Dallas Dealmakers and Future Place Conference

The Whelan Advisory team traveled to Dallas for Zonda’s Dealmakers and Future Place conference and had the following key takeaways:

• Housing activity is slow relative to the past four years, but relatively healthy / normal when compared to long-term averages

• Expect data comparisons to a 2019 baseline given the abnormal and outsized effects that influenced the market from 2020-2023

• Consumers are remaining stubbornly on the sideline in the back half of 2024, affecting homebuilder sales and closings

• A near-record number of homebuyers are saying it’s a bad time to buy

• With mortgage rates still near recent highs - more than double from levels seen prior to 2022 - many consumers are waiting for rate relief

• Quick move-in / spec inventory is high relative to historic norms

• This is in large part due to a shift in builder strategy to capitalize on operational efficiencies of specs; but something to watch in the months ahead as more come to market

• Despite the 2024 difficulties, land markets are as hot as ever, especially in Texas

• 85% of Texas homebuilders say they are “full steam ahead” or “moving forward with caution” on land acquisition, per Zonda survey results

• Will likely lead to some margin compression until consumers return to the market

• The great majority of builders are expecting a more active 2025, due to a variety of factors that include:

• Pent-up demand

• Lower rates

• More lot supply coming online

• Incentives, specifically rate buy-downs, are here to stay

• They have proven to be too great of an advantage for homebuilders

• Even if rates fall, many builders expect to continue buying rates down to lower levels

With widespread confidence in long-term homebuilding demand, M&A and the capital markets continue to be exceptionally active. Our team has closed 10 transactions so far in 2024. Please reach out for a confidential conversation to discuss your needs.