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Building Market Intelligence Q 3– Q 4 2 0 1 6







Local Governments Dictating Growth

Labor Shortage to Get Even Worse BY CHRIS PORTER

Starter Home Solutions in Expensive Markets

Remodeling Rather Than Moving BY TODD TOMAL AK





Declining Rural Life BY JOHN BURNS

20 The Foreclosure Generation




Surging RV Demand



The Sharing Generation Born in the 1980s


The Housing Cycle: Market by Market BY RICK PAL ACIOS JR.


6% Increase in New Home Competition BY JOHN BURNS


Building Homes for Rent BY JOHN BURNS

The Latest in Masterplan Amenity Innovation BY DEVYN BACHMAN


Hurricanes’ Historical Impact on Construction BY TODD TOMAL AK


Working Moms Love Surban™

Wall Street Has it Wrong: Big Difference Between Luxury Home Sales



Our Client Survey Says Say Good Times Will Continue BY JOHN BURNS





Publicly Traded Home Builders State of the Industry BY ALEX WILSON


Mortgages More Available Than Many Think BY BRENDA GARCIA-LEMUS


Successful Age-Restricted Lifestyle Apartments BY JEFF KOT TMEIER




Is My Uber Driving Holding Back the Housing Market?



OCT 32

E-Commuters Require Better Home Office Space

Local Governments Dictate Housing Growth

By John Burns, CEO July 2016 New home construction has been growing slowly and unevenly across the country, partially due to increasing difficulty getting projects approved and financially viable. CNBC just did a 3-minute feature on what I consider to be the poster child for difficult approvals: Sea Summit in San Clemente, California. We have worked in most major markets across the country and can tell you there is plenty of housing demand at lower price points. Most builders would love to build more affordable homes, yet they cannot do so and make a normal profit margin. We surveyed more than 100 builders earlier this year and learned that federal and local agencies have added significant building costs that did not exist 15 years ago. In many instances, government added these costs to

protect the environment and improve the area for existing residents. While these are noble goals, builders have to charge more for new homes—or simply not build homes in many instances. The chart to the right shows where builders have been successful growing their businesses in the last year and where they have not. Rolling up the top 33 markets in the country, we find that the number of new home communities has risen only 4% in the last year. At that pace, it will take until 2023 to get to 1.1 million singlefamily homes permitted—a number consistent with historical averages. There are many reasons why the recovery is not stronger, but the primary reason the volume recovery is stronger in some areas than others is local government. Government attitudes toward housing tend to fall into one of the following two categories: • Friendly and affordable. Texas and Georgia are well known for their business-friendly environments, where builders can get things done quickly to meet demand. Massive investments in freeway infrastructure in Texas the last decade have opened up huge areas of land for development, resulting in the two largest construction markets in the country. Texas has new homes near employment centers that are far cheaper than in most areas, even considering the strong price appreciation in the state the last few years. • Unfriendly and unaffordable. Au contraire, Virginia, Illinois, Washington (except for downtown Seattle), New Jersey, and California are well known for throwing hurdle after hurdle at builders. These highly desirable places to live have become extremely expensive, as new construction cannot keep up with demand. The bottom line is that there is a huge correlation between government attitudes and new home construction and prices. We strongly believe that the large, affordable markets will grow faster than the other markets. We have been advising our clients to look at the friendly and affordable markets for volume growth and the unfriendly and unaffordable markets for price appreciation. We expect 62% of new households to move into the Southern states, where 42% of US residents currently live, shifting the population further south. 5

Labor Force ShortagE AHEAD By Chris Porter, Chief Demographer | July 2016

A surge in retirees (people turning 65) will slow the growth of workers in the US. In 2000, 2 million people turned 65; 3.5 million did in 2016; and 4.0 million will in 2021. Even with a higher than usual rate of retiree-aged people working, US economic growth will almost certainly remain slow. We calculated that employment can only grow a maximum of 1.5% to 1.7% for the next three years (2.3 to 2.5 million jobs per year). After that, it will grow 0.9% to 1.0% per year (1.5 to 1.6 million jobs) through 2025, even using aggressive assumptions. We believe actual employment growth will be much slower. 6

We looked at the traditional working age population of 20–64 (the labor pool). From the time the first baby boomer turned 20 in the mid1960s until they turned 65 in 2011, this labor pool grew at a rate of 1%–2% per year. The reason? A much larger number of 20-year-olds were consistently entering the labor pool than 65-yearolds leaving it. We also looked at older workers and the recent increase in their propensity to work. Even with a surge in people working past 65, labor pool growth will be slow.

We believe actual employment growth will be much lower because we made some very aggressive assumptions to calculate this paltry level of economic growth, including: • Very low unemployment. The overall unemployment rate falls to 4.0% in 2018 and to 3.7% for those aged 20–64 and stays there through 2025. Only once in the last 30 years has unemployment averaged 4% for an entire year: the year 2000. • A huge return in the desire to work. The percent of 20–64 year old population who wants to work returns to 79% in 2025—3% higher than today and the highest since the year 2000. The maximum was 80% in 1997.

This would mark a significant reversal in trend for a rate that has generally trended down for 18 years. • Older people working long. Retiree participation continues to accelerate from today’s all-time high of 32% to 37% in 2025 for 65–69 year-olds and from 19% today to 22% for 70–74 year-olds. As we addressed in an earlier newsletter, the tightening of the labor supply will likely mean incomes will grow again, as employers have to compete for talent. New productivity tools will enable companies to do more with fewer people, but we believe wage pressure will exist nonetheless. The expected surge in retirement will impact so many aspects of our economy that we have devoted an entire chapter to this topic in our book Big Shifts Ahead: Demographic Clarity for Businesses. 9

Starter Home Solutions in Expensive Markets By Adam Artunian, Senior Manager August 2016

High land prices in good locations generally force builders to build expensive homes. However, a number of builders have figured out how to build and sell entry-level homes to a growing demographic group. Builders are capitalizing on the rising number of affluent first-time buyers. These buyers tend to be 10

dual-income, college-educated buyers with 10+ years of work experience who have delayed having children in comparison to their parents. For example, 23% of married couples had college degrees in 2014, compared to just 12% in 1990. We believe this affluent demographic will grow, too, as the surging number of people who

turned 20 in the last decade may be ready to buy a home in the next decade. To the right is our forecast by age group for 5.2 million more homeowners over the next decade. Many of our clients have identified fantastic solutions to address the demand of this growing demographic. Knowing exactly what this buyer wants and building the right product in the right location is crucial for success. Here are a few solutions: • High-density detached can work well. There are many detached products (with private outdoor spaces) achieving 16+ du/acre. Detached homes are generally more desirable for young families and allow for lower HOA dues. • Smaller homes. With good design, homes do not need to be large. Entry buyers will trade off size (to some extent) for location and lifestyle. • Three-story homes can live well for families—if done correctly. The layout must be open and allow for lots of light. Consider rooftop decks in lieu of private backyards. • Energy efficiency can save buyers hundreds or thousands of dollars per year, helping them choose a new home over a resale. Being green can save the homeowner a lot of money. Be sure to include this as a standard feature and market it. • More sales success has been achieved at prices below the FHA loan limit. FHA’s low-downpayment options appeal to many buyers. • Private outdoor space is crucial. These spaces do not have to be large, just functional. Consider pocket yards, side yards, and rooftop decks.

• Minimize homeowners association dues and infrastructure bond payments. Entry buyers are payment sensitive and will usually trade a lower monthly payment for fewer community amenities, expecially if the community is walkable to shops, restaurants, and entertainment. We have several tools to help our clients achieve entrylevel home sales success: • Our Consumer Insights Survey, with over 22,000 nationwide responses, provides unique insight into the price and feature trade-offs that entry-level buyers will make. • Our DesignLens subscription features the latest high-density solutions our consultants and selected industry experts have identified across the country. • Our demographics book called Big Shifts Ahead: Demographic Clarity for Businesses highlights our household formation and homeownership forecasts by age group. • Our consulting team has seen what works and does not work in every market. 11

Homeowners Remodeling Rather Than Mov ing By Todd Tomalak, Vice President August 2016 Homeowners are remodeling rather than moving. We know this because “big-ticket� remodeling revenue is surging, while homes for sale as a percentage of occupied households has hit an all-time low. Home builders and resale agents voice frustrations, while remodeling contractors have never been this busy. Homeowners are on pace to spend more than $215 billion on remodeling this year—$73 billion on big projects (above $5,000 per project) and the remainder on small projects.

Building product companies are experiencing very uneven demand right now: • Siding vendors have strong sales, as long-time homeowners (we call them nesters) frequently replace the siding. • Deck companies benefit less, however, as recent movers tend to put in new decks, while nesters do not. The graphic above illustrates the big discrepancies in spending between someone who has recently moved, has been in their home 4–9 years, or has been in the home ten years or longer. 13

T h e S h a r e rs: We are Tired of “Sharing” our Parents’ Spare Bedroom! By Mike Willinger, Senior Consultant | August 2016

I am a Sharer. At JBREC, we use the term Sharer to mean someone who was born in the 1980s and who is currently 26–35 today. There are 44 million of us in the US, and I have outlined our defining characteristics below: • We share our likes and location on social media. (This is sometimes me.) • We share rides on Uber or vacation rentals on Airbnb. (I know I do.) 14

• We believe our education is not paying off yet due to a poor economy and high student debt. While the Great Recession made us more educated, practical, and thrifty, we are less likely to commit—especially when it comes to home purchases. (Certain of these characteristics certainly describe me.) • Many of us share a home with our parents and are delaying marriage and children, thus delaying household formation and homeownership by 5+/- years. (No and yes for me.) • We are close to our parents. This is in part due to the advent of the birth control pill, which was approved in 1960 and resulted in a sharp drop in the number of children per household. (I am definitely close to my parents.)


As Sharers, we are an important demographic decade that will greatly impact the housing industry. In 2015, we headed 18.8 million households in the US, including 7.4 million owned homes and 11.4 million rented homes. While most of us have been more likely to rent and live urban—due to delayed marriage/kids and huge improvements in big city living—we are becoming more prevalent in the housing market today. Builders are starting to tailor homes for our decade (see Adam Artunian’s blog Starter Home Solutions in Expensive Markets), but the big boom will likely come when we move to the suburbs for affordability and schools. I bought my first home in 2014. I was tired of the apartment lifestyle, paying rent, and wanted to take advantage of low interest rates. My preferences included: • Townhouse for affordability, but an open floor plan for having friends and family over • Dedicated work space for telecommuting

Good suburban location close to retail, but with a sense of community

• Didn’t need new construction but did not want to do major improvements • Good suburban location close to retail, but with a sense of community I, like many Sharers, do not consider my first home purchase a “forever home.” Instead, I looked for one that reminded me of the American Dream, where I could start the next chapter of my life.

Mike’s Housing Preferences MIKE WILLINGER Senior Consultant & 1980s Sharer

Townhouse for affordability, but an open floor plan for having friends and family over Dedicated work space for telecommuting

Didn’t need new construction but did not want to do major improvements

Declining Rural Life, Despite Technology Improvements By John Burns, CEO | September 2016

Only half as many households as normal choose to live in rural areas these days. Using our definitions*, only 8% of household growth occurred in rural areas over the last five years, compared to the usual 17% of growth over the prior 30 years. Over the last five years, urban captured 21% of growth compared to the 30-year norm of 8%.

Now, I know that many cool, creative jobs are in urban areas, that big cities have spent billions redeveloping their downtowns into entertainment hubs, and millennials who are delaying families can hold off on the need to live in a good school district longer. However, consider the following: • More people than ever are retiring, and retiree growth has historically been strong in affordable, rural areas. • More knowledge workers than ever can telecommute from anywhere (we need a new term that doesn’t use the prefix tele in it), including “retirees” who continue to work part-time. • Online shopping has brought the best of retail to everyone with a postal address. Will rural living make a comeback? We are not forecasting* that it will, but I worry that we could be wrong. *From our book Big Shifts Ahead: Demographic Clarity for Businesses 19

By John Burns, CEO | September 2016


From 4% above Norm to 7% below Norm Homeownership Those born in the 1970s have fallen from having a 4% higher than normal homeownership rate in 2004 to a 7% lower than normal homeownership rate today. The housing crisis hit the 1970s Balancers harder than any other generation. We call those born in the 1970s Balancers because they best represent the clear shift in the US toward more work/personal balance. We could have called them the Foreclosure Generation. In 2004, those born in the 1970s were 25–34 years old, forming families, and ready to buy their first home at the same time that mortgage credit was flowing freely. That year, almost 50% of 1970 Balancers owned their home—a full 5% higher homeownership rate than the average since 1981 and a whopping 11% higher homeownership rate than today’s 25–34-year-olds*. Only 39% of today’s 25–34-year-olds own their home. 20

Fast forward ten years to 2014, and those same 1970s Balancers are 35–44 years old. They have a 59% homeownership rate today, which is 7% below the norm for that age group and the lowest rate for 35–44-year olds since the data became reliable in the early 1980s.

What Happens to the Other 7%? A 7% lower than normal homeownership rate at age 35–44 has huge economic and societal implications. So does a 6% lower than normal homeownership rate at age 25–34. Will home buying activity per adult remain lower than usual? What impact will this have on the economy, particularly for all of those businesses that rely on homeownership and home transactions to drive growth? These businesses range from the obvious, like real estate agencies and title companies, to the less obvious, like furniture manufacturers and landscapers.

In our book Big Shifts Ahead: Demographic Clarity for Businesses, which is now available for purchase on Amazon, Chris Porter and I took our best shot at projecting the homeownership rate for each generation by 2025, assuming the economic, mortgage underwriting, and societal shifts we deem to be most likely. The result was an overall 60.8% homeownership rate in 2025—the lowest since the mid-1950s. This will be 5.2 million more homeowners—15.9 million additional homeowners born in 1960 or later less 10.6 million older homeowners who will pass away or transition out of ownership. Therein lies the opportunity: marketing and selling to those 15.9 million new homeowners, only 2.8 million of whom will come from the Foreclosure Generation.

This chart is an excerpt from our upcoming book Big Shifts Ahead: Demographic Clarity for Businesses.

*The homeownership rate is the percentage of households who own versus rent. People who do not head a household, such as those living with their parents, are not included in the calculation. If included, today’s homeownership stats would look even lower. 21

Su rgi n g Demand for Homes with RV Parking

By Pete Reeb, Principal September 2016 The RV industry is on pace for record RV shipments this year. The Recreational Vehicle Industry Association (RVIA) estimates that over 400,000 RVs1 will be shipped in 2016. About 9 million RVs are now on the road in the US, and an estimated 8% to 9% of all US households now own an RV. New high-end motor homes can easily cost $100,000, $200,000, $300,000, or more—a sizable investment that you don’t necessarily want to just leave sitting out on the street. 22

So…where do you park all those things? New home builders have come up with at least four solutions for new home buyers who want to keep their RV close to home:

1. RV Parking Lot Our Florida market expert Lesley Deutch noted that GL Homes incorporated an on-site RV and boat parking area in their active adult masterplan Valencia Lakes in Tampa, FL. Marisa Lufkin, Project Manager at Valencia Lakes, notes that the RV parking area was a big selling point for the community when they first opened, and that all the spaces were reserved within their first year of home sales. They now have a waiting list. The spaces lease for $65 per month (paid up front for a full year), about double the price of a space in a traditional RV parking facility. Although the RV parking area at Valencia is roughly 1.3 acres in size and has about 50 spaces, other communities with RV parking lots are as small as 0.5 to 0.6 acres with 25 to 30 spaces. Many people also use the spaces for boat storage (estimated at 10% to 25% of spaces).

2. RV Garage Attached to the Home Las Vegas market expert Ken Perlman noticed that Lennar was having success offering homes that include an RV garage at their Encore Collection project in Heritage, an active-adult community in the Cadence masterplan in Henderson, NV. According to Brian Bell, the on-site sales agent at Encore, they offer one plan with an RV garage, and it’s their most popular plan. Despite about a $25,000 premium, around 20% of the homes they’ve sold so far are the RV garage plan. The garage is 22’2” x 42’8”, which is large enough for most (but not all) RVs, and includes a 50amp outlet (which can also be used to charge electric vehicles). Homeowners can clean out tanks through a sewage connection outside the back door of the garage. Lot sizes are about 6,000 square feet. 23

3. Entire Community with RV Garages Arizona RV Homes is developing Valley View at Sunrise Hills, a new home community in Ft. Mojave, AZ where every house includes an RV garage. The standard RV garage is 22’ x 52’ (1,144 square feet); however, Arizona RV Homes company owner Ron Bernstein notes that they can modify the garages and that he has built some as deep as 70’ and 80’. Lot sizes are a minimum of 9,500 square feet and include not only the enclosed RV garage, but an additional outside pad with full hook ups that is large enough to accommodate a second RV. Some buyers have added additional one- or two-car garages in the backyard. One floor plan offered is a one-bedroom, one-bath house with just 766 square feet—in this case your garage is bigger than your house! Many buyers at Valley View upgrade the garage and include air conditioning. One buyer added a loft with an elevator in the garage. Homes range from about $175,000 to $350,000.


4. RV Port-Homes Reunion Pointe by Bella Terra located east of Mobile, Alabama offers RV “port-homes.” These are homes with a covered outdoor area at the side of the home large enough to accommodate an RV, but open to the air. According to the builder, 74% of their buyers prefer a two-bedroom home. The target market is baby boomers, including full-time residents and second-home owners. The builder offers a three night “stay and play” special at a sister community to introduce prospects to the community lifestyle.

Honorable Mention: Side Yard RV Space—the Old Standby Many new home builders plot homes with a side yard space wide enough to accommodate an RV on a lot (typically at least 15’). In many cases, it’s as simple as just making sure the side yard space is wide enough and that the driveway configuration is such that an RV can be pulled into the side yard. Make sure that the space is wide enough for slideouts. New home projects advertising “room for RV parking” can stand out from the competition.

With more and more Americans owning RVs, builders have the opportunity to design homes and communities to accommodate RVs and set themselves apart from the competition. Our team of market experts can help you assess whether RV parking is an amenity to include in your next new home community. 1

Includes travel trailers, fifth-wheel trailers, truck campers, folding camper trailers, and motor homes. 25

The Housing Cycle: Market by Market

By Rick Palacios Jr., VP & Director of Research | September 2016 Where are we in the housing cycle? This, by far, is the question we get asked the most. It’s often framed with the metaphor of a nine-inning baseball game: What inning are we in? This question implies that markets move in unison, driven by similar factors. In reality, every market has its own unique set of industry influences, supply impediments (or lack thereof), and demographic drivers. While some markets took it on the chin during the last cycle, many others were left relatively unscathed. To better answer the cycle question, we examined all of these influences across the 20 largest new home volume markets. I break down our findings below.


Phase 1: Cycle Bottom / Early Recovery Declining to flattish home price and sales trends remain the norm, and investors can still find distressed opportunities. Only Chicago remains in the Early Recovery phase. Home values there are 23% below prior peak, and new home sales lag a whopping 85% below prior peak. Chicago’s economy continues to underperform, hampered by underperforming sectors such as manufacturing, financial services, and government. Lastly, budget and pension problems increase the likelihood of tax increases down the road—a risk many local builders/ developers/homebuyers aren’t interested in taking.

Phase 2: Expansion Capital investment picks up in the Expansion phase, accompanied by rising home values and sales trends. Affordability is good, and construction activity has reached healthy levels. Many of our clients today are laser-focused on these geographies, continuously adding to their investments in these markets. Job growth has come back nicely, with the lion’s share of Expansion markets recovering all of the jobs lost during the Great Recession. Prices have yet to rebound massively, with home values roughly 20%–30% below prior peak in markets such as Las Vegas, Riverside-San Bernardino, Phoenix, Orlando, and Tampa. Investment risk also remains fairly muted. Our Housing Cycle Risk Index™ (measuring demand/ supply/affordability within each market) indicates low to very low risk levels in all Phase 2 markets except Denver, Nashville, and Orange County. All three markets have nearly reached the Exuberance phase.

Phase 3: Exuberance Capital has flowed freely for several years now in these markets. Prices and sales volumes have surged, and smart money is now investing more cautiously. Austin, Dallas, the Bay Area, and Seattle all fit this description. It’s important to note that Texas markets never shot up to the extent that Phase 1 and Phase 2 markets did during the mid-2000s. Home values in both Austin and Dallas barely budged during the Great Recession, falling a modest 3%. Since then, prices have been on a tear, rising almost 50%. Job growth has also been phenomenal, with Dallas and Austin now possessing roughly 20% and 30% more jobs than during their prior peaks. Higher-paying jobs in tech, health care, and construction have driven this increase. Other Phase 3 markets, such as the Bay Area and Seattle, didn’t quite experience the run-up that other markets did during the subprime heyday. Rather, their economies were still recovering from the dot-com bust, with job losses stretching from 2001–2004. Tech has since entered a renaissance: surging job growth, booming construction activity, and sky-high home prices have become the norm in these markets. Along with a possible tech slowdown, our biggest concern in all Phase 3 markets is lack of affordability. Already we are beginning to see signs that look eerily familiar to prior boom/bust cycles. Builders in more affordable spillover markets such as Sacramento note a surge in transplants. Bay Area buyers are cashing out or are simply priced out of buying close to where they work.

Phase 4: Contraction / Early Downturn Only Houston has entered the Contraction phase. Oil’s move from

$100+/barrel to just $45 has resulted in job growth falling from 100,000 jobs per year to less than 10,000. Construction activity has pulled back, particularly in apartments. Higher price point homes have felt the brunt of the downturn, while lower price points have held up remarkably well. We believe Houston will remain in Phase 4 through 2017 and will most likely avoid the full-fledged downturn/recession associated with Phase 5.

Phase 5: Full Downturn / Recession Capital losses are the norm and are typically unavoidable at this point in the cycle. At the moment, none of the major new home markets are in recession.

Takeaways Our job is to help our clients decide when and where to place their investment chips throughout the cycle. We do this by objectively assessing risk/return profiles in housing markets throughout the country. We believe that the vast majority of markets remain in the Expansion phase. Plenty of innings are left to be played this recovery in these markets. There are a handful of markets that appear long in the tooth based on our market-specific definition of the housing cycle. In baseball terms, we’re pretty close to the 7th-inning stretch in Austin, Dallas, the Bay Area, and Seattle. These four markets are currently some of the strongest and most profitable markets in the country for our clients—and could very well remain so for quite some time, especially if rates stay low and tech avoids a major correction. 27

Competition Mounting as Community Counts Up

6% By John Burns, CEO September 2016 Strong housing markets attract competition. Home builder competition in the 33 largest markets in the country has increased 6% over the last year to 8,336 new home communities. These communities represent about 40% of US new home sales. The increases vary wildly by market, as shown in the chart to the right. It won’t surprise you that community counts are down as much as 27% in some of the most supply-constrained markets like San Francisco, Seattle, and Boston. But it might surprise you that community counts are up strongly in some supply-constrained markets, too, such as 31% in Orange County (CA) and 22% in Fort Lauderdale. Rising supply in high-priced markets can change dynamics quickly. Here are three examples: 28

1. Orange County, CA. Orange County’s housing market has clearly become more competitive in the $1 million +/- price range in the masterplans where much of the supply has been added. Consulting leader Adam Artunian reports that builders have been relying on an influx of foreign buyers to sell these expensive homes. Multiple times in the last year sales have surged and then slowed, and then surged again for reasons that have more to do with issues overseas than with Orange County’s local dynamics. 2. Fort Lauderdale, FL. In Fort Lauderdale, consulting leader Lesley Deutch reports Cal Atlantic and Hovnanian recently entered Fort Lauderdale, and Pulte will open up next year. Most of the local builders were not planning for this increased level of competition. 3. Northern California. In Northern California, consulting leader Dean Wehrli reports that increasing supply in both Sacramento and the East Bay have created pressure on builders to execute better. A few builders who pushed prices too far have had to retrench, and other builders who opened communities before they were buyer-ready have struggled as well. The builders with desirable floor plans that are priced right and executed well tend to outperform. The lesson here is to do your homework and don’t get sloppy.

Monitoring competitive supply can be just as important as monitoring overall market conditions. This is why we geocode communities in every MSA for 744 home builders. Those builders represent about 58% of US new home sales. Our recommendations: • Estimate how much competition will be in the market while you are selling and make that part of your budgeting plans. • Pay attention to new builders coming to town. Publicly traded home builders can afford to subsidize a division to get them up and running to scale. • Do it right the first time. While it is tempting to start sales right away and to set aggressive deadlines for your construction crews, be more realistic with your home buyers. Set reasonable expectations and pleasantly surprise them when you exceed expectations. Otherwise, you will lose sales to your competitors. If you have any questions about this email, are interested in seeing our local market research reports, or would like to speak with one of our consultants, please reply to this email. You can also directly contact one of our team members listed on our experts page. 29


Single-Family Homes F O R


By John Burns, CEO | September 2016 Building single-family rental home neighborhoods seems like a great idea, until you run the math. Almost 12% of all households in the country now rent a single-family home. Certainly, a portion of these renters will pay a rental premium for a new home. However, there is a snag. While the rental demand remains strong, our home building and rental clients who have run the analysis have concluded that build forsale homes usually create the most profits. Thus, most new home neighborhoods will continue to be for sale rather than for rent.

There are exceptions, however, particularly when generating cash quickly is the priority. These include: - Weak for-sale demand. For-rent communities make sense in areas where for-sale demand is weak. When a for-sale community might take years to sell out, a for-rent community can return cash sooner. - Helping retail feasibility. A master developer may need to attract more residents quickly to help its new retail center thrive. Rental homes generally lease up very quickly and can bring needed customers to an area to help support a retail development. - Additional segmentation. The developer might also choose to increase cash flow by selling a for-rent parcel to someone who won’t build homes that compete with the for-sale homes in the community. This strategy generates cash and brings future homebuyers to the community. - Significant relocation area. Often, relocating households prefer to rent for a while before buying. They want to learn more about the area, and might even want to wait for more certainty in their job situation. In summary, build for rent can make sense in some instances, but build for sale will continue to dominate the single-family home construction landscape. Do you agree or disagree? We would love to hear your thoughts.


The Latest in Masterplan Amenity Innovation By Devyn Bachman, Research Analyst October 2016 Velodromes, tree houses, zip lines, and even zoos have become hot new amenities for successful master-planned communities. During our survey of more than 270 masterplanned communities for our annual ranking of the 50 top-selling communities, we discovered numerous jaw-dropping amenities. 32

Velodrome/BMX Course

Residents of Riverwalk in the Charlotte MSA take adrenaline to new heights by embracing the world of extreme biking.

Orange Monster / Cruiser Bike Giveaway

Children designed their own dream play-scape in Eastmark known as the Orange Monster. The structure encourages community involvement and exercise. Over the past three years, every home within this Phoenix community has received a cruiser bike to promote a healthy, active, and social lifestyle. 34

US Tennis Association National Campus/Orlando City Soccer

Orlando’s Lake Nona attracted USTA’s new tennis headquarters with 102 tennis courts! The masterplan offers sports enthusiasts a chance to play in world-class training facilities and attracts families of the top tennis and soceer players in the nation.

Crystal Lagoon

Epperson in the Tampa MSA will house one of the first US residential crystal lagoons, a massive man-made lake for swimming and boating surrounded by white sand beaches. The technology includes hundreds of sensors and gadgets to help self-clean the pool. 35

Special Ambassador / Tree House

Hub, Cane Island’s community ambassador, is a golden retriever who welcomes residents to the Houston community and never turns down a back scratch. Residents gather at Cane Island’s unique tree house café.

The Incline

Outdoor and athletic enthusiasts in Denver love The Meadows’ incline, a 200-step outdoor staircase that residents use to get a serious work out. 36

Giving Tree

Inside Verrado is a “giving tree,” an actual tree that represents the Phoenix community’s passion for giving back. Verrado offers opportunities and encourages residents to become involved with local charities.

Zip Line

Nocatee community members can soar high above the Jacksonville terrain while riding on zip lines.


Brevard Zoo

Animal lovers and local residents rejoiced after developers of Viera, located along Florida’s Space Coast, donated a portion of their land to a local zoo.

Polo Fields

Residents at Lakewood Ranch in Sarasota can enjoy the on-site polo competitions and other equestrian fun. The Polo Club at Lakewood Ranch includes nine world-class fields and one regulation size arena. 38

Community Gardens

Daybreak in Salt Lake City offers residents an opportunity to be involved with their community gardens, embracing the farm-to-fork movement. Harvest in the Dallas-Ft. Worth MSA takes the concept to a whole new level, allowing residents to reserve plots and plant what they wish, while providing the water necessary to grow the gardens.

Tell Us about Your Property These unique amenities stood out in our master-planned community survey. If we missed an innovative amenity, please let us know by emailing Devyn Bachman at Our consulting team can help you determine the best amenity for your property. Please tell us about your property, and someone from our team will contact you right away.


Hurricanes’ Historical Impact on Construction By Todd Tomalak, Vice President October 2016 40

As Hurricane Matthew heads toward the East Coast of the United States, our thoughts are with our team members, family members, and millions of others along the Southeast coast. Hurricanes obviously have a big impact on the construction business. Here are a few facts and a chart clients will receive in our next Building Products Industry Analysis and Forecast report. • Hurricane Andrew caused about $24 billion of insured catastrophic losses in 1992 (in 2016 dollars). • If a Hurricane Andrew-sized event were to occur, it would be larger than the entire annual US insured losses seen for the past three years. • Note that TOTAL losses from the storm are even higher because non-insured losses are not counted in our data. Insured losses typically result in spending on building products. • Based on 30 years of data, we estimate that about $10–$11 billion of disaster-driven residentialremodeling spending per year is typical. Average residential remodeling from disasters totaled $7.1 billion for the last three years (2013–15). • More than 200,000 homes have been built along Florida’s eastern coast in the last decade. CNBC did a nice summary of the housing value there.

New home construction has obviously already slowed, as crews are home preparing. Wet conditions will slow construction even more, and building material costs will likely spike. A video from The Weather Channel shows what the shelves were already like at home improvement centers before the storm hit. Be safe, everyone!

Is My Uber Driver Holding Back the Housing Market? By John Burns, CEO & Mikaela Sharp, Research Analyst | October 2016 Why are so many young adults today willing to make perhaps the biggest commitment of all—having a child together—before getting married? Does this recent societal shift tell us anything about young adults’ willingness to commit to a 30-year mortgage? I recently had a conversation with an Uber driver who shed light on the younger generation’s choices.

Gaming the System to Save Money My Uber driver told me that he and his girlfriend were about to have their third child together. (Uber drivers have become a great source for researching social shifts, as they are right in the middle of the new Sharing Economy.) He said it made no financial sense for them to marry. Her modest income qualified her for all sorts of benefits, including free medical care for the kids. As long as she was not associated with his income, they could live a good life together while getting the government to cover many of their expenses. I didn’t ask if this was legal.

Playing the Game Prevents Homeownership This got me thinking. Our research has shown that today’s young adults born in the 1980s and 1990s are quite thrifty, taking advantage of technology to save money and very willing to share expenses with each other. The Uber driver and his girlfriend will clearly not become homeowners any time soon because to do so they would have to declare that they live together. I assume doing so would cause them to lose free 42

health insurance for their kids as well as other benefits. How many 1980s Sharers have figured out how to have a family and still receive maximum government assistance? We already know that the number of children born to unwed mothers has exploded to 41%. We call the higher taxes or fewer benefits that a married couple encounters in comparison to two single people with an equal combined income a “marriage penalty.” This new marriage penalty could easily be enough of an incentive for an unmarried parent to keep their relationship “off the books.” The table on the following page shows the median benefit amount for a nonworking single parent with two young children. Don’t add these up because it is highly unlikely that a recipient would receive all of these benefits simultaneously. Here is some more information we learned: • Food stamps: A single parent of two children earning $15,000 per year would typically be eligible to receive about $5,200 per year in food stamp benefits. If married to a partner with equal earnings, their food stamp benefit amount would be cut to zero.2

• Section 8 housing: On average, an unemployed single parent would be eligible to receive $11,000 per year of public housing or Section 8 benefits. If married to a partner earning $20,000 per year, their benefits would be cut by almost one-half.2 • Welfare benefits: A single parent earning $20,000 per year who married a partner earning the same amount would stand to lose about $12,000 per year in welfare benefits.2 • Income taxes: Unmarried parents could face a penalty as large as 12% of their combined income by filing their taxes as a married couple. For lowerincome households with children, these penalties result from a smaller Earned Income Tax Credit (EITC), as combining the parents’ incomes could easily phase them out of the eligible range3. An unmarried couple from California, each making $25,000, with two children would pay about $3,450 more in taxes if they got married and filed jointly because they would no longer be eligible for EITC. (With two children, combined income for a married couple must be under $49,974.)


Government Influences Demographics I don’t want to get into the pros and cons of these specific government policies, nor hear anyone’s political views, please. I am not suggesting that these are good or bad policies. My goal is to help building industry executives recognize that these policies clearly have some unintended consequences that are likely holding back the housing market. In Big Shifts Ahead: Demographic Clarity for Businesses (on sale now, finally!), we developed something we call the 4-5-6 Rule, where 4 stands for the Four Big Influencers that have impacted demographic behavior

over time. Government is one of the four influencers. It has had huge impacts over time, from establishing and eventually running the mortgage industry we have today to investing in the infrastructure that created suburbia in the 1950s and 1960s. Government has also made many changes to immigration law over the years. All forecasts for the housing market need to consider current and likely future government policies. P.S. As an interesting side note, it turns out that it makes financial sense for this same couple to get married much later in life. The lower earner can receive much higher Social Security benefits, and the survivor will receive estate tax benefits.

CATO Institute, “The Work Versus Welfare Trade-Off: 2013” 1

The Heritage Foundation, “How Welfare Undermines Marriage and What to Do About It”


Kyle Pomerleau, “Understanding the Marriage Penalty and Marriage Bonus”


*Figure 4.11 is an excerpt from our book Big Shifts Ahead: Demographic Clarity for Businesses. 44




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By Alex Wilson, Research Analyst October 2016 With public builders now comprising 34% of new home sales, we thought we would check in on the state of the industry by sharing our roll-up of their financial statements. The publicly traded home builders have shown tremendous discipline this cycle, building fortressed balance sheets while growing the business steadily. Growth has slowed lately as the larger builders who already have large market shares in most of their locations have decided to become more conservative, awaiting better opportunities to buy land. 45

Doubled homebuilding revenue over the last four years. In the last year, publicly traded home builders closed 123K homes valued at $47 billion in revenue ($382K per home) and have over $20 billion in sales backlog (a 5-month supply). Revenue in 2012 was only $22 billion. Some of this growth can be attributed to private builders becoming publicly traded.

Six years of land supply. Public builders control more than 720K lots, which is enough to last six years at current sales rates. Strategies and local market dynamics differ markedly by builder, but few seem overly concerned that they do not have enough land these days.

Strong balance sheets. The largest seven builders* have rock-solid balance sheets, with $27 billion in book equity (over half of their annual revenue). They have also paid down debt to only 36% of their asset value. Low debt levels provide huge cushions in the event of a downturn and great opportunities for acquisitions if so desired.

Thinner margins. Gross margins have slowly fallen since early 2015 to 18% of homebuilding revenue. Rising construction costs, higher land prices, and slowerthan-usual sales rates have all contributed to the margin challenges. Most builders have become very focused on margins lately, searching for ways to reduce costs and vetting every land deal even more carefully.

In conclusion, the publicly traded home builders as an industry are in great financial shape—both poised for growth and prepared for a downturn. Most expect the industry to continue to grow slowly but are prepared to react no matter what happens. Pretty nice situation to be in! *The top seven builders include: CAA, DHI, KBH, LEN, NVR, PHM, TOL, and TPH. 47


By Brenda Garcia Lemus Research Analyst October 2016 Our home-builder clients sell hundreds of homes every weekend to buyers with 5% down payments and below average credit scores. Yet, many middle-income households with average credit and access to a 5% down payment assume they cannot become homeowners because of the “tight credit� headlines. Renters can become homeowners today if they have the following: 1. A credit score in the top-60th percentile (or even lower) of Americans 2. Three years of evidence of their income 3. The willingness to pay up to 42% or even more of their income for housing 4. A 5% down payment, especially if buying a home priced less than 15% above the median home price in a metropolitan area We are not experts on what credit policy should be, nor advocates of whether credit should be tighter or looser. Our role is to educate business people on market conditions. We believe that mortgages are more attainable than many think.

T H E TI G H T C R ED IT CON V ERSAT IO N Long-time lenders know that there are 4 Cs to good lending: credit, character, capacity and collateral. Two of the Cs appear tight, while the other two appear quite loose. The financial press (who are generally focused on the biggest banks in the country and who also live in some of the most expensive markets in the country), real estate lobbying organizations (who always lobby for looser lending), and affordable housing advocates (ditto) loudly proclaim that mortgage credit is far too tight. They are focused on two of the Cs: 1. Credit: The lower-than-usual levels of lending to borrowers in the bottom-40th percentile of credit scores 2. Character: Lending to those who cannot produce documentation of steady income The charts on the following page support their claim but do not support the notion that mortgage credit is unavailable to most Americans. Affluent executives, especially in the expensive markets, also buy into the tight credit argument because they have heard how difficult the documentation is and that high LTV loans to jumbo borrowers are hard to obtain. They are correct. Documentation is tight, and jumbo borrowers need excellent credit or a large down payment. However, most entry-level home buyers who are buying a median-priced home somewhere in the middle or south of the country do not need a jumbo mortgage. 49

THE H OME BUY E RS CO N V ERSAT ION Most home buyers pass the credit and character test mentioned above, although clearly not as many as could pass the tests in 2000. A near historical number of home buyers today also pass the other two tests: 1. Capacity: Banks are lending quite freely to borrowers willing to pay more than 42% of their gross income on housing (known as debt-to-income ratio or DTI). In fact, 35% of primary home buyers obtaining a mortgage guaranteed by a government agency2 (which account for 85% of all purchase mortgages) pay at least 42% of their income for housing—the threshold Dodd-Frank suggested as a maximum. 2. Collateral: An all-time high number of primary home buyers with a mortgage guaranteed by a government agency2 (57%) are putting down 10% or less. The fact that renters have been unable to save a 5%–10% down payment is another issue that confuses the credit discussion. Many assume that a 20% down payment is required for most homes, which is not the case. Banks, and a growing number of nonbanks, make these high DTI and LTV loans because they are purchased and/or guaranteed by government agencies2. Home builders know exactly how to direct home buyers into the best mortgage program for them.

C R ED IT SUM M ARY The following charts, using data provided by the American Enterprise Institute, show the statistics on all four credit metrics, with the light blue dot representing today and the column representing the early 1990s at the bottom, the early 2000s in the middle, and the height of subprime lending at the top.


A growing number of banks are expanding the credit box, especially to include more low-credit borrowers. Here is a table showing some of the most recent low down payment products by lender:

Fannie Mae and Freddie Mac are also trying innovative ways to loosen mortgage credit in the two tight Cs: credit and character. Last month, Freddie Mac along with two nonbank lenders announced a new pilot program aimed at loosening income and documentation standards for first time to low- to moderate-income applicants. The pilot program is taking place in Las Vegas, Nevada, and Tustin, California, where the two mortgage originators are located. Fannie Mae is also allowing the use of trended credit data into its automated underwriting system in an effort to allow borrowers to demonstrate how they have managed their revolving credit card debt in the past 24 months. This new information could potentially increase access to mortgage loans.

CO NCLUSIO N In summary, mortgages are more available than many believe and are becoming more available every day. While documentation remains intense, and some lower-credit borrowers remain more challenged than some groups would like, Americans with 5%+ saved for a down payment and documentable income can qualify for a mortgage payment equal to 42%+/- of their income. I wonder how many more homes would be sold if this were widely known. 1

Refers to the government-sponsored enterprises Fannie Mae and Freddie Mac Includes Fannie Mae, Freddie Mac, FHA, VA, RHS



Successful Age-Restricted Lifestyle Apartments Achieve Higher Rents By Jeff Kottmeier, Manager October 2016 In ten short years, from 2005 to 2015, the number of people turning 65 each year exploded from 2.2 million to 3.5 million. Many of these older Americans are increasingly choosing to rent. With this surge of older renters, developers are building age-restricted or so-called activeadult lifestyle apartments. These apartment communities are designed specifically for older renters and are commanding a significant premium for doing so.

First of all, why are older Americans choosing to rent? Some prefer the flexibility that renting offers, especially when moving near their children and grandchildren or trying out urban living for a while. Less home maintenance also draws homeowners to a rental lifestyle. For others, a lack of sufficient savings for their elongated retirement will cause them to cash out on their current home and rent an apartment.ยน 53

What makes a successful age-restricted lifestyle community? Through our work across the US, we found that successful age-restricted lifestyle communities are based on three things: 1. Proximity to residents’ favorite activities and key services 2. Additional safety precautions and comfortable home designs 3. A sense of community The best communities have some of the following attributes:


How much more are rents in age-restricted apartments than market-rate apartments? Interestingly, successful age-restricted lifestyle communities are able to charge a premium over market-rate communities. We found that age-restricted properties may achieve a 12% to 35% premium above market-rate apartments, depending on local market competition, property specification levels, and types/varieties of property amenities. However, it is important to note that age-restricted properties charging significantly higher premiums above market-rate units resulted in slower absorption paces. Additionally, operating costs could also be higher in lifestyle communities due to activity programming and more amenities to maintain. We compared three successful age-restricted apartment communities to nearby market-rate apartments with similar building types and ages. The examples below are in suburban, walkable locations that bring the best of urban living to a more affordable suburban environment (what we like to call surbanTM).

Looking ahead, an aging population and the increasing propensity to rent result in demand for age-restricted properties. We believe that demand for age-restricted rentals will remain solid in the years to come. From our firm’s book, Big Shifts Ahead: Demographic Clarity for Businesses.



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By Danielle Leach, Senior Consultant November 2016

As a single, working mom, my two teenage boys often hear me say, “Time is money.” I need to be mindful of my housing budget while managing my crazy busy life with limited time. I am in the season of life when urban conveniences are strong desires but suburban perks, like good schools and a safe environment, are non-negotiable requirements. Lucky for me, surban living is becoming a new way of life for many: where the blend of urban and suburban living provides the best of both worlds. We use the term surban to define the trend we see around the country of suburban areas incorporating urban principles. Here is my not-so-short list of necessities:

• Close to restaurants, entertainment, and boutique shops • Safe and kid-friendly • Access to parks and youth sports programs • Walkable to grocery Where did I find all of that and more? Downtown St. Charles, Illinois, in the western suburbs of Chicago. St. Charles meets our criteria for surban, as it has a vibrant downtown with restaurants, entertainment, and shopping. The schools are top-notch, and the area is known for being family friendly. I can walk to work, and my kiddos are active in multiple sports programs and can often be found at the local park. Our firm leased an office nearby to accommodate my desire to save time.

• Access to strong public schools • Very short commute to work

Heritage Green is an example of a new-construction surban development located in St. Charles. The development is walkable to downtown St. Charles and includes the renovation of the historic Judd House as four apartment units as well as three, threeunit townhome buildings as for sale. Learn more about the surban living trend in our book Big Shifts Ahead. 57


Good Times Will Continue By John Burns, CEO | November 2016 We held our semiannual client conference in New York last Wednesday, the day after the election. I have never seen the city as quiet as it was Wednesday morning (presumably because everyone had stayed up so late)— or as noisy as Wednesday evening when protesters marched half a block from our hotel. The 43 speakers put their politics aside and educated the audience on what they were witnessing in their business. It was a meeting all 196 of us will never forget.

As usual, we held an anonymous poll. The poll consisted of 32% home builders, 21% private equity investors, 20% land developers, and 9% lenders. The remaining 18% were building products companies, rental landlords, and a few service providers. Using our generational names that categorize people by decade born, 2% were 1940s Achievers, 16% were 1950s Innovators, 42% were 1960s Equalers, 26% were 1970s Balancers, and 13% were 1980s Sharers. Their Presidential vote was almost equally split three ways between the two candidates and the Other / Did Not Vote option.

Our poll results show (and we were just reminded that polls are not always reliable): • Very profitable year in 2016. The housing industry has had a great year. Half the companies expect to earn at least 20% more this year than last year, and 41% expect to earn about the same this year. • 3-year outlook similar to last year. The executives’ 3-year outlook has not changed much from one year ago, with 34% more optimistic than one year ago, 29% less optimistic, and 37% feeling about the same. • Slow, steady growth ahead. Most expect the industry to keep growing slowly over the next three years, with 36% projecting single-family construction volumes to be 20%+ higher in 2019, 33% expecting volumes to be 10% higher, 19% expecting the same level of activity, and 12% expecting a decline. • Rising homeownership. A full 68% of participants expect homeownership to be higher than today—a

view that we find extremely optimistic even for homeownership bulls. Two relatively certain conditions will hurt the homeownership rate: 1) strong household formations (the denominator in the calculation) and 2) a substantial increase in deaths/assisted-living-facility occupation by people who have an 80% homeownership rate. As I pointed out in my presentation and in the book we gave everyone at the event, we still expect 16 million more households to become homeowners over the next 10 years, with a very strong preference for the latest technologies and floor plans. • Single-family rentals are the best investment. The favored risk-adjusted industry investment is single-family rental housing, attracting 38% of the vote, followed by 28% for raw land entitlement, 17% for home building, 9% for buying building products securities, and 7% for buying home builder stocks.

The rest of the survey and our summary of panelist comments will be available to all of our clients later this month.


E-Commuting Creating Demand for Better In-Home Office Space By Adam Artunian, Senior Manager | November 2016 39% of new home shoppers work at home at least one day per week. Almost 25% of shoppers born in the 1960s and 1970s work at home at least three days per week. This shift in work and home life has created a huge opportunity for home builders, since most resale homes were not designed with this demand in mind. E-commuting, formerly known as telecommuting, has exploded over the last 10 years, enabled by new technologies. E-commuting allows workers to avoid long commute times, save on gas, work in remote locations, and have more flexibility during the day. Some employers view e-commuting as a way to attract more talented people and save on overhead costs. E-commuting will increase with further technology advancements, worsening traffic, and the pronounced shift in generational attitudes discussed in our book 60

titled Big Shifts Ahead: Demographic Clarity for Businesses.

Great Home Office Design Ideas To help our clients maximize profits, we use two proprietary tools: • Consumer Insights: Our 153-question design survey of 22,294 new home shoppers • DesignLens: The new home industry’s leading online publisher of design trends, which we acquired two years ago Per our survey, one-third of home shoppers prefer a formal office. Somewhat surprisingly, younger home buyers prefer a formal office more than older buyers. Many Balancers (born in the 1970s) and Sharers

(born in the 1980s) need to escape their noisy children and barking dog during the day. The opportunity to close the door when on a business call makes a big difference. Alternatively, one in four home buyers prefer an informal office connected to the family living area. The majority of buyers told us they will pay a nice premium for this additional small office area. We have this information by

geography and customer life stage. Below are a few in-home office design ideas from DesignLens, serving different customers with different budgets. While the industry has mastered designing elaborate home offices, there is a growing need to design highly functional work spaces with limited square footage.

For great ideas on how to maximize profits, contact any of our consulting leaders.

Wall Street Has It Wrong:

Luxury Home Sales Increasing By John Burns, CEO | December 2016 Luxury home sales have increased, contrary to the opinions of most Wall Street analysts and press reports. Here are the facts: • Sales of homes priced above $600,000 have risen in 37 of the 43 counties where we purchased the data. • Home sales above $600,000 in the last 12 months exceed sales in the prior 12 months by 10%. • Home sales in Q3 2016 exceeded sales in Q3 2015 by 5%. • Sales have increased in every price increment from $600,000 to $1.5 million+. See the following charts—and then our explanation of why Wall Street has it wrong. 62

Source: CoreLogic; John Burns Real Estate Consulting, LLC (Data: Sep-16, Pub: Dec-16)


high end compared to more appreciation at lower prices. 4 . Increased $1 million new-home supply. New-home sales have slowed in a few new-home markets due to a surge in competitive supply. Coupling this surge in supply, builders have pushed prices too high in comparison to the resale competition due to rising costs.

Source: CoreLogic; John Burns Real Estate Consulting, LLC (Data: Sep-16, Pub: Dec-16)

Why Is the Common Perception Wrong? A confluence of five high-profile events has conspired to give the wrong perception: 1.

New disclosure laws. Foreign-buyer activity has slowed in two highprofile markets, Manhattan and Miami, due to threat of enforcement of new disclosure laws that began in 2016.

2 . High-profile Florida second-home markets. High-priced homes have indeed slowed in two of the highest-profile second home markets in the country, Naples (Collier County) and Palm Beach. These are two of the six counties where sales have declined. 3 . Fortune article on Greenwich, CT. The sales slowdown in high-profile Greenwich, CT, was featured in Fortune magazine. The article included some very misleading headlines about a national luxury slowdown that were supported only by the fact that prices have appreciated 5% at the 64

5 . Improving entrylevel sales. Entrylevel sales are also improving at a faster rate than higherpriced home sales. Indeed, the market for lower-priced homes is stronger, but that does not mean that luxury sales are struggling.

Summary In conclusion, luxury home sales continue to increase. Entry-level home sales continue to increase even faster. *We purchased new and existing home sales data in 43 counties in 16 states (AZ, CA, CO, FL, GA, IL, MN, NC, NJ, NV, NY, OR, PA, TN, VA, and WA) where new home construction is high. Our sample was not biased for this story. Data was not available in Texas, and data through September was not available everywhere. Every market and submarket is different.

Who we are.

John Burns Real Estate Consulting, LLC provides independent research and consulting services related to the US housing industry. John Burns founded the company in 2001 because he saw a need for better analysis on the housing market. The company has grown to a highly passionate team of research analysts and consultants in offices across the country, who work together to provide the most trusted source of US housing analysis.

Our clients engage with us in two primary ways: Research An ongoing, retainer-based relationship, in which we provide clients with our published research, client services, and exclusive events. Consulting A specific contracted engagement to help clients with a housing-related strategic decision.


About Us John Burns Real Estate Consulting, LLC helps executives make informed housing industry

decisions. Our passionate team of analysts and consultants from around the country helps our clients identify the best risk-adjusted investment opportunities. We are known for our:

• Client focus. Our clients have personal access to our

team of market and industry experts. We also connect clients to opportunities for new business. We always seek to innovate and improve our practices to make our clients’ lives easier.

Quick Stats Regularly Quoted In:

• Speed. We are focused exclusively on housing and strive to have the most current data at our fingertips. We are diligent, regularly out in the field, and tapped into industry leaders— resulting in great research and advice.

• Proprietary tools. We have created many tools to

provide unique and timely insight. They include a monthly survey of builder executives, several indexes and forecasts, and a demand model by price range and household composition.

• Data quality. We create, collect, and buy the best industry data available, and our analysts then tell clients how to apply that insight to their business planning.

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housing markets across the country.



• Management expertise. Our team leaders are


seasoned industry veterans who have learned from multiple housing cycles.

not recommend stock investments or take contingency fees so it is clear we have no conflicting agendas.



• Local knowledge. Our team has offices in many major

• Trusted integrity. We are independent advisors. We do


Bloomberg Ticker





STEVE DUTRA Sr. Vice President 949-870-1227 Research

MIDWEST TODD TOMALAK Vice President 920-373-6727 Consulting


DAVID KALOSIS Sr. Vice President 770-286-3493 Consulting

NICOLE MURRAY COO 949-870-1234 Research

SOUTHERN CALIFORNIA SAN DIEGO DON WALKER President and CFO 858-281-7212 Consulting PETE REEB Principal 858-281-7216 Consulting KEN PERLMAN Principal 858-281-7214 Consulting

DAN FULTON Sr. Vice President 703-955-3135 Consulting


MOLLIE CARMICHAEL Principal 949-870-1214 Consulting

RICK PALACIOS JR. Director of Research 949-870-1244 Research

JODY KAHN Sr. Vice President 603-235-5760 Research

FLORIDA SOUTHWEST STEVE BURCH Sr. Vice President 248-797-4469 Consulting

LESLEY DEUTCH Principal 561-998-5814 Consulting

TEXAS LISA MARQUIS JACKSON Sr. Vice President 214-389-9003 Research DAVID JARVIS Sr. Vice President 713-906-3829 Consulting

John Burns Real Estate Consulting, LLC takes great pride in our highly educated, resourceful, and experienced team. As a research client, you gain access to our team across the nation to discuss market conditions, our current research, and our forecasts.



















For more information about our research, please contact: Lisa Marquis Jackson Senior Vice President (214) 389-9003 3232


Profile for John Burns Real Estate Consulting

Building Market Intelligence 3Q-4Q 2016  

Our Building Market Intelligence releases from the second half of 2016. Join our newsletter list by visiting our website: https://www.reale...

Building Market Intelligence 3Q-4Q 2016  

Our Building Market Intelligence releases from the second half of 2016. Join our newsletter list by visiting our website: https://www.reale...