Larry Webb and Emile Haddad at OC Housing Forum Outlook 2018

IRVINE, CA—Climbing housing prices and apartment rents are preventing many workers from living near jobs in high-end submarkets, while understanding today's homebuyers' needs is more important than ever, said speakers at OC Forum's 2018 Housing Outlook here Thursday. In addition, constant disruptors can have a dampening effect on homebuyers.

Emile Haddad, chairman and CEO of FivePoint, told attendees at the luncheon event that his firm tries to plan its developments with customers' lifestyle in mind, recognizing the desires of the younger generation to be in urban core spaces and reimagining spaces for when driverless cars are commonplace.

There are dichotomies between what's happening in the housing industry and what's happening in the real world, according to Larry Webb, CEO of the New Home Co. “The worlds is always changing, but our industry is a family business” that perpetuates, generation after generation, said Webb. “They don't want to change; change scares them.” He added that the New Home Co. is always having “new” ideas since we live in a world of disruption, which creates uncertainty among homebuyers. “When uncertainty hits, people don't want to make the biggest purchase of their lives.”

Moderator Bryan Starr, president and CEO of the Greater Irvine Chamber of Commerce, asked the panelists how long the current cycle will last, and Webb said he believes there's still quite a bit of runway to go. “In the early 2000s, anything we had in the ground was successful, but in this cycle, 15% to 20% of homes are not doing as well. Land today is at an all-time high and getting higher,” which leads to lack of affordability, “but the building community has not overbuilt during this recovery. Land is constrained, but there are very few Great Parks; developers have been careful to make buildings successful.”

Real estate is not a national industry since every market behaves according to its own fundamentals, said Haddad. “We protect ourselves as a company by having [cash on the balance sheet].” He said if the economy should change due to, for example, an engagement with North Korea, this practice would offer his firm some protection.

Starr asked the panelists, with housing prices still rising, what could the government do to help the affordability crisis. Webb said, “There's a lot they could do—not just taxing new projects,” referring to this crisis really hitting Los Angeles now. “Most cities don't want affordable housing; if they did, they would do something about it.” Haddad added, “It doesn't help when you have elected officials looking at the situation with the lens of only two years.”

Haddad said his firm works on a lot of product that focuses on lifestyle, and it has spent a lot of time trying to do that. He pointed out that the affordability crisis is about business—not housing. “You can't attract business if you don't have affordable housing. You will find yourself as a city living in an old economy, not a new economy, if you don't provide affordable housing. You have to look at how do we start attracting new economy here/ People are not talking about this issue in Orange County.”

Starr asked the panelists how they factor in different generational needs in their developments. Webb said, “For every piece of ground, we try to understand who our buyers are going to be and how to create something they have never had before and want. Millennials are no different from anyone else—it's just taken them longer to launch.”

Webb added that Millennials have both positive and negative traits, but they do have the potential to change the world. He also noted that there is a dichotomy between those in our industry—from market research to architecture—in that everyone in these fields has traditionally been “old white guys—we need more diversity because that's not Millennials. They're slower to get married and have kids, but they will buy when they have families.”

Instant Insights /

Affordability, Disruptors Will Continue to Shape Housing

Related Stories

Recommended For You