What’s the best way to know what Meyers Research is thinking about what lies ahead for 2017? Ask California Homebuilding Foundation Hall-of-Famer Jeff Meyers himself! I recently sat down with Jeff to ask him a few questions about what this year has in store for us on an economic and housing front. Here is a summary of our conversation:
Looking back on 2016, what was the most impactful event on our industry?
The national election.
What factors will be the most important for homebuilding to monitor in 2017?
The new Administration and their policies. Interest rates will increase but credit will ease. Expect less regulation. Labor costs will increase as infrastructure spending expands. The luxury market and even second home market could improve as the affluent will see the greatest benefit of these shifts (private jet company stocks have increased and the luxury products sector is also expected to benefit). Wages will increase since full employment is already in place.
What will you do differently this year to be best-prepared for 2017?
Hire cautiously and manage expenses carefully. Be ready for the next downturn and have a contingency plan to deal with any possible market shifts.
What technology(ies) will most affect real estate development going forward?
Big data for digital marketing efforts. Automated Valuation Models will be everywhere, and with more computer learning, this could ultimately help make home transactions more efficient. Watch how Open Door impacts the resale market.
Define a few other strategies that homebuilders can embrace to optimize success.
Embrace smaller in-fill deals in the short term. The retail industry is being disrupted and there are significant opportunities for repurposing former retail sites into mixed-use neighborhoods. Continue to innovate product design and the connection of indoor and outdoor space. Focus on Gateway cities and major job centers. I expect that the center of the country will continue to lag despite trying to bring manufacturing jobs back to the U.S.
We expect 2017 will bring some dynamic and exciting events to the industry. Perhaps the biggest conclusion? Be ready for change.