Land is the most important yet least transparent part of homebuilding. To help, here’s commentary from land brokers across the country per our July survey. Top themes: 1) Builders going further out for deals. 2) Bigger land deals are back. 3) Development delays & lot shortages.
#SaltLakeCity land broker: “You can't get all the lots you need even when you overpay.”
#SanAntonio land broker: “Getting a vaccine approved took less time than getting land entitled.”
#Houston land broker: “Market is as strong as I’ve ever experienced. Money chasing every property that has any potential of being developed into lots. Trend of builders & developers looking further out has continued & is pushing prices higher for rural land.”
#Dallas land broker: “Builders have high demand for more lot pipeline and are more open to larger deals in order to get some scale. Smaller tertiary markets have never been in such high demand.”
#Chicago land broker: “Some builders have told me they can’t pass on material cost increases to buyers anymore & therefore, land prices are beginning to hold tight. Developments perceived to be too far out a couple years ago are selling well today.”
#Minneapolis land broker: “A lot of groups chasing build-for-rent but few executing. Demand for townhome land is increasing.”
#Atlanta land broker: “Almost every land tract that was close to getting sold in 2006-2007, all markets around Atlanta are back to those values or higher.”
#Charleston land broker: “Consensus is we're at the top of the market, so folks who haven't listed or been willing to sell in the past are now entertaining the idea of cashing in and letting go of long-held vacant land.”
#RaleighDurham land broker: “We used to use $40k as a back of the napkin estimate for the cost to develop a finished lot with city water and sewer. Now that cost is $70k.”
#Savannah land broker: “Raw land typically acquired for single-family residential development is being developed with distribution warehouses.”
#Phoenix land broker: “Masterplans have 9-12 month lot development delays. Buyers flipping transactions that have been in place for 12+ months have 100% price increases in some cases, but this isn't the norm.”
#Tucson land broker: “Tucson homebuilders have 6 months of finished lots in open communities remaining & another 12 months of paper lots to develop. An adequate pipeline in this market should be about 30 months, so it’s undersupplied by half right now.”
#Tampa land broker: “Good time to be a land owner.”
#LosAngeles land broker: “Running out of opportunities & active community count is at a cycle low. National builders are passing on Los Angeles proper since lot counts aren't big enough for them. They’d rather focus on secondary/tertiary markets to achieve larger lot counts.”
#OrangeCounty land broker: “In some cases, builders have opted to focused on the materials 'scavenger hunt' over the pursuit of new land.”
#RiversideSanBernardino land broker: “Inland Empire multifamily land market is strongest in my career.” THE END

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More from @RickPalaciosJr

15 Jul
Today's Fed Beige Book updates on housing sound familiar...

#Atlanta Fed
#Dallas Fed
Read 4 tweets
14 Jul
Doing monthly review of our macro housing/econ 350+slide deck. Ten charts grabbing my attention for July:

1/10: Percentage of banks easing credit standards for HELOCs (home equity line of credit) now highest ever post-housing induced 2007-2009 recession.
2/10: Acceleration in residential electric customers (proxy for household formations) has subsided. Ties directionally to some of the normalizing we're seeing in for-sale housing market.
3/10: Home builder labor shortages get a ton of attention lately (rightly so), but more of a structural issue than cyclical/transitory. Builders reporting elevated labor shortages goes all the way back to 2013 coming out of last housing downturn.
Read 10 tweets
5 Jul
Analyzing June new home sales & pricing figures from our monthly builder survey. As one builder noted: “It’s not fun to be a builder anymore.” Lumber relief is nice but pick your poison on other issues. Market commentary from across the country to follow...
#Richmond builder: “It's not fun to be a builder anymore. Cost pressure is killing us. Not only will builders like myself who take 12-24 months to build a house lose margin from increases, but the affordability is becoming a major issue.”
#Atlanta builder: “Costs have driven up prices & we’re no longer preselling. We will not sell a home until frame stage, so our sales numbers are off for June while awaiting framing stage.”
Read 26 tweets
19 Jun
Here's a housing🧵to chew on over weekend. Mid-June update from 100+home builders across country. 1) rumblings of price ceiling. 2) slightly shrinking pool of qualified buyers. 3) some home releases not selling out immediately. 4) normal summer slowing as vacations take priority.
#Austin builder: “Some interest lists are shrinking & others are not. Seeing buyers who are no longer able or willing to afford the monthly payment. Definitely seeing attrition here. Frustration that prices continued going up without an opportunity to purchase.”
#Dallas builder: “Interest lists are definitely shrinking because of pricing. Some drop off is happening due to price. But the re-sale market is still so tight it hasn’t dropped substantially. Extremely concerned about pricing going forward.”
Read 31 tweets
14 Jun
Going through our monthly macro housing/econ deck again for June. Here are some charts catching my attention this month.

1/7: The share of Americans expecting home prices to increase over the next year is now higher than back in 2005.
2/7: Looks like tax advantages of owning a home aren't as big of a driver for housing as some thought.
3/7: Trend of shrinking home from 2015-2020 appears to be over. Hopefully not the return of McMansions.
Read 7 tweets
9 Jun
New home sales fell in May, Y/Y & M/M. Theme of the month was sales decline by builder design. Few comments on demand slowing or skittish buyers, even w/new home prices +18% Y/Y nationally (survey record). Builder commentary from across the country per our survey to follow...
#Nashville builder: “Gapped out. Sales resume in June as new communities & phases start to open. By moving ability to contract on inventory homes later to finished drywall stage (window installation stage previously), expect sales to show continued decline. Decline by design.”
#Charlotte builder: “Paused sales from mid-May to mid-June in all communities & will selectively release homes for sale in the last 2 weeks of June & coming months. Sales look lower vs. last month but was capped due to limited lot availability & no inventory.”
Read 28 tweets

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