To all the agents in the house,
As a teenager, the song "1969" by The Stooges fascinated me.
It takes a momentous year in American history, one that included the introduction of the Vietnam War national draft lottery, Neil Armstrong's moon landing, the Woodstock music festival, the killing of Fred Hampton, social change and turmoil everywhere, and declares, "Well, it's 1969, okay? All across the USA. It's another year for me and you. Another year with nothing to do."
For someone to declare that 1969's problem was there was nothing to do…That took nerve!
I thought about Iggy Pop's youthful contrarianism and unexpected outlook while poring through the Pulte Group's earnings data Tuesday, and thinking about the future of U.S. homebuilding. It was a momentous year for Atlanta-based Pulte. They accelerated what has been a year-to-year forward march in revenue and net income.
Atlanta-headquartered Pulte Group reported $1.95 billion in 2021 net income, a 38% leap from $1.41 billion in 2020. And the company's revenue grew 26% to $13.9 billion.
Pulte is building more homes, and closing more deals than the company has in past years, and the homes are becoming more expensive. Buyers paid an average price of $463,000 per home in 2021, up 11% from the year before.
When a company is selling more products for a higher price than before, its CEO is usually pretty happy. Pulte's figures also come as new homes grab a bigger share of the U.S. real estate market. But Ryan Marshall has a somewhat different takeaway.
"The supply side of the equation has been extremely challenging, with no clear signs of when things will get better," Marshall said on the earnings call, repeatedly lamenting supply-chain bottlenecks and labor shortages.
I found Marshall's frustrations notable, and they are shared by other industry titans, who like Pulte, have companies that actually seem to be doing quite well.
Stuart Miller, executive chairman at Lennar, said homebuilding is a "difficult landscape" in a December earnings call. The longtime Lennar executive called the housing market strong, but warned, "Short supply is likely to remain for some time to come."
I wonder how homebuilders' ambivalence toward the current housing economy will impact their relations with other key actors. Agents, I have discussed with some of you strained relations buyer's agents have with Lennar and other homebuilders. What is the status of these dealings now? Do laments about a lack of supply suggest builders will keep seeing buyer's agents as unnecessary?
Also, how do you see clogged supply lines affecting your work? Is there a resignation that the inventory problems of last year will indefinitely stay the same?
Please send me your thoughts at mblake@housingwire.com.
Sincerely,
Matthew Blake
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