David Mandarich, President and COO of MDC Holdings, the parent of Richmond American Homes, gave a bullet point address to the Kentwood Company sales group yesterday morning. Mr. Mandarich's comments were most insightful and enlightening.
Below are some of the straight-forward comments.
- The overall attitudes of homebuyers are better. (This is hugely significant to the housing market recovery.)
- We are all in a food chain. Referencing a quote by Warren Buffet, when the bottom moves up, everything else moves up. (The meaning is that as the lower end price range of homes has gotten hotter than a firecracker, the sales activity there has had a ripple effect on all price ranges above.)
- Building hard costs are going up. Cities are raising their fees to builders, etc.
- Demand for attached housing is becoming stronger.
- There's not a lot of capital for home builders.
- 20% of American homeowners are still "under water". (Meaning they cannot sell their homes for enough to cover the outstanding loan balances.)
- Currently the largest group transitioning their housing situation is 65 year olds and older.
- Richmond is building more ranch style homes today whereas twenty years ago they hardly built any.
- Richmond American Homes is putting lots of inventory (spec homes) in the ground whereas last year they did essentially none.
- Douglas County in Colorado is the 6th or 7th strongest housing market in the country.
- Home starts in 2013 for Richmond will be about double the starts of 2012.
- Houston, Washington DC, and Phoenix are the top three recovering markets. Denver is about 10th.
For more information about the Denver housing market, click here...