Bear Creek Lumber

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Volume 16 Number 10
October 2002

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In This Issue:
Merle’s Road Trip
Boomers Senior Housing
Customer Comment
Industry News
Will RE Bubble Burst?
October Specials

In “Style”: Bear Creek Lumber Timbers
Featured in Baltimore Magazine

When designing the Adelaide Rackemann residence, the architect’s specified timbers to help the house capture the natural rustic feel of a country home. The owner didn’t want to live in a barn, but did want to have the sense of openness that older homes had. The open floor plan allows not only easy access, but also a flood of natural light between rooms. In the article in Style magazine, the high ceiling is described as “floating” 12 feet above the floor in a catherdral-like way. The timbers are exposed, giving the house a sense of both strength and natural wood beauty. An eastern facing glass wall brings the outdoors into the center of activity within the house. Concrete slab floors were textured to look like leather, with a stone recirculating fireplace as the primary heat source. The owner is especially thankful for the excess of storage space in the new home, as well as the custom made maple bookcases for her vast book collection.

The house was designed for “aging in place”, with wide doorways, grab bars in the brightly yellow tiled bathroom, adaptable cabinets, and an extra room for a caretaker. The cabin-in-the-woods feel mixes with enough modern amendities that Rackeman’s friends are envious of her new residence. Said the achitect, Ed Hord of Hord Caplan Macht Inc. of Baltimore MD, “In this day of McMansions, a small, simple house is unique”.
The article was published in the 2002 September/October issue of Style Magazine. The builder was John Tiralla of JA Tiralla Builders. Thanks to associate architect Laura Dulski for sharing this information with us.

An open east faced wall lets indoor and outdoor activities meet in a simple covered patio area. The house is filled with natural light.
Photos by Celia Pearson

Merle’s Montana Road Trip
After revisiting jobsites where our products have been shipped, salesman Merle Kirkley submitted these photos from his latest Montana road trip.
Left: Whitefish Lake in the background. We supplied the shakes and the exterior trim, which was rough sawn 4 X knotty appearance grade Western Red Cedar.
Left: Close up view of the 24" #1 Heavy fire-treated cedar shakes. These have weathered
for about one year.
Left: The Dow residence. Siding was 1 X 6 Western Red Cedar A&Btr. clear T&G flush joint with a resawn face. BCL also provided pre-staining.Heavy fire-treated cedar shakes. These have weathered
for about one year.
A New Generation of Seniors With Different Demands
Members of the leading edge of the post-World War II baby boom generation, who were born in 1946 turned 55 last year, which qualifies them to become residents of active adult communities. The latest wrinkle in the expanding senior housing market, these developments are breaking many of the stereotypes typically associated with retirement housing, and they are geared to households that are not only working, but that may also still have college-aged children living at home.
At the Senior Housing Symposium, in Orlando Florida on May 3, William Novelli, the director and CEO of AARP, said of boomer retirees, “ Don’t look for them in rocking chairs or out fishing. Retirement is being reinvented and today’s elderly people have abandoned the front porch. They are at home on the internet, exercising in the gym, out working or having a good time.” Of AARP’s 35.2 million members, who now join as early as 50, half are working because of the demographic revolution. And a full 85% would like to continue living where they already are. This creates big opportunities for remodelers, who can help people age in place by installing grab bars in the bathroom, ramps to the front porch and better lighting for staircases.
Builders should be building homes without entrance steps whenever possible, Novelli said, because this addresses the issues ofaccessisibility and mobility not just for those in wheelchairs but for young mothers with strollers and other people in a range of situations. Basic access should be built in to a house just like the wiring or plumbing. It’s less expensive if it is planned up front, Novelli said.
Just a quick note to say thanks for supplying the 4X4 posts I purchased a few months ago. Beautiful lumber! Structure turned out great.  Picture shows an almost complete set, minus the deck at 5 feet up in the main structure and a canvas top. Kids think it is great!
Eric Smith, Wenatchee, Wa  

Industry News
Construction spending in the United States held steady in July, following two straight months of declines. The Commerce Department said construction spending was unchanged in July at an annual rate of $834.1 billion, after falling a revised 1.7 percent in June. Economists, on average, expected construction spending to fall 0.4 percent, according to Briefing.com. In line with expectations, the pace of nationwide housing starts slowed 2.7 percent in July to a seasonally adjusted annual rate of 1.65 million units, the Commerce Department reported. The South and West reported more modest declines of 3.6 percent and 4.3 percent, respectively. As the exception to the rule, the Midwest posted a 5.8 percent gain in housing starts.
Meanwhile, building permits, which can be an indicator of future building activity, rose in three out of four regions in July. The Northeast, Midwest and West posted gains of 3 percent, 1.5 percent and 0.5 percent, respectively, while the South posted a 2.5 percent decline. Housing production has been running above last year's healthy pace, according to the National Association of Homebuilders. The Association is forecasting 1.32 million single-family housing starts for all of 2002, which would be the largest number since 1978. Sales of both new, and previously owned homes, posted solid gains in July as low mortgage rates motivated buyers to lock in good deals.
Will America’s Real Estate Bubble Burst?

The home construction market has not only held its ground during this recession, it actually has zoomed. The question now is how long the boom will last. Home prices have increased between 6 percent and 8 percent nationally for the past three years, and there has been record growth in mortgage refinancing. On the surface, this indicated the economy might regain post-recession momentum, and resume slow but solid growth by the end of the year.
Over the past few months you’ve probably come across many variations on this theme in news media; however, it’s unlikely that the writers, and analysts, providing the current optimism will be taken seriously long-term. In fact, there are some fairly frightening economic trends surfacing that threaten to negatively affect building professionals across the United States. Two-thirds of Americans own homes. The gains, and values, of those assets have encouraged a steady increase in consumer spending, largely supported by refinancing and borrowing against that property. This should be a good thing because at the bottom of the economic food chain lies consumer spending-where the buck does indeed stop. However, a problem does arise when consumer spending can be traced to a corresponding increase in consumer debt. If that debt as a percentage of one’s asset base increases (and given it’s an asset that is not liquid), then the problem is compounded. Also, when a homeowner’s debt increases, but the value of the home decreases at the same time, it limits the consumer’s ability to borrow money based on the value of the asset base- in this case the home. Indeed, debt is fixed.
If asset values drop, or debt increases in a declining market, an economic bubble develops, and eventually it can burst. In residential construction, it could bring down one house at a time, affecting the entire housing industry, and even the economy as a whole. Are we headed for a deeper recession? Probably not. Are we headed into a weaker housing market? Almost certainly considering how strong it has been. Is there currently anything fundamentally wrong with the economy? No. In fact, the demand for housing will not lessen, especially in tight housing markets where limited supply and increasing demand will keep prices up. Ironically, the same restrictions that make many areas difficult to develop will prop up housing values as fewer homes can be built in the desired area. Places such as San Francisco and Seattle are prime examples.
One of the biggest factors supporting an upwardly mobile housing market is the country’s continuing influx of immigrants who buy into the lower markets, allowing longer term home owners to trade up. The pressure keeps moderately priced housing hot, and favorably effects even upper end real estate. The biggest risk of over-saturation is in the highest end markets where housing is not restricted. Those builders need to be innovative if the recessions does deepen.


Editor: Ela Bannick ela@bearcreeklumber.com Feature Writer: Sage Bannick sagebannick@aol.com

2007

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