BTI Partners’ Noah Breakstone On People Moving to Florida

As managing partner of BTI Partners,  one of Florida’s major real estate and land developers with projects in Tampa, Orlando and South Florida, Noah Breakstone is in a good position to watch the effects of the growing flow of new residents entering the state. “South Florida has always been considered New York’s sixth borough but now we are seeing New Yorkers migrate to other parts of the state and COVID has definitely accelerated this trend,” he says. GlobeSt.com spoke with Breakstone about this and other trends. Read excerpts from this conversation in the following interview.

What are the challenges that the home homebuilding industry is facing? And where is it headed this year? 

>What’s interesting about the homebuilding industry is that the supply of developed land is undersupplied. Since the Great Recession, housing starts at that time dropped all the way down to just under 500,000, about a 75 to 80 percent drop. And over the last decade, the housing market never fully recovered. Today, the housing supply is about 3 million units under supply because there isn’t enough ready to build land. 

While the scarcity of land in cities will remain a challenge for homebuilders, the pandemic will most likely reshape the US residential market and could help solve America’s housing crisis. According to a recent survey by the National Association for Business Economics, only about 1 in 10 companies expect all employees to return to their pre-pandemic work arrangements. We will most likely see employers implementing a hybrid model. This would allow employees to live in more affordable areas and commute into the office only a couple days a week. Currently, America’s middle class pays more than 30 percent of their household income in housing just to be a reasonable distance to work so this would be a game changer and  great news for national and regional home builders who can look for land in areas where they could build housing that’s more affordable. Lately affordability has been impacted by other factors, such as cost of lumber and other building materials continuing to increase rapidly and, given affordability constraints of first-time homebuyers, most national homebuilders face downward pressure on operating margins, despite strong homebuying demand.  Also, mortgage rates are trending higher which could reduce homebuyer purchasing power, making it more difficult for homebuilders to pass on the higher costs.