Builders, Realtors team up for housing turnaround

The people who build houses and the people who sell them are amping up their partnership efforts to address common concerns about the local housing market and find ways to help turn it around.

In January, leadership teams from the Home Builders Association of Greater Springfield and the Greater Springfield Board of Realtors held their first quarterly meeting to discuss ways the groups can share information and collaborate on projects.

"What we've done is taken advantage of some downtime in the industry," said Rusty MacLachlan, HBA president and owner of MacLachlan Construction Co. Inc., which does business as J. Russell MacLachlan Homes.

"I equate it to the off-season of the NFL. During these slower winter months we are figuring out how to take full advantage of the slowdown and our partnership to make sure that we make the industry better," he added.

Residential sales in the Springfield area dropped 23 percent to $847.4 million in 2008, and the average sale price slipped a little more than 5.5 percent to $139,240, according to Miles Noennig, president of the Greater Springfield Board of Realtors and chief administrative officer at Carol Jones Realtors.

The quarterly meetings aren't the first collaboration between the two groups; they already work together on the KY3 Focus on Home advertising campaign.

"We have always worked together," said Matt Morrow, executive officer for the HBA. "This is just a more intentional way of making a point to get together on a quarterly basis to share things that we are hearing and discuss the issues that are most urgent and pressing."

Sharing strengths

Each group brings different strengths to the table. The HBA is active in new construction, which supplies inventory at all price points for the Realtors' businesses, and many builders enlist Realtors' help to sell the homes they build.

"We understand that the Realtors have a much better grasp on where the market is headed and what price points properties are selling at," MacLachlan said. "We should take greater advantage of that."

At the January meeting, the groups discussed opportunities for HBA builders to share a database of custom home sales that will allow Realtors and appraisers the opportunity to use those homes for comparisons in appraisals. That would help Realtors and builders foster higher and more accurate appraisals for the area, MacLachlan said.

Noennig and MacLachlan noted that GSBOR also is looking into adding builder names on Multilist Service forms for each posted listing. In the past, Realtors did not typically have access to data from custom homes through MLS data. The listings also could include whether the builder is an HBA member.

Protecting the public

MacLachlan said it is important for potential homebuyers to know whether a builder belongs to HBA because that membership shows that a builder has the required insurance coverage.

"There are protections for the public and the property if a builder or subcontractor has been negligent on construction practices,' MacLachlan said. "If a builder of a house is not carrying (workers') comp, a workman on that job has the right to sue everybody, including the builder and the homeowner. If they do carry (workers') comp, the workman is required to accept the compensation provided by that insurance."

Morrow said the current downtime allows the HBA to get some of these bigger-picture issues in order. HBA is working with Greene County, Christian County and other surrounding areas to encourage them to implement new rules requiring builders to get insurance before issuing building permits. He also wants to see current insurance law enforced better.

"We think that for basic consumer protection and to create a more level playing field, every builder should hold adequate insurance," Morrow said. "Some of the riskier builders out there are frequently getting the low bids on projects because they aren't holding the insurance required. There is not enough enforcement of the law."

Outlook for improvement

Morrow said he is hopeful that the partnership between HBA and GSBOR will fuel better times ahead: "We have a lot of advantages here in Springfield. Our unemployment rate is still under 6 percent locally, which is attributed to our diverse economy. Our housing prices never inflated to the rate they did in some other parts of the country, and most of the local lenders hold their own paper. They tend to be more careful about the types of loan products they offer. These things mean we got into this housing slump later than the rest of the country and we are going to come out quicker."

Noennig said 2009 sales figures should be similar to 2008, and business should begin to pick up in the third quarter.

"We can't create the market, but we can get the word out and send positive aspects of the current economy, particularly with respect to interest rates being at all-time lows and inventories being at good levels," he added.

In the coming weeks the public will see a few visible signs of the partnership, such as association logos on the HBA and GSBOR Web sites, but most of the work so far has been behind the scenes.

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