EAST BAY AREA HOUSING OUTLOOK

East Bay Area AnalysisJBREC Research and Consulting Services

DesignLensTop MPCs of 2014Consumer Insights

Top Amenities by GenerationCompany Overview

Local insight was provided by Dean Wehrli, SVP.

For further information, on our research please contact Dean at dwehrli@realestateconsulting.com.

Analysis

Dean WehrliSr. Vice PresidentConsulting

East Bay Area, CA

East Bay Area Analysis*

• We are upgrading the East Bay to Hot. Sales activity is very strong market-wide. Builders report sustained pricing power, especially by way of lot premiums, although annual price appreciation may be weaker than in 2013. Strong housing supply and demand fundamentals bode well for the rest of the spring selling season.

• The Professional and Business Services sector has strengthened. Job growth has risen in nearly all employment sectors over one year. The Professional and Business Services (PBS) sector led, adding 8,400 jobs YOY for a 4.8% YOY increase. High-income sectors, like PBS, typically generate more new home demand than other employment sectors. The impressive job growth is keeping new home demand strong.

• Lennar won approval for a development near a future BART station. The Fremont City Council approved Lennar’s 2,214-unit development near the future Warm Springs BART station last month. Plans call for 1,256 rental units and 958 for-sale units. The project will be built out in three phases and likely finished by 2026. The BART expansions into southwest Alameda County and further into the Highway 4 corridor in Contra Costa County should fuel new home demand in those areas.

• Low interest rates are supporting sales and pricing. East Bay home values are 7% underpriced at today’s interest rates, according to our Burns Intrinsic Home Value Index™. If rates were at the historical average of 6%, however, home values would be 9% overpriced. We forecast interest rates to rise by 25 bp annually over the next three years. The marginal rate growth will allow for home values to appreciate at a sustainable pace while staying below their intrinsic values.

*Based on Nov 2014 Data

Housing Cycle Risk Index

Market TrendsMetro Analysis and Forecast*

HCRI Legend

Our HCRI is a 1–2 year leading indicator for home price appreciation/depreciation. Improving markets (rising prices and rising construction) make the market riskier and vice versa.

*Based on a three-month trend

Demand

*Actual results will vary from projections and the variation can be significant. We assume no liability for the use of any of the data or projections in this report. Projections as of: April 2015

Research Services

Metro Analysis and ForecastThis monthly report shows major housing and economic metrics, as well as our forecasts, at an MSA level. The report is combined with local insight, proprietary surveys, and extensive data analysis to give a complete picture of the important housing dynamics and shifts at the market level.

Regional Analysis and ForecastThis comprehensive monthly report summarizes important information in ten regions and key metro areas. The report contains five-year pricing forecasts, supply and demand, housing affordability, and market health.

Home Builder Analysis and ForecastThis report examines all publicly traded home builders and ranks them based on their geographic footprint and forecasted market growth. It also has location comparisons of builders based on the builders’ market fundamentals and submarket desirability.

Comprehensive ResearchEach month, we analyze housing data at the metro, regional, and national levels to give our clients the information they need for a competitive edge. Our clients receive a combination of the reports below to answer questions and get insight based on their business.

US Housing Analysis and ForecastThis monthly report examines more than 150 housing-related metrics. The executive summary gives an overview of the metrics and our view of their effects in the future.

Monthly Builder Survey Every month, we survey more than 200 builders across the nation on the new home market. Our survey provides timely and accurate insights on housing market conditions a few days after each month ends. We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau’s.

Land Broker Survey and Land Value IndexOur quarterly land survey and index provides a balanced qualitative and quantitative approach to the land market, using a proprietary model built through published data, local expertise, and our market knowledge.

The US Housing Analysis and Forecast, Monthly Builder Survey, and Land Broker Survey and Land Value Index come with each research subscription.

Single-Family Rental Analysis and ForecastThis quarterly report examines the single-family rental market, including single-family rents, vacancy, and home price appreciation. Each month, we provide 2 pages of data for each of the 65 metro areas identified as a top single-family rental market in the country.

Client Events

• Client-exclusive webinars. We sponsor webinars with Q&A that inform our clients of timely market dynamics and offer insight into specialty areas such as consumer research.

•

•

Apartment Analysis and ForecastThis quarterly report has an economic outlook for the multifamily market and analysis of the interplay between housing and apartment market dynamics and demographics. Also included are five-year apartment rent forecasts and rankings of top apartment REITs based on regional diversification and other factors.

National Consumer ResearchWe have partnered with builders and developers across the nation to launch our fourth annual Consumer Insights survey. Our three past surveys combined gathered more than 50,000 responses from prospective home buyers. Research clients may buy the national report.

Ongoing Insight

• White papers: We publish thorough research reports on important topics.

• Truth in Housing: We regularly send our clients Truth in Housing e-mails that have non-confidential insight we uncover in the field, at industry conferences, or through our industry contacts.

• Public builder call summaries: We summarize key performance statistics and market insight from the public builders’ quarterly earnings conference calls.

Client-exclusive annual housing conference. Clients receive one invitation to our annual client-only conference, The Summit, where we gather housing industry leaders for a day and a half of thought-provoking discussion and networking. We publish an annual summary of the event for clients only.

Client-exclusive annual housing conference. We designed the Housing Market Outlook conference to be the industry’s most informative day. We meet in New York, discuss what is in store for the market, and introduce builders and developers to money sources.

HOUSING MARKET OUTLOOK

Client Services

• Executive access. Personal access to our team of market experts and research analysts.

• Presentations. As requested, we meet with our clients and provide formal or informal industry or market-specific updates.

• Introductions. We have helped many of our clients find a builder, developer, or capital partner, and we have introduced many clients to specific industry experts.

• Data access. We collect, scrub, and analyze more than 1,000 data points each cycle. Our clients have access to reasonable and appropriate data exports from our SQL database.

SUMMITTHE

Specialized Reports: We offer specialized reports for an additional cost.

Customized ConsultingOur leadership can help executives make more informed decisions on issues including market feasibility, land and company valuation, demographic drivers, home and community design, and effective marketing.

Lisa Marquis JacksonSenior Vice President

For more information about our research, please contact:

lmjackson@realestateconsulting.com(214) 389-9003

Melissa JonasVice President

mjonas@realestateconsulting.com(703) 244-5229

Consulting Services

Our Custom Consulting Team helps our clients maximize opportunity in the housing market. Our clients benefit from a team who applies their public and private home building background, local market insight, and analytical processes to market research.

1. Market Feasibility2. Consumer Research3. Valuation & Cash Flows4. Community Planning5. Apartment Analysis6. Litigation Support7. Performance Improvement8. Demand Model by Lifestage9. Business Plan/Strategy Development10. Loan Workouts/Restructuring11. Commercial Analysis12. Urban Residential & Mixed Used

Redevelopment13. International & Resort Services

Advisory

Builders & DevelopersPrivate EquityInstitutional InvestorsBuilding ProductsSF RentalsOther

• • • • • •

Clients

Marketing and Sales

MarketHealth

People/Demographic

Shifts

Societal/GeographicPersonality

Demandby Lifestageand Price

ConsumerPersonality &Preferences

HousingSupply

Competitve Environment

Product

FinancialTesting

Our Clients Outperform Their PeersOur diverse client base allows us to look at the market from a variety of perspectives. Our clients consistently outperform their peers.

• Superior Returns. As of December 2014, our publicly-traded home builder clients’ returns were 337% since December 2008 compared to non-clients at 80%.

• Newly Capitalized. All of the home builders that filed IPOs in 2013 and early 2014 are research and/or consulting clients of our firm.

• Cyclical Investors. Our clients use our research to appropriately time the market. Our two largest clients in 2006 sold their companies at huge book value/stock price premiums. Three of our investment clients in 2007/2008 reported 100%+ returns.

• Repeat Business. Our clients have made smart land portfolio acquisitions, valuations and due diligence decisions. Eighty-five percent of our consulting assignments come from repeat customers.

ClientsOur

ClientFeedback

Home Builder, CEO

“My experience with John Burns has enabled me to better assess current market risk level at any point in the homebuilding cycle. Also, I have been able to make new valuable contacts.”

Land Developer, President

“John Burns Real Estate Consulting has provided our company with sound, insightful, and timely consulting in a number of real estate related areas. Specifically, reports and analysis for credit reporting agencies, company valuation studies, and presentations to foreign investors have been areas where they have excelled.”

Land Developer, VP

“Quick accessibility of local market knowledge is critical for us. This is one of the reasons why we switched (to John Burns Real Estate Consulting).”

Home Builder, President

“John Burns Real Estate Company delivers valuable and comprehensive market data, which we feel it is the best in the industry. They also facilitated long standing relationships with industry leaders and now play an instrumental part in our culture by speaking at our annual events and enlightening our company on market trends.”

Calling It RightAccurately Predicting the Market

2006We called that Southern California was a time bomb ready to explode, and then construction fell 84% in 2008 and 2009.

2008We said future growth would be dominated by renters, and the apartment REIT stocks soared by 84% and renter household formation surged for 6+ years

2010Our starts forecast was 20% more accurate than a WSJ survey of economists. Our forecasted price appreciation was within 2% of the actual. We pitched the idea of mass rental of SF homes as a potential solution directly to government, and they pursued the idea, eventually positioning us as the experts when institutional investors got involved.

2012In February 2012, we forecasted 919K starts in 2013, much higher than consensus. Actual housing starts in 2013 totaled 925k.

2014At our February company meeting, 11 teams made their predictions for our coveted Forecaster of the Year award. The Bay Area team won, projecting 9.0% price appreciation and 3,200 single-family permits for the year, in comparison to the actual 9.1% appreciation and 3,072 single-family permits. Our Riverside-San Bernardino team finished a very close second.

2007We said resale prices would fall another 15%, and they fell 19% in 2008 and 2009.

We warned of the tightness of mortgage credit in a newsletter.

2009We said “great land will be bid up aggressively,” and land prices soared in early 2010 through 2013.

2011We forecasted a 3% price decline, rising rents, and a bottom in construction. We also cautioned on the impact of student loan debt delaying homeownership before it was covered in the media.

2013At the start of the year, we claimed “The Housing Market Is ‘On Fire’ Thanks to Low Mortgage Rates; 2013 Should Be a Banner Year!” with a very bullish forecast, including 8.0% new home price appreciation. The market delivered 8.2% new home price appreciation.

Our experts have been making confident decisions ahead of the market for more than 10 years. The timeline below demonstrates some more recent market predictions our clients were informed about prior to their competition.

Building an Accurate Housing ForecastWe forecast the following key housing variables for over 100 markets, as well as 10 regions and the US overall:

• New and resale home sales• New and resale home price appreciation• Single-family and multifamily building permits

To do this, we analyze the job growth, population growth, household formation, mortgage rate, and household income forecasts of others and come to our own conclusions.

We collect and analyze a lot of data and debate industry issues with our wide variety of clients to form our conclusions. Our unique process of gathering feedback form our consultants and clients gives us confidence that we make the most informed forecast possible.

Our ProcessOur team has developed a process that includes the most thorough data collection and analysis available, and we continually invest the time and money to research unique trends. To provide our best estimate of the future, we:

Study history. We study the historical cycles in every market, knowing that history tends to repeat itself—but usually with a twist that is unique to each cycle.

Buy Data and Forecasts. Each month, we purchase the best available data on each MSA, load it into our SQL database, and generate 50+/- pages of charts on each MSA for our analysts to study and identify trends.  We also buy third party forecasts to understand what others believe will happen.

Listen, learn, and share. We spend a lot of our time with many smart people with diversified backgrounds who know their unique aspects of the market better than we do.

Read. We read everything we can in search of identifying something important that we do not yet know.

Invest. We invest the time and money to investigate the unknown, such as our recent papers on foreign buyers, boomerang buyers, and a currently in-process in-depth analysis of home buyer demographics.

Fear what we don’t know. We strive to identify the trends that we don’t know about or understand.

Develop indices. We develop proprietary indices (Housing Cycle Risk Index, Land Index, Burns Home Value Index, etc.) and surveys to measure market health quantitatively and qualitatively, to keep our emotions in check, but also to keep a pulse on the current market.

Help from Our Clients and FriendsWe listen carefully to our clients and industry contacts to learn what they know and share with them what we learn from others. Here is a general summary of what we learn:

Local knowledge. Our builder and developer clients and survey participants have the best feel for short-term demand, as well as how many homes will get built in a market the next 2 years, but miss many of the macro trends.

Constraints. Our product manufacturer clients have the best feel for construction constraints, but are far removed from current sales trends.

Early indicators. Our service provider clients and friends see trends developing early, often in their own business, but are not monitoring the fundamentals.

Global impact. Our stock and bond market investor clients see important global events that will impact housing, such as the subprime and Euro crises, changing exchange rates, and mortgage rates, but they don’t have the local insight or the resources to research the impact of these trends, or rollup the regions to make a national conclusion.

Shared internal learnings. Our consultants and analysts see trend-setting analysis that may start in one market and spread to others. They attend just about every major industry event and ask a lot of questions. Multiple team members are visiting new home communities every day. Every Monday morning they share the most interesting thinng they learned the prior week with the rest of our firm.

Forward thinking. Our private equity clients think 1 to 3 years ahead to make contrarian investments, but often have little money to invest at the right time and too much money to invest at the end of the cycle.

We regularly update our forecasts as new information comes to light. We do this at the market level. If you’d like to discuss how we can support your work or more details on our forecast, please contact Lisa Marquis Jackson as (214) 389-9003 or by at email at lmjackson@realestateconsulting.com

WWW.REALESTATECONSULTING.COM

Monthly DistributionThis report provides an overview of major housing and economic metrics, as well as our forecasts, at an MSA level. It also contains local insight, proprietary surveys, and extensive data analysis to offer a complete picture of the important housing dynamics and shifts at the metro level.

The report includes the following by market:

• Our proprietary Burns Home Value IndexTM (BHVI), with five-year pricing forecast for the MSA

• Short- and long-term outlooks on the market’s fundamentals and a “grade” system for all major metrics, for a quick pulse on the MSA’s health

• Housing demand: employment growth, population, households

• Housing supply: single- and multifamily permits, resale listings, pre-foreclosures

• Our Burns Affordability IndexTM (BAI), measuring an MSA’s current affordability versus its historical median affordability

• Our Housing Cycle Risk Index (HCRI), which examines the health of market fundamentals in an MSA. This has proven to be very good one- to two-year leading indicator for home price appreciation/ depreciation.

• Timely insight into market trends based on our extensive builder outreach, field research, and local expertise

What Questions Will This Report Help You Answer?• How much home price

appreciation can I expect in this MSA over the next five years?

• How many new jobs are forecast for this market?

• Are market fundamentals better or worse than they were a month or a year ago?

• How many permits have been pulled in this market, and how does that number compare with peak levels?

• How affordable is this market, and how affordable will it be over the next five years?

• What is the temperature of this market—hot, warm, or cold? 

MetroAnalysis and Forecast

Monthly DistributionThis report examines all publicly traded home builders (mid-, small-, and micro-cap) based on their geographic footprint and includes the following:

• Builder rankings by past market performance, current market conditions, and forecasted market growth

• Location comparisons of builders based on the builders’ markets’ fundamentals (HCRI) and submarket desirability

• Builder metrics, such as active community count changes, orders, and cancellations

• Overview of each builder evaluating market strengths, weaknesses, median price in the markets and price appreciation, employment growth, and permits, compared with an average of all builders

What Questions Will This Report Help You Answer?• Which builders should report the

greatest revenue growth if they kept pace with their markets?

• Which builders should have the best quarter in terms of orders and raising price?

• Which builders are in the best geographies based on our forecasts?

• How do community counts change quarterly by builder and by region?

• Which builders are in the most desirable submarkets with the best market fundamentals?

Home BuilderAnalysis and Forecast

Forecasted market growth is a calculation of our forecasted single-family permit growth and Burns Home Value Index™ weighted by the number of current actively selling communities for each builder.

Source: John Burns Real Estate Consulting, LLC (Data: Jan-15, Pub: Feb-15)

Monthly DistributionEvery month, we survey more than 200 builders across the nation on the new home market. Our survey provides timely and accurate insights on housing market conditions a few days after each month ends. Our report is the best monthly monitor of the new home market and features the following:

• Graphs and analysis of new home traffic and sales, pricing trends, starts, inventory, cancellations, and starts by region and rolled-up nationally

• Timely questions of the month on topics such as buyer qualifications and labor shortages

• Feedback and direct quotes from public and private builders managing about 2,000 communities in 80 metros and representing roughly 16% of new home sales annually

We believe our survey represents market conditions for production volume builders much more accurately than the Census Bureau’s. We invite the same 5,000+/- builders each month and have many regular survey participants. The Census Bureau sample differs each month; often includes a mix of smaller, custom builders; and typically has a huge margin of error.

What Questions Will This Report Help You Answer?• How is the housing market

nationally?

• What national assumptions about starts, permits, price appreciation, job growth, and interest rates should we use for the next five years?

• What is the national economic health of housing?

Housing Surveyfrom the Front Lines

Note: Sales rates are per the original survey responses.Source: John Burns Real Estate Consulting, LLC independent survey of ~10% of all US new home sales, NSA (Data: Mar-14 through Mar-15, Pub: Apr-15)

Insight Inspire Innovate

Online Image Tours of Great Communities

Established in 2001, DesignLens is the building industry's largest online library of photo tours for:

• Model Homes• Master Planned Communities• Historical Neighborhoods• Town/Commercial Centers

The 800+ communities and developments depicted on DesignLens have been specifically chosen for their innovations in architecture, design, land planning and/or historical significance.

Monthly Publication of 8-10 Innovative Projects

New communities and topics will be featured each month comprised of:

• 5-7 New Home Projects• 1 Master Plan• 1 Historical Neighborhood• 1 Special Feature

Each community will include, if applicable:

• Photo tour with narration• Site Plan• Floor Plans• Project Stats• Included Features• Consultant Information

These communities will join the database of 800+ communities and developments previously on the site.

A Photo Library of Inspiring Designs

The more than 100,000 images stored in the DesignLens archives are searchable by:

• Architectural Styles• Housing Types• Exterior Features• Interior Details• Green Building• Square Footages and House Widths• Regions, and more

Along with the photographs, DesignLens offers floor plans, site plans and written analyses that all help profile some of the country's finest examples of residential and commercial development.

A Resource that Gives You a Competitive Edge

DesignLens also provides communication tools that let you share this valuable information with clients and colleagues, including:

• Create slideshows for design boards and presentations

• Share images and ideas with clients from remote locations

• Make folders of your favorite images

19

www.DESIGNLENS.com

av

Become a SubscriberFor more information or to start your subscription, contact Isabell Kerins

ikerins@realestateconsulting.com

(949) 870-1241

1 1

2 2

3 5

4 6

5 4

6 10

7 11

8 15

9t 20

9t 9

11 7

12 8

13t 3

13t 22

15 N/A

16 N/A

17 12

18 38

19 14

20 16

21 13

22 18

23 24

24 19

25 21

2,601 3,419

1,431 1,416

851 838

719 791

609 841

585 600

508 570

500 468

493 372

493 618

487 726

468 649

451 854

451 360

444 235

442 193

437 566

425 245

419 475

417 457

411 515

410 515

385 341

374 373

368 361

-24%

1%

2%

-9%

-28%

-3%

-11%

7%

33%

-20%

-33%

-28%

-47%

25%

89%

129%

-23%

73%

-12%

-9%

-20%

-20%

13%

0%

2%

THE VILLAGES The Villages, FL (Central FL)

THE IRVINE RANCH1 Orange County, CA

NOCATEE Jacksonville, FL

RIVERSTONE Houston, TX

MOUNTAIN’S EDGE Las Vegas, NV

ALAMO RANCH2 San Antonio, TX

STAPLETON Denver, CO

ALIANA Houston, TX

VALENCIA Los Angeles, CA

LAKEWOOD RANCH Sarasota, FL

PROVIDENCE Las Vegas, NV

THE WOODLANDS Houston, TX

CINCO RANCH Houston, TX

RANCHO MISSION VIEJO Orange County, CA

COLLEGE PARK Riverside-San Bernadino, CA

WILDWOOD AT NORTHPOINTE Houston, TX

SUMMERLIN Las Vegas, NV

PAVILION PARK AT GREAT PARK Orange County, CA

LAKE NONA Orlando, FL

WOODFOREST Houston, TX

CROSS CREEK RANCH Houston, TX

CANYON LAKES WEST Houston,TX

CANE BAY PLANTATION Charleston, SC

BRAMBLETON Washington, DC

FIRETHORNE Houston, TX

Villages of Lake Sumter, LLC

The Irvine Company

The PARC Group

Johnson Development Corp.

Focus Property Group

Galo Properties

Forest City Enterprises

Aliana Development Company

Five Point Communities/Newhall Land

Schroeder-Manatee Ranch, Inc.

Focus Property Group

The Woodlands Development Company

Newland Communities

Rancho Mission Viejo, LLC

StandardPacificHomes/Lennar Homes , LLC

Friendswood Development Company

The Howard Hughes Corporation

Five Point Communities

Tavistock Group

Johnson Development Corp.

Johnson Development Corp.

Land Tejas Company

Gramling Brothers Real Estate & Development

Brambleton Group LLC

Jefferson Development Company

2014

20142013

Rank Increased 1Irvine Ranch includes Cypress Village, Portola Springs, Stonegate, Woodbury, and Orchard Hills.

Rank Declined 2Estimate

2013

Project Name and Location

Rankings Developer Net Sales YOY%∆

Bold Multiple MPCs on list

50TopMaster-Planned Communities of 2014

-24%

1%

2%

-9%

-28%

-3%

-11%

7%

33%

-20%

-33%

-28%

-47%

25%

89%

129%

-23%

73%

-12%

-9%

-20%

-20%

13%

0%

2%

YOY%∆

26 N/A

27 17

28t N/A

28t 23

30 28t

31 49

32 11

33 N/A

34 43t

35 30

36 N/A

37 N/A

38t N/A

38t 27

40 50

41 N/A

42 41t

43 28t

44 37

45 N/A

46 32

47 N/A

48 N/A

49 N/A

50 46t

366 268

359 445

337 330

337 353

329 299

327 224

319 321

309 0

301 235

296 290

293 253

288 262

276 197

276 305

263 220

254 315

250 241

244 304

241 249

239 215

238 263

233 143

231 179

227 173

226 230

37%

-19%

2%

-5%

10%

46%

-1%

N/A

28%

2%

16%

10%

40%

-10%

20%

-19%

4%

-20%

-3%

11%

-10%

63%

29%

31%

-2%

TOWNELAKE Houston, TX

SIENNA PLANTATION Houston, TX

PHILLIPS CREEK RANCH Dallas, TX

DAYBREAK Salt Lake City, UT

VALENCIA RESERVE/COVE West Palm Beach, FL

OAKHURST AT KINGWOOD Houston, TX

EAGLE SPRINGS Houston, TX

BAKER RANCH Orange County, CA

WESTRIDGE Dallas, TX

MOUNTAIN HOUSE Stockton, CA

GREEN VALLEY RANCH Denver, CO

VIERA Palm Bay-Melbourne, FL

GRAND MISSION ESTATES Houston, TX

CRYSTAL FALLS Austin, TX

HIGHLANDS RANCH Denver, CO

OTAY RANCH San Diego, CA

ST. CHARLES Washington, DC

SHADOW CREEK RANCH Houston, TX

TERAVISTA Austin, TX

TREVISO BAY Naples, FL

THE MEADOWS Denver, CO

POSITANO2 East Bay, CA

DEL SUR San Diego, CA

AVE MARIA Naples, FL

RIVERSTONE Naples, FL

Caldwell Companies

Johnson Development Corp.

Republic Property Group

Kennecott Land

GL Homes

Friendswood Development Company

Newland Communities

Shea Homes/Toll Brothers

DR Horton

Shea Homes

Oakwood Homes

The Viera Company

Friendswood Development Company

Lookout Development Group

Shea Homes

McMillin Land Development/Baldwin & Sons

St. Charles Companies

Shadow Creek Ranch Development

Newland Communities

Lennar Homes, LLC

Castle Rock Development Co.

Braddock and Logan

StandardPacificHomes

Barron Collier Companies

GL Homes

2014

20142013 2013

Project Name and Location

Rankings Developer Net Sales YOY%∆

SOURCE: John Burns Real Estate Consulting, LLC (January 2015)

TOTAL 22,238 23,112 -4%

Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our 3rd annual Consumer Insights couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.

What Do You Call Home?

E-MAIL SURVEYOver 100 questions and several hundred variables regarding shopper’s opinions on their next home and community.

PARTNERSBuilders, developers, and Zillow joined in the effort nationwide by sending an e-mail to their prospective shoppers.

NATIONWIDE SAMPLEOver 22,000 responses are collected across the nation annually. We have access to over 50,000 total responses in our past survey database.

ConsumerInsights

What Do You Call Home?

Insight Customized

GEOGRAPHICWe understand that geography affects consumer preferences. Responses can roll up to a national or regional level or drilled down to the MSA or submarket level.

PRICE POINTWe understand that affordability is different for each new home shopper. Respondents

were asked their desired price point and payment in their next home; our report

can be filtered accordingly.

GENERATIONS & LIFESTAGEWe understand that lifestage impacts purchasing behaviors. Reports are available specifically for 55+ and the millennial buyers.

Consumer Insights is a “focus-forward” study so that real estate practitioners can use this information to make strategic decisions moving forward. The information can be customized to meet your needs.

to Increase Your Bottom Line

HOMEKitchenBathroomPrivate outdoor livingGreat spaceArchitectural styleYard preferencesSpecifications & Technology

INTERIOR STYLEInterior style preferencesExterior style preferencesInterior specificationsTextureColor

COMMUNITYCommunity amenitiesLifestyle

ATTITUDESHow they liveHow they shopWhat they value

Fantastic Insight On:

To learn more about how you can better develop your next community, marketing strategy, or new product design, please contact:

MOLLIE CARMICHAELPrincipal

mcarmichael@realestateconsulting.com (949) 870-1214

Inside the Mind of a

Millennialby Ali Wolf Senior Research Analyst

FEELING THE PINCH

New homes are expensive.

Resalestendtobemoreaffordablebut not ideal.

Youngergenerationsaremorefinanciallyindependent since the recession, with more expenses.

Mom and dad will house me for free, cook dinner, help with laundry, pay my cell phone bill, and help with auto insurance—where’s my incentive to move?!

Historical spread vs.

resale $20,000

Current spread vs.

resale $67,000

49% of Millennials cannot find what they are looking for in a home, according to our Consumer Insights survey.

49%

More couples are paying for weddings themselves (40% of all couples fully fund their wedding), saving for down payments on their own, and paying down student loans.

Millennials prioritize about $200 to $300 in monthly expenses, which include smartphones, Netflix, and organic shopping.

15% of 25–34 year olds live at home with their parents.

FEAR FACTORS

What if I lose my job?

We saw our parents go through the worst economic times since the Great Depression and we are terrified.

Two issues: I won’t have money for my mortgage, and what if my new job is far from the house I purchased?

They lost their job, went through foreclosure or default, and became very careful with their money.

PLACES TO GO, PEOPLE TO SEE

APPLES TO APPLES

I want to travel.

WhatifIwanttoliveinadifferentcity or try out a new scene? Owning a home will tie me down.

Why buy a home when you can rent something for a similar cost with amenities (pool, gym, electric car charging ports), a sense of community, a good location, and no maintenance work or repairs?

Boston Consulting Group found that Millennials want to travel abroad more than other generations by a 23% margin.23%

TIMES ARE CHANGING

People are seriously dating and marrying later.

I want the city life now—but maybe something quieter later.

I want a neighborhood with conveniences, where I can walk or bike to work.

Student loans are preventing me from purchasing a home.

Men and women are marrying over six years later compared to 50 years prior. What if my wife/husband does not want to live here?

YearsLater6

Millennials are renting in cities, where they can enjoy walking to cultural events, nightlife, and grocery stores. When they have kids, the (inner) suburbs tend to be more desirable.

According to our Consumer Insights survey, 73% of Millennials want a village square that is centrally located with shops, dining, gathering spaces, etc.

73%

5.9 million households under age 40 pay over $250 in student loans per month compared to just 2.2 million back in 2005.

BoomersBorn 1946 to 1964

Gen XBorn 1965 to 1979

Gen YBorn 1980 to 2000

ConsumerInsights

Top AmenitiesCheck out what 22,000 new home shoppers shared as the amenities they most wanted in their next community. Below are the top 25 preferences by generation. The major differences relate to the presence of children for the younger generations.

23

Village Square Recreational Center Children’s Park

Grocery Store Close By Grocery Store Close ByGrocery Store Close By

Fitness CenterWalking Trails Walking Trails

Fitness Center Fitness Center Walking Trails

Restaurants Close By Restaurants Close ByRestaurants Close By

Organized On-Site Programming Shaded AreasCommunity-Wide events

Yoga/Pilates Studio Running Dog Park

RunningCommunity Intranet with Events,

Clubs, Bulletin Boards, etcLake, Pond, Stream, and Water

Elements, $50/Month

Organized On-Site Programming

Community Intranet with Events, Clubs, Bulletin Boards, etc

Children’s Water/Play Area

Community-Wide events Shaded Areas Community-Wide events

Shopping ShoppingVillage Square

Wi-Fi Internet Access in Public Areas

Shopping Recreational Center

Community High-Speed Internet

Recreational Center Village Square

Community High-Speed Internet

Wi-Fi Internet Access in Public Areas

Wi-Fi Internet Access in Public Areas

Shaded Areas Children’s Park Community High-Speed Internet

Look for our future trends in what consumers want in communities and homes by generation.

We believe it starts with your consumers.

Today’s shoppers rated Service & Retail as the most important

amenities for their next community

purchase.

*

All three generations ranked Fitness

Center and Walking Trails as top

amenities above retail shopping.

*

Community-Wide events rank above

pools, parks, and other typical amenities. Events can be much less

expensive too!

*

A Dog Park is among the top park choices. It scored highest for Gen

Y, followed by the Boomers.

*

Wi-Fi Internet Access and a

Community Intranet with Events, Clubs,

etc. are more important to the Boomers than

they are toGen X and Gen Y.

*

54

78

6

109

1112131415

1

BoomersBorn 1946 to 1964

Gen XBorn 1965 to 1979

Gen YBorn 1980 to 2000

Library Live Music in the Park Live Music in the Park

Cycling Movies in the ParkAdult-only Pool (18+)

Community Intranet with Events, Clubs, Bulletin Boards, etcAmphitheater Outdoors Dog Park

Art Shows in the Park Basketball Courts Lake, Pond, Stream, and Water Elements, $50/Month

Hiking Trails with Historical Markers of the Area

Lake, Pond, Stream, and Water Elements, $50/MonthOpen Space, $50/Month

WATER PARKSADVENTURE REC CENTERARTS &ENTERTAINMENTNATURE EVENTS SERVICE &

RETAILSPECIAL

AMENITIES

Let us help! We can help optimize your community and home design for better homes, better places, and better profit.

Please contact Mollie Carmichael at mcarmichael@realestateconsulting.com or (949) 870-1214.

Events and experiences, as a whole, rank above “hard amenities”

like a pool.

*

Consumer research in the real estate world is often overlooked because it is difficult and expensive to conduct. However, understanding what home buyers value is critical, given the market climate and competitive field today. Our third annual Consumer Insights report couples our timely market research with qualitative findings from our proprietary “What Do You Call Home?” survey to provide better information on consumer marketing strategies for your communities.

WWW.REALESTATECONSULTING.COM

Live Music in the Park Yoga/Pilates Studio Sport Fields

Hiking Trails with Historical Markers of the Area

Cycling Yoga/Pilates Studio

Dog Park Children’s Water/Play Area Tennis Courts

Organized On-Site ProgrammingTennis CourtsHiking Trails with Historical

Markers of the Area

Sport Fields Basketball CourtsRemote Guard Gate, $50/month

16171819202122232425

John founded John Burns Real Estate Consulting in 2001, but he has advised real estate executives for more than 25 years. He spent eight years in KPMG Peat Marwick’s Real Estate Consulting practice and two years as a CPA before starting JBREC.

Many of the largest companies in the real estate and investment industries retain John for ongoing research and advice, as well as customized market and consumer research studies to help with portfolio, strategic, and community-specific decisions.

Highly regarded as an authority in the housing industry, 250,000 people follow John’s Influencer column on LinkedIn, 28,000 subscribe to his free Building Market Intelligence emails. The media turns to John for insight on the housing market as often as 60 times per year.

Presenting our team’s industry knowledge to groups of smart people and learning from them during the Q&A afterward is one of John’s pleasures. The feedback helps him work harder to make our research even better. John has a B.A. Economics from Stanford University and a MBA from the University of California, Los Angeles.When not dissecting and disseminating data for clients across the country, John attended home games for all 30 major league baseball teams. He regularly runs 5Ks, and has seen every Academy Award-winning Best Picture.

EDUCATIONB.A. Economics from Stanford UniversityMBA from the University of California, Los Angeles

JOHN BURNSCEO

(949) 870-1210 jburns@realestateconsulting.com

Dean manages residential and commercial real estate consulting assignments across the country and has more than 15 years of experience in real estate market feasibility analyses. He is our Senior Vice President with an emphasis on the Bay Area, Sacramento, the Central Valley, and Northern Nevada markets. His experience as a seasoned analyst has spanned nearly 20 states and over 60 markets, consulting on developments ranging from a few lots of multi-million dollar custom homes to master planned communities with thousands of units. Dean’s analyses have focused on pricing, absorption, buyer profiles, product recommendations and segmentation, supply and demand, economic and demographic impacts, and aggregate housing market trends. Previously, Dean spent many years at Hanley Wood Market Intelligence (formerly The Meyers Group) and Sullivan Group as Managing Director of their Sacramento office. Dean plays basketball when not injured, writes novels and screenplays, and almost always wins at Trivial Pursuit. Almost.

EDUCATIONPh.D. from the University of California, Los Angeles B.A. in Political Science from Cal State Fullerton.

AFFILIATIONSBuilding Industry AssociationUrban Land Institute

DEAN WEHRLISr. Vice President

(916) 647-3263 dwehrli@realestateconsulting.com

John Burns Real Estate Consulting, LLC (JBREC) helps executives make informed housing industry decisions. Our passionate team of analysts and consultants from around the country helps our clients identify the best risk-adjusted investment opportunities. We are known for:

About Us

• Client focus. Our clients have personal access to our team of market and industry experts. We also connect clients to opportunities for new business. We always seek to innovate and improve our practices to make our clients’ lives easier.

• Speed. We are focused exclusively on housing and strive to have the most current data at our fingertips. We are diligent, regularly out in the field, and tapped into industry leaders— resulting in great research and advice.

• Proprietary tools. We have created many tools to provide unique and timely insight. They include a monthly survey of builder executives, several indexes and forecasts, and a demand model by price range and household composition.

• Data quality. We create, collect, and buy the best industry data available, and our analysts then tell clients how to apply that insight to their business planning.

• Local knowledge. Our team has offices in 13 major housing markets across the country.

• Management expertise. Our Our team leaders are seasoned industry veterans who have learned from multiple housing cycles.

• Trusted integrity. We are independent advisors. We do not recommend stock investments or take contingency fees so it is clear we have no conflicting agendas.

Quick StatsRegularly Quoted in:

Weekly Newsletter

28,000+subscribers

250K+followers

3,000+followers

Bloomberg Ticker JBRE

Top 50

CLIENT RESOURCESJohn Burns Real Estate Consulting, LLC takes great pride in our highly educated, resourceful, and experienced team, which includes practitioners with 25+ years of experience in both homebuilding and community development. As a research client, you gain access to our team across the nation to discuss market conditions, our current research, and our forecasts.

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OUR TEAM

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DEAN WEHRLISr. Vice President916-647-3263dwehrli@jbrec.com

NICOLE MURRAYSr. Vice President949-870-1234nmurray@jbrec.com

MOLLIE CARMICHAELPrincipal949-870-1214mcarmichael@jbrec.com

RALEIGH

KEN PERLMANPrincipal858-281-7214kperlman@jbrec.com

DON WALKERPresident858-281-7212dwalker@jbrec.com

PETE REEBPrincipal858-281-7216preeb@jbrec.com

SOUTHERN CALIFORNIASAN DIEGO TEXAS

PAIGE SHIPPSr. Manager214-389-9004pshipp@jbrec.com

LESLEY DEUTCHSr. Vice President561-998-5814ldeutch@jbrec.com

DAVID KALOSISSr. Vice President770-286-3493dkalosis@jbrec.com

DAN FULTONSr. Vice President703-955-3135dfulton@jbrec.com

JODY KAHNSr. Vice President603-235-5760jkahn@jbrec.comTODD TOMALAK

Vice President920-373-6727ttomalak@jbrec.com

LANCE RAMELLASr. Vice President630-544-7826lramella@jbrec.com

JOHN BURNSCEO949-870-1210jburns@jbrec.com

LISA MARQUIS JACKSONSr. Vice PresidentBusiness Development214-389-9003lmjackson@jbrec.com

RICK PALACIOS JR.Director of Research949-870-1244rpalacios@jbrec.com

STEVE DUTRASr. Vice PresidentData Management949-870-1227sdutra@jbrec.com

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