Welcome to the Foxhole! I'm Alex Kamkar, and I'm excited to share insights and updates on the latest news impacting our industry. I'll be drawing on insight from
My professional background as a masterplan community developer (10 year veteran, developed over 4K lots in my career)
Drawing from my extensive public service (elected to two terms for a large Texas city with a $100M+budget/year)
🦊 Situational awareness: As we delve into the world of land development and community growth, expect to see discussions on key industry trends and local projects.
Texas has joined Louisiana and Florida in experiencing the highest home insurance rates as coverage areas shrink. Rising insurance rates are impacting homeowners across Texas, particularly in coastal and storm-prone regions. State lawmakers in Austin are expected to address this issue in the next legislative session starting in January 2025. Learn more.
Happiness is a function of expectations—so expect mortgage rates to remain high and builder buydowns to continue. Understanding the relationship between mortgage rates and expectations can help both buyers and builders make informed decisions. With the Fed starting to lower its benchmark interest rate, it's important to monitor how this impacts long-term mortgage rates as builder buydowns may become more pricey if the gap between 30 year money and 10 year treasuries continue to widen. Learn more.
At Bold Fox Development, we're deeply concerned about the increasing burden of home insurance and property taxes now surpassing mortgage costs for homeowners. The pricing shift of the “hidden costs” of homeownership threatens the affordability of housing, potentially reducing homeownership rates and destabilizing communities, as new buyers hold off and existing homeowners are forced to reassess their financial strategies. Learn more.
Pending home sales in the U.S. reached a 21-month high in November, signaling a strong rebound in the real estate market. This surge suggests a renewed confidence among homebuyers despite ongoing economic uncertainties. American families are reacting to this cocktail of factors. Learn more.
Lennar is spinning off Millrose Properties as a real estate investment trust (REIT) to focus on a “land light” strategy as reported in Builder Magazine. This shift supports Lennar's asset-light strategy, boosting cash flow by quickly recycling capital. This allows Lennar to focus on being a “pure play” homebuilder delivering homesites in a just in time fashion.
After reviewing the 4Q transcript from the Lennar call. Lennar CFO Diane Bessette mentioned the phrase “Capital Efficient” . The thought bubble I keep getting is “How does a builder who is not publicly traded compete against a public sourced cost of capital?” Learn more.
Stay tuned as we continue to dive into what's happening and what's coming next for our industry.