In this podcast, I explain why I believe new home sales and construction have “run out of steam,” at levels many deem to be too low. What’s different this time from prior cycles includes:
- Banks – Two banking regulation laws (Dodd-Frank and FIRREA) that have held mortgage lending and construction lending, respectively, in check
- Municipalities – Local regulations, which have significantly reduced market rate affordable housing in good locations
- New business models – An institutional class single-family rental industry whose company values already rival the largest home builders in the country, as well as the proven viability of supplemental rental income thanks to Airbnb
- Societal aspirations – A shift to living closer to work and a willingness to make compromises to do so
This episode features several successful pivots that our clients have made, including:
- Brookfield’s mall redevelopment plans
- Kohler’s smart home initiatives
- Lennar’s mind shift to a tech company that builds homes, including early investments in disruptors like Opendoor, partnerships with Amazon, and their hiring of newly formed offsite construction companies
- Clayton’s entry into the production home building world
- Tricon’s pivot to add rental housing investments to their for-sale portfolio
I also highlight some of the reasons various markets are behaving very differently. To subscribe to our reports and services, please send us an email for more info.
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