Current Trends and Future Shifts in Florida s Housing Market

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1 Current Trends and Future Shifts in Florida s Housing Market Lesley Deutch Principal John Burns Real Estate Consulting Mike Belmont President Minto Communities USA Jim Leiferman President Mattamy Homes Chris Ward Principal Pablo Creek Land

2 Session Outline Quick Florida Housing Market Overview WHAT are they looking for? WHERE: What markets see strong growth? WHO are the buyers? WHEN will they buy? WHY/HOW: How do we overcome obstacles to meet demand?

3 FLORIDA HOUSING MARKET OVERVIEW

4 Current Housing Market Rankings J B R E C M A R K E T H O T N E S S I N D E X F O R 5 0 L A R G E S T M A R K E T S

5 Florida s Economy Is Growing, Led by Service Jobs JACKSONVILLE 15,800 TA M PA 28,700 SARASO TA 11,200 FORT MYERS -1,200 O R L A N D O 36,800 WEST PALM BEACH 8,900 FT. LAUDERDALE 25,200 N A P L E S 4,700 M I A M I 27,900

6 Florida s Single-Family Permit Growth by Market Single-Family Permit Growth (TTM) Trailing 12 Month, YOY % Change (Dec -17) Tampa 19.0% Fort Myers 18.0% Jacksonville 14.4% Fort Lauderdale 13.6% West Palm Beach 12.9% Orlando 3.9% Sarasota 2.9% Naples 2.7% Miami -20.2% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

7 Florida s Affordability by Market Burns Affordability Index (Feb. 2018) Miami Naples West Palm Beach Fort Lauderdale Fort Myers Sarasota Orlando 7.3 Tampa 6.7 Jacksonville 6.2

o o PANHANDLE ORLANDO Rising Activity o Available land at relatively Job Growth and Diverse low prices is driving interest Housing Base from developers/builders.

8 o o PANHANDLE ORLANDO Rising Activity o Available land at relatively Job Growth and Diverse low prices is driving interest Housing Base from developers/builders. o Diverse o Looking employment to capture base 55+ allows for demand SARASOTA wide range in product A types and o Rediscovered St. Joe s Bay-Walton Gem Plan FORT submarkets LAUDERDALE o Good will have an impact o Home Infill prices FORT bang for and still Condos MYERS your buck rising and especially demand Growth on the steady in custom 2018 o WEST Demand home PALM side is strong BEACH across all o First-time homebuyer is oproduct owatch strong MIAMI Increasing Rapid segments, Affordability public price despite builder in Orlando; looking A Market rising prices o Western presence appreciation in Estero/ Bonita towards Beach Divided Osceola, suburbs Lake and o olimited expanding; Polk Buyers Counties. land NAPLES are affordability available retirees, for second is development key o home, Remains Improving and an families affordability Rapidly play Slowdown Infill in increasingly condo central demand north Fort o Rapid Competition price escalation is becoming rising from foreign o Strong Myers popular buyers season ahead slowed demand Single o o family otax Midwest Condo affordable bill sending buyer buyers is still from construction aimed market at in Northern Homestead, predominant markets end-user (not Doral foreign and Hialeah investors) o Family steady. buyer presence is increasing o o o o o o o JACKSONVILLE Growing Rapidly Boomtown in St. Johns County Demand TAMPA is stronger for under $400K Jobs Driven School district drives Affordability housing demand; is still impact #1 concern Strong fees rising employment growth is increasing overall demand Rising supply has made builders extremely competitive Tampa seeing influx of younger residents looking for jobs

9 WHO IS THE BUYER?

10 Growth will be & 65+ households. H O U S E H O L D C H A N G E B Y A G E G R O U P, M 3.3 M -1.0 M

11 WHAT ARE THEY LOOKING FOR?

12 Consumer and Product Insights S A M P L E S I Z E S NATIONAL FLORIDA 23,720 1,867 Respondents include new home shoppers that registered interest with new home builders online or in their sales office. Our questions are all focused on future home preference. Source: John Burns Real Estate Consulting 2018 Consumer and Product Insights Survey

13 What s Important to Them? C O M M U N I T Y F E AT U R E S H O M E F E AT U R E S S A F E T Y D E S I G N L O C AT I O N P R I C E STREET APPEAL F U N C T I O N

14 Where Do They Want to Live? 50% 16% 19% 11% 3% Urban Surban Suburban Simple Suburban Rural

15 What s Their Style? INTERIORS 49% Somewhat/Very Traditional Modern Traditional, Traditional, & Casual Contemporary EXTERIORS 59% Traditional vs. 32% Modern Mediterranean, Craftsman, & Traditional

16 Next Home Preferences 87% 61% 45% 53% Desire single-family detached Desire a 1-story home, with 19% wanting 2-story, master down Expect their next home to be larger in size, while 30% expect equal in size Are looking for a home with less than 2,500 square feet 72% 44% 23% 64% Expect to pay less than $450K Want a home with a 3-car garage; 51% want a 2-car garage Expect to consider accommodating an elderly parent, while 21% expect to have an 18+ child Want a remoteoperated guard gate and expect to pay $35 more per month for it

17 WHEN WILL THEY MOVE?

18 NET NUMBER OF PEOPLE (MILLIONS) Expect a shift back to the suburbs + retirement surge F U T U R E C H A N G E I N A D U LT P O P U L AT I O N B Y A G E Young Adult Family Formation Empty Nester Retirement K (-0.1%) +8.1 M (+13.1%) AGE +655 K (+1.6%) M (+40.7%)

19 Florida MSAs Are Big In-Migration Markets B A S E D O N U - H A U L T R U C K R E N TA L P R I C I N G Premium Rank In-Migration Markets #1 Atlanta $923 #2 Jacksonville $753 #7 Tampa $539 #10 Orlando $486 #27 San Francisco ($1,317)

20 Mattamy Homes - Tapestry

21 Minto Communities Latitude Margaritaville

22 Jacksonville Nocatee

23 WHERE: WHAT MARKETS WILL SEE THE STRONGEST GROWTH?

24 Florida s Current and Forecasted Permit Issuance (Total SF & MF, Rolling 12 Months) ORLANDO 2017 Permits 2021 Forecasted Permits 19,453 21,200 TAMPA 18,292 19,300 JACKSONVILLE MIAMI SARASOTA FORT MYERS 12,596 10,151 8,174 6,943 13,800 8,200 7,940 6,960 FORT LAUDERDALE NAPLES WEST PALM BEACH 4,152 4,090 5,207 4,300 4,180 4,500 Source: U.S. Census Bureau, JBREC Current Data reflects 12 months ending December 2017; Compiled February is JBREC Forecast.

25 WHY/HOW DO WE BUILD FOR THE NEW BUYER?

26 Is the Answer in New Technologies? Source: John Burns Real Estate Consulting 2018 Consumer and Product Insights Survey

27 THANK YOU Lesley Deutch Principal John Burns Real Estate Consulting Mike Belmont President Minto Communities USA Jim Leiferman President Mattamy Homes Chris Ward Principal Pablo Creek Land

Emerging Trends in Real Estate Navigating at Altitude

Emerging Trends in Real Estate 2018 Navigating at Altitude We are in a long cycle, not in boom/ bust. The key to the next few years is to expand horizons, market by market, property type by property type.