Baseball and real estate—what do the two have in common? First, there are some “minor league” markets with low barriers to entry where it is easy to build, but there are also “major league” markets where the going is a lot tougher. There is no clock on the housing market. We may be in the seventh inning, but the housing market appears to be batting around and still has some outs to play with.
In this week’s New Home Insights podcast episode, we speak with Mike Forsum, President and COO of Landsea Homes. We talk about the highs and lows of markets, what housing product are the toughest to execute, how they shifted strategies to meet new market needs, and what the future might hold. Additionally, Landsea went public recently, and Mike gives us an inside look at the perils and promise of that decision. Keep reading below for some of his key takeaways.
Mike Forsum, President and COO, Landsea Homes
High Barrier to Entry Markets
- Increased profits are a motivator to work in more difficult markets, such as the San Francisco Bay Area or New York City.
- Landsea is motivated to work in these markets so that housing solutions can be provided in areas it would not otherwise be available in.
- There is typically less competition in markets with a high barrier to entry.
Current Market Activity
- Landsea has seen a shift in buyer preference towards more suburban product within their communities. This is driven by a need for increased space and safety and fueled by remote working opportunities.
- Double-digit appreciation seen in many markets today is unsustainable in the long term. Markets will inevitably cool off.
- Landsea recently went public using a Special Purpose Acquisition Company (SPAC).
- A SPAC is a faster alternative to a traditional IPO.
- Listen to this podcast for a rundown of Landsea’s SPAC and “de-SPACing” process.
- Mike teased that Landsea is not done yet with mergers & acquisitions. Stay tuned for more news.
- Increased work-from-home (WFH) activity is here to stay. Landsea’s LiveFlex® rooms provide creative solutions for home offices and other needs.