Tag Archive: Jeff Meyers

  1. Homeownership Rates, Economic Recovery, and Rental Market Clarity At IMN Miami 2018

    The hot and humid Miami weather didn’t stop a lively mix of homebuilders, land developers, and capital sources from being fully engaged with the all of the topics covered at IMN Miami. The key reoccurring theme throughout the day was the remaining runway in the current recovery—when does the market weaken? Our team critiqued this topic, and also dove into desirable geographies, construction costs, interest rates, the rental industry, and more.

    Macro Overview

    Ali Wolf, Director, Economic Research

    We are now in the second longest economic recovery on record and inflation is on the rise. The good news is that disposable income is at an all-time high and the 10-year bond is still below 3%. The not-so-good news is that rents and mortgage rates are inching up. Debt is also up, and while this is not not necessarily bad, the higher interest rates are a warning sign. Tracking mortgage, auto loans, and consumer debt delinquencies also give early warning signs, but there’s nothing to be worried about yet.

    Public and Private Homebuilder Panel

    Steve LaTerra, Managing Director

    Steve asked the room, “How do private builders compete against public builders?” Builders such as Van Metre Homes have created panelization plants to reduce cycle times, and McGuinn Homes has created deeper capital relationships.

    The second major question was, “Which geographies are desirable?” Since the answer depends on both job growth and limited entitlement difficulties, California does not make the cut. Instead, Steve said to look to the area that falls between urban and suburban zones and stay away from nationals.

    Building Single Family for Rent (SFR) and Building to Sell:  Homebuilder and Financier Perspectives 

    Moderated by Tim Sullivan, Managing Principal

    The origins of the Single Family Rental (SFR) industry came from investors’ desire to buy assets at a deep discount. Nobody was sure the space would work, and the fallback strategy was to sell the rental homes to the renters or other buyers, but now institutional capital accepts SFR. The “older” age of many of the SFR homes (1960 to 1990) requires more maintenance and capex reserves which is costlier to own, driving down yields.  This was the “miss” when many investors got into the space in 2008-2010. Yields are now at 5.6 to 5.9% (they were 50% plus higher in the early days) and price appreciation has been solid. The “fix-and-flip” concept still  works in lower priced markets (where homes are priced under $200k). Lenders in the space may loan from $20k to $40k per month to fix-and-flip operators (per Matt Neisser of Lending One). Some investment groups are buying new homes from homebuilders, which can help the homebuilder move inventory faster.

    The most solid markets for SFRs include: Jacksonville, Raleigh Durham, Orlando, Tampa, and Atlanta.

    Our top tips and tricks for SFRs:

    • Strong property managers are a must
    • Love your banker and tell your story clearly
    • Understand your local market
    • Be careful of expecting a lot more HPA
    General Market Outlook Panel

    Moderated by Jeff Meyers, President

    Homeownership

    Homeownership rates have not yet hit their peak and will remain fairly flat. Prices are now back to the previous peak in other markets, which makes things challenging as rates go up. In terms of starts compared to peaks, we should be at 800K new home sales. The rise of the outer suburbs is key to this growth: Suburbs are growing faster than cities and this will drive our opportunities over the next 10 years.

    Relentless Rise In Costs & Home Prices

    Costs have been rising across the board for development loans, concrete, and other materials. Home prices have also been rising but have been shielded by low mortgage rates. It’s important to point out that the process to get a mortgage is more difficult now. Millennials are unable to come up with enough down payment and have been relying on assistance from friends and family. We all know that building more housing will help drive down costs, but we still need to know where new starts will come from. Currently, there isn’t any developable land, and we likely won’t get back to the level we had before.

    Join Us At The Next IMN

    The next IMN will be in Las Vegas on September 24-25, where we will continue the conversation around private equity, debt, and joint venture financing. Register before August 17th to catch the homebuilder early bird registration discount. We hope to see you there!

  2. Meyers Research Raises $500K For HomeAid To Combat Homelessness

    Meyers Research has partnered with HomeAid America to shine light upon and rally more support for building shelters in communities around the country. Last week’s Housing Market Outlook event hosted by Meyers Research raised $30,000 with combined ticket sales and sponsorships for HomeAid America, a leading national non-profit provider of housing for today’s transitionally homeless. To date, we’ve raised $500,000 in proceeds for HomeAid America. The organization builds and renovates multi-unit shelters for America’s homeless families and individuals (more than one million of whom are children) while the residents rebuild their lives. Help us spread the word and invite your colleagues to join as well in change making.

    SESSION HIGHLIGHTS

    Economic Session
    Presented by Ali Wolf, Manager of Housing Economics at Meyers Research

    Ali kicked off the event by covering the elephant in the room – the length of our current economic expansion and how long the strength will last. Luckily, baring some unexpected economic or geopolitical shock, the overall fundamentals support continued growth. For example, we’ve never had both the unemployment rate and mortgage rates be this low simultaneously. This combination helps explain the 9% YOY increase in national new home sales. The strong annual clip in sales is great for the overall economy since the housing industry’s multiplier effect creates additional spending once the consumer purchases the property. Recent homebuyers spend more money at places like Home Depot, Target, Amazon, and Wayfair than those that don’t move.

    Capital Session
    Moderated by Jeff Meyers, President at Meyers Research

    Panelists:
    Joel Kaul, Regional President at Mountain Real Estate
    Rodney Montag, CEO and Managing Principal at RAM Real Estate Capital
    Robert Springer, Senior Vice President at Bank of America

    The length of the cycle discussion resonated with the capital partners, who are acting more “cycle aware.” With that mindset in mind, members on our panel said they are carrying on business as usual. The panelists believe consumer fundamentals are solid across most markets in the country, but, supply is still a top concern. For example, in Denver, the months of resale supply is below 2.0, far from the 6.0 equilibrium level. The panelists explained that some master plans are accelerating their phasing to help bring more supply to the market now. They’ve seen increased appetite of more segmentation within communities, including villas, townhomes, and single-family detached.

    It’s hard to be in Denver without a discussion of condo development. There’s a huge opportunity in the condo business for Denver because of the price point, but there’s also many headwinds. Condo deals in Denver appear too risky for some investors as the risk of litigation persists. Our panelists also believe that rising costs, in some cases, make providing this product at an attainable price unrealistic. For the experts to seriously consider condo development, they’d want to work with partners that specialize in the space. If they don’t feel the expertise is there, they’d rather work on higher priced single-family detached projects.

    Homebuilding Session
    Moderated by Mike Rinner, Senior Vice President at Meyers Research

    Panelists:
    Liesel Cooper, EVP and Western Regional President at Century Communities
    Chetter Latcham, President at Shea Homes Colorado
    Jeff Willis, Principal at Berkeley Homes

    The builder panel inadvertently highlighted the need for consumer research on a local level by going back and forth on providing amenities within new home communities.

    The pro-amenity argument: sense of community

    • Some buyers purchase a home based on their desired lifestyle. These buyers idealize bringing their kids to the pool and participating in community barbecues. In these cases, the house is just a side item compared to the accompanying lifestyle and sense of community.
    • Once the owner is ready to move, their resale value will be higher.

    The anti-amenity argument: costs

    • Affordability is a big issue in Denver. Adding amenities increases the monthly payment for buyers, making it harder for entry-level individuals to enter the market. For some communities, the location is the amenity.
    • People only really use the pools for a few months in Denver due to the climate. Is the cost justified?

    SEE ALL RECENT BLOG POSTS

  3. Jeff Meyers Decodes 2017

    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
    EMAIL TIM | TIM’S PROFILE 

    SEE ALL RECENT BLOG POSTS

  4. The Future of Housing looks Bright to Jeff Meyers

    The future of housing looks bright to Jeff Meyers and that’s great news because he brings over 33 years experience in which time he founded, built and sold the largest market research company serving the U.S. home building industry.

  5. Meyers Research Adds Industry Veteran Steve LaTerra

    We are pleased to announce that Steve LaTerra is joining our team as a Managing Director in the Advisory Practice. Steve is an long time industry veteran that will focus on propelling the company’s advisory services business.

    We are pleased that Steve has decided to come home to Meyers, where he began his real estate career in the 1980s as an analyst based out of the Los Angeles office. We have worked with Steve over the years and we are excited to continue to broaden our leadership team.

    – Jeff Meyers, President

    Steve LaTerra, Managing Director – Advisory Phoenix
    EMAIL STEVE  |  STEVE’S PROFILE 

    Steve has spent the majority of his career as a real estate analyst and investor. Most recently he owned his own land investment and lot banking company, where he accumulated a portfolio of more than 1,000 lots throughout Arizona. Previously, he served in Principal and Senior Executive positions with Land Advisors Capital, APEX Capital and Acacia Capital Corporation, where he collectively purchased or funded more than 20,000 residential lots throughout the United States. Steve is a Full Member of the Urban Land Institute and has served as the Chair of the Residential Neighborhood Development Council at the National level and is the current Chair of ULI Arizona.  He has served on the Real Estate Investment Advisory Council and has been actively involved with several charitable organizations including the Executive Council, EC70 Charities (formerly Boys and Girls Clubs) and the National Kidney Foundation of Arizona.

    Steve’s background in land development and working with providers of Capital will help us better serve our clients in these spaces. Steve also brings tremendous energy and enthusiasm to our team and he will elevate our capabilities.

    – Tim Sullivan, Practice Leader

    Tim Sullivan, Practice Leader – Advisory San Diego
    EMAIL TIM  |  TIM’S PROFILE

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