 3.7% to 5.4%
Small-Volume Builders (1) 16.8% to 19.5% 3.2% to 5.5%
Production Builders (2) 18.5% to 20.9% 5.4% to 8.7%
     
Notes:(1) Builders who build 25 or fewer single-family homes per year
(2) Builders who build 26 or more single-family homes per year
Source: NAHB Cost of Doing Business Study

 

The difference between the Builder’s Gross Profit Margin and Net Profit is the Builder’s expenses which include his or her General and Administrative Expenses, Financing Expenses, and Sales and Marketing Expenses. General and Administrative Expenses range from 8.3% to 12.9% and include employee salaries; payroll taxes, insurance, and other benefits; office expenses; vehicle expenses; taxes; general liability insurance; accounting and legal service fees and expenses, and depreciation.  Financing expenses range from 0.3% to 0.9% and include interest lines of credit and construction loans; and closing costs. Sales and Marketing expenses range from 0.9% to 3.8% and include commissions, website hosting and maintenance, and other advertising and promotion expenses.

The Net Profit is what enables the Builder to continue to operate when business is slow and revenues are down.  It’s what enables them to perform warranty and maintenance services on their finished homes.

According to BuildIdaho.com, the average sales price for new homes is approximately $190,000 in Ada County and $145,000 in Canyon County.  For a small volume builder in a normal market, the average net profit on that new home in Ada County would be somewhere between $6,080 and $10,450. Considering that new home takes approximately 90 to 150 days to build, that equates to $1,216 to 3,483 a month.

Are you waiting for the price of that new home you’d like to build to drop further?  I wouldn’t.

Chuck Miller GMB   CGP  CGB   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Posted in: builder profit, building, home building, real estate

Leave a Comment (3) →

The End of the McMansion – I Think So

 

The median size of new homes in the U.S. increased from just over 1,500 square feet in 1973 (the first year the Census Bureau began tracking new home size) to 2,309 square feet at its peak in 2007.  The median size has declined almost 10% since then.  Will the trend to smaller-sized homes persist?

While it is unlikely that new homes will continue to decline, I think we have seen the end of the McMansion.

NAHB’s Chief Economist David Crowe, although he didn’t proclaim the end of the McMansion, believes that the trend to smaller homes may last longer than in past recoveries.

Baby-Boomers, although they might wish to downsize, might be unable to do so due to their inability to sell their existing McMansions because of an oversupply these larger homes and downward price pressure coupled with their recently decimated wealth. However, immigrant households with their lower incomes while they may be unable to afford new larger homes, might be able to purchase the Baby-Boomers existing homes allowing the Baby-Boomers to downsize into smaller new homes.

Gen X’ers could be driven to purchase smaller, more affordable homes due to affordability barriers combined with the more stringent lending standards and fewer mortgage options resulting from the subprime mortgage fiasco.

The sheer number of Gen Y households projected to increase by between 2.0 million and 3.4 million should keep the demand for smaller starter homes strong for the next 10 years.

The trend to single-person households and women as heads of households should also support the trend to smaller-sized homes.

While the rising cost of energy could also drive some buyers to purchase smaller homes, this may not be enough to drive the trend to smaller homes.

The information presented in this series of blogs appears to support a continuation of the trend to smaller homes and the end of the McMansion. However, all real estate is local and the impact of the changes I have discussed will vary by market.  Each market will experience these changes to varying degrees and at varying times, but it is reasonably certain that they will experience them.

The National Association of Home Builders Institute of Residential Marketing (IRM) courses will teach you how to do market research so that you understand your local housing market and your potential customers. The BCASWI Sales and Marketing Council is offering IRM I – Understanding Housing Markets and Consumers on February 16th and 17th in Boise, Idaho.  In IRM I, you’ll gain knowledge of the demographic, economic, and psychographic factors that affect housing supply and demand and learn to employ a model that projects opportunities for specific local markets.  For more information and to register, contact me or the BCASWI.

Chuck Miller GMB   CGP   CGB   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Posted in: building, home building, land development, marketing, real estate

Leave a Comment (2) →
Page 5 of 7 «...34567