Home Builders Pivot To Hit The Market With More Affordable Homes As Millennials Start To Buy

 

 

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “    I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS  –  CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS  Call me if you want to sell your property and  need an estimated value.  Direct : 602-759-1209, Prefer cell: 520-975-5207 or email me walterunger@ccim.net.     

Forbes, Brad Hunter Jul 17, 2019.

When mortgage rates went up from the 3%’s to nearly 5% in the second half of 2018, builders felt a pinch from lower sales. Now that mortgage rates have come back down again, many home shoppers are feeling like they now have a second chance to buy a home and lock in a rate at generational lows.

But builders aren’t taking the market’s improvement for granted. Large homebuilding companies have been gearing up for the past several years to bring homes to market that target first-time home buyers.

“Normally the first-time homebuyer group leads the pack in a housing recovery, and the move-up group fills in later,” said Jeff Mezger, CEO of KB Home. “This time around, it was flipped; the millennials delayed buying for a decade, and the industry was fed by the move-up segment. Now, we’re finally starting to see a normal housing recovery.”

KB Home has always focused heavily on the first-time homebuyer audience, so this is nothing new to them, but the first-time segment is growing rapidly for that company. Mezger noted that 55% of KB’s new home deliveries in the second quarter of 2019 were to first-time home buyers, which is the highest percentage in a decade (KB had been tracking 50%-52% for a long time). Mezger attributes some of their success in attracting first-time homebuyers to KB Home’s built-to-order business model which allows more personalization than some other builders.

But what about all the talk about the millennials not being willing or able to start a household and buy a home? Millennials had indeed delayed forming their own households, getting married, and having children, but now they are entering a new phase of life and are heading into the home buying market in large numbers. Most builders are adding homes with lower square footages in order to make sure they have something that is affordable to this group.

D.R. Horton, the largest homebuilder in America, has pushed the envelope with regard to building homes that first-time homebuyers could afford. They have offered homes in the sub-$200,000 range through their Express Homes brand for five years now. Their success stimulated other homebuilders to start building smaller, more price-effective homes. Very few can compete and be profitable at that price point, particularly with lot and land prices at levels near the bubble peak, but many are nonetheless reaching lower price points than they had historically done.

The shift in homebuilder offerings is being referred to by industry watchers as the “pivot.” Nothing changes extremely quickly in the homebuilding industry, but the pivot toward more affordable offerings is happening quickly by homebuilding industry standards.

Of course “affordable” means different things to different builders. Even the high-end production builder Toll Brothers is shifting the product mix to serve the older millennials. Toll Brothers has historically had an average home price that is more than double that of the other public homebuilders. But Fred Cooper, Senior Vice President at Toll said:

“In markets such as Jacksonville, Boise, Reno, and many others we have had great success with product in the $350-$450,000 range. We are offering similarly priced product in Phoenix and recently acquired a home builder in Atlanta who offers home in that price range along with other, higher priced product.”

Cooper at Toll Brothers also noted that millennial couples are getting into homeownership later than previous generations, and that, as a result, they have ten to twenty years’ worth of work (and income) behind them by the time they make a home purchase.

Toll is selling homes at The Crossings at Meridian in the Phoenix market at base prices starting in the low $300,000s. That is still steep for the vast majority of first-time homebuyers, but it is representative of the shift that is occurring among homebuilders and their offerings.

Mezger noted in this interview that Las Vegas continues to be a very strong market for KB Home, and that San Antonio and Houston are strong as well. “It’s all about jobs and affordability,” he added. California is known for its high home prices and affordability concerns, but KB Home has met this head-on with their newest product offerings. At their Autumn Windscommunity in Riverside County, one of their most popular home designs is 1,593 square feet detached single-family home, currently priced in the low $330,000s, which is very affordable by southern California standards.

SEE IT ALL: https://www.forbes.com/sites/bradhunter/2019/07/17/home-builders-pivot-to-hit-the-market-with-more-affordable-homes/?ct=tThe_SAAR_News_06_30_19_COPY_01#253444a22366

FROM ME:                                                                      

Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group.  I also sold  hundreds millions of dollars’ worth of  Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with  brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial en.wikipedia.org/wiki/CCIM    I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS   CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS     PLEASE CALL ME –  Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net

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I AM YOUR LAND / INDUSTRIAL AND INVESTMENT SPECIALIST / LOOKING FOR OWNERS   CLICK HERE TO VIEW ALL MY $ 60 MIL OF LISTINGS

 

Walter Unger CCIM

Senior Associate Broker

Kasten Long Commercial Group

5110 N 40th Street, Suite 110

Phoenix , AZ 85018

CELL: 520-975-5207

Direct: 602-759-1209

Office: 602-445-4112

Fax:       602-865-7461

walterunger@ccim.net

CLICK HERE TO VIEW ALL MY LISTINGS

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www.KLCommercialGroup.com

What is a CCIM.

 

 

 “You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “  ARE YOU READY TO SELL OR PURCHASE YOUR INDUSTRIAL / OFFICE OR RETAIL BUILDING OR YOUR  LAND  in Phoenix, Maricopa County and Pinal County, Arizona, please call me.  Office: 602-445-4113,  Direct : 602-759-1209 , cell: 520-975-5207 or email me walterunger@ccim.net.  … CLICK HERE TO VIEW ALL MY LISTINGS.

 Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE     

CLICK HERE:  Arizona Opportunity Zones As We Understand /maps. Interested!!! Please contact me.

History of Arizona from  900 BC – 2017 -Timeline.

WHY PHOENIX? AMAZING!!!  POPULATION – IN 1950 THERE WERE 331,700 PEOPLE LIVING IN PHOENIX – “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

 

8 Reasons You Should Invest in Land

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History of Arizona from  900 BC – 2017 -Timeline.

 

WHY PHOENIX? AMAZING!!!  POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”

PHOENIX TOPS US IN POPULATION GROWTH (MORE THAN LA, NYC) AND WHY THAT’S GOOD FOR THE ECONOMY, BUSINESS

DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION

ARIZONA FACTS – YEAR 1848 TO 2013

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  • DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
  • The average age of the population is 34 years old.
  • The health cost index score in this area is 102.1. (100 = national average)
  • Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).

PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017

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2016 Official Arizona Visitors Guide

Visit Arizona

Why Phoenix?  This is a very interesting article, you should read it, amazing, there were only 350 K people living in Phoenix in 1950

Timeline of Phoenix, Arizona history

Phoenix, Arizona

Facts of Arizona – year 1848 to 2013

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.

Walter Unger CCIM

Senior Associate Broker

Kasten Long Commercial Group

5110 N 40th Street, Suite 110

Phoenix , AZ 85018

Direct: 602-759-1209

CELL: 520-975-5207

Office: 602-445-4112

Fax:       602-865-7461

walterunger@ccim.net

CLICK HERE TO VIEW ALL MY LISTINGS

www.Walter-Unger.com

www.KLCommercialGroup.com

What is a CCIM.

 

“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “   

Please check maps if your Land or Commercial Property is in the Opportunity Zone, IF SO CONTACT ME / THIS IS FOR SELLER’S AND BUYER’S.

ARE YOU READY TO SELL OR PURCHASE YOUR INDUSTRIAL / OFFICE OR RETAIL BUILDING OR YOUR  LAND  in Phoenix, Maricopa County and Pinal County, Arizona, please call me.

Also Call me if you need an estimated value of your Property.

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 Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages.  The interactive map  shows the location of each community (10+ units) and each location is color coded by the size (number of total units). 

 Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 

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