JBREC Building Product Manufacturers

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Building Product Manufacturers

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Building Product Manufacturers Our Building Product Manufacturers clients have been able to identify their top customers, gauge housing market conditions and better align their supply chain due to our research and consulting services. Our relationships with builders from across the country, our consumer research and market knowledge has allowed us to dive into construction timelines, purchasing decisions and preferences to help our building product clients answer the following: • Identifying top customers • Understanding the drivers of decisions and the sales cycle of homebuilders • Gauging the health of the housing market • Anticipating product demand • Positioning building product strategically

“John Burns Real Estate Consulting reports provides the timeliest local market pulse of any national data service allowing my residential divisions to know exactly where to focus. [They have] the contacts and insight to provide the most thorough local market analysis enabling us to make the right decisions.” Publicly Traded Building Product Manfacturer, President

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To keep a pulse on the housing market, our US Housing Analysis and Forecast provides the following metrics on a monthly basis with 4-year forecasts: • • • • • •

Single-Family and Multifamily Construction New Home Sales Existing Home Sales Distressed Home Sales Existing Home Price Residential Repairs and Remodeling Metrics

Our Regional Analysis and Forecast will break down construction and sales forecast on a regional level along with providing insight on key MSAs across the country.

Our Consumer Insights survey helps Building Product Manufacturers understand buyers’ home preferences from exterior home elevations to interior home specifications. The survey allow manufacturers to better position their product for today’s trends.

“For several years now I have relied on John and his team to provide timely and accurate research on the housing market. JBREC analysis has proven to be invaluable as we plan our business” Publicly Traded Building Product Manfacturer, President

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Mind the Gap: Starts vs. Completions

White Paper

Published January 2013

Construction Delays & Implications for Building Product Sector in 2013 In mid-2012 as the housing recovery was picking up steam, many of our clients were puzzled by the fact that building product suppliers had not yet seen a broad pickup in demand. We thus examined how housing recoveries typically play out, paying close attention to the relationship between various phases of the build cycle – namely starts and completions. As seen in the table below, our research uncovered that dating back to 1985, a 7 to 8 month lag between growth in housing starts and completions is typical in construction recoveries. As such, building product industry performance is much more correlated with housing completions. We ultimately concluded that completions would begin to catch up with starts in early 2013. Consequently, we advised our clients that building product suppliers with products geared toward later stages of construction as well as repair and remodel activity would begin to see demand accelerate at a 10%+ y/y clip in early 2013, roughly 7 to 8 months after housing starts began accelerating at a doubledigit clip. In addition, we stressed that housing’s positive feedback loop would help building product companies that depend on repair and remodel spending in 2013.

With two years now in the rearview mirror, we can see very clearly that our conclusions and recommendations back in January 2013 were spot-on. As shown in the charts on the next page, single-family completions began to accelerate at a 10%+ clip beginning in January 2013, ultimately growing by 18% through the full calendar year. Moreover, building product company stocks started to takeoff in early 2013 and have since outperformed the S&P 500 by a wide margin.

Construction Recovery Phase

Single-Family Starts Begin to Accelerate at 10%+ Y/Y

Single-Family Completions Begin to Accelerate at 10%+ Y/Y

1991-1993 1997-1999 2001-2004

March, 1992 October, 1998 October, 2003

October, 1992 May, 1999 June, 2004

Source: Census Bureau, John Burns Real Estate Consulting, LLC (Rolling 12-month, NSA)

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Month Lag (DoubleDigit Growth in Starts and Completions) 7 Months 7 Months 8 Months


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SAMPLE US HOUSING ANALYSIS AND FORECAST

SAMPLE REPORT

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SAMPLE REPORT

SAMPLE REGIONAL ANALYSIS AND FORECAST

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Why Frame Walls When You Can Frack Wells? by Rick Palacios Jr., Director of Research

In late 2008, oil and gas pipeline construction workers earned $0.46 per hour more than new home framing contractors. Today, they earn $8.15 more per hour. It’s no wonder labor is tight in the new home market, especially in Texas and Denver, the closest major markets to North Dakota. Since 2008, framing contractor wages have fallen 8%, while oil and gas pipeline construction wages have swelled by 20%. Since the end of 2007, oil and gas construction grew by 223,000 jobs, while residential construction employment fell by 743,000 jobs. That still means that there are at least 500,000 former construction workers not in the oil industry who need to be enticed to return to the residential construction market. Touring the Washington, DC, Charlotte, Atlanta, Austin, and Phoenix housing markets recently, the triple-digit thermometer readings reminded me just how difficult home construction can be. We will be watching the inevitable wage increases carefully, as rising wages will have the additional impact of reducing the price home builders will pay for land.

Note: We are defining energy sector and residential construction as follows: Energy sector = oil and gas pipeline construction + oil and gas extraction + support activities for oil and gas operations Residential construction = residential building construction + residential specialty trade contractors 8

Sample Newsletter


Delayed Marriage Equals Delayed Homeownership

Sample Newsletter

by Mollie Carmichael, Principal The share of 25-- 29 year-olds who are married is down by almost 48% for men and 43% for women from 1970. This single fact is one of the biggest game changers in the housing industry.

Cohabitation has certainly been on the rise in recent decades, but homeownership rates for cohabitating couples are much lower than rates for married couples.

What impact does this change in marital status mean for your housing strategies? It is huge!

The addition of children makes owning a home almost a necessity, given the need for yards, toys, education, and social circles.

The housing market is unquestionably fueled by life stage changes, particularly the change of marital status and the addition (and subtraction) of children. These changes significantly affect where consumers want to live and what kind of home and community they will choose. For example: • Singles are more likely to rent and live in locations that are closer to entertainment and employment, and these areas are seeing more demand today than they have historically. •

Marriage usually ignites the desire to own a home with a variety of locational and housing choices depending on income and family present.

• Children moving out often results in lifestyle changes, including different social circles, home size, and floor plan needs. Locational preferences also begin to shift. Our Consumer Insights survey of 22,000+ new home shoppers, coupled with our Housing Demand Model by Lifestage and Price Point, shows just how much housing preferences have changed. These preferences can vary widely by geography and price point, and our team can help you make sense of how these changing dynamics are affecting your market.

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About Us John Burns Real Estate Consulting (JBREC) 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:

• 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 seek to continually innovate and improve our practices to make our clients’ lives easier.

Quick Stats Regularly Quoted in:

• Speed. We focus 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 indices and forecasts, and a demand model by price range and household composition.

• Data quality. We create, collect and buy the best industry data available, enabling our analysts to evaluate market conditions clients apply that insight to their business planning.

Weekly Newsletter Top 50

27,000+ subscribers

200K+ followers

• Local knowledge. Our executives live in 11 of the major housing markets across the country.

3,000+

• Management expertise. Our team leaders have

followers

learned from multiple housing cycles.

• Trusted integrity. We do not recommend stock

investments or take contingency fees so it is clear we have no conflicting agendas.

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Bloomberg Ticker

JBRE


Our

Team

Access to Our Nationwide Team of Experts John Burns Real Estate Consulting, LLC takes great pride in our highly educated, resourceful and experienced team that includes practitioners with 25+ years of experience in both homebuilding and community development. As a research client, you gain access to our team across the nation to discuss market conditions, our current research and our forecasts.

Regional Offices

Client Resources John Burns CEO

Rick Palacios Director of Research

Lisa Marquis Jackson Business Development

Steve Dutra Data Management

Sacramento, CA Dean Wehrli Chicago, IL Lance Ramella

Irvine, CA

New England Jody Kahn

Mollie Carmichael

Nicole Murray

Washington, DC Dan Fulton

San Diego, CA Pete Reeb

Atlanta, GA David Kalosis

Don Walker Dallas, TX Ken Perlman

Paige Shipp

Boca Raton, FL Lesley Deutch

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Research

Services

Comprehensive Research & Services Every month, we analyze housing data at the metro, regional, and national levels to provide you with the information you need for a competitive edge. Clients receive a flagship report, such as the Regional Analysis and Forecast, to answer questions and get insight based on their business. In addition to the flagship report, clients receive ongoing reports and research, client services and invitations to client-exclusive events.

Regional Analysis & Forecast

RAF

This comprehensive monthly report summarizes important information in ten regions and key metro areas. This includes five-year pricing forecasts, supply and demand, and housing affordability and market health.

The US Housing Analysis and Forecast, Monthly Builder Survey and Quarterly Land Survey and Land Index come with every research subscription.

U.S. Housing Analysis & Forecast

This monthly report examines more than 150 metrics related to housing, and includes an Executive Summary with an overview of the important metrics affecting the housing market and our view of its impact on the future.

Monthly Builder Survey

Every month we survey more than 200 builders across the nation on new home market conditions. Our survey provides timely and accurate insights on housing market conditions just a few days after the end of every month. We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau.

Quarterly Land Survey and Land Index

Our quarterly land survey and index provides a balanced qualitative and quantitative approach to understanding the land market, using a proprietary model built through published data, local expertise, and our own market knowledge.

Ongoing Insight •

White Papers: We publish thorough research reports covering relevant and important topics.

Truth in Housing: We regularly send out email notes to clients called “Truth in Housing” which include relevant non-confidential insight that we uncover in the field, at industry conferences, or through our industry contacts.

Public Builder and Single-Family Rental REITs Call Summaries: We summarize key performance statistics and market insight from the public builder quarterly earnings conference calls. For more information about our research, please contact:

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Lisa Marquis Jackson Sr. Vice President

lmjackson@realestateconsulting.com (214) 389-9003


Client Services •

Executive Access. Personal access to our team of market experts and research analysts.

Presentations. As requested, we meet with our clients and provide formal or informal industry or market-specific updates.

Introductions. We have helped many of our clients find a builder, developer, or capital partner and we have introduced many of our clients to specific industry experts.

Data Access. We collect, scrub, and analyze more than 1,000 data points each cycle. Our clients have access to reasonable and appropriate data exports from our team’s SQL database.

Client Events •

Client-exclusive webinars. We sponsor webinars with Q&A that informs our clients of timely market dynamics and offers insight on specialty areas like consumer research.

The Summit

Our annual client-only conference, The Summit, gathers leaders across the housing industry for one and a half days of thoughtprovoking discussion and networking.

HOUSING MARKET OUTLOOK The Housing Market Outlook, our other annual client-only conference, is designed to be the industry’s most informative day of the year. This new conference will highlight insight from 50 speakers from every region and discipline of the housing industry.

Other flagship reports that our team produces on a monthly or quarterly basis include the following:

Metro Analysis & Forecast

MAF

This monthly report provides an overview of major housing and economic metrics, as well as our forecasts, at an MSA level. This is combined with local insight, proprietary surveys, and extensive data analysis to provide a complete picture of the important housing dynamics and shifts at the market level.

Home Builder Analysis & Forecast

HBAF

This report examines each of the publicly traded home builders based on their geographic footprint, ranked by their forecasted market growth in mid, small and micro-cap. It also includes location comparisons of builders based on the builders’ market fundamentals and submarket desirability.

Apartment Analysis & Forecast

AAF

This wide-ranging quarterly report includes an economic outlook for the multifamily market and analysis of the interplay between housing and apartment market dynamics and demographics. Included are five-year apartment rent forecasts, and rankings of top apartment REITs based on their regional diversification and economic factors.

Single-Family Rental Analysis & Forecast

This wide-ranging quarterly report includes an economic outlook for the multifamily market and analysis of the interplay between housing and apartment market dynamics and demographics. Included are five-year apartment rent forecasts, and rankings of top apartment REITs based on their regional diversification and economic factors. 13


ConsumerInsights What Do You Call Home?

NATIONWIDE SAMPLE

Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our third annual Consumer Insights report couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.

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Over 22,000 responses are collected across the nation annually. We have access to over 50,000 total responses in our past survey database.

PARTNERS

Builders, developers, and Zillow joined in the effort nationwide by sending an e-mail to their prospective shoppers.

E-MAIL SURVEY

Our survey includes over 100 questions and several hundred variables regarding shoppers’ opinions on their next home and community.


Insight Customized to Increase Your Bottom Line Consumer Insights is a “focus-forward� study so that real estate practitioners can use this information to make strategic decisions moving forward. The information can be customized to meet your needs.

GEOGRAPHIC

We understand that geography affects consumer preferences. Responses can roll up to a national or regional level or drill down to the MSA or submarket level.

PRICE POINT

We understand that affordability is different for each new home shopper. Respondents were asked their desired price point and payment in their next home; our report can be filtered accordingly.

GENERATIONS & LIFESTAGE

We understand that lifestage impacts purchasing behaviors. Reports are available specifically for 55+ and the millennial buyers.

Fantastic Insight On: HOME To learn more about how you can better develop your next community, marketing strategy, or new product design, please contact:

Kitchen Bathroom Private outdoor living Great space Architectural style Yard preferences Specifications & Technology

MOLLIE CARMICHAEL Principal

COMMUNITY

mcarmichael@realestateconsulting.com (949) 870-1214

Community amenities Lifestyle

INTERIOR STYLE

Interior style preferences Exterior style preferences Interior specifications Texture Color

ATTITUDES

How they live How they shop What they value

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Consumer

Insights

Top Amenities Check out what 22,000 new home shoppers shared as the amenities they most wanted in their next community. Below are the top 25 preferences by generation. The major differences relate to the presence of children for the younger generations.

Boomers

Born 1946 to 1964

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Gen X

Born 1965 to 1979

Gen Y

Born 1980 to 2000

*

Grocery Store Close By

Grocery Store Close By

Grocery Store Close By

Restaurants Close By

Restaurants Close By

Restaurants Close By

Walking Trails

Walking Trails

Fitness Center

Fitness Center

Fitness Center

Walking Trails

Village Square

Recreational Center

Children’s Park

Shopping

Village Square

Shopping

Wi-Fi Internet Access in Public Areas

Shopping

Recreational Center

Community High-Speed Internet

Wi-Fi Internet Access in Public Areas

Recreational Center

Community High-Speed Internet

Community-Wide events

Shaded Areas

Shaded Areas

Children’s Park

Community High-Speed Internet

Organized On-Site Programming

Community-Wide events

Shaded Areas

Community Intranet with Events, Clubs, Bulletin Boards, etc

Organized On-Site Programming

Yoga/Pilates Studio

Running

Dog Park

Lake, Pond, Stream, and Water Elements, $50/Month

Community Intranet with Events, Clubs, Bulletin Boards, etc

Running

*

All three generations ranked Fitness Center and Walking Trails as top amenities above retail shopping.

Wi-Fi Internet Access in Public Areas

*

Wi-Fi Internet Access and a Community Intranet with Events, Clubs, etc. are more Village Square important to the Boomers than they are to Community-Wide events Gen X and Gen Y.

*

Community-Wide events rank above pools, parks, and other typical amenities. Events can be much less expensive too!

Children’s Water /Play Area

*

Look for our future trends in what consumers want in communities and homes by generation. We believe it starts with your consumers. 16

Today’s shoppers rated Service & Retail as the most important amenities for their next community purchase.

A Dog Park is among the top park choices. It scored highest for Gen Y, followed by the Boomers.


Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our third annual Consumer Insights report couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.

Gen X

Boomers

16 17

Gen Y

Born 1965 to 1979

Born 1946 to 1964

Born 1980 to 2000

Hiking Trails with Historical Markers of the Area

Tennis Courts

Live Music in the Park

Yoga/Pilates Studio

Sport Fields

Remote Guard Gate, $50/month

Sport Fields

Basketball Courts

Dog Park

Children’s Water/Play Area

Tennis Courts

Cycling

Hiking Trails with Historical Markers of the Area

Yoga/Pilates Studio

Open Space, $50/Month

Lake, Pond, Stream, and Water Elements, $50/Month

Hiking Trails with Historical Markers of the Area

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Amphitheater Outdoors

Dog Park

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Adult-only Pool (18+)

Cycling

Art Shows in the Park

Basketball Courts

Lake, Pond, Stream, and Water Elements, $50/Month

Library

Live Music in the Park

Live Music in the Park

18 19 20 21

24 25

WATER

ADVENTURE

NATURE

ARTS &

ENTERTAINMENT

PARKS

Organized On-Site Programming

*

Events and experiences, as a whole, rank above “hard amenities” like a pool.

Community Intranet with Events, Clubs, Bulletin Boards, etc

Movies in the Park

REC CENTER

EVENTS

SERVICE & RETAIL

SPECIAL AMENITIES

Let us help! We can help optimize your community and home design for better homes, better places, and better profit. Please contact Mollie Carmichael at mcarmichael@realestateconsulting.com or (949) 870-1214. WWW.REALESTATECONSULTING.COM

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TODD TOMALAK Vice President

(920) 373-6727

ttomalak@realestateconsulting.com

As a Vice President, Todd oversees our building product research and is an expert in building product market assessment and industry analytics. Prior to joining John Burns Real Estate Consulting, Todd served as Manager of Economic & Industry Analytics at Kohler Co, responsible for all North American market modeling and quantitative market research measurement. Todd is the six-time winner of Most Accurate Category Forecaster from Chicago Federal Reserve, which peer group includes Wells Fargo, Caterpillar, Ford, GM, Macroeconomic Advisors, and more. In his free time, Todd enjoys live music, good food, and is an avid chess player. Education B.A. in Mathematics from St. Norbert College

NICOLE MURRAY Sr. Vice President

(949) 870-1234

nmurray@realestateconsulting.com

As a Senior Vice President, Nicole oversees our company’s research team, research products and marketing. In addition she manages custom consulting market research and special projects across the country. Her experience includes land acquisition, entitlement processing, product design, BRE processing, land development, onsite production, sales and marketing, escrow management, and business planning and projections. Prior to her tenure as Vice President of Community Development for a privately held homebuilder, Nicole worked for the Burnham-Moores Center for Real Estate launching their Master of Science in Real Estate (MSRE). In 2011, Nicole was selected as “Top 40 Under 40″ by Professional Builder Magazine for United States and Canada. She is a licensed Real Estate Broker and Contractor in the State of California. She enjoys travel and is on quest to see 140 modern and ancient wonders of the world. EDUCATION M.B.A. from the University of San Diego B.A. in Communications from the University of San Diego


LISA MARQUIS JACKSON Sr. Vice President

(214) 389-9003

lmjackson@realestateconsulting.com

As Senior Vice President, Lisa leads the company’s strategic research and business development efforts. With over 23 years of experience in housing research, she is a proven industry strategist with a demonstrated track record for driving growth and successfully creating solutions for complex business challenges and opportunities. Leveraging the strength of her network, experience and industry knowledge, Lisa is a driver of opportunity and has developed a reputation for being a dynamic and strategic business advisor. Prior to joining John Burns Real Estate Consulting, Lisa was an award-winning business journalist providing in-depth news and interpretive coverage of the housing industry for 18 years—most recently with Hanley Wood publications. She also gained industry experience as an account director for a boutique marketing research firm, creating custom research products for business-to-business clients. Lisa has been widely sourced in major media including the Wall Street Journal, NPR, and CNBC. In her free time, Lisa enjoys tending to her budding, urban farm. Education B.S. in Mass Communications from Illinois State University

RICK PALACIOS JR. Director of Research

(949) 870-1244

rpalacios@realestateconsulting.com

With more than 10 years of experience in residential real estate and economic research, Rick oversees all research pertaining to the single-family for sale/rent, multifamily and building product sectors. Previously, Rick worked as an Equity Research Associate (homebuilders) at Morgan Stanley in New York. In addition, he spent several years as an Analyst at the Milken Institute, an economic think tank located in Santa Monica, California. Rick is regularly quoted in local news publications as well as major outlets such as the Wall Street Journal, Bloomberg Businessweek, CNBC, CNN, MSNBC, and Professional Builder. In his free time Rick loves to travel. EDUCATION M.S. in Real Estate Economics and Finance from the London School of Economics B.A. from the University of California, Irvine

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REGIONAL OFFICE LOCATIONS ATLANTA, GA

CHARLOTTE, NC

12600 Deerfield Parkway | Suite 100 Alpharetta, Georgia 30004

1900 Glades Road | Suite 205 Boca Raton, Florida 33431

9935-D Rea Road | Suite 273 Charlotte, North Carolina 28277

DIR: (770) 286-3493

DIR: (561) 998-5814

DIR: (704) 989-1190

CHICAGO, IL

DALLAS, TX

DENVER, CO

3108 State Route 59 | Suite 124-247 Naperville, Illinois 60564

5220 Spring Valley Road | Suite 215 Dallas, Texas 75254

1630-A 30th Street| Suite 475 Boulder, Colorado 80301

DIR: (630) 544-7826

DIR: (214) 389-9003

DIR: (720) 328-1530

IRVINE, CA

NEW ENGLAND

SACRAMENTO, CA

9140 Irvine Center Drive | Suite 200 Irvine, California 92618

155 Fleet Street | Suite 11 Portsmouth, New Hampshire 03801

7840 Madison Avenue | Suite 187 Fair Oaks, California 95628

DIR: (949) 870-1200

DIR: (603) 235-5760

DIR: (949) 870-1200

SAN DIEGO, CA

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BOCA RATON, FL

WASHINGTON, DC

4250 Executive Square | Suite 540 La Jolla, California 92037

11710 Plaza America Drive | Suite 2000 Reston, Virginia 20190

DIR: (858) 558-8384

DIR: (703) 447-7171

WWW.REALESTATECONSULTING.COM

WISCONSIN DIR: (920) 373-6727


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