Consumer Insights Top Amenities by Generation Chicago Housing Outlook & more!
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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 3rd annual Consumer Insights 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.
PARTNERS
Builders, developers, and Zillow joined in the effort nationwide by sending an e-mail to their prospective shoppers.
E-MAIL SURVEY
Over 100 questions and several hundred variables regarding shopper’s 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
Responses can be drilled down to the MSA or submarket level or rolled up to a regional and national level.
PRICE POINT
Respondents were asked their desired price point and payment in their next home; our report can be filtered accordingly.
GENERATIONS & LIFESTAGE 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) 870-1219
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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LANCE RAMELLA Sr. Vice President Lance consults on a broad spectrum of residential and commercial properties, including all for-sale and rental product types, master-planned communities and resorts, infill developments, and active adult and senior housing projects. With over 26 years of industry experience, he has led consulting operations and management for the Central and Eastern US as Director of Consulting at Metrostudy and Senior Managing Director at Hanley Wood Market Intelligence. As a leader in the industry, Lance regularly provides insight to leading publications including The Chicago Tribune, Crain’s Chicago Business, The Daily Herald, Builder Magazine, Big Builder Magazine, Developer Magazine, and The Washington Post. He has been a featured speaker at the Builder 100 Conference, Developer Conference, Presidential Seminar Urban Land Institute and Navigating the Chicago Real Estate Market. In his free time, Lance enjoys golf, reading and riding his bike. Education B.S. from Arizona State University’s W.P. Carey School of Business Affiliations ULI Chicago Chapter ULI – Community Development Council – Blue Flight HBA of Greater Chicago
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MOLLIE CARMICHAEL Principal Mollie is a Principal in our custom consulting practice. For over 25 years, Mollie has helped companies increase profits dramatically by understanding the market and consumer first. She is passionate about guiding strategic planning decisions with consumer and market based methodologies in order to optimize financial results. Mollie has led research efforts throughout the country on masterplan communities and individual neighborhood design where companies. In addition to managing various consulting assignments, Mollie leads our firm’s Consumer Insights research to help our clients understand what consumers value in their homes and communities. Prior to joining the company, Mollie served as a Vice President of Strategic Marketing for Lennar, Centex Homes, Pulte Homes/Del Webb and Vice President of Residential Product Planning at The Irvine Company, where she led strategic planning, target land acquisition strategies, acquisition and market study due diligence, consumer and product segmentation, quantitative and qualitative consumer research, competitive research, as well as tactical media planning, model and sales office merchandising. Mollie has been quoted in various media publications including the Wall Street Journal, MSNBC, Reuters, Businessweek, and Professional Builder. She has been a speaker on Consumer Insights and innovative planning ideas throughout the country including PCBC, ULI, UBS, and other specific venues. Affiliations ULI – Community Development Council Building Industry Association 55+ Housing Council
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Consumer
Insights
81%
of prospective shoppers say the design is one of the most important factors motivating them to buy a new home.
80%
will consider a smaller backyard if it is designed as a great outdoor space.
Consumer
Insights
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Consumer
Insights
Look out for multi-generational living! 39% plan on an elderly parent and 35% plan on a child over 18 living with them with their next purchase.
67% of all shoppers have pets.
Consumer
Insights
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Consumer
Insights
Top Amenities Check out what more than 20,000 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. 8
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 3rd 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
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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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Analysis Chicago, IL May 2014 Chicago Analysis • The Chicago market is Warm. Builders in Chicago are getting a spring lift now that the weather has thawed. The production builders we surveyed averaged 3 net sales per community in April, with relatively flat prices. According to our Burns Home Value Index™, homes in the resale market appreciated 6% over the past twelve months. Some submarkets are Hot and continue to outperform, including Naperville, Geneva, and Wheaton. The further out submarkets are seeing steady sales but not much pricing power. • Traffic picks up. Builders report average traffic in their model homes of 8–12 visitors per week, a significant increase from the downturn, when they were lucky to get 2 or 3 visitors per week. Builders we spoke with noted the quality of most traffic was good and that real buyers are out there looking. Some builders report traffic above 15 visitors at their stronger communities. Most plan to add a second full-time sales person when traffic is consistently above 20 per week. • The resale market heats up. Resale sales increased 26% compared to last year, even with just 4.7 months of supply on the market. In hot submarkets supply is even smaller. Pending resale sales in April reached the highest level in two years, up 19% MOM and 14% YOY. Pending sales are generally a strong indicator of what actual sales will be in the next 1 to 2 months. • Labor shortages continue as a major concern. Large builders are “poaching” contractors from smaller builders’ worksites to meet construction deadlines. The builders offer significant wage increases, which drives up construction costs. • David Weekley Homes entering Chicago. David Weekley has land under contract in Chicago and plans to build homes in Highland Park, Kildeer, Glenview, Barrington, and Naperville. Their homes will be priced between $500,000 and $700,000.
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Lance Ramella Sr. Vice President Consulting
Local insight was provided by Lance Ramella, Consulting. For further information, on our research please contact Lance at lramella@realestateconsulting. com.
Market Trends Metro Analysis and Forecast Housing Cycle Risk Index
HCRI Legend
Our HCRI is a 1–2 year leading indicator for home price appreciation/depreciation. Improving markets (rising prices and rising construction) make the market riskier and vice versa. *Based on a three-month trend
Demand
Actual results will vary from projections and the variation can be significant. We assume no liability for the use of any of the data or projections in this report. Projections as of: May 2014
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Chicago Housing Outlook an A+ After Falling 91% BY JOHN BURNS, CEO
Watch out for a housing renaissance in the Chicago metro area. The region massively overcorrected in this last downturn and just recently joined the recovery. New home revenue fell 91% from 2005 to 2010, and most private builders went out of business. Today, Chicago’s economy grows rapidly—with rising home sales volumes, very low levels of new and resale supply, and great affordability. Here are the facts: • Demand for more housing: 55,000 more people work in the Chicago MSA than one year ago, and cities issued only 9,000 total permits during that time. Chicago should be back to peak employment by 2016, at which point the market should be in a strong recovery mode. • Buyer demand: Resale home buying activity rose a whopping 38% over the last year and has returned to its normal level of activity per household. • New home supply: Single-family construction comprised only 5,100 of the 9,000 total permits issued in the last 12 months—80% below the average singlefamily activity since 1981.
• Land: In our land survey, several Chicago land brokers indicate finished lot prices rose 18–25% in the last 12 months. Private builders are growing again but having difficulty competing with the public builders for the best land. Publicly traded home builders bought approximately 65% of the finished lots sold last quarter. Because the Chicago housing market surprisingly gets so little media attention, builders do not have as much competition as those in the more widely discussed markets. Contact our SVP and industry veteran Lance Ramella in our Chicago office at lramella@realestateconsulting.com or 630-544-7826 for more information.
• Resale supply: Only 3.9 months of resale home supply on the market means sellers have the advantage over buyers. • Affordability: A typical home buyer pays only $1,055 per month in mortgage payments —an $84 per month discount compared to renting and $274 less than in 2008. 12
John Burns, CEO (949) 870-1210 jburns@realestateconsulting.com
Trusted Analysis for Executive Decisions INSIGHT With over 45 consultants and research analysts working together to provide understanding and clarity through the intricacies of an ever changing real estate cycle, our objective is to make you more successful. Through straightforward and open dialogue, we can determine how to best put our experience and knowledge to work in a way that assists you in reaching your business goals and financial targets. RELATIONSHIPS We have worked with every stakeholder in the industry: builders and developers, private and institutional investors, financial and legal service firms, and building product manufacturers. This dense network of high achieving professionals allows us to see more clearly, create opportunity and generate creative solutions. RESULTS Our team’s understanding of the complexities posed through changing economic and business climates is demonstrated through our consistent ability to deliver timely service with exceptional results.
KEY LEADERSHIP
Our team, led by experienced industry executives, is committed to helping our clients make great investment decisions based on knowing the facts.
John Burns CEO
Don Walker President
Mollie Carmichael Principal
National Market Outlook & Forecasts
Portfolio & Valuations
Consumer Research & Community
Steve Dutra Sr. Vice President
Lisa Marquis Jackson Sr. Vice President
Lesley Deutch Sr. Vice President
Research & Data
Business Development
Florida Market Leader
Jody Kahn Sr. Vice President
Ken Perlman Sr. Vice President
Pete Reeb Sr. Vice President
Builder, Land, & Geographic Insight
Southwest Market Leader
So. California Market Leader
Lance Ramella Sr. Vice President
David Kalosis Sr. Vice President
Dan Fulton Sr. Vice President
Midwest Market Leader
Southeast Market Leader
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Dean Wehrli Sr. Vice President
Paige Shipp Sr. Manager
No. California Market Leader
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Consulting Services
Our Custom Consulting Team helps our clients maximize opportunity in the housing market. Our clients benefit from a team who applies their public and private home building background, local market insight, and analytical processes to market research.
Advisory 1. Market Feasibility 2. Consumer Research 3. Valuation & Cash Flows 4. Community Planning 5. Apartment Analysis 6. Litigation Support 7. Performance Improvement 8. Demand Model by Lifestage 9. Business Plan/Strategy Development 10. Loan Workouts/Restructuring
Market Health
11. Commercial Analysis 12. Urban Residential & Mixed Used Redevelopment
People/ Demographic Shifts
Marketing and Sales
13. International & Resort Services
Financial Testing
Societal/ Geographic Personality
Clients • Builders & Developers • Private Equity • Institutional Investors • Building Products • SF Rentals
Product
• Other
Consumer Personality & Preferences
Competitve Environment Housing Supply 14
Demand by Lifestage and Price
Research
Services
Metro Analysis & Forecast
MAF
This monthly report provides an overview of major housing metrics within a MSA. This is combined with local insight, proprietary surveys, and extensive data analysis to provide a complete picture of the important housing dynamics and shifts within a given markets.
Regional Analysis & Forecast
RAF
A comprehensive monthly report that summarizes important information by ten regions and key metro areas. This includes fiveyear pricing forecasts, supply and demand, and housing affordability and market health.
Monthly Proprietary Builder Survey
This is the timeliest survey on housing conditions released in the industry being delivered to our clients’ inbox by the third business day of the month. This is the best monthly monitor of new home market conditions with feedback from approximately 2,000 communities across 80 metros with a mix of public and private home builders.
Quarterly Proprietary 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 though published data, local expertise, and our own market knowledge.
National Consumer Research
We partnered with builders and developers across the nation to launch our third annual consumer insights survey. The combined three surveys have presented more than 50,000 total responses of prospective homebuyers.
Ongoing Insight
U.S. Housing Analysis & Forecast
USHAF
This monthly report examines over 150 metrics related to housing, and includes an executive summary providing an overview of the important metrics affecting the housing metrics and our view of is impact on the future.
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’ markets fundamentals and submarket desirability.
Apartment Analysis & Forecast
AAF
A wide-ranging quarterly report including economic outlook for the multifamily market and analysis on 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
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White papers: We publish thorough research reports covering relevant and important topics.
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Truth in Housing: A regular email update on significant information that was not reported in the press including findings of non-confidential information we uncover in the field and through our industry contacts.
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Public Builder Call Summaries: We summarize key performance statistics and market insight from the public builder quarterly earnings conference calls.
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Industry Expert Webinars: We sponsor webinars with Q&A that inform our clients of timely market and consumer research.
The Summit
Client-Exclusive Annual Housing Conference
Our annual client-only conference, The Summit, where we gather leaders across the housing industry for one and a half days of thought-provoking discussion and networking.
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