Do You Know
A Conversation With
In November, the DOL released a few opinion letters answering questions related to employee continuing education (reviewed in “Is Training Time Paid? DOL Reiterates Standard Position”) and ongoing questions involving employee travel times. Travel time can be a complex issue to assess, particularly given that many employees mix business and pleasure while they are traveling.
The letter addresses a construction company’s concerns. The company had multiple job sites with a primarily non-exempt workforce. Trucks were maintained at the principal place of business and for local work, the employee came first to the main office to obtain a truck and then drove the work truck to a job site. The work truck was returned to the place of business on a daily basis.
Local job sites
Not surprisingly, if an employee is required to come first to the main business office, pick up a vehicle, and then travel to a job site, the time spent between moving from the main business office to the job site was considered compensable time. This is clearly in line with prior DOL opinions and regulations relating to the Portal-to-Portal Act.
In some instances, laborers who do not require a company truck may drive directly to the local job site. Again, in conformance with prior opinions relating to the Portal-to-Portal Act, travel from the employee’s home to a job site, even if that jobsite may differ on a day-to-day basis, is considered a normal commuting time and is not compensable. Even if employees chose to congregate at a different site in order to carpool, the time to that particular site and then to the job site are all considered to be a regular commute.
This would be different if the employer required the employee to report to a place for transportation. This could occur if an employer was limiting vehicles on a job site, so it had them park 20 miles away and then transported them. The time between parking and the job site in that scenario is likely paid time.
Remote job sites
A second set of scenarios involve truly remote job sites where travel away from home is required. In this instance, laborers traveled from their hotel to a job site and this time was considered to be commute or normal home to work travel which is not compensable.
The DOL draws a distinction between the person driving to a remote site and their passengers.
Initial transportation to the remote site and the hotel was considered to be compensable time if that time, “cuts across their normal work hours” even on a nonwork day for the employee driving the vehicle.
Passengers, however, have a different standard. The DOL indicates, “if the laborers are traveling to the remote job site as passengers outside of their normal working hours, WHD would not consider their time compensable.” If the laborers are traveling to the remote job site during their normal working hours, even if not on normal workdays, their time would be compensable.
Note that there is a difference between the original travel, which brings the employee to a remote worksite where he or she may be staying (possibly compensable), and the day-to-day travel once someone is at a remote site. Time spent going from wherever they are staying to the work location is typically not compensable.
Chooses to travel
Another scenario would be an employee who chooses not to stay overnight or in a hotel at remote job sites but to commute to the remote job site on a daily basis from their home. That commute, even though potentially significantly longer than the employee’s regular commute, is not considered to be compensable time.
Do You Know
A Conversation With
As the last days of the 2020 Des Moines real estate market come to pass, there are many national reports forecasting what will happen in 2021. If 2020 taught us anything, it is that predictions are not as easy as they used to be. In this issue, I’m looking at national forecasts and applying them to the Des Moines real estate market.
The cost of borrowing money to purchase a home in 2020 was historically low. That doesn’t automatically translate to affordability, however. With mortgage interest rates below 3% this year, home buyers were able to increase their ability to find more homes in a record low inventory market.
However, even as the Federal Reserve works to keep rates around the 3–3.5% range into 2021, the real challenge for buyers is to stay within their means and buy smartly so they don’t put themselves in a position that they have maxed out their income to debt ratios. Just because the cost of borrowing money is “on sale” doesn’t mean that buyers should spend to their limit.
- Central Iowa home buyers may find it frustrating to have the opportunity to buy using such low mortgage rates yet not have the selection of homes to choose from.
- There will continue to be high demand and low inventory through 2021.
Home Pricing in 2021
A change in sale price year-over-year isn’t the same as home appreciation values. Overall, in the Metro, the sale price of homes sold in 2020 were up by 5½%. If you look only at Single Family Resale properties, prices were up 7% and Condo-Townhome Resale properties ended up 3.3%. In the new construction arena, sale prices of new build Single Family homes were actually down 2% and Condo-Townhome new build sale pricing was down 2½%. This drop in average sale prices for new homes is explained by understanding that home builders spent much of the year catering to the entry level new home buyers in a market where resale inventory was extremely low. Many buyers found that with record low mortgage interest rates, they could reach the entry level pricing of new homes.
- With the continued high demand, especially of larger homes, expect buyers to push pricing upwards challenging appraisers to justify higher home values in 2021.
- New construction pricing will rise as a continued shortage of building materials affects that segment of the market.
Consumer Confidence & Employment
With a transition in national leadership and a Biden administration taking over in January, there is likely to be little change in homebuyer eagerness. The Central Iowa real estate market activity has proven that there is confidence in the local economy and the pandemic related seasonally adjusted state unemployment rates at the end of November were at 3.6% (compared to pre-pandemic 2.8% in November 2019).
And the recent announcement of a $900 billion covid relief bill bringing a new round of stimulus payments ($600 to most Americans including dependents) and the extension of unemployment assistance and much needed rental assistance is giving many Americans a chance to take a deep breath again. In addition, Covid-19 vaccinations have begun, starting with health care and front-line workers.
- With our local confidence growing and a return to more normal employment rates, 2021 should begin to see home sellers that have been staying on the sidelines the last couple of years put their homes on the market.
Home Buyer Demand and Home Seller Inventory
Clearly, 2020 was the year that experienced a severe imbalance of homebuyers to home sellers. It was truly a record-breaking year for home sales even as many homeowners pulled back from listing their homes and took a wait and see approach during the pandemic. Frustrated homebuyers rushed to new listings as they hit the market buying at a record pace that increased home sales in 2020 by over 15% from 2019, all the while the number of homes for buyers to choose from is down 40% from 2019.
- 2021 will be a building year (both new construction and the addition of resale properties) as home sellers begin to re-enter the housing market. Buyer demand will remain high and homes will continue to be purchased so quickly that inventory levels may not appear to rise.
- By watching Pending Sales activity and New Listings activity closely, we will be able to tell if we are gaining any ground in this area in 2021.
- The potential for another 16,000-sale year is certainly attainable in 2021.
Suburb Migration—Is It A Real Thing?
Earlier this year there was talk nationally about buyers moving out toward the suburbs during Covid-19. It appears that the Des Moines metro market is indeed seeing some Suburb Migration. The areas in Red show a positive percentage indicating an increase in sales compared to 2019. The brighter the Red, the larger the percentage.
Pleasant Hill on the east edge of the Des Moines metro leads the way with almost a 19% increase. Norwalk came in a just under a 12% increase. Interestingly, the very core of the city—Downtown Des Moines zip code 50309—saw a 10.8% increase in sales as a result of several pre-sales in new condominium projects. This data was calculated by comparing total unit sales by zip code in 2020 vs 2019.
Do You Know
A Conversation With
As we start a new year, it’s fair to say that we’ve all learned something about the social, political, physical and environmental forces that have affected everyone. And, in some ways, our lives will be changed, perhaps permanently. But as an investor, what lessons can you learn from 2020?
Here are some to consider:
- The markets look ahead. Here’s something many investors discovered in 2020: Investment prices don’t always move in the same direction as the overall economy. This might not have seemed apparent right after the COVID-19 pandemic struck in mid-February, as the overall economy and the stock market took big hits. But just about five weeks later, the markets began a rally that lasted several months. During this time, the economy also recovered somewhat, but still remains on weak footing.
What can explain this discrepancy between the markets and economic activity? Essentially, economic numbers, such as the unemployment rate and gross domestic product (GDP), reflect what’s happening today, but the markets are always looking toward tomorrow, which means they are anticipating a stronger economic recovery and the results that come with it, such as greater corporate earnings in 2021. No one can say for sure what the future holds, but you can usually know the market’s opinion by looking at its performance.
- Opportunities will always exist for investors. Although the coronavirus seems unprecedented, the equity markets have rebounded from many crises before it. From war to global financial meltdowns, the market has seen it all. But even at the height of these events, when the markets might be most affected, individual segments or industries can do well.
For example, in the current environment, when many people have been forced to work and shop from home, and get their entertainment online, it’s probably not surprising that some parts of the technology sector have seen their economic activity grow, along with their stock prices. Here’s the key point: Investment opportunities always exist, especially in times of market stress—and smart investors will find them and incorporate them into their portfolios in a way that’s appropriate for their goals and risk tolerance.
- Patience and discipline can pay dividends. As mentioned above, the stock market dropped sharply in the weeks immediately following the pandemic, but then gained steadily for months afterward. Investors who tried to “cut losses” and exited the market likely did so at the wrong time and missed out on the beginning of the upturn. Unfortunately, this is not uncommon—investors who overreact to market declines often find themselves on the investment sidelines just when a new rally begins. Rather than being reactive in this way, you may be better off sticking with a long-term investment strategy, and buying and selling investments only when it makes sense for your situation, such as when you need to diversify your portfolio.
For many reasons, it’s unlikely that we’ll see anything exactly like 2020 again. But some of the investment lessons we learned are applicable in every year—so keep them in mind for 2021 and even beyond
Do You Know
A Conversation With
I was talking with a business owner recently and he told me this:
“I’d LIKE to send social media updates more often, but my business partner thinks it’s a big mistake. He says we’ll alienate our community and he’s concerned people will unsubscribe in droves.”
I gave him my view on that, which is basically: You can’t post too often …
You can only post poorly … or too obnoxiously … or too salesy … and without a sufficient amount of storytelling or other value-driven content intended to make the lives of your subscribers better, well yeah, then you WILL get people jumping off like deck chairs being tossed off the Titanic.
(I mangled that simile on purpose, just to see if you were paying attention 🙂
Anyway, he listened to my thoughts on all this. He did not disagree with the notion that posting more content on social media generally equates to increased revenue and a cascade of other good things as well.
He was part of the choir that didn’t need preaching to.
But then he said the following:
“No, I think it’s something else. I believe his refusal to post more often stems from his thinking that social media isn’t that important. I’m not sure how to handle this, it’s really infuriating.”
Wow. So his best explanation for this impasse was his partner not caring about social media. It’s rare that my sympathies can change so abruptly over the course of a short conversation.
In Minute 1, I’m feeling his pain. Two sentences into his rebuttal I’m on Team Business Partner and Googling “vertigo symptoms.”
There are lots of definitions of what makes up a good person or contractor, but you could do a lot worse than this one: humility, with a willingness to look inward for responsibility when something goes wrong.
The alternative is to be the finger-pointer, the excuse-maker. And this is not to say that this man’s business partner doesn’t have his own issues.
Look, I am not Dr. Phil and this is not an advice column. This is not about that. But I thought this story was worth telling for the lesson of getting out of your own way when it comes to social media marketing.
Get your message out there, imperfect as they may be. (Like this one.)
Do You Know
A Conversation With
The line of thinking is: “I’ll put up another picture of a half-done deck so people can see that we are doing “something.”
And I put “something” in quotes there because in the minds of too many people that something equates to: “I’ll just keep posting pictures of this job, then when I’m done, I’ll go on to post pictures of another job that looks exactly like the last one, but at least I’m doing something on social media”
Wrong, wrong, wrong. On so many levels. Stop equating posting for the sake of posting with a great social media presence. (That should be posted in huge letters on the top of every computer in your office… oh, but wait… those machines are there just to check email or the bank balance, never mind.)
Hey, they call it “mailing it in” for a reason.
You’re posting on social media, but so what?
Posting on social media only matters if you’re giving your community something they can use, or what I like to call “Being a Utility,” but continually posting updated project pictures is what will drive your community away.
But you think posting your projects pics tells your community you know what you are doing, It doesn’t. It’s a lie that contractors tell themselves to this day. Part of my mission with The Contractor’s Toolbox is wiping that out. Only when you decide to execute a proper social media strategy is when your community start to engage with what you do. It works for everyone who uses it consistently.
So let’s talk about what you REALLY want to accomplish with social media.
Like, I said, just because you’re posting to Facebook, LinkedIn, Twitter or Instagram doesn’t mean its being done properly. NONE of that matters. Why? Because what truly matters is educating your community.
Fine, if you like decks, then post pics of your completed decks. But mix in other information your readers can use that has nothing to do with decks. As Zig Ziglar once said, “What gets measured gets improved.”
Your social media needs to have performance goals. Do you want to be a resource to your community, or just be like every other contractor who posts half-completed jobs no one else cares about? Boring old images of demo day or the day the sheetrock gets delivered.
Try this instead: post with the intention to set new ideas and concepts in your reader’s minds so they know what they are missing…and want you to fix it for them now. WHICH social media post types are truly useful and which are a waste of time? Track your progress and keep a log of your social media content challenge your readers to think.
Rather than be the guy or girl who just “shows up” and “puts in time,” show some purpose and BE the contractor whose content people can’t wait to see because their posts went from a pathetic looking Facebook page to a full-throated resource people can actually use.
Useless or useful—it’s your choice! And it’s a choice you make every day.
Copyright © 2021 Home Productions, LLC. All rights reserved.