Part 3 of a 3-part series, this video takes us inside the testing and quality control of LP® SmartSide® engineered wood trim and siding.
4 Observations on the Housing Market
The PCBC show held its first Capital Markets Forum in June. The program was well attended and many of the industry’s top financial experts were on hand. Here’s a roundup of the highlights from the event:
1. Market is poised for slow growth. David Crowe, NAHB’s chief economist, and Elliott Pollack, CEO of Elliott D. Pollack and Co., gave an upbeat but cautious market outlook. In short, housing starts and sales numbers are likely to improve slowly — sometimes even doubling. However, last year’s numbers were so bad that even a doubling of output is dismal.
2. Land deals are done. A panel of land experts — which included Peter Fioretti, president and CEO of Mountain Funding LLC, Steven Magee, land portfolio manager with iStar Financial, and Gregory Vogel, founder and CEO of Land Advisors Organization — indicated that most, if not all, major land deals are now done. Large public builders aggressively bought up all the land they could and largely overpaid for the property, according to the panel.
3. Equity is available for builders. Mathew Wyman, partner at Cox, Castle and Nicholson, moderated a panel of equity providers. The consensus opinion: There’s plenty of private equity available for developers and builders who are willing to take on a financial partner. But there’s a catch: private equity is not cheap.
4. Banks aren’t back, yet. My take from the debt provider panel is that banks are not in the business of lending for developments and home building, yet. For instance, when asked about volume of deals, panelist Frank Henry of California Bank and Trust said he’s closing “perhaps one a month.”