10 Takeaways From Day One of the Builder 100 Conference

The first day of the Builder 100 Conference at the Ritz-Carlton Laguna Niguel in Dana Point, California, provided attendees with insight on the state of the housing market, actionable takeaways from top executives in the sector, and a peek into the future with a keynote on artificial intelligence.

Here are 10 takeaways from the four education sessions from day one of the Builder 100 Conference:

1. It is hard to describe the current housing market with one blanket statement. During the economic outlook, Zonda chief economist Ali Wolf shared that metro locations across the country are experiencing different housing situations. Approximately 62% of the largest metro markets are overperforming historical averages, according to the Zonda Market Ranking, but in many major metros, it is difficult to sell homes. Wolf said despite the different realities across the country, generally it is taking a lot of effort, resources, and money to secure sales.
2. The builder's advantage over the resale market remains in play. Consistent with 2023, the new-home market continues to benefit from limited inventory in the resale market. Builders benefit from the ability to offer financial incentives and rate buydowns, options that cannot be offered in the resale market. While resale inventory in April was at its highest level since April 2020 and is higher year over year in several Texas and Florida markets, it remains 35% below 2019 levels nationally, according to Wolf. A survey of builders indicates nearly two-thirds are facing little competition from the existing-home market.
3. Affordability and economic risks to the housing market remain. Inflation and labor market data remain key indicators to watch with the Fed continuing to hold the federal funds target rate stable. How quickly the data cools—or remains strong—will dictate how the Fed behaves in the second half of 2024. Many prospective buyers remain highly cost sensitive, making inflation and mortgage rate data important indicators for builders to track.
4. Millennials are the largest buying generation. After ceding the top spot to baby boomers in 2023, data through April indicates millennials are once again the largest buying generation, according to Wolf. Many baby boomers are becoming discretionary buyers—remaining the best positioned to buy, but not in situations where they have to buy. Instead, older millennials who are already homeowners are continuing to remain active in the housing market as life or job changes necessitate moving.
5. People are still needed in the home buying process. Despite the rise in online sales tools and digital experiences for prospective buyers, individuals still desire interacting with humans prior to making the largest purchase of their life, according to real estate tech strategist Mike DelPrete. While more technologically inclined, millennial and Gen Z home buyers with no prior experience in the housing market desire the assistance of experts to help in the home buying process. Approximately 90% of home sales remain agent-assisted sales, noted DelPrete.
6. Real estate portals are likely to get more deeply involved in transactions. DelPrete said companies such as Zillow have added functionality that will likely make them more involved in the home buying process. Rather than just operating as lead generation companies, real estate portals will likely assist with more elements of the home buying transaction moving forward, such as mortgage originations and home loans.
7. Empower your teams with responsibility and authority. During “The New Leadership Agenda” panel, Meritage Homes CEO Phillippe Lord spoke about the importance of leaders surrounding themselves with people who think differently. He said the more people you hear from in the decision-making process, the more opportunities there are to grow and improve. People drive the decision-making process, and an important element of developing a strong culture is providing leaders with the responsibility to make decisions and the authority to execute them. David Weekley Homes president Chris Weekley said the company is focused on “degrees of delegation” and identifying when certain team members are ready to take on more responsibility.
8. One of the most important leadership skills is being authentic. Lord and Weekley talked about the importance of communicating with teams, querying about what the company is doing well, how it can improve, and taking action. “It’s not enough just to ask. We have to follow through and respond. [People] need to know their voice is heard,” Lord said during the panel discussion.
9. The BTR space remains in the early innings. Lord and Weekley agreed that the build-to-rent space is continuing to evolve and become more mature as operators figure out how to deliver value to customers. Both believe there is a consumer for the single-family rental product long term and expressed it will likely be a part of the Meritage Homes and David Weekley playbooks moving forward.
10. Above all, AI should be responsible. During her keynote presentation, Kleiner Powell International founder and managing partner Juliette Powell expressed the importance of deploying artificial intelligence responsibly, especially as a first mover in the space. The author of “The AI Dilemma: 7 Principles for Responsible Technology” shared that organizational, operational, technical, and reputational frameworks are important to developing a responsible approach to AI. Deployment of AI technology should include a clearly defined way of working, leadership groups with responsibility and accountability for AI, technical knowledge, and an AI mission anchored to company values.

Following the education sessions, the day concluded with an awards ceremony honoring Hearthstone BUILDER Humanitarian Award winner Pat Neal of Neal Communities; Builder of the Year United Homes Group; inaugural Builder on the Rise Chelsea Timmons; Builder 100 Biggest Mover Prominence Homes; and Next 100 Biggest Mover Landmark 24 Homes.