High Demand, Low Inventory: the State of the Housing Market, Winter 2017-2018

Despite labor shortages, tentative demand, and a sluggish tempo to the market in the past year, builders still have reason to celebrate as the new year begins.


Housing Demand is Up                         

Redfin is reporting that September was their best month since they began tracking housing demand in 2013. Mortgages hit a low, and as a result, buyer interest was up 4.3% from the previous month. Offers were up 8.2% from the previous year.


However, trouble longer-term trends will call out for course correction in the coming year.


Struggling Inventory                                                   

In October the number of homes for sale took another tumble: down 12.2% year over year. The tight inventory—3.1 months supply, almost half of the established benchmark of 6 months– indicates the market remains deeply tilted in favor of sellers; the market has not been in buyer’s favor since January 2012.  The average home spent 44 days on the market this fall.


A New Housing Bubble?

Meanwhile the investment experts at Seeking Alpha wonder if we’re on the brink of a housing bubble. They cite rising home prices as a key factor in their concerns. They have also observed behavior that presaged the last housing bubble, notably investors flipping houses. Their intensive borrowing, the total amount of flipping, and flipping volume to sales, are all also warning signs. But we have not yet entered the critical second phase of their bubble evaluation process. It remains to be seen whether more troublesome trends will develop.


Despite potential trials, next year looks bright. Stay tuned for our preview of 2018, and the trends that will shape the market in the coming year.


Our Vision, Your Success: A Unified Ecosystem of Building Solutions

At MiTek, “we build the building industry” isn’t just a slogan. It’s a statement of fact.


Our products have made the journey to 95 countries around the world, connecting component industry leaders to solutions that improve their workflows and solve everyday problems on the shop floor and the jobsite. Our construction software is a part of our customers’ everyday operations.


We wanted to bring our experience streamlining the component production process, to the building community. First, we know the challenges builders face are complex. Like you, we couldn’t do it alone. That’s why we brought together a family of companies underneath the MiTek umbrella to create a new way of doing things.


Our Promise


We promise you nothing less than a complete hardware and software ecosystem for the building industry.



Our hardware–truss plates, connectors, fasteners, Hardy Frames, and hangars–are the backbone of the industry. Furthermore, construction software touches every corner of a builder’s operations, estimating, and design processes.


Together these parts and pieces form one powerful, unified, comprehensive system–all designed to put peak performance, within your reach. Now isn’t that a vision you can believe in?


Upheaval Ahead: Tax Bill Changes Daunting to the Real Estate Market

The recently passed tax bill known as the Tax Cuts and Jobs Act is poised to shift many financial realities. The housing industry is far from immune to the changes it will bring.


Home Values Jeopardized


The National Association of Realtors spoke out against the bill before its passage, warning that the changes it promises would lower home values across the country. The cumulative effects of changes to tax deductions, as well as interest and moving expenses, would act in concert to lower home prices. The NAR warns prices could fall by as much as 10%.


Related to the potential for lowered home values is the problem of inventory. Home inventory is already at a historic low. If fewer homeowners can sell, that will restrict the amount of inventory on the market even further. High-tax states would struggle the most.


Homeowners Hit Hardest


However, from an industry standpoint, the completed version of the bill is an improvement from the original draft version. That version, which passed through the House before meeting defeat in the Senate, also drew an outcry from the NAHB.  They approved the final version. But one feature hasn’t changed—the bill remains unfriendly to many homeowners.


It chips away at what has long been a pillar of home ownership in the US: the mortgage interest deduction. Although the deduction remains in place for mortgages up to $1 million, it takes away the deduction for interest paid on home equity debt.  There would be a higher standard deduction – virtually doubled. Plus the capital gains exclusion can only be used on one sale every five years, instead of one sale every two.


Changes to the capital-gains tax may incentivize homeowners to stay where they are, as moves would become riskier.


Of course, the bill would affect different states in different ways. Builders in New Jersey would be particularly affected, as will those in Connecticut, Illinois, New Hampshire, Maryland, Rhode Island, and Virginia. Builders in Wisconsin, Georgia, Minnesota, New York, Ohio, Pennsylvania and Texas may also feel the effects of the bill.


In the meantime, expect confusion to be its own road block. Buyers and sellers may take months to come to terms with the new system. One New Jersey real estate broker reports he lost a $1.4 million sale due to buyer confusion over the effects of the tax changes.


INCREDI-BOND: Simple, Incredible Results.



Sometimes in life, all you need is a super strong glue. INCREDI-BOND® is stronger and more effective than mere “glue”— it’s a professional-grade, multipurpose high-strength bonding agent.



It’s simple to use and leaves undeniable results. INCREDI-BOND cures in three hours with a thirty-minute “window” to allow you time to work. A two-part application process yields a bond that reaches 1000 psi.



A Multipurpose, Practical Epoxy Bonding Agent



There are no limits to the utility of this practical product. It can bond to wood, steel, concrete, brick, stone, CMU block, ceramic, glass, and stucco.



INCREDI-BOND is designed to adjust and fit to your project’s exact needs. INCREDI-BOND can be troweled, sanded, and even painted. With INCREDI-BOND, we’ve fixed some of the issues with those other bonding agent products. INCREDI-BOND is 100% solvent-free and low on VOCs (volatile organic compounds). It doesn’t sag, smell, or drip.



If you need a redo for any reason, then you can clean it up with either methylethylketone or just WD-40.



Whenever you need a bonding agent proven to deliver incredible results, find INCREDI-BOND epoxy in hardware stores near you.

Pride of Acadia: The Savoy Story

From the MiTek series on the American Craftsman, comes the story of Acadian Accordions. This story comes from the visual storytelling artist, Tadd Myers, a photographer who has captured the heart of the American craftsman in a pictorial masterpiece. 


To some, it’s a funny-looking instrument; to the makers of the Acadian accordion, it’s serious business. As with learning to play Cajun music, learning to build an accordion is a lifelong process.



Marc Savoy has been playing, making, and tinkering with accordions since he was twelve years old. It’s an old craft. Yet he sees no reason why traditional methods can’t coexist with innovation and process improvement. This attitude goes all the way back to the very first accordion he created. As Savoy says, “not too long after I completed it I lit a fire in the barbecue pit and burned it. I knew I could do a better job on the next one.” He adds, “Even after those many years of discovering ‘what makes it tick’, we continue to make improvements as better materials are found and techniques refined.



Crafting an Accordion



Marc Savoy, and his business partner, self-taught luthier Tina Pilione, are just as picky about their materials as they are about the end product. First, only handmade Italian reeds will do for the makers of the Acadian accordion. Reeds are critical in the construction of an accordion. Their vibrations produce the distinctive sound of the instrument.



The wood of an accordion is comparatively—and surprisingly, to some—less critical to the sound of the instrument. The wood is dried then for a year or more.  Their standards are often higher than the suppliers they buy from. Sixteen different types of wood can be used to make an accordion. Then it’s up to the buyer to decide the wood they’d like based on personal preference. Owners love the classic looks of the high-quality woods the makers use.



After the accordion is built, next it’s time to tune it—and this is where the makers of the Acadian really shine. Tuning is key to the resonance and beauty of the instrument. It can only be accomplished by tuning individual reeds to a state-of-the-art electronic tuning device. Human ears then add finesse to the technical process. Careful listening will ensure the accordion sounds as good as it looks.



Today, the Savoy Music Center continues to make accordions according to their own exacting specifications. Musicians can focus on the timeless craft they love: Cajun music. And the band plays on.


This story was sourced from the American Craftsman Project website, with permission by the author, Tadd Myers. MiTek appreciates the heart of the American craftsman – the men and women who perform their work according to principles of integrity, hard work, quality and a desire to forge something that will create not just a lasting product, but a lasting relationship.

Why It’s Time to Ditch Sticks and Embrace Trusses

Why should you use trusses?

If you’re in a market dominated by trusses, it might not ever occur to you to ask this question. You’re familiar with the benefits of components, which include much faster jobsite installation and dry-in, but also includes less jobsite waste, less theft, better cost control, and all-in, lower cost in your homes.


If you’re in a region where stick-built homes are the norm, you may not yet have heard these success stories— or you may have heard outdated or factually untrue information about using trusses, particularly trusses for custom roof and ceiling framing. Below are a few commonly-held ideas about trusses that are simply not true anymore, with the now common 3D framing (BIM) software and the advances in automation used in component manufacturing?


  • Myth: My customers want custom features, and custom trusses are too expensive, or not practical.
  • Fact: Today’s truss manufacturers can produce even trusses with custom ceiling profiles at a nearly production speeds and sensible costs. And with the lower labor costs in the field


  • Myth: Trusses are complicated to order.
  • Fact: CMs are very good at taking even difficult and complicated designs, and giving you accurate estimates, layouts and sometimes even 3D models of your framing.  And today the precision-automated saws and other equipment are often driven by the same software that designed the truss and its structure. So their accuracy is awesome.


  • Myth: Trusses can be complicated to figure out on the jobsite, and I need truss specialists to set them.
  • Fact:  You should always choose your crews wisely, but a reputable framer will likely be capable of setting trusses very well on your project. Especially now, as the truss jobs come with 3D details and section, all the tricky corners are detailed with great accuracy, and easy to see before they go in place. One of the great benefits to truss design today is that it takes most of the thinking out of the field and make your project easy to assemble correctly and safely.


Find a good truss manufacturer and a good framing crew.  They could be your best friends to building your homes with better cost control, better quality control, faster installation, and a better bottom line.


Faced with a complicated design, many builders assumed sticks are the best way to go. Fewer and fewer builders make that choice anymore, now that today’s technology allows you to use components to frame even your most complicated plans.

Build for Your Buyers: Retirees

Customization: What Makes Your Homes Stand Out

Don’t make the mistake of underestimating Boomers—this is a group on top of trends. Jonathan Smoke’s report identified many key design features builders may want to aim for. Open floor plans with kitchen bonuses such as islands, stainless appliances, and breakfast nooks, continue to dominate the marketplace—and the wishlists of Boomer buyers.

 Retiree home options

Quality First

Although all three of the main home-buying demographics have a strong interest in seeing quality in their new homes, retirees have perhaps the most stringent standards. Working with your component manufacturer should help you provide this group with what they need, but they may also be interested in energy-efficient features. Yours home will also need to display, at least, your awareness of how to build with buyers’ energy needs in mind. Their needs are driven less by environmentalism than practicality: many simply hate paying high gas and electricity bills, which can be unpredictable to those on fixed income.

Smaller Homes in Older Markets

Bigger is not necessarily better for this sale. To win retirees, think smaller and aim for older, more established markets such as Boston, or markets in Florida and California. “Destination” markets have an obvious appeal for Boomers hoping to enjoy their retirement, but this generation will consider snowy college towns to be as desirable as beach towns as they search for their next homes. Baby Boomers are more likely to work with Realtors, so extensive online campaigns directed at their needs may be a waste of time and energy.

Don’t Ignore Younger Boomers

Although retirees’ needs should be front and center, don’t discount others in their age group who are still working, as they may be likely to move this year as well. Their motives for moving will be a little different. While most Boomers are looking for a retirement home, younger Boomers may actually be relocating for a job. Approach them the same way as you would retirees—just know that location (proximity to cities, businesses, and schools) may play a different role in their new home searches.

Both retirees and working Boomers have a tendency to get bogged down in selling their old homes, so they may not be ready to buy as fast as younger groups and most can afford to be choosier.

There’s no question retirees will be an important factor in the home market. Learn how to build for their needs—as well as the needs of this year’s other major home-buying group—and you can look ‘forward to a successful year ahead.

What Can BIM Do for You? (Even if You Don’t Buy the Entire Suite of 3D Software)

BIM software is all the rage today, just as CAD software was all the rage a few years ago. And before there was CAD?  Well, contractors may have been similarly wowed with large-format printers, which could spit out multiple copies of blue prints in minutes.  (The next thing, you’re going to tell me is that they have pictures now that can develop themselves instantly.)


What’s Coming

What technology is likely to come after BIM?  The next natural step is for virtual environments, based on BIM data, where you can interact with, and alter, full-scale built environments long before they are even built.  (Go ahead, you’re not dreaming, check the view out of the virtual windows or check the clearance on the cabinets by virtually swinging open the doors. Change the wall paint color with a flick of your finger.)


Does all this power software have a drawback? It can be expensive for early adopters.  However, keep in mind pricing patterns: what is now affordable—and worth the investment— for most builders is the CAD software that was once prohibitively priced.  If the pattern follows, soon the price of BIM software will drop as well.


The Good News

But is there any way for the average builder to take advantage of BIM design software and high-end CAD systems without buying the entire suite?


Indeed, there is.  Some CAD and BIM software packages offer a “thin client” version of the software, so contractors can get fractional use of the powerful systems, by accessing BIM models that are just as complete as those created by the designers.


That’s especially true of MiTek’s SAPPHIRE™ Suite, which is a true 3D BIM software system, designed to optimize the wood frame.  SAPPHIRE™ Suite also enables component manufacturers to design the structural framing and also to automate the manufacturing of the trusses and wall panels.  SAPPHIRE even drives the component manufacturers’ saws in the shop for super precise truss and wall-panel construction.


However, since most contactors don’t need the full firepower of the SAPPHIRE™ Suite, MiTek offers SAPPHIRE Viewer, a free 3D software tool.  SAPPHIRE Viewer is designed for builders, architects, and engineers to collaborate on house plans using a shared 3D model if their component manufacturers are using SAPPHIRE.  (Component manufacturers, or CMs, manufacture the roof trusses, floor trusses, and wall panels for residential home builders, and they are typically affiliated with local lumberyards.)


SAPPHIRE Viewer users can quickly review SAPPHIRE models in “plan” and 3-D views, using zoom and pan. They can also view elevation drawings, check dimensions, and isolate items to view in the model, such as a particular level or layer.  SAPPHIRE Viewer users can also print layout sheets or print plans in 3-D, and elevation views. As a key part of successful collaboration, SAPPHIRE Viewer users can add and track mark-ups and comments, ensuring all parties are on the same page.


Do you use BIM yet? If not, don’t worry. You may not need the professional grade of BIM systems, when you can access SAPPHIRE functionality through Viewer.  With it, you get the benefits of the power of digital collaboration, and you might even add a few percentage points to your bottom line in the process, through the use of an optimized wood frame and precision building components.

The Net-Zero Energy Home

Depending on your market, green energy and energy-efficiency is one of those topics that may seem like second nature already. In other parts of the country, it may be less popular.  Still, with the rise of codes like the IgGG, the IECC, and additional state codes that are increasingly strict (and carry the force of law), the momentum is for builders who incorporate green building practices into their building process, product selection, and final product.


It’s clear that energy-efficient building can be practical and profitable; it’s easy to implement from knowledge and products that you are likely using today. Looking farther down the road, thanks to some current R&D we have been following, it may be even easier to build these greener homes in the near future.


Enter the net-zero home.

This test home may be a little impersonal, as far as completed homes go. There are no occupants, no car that pulls in the garage, no family dog running around in the backyard. That’s because this net-zero home is not a home in the traditional sense.  It’s more accurate to call it a LEED Platinum laboratory, and it’s manned by researchers at the National Institute of Standards and Technology, where they build and test concept homes, a.k.a. “Homes of the Future.”


“Homes of the future” is a phrase that can conjure images of the Jetsons and World Fair exhibits. There are definitely aspects of the net-zero home that fulfill that stereotype: in the test homes, software takes the place of occupants. Software activates the systems inside the home much as real people would, taking daily showers or turning on the TV for the length of a sitcom. To power the place, as you might expect, there are solar panels, and insulation plays a big role in creating the “net-zero” effect.


The windows are all triple-paned; plus, the home itself encased in a thick “thermal envelope,” including a rubber membrane wrapped around the home before roofing. In fact the insulation is so effective, air changes had to be upped to prevent VOCs from building up and making the home unsafe for its software “occupants.”


Today, research on the NIST Home of the Future is ongoing, and incremental improvements are being made to adjust to use patterns. Now that NIST has conquered heat loss through better insulation and gotten its energy from solar panels, the researchers’ next project is to tap latent heat in the soil. They’ll also experiment to bring down the price tag: if you built your own NIST home today, it would sell for $652,000—not exactly affordable for the average buyer, outside of certain cities on the coast.  (San Francisco, we’re looking at you.) But if the technology discoveries continue on their current pace and organizations like NIST integrate them into common building practices, Homes of the Future will soon consume 0% of the nation’s energy, instead of the 21% they consume today.