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Events

Builder 100 Key Takeaways

May 11, 2022

The Builder 100 conference brought together top builders and industry leaders for three thought-provoking days of panels, discussions, awards, and networking.

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The annual Builder 100 conference welcomed a full house this year with nearly 400 attendees at the Ritz-Carlton in Dana Point, California. The sold-out event was the largest Builder 100 yet, featuring three packed days filled with 16 sessions, the BUILDER awards ceremony, networking, happy hours, a custom-made sand sculpture, and a rockin’ concert from Orange County’s own Mark McGrath of the 90’s band Sugar Ray.

Builder 100 brings together the top 100 largest home builders in the U.S., as named annually by BUILDER magazine. This year’s conference theme, The Great Reshuffle: Building the Future of Housing, centered around current design, technology, labor, and capital challenges to help inform and inspire the industry to prepare for the future while continuing to trailblaze creative innovations for tomorrow.

Jump to Sessions

Read on to explore the key takeaways from the event, or click on the session titles below to jump to a particular section.

Learn more about upcoming Zonda Events at www.zondahome.com/events, including our free Outlook Webinar series and new Inspirational Leadership podcast series.

“There is not another event in our industry that brings such a high level of leaders and innovators together to share their experiences and knowledge.” —2022 attendee

Economic Outlook for Housing

Ali Wolf, Chief Economist, Zonda

Key takeaways

  • Inflation is up 6-9% year-over-year. It is at the highest level in 40 years. A healthy rate of inflation is 2-3%.
  • The Fed is incrementally raising mortgage rates to stave-off inflation in hopes of a “soft landing” versus a “hard landing” (i.e., recession.) Monthly payments are up 30% since the beginning of the year due to higher interest rates.
  • Forecast
    • Calling for modest growth across the board, but with caution!
      • Single-family starts 2-5% in 2022
    • Sales dependent on supply, sales caps, and affordability
      • New home sales +1.8% in 2022
  • The ‘If you build it, they will come’ mentality will run out. Demand won’t always be so high.

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The Future of Work and The Marketplace

Kim Lear, Founder and Content Director, Inlay Insights

Key takeaways

  • As record numbers of Baby Boomers retire, these differing generational paradigms are disrupting workplace norms.
  • It’s time to challenge conventional thinking and create more empathetic, personal, and customized experiences.
  • We need to understand each generation and how to communicate with them effectively.
  • Baby Boomers: population 80 million, born 1946-1964
    • ‘Boomers’ believe in the quintessential American Dream, are brand loyalists, have strained relationships with their parents, and are less likely to communicate their feelings.
  • Generation X: population 60 million, born 1965-1979
    • ‘Gen Xers’ are the first generation with two working parents, saw the rise of divorce, and Watergate. They are skeptical, entrepreneurial, and independent; most likely to homeschool (for non-religious reasons); are honest, direct, and unfiltered; the sandwich generation (caring for their children and aging parents simultaneously).
  • Millennials: population 82 million, born 1980-1995
    • Witnessed widely broadcast violence at a young age from Columbine shootings and 9/11. This caused an influx of school guidance counselors and started mental and emotional health conversations.
    • Millennials are much closer with their children. They are collaborative, empowered, networked, risk average, and in search of meaning.
  • Generation Z: population 76 million, born 1996-2010
    • Gen Z grew up with the backdrop of growing equality. Their parent-child dynamic has continued to draw closer, with 70% of teenagers saying their parents are their best friends.
    • There are now more women with PHDs than men and more women are high school valedictorians than men.
    • They grew up with the first Black president, went to grade school during the threat of increased school shootings, and their college experience has been impacted by a global pandemic.

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Becoming a Best Place to Work

Moderator Michelle Simms, Founder and CEO, Strive Coaching Studio
Karin Shaban, Senior VP, HR, Ashton Woods
Charissa Wagner, SVP, People Operations, Development & Acquisition, Taylor Morrison

Key takeaways

  • It is important in today’s multigenerational workplaces to focus on individuals, their talent, and their well-being.
  • Everyone is looking for flexibility. “The Great Resignation”,  has created a candidates’ market.
  • Leaders need to truly understand what motivates their employees.
  • Employers need to be strategic about who they’re investing in.
  • In this remote workforce, it’s important to communicate clearly and often to build trust and retention.
  • Candidates are searching for a sense of meaning. Communicate what your company stands for and create a culture that gives employees a sense of belonging within the organization.

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3D Printing: The Future of New Home Construction?

Zachary Mannheimer, CEO, Alquist 3D

Key takeaways

  • “A house is a home before it’s an asset. —Zachary Mannheimer
  • Advantages of 3D printing: 
    • Reduces framing time by 2-4 weeks 
    • Requires less human capital on site 
    • 50% less energy than traditional homes 
    • 80% less waste on-site 
    • Costs at least a third less than traditional lumber
  • The first owner-occupied 3D printed home was made for Habitat for Humanity in Williamsburg. It took 22 hours to print and was 1,200 square feet, featuring three bedrooms, and two full bathrooms.
  • 3D-printed homes can withstand fires.
  • The Future
    • Mannheimer believes housing will become more affordable through 3D printing.
    • Every home Alquist 3D prints comes with a 3D printer built in, allowing homeowners to print what they need themselves, instead of heading to the local hardware store. 
    • Customers will be able to design their homes online.

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Achieving the X Factor and Building with Purpose

Moderator Mollie Carmichael, Principal, Zonda
Randall Lewis, Senior Executive Vice President, The Lewis Group of Companies
Brent Herrington, President and CEO, DMB Development

Key takeaways

  • What drives a home price?
    • Land cost, lot improvements, construction, marketing, and more.
  • Intangible drivers of home prices—to make money, add creativity!
    • Artful planning and design
    • The cachet of community brand
    • Uniqueness and authenticity
    • Architectural character and charm
    • Picturesque street scenes
    • Parks and amenities
  • Overall profitability is not determined by where selling prices start but where they end up.
    • Commitment to quality and creativity gives pricing more room to float upward.
  • Planning with purpose
    • “As a leader, you don’t want to do cruddy projects, you want to do really good projects that you’re proud of….people want to work for a company that stands for something.” —Randall Lewis

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“Each year the content, panels, presentations and guest speakers gets better and better.” — 2022 attendee

BUILDER Awards

Winners

Congratulations to this year’s winners of the builder awards!
Builder of the Year
  • Winner: Landsea Homes
    • Through consecutive strategic moves in 2021, Landsea Homes, led by CEO John Ho and COO Mike Forsum, experienced a historical year of transformation after going public, exceeding $1 billion in revenue, acquiring Vintage Estate Homes, expanding into the Texas and Florida markets, and completing 1,640 closings. These moves culminated to earn Landsea the 47th spot on the Builder 100 list along with the Builder of the Year title.
Hearthstone BUILDER Humanitarian Award
  • Winner: Nelson Mitchell, HistoryMaker Homes
    • Nelson’s company has raised over $14.5 million benefiting children with disabilities, impoverished communities, veterans, and local homeless populations. Two organizations, in particular, have been deeply impacted by Mitchell’s fastidious generosity: Homes for HOPE, an organization that aims to fight global poverty, for whom the builder has constructed two houses; and The Miracle League, which provides children and young adults the opportunity to play baseball regardless of their abilities, including custom fields that accommodate wheelchairs.
    • The 2022 Hearthstone BUILDER Humanitarian Award is proud to present $300,000 total to Mitchell’s two charities—$150,000 to Homes for HOPE and $150,000 to The Miracle League.
Biggest Mover Top 100
  • Winner: Holt Homes
    • Holt Homes, based in Vancouver, Washington, moved up 37 spots and broke into the top 100 at number 85.
    • Headed by founder and president Greg Kubicek, Holt Homes closed 726 new homes last year—265 more than in 2020—with a revenue of $348 million.
Biggest Mover Next 100
  • Winner: New Tradition Homes
    • Serving the Vancouver and Tri-Cities areas, New Tradition Homes jumped 43 spots on the Builder Next 100—from number 190 to 147.
    • The home builder, led by president Chris Helmes, closed 346 new homes last year—139 more than in 2020—with a revenue of $170 million.

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CEO Power Panel

Moderator Tim Sullivan, Senior Managing Principal, Zonda
John Ho, CEO Landsea Homes
Ryan Marshall, CEO, Pulte Homes
Joel Shine, CEO, Exceller LLC

Key takeaways

  • The U.S. has been undersupplied by one million units since 1990.
  • John Ho doesn’t believe there is any specific advantage for foreign ownership.
    • Took company public to have more diverse shareholders.
  • We might see prices go up even when things flatten.
    • Might see relief in mid-2023.
  • Assume what you think will happen in the future won’t.
  • What’s similar and what’s different from the Great Recession:
    • Recession – overbuilt, giving unqualified mortgages.
    • Now – underbuilt, strict on mortgages.
  • Builder balance sheets are better.

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New Rules for a New World

Mike Walsh, CEO of Tomorrow | Author of The Algorithmic Leader

Key takeaways

  • Rule 1: There is no digital disruption, just digital delivery.
    • If you are not a digital business, you are no longer in business.
    • Start thinking like a platform, not a business.
    • Act ahead of the transition.
    • Focus on the infrastructure, not the interfaces.
  • Rule 2: There is no remote work, just work.
    • “Technology can change your hardware, but culture is your true operating system.” —Mike Walsh
    • It is not where we work that is changing, it is the how.
    • Five drivers of distributed work:
      • Mobility
      • Autonomy
      • Memory
      • Objectivity
      • Velocity
  • Rule 3: AI will not destroy jobs, it will change them.
    • We will have to become a new type of leader in the next 10 years.
    • Algorithmic leaders of the future will need to combine a deep understanding of human complexity with a flair for computational thinking.
  • 3 Principals
    • When you automate, elevate.
      • Make a plan for how you are going to bring your people with you.
    • Don’t work, design work.
      • Is there a smarter way of doing this? Is there a way to automate it?
    • Get better at embracing uncertainty.
      • How do we get better at leading through ambiguity?
      • Be curious, not judgmental.

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E-Retail Meets the Model Home

Eoin Harrington, CEO, Mine
Moderator Karyn Bonder, Vice President Business Development, Builder Sales + Marketing, Zonda

Key takeaways

  • Current style trends and model home insights based on consumer purchases
    • Move toward contemporary design85% modern, 15% traditional.
    • Sub trend: transitional design which combines traditional and modern.
    • Industrial evolution: refined industrial finishes.
    • Less is more! Less clutter, high customer appeal, low staging cost, and lower maintenance. 
    • Neutral tones are winning across the board.
    • 79% of new construction homeowners say the way the home was furnished influenced their decision.
    • 6/10  homeowners would like to recreate model home designs in their homes.
  • New home behaviors
    • 76% work with a designer before moving into a home.
    • Customers order in phases due to financial constraints.
    • Some home buyers want to recreate the look at their price point.
    • 87% of new home buyers have furniture needs.
    • 84% of new construction homeowners are open to financing their furnishing purchase.

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Innovation Lives Here: Tech Giants + The Smart Home Future

Brad Russell, Vice President, Interpret
Mollie Carmichael, Principal, Zonda

Key takeaways

  • 54% of U.S. adults own a smart home device (up from 15% five years ago.)
  • The average number of smart home devices owned in a home is 7.5.
  • 41% of people would like the new home to include smart devices, instead of the after-purchase sale. 
  • 39% still have demand for smart security.
  • 1 in 3 people believes a movein ready home has smart home technology.
  • 52% plan on bringing devices they already own.
  • 61% say it’s important that their smart devices connect and work together (control all devices from a single app).
  • 1 in 10 adults is using a smart speaker to control smart home features.
  • 19% of adults have a smart security system in the home.
  • Evolving demographics of smart home buyers:
    • 59% of buyers earned less than $75K.
    • Women and men are almost equal in buying power.
    • 20% of buyers are aged 55-65.
    • Diversity: 40% nonwhite buyers (matches U.S. census data).

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Subdivision of the Future? Mixing it Up with Rental and For Sale

Moderator Tim Sullivan, Senior Managing Principal, Zonda
Brent Landry, EVP, Development, American Homes 4 Rent
Darin Rowe, National President Build-To-Rent, Taylor Morrison
Blair Sweeney, Managing Director, Build to Rent, Landmark Properties, Inc

Key takeaways

  • Be judiciousthis space has a strong runway, but it is not for everyone.
  • New matterswhat will you do to maintain the fresh feel of your homes and the community?
  • Understand the consumer – why are they looking to rent?
  • Standardize your product – minimize costs while presenting a consistent lifestyle.
  • Amenity equilibrium include only what is valued.
  • Cash flow cyclicality plan for it! The “easy button” is gone. 

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Mergers + Acquisitions Trends Report

Tony Avila, CEO, Builder Advisor Group
Moderator Tim Sullivan, Senior Managing Principal, Zonda

Key takeaways

  • Why mergers and acquisitions (M&A)?
    • Public Builders
      • Expand geographically and diversify product lines.
    • Private Equity
      • IRR and equity multiple-driven.
    • International Buyers
      • America is the cleanest shirt in the dirty economy laundry basket.
      • Growth in jobs and population.
      • Better return on capital.
    • Family/Offices/High Net Worth Individuals and Others
      • There is no alternative for putting money to work, so focus on real estate.
      • Good diversification.
  • Why Sell? 
    • To diversify net worth, retire, convert ordinary income into capital gains, unlock and distribute equity, and/or eliminate liabilities.
  • Types of M&A transactions and consideration
    • Partial sale of equity
    • 100% sale
    • Consideration timing
  • 2021 was one of the busiest years ever for homebuilder M&A.
  • To date, there have been four homebuilder M&A transactions in 2022.
  • Private builders are trading at a premium to public builders.
  • The list of potential buyers in the homebuilding sector is as large and diverse as it has ever been.
  • Builders who have IPO’d since 2020 have grown considerably through M&A.

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The Transaction Revolution: What’s next for i-Buying?

Brigham Weight, National Director, Strategic Partnerships, Offerpad
Nathan Harbacek, Head of Partnerships, Opendoor
Moderator Paul Tourbaf, EVP, Zonda

Key takeaways

  • 60% of Americans have to sell their current house in order to afford to purchase a new home.
  • We have to eliminate contingencies for consumers.
  • Consumer-focused solution center.
  • Flexible buying – change closing dates, extended stay.
  • Avoid the Zillow Listings pitfall: be local market experts. Set up in the markets you are selling in.
  • Focus on the buyer and empower them to find their next home.
  • Bundle services, one-stop-shop
  • Where will ibuying be in two years?
    • Opendoor is building a platform to minimize the number of steps it takes to buy a home. The goal is to bring technology to partners to help consumers and give them the best experience.

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