By Patrick L. O’Toole, Publisher and Editorial Director
October 23, 2011
NHQ Awards, Wathen Castanos Hybrid Homes, National Housing Quality Awards

NATIONAL HOUSING QUALITY AWARDS

The home-building business tends to be dominated by owner-operators. The types of people that launch businesses typically take charge of that business and only reluctantly does that original entrepreneur hand over the reins to someone else. Other owner-operators, who do reach a point where they would like to move on, find out too late that they have not laid adequate plans to transition the business to new owners. Many obstacles block their path to retirement and they keep working. Chief among those obstacles are a lack of repeatable systems and processes, without which, a new owner from outside the company is reluctant to buy into the business. Another obstacle: capable internal leaders have not been properly identified and groomed for leadership.

As a past winner of a National Housing Quality Bronze Award, Wathen Castanos Hybrid Homes Inc. has successfully navigated major transitions in the past. When the housing market came to a particularly precipitous crash in their home region — California’s Central Valley — company leaders pivoted to position the firm as a leader in green and sustainable homes. They even borrowed the term “hybrid” from the automotive industry so there would be no confusion about the kind of homes they build. At the same time, the company implemented an admirable system of total quality management that helped improve the company’s levels of customer satisfaction and its ability to navigate treacherous local economic conditions. A different and perhaps more difficult transition in owner-management power sharing is ultimately what helped the firm garner a second National Housing Quality Award, this time a Silver Award, explains company president, Mike Nimon.

“The owners of this company (Kevin Castanos and Richard Wathen), along with the management team, devised a business plan that would allow the operators of the business — the directors, managers, and executives of the company to operate the company while the owners provided review,” Nimon explains. “They are an executive board with oversight and are engaged in the team as needed based on their resources and some of their past expertise and yet not directly in touch with the company.”

This transition laid the groundwork for the implementation of a new business plan — one that is reviewed weekly against goals — with stated objectives two and three years out. Implemented only a year ago, the business plan is the centerpiece of the conversation between owners and managers when they meet each week. It has also helped create a sense of long-term vision that has enabled a talented stable of managers and employees feel secure in the direction of the firm. For example, goals for 2012 require that the firm build six new model complexes this fall in order to get ready for the post-Super Bowl, spring selling season.
According to Laura Mather, VP of marketing and communications for the company, the new structure has brought clarity and a sense of direction that allowed team members to focus on the long term.

“With Kevin and Rich wanting to take a different direction at this point in their careers, there was a lot of concern among our people. What was going to happen? What are we going to do as a company because of the economic environment that we are in as a company? Are we going to continue to buy land?” says Mather. “The business plan brings clarity, because it is shared with all of our employees. They can see that we are purchasing land and that we’ve got six projects in the pipeline, and that brings a sense of job security and clarity. It is a long-term plan versus a month-to-month or every six months approach. Our plan goes out two to three years.”

With owners and managers working together in new ways and working from the same playbook, the company has been freed up to focus on improvement in key areas. Among its goals: increasing to 30 percent the number of clients who fall into the company’s highest level of customer satisfaction — “Evangelical” buyers. These are buyers who give the company perfect scores in 12 key areas of satisfaction. By January of 2011, the company had already exceeded its goal. It posted a level of 39 percent of evangelical buyers and the number climbed steadily higher as the months went by. In August, the figure approached 60 percent of buyers at the evangelical level.

Nimon, Mather, and other members of the management team — including Lorie Walker, director of customer service; Peter Castanos, director of sales; Josh Peterson, CFO; and Freddie Logue, director of construction — all emphasized the importance of having a fact-based company culture, one that discourages the “construction versus sales” and “us versus them” types of scenarios. Work Improvement Groups, or WIGs, have been an important factor in creating the flatter organization that avoids internal gamesmanship. Led by employees, WIGs tackled seven key company initiatives in 2010. Almost every member of the company’s 28-member team participates in a WIG. For 2011, WIGs focused on creating a Quality Process Procedural Manual, a Hot Spot Improvement Process, and an Employee Growth and Goals Initiative, among others.

This kind of team work, says Lorie Walker, has improved the customer’s experience as they go through the sales and building process. They don’t feel as if they are being shifted from one department to another, creating a more seamless experience. As a result, the company has increased its referral rate dramatically from 22 percent in 2009 to 33 percent in 2010, with further gains expected this year. In 2011, the company will increase its number of closings to in excess of 210, up from 194, all while holding the line on its number of full-time employees.

“Our new business plan has allowed our people to feel secure in their roles and therefore be more productive in them,” says Nimon. “This year we have actually begun using words that have not been in our vocabulary for awhile — words like ‘hire’ and ‘profit’ and ‘sharing’ and ‘bonuses’ that tie to specific objectives or a company. These gains have come out of this business plan and have reinforced that the plan is working.”
The 2,028-square-foot Jordan floor plan is the builder’s best-seller.

Wathen Castanos Hybrid Homes
Fresno/Clovis, Calif.

Established: 1985
No. of homes built in 2010: 194
Markets served: 1
Notable benchmarks:
• Work Improvement Groups — Specific team “chartering” that uses DMAIC (define, measure, analyze, improve, and control) methodology to empower employees’ leadership toward solutions.
• Extensive home buyer touch points — Builder-to-buyer communication by sales, construction, design, lender, and Customer Care at planned experience points.
• Process mapping — Strategic team process mapping that identified more than 20 areas of team improvements centered around our mission.
• Third-party verification — Confirmation of quality results verified to an industry, third-party standard (e.g., Builders Challenge, Energy Star).
• Strategic goal setting — Monthly, quarterly, and yearly goals tracked by a dashboard matrix to measure success.
• Weekly staff success recognition — All staff have annual goals that are defined in weekly practice objective sessions and recognized by the president in success updates.

http://www.housingzone.com/awards/nhq-awards-empowering-improvement-wathen-castanos-hybrid-homes

FRESNO, Calif. (KFSN) — A housing development in Northwest Fresno is now offering homes especially for those 55 and older.

Forkner Crest held its grand opening Saturday on Forkner Avenue, between Bullard and Barstow. The homes are constructed by Wathen Castanos and all feature hybrid technology for energy efficiency.

The gated community is exclusively for those over 55 years old. Its builders say it fills a specific need in the area.

“What we’re doing is responding to a market niche in Northwest Fresno. There hasn’t been a whole lot of new development in the Forkner Van Ness extension area so it fits well,” said Peter Castanos.

Homes at Forkner Crest start at around $250-thousand. A total of 36 will be built at the development — and nine houses have already been sold.

The Echo solar system is now powering net zero energy homes in communities across California and the Southwest. Meritage Homes, one of the nation’s largest Top 10 production homebuilders, just introduced their Echo-powered line of new, highly affordable net zero energy homes. C.R. Herro, vice president of environmental affairs for Meritage Homes, said: “Meritage Homes is delivering the next phase of what we’re calling a residential revolution. The net zero energy home powered by Echo illustrates how new homes can and should be built.”

Other innovative builders (outside of the production home environment) are also utilizing Echo to deliver a net zero energy home today. ZETA Communities, a producer of net zero energy / highly energy-efficient homes, has installed Echo in a net zero energy home recently completed in their Sacramento, CA factory. “Echo, in conjunction with our advanced manufacturing technology, can deliver net zero energy homes cost effectively to the general public,” said Andrew Silverman, vice president of project development at ZETA.

“Echo is an affordable, practical solution for homebuilders and homeowners who want a complete solution to their energy problem. With Echo, a net zero energy home is no longer ‘the home of the future’ — it’s a practical, available option today,” said Vikas Desai, CEO of EchoFirst. “Echo delivers zero energy home performance — and the beautiful roof-integrated aesthetics and curb appeal demanded by builders and homebuyers alike.”

About EchoFirst Inc.
EchoFirst Inc. designs, manufactures, and markets the Echo solar system. Echo supplements conventional solar electric PV panels with a unique solar thermal technology that captures the heat from the PV panels. Echo generates not only electricity, but also hot water for washing and bathing, and thermal energy for home heating and home cooling. EchoFirst headquarters are in Fremont, California. For more information, please visit www.echofirst.com.

The Echo solar system is now powering net zero energy homes in communities across California and the Southwest. Meritage Homes, one of the nation’s largest Top 10 production homebuilders, just introduced their Echo-powered line of new, highly affordable net zero energy homes. C.R. Herro, vice president of environmental affairs for Meritage Homes, said: “Meritage Homes is delivering the next phase of what we’re calling a residential revolution. The net zero energy home powered by Echo illustrates how new homes can and should be built.”

Other innovative builders (outside of the production home environment) are also utilizing Echo to deliver a net zero energy home today. ZETA Communities, a producer of net zero energy / highly energy-efficient homes, has installed Echo in a net zero energy home recently completed in their Sacramento, CA factory. “Echo, in conjunction with our advanced manufacturing technology, can deliver net zero energy homes cost effectively to the general public,” said Andrew Silverman, vice president of project development at ZETA.

“Echo is an affordable, practical solution for homebuilders and homeowners who want a complete solution to their energy problem. With Echo, a net zero energy home is no longer ‘the home of the future’ — it’s a practical, available option today,” said Vikas Desai, CEO of EchoFirst. “Echo delivers zero energy home performance — and the beautiful roof-integrated aesthetics and curb appeal demanded by builders and homebuyers alike.”

About EchoFirst Inc.
EchoFirst Inc. designs, manufactures, and markets the Echo solar system. Echo supplements conventional solar electric PV panels with a unique solar thermal technology that captures the heat from the PV panels. Echo generates not only electricity, but also hot water for washing and bathing, and thermal energy for home heating and home cooling. EchoFirst headquarters are in Fremont, California. For more information, please visit www.echofirst.com.

Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

A home under construction in Austin. The number of new homes in the pipeline nationwide is quite low.

From his wide-rimmed cowboy hat to his roper boots, Mike Castleman fits moviedom’s image of the lanky Texas rancher. On a recent March evening, Castleman is feeding cattle biscuits to his two pet longhorn steers, Big Buddy and Little Buddy, on his 460-acre Bar Ten Creek Ranch in Dripping Springs, a hamlet outside Austin in the Texas Hill Country. The spread is a medley of meandering streams, craggy cliffs, and centuries-old oaks. But even in this pastoral setting, his mind keeps returning to a subject he knows as well as any expert around: the housing market. “I’m a dirt-road economist who sees what’s happening on the ground, and in 35 years I’ve never seen a shortage of new construction like the one I’m seeing today,” declares Castleman, 70, now offering a biscuit to his miniature donkey Thumper. “The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin’ to rise, not fall.”

Castleman is in a unique position to know. As the founder and CEO of a company called Metrostudy, he’s spent more than three decades tracking real-time data on the country’s inventory of new homes. Each quarter he dispatches 500 inspectors to literally drive through 45,000 subdivisions from Baltimore to Sacramento. The inspectors examine 5 million finished lots, one at a time, and record whether they contain a house that’s under construction, one that’s finished and for sale, or a home that’s sold. Metrostudy covers 19 states, or around 65% of the U.S. housing market, including all the ones hardest hit by the crash: Florida, California, Arizona, and Nevada. The company’s client list includes virtually every major homebuilder and bank — from Pulte (PHM) and KB Home (KBH) to Bank of America (BAC) and Wells Fargo (WFC).

The key figures that Metrostudy collects, and that those clients prize, are the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them. Together those figures measure inventory — the key metric in determining whether a market has a surplus or a shortage of new housing.

Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That’s less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”

If all the noise you’re hearing about housing has you totally confused, join the crowd. One day you’ll read that owning a home has never been more affordable. The next day you’ll see news that housing starts have plunged to nearly their lowest level in half a century, as headlines announced in March. After four years of falling prices and surging foreclosures, it’s hard to know what to think. Even Robert Shiller and Karl Case can’t agree. The two economists, who together created the widely followed S&P/Case-Shiller Home Price indices, are right now offering sharply contrasting views of housing’s future. Shiller recently warned that the chances were high for a further double-digit drop in U.S. home prices. But in an interview with Fortune, Case took a far brighter view: “The lack of new home building is a huge help that a lot of people are ignoring,” says Case. “People think I’m crazy to be optimistic, but housing is looking like the little engine that could.”

To see where real estate is truly headed, it’s critical to keep your eye firmly on the fundamentals that, over time, always determine the course of prices and construction. During the last decade’s historic run-up in prices, Fortune repeatedly warned that things were moving too fast. In a cover story titled “Is the Housing Boom Over?,” this writer’s analysis found that the basic forces that govern the market — the cost of owning vs. renting and the level of new construction — were in bubble territory. Eventually reality set in, and prices plummeted. Our current view focuses on those same fundamentals — only now they’re pointing in the opposite direction.

So let’s state it simply and forcibly: Housing is back.

Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction that so amazes Castleman. The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year.

Drumming up sales

Of course, home prices are low and home construction is weak for a reason: incredibly low demand. For our scenario to play out, America will need a decent economy, with job creation and consumer confidence continuing to claw their way back to normal.

One big fear is that today’s tight credit standards will chill the market. But we’re really returning to the standards that prevailed before the craze, and those requirements didn’t stop prices and homebuilding from rising in a good economy. “The credit standards are now at about historical levels, excluding the bubble period,” says Mark Zandi, chief economist for Moody’s Analytics. “We saw prices rising with fundamentals in those periods, and it will happen again.”

To see why, let’s examine the remarkable shift in home affordability. A new study by Deutsche Bank measures affordability in two ways: first, the share of income Americans are paying to own a home. And second, the cost of owning vs. renting. On the first metric, the analysis finds that homeowners now pay just 9.8% of their income in after-tax mortgage, tax, and insurance payments. That’s down from 17.2% at the bubble’s peak in 2007, and by far the lowest number in the Deutsche Bank database, going back to 1999. The second measure, the cost of owning compared with renting, should also inspire potential buyers. In 28 out of 54 major markets, it’s now cheaper to pay a mortgage and other major costs than to rent the same house. What’s most compelling is that in all of the distressed markets, owning now wins by a wide margin — a stunning reversal from four years ago. It now costs 34% less than renting in Atlanta. In Miami the average rent is now $1,031 a month, vs. the $856 it costs to carry a ranch house or stucco cottage as an owner. (For more, see The top 10 cities for home buyers)

Not all markets will bounce back equally, of course. Housing resembles the weather: The exact conditions are different in every city. But in general the big U.S. markets fall into two different climate zones right now. We’ll call them the “nondistressed markets” and the “foreclosure markets.” A more detailed look shows why the forecast for both is favorable.

Nondistressed markets: Ready for launch

No cities went untouched by the collapse in prices over the past few years. But markets such as Northern Virginia, Indianapolis, Minneapolis, San Diego, the San Francisco suburbs, and virtually all of Texas held up reasonably well. In those areas prices spiked far less than in bubble cities — the foreclosure markets we’ll get to shortly — chiefly because they didn’t get nearly as many speculators who thought they could flip the homes or rent them to snowbirds.

The nondistressed markets will be able to get prices rising and construction growing far faster than the harder-hit areas for a simple reason: Although some of these markets are still suffering from foreclosures, they don’t need to work through the big overhang haunting a Las Vegas or a Phoenix. The number of new homes for sale or in the pipeline is extraordinarily low in nondistressed markets. San Diego is typical. It has just 921 freestanding homes for sale or under construction, compared with 4,425 in late 2005. The challenge for these cities is to generate enough demand to reduce inventories of existing, or resale, homes. In the entire country the resale supply stands at 3.5 million houses and condos. That’s a fairly high number, since it would take more than eight months to sell those properties; seven months or below is the threshold for a strong market.

But in the nondistressed cities, the existing home inventory is lower, closer to seven months on average. So a modest increase in demand will translate into strong gains in both prices and new construction. That should happen quickly, because most of those markets — including Silicon Valley, Northern Virginia, and Texas — are now showing good job growth.

Zandi of Moody’s Analytics expects that prices will rise three to four points faster than inflation for the next few years in virtually all of the nondistressed markets. His view is that prices will increase in line with rents, which are now growing briskly because apartments are in short supply. Those higher rents will encourage buyers to cross the street from an apartment to a home of their own.

In Northern Virginia, Chris Bratz, an engineer, and his wife, Amy DiElsi, a publicist, are planning to leave their rental apartment and become homeowners for the first time. The main reason? Buying has simply become a far better deal than renting. “The market got completely inflated, then it crashed, so prices are coming back to where they should be,” says Chris. As the couple have watched prices fall, they have also watched the rent on their apartment spiral upward, reaching $2,700 a month. They calculate that they should be able to purchase a townhouse for between $400,000 and $500,000 and pay less per month for a mortgage.

The nondistressed markets will also lead the way in construction. Zandi predicts that for the nation as a whole, single-family housing “starts” — measured when a builder pours a foundation for a new home — will rise from 470,000 in 2010 to as much as 700,000 this year. A large portion of that activity will happen in nondistressed markets where a tightening supply of resale houses will start making new homes look like a good deal. “Our main competition is from resales,” says Jeff Mezger, CEO of KB Home. “The prices of those homes have stayed so low, because of low demand, that it’s hampered the ability of builders to sell new houses.”

But many would-be buyers simply prefer a brand-new house. Eventually they’ll move from renters to buyers, and the trend will accelerate now that prices are no longer dropping. In Minneapolis, Yuan Qu and her husband, Xiang Chen, a researcher at the University of Minnesota, just moved from a two-bedroom rental to a new light-blue four-bedroom ranch with a chocolate-colored roof on a spacious corner lot. They paid $400,000, a bargain price compared with a few years ago. The couple, both in their early thirties, moved to Minnesota from China six years ago. “We wanted to buy a house, and we’ve been waiting and waiting and waiting,” says Qu. “The prices went down for so long, we finally thought they couldn’t keep falling.” For Qu the only choice was new construction. “We’re not very handy people,” she admits.

Foreclosure markets: The outlook is brightening

A home off the market in Mesa, Ariz.

The true disaster areas for housing since the bubble burst have been Sunbelt cities such as Las Vegas, Phoenix, and Miami — places that boasted great job and population growth in the mid-2000s, only to suffer a housing crash that swamped them with empty homes and condos and crushed their economies. But people always want to live in those sunny locales, and their job markets are starting to recover, albeit slowly. In foreclosure markets the inventory problem is far greater because it includes not just traditional resale homes but millions of distressed properties. Fortunately those houses are now such a screaming deal that investors, including lots of mom-and-pop buyers, are purchasing them at a rapid pace. To be sure, some foreclosure markets won’t rebound for years because they’re both vastly overbuilt and far from big job centers; a prime example is California’s Inland Empire, a real estate disaster zone 80 miles east of Los Angeles.

But the outlook is brightening for Phoenix, Las Vegas, Miami, and parts of Northern California. A big positive is the tiny supply of new homes entering the market. Phoenix, for example, has a total of just 8,100 new homes that are either for sale or under construction, down from 53,000 in mid-2006. The big test in these cities is absorbing the steady stream of distressed properties. The foreclosures put downward pressure on the market far out of proportion to their numbers because of markdown pricing. “We had levels of inventory even higher than this in 1990 and 1991,” says MIT economist William Wheaton. “But they were traditional listings, not foreclosures, so they didn’t create the big discounts you get with foreclosures.”

Wheaton reckons that we’ll see a flow of around 1 million foreclosures a year, at a fairly even pace, from now through 2013. That figure is frequently cited as evidence that the market is doomed for years in most foreclosure markets. Not so. The reason is that the vast bulk of those units, probably over 600,000, according to Gleb Nechayev, an economist with real estate firm CB Richard Ellis (CBG), are being converted to rentals either by investors or their current owners. Those properties are finding plenty of renters, since the rental market is still extremely strong across the country. Remember, the millions who lost their homes to foreclosure still need somewhere to live.

A typical investor is Alex Barbalat, a Russian immigrant who’s purchased seven homes east of San Francisco in the towns of Bay Point, Antioch, and Pittsburg. His average purchase price is around $100,000 for homes that once sold for between $300,000 and $500,000. But he has no trouble finding renters, since his tenants can commute to jobs in San Francisco on the BART transit system. Barbalat is pocketing rental yields on the prices he paid of around 12%, and he’s in no hurry to sell. “I’m holding them until prices drastically rise,” he says.

Investment funds are also entering the game. Dotan Y. Melech looks for bargains in Las Vegas for UnitedAMS, a firm he co-founded that manages apartments and other real estate investments. The firm has raised more than $20 million from outside investors to purchase distressed properties. So far, Melech has bought around 300 houses and plans to purchase another 200 this year. He has no trouble renting the houses he buys, since, he estimates, occupancy rates in Las Vegas are touching 95%. The “cap rate,” or return on investment after all expenses, is between 8% and 10% — twice the rate on 10-year Treasuries. Melech rents to people who lost their homes but are reliable renters. “A lot of people can’t be buyers because their credit got hurt,” he says.

Even with investors jumping in, buying activity in foreclosure markets hasn’t yet increased enough to bring inventories down. It will soon. Zandi thinks prices will fall a couple of percentage points lower in the distressed markets in the short run. “But that will be overshooting,” he says. “It’s like an elastic band. If prices do drop this year, they will need to bounce back because they’ll be far too low compared with rents and replacement cost.” Renters will come off the sidelines to purchase homes in the years ahead, precisely the opposite trend of the past few years.

Consider the example of Michael Dynda, a retired Air Force avionics technician who now works for a government contractor in Las Vegas. Dynda, 49, is a first-time buyer who put off purchasing for years, in part because prices were falling so rapidly in Las Vegas, with no bottom in sight. But last year the combination of bargain prices and low mortgage rates became too good to resist. He ended up purchasing a 2,300-square-foot stucco home for $240,000, or about half what it would have fetched in 2007. Dynda got a 4.38% home loan, and pays the same amount on his mortgage as on the rent on the house he left to become a homeowner. “The timing was about as good as it could get,” says Dynda.

Mike Castleman’s company tracks the inventory of new homes in 19 states across the country. He sees supply getting tight. “Home prices are fixin’ to rise,” he says.

Back on the ranch, Mike Castleman is lounging in his creek-front mansion, built from “a hundred tons of fine central Texas limestone.” As he shows off his collection of custom-made guitars, including one crafted to resemble the skin of a rattlesnake, the homespun housing guru once again returns to his favorite topic.

Castleman claims that this recovery will look like all the others: It will bring a severe shortage of housing. He invokes the livestock business to explain. “It takes three years between the time a bull mates with a cow and when you get a calf ready for market,” he says. “That’s how it is in housing too. We’ll get a big surge in demand and the drywall companies will take a long time to ramp up, and it will take years to get new lots approved. Buyers will show up looking for a house in a subdivision, and all the houses will be sold. The builders will tell them it will take six months to deliver a house.” But those folks, says Castleman, will be set on buying a place. “And they’ll want it so bad they’ll bid the prices up!” In other words: Beat the crowd.

It’s a Great Time to Buy a House
Mike Castleman, the Texan with the best realtime view of housing in the U.S., tells editor-atlarge Shawn Tully that the naysayers are about to get a big surprise: rising prices for new homes.

–Reporter associates: Anne VanderMey and Christopher Tkaczyk

http://finance.fortune.cnn.com/2011/03/28/real-estate-its-time-to-buy-again/

Allowing new buyers to customize and add energy-saving choices before builders lay the foundations for their Fresno-Clovis area tract homes has gained popularity in a discriminating but continuing market.

It’s trying to offer as much as can be offered and is an enticement to buy new homes, Fresno Association of Realtors President Jim Witlach said this week in Clovis. Buyers have the opportunity to do something on their own, instead of just selecting a tract home already completed on speculation.

“The new-home builders have to offer incentives and create a perception of value … It’s a very tough market,” Witlach said.

In the 60-year march of Fresno’s city limits north to the San Joaquin River and east into Clovis, tract builders usually built a few model homes to show potential buyers. Then, they hastened to build the rest of the tract for sales.

In those prospering years, entire tracts were soon sold. It was a build-it-and-they-will-buy market. Spokespersons at three large family-named Fresno homebuilders said that in today’s market, all three still offer “ready-to-move-in” new homes in their tracts. They differed on the overall popularity of buyer-designed homes versus tract homes already ready for move-in.

At De Young Properties, Ryan De Young noted that: “Our De Young design center, which features a vast array of the latest amenities so homebuyers can convey their personal preferences, is not new but over the past year we have seen about a 50% increase in the number of homebuyers who request customizing their homes’ features for a more unique feel.”

De Young includes a variety of home elevations for each floor plan. This, De Young said, allows the customers a choice and also improves the entire neighborhood with an enhanced street appeal. There’s also increased interest in “Energy-Smart” homes. De Young offers homes designed to “reduce annual energy costs” featuring a solar energy system. “Right now it is a buyers’ market, so to be a leader in the field, you must understand buyer preferences and match it,” De Young said.

In some 35 years in the San Joaquin Valley, the De Young builders have never built large quantities of homes for speculation purposes, he said.

Instead: “De Young has always preferred to build only a few move-in-ready homes at one time for those people who need to find a home quickly.”

De Young said the builder has seen “a heavy amount of traffic and steady sales,” and these indicators point to a strong 2011.

At Wathen Castanos Hybrid Homes, Inc. Sales and Marketing Vice President Laura Mather said that company, which traces its Fresno roots back some 80 years, isn’t seeing a growing trend of building homes to suit, “probably 30% of or sales are build to suit.” Approximately 70% of Wathen Castanos sales are “inventory, spec homes.”

Mather said: “We certainly don’t build entire tracts on speculation. But there seems to be a growing need to have inventory on-hand for closings that can take place in 30-45 days. Buyers seem to be satisfied with how we spec homes, as we pay careful attention to color selections and floor-plan options.”

Some buyers feel that if they build “from dirt,” that three-to-four month process wouldn’t differ that much from an already started home they could move into in 30 days.

Mather said, “From an economic standpoint, another advantage to buying an inventory home is that most builders tend to offer a little more in incentives on move-in-ready homes.”

“2011 is going to be a tough year for all homebuilders across the country,” Mather added. “Fresno is no different.”

Wathen Castanos Hybrid Homes Inc. had a “very strong” 2010. The builder won several national awards, including the prestigious 2011 National Housing Quality Award, she said.

At McCaffrey Homes, Karen McCaffrey said her family counts three generations of Fresno-area homebuilding. She has seen homes offered ready to move into for buyers who want to get their children started on time in school. There also are un-started home sites for buyers who prefer “to personalize their home from the ground up.”

McCaffrey said: “We might start a few homes to meet the needs of those who are seeking a quicker move-in. It just kind of varies.”

She said that preferences haven’t changed because of the economy. Business has been good. “Homebuyers are out there,” McCaffrey said. “They’re shopping and there’s demand.”

Now in its 16th year, the EVHA is supported by the U.S. Department of Energy through its Building America program, the National Association of Home Builders (NAHB), and the National Renewable Energy Laboratory (NREL), in addition to the NAHB Research Center. The EVHA challenges builders to elevate standards for energy-efficient new construction and remodeling, provides educational opportunities for building professionals, and fosters the adoption of energy efficiency principles.

Finalists were selected from projects in three climate regions (cold, moderate, hot) and five categories (affordable, custom/demonstration, multifamily, production, and existing homes). The awards will be presented at a unique ceremony on Tuesday, January 11, 2011, at the Atlantic Dance Hall at Disney’s Boardwalk Resort in Orlando. While finalists have already been notified of their status, their award level (Gold, Silver, Builder of the Year, Remodeler of the Year, People’s Choice) will be announced at the awards celebration.

The 2011 EVHA finalists and their home locations are:

* Baldwin Homes, Inc., Arnold, MD

* Cobblestone Homes, Saginaw, MI

* CVH, Inc. dba Clifton View Homes, Coupeville, WA

* DOE Building America Team of Building Media, Inc., & Green Builder Media, LLC (ReVISION House), Las Vegas, NV

* Ferrier Custom Homes, Fort Worth, TX

* GreenCraft Builders, LLC, Lewisville, TX

* Imagine Homes, San Antonio, TX

* Meritage Homes, Scottsdale, AZ

* Near Zero Maine , Vassalboro, ME

* Scott Homes, Olympia, WA

* Treasure Homes, Inc., Wheatfield, IN

* Wathen-Castanos Hybrid Homes, Inc., Fresno, CA

Judges for this year’s awards were unified in their remarks regarding how exceptional the building envelopes on these award-winning homes are. The judges also noted that all finalists seemed to have internally-generated motivation to build highly energy-efficient homes, rather than being driven by consumer demands alone; this was true for production and custom builders alike.

The panel of judges for the 2011 EnergyValue Housing Award included:

* Eric S. Borsting, CGP – chair, NAHB Green Building Subcommittee; member, ICC’s IRC Building & Energy Committee
* Michael Chandler - 2010 EVHA-winning builder; president, Chandler Design Build (NC)
* Craig Conner - energy codes and green building consultant
* Tim Ellis - NAHB Research Center Accredited Green Verifier; LEED AP; Certified Aging in Place Specialist; Certified Green Remodeler
* Jordon Goldman - principal engineer, ZeroEnergy; NAHB Research Center Accredited Green Verifier; LEED AP; HERS Rater; Passive House Consultant-in-Training; ASHRAE member
* Joe Gregory - 2007 EVHA-winning builder; 2007 Energy Star Partner with Bob Ward Companies (MD)
* Steve Hale, CGP – president, Hale and Sun Construction, Inc.; director, Build Green New Mexico
* David Hales - building systems specialist, Washington State University’s Extension Energy Program
* John Kurowski - 2010 EVHA-winning builder; president/owner, Kurowski Development Corp.
* Peter Pfeiffer - founding principal, Barley + Pfeiffer Architects; LEED AP architect, interior designer, building specialist
* Dr. Sydney G. Roberts - Home Services program manager, Southface Energy Institute
* Stacey Rothgeb - research coordinator, DOE Building America Program at NREL

Information about advertising or sponsorship for the awards ceremony and tickets for the event are available from program coordinator Debra Sagan, CGP, online at www.nahbrc.com/evha, or by calling the NAHB Research Center at (800) 638-8556.

“We are committed to building the most innovative, energy efficient homes in the Central Valley,” says Freddie Logue, director of construction of Wathen Castanos Hybrid Homes. “And offering our customers a sustainable roofing solution with a lifetime warranty is an important way for us to improve the energy and money savings we achieve for our home buyers.”

The roof tear off occurred at the Ivy Gate at Harlan Ranch community in the city of Fresno. Madera Roofing provided the re-roofing services, tearing existing asphalt shingles off of the four model homes and replacing them with the Concrete Tile Cool Roof solution. The company has been providing quality roofing for more than 35 years and specializes in residential new construction, re-roofing, multifamily, and light commercial.

“Most people don’t realize that the roof of a home can act as a conduit of energy, absorbing the sun’s hot rays during summer months and causing a homeowner to accrue excessive air conditioning bills,” says Robert Pacelli, marketing communications manager of Boral Roofing. “The concrete cool roof solution can prevent this from happening by deflecting sun radiation instead of absorbing it.”

The concrete cool roof works by reflecting many of the solar rays that hit the roof and by radiating the heat from the sun that is absorbed. The new roofs installed on the Ivy Gate homes meet requirements set forth by the Cool Roof Rating Council (CRRC).

CRRC provides a system for calculating the Solar Reflective Index, or SRI, of a roof. A value between 0–100 indicates surface heat when exposed to sunlight and the calculation incorporates thermal emittance and solar reflection with the highest values being attributed to the coolest surfaces. The concrete cool roof tile achieves significantly higher SRI than non-sustainable products making the product particularly ripe for the Central Valley and its climate. Summer months are hot and dry with winters reaching very cool temperatures, conditions that cause excessive electricity consumption.

With an expected annual energy consumption of $431, the concrete roofing provides substantial energy and money savings for homeowners as compared with the $899 expected annual energy consumption of a home with asphalt shingle roofing. Total energy savings per year approximate $464. Residents of the Ivy Gate community with concrete cool roofs will also obtain additional utility rebates from PG&E. (Source: Energy Efficient Roof Calculator)

“And because electricity can be generated by fossil fuels, the concrete roof solution also represents one way for consumers to break from the fossil fuel dependence that plagues our pocketbooks and environment,” notes Robert Pacelli.

The solar reflection and radiation qualities of the roof on the Wathen Castanos built homes at Ivy Gate at Harlan Ranch are complemented by many additional sustainable features. Considered high performance hybrid homes, the residences are sold with standard eco-friendly features including: tested sealed ducts ensuring conditioned air gets only to the desired locations in the home, fluorescent lighting utilizing 75% less energy than normal bulbs, optimized spider insulation, tankless water heaters providing endless hot water and energy savings, thermal blanket for a quieter home that remains cool on hot days and warm on cool days, water saving plumbing and landscape fixtures, and revolutionary windows ensuring maximum UV blockage and minimal heat transfer.

“The concrete cool roof tile is the perfect addition to the standard earth-friendly features we provide on our hybrid homes,” says Freddie Logue. “With the roof being a major component of a home’s energy-efficiency potential, we believe our environmentally minded, money conscious customers are going to see the true benefit of this roofing option and that concrete tile will become more commonplace in the Central Valley.”