The Light | John Burns Real Estate Consulting

The Light

The mission of John Burns Real Estate Consulting is “to help executives make informed housing industry investment decisions.” And despite the uncertainty in the global economy today, a recovery will be in our future. In this newsletter, we choose to focus on the positive, and each week we will offer The Light, or a potential strategy / competitive advantage in the housing industry arising from the turmoil caused by the COVID-19 pandemic. Subscribe to our newsletter to receive all upcoming releases every Friday.

Recent Releases

The Light: Good Times Keep Rolling for Top Single-Family Rental Markets

The single-family rental (SFR) sector continues to impress in 2021, with new lease effective single-family rents exceeding double digits in many of the largest single-family rental markets.

Read More


The Light: Homes That Make Us Feel Better: A Priority for 69% of Buyers

Last month we shared tips on how to cater to the 76% of homeowners* taking more steps to promote their physical health. This month, we focus on designing homes for the 69% of homeowners* taking more steps to enhance their mental well-being. Here are 3 solutions and 6 inspiring examples from our DesignLens™ database that can take your homes and communities to the next level for wellness and connectivity.

Read More


The Light: Inaugural Burns Resale Agent Survey Shines Light on Still Hot Housing Market

We are proud to introduce the Burns Resale Housing Market Index (RHMI), a diffusion-based index driven by a proprietary survey of 6,000+ resale agents measuring the overall health and sentiment of national resale housing market fundamentals.

Read More


The Light: New Homes Improve Your Health

New homes improve resident health in many ways, from reducing mold and odor to circulating healthier air throughout the house.

Read More


The Light: Lack of Supply Is Pushing Rents and Home Prices

Since the middle of 2019—with one huge pause last spring—housing demand has been greatly outstripping supply. More housing (both for-rent and for-sale) will help alleviate the current environment of rapidly rising rents and home prices. We are well on our way to more supply coming in 2022 and 2023.

Read More


The Light: The Rise of the Sister Cities as an Affordability Solution

Just like little sisters steal their big sister’s clothes, sister cities across the country are stealing home buyers from their larger and nearby major metros. Many buyers and renters who will no longer be required to come to the office every day are flocking to these smaller metros for their affordability, desirability, and proximity to major hubs. What factors make sister cities appealing?

Read More


The Light: Are Big Companies Better at Hitting a Moving Target?

How do you invest in the future when revenues, expenses, and costs are swinging so wildly that it is difficult to even determine where they are today? Underwriting investments has perhaps never been harder than today because revenue and cost assumptions have never been more unpredictable. Housing executives are learning to hit a moving target, which is inherently much riskier than hitting a stationary target.

Read More


The Light: Putting Your DIY Skills to Work

The 20+ year decline in DIY activity appears to have ended. Today, DIY projects per household are 46% lower than they were in the 1990s, leaving significant room for growth. We believe a rebound is underway in DIY.

Read More


The Light: Taking on the Affordability Challenge

The housing market continues to see massive price appreciation, and affordability has become a top concern among developers, builders, and home buyers.

Here are some creative ways we see builders combating affordability (and succeeding!)

Read More


The Light: Shedding Light on the Housing Supply “Shortage”

True statements can lead to misleading conclusions, especially in a busy world full of sound bites and analysis limited to 280 characters. Thank you to one of our clients for several long exchanges that pushed me to clarify our thinking on numerous issues.

To help you continue making decisions with great clarity, here is our version of what is true and not true on four hot topics:

  1. Home supply shortages
  2. Owning vs. renting
  3. Urban vs. suburban
  4. Housing Cycle Risk

In a nutshell, supply is short because DEMAND is huge. This is a demand-driven housing boom, which is contrary to the housing shortage theories being propagated by those who have an incentive to make others think there is no risk to investing in housing today.

Read More


The Light: Three Keys to Targeting Young Homebuyers

The largest age group in the US today is 27 to 31 years old. With the median age of an entry-level buyer at 33, according to the National Association of Realtors, we believe demographics will continue to support strong home buying demand for the next several years. To attract the younger buyer, we highlight our housing, demographic, and consumer research which leads to opportunities in marketing and home design.

Read More


The Light: Shining Light on the Bubble Discussion

In 2013, we collaborated with our clients to identify ten quantitative and ten qualitative signs of a housing bubble. Each year, we review those signs to gauge where we are in the cycle. Today, eleven of the bubble signs are visible. While the risks in the housing market are increasing, so are the opportunities for success. What opportunities exist in this hyper-competitive housing market?

Read More


The Light: Housing’s Future Leaders

In a time of so much uncertainty, we are grateful for our Housing’s Future Leaders. We designed this program as a learning and networking opportunity for the industry’s next generation of leaders, and since its inception, it’s grown to be so much more than that.

In early March 2020, we held our first meetings: 4 groups, each consisting of 16 people from a range of housing industry disciplines and geographies. With the onset of a pandemic, the purpose of these meetings quickly pivoted to helping members understand the deep and swift impact COVID-19 had on each of our businesses and the industry as a whole.

Read More


The Light: High Risk, High Reward

In our February client webinar, we noted the housing market has reached the “High Risk / High Reward” part of the cycle. As the market becomes more complicated we point out a few of today’s higher-risk elements, and offer some insights for opportunities that can lead to those rewards.

Read More


The Light: 200 Companies Revolutionizing Housing

We’ve identified 200 players driving a new hyper data-driven, technology-fueled, and institutionally backed housing investor ecosystem. Almost none of these companies existed during the mid-2000s housing boom and they’re without a doubt accelerating today’s housing recovery.

Read More


The Light: Master-Planned Communities Lean into Health and Wellness

The once-prolific “resort lifestyle” is now a top focus for only 18% of developers we surveyed for our March Master-Planned Communities Trend Report. The newcomer appearing to take its place? Health and wellness, which is now second only to long-time frontrunner, Family Friendliness.

It is for good reason: 76% of homeowners report they are taking more steps to promote their physical health than last year, creating a surging emphasis on connection to nature, fitness, sustainability, and local food sources. The standard health offerings (e.g. trails or a lap pool) have become ordinary, pushing innovative developers to take health and wellness to the next level with deep immersion into nature, integration of healthcare into the community, a focus on mental health, and reinvestments in sustainable healthy food sources.

Read More


The Light: Happy First Anniversary!

One year ago this week, we were in the early stages of the pandemic. We decided to focus our efforts on learning about the potential for change the situation might create, and we decided to write about it in a newsletter we called the Light. In honor of the one-year anniversary of the Light, we are highlighting some of the best opportunities from our 48 publications.

Read More


The Light: The Bracketology of the Next Emerging Markets

Over the course of the last year, the Great American Move has benefited markets such as Salt Lake City and Charlotte as they become destinations for homebuyers looking for more space and better values. As demand heats up, home prices are rapidly appreciating, creating affordability challenges in locations once considered “value-oriented,” and creating opportunities in the “next” emerging markets.

Read More


The Light: What Women Want (in a Home)

We honor Women’s History Month in this release by highlighting some of the important demographic shifts that impact the housing industry. While the pandemic may have temporarily slowed some of these shifts, we believe many are long term and, if properly addressed, will provide builders and developers with a competitive advantage in the future.

Read More


The Light: A Lumber Playbook

Lumber prices are at an all-time high, driven up by surging demand amid a supply chain coordination squeeze, production limitations, and a pesky beetle.

How did we get here?

Read More


The Light: 4 Goals for the Housing Market in 2021

February is goals month at John Burns Real Estate Consulting, a time where we reflect on our accomplishments in 2020 and establish our objectives for 2021. This week we highlight the goals housing industry executives should be setting for the coming year.

Read More


The Light: Southern California Is Still Golden

In 2020, we predicted The Great American Move would create new opportunities throughout the nation. Housing demand continues shifting away from dense, high-cost areas to wherever people can find more space and lower costs—be that a new city, a new state, or a different type of home. Southern California is often the example chosen to illustrate this trend. With that in mind, we examine the opportunities we see in Southern California today.

Read More


The Light: Behind the Design of the New New Home

Over the past year, the pandemic provided the opportunity for us to examine how people live now and how they will be living in the future. Our design and trends team used our consumer research, in collaboration with Woodley Architectural Group, to create a vision for the “New New Home.” We considered the functionality of the entire house from the front to the garage, outdoor spaces, and casitas. This release of The Light provides a glimpse into our research.

Read More


The Light: Apartment Rent Forecasts (to Help You Weather Market Shifts)

Recently, we completed our rent forecasts for 127 metro area apartment markets. We maintain a bullish outlook for demand, with some key differences by market. With such a wide variation across the markets, good timing could lead to great opportunities.

Read More


The Light: Biggest Real Estate Surprises

The housing industry is uniquely positioned to take advantage of lifestyle changes accelerated by the pandemic. While we anticipated many of the trends in previous editions of The Light, we thought we would reach out to of our clients and colleagues across the country to see what their biggest “surprises” were in 2020.

Read More


The Light: To Sell or to Rent? That Is the Question

The two brightest spots in the residential space today are for-sale housing and the single-family rental market. And because both sectors are so strong, our clients are consistently asking: “What’s the best option for my project?” We are monitoring both sectors closely, with the key metrics our research team tracks daily and through the hundreds of project-specific feasibility assignments our national consulting team conducts each month.

Read More


The Light: Surviving the Studio Slump

Economic conditions have converged to make life especially difficult for one particular type of floor plan: the studio. We expect demand for studio units to remain depressed in the short term, but we anticipate a post-vaccine snapback will reinvigorate demand, closer to employment and cultural amenities.

Read More


The Light: Suburban Apartment Opportunity: Follow the Homes

We just published our Apartment Analysis and Forecast report, and our conclusion is in the title: Sunny Outlook for Suburban; Harsh Winter for Urban Apartments. We believe there is a further niche opportunity for suburban apartments—near rapidly developing new home submarkets.

Read More


The Light: Suburban Migration Benefits Single-Family Rentals

We have all heard the tales of the current renter migration to the suburbs and even to the exurbs in some parts of the country. Until now, the migration story captivating the housing sector has been mostly anecdotal. But we now have proof! Our recent national survey of single-family rental (SFR) operators provides hard data confirming the migration movement that has been amplified by the pandemic. Permanent work from home permissions, the possibility of more online school in the future, and the need for larger and better configured indoor and outdoor spaces are acting as the accelerants.

Read More


The Light: The Great American Land Rush Accelerates

In our September 4 edition we wrote about The Great American Land Rush. We noted that the residential land market had fully recovered during the second quarter 2020 from spring’s pandemic-induced uncertainty. Paused land transactions were back in full force by the start of the summer, and 60% of top land brokers rated their markets as Hot or On Fire. Fast-forward three months, and the Great American Land Rush has only accelerated.

Read More


The Light: Who Is Your Renter

The national apartment market has fared better than many in the real estate industry expected. Suburban markets are outperforming urban. The pandemic convinced many to look for larger spaces in more value-oriented locations as they embraced working from home. In the market-rate sector, many Class A suburban apartments are holding up particularly well as renters “trade up” for better deals in newer communities. Affordable apartment owners are also maintaining high occupancy as fiscal stimulus, eviction moratoriums, and a general reluctance to move unless necessary (due to COVID and job loss) keeps current tenants in place.

Read More


The Light: Real Estate’s Big Winner: Build-for-Rent

The purpose of the Light is to highlight bright spots in the real estate market in the wake of a historic pandemic. Perhaps no other real estate asset class performed as well or garnered as much interest since COVID hit than the single-family rental (SFR) space.

Read More


The Light: Time to Think about a Career in Real Estate?

The pandemic continues to be a tale of two markets. While the US has now recovered about half of the jobs lost since February, the rate of improvement is starting to slow, and 25 million people in the US are receiving unemployment benefits. At the same time, the housing market is one of the strongest on record. Home builder confidence is the highest ever, the pending home sales index is the best in history, and new and existing home sales are the strongest since 2006.

Despite the uncertainty caused by the pandemic, it may be time for those in the housing industry to consider expanding their workforce.

Read More


The Light: The Great Regional Debates. Round 3: Texas

Everything is bigger in Texas. The state continues to benefit from in-migration, driven by its relative affordability (including no state income tax) and vast supply of suburban and exurban housing.

Read More


The Light: The Great American Move Accelerates

Never before have space and location been more important. The housing industry continues to benefit from The Great American Move. We continue to track the acceleration of movements to exurban communities—those in the affordable West and South.

Many growing families rely on 20-foot moving trucks when moving to a larger home, ideal for 2–3-bedroom homes or large apartments. We just updated our analysis of U-Haul rental rates between cities, which gives us insight into migration patterns.

Read More


The Light: The Great Regional Debates. Round 2: The West

In the last edition, we launched the first Great Regional Debate, which showcased key opportunities for housing market success in Florida and the Southeast. In this release, we highlight some of the key markets in the West.

Read More


The Light: The Great Regional Debates. Topic #1: Florida or the Southeast?

For the next two editions of the Light, we will highlight various regions of the US and showcase the opportunities (and some risks) for each as we continue to navigate the pandemic.

We start with Florida vs. the Southeast. While both Florida and the Southeast offer affordability, sunshine, and strong population growth, these two regions offer distinctively different investment potential.

Read More


The Light: The Active Adult Buyer Is Back!

With the national housing market surging, active adults have decided it is time to participate again. As discretionary buyers, they’ve had time to “restart” their purchasing process, and many of our developer and builder clients report that with proper health precautions in place, they’ve been willing to do so. In many age-qualified communities across the nation, home sales were particularly strong in August and September.

Read More


The Light: Timing is Everything

Job losses and unemployment claims put many apartment renters out of work, but extended eviction moratoriums and government stimulus have helped them keep their homes. These factors have resulted in our revised 2020 forecast for stable rents in many MSAs. Multifamily construction in many markets surged over the last few years (in many cases a response to affordability challenges), and capital markets and banks are still backing new construction. Interest rates are at historic lows, drawing renters into homeownership. We believe there are suburban and urban opportunities for construction and investment in the apartment sector. It all depends on timing.

Read More


The Light: 10 Big Real Estate Ideas

This edition marks our 25th consecutive issue of The Light. We looked back at all of our posts and picked the top ten housing market trends from the last six months. Which ones are most important to you?

Read More


The Light: The Great American Land Rush

Demand for housing is frenzied. Meritage Homes CEO Steve Hilton described it best on our recent New Home Insights podcast as the strongest housing market he’s experienced in his 35 years with the company. Builders and developers are in desperate search of lots and land, and in our 2Q2020 land survey 60% of brokers rated the national land market as Hot or On Fire.

Read More


The Light: YOLO! Second-Home Boom

Demand for second homes in drive-to destinations is surging. Nationwide, these convenient locations are benefiting from a rise in the YOLO (you only live once) mindset as people across the country look to get away and enjoy life as safely as possible during the pandemic. Developers and builders can take advantage of the boom by understanding second-home buyer preferences and a renewed focus on lifestyle in their communities.

Read More


The Light: Disneyworld… or a New Home?

Many families missed their annual Disneyworld vacation this year due to the pandemic. But what many of them did not miss was the opportunity to buy a home, taking advantage of the lowest mortgage rates in history. A 7-day Disneyworld vacation would have cost a family of four approximately $8,100 this summer, which is about the same as the down payment for many entry-level new homes financed with an FHA loan. And with incredibly low mortgage rates, monthly payments for some new homes range from only $1,400 to $1,900—similar to rental rates for much smaller spaces.

The booming demand for entry-level homes is not only driven by affordability. Today’s buyers are motivated by safety, control, a great place to live, and of course FOMO on the opportunity to own a home.

Read More


The Light: Your Kids Live at Home Too

While the pandemic will subside and kids will return to school, most parents will never look at a new home in the same way. The previous focus on kitchens and master bedrooms will remain, but buyers will also be seeking functional spaces for their children and environments that let working parents coexist with their active kids. We highlight some clever design elements to help make the experience more valuable for everyone.

Read More


The Light: Market Opportunitites

Despite the tremendous economic distress caused by COVID-19, our clients continue to find strong renter and home buyer demand for newly built homes across the country. In this release, we highlight the markets and real estate segments where we are consulting most frequently.

Read More


The Light: Remember the Healthy Amenities

So much of today’s dialogue about housing relates to making the home a place of comfort and safety. The same is true for the community. As we continue to assess master plans across the country, we’ve noted the amenities that promote outdoor health and wellness are the most used.

Read More


The Light: Retail—Reimagine, Reuse, and Recycle

The devastation wrought by retail closures will bring opportunities for redevelopment. Our consulting group was already considering new, residential options for dated retail spaces, which often feature desirable locations, close to employment, transportation, and services. Historically low mortgage rates will provide a huge boost to residential as a reuse for retail.

Read More


The Light: Giving Back

Each week we strive to find new opportunities in the housing industry. In this edition of the Light, we choose to highlight instances of “inspirational wins,” when, against the backdrop of challenging circumstances, people demonstrate what is most important.

Our friends in the housing industry continue to inspire us as they mobilize during these trying times to help those most in need.

Read More


The Light: The New American Home Buyer

New home construction is perhaps the brightest spot in the economy right now. Thanks to The Great American Move, low mortgage rates, and a hyperawareness about living environment, new home sales in June exceeded those in the same month last year by 55%, according to our survey that captures ~21% of all new home inventory in the country.

Just who is purchasing a home during the pandemic?

Read More


The Light: Celebrating the American Home

As we celebrate our country this year, we consider and appreciate our role in helping our clients create and finance highly desirable and inspirational places to live. Now, perhaps more than ever, the home is playing an important part in the realization of the American Dream.

Read More


The Light: The Fourth Tee

We believe the nation is about to tee off on the fourth hole of the housing market recovery. The fourth hole represents a stage in the game where players may have started to gain confidence with a few good shots. It also represents a point on the course where players must settle down, implement the right strategies, and consider the future.

Read More


The Light: Virtual Empathy

New home marketing will never be the same. The home is more of a place of refuge and safety than ever before. For many more, the home is also now their office. Here are some marketing tactics we see working.

Read More


The Light: The Housing Rally

Stay-at-home orders first generated a jump in DIY projects and are now resulting in a surge in new home purchases and remodeling projects involving contractors.

Read More


The Light: Home Buyers on the Move

As the world reopens, the Great American Move that we projected on May 8 has begun! The housing industry is benefiting from the movement, and this release of The Light highlights some of the opportunities.

Read More


The Light: Renters Need Their Space

“Space” in home and community design has never been more important. People need space for health reasons, and people need space and privacy to work from home. Working from home will be a significant shift that stays with us for years.

With record low mortgage rates, the need for more space is one reason that new home sales have already finished their V recovery. To succeed during lease-up, the more than 400,000 apartment units currently in some stage of construction also need to capitalize on tenants’ need for space.

A few weeks ago we asked, “Does it take a pandemic to get millennials to buy?” In this release we ask, “What does it take to get people to rent?” We highlight two opportunities for new apartment construction, both of which were already trending before COVID-19 hit.

Read More


The Light: Tell Me a Story

Once upon a time, a pandemic known as COVID-19 wreaked havoc on the world. Real estate developers—the people who create the wonderful communities we live in and who employ hundreds of thousands of great people—successfully raised the money they needed to keep their businesses going by learning to  “tell a story” about why their development would be successful in a post-COVID-19 world.

Read More


The Light: Reinventing Community

Successful master-planned community developers are evolving their marketing messages to allow for more comfortable, socially distant interactions for future buyers, while they foster the sense of community that is special to their existing residents. These developers are also at the forefront of community service with a focus on neighbors and first responders in need.

Read More


The Light: The Great American Move

As states, cities, and counties around the country slowly reopen, we predict The Great American Move. For safety reasons, financial prospects, life change improvements, personal comfort, and employment, we expect a surge in household and business relocations over the next few months that will provide new, strategic opportunities for the real estate market.

Read More


The Light: Does It Take a Pandemic to Get Millennials to Buy?

After four weeks of plunging new home sales, transactions have roughly doubled in the last two. The jump in demand has largely been driven by Sharers (31–40-year-olds), a term we developed in our book Big Shifts Ahead to describe the older millennials born in the 1980s. The buyers are mostly couples and individuals who:

  • Have been wanting to buy for some time
  • Are cooped up in a living situation they don’t like
  • Have little fear of losing their job soon
  • Are more focused on low payments than on future price appreciation

The headlines would have you think that few people are in that situation, but numerous builders confirmed during their earnings calls this week that they are seeing the opposite. While the size of this pent-up demand is hard to determine, here is where we see the opportunities for builders to target and adjust to the buyer.

Read More


The Light: Geographic Opportunities

While shelter-in-place is common among most markets, they each have very different housing market fundamentals.

Read More


The Light: The Future of (Re)Development

In our latest release, we explore the increased importance of thoughtful development and redevelopment in housing. The concepts of safety, security, and convenience will play an increasing role in where people want to live.

Read More


The Light: Opportunities Ahead

See what our experts have to say on geographic opportunities and land prices as we continue to focus on positive strategies for the future.

Read More


The Light: 5 Key Consumer Shifts

Recently, we connected with more than 90 real estate professionals in more than 45 metro areas to understand what buyers were feeling, thinking, and saying about new home purchases. In this release, we focus on the positive and how understanding current conditions can provide strategic insight into consumer preferences when the recovery begins.

Read More


The Light: The Apartment Industry

Our first release for The Light focuses on the market landscape of apartments. Here are the conditions from which we anticipate opportunities will arise.

Read More


Ken Perlman If you have any questions, please contact Ken Perlman, Managing Principal, at (858) 281-7214 or by email.
Lesley Deutch If you have any questions, please contact Lesley Deutch, Managing Principal, at (561) 998-5814 or by email.