Author Archives: Adam McAbee

  1. All in the Family… Office

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    Family Offices are one of the least understood capital sources in the real estate industry. While there is an adage that says, “if you know one family office, then you know one family office”, our Managing Director of Capital Markets, Steve La Terra, discovered some commonalities while conducting a deep dive analysis into this component of the real estate private equity world.


    Family Offices (FO) are typically established to diversify a family’s wealth beyond the business that created their wealth. Often established by an entrepreneurial patriarch or matriarch to provide for future generations, FOs seek to create generational wealth. Establishing a FO generally makes financial sense when there is $100M or more of investable capital. It is common to find FOs investing for the long-term, which makes real estate a viable option.

    Family Offices can be categorized as either Single Family Offices (SFO) or Multi-Family Offices (MFO). A SFO is limited to one family, although may include multiple generations. Investment decisions within a SFO are generally made by an individual or a small number of siblings. A MFO is a collection of two or more families that invest together. They tend to operate by committee with consultants such as accountants or attorneys providing deal flow, expertise, and professional services.


    • Family dynamics matter. The internal family dynamics play an important role in the investment strategy of a FO. Anything from who the decision makers are to how they all get along can impact how their capital is deployed.
    • The first rule. When it comes to investing, the first rule for FOs is don’t lose principal. The second rule is to understand what the family wants first, then make a pitch, but only if your opportunity aligns with the family’s goals.
    • Plenty out there, if you can find them. There are 3,000 to 5,000 SFOs and 10,000 MFOs in the United States today. Most FOs are relationship-based, do not market themselves, and prefer anonymity.
    • Reputation is everything. When considering a new operator relationship, FOs will look to reputation and established competence as primary drivers. FOs will do extensive diligence on a new operator through their trusted advisers and their networks of high net worth friends/investors.
    • Keep a Plan B. A FOs investment goals can change suddenly, especially when family dynamics change (i.e. marriage, divorce, etc.) or during the period of a generational shift leading to a shift in investment appetite.  Always have a Plan B.
    • Communication is key. It should also be noted that the Family Office universe is quite small and word travels fast, so make sure you provide prompt, honest communication, especially when things don’t turn out as planned. FOs can be very understanding and sympathetic partners, but not if they feel that information is being withheld.
    • What makes it worth it. FOs can be reliable partners who will often open doors to additional capital sources, make investment decisions rapidly, can be very patient and have return requirements that may be more flexible than traditional private equity sources.
    Please contact us for more insights into the dynamics of Family Offices.
    Steve LaTerra, Managing Director – Advisory Phoenix


  2. The Bay Area: Innovating Its Way Out of a Housing Crisis

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    As the Bay Area and Silicon Valley face a massive affordability crisis, businesses, builders and residents are being forced to redefine what is “normal” through innovation.  Because, at the end of the day, if people cannot obtain quality of life in the Bay Area they will leave. The most critical items are:

    • Shortening the time spent commuting to work
    • Producing housing that is affordable

    Our Manager of Advisory, Michelle Sklaver, recently attended the 22nd Annual Fisher Center Real Estate Conference held in San Francisco. Almost every discussion came down to one central theme: It’s too expensive in the Bay Area, and it is not sustainable. As one of the conference speakers aptly joked about relocating to Denver, “I could learn to ski. Skiing isn’t so bad…”

    The chart below illustrates the grim reality. In the San Francisco MSA, only 21.5% of residents can afford to buy a home. It’s even worse in the San Jose MSA, where only 15.2% of residents can afford to buy. This explains why people are looking to peripheral markets for the opportunity to own, some commuting two hours in each direction. Affordability is much better in the Sacramento, Stockton, Vallejo and Modesto MSAs, all ranging from about 40-45% of residents who can afford to buy. It’s still below the national average at 52.2%, but at least it’s in the ballpark.

    The good news is that the Bay Area and Silicon Valley are slowly adapting. We singled out a few examples as to how the commuting issue is being addressed:

    • Increase in telecommuting. To retain talent, an increasing number of Bay Area employers are adjusting the traditional 9-5 work day by offering increasingly flexible schedules and remote commuting. As Bay Area employees seek a better quality of life, many are moving to less expensive regions and commuting to the Bay Area once or twice a week. Santana Ranch in Hollister (a 1+ hour commute) has a lot of buyers and new residents that commute to Silicon Valley or the Bay Area. Some commute every day, but many make the drive only part time.
    • Increase in company buses and ridesharing. An increasing number of companies are offering bus services to take employees to and from work, which is a more palatable solution for many than driving. There is enough space on the buses to work on an iPad or scrunch up with a small laptop. These buses give people access to more affordable housing, while not dipping into precious productivity time. Many companies do not post the bus schedules outside of their internal intranet systems, though they’re sometimes accessible through web forums and information sharing sites.

    There are even some innovations and trends on the horizon that could change the way we think about affordable infill housing:

    • A future of factory-built housing. Patrick Kennedy of Panoramic Interests has become a prominent leader in innovative building for his housing units, which mirror the concept of shipping containers (see their CitySpaces Micropad concept). They would be built in a factory (cheaper than building on-site) by robots and installed on-site. The savings could then be passed on the buyer. These units were originally intended as a solution for low income housing, but the conference was abuzz with opportunities for scaling the factory-built model to all types of housing.
    • Car ownership is on the decline. Builders are asking for less parking requirements at infill sites, knowing that younger people do not drive as much as their parents did.  In fact, teenagers are applying for driver’s licenses later, relying more on Uber, public transit, or walking. This means fewer parking spaces are needed and less cars parked on the streets. Parking issues often delay project approvals from the city, so fewer cars is a huge advantage. The Coloradan by East West Partners in Denver is a good example of shifting needs related to parking – their homes will include the deeded right to lease a space if needed.

    Collectively, the goal is to create a Bay Area that isn’t just affordable, but also desirable for the long term. As the Bay Area and Silicon Valley pioneer new information technology and new modes of transportation, it will also be pioneering a new generation of how we live, work, and, of course, build homes.

    Contact us to discuss how we can help you with affordability solutions in your market.

    Michelle Sklaver, Manager – Advisory Bay Area


  3. Ohhh… Mex-i-co: Baja Norte’s Surge in Home Building Activity

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    While it may be easy to overlook from here in the United States, our neighbor (or roommate?) to the south has become a bustling metropolis of seemingly insatiable demand for new homes. Low cost, coupled with high demand, is yielding strong sales in Tijuana, with some developments selling as many as 14 units in one day. This flurry of activity has been driven by the strong economic and population growth that occurred there over the past decade (350,000+ people), and this growth is driving a bustling and ever changing culinary and cultural “scene” that is enjoyed by patrons throughout the region.

    We recently sent our Research Consultant Sophia Roberts to her native Mexico to visit numerous new home communities up and down the coast, from Tijuana to Ensenada. While there are notable differences in sales activity and buyer profile between each of these areas (Tijuana is mostly a primary housing market, while Rosarito, the Valle de Guadalupe—Mexico’s wine country—and Ensenada tend to attract more second home buyers), we uncovered some interesting trends.

    At the outset, we identified over 50 new home developments. Many of these did not have sales offices and most were still actively under construction, but they all had some degree of presence from a marketing standpoint. Collectively, we surveyed roughly 20 of them, and found product that ranged from entry level single family homes to luxury condos, prices that ranged from $75,000 to $800,000 ($USD) and a buyer profile that included both primary and secondary/investment home buyers.

    While meeting with the various sales agents and managers, we not only asked the traditional questions about product, pricing, absorption and buyer profile, but we queried each location on the state of the market and what they expected for the region going forward. Overall, we found that the market in Tijuana specifically is very strong. This is based on:

    The biggest question we had before conducting our research in Tijuana was related to President Trump and his effect on the housing market there. Surprisingly, we found his policies and presidency are actually helping the local market. The reasons for this phenomenon focus on the fear that:

    • A cap will be placed on the amount of money that can leave the United States once invested
    • There will be cross-border limitations on travel
    • Assets in the United States will be seized

    There is also some general anger and backlash about investing in what is perceived as a country where Mexicans may not be welcome.

    Lack of Supply
    After the global market crash of 2008, when the lack of security around Mexico became front-page news both domestically and abroad, development in border towns like Tijuana ground to a halt. This sent local investors and developers out of the country and into the U.S. in search of safety—both physical and economic. Over the next several years, Tijuana continued to grow as people from all over Mexico poured in, attracted to the significant job opportunities and proximity to the U.S. border. But like San Diego and most markets around the United States, development did not pick up again until the past few years, leaving a large level of pent-up demand.

    Unstable Currency
    Given the instability of the peso, there is a desire to invest in something more tangible and stable. And since the peso is at a relative low, now is an excellent time to invest in Mexican real estate.

    Undocumented Workers
    Some of those that are working in the United States illegally view their deportation as inevitable, and since they are making a much higher wage in the U.S. than they can in Mexico, they are sending the money back to their extended family to the south and buying homes now for when the deportation comes.

    Legal Cross-Border Workers
    There is another segment of the Mexican population that lives in Tijuana but commutes to the United States daily for work and is paid in dollars. The higher incomes allow them to buy real estate at a significant value compared to home prices in the United States. For example, the typical new home community we visited was priced in the mid-$200,000s (USD)—this is well below the median price for even older/existing homes in San Diego ($380,000 for attached homes and $540,000 for detached homes in 2016). This poses an interesting question: does an opportunity exist for Tijuana to serve as the new submarket of San Diego, for those in search of affordability?

    Over the next two years, there will be over 2,000 new condominiums completed in Tijuana, and pre-sales in many of these communities are strong. For example, Levant, a high rise in Tijuana, started pre-sales in February 2017 and sold 27 units in one month. Another project, Adamant, sold 42 units in the last three months.  Distrito Revolucion is a third example that sold 14 units on their opening day of presales. This is clear evidence of pent-up demand, which is influenced by the factors above. While the future remains to be seen, every agent we surveyed had a favorable outlook for the local market and if anything, had a positive reaction to the impacts of the Trump presidency.


    Contact us to discuss how we can help with your next project on either side of the border.

    Sophia Roberts, Research Consultant – Advisory San Diego


  4. Retail’s Rampant Revitalization (Part 2)

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    While our last blog discussed the latest trends in commercial real estate, part 2 of our Senior Manager Shaun McCutcheon’s report on the retail sector in the United States provides insight into how developers can be successful in today’s ever-changing world. Successful retail development is still possible—the housing rebound that occurred over the past five plus years comes with a renewed demand for new retail centers in select locations. Urban/infill areas also have a need for some expansion and storefront “facelift” improvements, which has proven to increase occupancies and lease rates in many cases. Based on our research in the feasibility of new commercial and mixed-use developments around the country, the following concepts have proven to be the most effective:

    • High visibility, high traffic locations.  As a rule of thumb, anchor retailers want to be located on streets with at least 20,000 vehicles per day, and 30,000+ vehicles per day is ideal—a major intersection with two roads that each have vehicle counts in this range is even better. New retail centers that lack these traffic counts can still emerge if other factors exist, such as freeway visibility/signage (freeways often have 100,000+ vehicles per day), or planned/under construction roads that will ultimately increase traffic counts.
    • Locations with “360 degrees” of rooftops. Optimal locations for retail centers are those that offer residential concentrations in all four quadrants.
    • Serve the daily needs. A focus on tenants that offer services (gym/yoga/spin, hair/nail/day spa), pet care, dining and grocery stores (frozen and perishable foods) are essential to visit in person rather than shopping online.
    • Income levels are a factor but don’t necessarily dictate whether retail development can occur or not.  Naturally, higher income levels are preferable to attract retail tenants to a new center, but it is also possible to develop in lower income areas. Discount retailers such as Big Lots, Dollar Tree, Ross and Marshalls are expanding and leasing space in newly constructed centers in select high growth/low income locations, paying higher rents than in dated centers.
    • Make it interactive.  Big box stores can still thrive by offering an interactive experience and creating synergy with their online platform.
    • Share the parking with a tenant mix that utilizes parking at different times of the day. In urban mixed-use projects, parking is a concern and the amount of spaces required is often an issue. It is ideal to plan a tenant mix that uses parking spots at different times of the day—for example a bakery and a coffee shop could be problematic as two tenants in a small project with a few street stalls, as would two restaurants that focus on lunch and dinner crowds. Ideally, a coffee shop and restaurant would be two complimentary tenants to share parking spaces at different times of the day.
    • Consider alternative commercial uses in “B” locations. Uses such as self-storage, child care and religious facilities are in demand in high growth areas, and don’t necessary require being located at the “A” commercial intersection. These uses should be considered if a commercial parcel is relatively large and traditional retail needs are already being met by existing storefronts.
    • Allocate space for temporary (dining) space as an area evolves. The explosion of food trucks specializing in a variety of cuisines has changed the landscape of restaurant space in the most hip and trendy US cities (Portland and Austin, for example). The concept is increasing in popularity elsewhere, and can be adapted to growing suburban areas that need these services but may not have the population levels to justify vertical development of a shopping center (yet).

    With the elections over, consumer confidence stable and incomes increasing, there is hope in the world of retail development, despite formidable competition from shopping on our phones and laptops. The key will be focusing on the best locations and providing space for tenants that offer goods and services that cannot be replicated via online shopping.

    Please contact us to discuss how we can help with your next commercial/mixed-use development.

    Shaun McCutcheon, Senior Manager – Advisory Charlotte


  5. Retail’s Rampant Revitalization (Part 1)

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    The retail market in the United States is rapidly changing, with strong demand, little new supply and characteristics that seem to change by the hour. If your post-holiday routine included an overstuffed recycling bin filled with cardboard shipping boxes, you’re not alone—there was a surge in online shopping in 2016, with respectable retail revenue growth overall. According to the National Retail Federation, retail sales during November and December increased 4% over 2015 to $658.3 billion (exceeding forecasts), and $122.9 billion (19%) of this was in non-store sales (a robust 12.6% increase over the year before). The holiday season and beginning of the New Year brought some bright spots, but also some cause for concern in the retail sector, which in turn impacts commercial real estate. For example, some household names announced store closures in recent months, while other sectors of the retail world have survived, thrived and even expanded.

    So what does this all mean for commercial real estate, and how can you effectively plan for future retail development? Our Senior Manager Shaun McCutcheon specializes in the commercial space and helps clarify the many moving parts in that sector with this two-part blog.  Consider the following themes being revealed in most metro areas around the country:

    New Construction Lagging: Deliveries of new construction retail space have been at historical lows during the 2010s, and while there has been an increase in deliveries in 2015 and 2016, the new inventory is far below historical (30 year) annual averages of growth in many metro areas.

    Demand is Stronger Than Supply: Positive absorption is now outpacing deliveries in most markets, reversing a trend in which new deliveries far exceeded lease-up activity during the Great Recession.

    No Space, Stable/Rising Rents: Vacancy rates are decreasing, though lease rates are stable in most markets (except more expensive coastal metro areas, which are also experiencing rent growth).

    Food/Health Driving Growth: Expanding sectors include dining (particularly fast food with drive thru and informal counter service), food stores (health food markets, specialty/ethnic markets and supermarkets) and gyms/specialty fitness facilities in particular.

    Department Stores Declining: Contracting sectors include select department stores and big box retailers: Sports Chalet and Sports Authority both filed bankruptcy, closing a combined 490 stores in 2016; Macy’s plans to close 68 of its 750 department stores in 2017 and Kmart/Sears plans to close 150 stores in the near term as select storefronts undergo a real estate liquidation process. Some of these closures will result in increased vacancy, while others will disappear from the retail inventory altogether as the space is re-adapted or redeveloped to other uses.

    Big Box Diversifying: Successful big box retailers are differentiating themselves from online competition. For example, Best Buy is trying to combat the trend of consumers “showrooming” their stores—trying out products but then purchasing them online for a lower price, by 1) price matching their products, and 2) focusing on large, big-ticket items such as household appliances that are often more a need rather than a want and cannot be shipped from an online retailer quickly or inexpensively.  In fact, Best Buy increased their share of showroom space to accommodate large appliances, and during the 2016 holiday season had sales growth in health & wearables, home theater and major appliances (along with “significant declines” in mobile phones, tablets and digital imaging) according to their latest financial report.  Further, Dick’s Sporting Goods, Cabela’s and Bass Pro Shops have succeeded in the sporting goods sector by offering product demonstrations and interactive/virtual reality experiences that are fun for the consumer, and a big value add versus online shopping. Finally, Amazon has entered the brick-and-mortar world with Amazon Books stores in select markets (Seattle, Portland, San Diego), which not only sells their books and showcases their latest media gadgets, but also serves as a pick-up spot for those who have purchased online. Amazon has plans for eight more of these stores.

    Collectively, these trends highlight the rapidly changing landscape faced by today’s retailers and commercial developers. Stay tuned for our next blog, which is designed to help you plan your next commercial or mixed-use development, in light of these changes.

    Contact us to discuss how we can help with your next development.

    Shaun McCutcheon, Senior Manager – Advisory Charlotte


  6. Jeff Meyers Decodes 2017

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    What’s the best way to know what Meyers Research is thinking about what lies ahead for 2017? Ask California Homebuilding Foundation Hall-of-Famer Jeff Meyers himself! I recently sat down with Jeff to ask him a few questions about what this year has in store for us on an economic and housing front. Here is a summary of our conversation:

    Looking back on 2016, what was the most impactful event on our industry?

    The national election.

    What factors will be the most important for homebuilding to monitor in 2017?

    The new Administration and their policies. Interest rates will increase but credit will ease. Expect less regulation. Labor costs will increase as infrastructure spending expands. The luxury market and even second home market could improve as the affluent will see the greatest benefit of these shifts (private jet company stocks have increased and the luxury products sector is also expected to benefit). Wages will increase since full employment is already in place.

    What will you do differently this year to be best-prepared for 2017?

    Hire cautiously and manage expenses carefully. Be ready for the next downturn and have a contingency plan to deal with any possible market shifts.

    What technology(ies) will most affect real estate development going forward?

    Big data for digital marketing efforts. Automated Valuation Models will be everywhere, and with more computer learning, this could ultimately help make home transactions more efficient. Watch how Open Door impacts the resale market.

    Define a few other strategies that homebuilders can embrace to optimize success.

    Embrace smaller in-fill deals in the short term. The retail industry is being disrupted and there are significant opportunities for repurposing former retail sites into mixed-use neighborhoods. Continue to innovate product design and the connection of indoor and outdoor space. Focus on Gateway cities and major job centers. I expect that the center of the country will continue to lag despite trying to bring manufacturing jobs back to the U.S.

    We expect 2017 will bring some dynamic and exciting events to the industry. Perhaps the biggest conclusion? Be ready for change.

    Please contact us with any questions or how we can help you decode 2017.Tim Sullivan, Managing Principal – Advisory


  7. Density Meets Livability in San Diego’s South County

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    Around the country, the most expensive housing markets are always in need of attainably-priced housing, but lower prices can sometimes translate into lower quality—not in San Diego’s South County. Our Vice President of Advisory Adam McAbee recently visited a number of actively selling new home communities in this submarket to understand how local builders are matching demand for new housing with the need for affordability, and, more importantly, how they are creating great places to live.

    The video above illustrates what he learned while visiting a total of seven product lines by three builders, all of which opened in 2016, are priced under the county’s FHA loan limit, and are selling well.  The product lines are generally dense (particularly by suburban standards), but they are also high quality with creative, livable floorplans and more “wow” than one might expect given the price point. The projects visited include Sea Glass and Blu Strand by Shea Homes, Luna and Azul by Pardee Homes, and Evo, Trio and Metro by Meridian Communities.

    Some of the key takeaways include:

    • Density connects the dots between new construction and attainable pricing.
    • Density can work in suburbia.
    • Private elevators help three-story townhomes live like single-level homes (in this case they are included with the floorplan as part of the base price).
    • Contemporary design is at the forefront.
    • Remember that home buying is often an emotional experience, so make it fun.

    Contact us to discuss how we can help with your new home development.

    Adam McAbee, Vice President – Advisory San Diego


  8. Millions Mean Magic in Southern California

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    As crazy as it may sound, making your million-dollar home community stand out among the competition can be more difficult than it would seem – particularly in a market like Orange County, California, where the median new single family home price is over $1.1 million.  How do you offer more than just a nice house?  And what if everyone offers great views – how do you differentiate?  Our Vice President of Advisory Adam McAbee went in search of some of Southern California’s greatest new housing communities in this price range from 2016, and what he found was eye-opening.

    As seen in the video above, some of the most interesting projects we found include The Summit by Richmond American in San Marcos, Coral Canyon and Coral Crest by The New Home Company in Newport Beach and a surprising standout, The Oaks Farms by Davidson Communities in San Juan Capistrano.  All opened for sale less than 10 months ago and offer large single family homes on relatively large lots (by California standards, anyway), with starting prices that range from $1.2 to nearly $7 million.

    Some of the key takeaways include:

    • Indoor/outdoor living is not new, but some of these projects took that concept to a whole new level, even making it difficult to determine where the “inside” ends and the “outside” begins.
    • Everyone knows that golf or ocean views can command premiums, but what about an equestrian center?  Davidson Communities is achieving notable premiums for these views today.
    • There seemed to be a particular focus on interesting bathtubs this year.

    Contact us to discuss how we can help with your new home development.

    Adam McAbee, Vice President – Advisory San Diego


  9. Where Is The Cheap Real Estate Capital?

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    The cost of capital is helping keep affordable housing out of the hands of consumers. It is not news that housing markets throughout the country are undersupplied with new product and that demand generally exceeds supply. In some cases, home prices have been pushed above previous peaks, which is making room for apartment rent increases and a general feeling that homeownership rates will permanently shift lower. The challenge is that affordable new homes are not being built. Our Managing Director Steve LaTerra argues that if significant amounts of affordable for sale housing were available in most metro areas, the homeownership rate would be significantly higher. Why can’t our industry produce product that the market desperately needs?

    Over the last 30 years there have typically been low cost providers of capital for developers and homebuilders to access, such as savings and loans (S&L) or banks supported by government insurance programs. With this inexpensive capital, builders and developers could limit the amount of expensive equity required to finance a deal and deliver appropriate risk adjusted returns to their capital partners. Today, there are no S&Ls and there is preciously little available bank debt to support new housing. Equity return requirements are simply not achievable without some form of affordable leverage. To make matters worse, reserve requirements resulting from the Dodd-Frank Act are higher than ever, which will keep banks out of the market for the foreseeable future. So, where does this leave us?

    As it stands, inventory levels are lacking and they are not expected to improve quickly enough to offset demand. This puts upward pressure on pricing and decreases the risk of investing in the space, but does little to address the country’s housing shortage. Private lenders have emerged to fill the void left by traditional banks, but private loans are not much cheaper than equity and are not a permanent solution to the issue. Unfortunately, the answer is likely political.

    Banks want to do your deal. They want to lend to home builders and developers. After all, in the 1990s, acquisition, development, and construction loans (AD&C) accounted for 7-10% of the balance sheet of the largest banks in the country, and these loans were highly profitable. Banks recognize this, and in some cases bankers are as frustrated with the current situation as developers and builders. However, a banker’s ability to provide AD&C money (as it’s known) is limited by regulations of the Federal Government. The regulating agencies (FDIC and OCC) have placed significantly limiting restrictions on banks, which some might say have unnecessarily limited lending to the home building industry.

    With the election of Donald Trump, a free market proponent, there is some question as to the future of GSEs, like Fannie Mae and Freddie Mac. Without these programs in place, lending to the home building industry would likely be even more expensive. Some may overreact to the threat of a system overhaul; however, let’s not forget that Trump is a real estate entrepreneur and will likely support policies that are ultimately favorable to our business. Time will tell, but it’s clearly too soon to assume the worst.

    Contact us to discuss how we can help you navigate the world of capital.

    Steve LaTerra, Managing Director – Advisory Phoenix


  10. FHA Qualification is the Secret Sauce for Absorption

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    Our research around the country shows us that price elasticity is one of the few consistencies in the Housing industry, and sales rates of new home projects that are above or below the local FHA loan limit proves that point. As we conduct housing market analyses across North America, we typically see lower-priced new home subdivisions outsell higher-priced communities. This is logical, since a lower price point implies a larger base of potential buyers that can afford that product. There is another indicator that is connected to this as well: the FHA limit.

    FHA Sales Rates Rock
    The sales rates in new subdivisions that qualify for FHA financing have achieved superior absorption rates in nearly every market in the country. As illustrated in the table below, FHA communities are outselling conventional communities nearly 2 to 1 in the Phoenix market (Maricopa County, AZ), and nearly 3 to 1 in the core of the Houston market (Harris County, TX) from a monthly sales rate perspective. This disparity is not often so significant, but it is still material in most markets. The center of activity in Orlando (Orange County, FL) sees the FHA-qualified communities achieve absorption rates that sell at a ratio of 1.7 to 1, and in California’s Riverside County (part of the Inland Empire) the FHA communities outsell the conventional communities 1.2 to 1.


    Attainability Is The Target
    The key takeaway from this is that an attainable price is still a key driver for most of our new home markets nationwide. Our research also shows that some markets have such a restricted supply of new homes (with higher land costs, construction costs, and development fees that are rising) that most of the new construction is producing prices above the FHA limit. In that case, the resale market becomes the outlet for affordability.

    Great Design Is Also a Driver
    Regardless of the price point, compelling product that motivates a home shopper to make a move should be the focus of every new home community.

    Contact us to discuss how we can help define the best products and the best markets for your operation.

    Tim Sullivan, Managing Principal, Advisory



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