September 28th 2016
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October Members 
Night Out

October 20th

From Greg Meyers with Midwest Environmental 
EPA inspections will be conducted in the Northland starting September 2016

We received notice from Greg with Midwest Environmental Consulting LLC.  The EPA will be conducting random and unannounced lead inspections starting September 2016 here in the Region 5 Northland. 

For all Remodel, Repair and Paint contractors make sure you are following EPA lead guidelines to avoid hefty fines.  
Greg says "that they have chosen the Region 5 in Minnesota because it rarely gets looked at."  Click on the link below to make sure you have all the information you need to comply with the EPA Lead laws. 
Sale and Contract Prices per Square Foot in 2015
Looking at single-family homes started in 2015, the median prices, excluding improved lot values, range from $168 per square foot for contractor-built homes in the Pacific division to $78 per square foot for speculatively built homes in the East South Central division.

At $168 per square foot, new contractor-built single-family homes in Pacific are the most expensive to build exceeding the national average of $105 per square foot by 60%. Per square foot costs exclude the cost of developed lot, so highly variant land values cannot explain the regional differences in per square foot costs. However, higher and rising regulatory costs undoubtedly contribute to higher per square foot costs.

New England with the median contract price of $149 per square foot is second on the list of most expensive contract prices per square foot. In 2015, New England also became home to the most expensive spec houses with the median sale price of $144 per square foot, excluding improved lot values. 


Building Materials Prices 
Continue to Climb
Inflation in prices received by producers (prior to sales to consumers) held steady in August after a striking 0.4% decline in July.  The flat reading was the result of a 0.1% increase in prices for services combined with a 0.4% drop in goods prices, according to the latest Producer Price Index (PPI)  release by the Bureau of Labor Statistics (more weight is placed on services, in line with its share of the economy relative to goods).  Final demand prices for core goods (i.e. goods excluding food and energy) inched up 0.1%.

In contrast to the steady overall index, prices of key building materials were anything but level.  OSB prices rose sharply (+1.5%), continuing a 6-month, upward trend.  The producer price of OSB has increased by 8.7% over that period.  Gypsum prices rose by 0.2% as the price of ready-mix concrete rose modestly (+0.1%).

Unsurprisingly, given the net change of zero, the report showed mixed signals.  Services prices were kept steady by opposing forces from services less trade, transportation, and warehousing (which increased 0.5%) and trade services (which fell 0.6%).  This marked the second consecutive month that the trade index fell and a cumulative two-month decline of nearly 2%. The product detail showed a net decline in prices for real estate services of roughly 3% in August.

Thirty percent of the decrease in prices for final demand goods was attributable to a 3.6% drop in prices for meats and energy products.  These declines were partially offset by increases in the pharmaceuticals industry.
Softwood lumber prices rose relatively sharply (+1.5%) in August following a July increase (+0.4%). Although the U.S. dollar remains relatively strong against the Canadian dollar, it has declined to July 2015 levels and all market indicators point to a continued narrowing of the currency advantage until 2017.  This is of particular importance as a large percentage of domestically consumed softwood lumber is purchased from Canadian producers.


New Single-Family Homes Started in 2015 Have More Bedrooms

Recently released data from the US Census' Survey of Construction (SOC) show that 10 percent of single-family homes started in 2015 have 2 or less bedrooms, 43 percent have 3 bedrooms, 36 percent have 4 bedrooms, and 11 percent have 5 or more bedrooms.
Three bedroom homes have consistently been the most common type of new single-family home built. However, the share of new homes with 3 bedrooms has declined, going from 54 percent in 2009 to 43 percent in 2015 (Figure 1).

On the other hand, the share of new single-family homes with 4 bedrooms and the share with 5 or more bedrooms have increased since 2009. The share of new homes with four bedrooms went from 29 percent in 2009 to 36 percent in 2015. Moreover, the share of homes with five or more bedrooms went from 6 percent in 2009 to 11 percent in 2015.
Figure 2 displays the share of new homes with 4 or more bedrooms by Census Region. In 2015, the Pacific region had the largest share of new single-family homes with 4 or more bedrooms (57 percent). Other regions with relatively large shares include the South Atlantic Region (55 percent) and the Middle Atlantic region (51 percent). In contrast, the regions with the smallest shares of new homes with 4 or more bedrooms include the East North Central region (33 percent) and the East South Central region (32 percent).

The increase in the share of new homes with 4 or more bedrooms in 2015 may reflect  the move by builders to focus on higher end, larger homes in the post-recession period.
However, recent data indicate that this trend started to reverse with  new 2016 data showing that the median square feet of new homes declined. Growth in the number of smaller homes, such as townhomes, may emerge going forward in response to first-time buyers returning to the market.

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