SNHBA chief exudes optimism


Local home builder Michael "Mick" Galatio, the 2008 president of the Southern Nevada Home Builders Association, said declining home prices last year and continuing low interest rates make this "the best buyer's market I've seen in many years." He urged builders and their sales forces to keep "a bullish attitude" as the inevitable bounceback draws nearer.

Galatio recently took the helm of the Southern Nevada Home Builders Association, the oldest and largest trade association serving the residential construction industry in Nevada. He assumes the reins at a turbulent time as the Las Vegas real estate industry faces unprecedented challenges and perhaps some rarely seen opportunities as well.

In 1995, Galatio and a pair of partners, John Heard and Mark Casey, founded Desert Wind Homes, specializing in single-family homes for first-time buyers and first-time move-up buyers. The company -- which now serves some move-down buyers as well -- builds and sells about 100 to 125 new homes a year, according to the new SNHBA chief.

Galatio grew up in the bucolic community of Hornell, N.Y. (population just over 9,000) in the western part of the state. He served in the Marine Corps at Camp Pendleton, Calif., in the early 1970s and then returned to western New York to earn an associate degree in building construction from Alfred State College.

Galatio headed west in search of new opportunities in 1975; his journey ended in Las Vegas where he found good jobs in construction, ranging from framing and finish work, to pouring concrete, hanging drywall and supervising job sites. By the late 1980s, he was working for respected builder Bill Schroder of Nevada General Development as a superintendent and project manager, reviewing plans and bids, and overseeing all phases of construction at new-home subdivisions, including Stones Throw, Horseshoe Bend, Willow Bend and Vista Del Sol in the northwest valley. In 1995 he struck out on his own to start Desert Wind Homes.

Galatio, who is now sole owner of Desert Wind, succeeded by filling a niche for customized production housing that includes options such as ramps for the disabled and doggie doors for family pets. He is a strong believer in building relationships by working closely with local marketing experts, Realtors, land brokers, trade contractors and bankers.

The entrepreneur joined the SNHBA in 1995 to get more involved in home building industry issues, especially those related to governmental jurisdictions. He served on the association's Community Planning & Development Committee, was elected to the board of the directors and then was named to the executive committee.

Galatio recently sat down with Monica Caruso, SNHBA director of public affairs, to answer a few questions as he began his tenure as president.

Q: What is the current state of the local home building industry?

A: We're still coming down from the boom period in 2004 and into 2006 that was fueled by speculators, easy financing, low interest rates and rising home values. The industry had to cut back on production significantly in 2007 because of the large number of resale homes on the market. We sold about 15,000 new homes last year, compared with about 36,000 in 2006, and about 31,000 in 2005, so, there's quite an adjustment going on in our industry. It's created a negative atmosphere that's keeping potential home buyers out of the market.

Q: Despite the negativity, do you have any encouraging words about the current housing market situation?

A: We've all slowed down quite a bit, but it's been good for us in some ways. Buyers are getting a lot more attention from the builders compared to when things were going so fast. Builders are offering very attractive incentives to buyers, like appliance packages, free upgrades, lot premiums and closing costs paid by the builder. Prices are coming down, too, and that's improved the local housing affordability situation. It's easier to find a nice home for under $200,000 and rates are still low. It really is a great time to buy a home. It's the best buyers' market I've seen in many years. That's the good part of the market right now.

Q: Where do you see the home building industry in 2008?

A: It's a real unknown until we get through the first and second quarters of the year. Those two quarters are typically our strongest sales period of the year, and then it levels off during the summer and falls toward the end of the year. That's the normal cycle. We're really going to need to watch those two early quarters of the year.

Q: Do you see a strategy that might boost, or help sales in the first and second quarters?

A: We need to go into the first and second quarters with a bullish attitude. We need to readjust the negative attitudes: No more talking down, but looking ahead at what we need to do to get ready for the market to come back, as it always does in the cycle. Our sales' staffs must have a very positive attitude welcoming potential home buyers at the model home complexes. I think builders are going to have to work very closely with their sales' staff, including some training, to prepare them. It's different market conditions than many of them have ever experienced. They're used to sales increasing every year with our population growth and job growth. The decline hit the sales' staffs pretty hard. We need to work with them.

Q: Why are you bullish about improved activity in 2008?

A: The indicators are out there; we're at the bottom of the cycle. We need to use 2008 as the springboard to turn our market around. The association commissioned a study of our housing market by Jeremy Aguero of Applied Analysis that indicated we're actually going to have a housing shortage in 2009 and 2010 as the giant projects on the Strip start opening and create tens of thousands of new jobs. Those people will need housing. We better get going now to be prepared.

Q: What are your goals as the president of the association this year?

A: I want to be even more involved in the working part of the decision-making process that affects the industry. I want to work with the association's membership and community entities to achieve our goals for housing for our residents, such as expediting the planning process, better communication with the building inspection process, being involved with the association's committees that work with the governmental jurisdictions. I plan to attend as many committee meetings as I can and be a hands-on president.

I want to get the message out to our builders to be thankful for our associate members (non-builders), trade partners and financers because they've worked with us during the down times, and it's been difficult for them, too. We want to continue that relationship as we get into a higher production rate of building homes, and are going to have to deal with the challenges of rebuilding our companies and the industry.

I want to stay on top of the important issues that we're dealing with right now, bringing the market back, the drought and the infrastructure needs in our community.

And I want to play an active role in the success of the association's programs, such as our educational classes, the Quality Assurance Program, the Green Building Partnership program, Southern Nevada Housing Day and the Builders Show.

I plan to be busy.

Galatio received the 2005 Builder Member of the Year Award from then-President Rich Priesing for outstanding service to the association and industry, and also accepted the position of second vice president, which put him in line for the presidency in 2008.

In announcing his selection, Priesing had this to say about Galatio: "This member is a true gentleman in the home building industry. He's one of the nicest guys you'll ever meet. This man steps up, front and center, whenever the association needs a home builder to show up and testify at some hearing about conditions in the local home building industry.

"We know we can call on him whenever we need to send a home builder to the front lines -- he's knowledgeable and articulate. He knows how to make a case on behalf of the industry," Priesing said. "This year, he served us well by testifying at government hearings on the affordable housing issue; he's a valuable government affairs liaison, and, he volunteered to serve as the industry's representative on the Clark County Airport Noise Abatement Advisory Board."

Galatio's reputation in the industry has earned him feature stories in the April 2003 issue of Professional Builder magazine, and the summer 2001 issue of Emerging Business magazine.

 

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