Consumer Insights
Top Amenities by Generation East Bay Housing Outlook A Look at The Boomers, Gen X, and Gen Y
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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 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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DEAN WEHRLI Sr. Vice President Dean manages residential and commercial real estate consulting assignments across the country and has more than 15 years of experience in real estate market feasibility analyses. He is our Senior Vice President with an emphasis on the Bay Area, Sacramento, the Central Valley, and Northern Nevada markets. His experience as a seasoned analyst has spanned nearly 20 states and over 60 markets, consulting on developments ranging from a few lots of multi-million dollar custom homes to master planned communities with thousands of units. Dean’s analyses have focused on pricing, absorption, buyer profiles, product recommendations and segmentation, supply and demand, economic and demographic impacts, and aggregate housing market trends. Previously, Dean spent many years at Hanley Wood Market Intelligence (formerly The Meyers Group) and Sullivan Group as Managing Director of their Sacramento office. Dean plays basketball when not injured, writes novels and screenplays, and almost always wins at Trivial Pursuit. Almost. EDUCATION Ph.D. from the University of California, Los Angeles B.A. in Political Science from Cal State Fullerton. AFFILIATIONS Building Industry Association Urban Land Institute
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MOLLIE CARMICHAEL Principal Mollie Carmichael is a Principal at John Burns Real Estate Consulting. For over 25 years, Carmichael 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. Carmichael has led research efforts throughout the country on masterplan communities and individual neighborhood design where companies. In addition to managing various consulting assignments, Carmichael leads our firm’s Consumer Insights research to help our clients understand what consumers value in their homes and communities. She has led a national consumer survey for the last several years that has been launched to several million homeshoppers throughout the company. The survey effort is all about better understanding what consumers value and what they will pay for in their next community and home. It is the only survey of its kind today. Prior to joining the company, Carmichael 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. Carmichael 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 5
Consumer
Insights
81%
of prospective shoppers say that 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
62%
will use either their tablet or mobile phone while shopping for their next home.
Top kitchen features include large islands, walk-in pantries, and high-tech appliances.
Consumer
Insights
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Consumer
Insights New Home Shoppers
Generations
Let’s look at who’s shopping out there today for a new home! Who are they? What do they want? This infographic is part of a new series of studies by JBREC on generational differences, based on responses from 22,000 new home shoppers. This Generations infographic details each generation’s life stage and behavior in regards to purchasing a home. Visit www.realestateconsulting.com and let us help your team improve your home or community strategies by better understanding your consumers by specific location.
New Home Shoppers
Boomers
New Home Shoppers
Gen X
Born 1946 to 1964
Gen Y
Born 1965 to 1979
Born 1980 to 2000
LIFE STAGE Family
Single
21%
Family
Single
66%
14%
79%
10%
34%
have 2 or fewer people in household.
have 2 or fewer people in household.
Family
Single
44%
9%
56%
have 2 or fewer people in household. Highest percentage of college graduates at 45%
PAYMENT, PRICE, AND DOWN PAYMENT
47%
of Boomers have a down payment of 30% or greater—thanks to their home equity. This generation is looking for the lowest monthly payment but not necessarily the lowest price. Boomer payments are lower than Gen Y because they are moving down and putting down equity. Their larger down payments help! This consumer will rely heavily on equity—particularly for the consumer that needs to travel further out to purchase or “cash out” for financial security.
47% Gen X
are paying the highest monthly payments...not the Boomers. They also have the highest incomes.
of Gen Y will rely on savings for their down payment. They are the most budget-conscious of all shopping groups. They are almost 2x more likely to get their down payment from their family than Gen X.
18% will pay $2,500+/month
28% will pay $2,500+/month
19% will pay $2,500+/month
69% want a home under $2,500/month
45% want a home under $2,500/month
52% want a home under $2,500/month
33% are looking for a home priced above $400k (varies by geography)
37% are looking for a home priced above $400k (varies by geography)
26% are looking for a home priced above $400k (varies by geography)
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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. 10
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
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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 East Bay Area, CA June 2014 East Bay Area Analysis • East Bay Area remains strong in May. The East Bay market continues to show strength across a variety of product type and price points. JBREC consultant Dean Wehrli notes that sales in Dublin have been normalizing at a sales pace of 3–5 net sales a month, with prices ranging from low $800Ks to +1 million. Limited land supply close to tech job hubs and elevated land prices are driving a shift towards higher-density product type in the East Bay. • East Bay employment market continues to grow. Over the 12 months ending April, the total number of jobs in the East Bay Area increased 1.6%, growing by 16,300. The education and health services sector added the most jobs, growing by 5,400. The highincome sector lost 200 jobs. Future job growth will remain stable as companies continue to enter the area. Recently, Amazon started hiring for its new 574K square foot distribution center in Newark. • Investor activity trends lower. Over the last year, home prices in the East Bay increased 12% according the Burns Home Value Index™. Healthy price growth over the last year has decreased distressed inventory and has slowly reduced investor activity in the East Bay housing market. In 1Q14, the investor share of total sales decreased to 25.8% from 30.6% a year earlier. • Tenant’s spillover from San Francisco grows. While technology companies are paying up for expensive commercial space in the city, a number of other tenants are getting priced out of San Francisco submarkets and pushed into the East Bay. Over the past 18 months, companies migrating or expanding out of San Francisco to the East Bay have leased a total of 300,000 sq. ft. Recently, Del Monte Foods moved its office and 150 employees from San Francisco to Walnut Creek, where prices reach a high of $36 per square foot compared to nearly $60 per square foot in San Francisco.
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Dean Wehrli Sr. Vice President Consulting
Local insight was provided by Dean Wehrli, Consulting. For further information, on our research please contact Dean at dwehrli@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: June 2014
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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 that applies its public and private home building background, local market insight, and analytical processes to market research.
Advisory 1. Market Feasibility
Market Health
Financial Testing
Societal/ Geographic Personality
Scope of Advisory
2. Consumer Research 3. Valuation & Cash Flows 4. Community Planning 5. Apartment Analysis
People/ Demographic Shifts
Marketing and Sales
Demand by Lifestage and Price
Product
6. Litigation Support 7. Performance Improvement 8. Demand Model by Lifestage 9. Business Plan/Strategy Development 10. Loan Workouts/Restructuring 11. Commercial Analysis 12. Urban Residential & Mixed Used Redevelopment 13. International & Resort Services
JBREC Client Segments
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Consumer Personality & Preferences
Competitve Environment Housing Supply
Research
Services
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.
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.
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.
National Consumer Research
We have partnered with builders and developers across the nation to launch our third annual Consumer Insights survey. These three surveys combined present more than 50,000 total responses from prospective home buyers.
Ongoing Insight
U.S. Housing Analysis & Forecast
USHAF
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.
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.
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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 nonconfidential insight that we uncover in the field, at industry conferences, or through our industry contacts.
•
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
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. For more information about our research, please contact:
Lisa Marquis Jackson Sr. Vice President
lmjackson@realestateconsulting.com (214) 389-9003
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