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Every time I attend a conference I learn something. Last month, legendary Inland Empire investor Bruce Norris held a charity event for 500 people with a number of top analysts. He estimated that at least $1 billion of Southern California residential real estate investment capital was in the room. These investors are anxious about new home construction and, surprisingly, were the most interested in hearing me speak about the future supply of new homes.
The highlight for me was the time I got to spend at dinner with Debra Still, CEO of Pulte Mortgage and outgoing Chairwoman of the Mortgage Banker Association. I haven't met anyone who articulates the mortgage industry issues as well as she does.
Below are a few links to the event.
While the national story is slow and steady job growth, the local story is much different. The US is a mix of rapidly accelerating and decelerating economies. The larger markets, particularly in the South, are growing faster than the smaller markets, which is particularly good for new home construction. There are other, more local factors at play as well.
The following 2 charts show 8 rapidly accelerating and decelerating economies over the last year.
While mortgage rates remain near historical lows, home prices have come back strong.Thanks to strong price appreciation, the ratio of Median Home Price / Median Household Income now exceeds historical averages (since 1981) in 20 of the top 21 housing markets.