EAST BAY AREA HOUSING OUTLOOK East Bay Area Analysis JBREC Research and Consulting Services DesignLens Top MPCs of 2014 Consumer Insights Top Amenities by Generation Company Overview
Analysis East Bay Area, CA East Bay Area Analysis* • We are upgrading the East Bay to Hot. Sales activity is very strong market-wide. Builders report sustained pricing power, especially by way of lot premiums, although annual price appreciation may be weaker than in 2013. Strong housing supply and demand fundamentals bode well for the rest of the spring selling season.
• Low interest rates are supporting sales and pricing. East Bay home values are 7% underpriced at today’s interest rates, according to our Burns Intrinsic Home Value Index™. If rates were at the historical average of 6%, however, home values would be 9% overpriced. We forecast interest rates to rise by 25 bp annually over the next three years. The marginal rate growth will allow for home values to appreciate at a sustainable pace while staying below their intrinsic values. *Based on Nov 2014 Data
• The Professional and Business Services sector has strengthened. Job growth has risen in nearly all employment sectors over one year. The Professional and Business Services (PBS) sector led, adding 8,400 jobs YOY for a 4.8% YOY increase. Highincome sectors, like PBS, typically generate more new home demand than other employment sectors. The impressive job growth is keeping new home demand strong. • Lennar won approval for a development near a future BART station. The Fremont City Council approved Lennar’s 2,214-unit development near the future Warm Springs BART station last month. Plans call for 1,256 rental units and 958 for-sale units. The project will be built out in three phases and likely finished by 2026. The BART expansions into southwest Alameda County and further into the Highway 4 corridor in Contra Costa County should fuel new home demand in those areas.
Dean Wehrli Sr. Vice President Consulting
Local insight was provided by Dean Wehrli, SVP. 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: April 2015
Research
Services
Comprehensive Research Each month, we analyze housing data at the metro, regional, and national levels to give our clients the information they need for a competitive edge. Our clients receive a combination of the reports below to answer questions and get insight based on their business.
Metro Analysis and Forecast
This monthly report shows major housing and economic metrics, as well as our forecasts, at an MSA level. The report is combined with local insight, proprietary surveys, and extensive data analysis to give a complete picture of the important housing dynamics and shifts at the market level.
Regional Analysis and Forecast
This comprehensive monthly report summarizes important information in ten regions and key metro areas. The report contains five-year pricing forecasts, supply and demand, housing affordability, and market health.
Home Builder Analysis and Forecast
This report examines all publicly traded home builders and ranks them based on their geographic footprint and forecasted market growth. It also has location comparisons of builders based on the builders’ market fundamentals and submarket desirability.
Single-Family Rental Analysis and Forecast
This quarterly report examines the single-family rental market, including single-family rents, vacancy, and home price appreciation. Each month, we provide 2 pages of data for each of the 65 metro areas identified as a top single-family rental market in the country. The US Housing Analysis and Forecast, Monthly Builder Survey, and Land Broker Survey and Land Value Index come with each research subscription.
US Housing Analysis and Forecast
This monthly report examines more than 150 housing-related metrics. The executive summary gives an overview of the metrics and our view of their effects in the future.
Monthly Builder Survey
Every month, we survey more than 200 builders across the nation on the new home market. Our survey provides timely and accurate insights on housing market conditions a few days after each month ends. We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau’s.
Land Broker Survey and Land Value Index
Our quarterly land survey and index provides a balanced qualitative and quantitative approach to the land market, using a proprietary model built through published data, local expertise, and our market knowledge.
Ongoing Insight •
White papers: We publish thorough research reports on important topics.
•
Truth in Housing: We regularly send our clients Truth in Housing e-mails that have non-confidential insight 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 builders’ quarterly earnings conference calls.
Client Events •
•
Client-exclusive webinars. We sponsor webinars with Q&A that inform our clients of timely market dynamics and offer insight into specialty areas such as consumer research.
THE
SUMMIT
Client-exclusive annual housing conference. Clients receive one invitation to our annual client-only conference, The Summit, where we gather housing industry leaders for a day and a half of thoughtprovoking discussion and networking. We publish an annual summary of the event for clients only.
HOUSING MARKET OUTLOOK
•
Client-exclusive annual housing conference. We designed the Housing Market Outlook conference to be the industry’s most informative day. We meet in New York, discuss what is in store for the market, and introduce builders and developers to money sources.
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 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 SQL database.
Specialized Reports: We offer specialized reports for an additional cost.
National Consumer Research
We have partnered with builders and developers across the nation to launch our fourth annual Consumer Insights survey. Our three past surveys combined gathered more than 50,000 responses from prospective home buyers. Research clients may buy the national report.
Apartment Analysis and Forecast
This quarterly report has an economic outlook for the multifamily market and analysis of the interplay between housing and apartment market dynamics and demographics. Also included are five-year apartment rent forecasts and rankings of top apartment REITs based on regional diversification and other factors.
Customized Consulting
Our leadership can help executives make more informed decisions on issues including market feasibility, land and company valuation, demographic drivers, home and community design, and effective marketing.
For more information about our research, please contact:
Lisa Marquis Jackson Senior Vice President
lmjackson@realestateconsulting.com (214) 389-9003
Melissa Jonas Vice President
mjonas@realestateconsulting.com (703) 244-5229
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
Demand by Lifestage and Price
• Other
Consumer Personality & Preferences
Competitve Environment Housing Supply
Our
Clients
Our Clients Outperform Their Peers Our diverse client base allows us to look at the market from a variety of perspectives. Our clients consistently outperform their peers.
• Superior Returns. As of December 2014, our publicly-traded home builder clients’ returns were 337% since December 2008 compared to non-clients at 80%.
• Newly Capitalized. All of the home builders that filed IPOs in 2013 and early 2014 are research and/or consulting clients of our firm.
• Cyclical Investors. Our clients use our research to appropriately time the market.
Our two largest clients in 2006 sold their companies at huge book value/stock price premiums. Three of our investment clients in 2007/2008 reported 100%+ returns.
• Repeat Business. Our clients have made smart land portfolio acquisitions, valuations and due diligence decisions. Eighty-five percent of our consulting assignments come from repeat customers.
Client Feedback Land Developer, President
Home Builder, CEO “My experience with John Burns has enabled me to better assess current market risk level at any point in the homebuilding cycle. Also, I have been able to make new valuable contacts.”
“John Burns Real Estate Consulting has provided our company with sound, insightful, and timely consulting in a number of real estate related areas. Specifically, reports and analysis for credit reporting agencies, company valuation studies, and presentations to foreign investors have been areas where they have excelled.”
Land Developer, VP “Quick accessibility of local market knowledge is critical for us. This is one of the reasons why we switched (to John Burns Real Estate Consulting).”
Home Builder, President “John Burns Real Estate Company delivers valuable and comprehensive market data, which we feel it is the best in the industry. They also facilitated long standing relationships with industry leaders and now play an instrumental part in our culture by speaking at our annual events and enlightening our company on market trends.”
Calling It Right Accurately Predicting the Market
Our experts have been making confident decisions ahead of the market for more than 10 years. The timeline below demonstrates some more recent market predictions our clients were informed about prior to their competition.
2006 We called that Southern California was a time bomb ready to explode, and then construction fell 84% in 2008 and 2009.
2008 We said future growth would be dominated by renters, and the apartment REIT stocks soared by 84% and renter household formation surged for 6+ years
2010 Our starts forecast was 20% more accurate than a WSJ survey of economists. Our forecasted price appreciation was within 2% of the actual. We pitched the idea of mass rental of SF homes as a potential solution directly to government, and they pursued the idea, eventually positioning us as the experts when institutional investors got involved.
2012 In February 2012, we forecasted 919K starts in 2013, much higher than consensus. Actual housing starts in 2013 totaled 925k.
2014 At our February company meeting, 11 teams made their predictions for our coveted Forecaster of the Year award. The Bay Area team won, projecting 9.0% price appreciation and 3,200 single-family permits for the year, in comparison to the actual 9.1% appreciation and 3,072 single-family permits. Our Riverside-San Bernardino team finished a very close second.
2007 We said resale prices would fall another 15%, and they fell 19% in 2008 and 2009. We warned of the tightness of mortgage credit in a newsletter.
2009 We said “great land will be bid up aggressively,” and land prices soared in early 2010 through 2013.
2011 We forecasted a 3% price decline, rising rents, and a bottom in construction. We also cautioned on the impact of student loan debt delaying homeownership before it was covered in the media.
2013 At the start of the year, we claimed “The Housing Market Is ‘On Fire’ Thanks to Low Mortgage Rates; 2013 Should Be a Banner Year!” with a very bullish forecast, including 8.0% new home price appreciation. The market delivered 8.2% new home price appreciation.
Building an Accurate Housing Forecast We forecast the following key housing variables for over 100 markets, as well as 10 regions and the US overall: • • •
New and resale home sales New and resale home price appreciation Single-family and multifamily building permits
To do this, we analyze the job growth, population growth, household formation, mortgage rate, and household income forecasts of others and come to our own conclusions. We collect and analyze a lot of data and debate industry issues with our wide variety of clients to form our conclusions. Our unique process of gathering feedback form our consultants and clients gives us confidence that we make the most informed forecast possible.
Our Process Our team has developed a process that includes the most thorough data collection and analysis available, and we continually invest the time and money to research unique trends. To provide our best estimate of the future, we: Study history. We study the historical cycles in every market, knowing that history tends to repeat itself—but usually with a twist that is unique to each cycle. Buy Data and Forecasts. Each month, we purchase the best available data on each MSA, load it into our SQL database, and generate 50+/- pages of charts on each MSA for our analysts to study and identify trends. We also buy third party forecasts to understand what others believe will happen. Develop indices. We develop proprietary indices (Housing Cycle Risk Index, Land Index, Burns Home Value Index, etc.) and surveys to measure market health quantitatively and qualitatively, to keep our emotions in check, but also to keep a pulse on the current market. Listen, learn, and share. We spend a lot of our time with many smart people with diversified backgrounds who know their unique aspects of the market better than we do. Read. We read everything we can in search of identifying something important that we do not yet know. Invest. We invest the time and money to investigate the unknown, such as our recent papers on foreign buyers, boomerang buyers, and a currently in-process indepth analysis of home buyer demographics. Fear what we don’t know. We strive to identify the trends that we don’t know about or understand.
Help from Our Clients and Friends We listen carefully to our clients and industry contacts to learn what they know and share with them what we learn from others. Here is a general summary of what we learn: Local knowledge. Our builder and developer clients and survey participants have the best feel for short-term demand, as well as how many homes will get built in a market the next 2 years, but miss many of the macro trends. Constraints. Our product manufacturer clients have the best feel for construction constraints, but are far removed from current sales trends. Forward thinking. Our private equity clients think 1 to 3 years ahead to make contrarian investments, but often have little money to invest at the right time and too much money to invest at the end of the cycle. Early indicators. Our service provider clients and friends see trends developing early, often in their own business, but are not monitoring the fundamentals. Global impact. Our stock and bond market investor clients see important global events that will impact housing, such as the subprime and Euro crises, changing exchange rates, and mortgage rates, but they don’t have the local insight or the resources to research the impact of these trends, or rollup the regions to make a national conclusion. Shared internal learnings. Our consultants and analysts see trend-setting analysis that may start in one market and spread to others. They attend just about every major industry event and ask a lot of questions. Multiple team members are visiting new home communities every day. Every Monday morning they share the most interesting thinng they learned the prior week with the rest of our firm. We regularly update our forecasts as new information comes to light. We do this at the market level. If you’d like to discuss how we can support your work or more details on our forecast, please contact Lisa Marquis Jackson as (214) 389-9003 or by at email at lmjackson@realestateconsulting.com
WWW.REALESTATECONSULTING.COM
Metro
Analysis and Forecast Monthly Distribution This report provides an overview of major housing and economic metrics, as well as our forecasts, at an MSA level. It also contains local insight, proprietary surveys, and extensive data analysis to offer a complete picture of the important housing dynamics and shifts at the metro level. The report includes the following by market: • Our proprietary Burns Home Value IndexTM (BHVI), with five-year pricing forecast for the MSA • Short- and long-term outlooks on the market’s fundamentals and a “grade” system for all major metrics, for a quick pulse on the MSA’s health • Housing demand: employment growth, population, households
What Questions Will This Report Help You Answer? • How much home price appreciation can I expect in this MSA over the next five years? • How many new jobs are forecast for this market? • Are market fundamentals better or worse than they were a month or a year ago? • How many permits have been pulled in this market, and how does that number compare with peak levels?
• Housing supply: single- and multifamily permits, resale listings, pre-foreclosures
• How affordable is this market, and how affordable will it be over the next five years?
• Our Burns Affordability Index TM (BAI), measuring an MSA’s current affordability versus its historical median affordability
• What is the temperature of this market—hot, warm, or cold?
• Our Housing Cycle Risk Index (HCRI), which examines the health of market fundamentals in an MSA. This has proven to be very good one- to twoyear leading indicator for home price appreciation/ depreciation. • Timely insight into market trends based on our extensive builder outreach, field research, and local expertise
Home Builder
Analysis and Forecast Monthly Distribution This report examines all publicly traded home builders (mid-, small-, and micro-cap) based on their geographic footprint and includes the following: • Builder rankings by past market performance, current market conditions, and forecasted market growth • Location comparisons of builders based on the builders’ markets’ fundamentals (HCRI) and submarket desirability • Builder metrics, such as active community count changes, orders, and cancellations • Overview of each builder evaluating market strengths, weaknesses, median price in the markets and price appreciation, employment growth, and permits, compared with an average of all builders
What Questions Will This Report Help You Answer? • Which builders should report the greatest revenue growth if they kept pace with their markets? • Which builders should have the best quarter in terms of orders and raising price? • Which builders are in the best geographies based on our forecasts? • How do community counts change quarterly by builder and by region? • Which builders are in the most desirable submarkets with the best market fundamentals?
Forecasted market growth is a calculation of our forecasted single-family permit growth and Burns Home Value Index™ weighted by the number of current actively selling communities for each builder. Source: John Burns Real Estate Consulting, LLC (Data: Jan-15, Pub: Feb-15)
Housing Survey
from the Front Lines Monthly Distribution Every month, we survey more than 200 builders across the nation on the new home market. Our survey provides timely and accurate insights on housing market conditions a few days after each month ends. Our report is the best monthly monitor of the new home market and features the following:
What Questions Will This Report Help You Answer? • How is the housing market nationally?
• Graphs and analysis of new home traffic and sales, pricing trends, starts, inventory, cancellations, and starts by region and rolled-up nationally
• What national assumptions about starts, permits, price appreciation, job growth, and interest rates should we use for the next five years?
• Timely questions of the month on topics such as buyer qualifications and labor shortages
• What is the national economic health of housing?
• Feedback and direct quotes from public and private builders managing about 2,000 communities in 80 metros and representing roughly 16% of new home sales annually We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau’s. We invite the same 5,000+/builders each month and have many regular survey participants. The Census Bureau sample differs each month; often includes a mix of smaller, custom builders; and typically has a huge margin of error.
Note: Sales rates are per the original survey responses. Source: John Burns Real Estate Consulting, LLC independent survey of ~10% of all US new home sales, NSA (Data: Mar-14 through Mar-15, Pub: Apr-15)
Insight Inspire Innovate Online Image Tours of Great Communities Established in 2001, DesignLens is the building industry's largest online library of photo tours for: • • • •
Model Homes Master Planned Communities Historical Neighborhoods Town/Commercial Centers
The 800+ communities and developments depicted on DesignLens have been specifically chosen for their innovations in architecture, design, land planning and/or historical significance. Monthly Publication of 8-10 Innovative Projects New communities and topics will be featured each month comprised of: • • • •
5-7 New Home Projects 1 Master Plan 1 Historical Neighborhood 1 Special Feature
Each community will include, if applicable: • • • • • •
Photo tour with narration Site Plan Floor Plans Project Stats Included Features Consultant Information
These communities will join the database of 800+ communities and developments previously on the site. A Photo Library of Inspiring Designs The more than 100,000 images stored in the DesignLens archives are searchable by: • • • • • • •
Architectural Styles Housing Types Exterior Features Interior Details Green Building Square Footages and House Widths Regions, and more
Along with the photographs, DesignLens offers floor plans, site plans and written analyses that all help profile some of the country's finest examples of residential and commercial development. A Resource that Gives You a Competitive Edge DesignLens also provides communication tools that let you share this valuable information with clients and colleagues, including: • Create slideshows for design boards and presentations • Share images and ideas with clients from remote locations • Make folders of your favorite images
av
Become a Subscriber For more information or to start your subscription, contact Isabell Kerins ikerins@realestateconsulting.com (949) 870-1241
www.DESIGNLENS.com 19
50
Top
Master-Planned Communities of 2014 2014
2013
YOY% ∆
Villages of Lake Sumter, LLC
2,601
3,419
-24%
THE IRVINE RANCH1 Orange County, CA
The Irvine Company
1,431
1,416
1%
5
NOCATEE Jacksonville, FL
The PARC Group
851
838
2%
6
RIVERSTONE Houston, TX
Johnson Development Corp.
719
791
-9%
4
MOUNTAIN’S EDGE Las Vegas, NV
Focus Property Group
609
841
-28%
10
ALAMO RANCH2 San Antonio, TX
Galo Properties
585
600
-3%
11
STAPLETON Denver, CO
Forest City Enterprises
508
570
-11%
15
ALIANA Houston, TX
Aliana Development Company
500
468
7%
20
VALENCIA Los Angeles, CA
Five Point Communities/Newhall Land
493
372
33%
9t
9
LAKEWOOD RANCH Sarasota, FL
Schroeder-Manatee Ranch, Inc.
493
618
-20%
11
7
PROVIDENCE Las Vegas, NV
Focus Property Group
487
726
-33%
8
THE WOODLANDS Houston, TX
The Woodlands Development Company
468
649
-28%
3
CINCO RANCH Houston, TX
Newland Communities
451
854
-47%
22
RANCHO MISSION VIEJO Orange County, CA Rancho Mission Viejo, LLC
451
360
25%
15
N/A
COLLEGE PARK Riverside-San Bernadino, CA
Standard Pacific Homes/Lennar Homes , LLC
444
235
89%
16
N/A
WILDWOOD AT NORTHPOINTE Houston, TX
Friendswood Development Company
442
193
129%
17
12
SUMMERLIN Las Vegas, NV
The Howard Hughes Corporation
437
566
-23%
38
PAVILION PARK AT GREAT PARK Orange County, CA
Five Point Communities
425
245
73%
14
LAKE NONA Orlando, FL
Tavistock Group
419
475
-12%
16
WOODFOREST Houston, TX
Johnson Development Corp.
417
457
-9%
13
CROSS CREEK RANCH Houston, TX
Johnson Development Corp.
411
515
-20%
18
CANYON LAKES WEST Houston,TX
Land Tejas Company
410
515
-20%
24
CANE BAY PLANTATION Charleston, SC
Gramling Brothers Real Estate & Development
385
341
13%
19
BRAMBLETON Washington, DC
Brambleton Group LLC
374
373
0%
Net Sales
Developer
Project Name and Location
Rankings
21
FIRETHORNE Houston, TX
Jefferson Development Company
368
361
2%
2014
2013
1
1
THE VILLAGES The Villages, FL (Central FL)
2
2
3 4 5 6 7 8 9t
12 13t 13t
18 19 20 21 22 23 24
25
Rank Increased
1
Rank Declined
2
Irvine Ranch includes Cypress Village, Portola Springs, Stonegate, Woodbury, and Orchard Hills. Estimate
Bold Multiple MPCs on list
Rankings
27
17
28t 28t 31
Caldwell Companies
366
268
37%
SIENNA PLANTATION Houston, TX
Johnson Development Corp.
359
445
-19%
N/A
PHILLIPS CREEK RANCH Dallas, TX
Republic Property Group
337
330
2%
23
DAYBREAK Salt Lake City, UT
Kennecott Land
337
353
-5%
28t
VALENCIA RESERVE/COVE West Palm Beach, FL GL Homes
329
299
10%
49
OAKHURST AT KINGWOOD Houston, TX
Friendswood Development Company
327
224
46%
11
EAGLE SPRINGS Houston, TX
Newland Communities
319
321
-1%
N/A
BAKER RANCH Orange County, CA
Shea Homes/Toll Brothers
309
0
N/A
34
43t
WESTRIDGE Dallas, TX
DR Horton
301
235
28%
30
MOUNTAIN HOUSE Stockton, CA
Shea Homes
296
290
2%
36
N/A
GREEN VALLEY RANCH Denver, CO
Oakwood Homes
293
253
16%
37
N/A
VIERA Palm Bay-Melbourne, FL
The Viera Company
288
262
10%
38t
N/A
GRAND MISSION ESTATES Houston, TX
Friendswood Development Company
276
197
40%
38t
27
CRYSTAL FALLS Austin, TX
Lookout Development Group
276
305
-10%
50
HIGHLANDS RANCH Denver, CO
Shea Homes
263
220
20%
41
N/A
OTAY RANCH San Diego, CA
McMillin Land Development/Baldwin & Sons
254
315
-19%
42
41t
ST. CHARLES Washington, DC
St. Charles Companies
250
241
4%
28t
SHADOW CREEK RANCH Houston, TX
Shadow Creek Ranch Development
244
304
-20%
37
TERAVISTA Austin, TX
Newland Communities
241
249
-3%
45
N/A
TREVISO BAY Naples, FL
Lennar Homes, LLC
239
215
11%
46
32
THE MEADOWS Denver, CO
Castle Rock Development Co.
238
263
-10%
47
N/A
POSITANO2 East Bay, CA
Braddock and Logan
233
143
63%
48
N/A
DEL SUR San Diego, CA
Standard Pacific Homes
231
179
29%
49
N/A
AVE MARIA Naples, FL
Barron Collier Companies
227
173
31%
50
46t
RIVERSTONE Naples, FL
GL Homes
226
230
-2%
22,238
23,112
-4%
35
40
43 44
33
32
2013
30
TOWNELAKE Houston, TX
2014
N/A
YOY% ∆
26
Net Sales
2013
Developer
2014
Project Name and Location
TOTAL
SOURCE: John Burns Real Estate Consulting, LLC (January 2015)
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.
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
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
We understand that geography affects consumer preferences. Responses can roll up to a national or regional level or drilled 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
Inside the Mind of a
Millennial by Ali Wolf Senior Research Analyst
FEELING THE PINCH New homes are expensive. Historical spread vs. resale $20,000 Current spread vs. resale $67,000
Resales tend to be more affordable but not ideal.
49%
49% of Millennials cannot find what they are looking for in a home, according to our Consumer Insights survey.
Younger generations are more financially independent since the recession, with more expenses.
FEAR FACTORS What if I lose my job? Two issues: I won’t have money for my mortgage, and what if my new job is far from the house I purchased?
We saw our parents go through the worst economic times since the Great Depression and we are terrified. They lost their job, went through foreclosure or default, and became very careful with their money.
More couples are paying for weddings themselves (40% of all couples fully fund their wedding), saving for down payments on their own, and paying down student loans. Millennials prioritize about $200 to $300 in monthly expenses, which include smartphones, Netflix, and organic shopping.
Mom and dad will house me for free, cook dinner, help with laundry, pay my cell phone bill, and help with auto insurance— where’s my incentive to move?!
15% of 25–34 year olds live at home with their parents.
TIMES ARE CHANGING People are seriously dating and marrying later. Men and women are marrying over six years later compared to 50 years prior. What if my wife/ husband does not want to live here?
6
PLACES TO GO, PEOPLE TO SEE I want to travel.
23% Years Later
Boston Consulting Group found that Millennials want to travel abroad more than other generations by a 23% margin.
What if I want to live in a different city or try out a new scene? Owning a home will tie me down.
I want the city life now—but maybe something quieter later. Millennials are renting in cities, where they can enjoy walking to cultural events, nightlife, and grocery stores. When they have kids, the (inner) suburbs tend to be more desirable.
APPLES TO APPLES
I want a neighborhood with conveniences, where I can walk or bike to work. According to our Consumer Insights survey, 73% of Millennials want a village square that is centrally located with shops, dining, gathering spaces, etc.
73%
Student loans are preventing me from purchasing a home. 5.9 million households under age 40 pay over $250 in student loans per month compared to just 2.2 million back in 2005.
Why buy a home when you can rent something for a similar cost with amenities (pool, gym, electric car charging ports), a sense of community, a good location, and no maintenance work or repairs?
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.
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
22
Amphitheater Outdoors
Dog Park
23
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
JOHN BURNS CEO
(949) 870-1210
jburns@realestateconsulting.com
John founded John Burns Real Estate Consulting in 2001, but he has advised real estate executives for more than 25 years. He spent eight years in KPMG Peat Marwick’s Real Estate Consulting practice and two years as a CPA before starting JBREC. Many of the largest companies in the real estate and investment industries retain John for ongoing research and advice, as well as customized market and consumer research studies to help with portfolio, strategic, and community-specific decisions. Highly regarded as an authority in the housing industry, 250,000 people follow John’s Influencer column on LinkedIn, 28,000 subscribe to his free Building Market Intelligence emails. The media turns to John for insight on the housing market as often as 60 times per year. Presenting our team’s industry knowledge to groups of smart people and learning from them during the Q&A afterward is one of John’s pleasures. The feedback helps him work harder to make our research even better. John has a B.A. Economics from Stanford University and a MBA from the University of California, Los Angeles. When not dissecting and disseminating data for clients across the country, John attended home games for all 30 major league baseball teams. He regularly runs 5Ks, and has seen every Academy Award-winning Best Picture.
EDUCATION B.A. Economics from Stanford University MBA from the University of California, Los Angeles
DEAN WEHRLI Sr. Vice President
(916) 647-3263
dwehrli@realestateconsulting.com
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
About Us John Burns Real Estate Consulting, LLC (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 always seek to innovate and improve our practices to make our clients’ lives easier.
Quick Stats Regularly Quoted in:
• Speed. We are focused 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 indexes and forecasts, and a demand model by price range and household composition.
• Data quality. We create, collect, and buy the best industry data available, and our analysts then tell clients how to apply that insight to their business planning.
Weekly Newsletter Top 50
housing markets across the country.
250K+ 3,000+
• Management expertise. Our Our team leaders are
followers
seasoned industry veterans who have learned from multiple housing cycles.
not recommend stock investments or take contingency fees so it is clear we have no conflicting agendas.
subscribers
followers
• Local knowledge. Our team has offices in 13 major
• Trusted integrity. We are independent advisors. We do
28,000+
Bloomberg Ticker
JBRE
OUR TEAM CLIENT RESOURCES John Burns Real Estate Consulting, LLC takes great pride in our highly educated, resourceful, and experienced team, which 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 NORTHERN CALIFORNIA DEAN WEHRLI Sr. Vice President 916-647-3263 dwehrli@jbrec.com
JOHN BURNS CEO 949-870-1210 jburns@jbrec.com
RICK PALACIOS JR. Director of Research 949-870-1244 rpalacios@jbrec.com
LISA MARQUIS JACKSON Sr. Vice President Business Development 214-389-9003 lmjackson@jbrec.com
STEVE DUTRA Sr. Vice President Data Management 949-870-1227 sdutra@jbrec.com
MIDWEST NORTHEAST
LANCE RAMELLA Sr. Vice President 630-544-7826 lramella@jbrec.com
JODY KAHN Sr. Vice President 603-235-5760 jkahn@jbrec.com
TODD TOMALAK Vice President 920-373-6727 ttomalak@jbrec.com
DAN FULTON Sr. Vice President 703-955-3135 dfulton@jbrec.com
SOUTHERN CALIFORNIA ORANGE COUNTY MOLLIE CARMICHAEL Principal 949-870-1214 mcarmichael@jbrec.com RALEIGH
NICOLE MURRAY Sr. Vice President 949-870-1234 nmurray@jbrec.com
SOUTHERN CALIFORNIA SAN DIEGO DON WALKER President 858-281-7212 dwalker@jbrec.com PETE REEB Principal 858-281-7216 preeb@jbrec.com KEN PERLMAN Principal 858-281-7214 kperlman@jbrec.com
SOUTHEAST
TEXAS PAIGE SHIPP Sr. Manager 214-389-9004 pshipp@jbrec.com
DAVID KALOSIS Sr. Vice President 770-286-3493 dkalosis@jbrec.com
FLORIDA LESLEY DEUTCH Sr. Vice President 561-998-5814 ldeutch@jbrec.com
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
7844 Madison Avenue | Suite 145 Fair Oaks, California 95628
DIR: (949) 870-1200
DIR: (603) 235-5760
DIR: (949) 870-1200
SAN DIEGO, CA
32
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