Tag Archive: Tim Sullivan

  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. In Case You Missed IBS & Our 2018 Housing Market Outlook

    IBS Orlando was an inspiring, busy, and exciting way to start off the new year with over 85,000 attendees. Our experts spoke at 6 sessions, hosted a Zonda lounge at the Ritz, and emceed the Nationals. What a whirlwind!

    If you missed it, have no fear. We packaged up a great recap for you. Find out what Millennials are doing about unaffordable homes, how long this year’s strong economy is predicted to last, and more below.

    Meyers Research IBS 2018

    2018 Starts Off Strong, But How Long Will It Last?

    “We are not oversupplied, prices are starting to level, and we have job growth. Generally, we’re in pretty good shape. 2018 is pretty positive.” –  Tim SullivanManaging Principal

    Watch Tim give an interview on Professional Builder Show Village LIVE where he answers the new year’s most pressing questions:

      1. How long will the economy hold up prior to a downturn? Is a downturn coming?
      2. What could cause the next recession?
      3. For a builder, what would you tell them to pay attention to over the next few years?
      4. Is land development an untapped opportunity?

    Solutions For Millennials Who Struggle With Affordability

    Ali Wolf, our Director of Economic Research, partnered with Danielian Associates Architecture + Planning to marry data & design to figure out the best ways to provide attainable housing for Millennials. Watch her interview and read her top talking points from her session on Millennials below:

    Two Millennials Tell All: Deconstructing Today’s First-Time Buyers And Their Design Preferences

        • Millennials say affordability is the #1 reason they don’t already own a home. In just the past 5 years alone, national incomes have risen 10% compared to 40% price appreciation for new and existing homes. Making matters worse, the demand for bottom-tiered home prices, largely driving by first-time buyers, is pushing prices in this segment up faster than middle- and top-tier homes.
        • We ran the math. A new single-family detached home is unaffordable for the average Millennial in 40% of the top markets in the country, assuming a 10% down payment. Using the same assumptions, only 20% of the top markets are unaffordable when looking at the median attached new home price (assuming a $150 HOA). While Millennials will almost unanimously tell you they are seeking a single-family detached home, many are willing to make a compromise on their first home.

    In the interactive session, Ali learned:

        • The majority of Millennials polled are willing to make parking concessions to get into homeownership (like giving up the standard two car garage)
        • Most of the Millennials would opt to skip on a tech savvy home on day 1, knowing they’d make adjustments in the future
        • 100% of the Millennials in our audience value value over quality for their first home (i.e. cheaper wood floor alternatives compared to actual wood floors)
     Zonda Continues To Lead The Data Front

    Remember the saying, “a picture is worth a thousand words?” That rang especially true for the executives, sales, and marketing teams who stopped by our booth and saw Zonda as a “left brain – data” “right brain – images” app that allowed them to visually see market trends. Zonda’s beautiful imagery such as heat maps and easy-to-understand infographics made everyone realize that you don’t have to be traditionally trained in data to understand it.

    Sign up for our webinar to help your team be housing data advocates: Zonda Basics For Non-Data Users

    WE RAISED $27K FOR HOMEAID AMERICA

    We’ve donated 100% of the money we raised from our 2018 Housing Market Outlook to Homeaid to help build housing for today’s homeless. We are humbled by the generosity of our sponsors and attendees to support a cause we deeply care about. Thank you!

    Our 2018 forecast was the imminent disruption of the housing industry, with tech as a significant factor in revolutionizing the way home building and builders operate now. Read ProBuilder’s full coverage of our event.

    We will have another Housing Market Outlook event on April 18th in sunny Newport Beach, CA. Early bird tickets are already available! If you know you can’t make it, please consider making a donation in any amount.

    Eventbrite - 2018 Meyers Housing Market Outlook

    Ashley Soo, Content Strategist
    EMAIL ASHLEY | ASHLEY’S PROFILE

  3. Disrupting Ourselves: The Meyers Research National Housing Outlook for 2018

    Tim Sullivan, Managing Principal at Meyers Research, stated that “this industry is ready for disruption,” and asked, “who will be the Elon Musk of home building?” Sullivan believes that it may be individuals or companies outside of the housing industry that may have the clearest view of, and most efficient approach for what it needs.

  4. IBS 2018 Call for Press Coverage!

    If you are writing about IBS 2018, Meyers Research would love to team up with you.

    IBS 2018 Day 1

    Bringing The Best Of Urban To The Suburban
    1. Learn from lessons of the Past on what works and what has not
    2. Learn about solutions that work today
    3. Learn what urban means to different consumer groups and geographies
    4. Discussion about future consumer trends and “must know” innovation
    5. Enjoy new land plan and product solutions

    Jan. 9, 2:00-3:00 PM
    Location: OCCC – West Concourse, Level 3, Room W 311 A

    Speaker Name: Mollie Carmichael, Principal
    Email: mcarmichael@meyersresearchllc.com
    Phone: (714) 619-7857

    What Today’s Buyers Want & How To Give It To Them
    1. Discover inspiring ideas to help better understand your customers
    2. Define the product offerings that are sought after and that customers will pay for
    3. See examples of how leading builders are meeting market needs
    4. Learn how to better connect with customers and provide a homebuilding experience that today’s buyers crave

    Jan. 9, 2:00 PM-3:00 PM
    Location: OCCC – West Concourse, Level 3, Room W 314 A

    Speaker Name: Tim Sullivan, Managing Principal
    Co-Presenter:  Jane Meagher, CMP, MIRM, CAASH; Success Strategies
    Email: tsullivan@meyersresearchllc.com
    Phone: (858) 381-4381

    How Prepared Is Senior Housing For Another Natural Disaster?
    1. Get insights into the growth of this cohort
    2. What preparations do Senior Housing Communities have in place to protect their resident
    3. What lessons were learned from Hurricane Harvey and Irma
    4. How do municipalities, hospitals and other essential personnel prioritize response times for these residents

    Jan. 9, 3:00 PM-3:30 PM
    Location: 55+ Housing Central – West Concourse, Level 3, Room W307A

    Speaker Name: Mike TimmermanSenior Vice President
    Email: mtimmerman@meyersresearchllc.com
    Phone: (239) 269-0769

    IBS 2018 Day 2

    Two Millennials Tell All: Deconstructing Today’s First-Time Buyers & Their Design Preferences
    1. Learn what makes Millennial homebuyers different, and similar, compared to other age cohorts
    2. Find out strategies of builders that have successfully targeted first-time buyers
    3. Understand the tradeoffs related to student loan debt
    4. See proven density solutions, with examples throughout the country
    5. Gain insights into lifestage differences for the largest living generation

    Jan. 10, 8:30 AM-9:30 AM
    Location: OCCC – West Concourse, Level 3, Room W 311 C

    Speaker Name: Ali WolfManager, Housing Economics
    Email: awolf@meyersresearchllc.com
    Phone: (714) 619-7831

    Active Adult Housing: Why Amenities Matter For Established Communities
    1. Learn how shifting demographics are impact community amenities.
    2. How do established Golf Course communities compete with newly developing non-golf oriented communities?
    3. Learn what amenities are in vogue and who they need to cater to.
    4. Find out how developers and builders can capitalize on these new opportunities.
    5. Gain insights on how to sell the amenity renovation to existing members and owners.

    Jan. 10, 1:00 PM-1:30 PM
    Location: 55+ Housing Central – West Concourse, Level 3, Room W307A

    Speaker Name: Mike TimmermanSenior Vice President
    Email: mtimmerman@meyersresearchllc.com
    Phone: (239) 269-0769

    Home Building Industry Trends & Analysis
    1. Understand regional housing differences
    2. Learn what markets have pricing above their previous peaks
    3. Analyze data of winning markets from the new FHA loan limits
    4. See the relationship between home prices and incomes
    5. Find out what markets have seen the most migration changes

    Jan. 10, 1:30 PM-2:30 PM
    Location: OCCC – West Concourse, Level 3, Room W 314 A

    Speaker Name: Ali WolfManager, Housing Economics
    Email: awolf@meyersresearchllc.com
    Phone: (714) 619-7831

    Zonda Release Call Out
    1. Never lose the pulse on resale competition. View over 1 million active and pending listings. Power up on land. Access an improved feed of land listings. Find them on CBSA, county, city and zip code when you are on the Supply tab.
    2. Put metro data to work. Save time on tracking down CBSA metrics and maps, and instantly build on knowledge in your market. Discover the best-selling project in Houston, or see how Denver’s job market is faring.
    3. Instantly reveal the school influence with the new map filter. Quickly create project, closings, and listings price graphs to pit pricing per square foot for one school boundary against another. Use alongside the school district filter to showcase the location

    Jan. 10, 1:30 PM-2:30 PM
    Location: OCCC – West Concourse, Level 3, Room W 314 A

    Speaker Name: Jeff MeyersPresident
    Email: jmeyers@meyersresearchllc.com
    Phone: (310) 887-6297

  5. Merger Madness: Learn What A Combined LEN & CAA Might Look Like

    America’s number two homebuilder, Lennar (LEN), and number five, CalAtlantic Homes (CAA), announced on Monday their merger, creating the largest homebuilder in the US. The deal is expected to close late first quarter 2018. The news came just two years after Standard Pacific Homes and Ryland Homes merged to create CAA, and eight months after LEN acquired WCI Communities.

    “We have been expecting continued merger and
    acquisition activity in the homebuilding industry,
    but this merger is huge. The organization will benefit
    from notable specialties by leveraging off Lennar’s
    excellence in land buying and management and
    CalAtlantic’s significant product strengths.”

    Tim Sullivan, Managing Principal, Advisory

    WHAT DOES THE COMBINED COMPANY LOOK LIKE? 

    We pulled our proprietary data from Zonda iPad app to show what a combined CAA and LEN might look like. Each month, our team tracks contract sales activity for 16,000 actively selling new home communities throughout the United States. The analysis below is based on 2017 year-to-date sales (YTD). Going forward, we will use “Lennar” to describe the combined company.

    HIGH VOLUME MARKETS
    Lennar has home-court advantage:

    • Houston, Tampa, Orlando, Miami, and Phoenix are Lennar’s highest volume markets. Lennar is also the #1 builder in each of these metros.
    • Lennar is based in Florida, and not surprisingly, three of their top five sales markets fall within their backyard. The sunshine state represents 21% of their geographic exposure.
    • Houston and Tampa each represent 8% of Lennar’s overall sales portfolio, Orlando makes up 7%, and Miami and Phoenix each comprise 6%.
    • Of Lennar’s actively selling communities in Houston, the Brookstone and Camden Collections at McCrary Meadows is selling at the fastest pace. The community offers single-family detached homes from the $250,000s, and offers Lennar’s Home Within a Home® to allow for flexible living space.

    TOTAL DOMINATION
    Lennar tops 30% market share in three different markets:

    • When looking at each metro specifically, Lennar makes up over 30% of the market share for Miami, Bakersfield, and Tampa. This bump above the 30% threshold will be great for brand awareness. In these markets, three of ten homes will be supplied by Lennar. Lennar is also the #1 builder in these markets.
    • In Naples, the merger won’t give Lennar a substantial lift in market share; LEN already supplied 22% of the market.
    • The merger will nearly double Lennar’s position in Minneapolis, a market that enjoys a 3.5% unemployment rate.
    • In high volume markets like Dallas, Atlanta, and Austin, Lennar’s market share is <10%.

    MONEY MAKERS
    Los Angeles is a top revenue market for Lennar due to price:

    • Miami is estimated to bring in the most revenue for Lennar. The market has strong sales volume (#4 for the company) and a relatively high average list price ($470,000).
    • Los Angeles and Riverside bumped out some high volume markets due to the average list prices of $1.1M and $530,000, respectively. In Los Angeles, the high sales price was countered by the relatively muted sales volume of 730 YTD.
    • Houston’s average list price is roughly $350,000, but the metro is the top producer for sales YTD.

    Note: estimated revenue is based on YTD sales and current average list price

    The merger made waves in the homebuilding industry. The new company will not only be the largest homebuilder in the US, but is aiming to be the most profitable. Empirically, when LEN acquired WCI Communities, they addressed known issues and ended up exceeding profit goals. The lessons learned combined with economies of scale and other gained efficiencies from this merger will help Lennar work towards their monetary goals.

    We’ve worked on a lot of mergers and acquisitions in our industry over the years. Contact us if we can help grow your business.
    Ali Wolf, Manager of Housing Economics
    EMAIL ALI  |  ALI’S PROFILE 

    SEE ALL RECENT BLOG POSTS

  6. Advisory Practice Announces Strategic Expansion In Florida

    We are pleased to announce that Mike Timmerman is joining our team as a Senior Vice President in Meyers Research’s Advisory Practice. Mike is a long time industry veteran based in Naples that will focus on expanding the team’s expertise in Florida.

    “We are excited that Mike will lead our Florida practice and help broaden our geographic reach to better serve our clients.”

    Tim SullivanManaging Principal

    Mike Timmerman
    Senior Vice President, Advisory
    EMAIL MIKE  |  MIKE’S PROFILE

    Mike’s career spans 30 years and his knowledge of Florida real estate will provide our clients with market intelligence to measure and monitor changes in this critical housing market. Knowing how your customers interact with the economy allows you to make focused, strategic plans to achieve your objectives. Mike’s ability to evaluate and segment the housing supply by lifestyle helps quantify the specific housing demographic that each lifestyle caters to.

    Prior to joining Meyers, Mike owned a consulting firm serving developers, private equity firms, and family funds. He had founded a market research firm, Feasinomics, that later was acquired by Hanley Wood. Mike is an Economics graduate from Northland College in Wisconsin and holds the CRE designation from the Counselors of Real Estate. A mapping and GIS expert, Mike is currently a fellow of the Royal Institute of Chartered Surveyors.

    Tim Sullivan, Managing Principal, Advisory
    EMAIL TIM  |  TIM’S PROFILE

    SEE ALL RECENT NEWS POSTS

     

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