Sheryl Palmer, CEO of Taylor Morrison, told CNBC on Thursday that the strength of the property market has expanded in recent months, adding to the pandemic-era residential boom.
“It’s a phenomenal dynamic that we’re seeing in the market,” Palmer said in an interview with Closing Bell, the day after the country’s fifth largest contractor reported fourth-quarter sales of $ 1.6 billion. which corresponds to an increase of 6% compared to the previous year. The net order increased by 46% compared to the same period last year.
“We’re seeing strength in nearly every region and in every consumer group. This is a change from a few months ago,” said Palmer, who has headed Taylor Morrison of Scottsdale, Arizona since 2007.
The housing market was one of the hottest parts of the U.S. economy when it emerged from the pandemic-triggered recession. However, Palmer said the heat was unevenly distributed as home sales picked up after the initial stagnation in the spring.
Initially, Palmer said Taylor Morrison, who operates in eleven states, has seen the greatest attraction among younger millennial buyers. They wanted to leave the apartments to find more space, or possibly move out alone for the first time.
Since then, the search for a new home has expanded to include all consumer groups and ages, she said. “The 55 [years old] Plus, the Lifestyle Shopper was the last one we saw come back because they haven’t really traveled for all the right reasons, but given all of our virtual tools, we see them in such a big way. “
Taylor Morrison’s sales of $ 6.13 billion in 2020 increased 28.7% from 2019.
Taylor Morrison’s shares rose 2.52% to $ 30.15 apiece on Thursday. The stock is up about 370% since its pandemic bottom of $ 6.39 on March 19.
Palmer said the home builder is currently facing higher costs, an industry-wide issue due to rising land and lumber prices. However, with demand this robust, Taylor Morrison has seen the price differential between new and existing homes narrow, Palmer said.
“When that happens, there is a real bias towards new things. So if I spend the same amount of money, I might as well have a new home,” she said.
Late last month, the US Department of Commerce reported that December housing starts rose 5.8% to a seasonally adjusted annual rate of 1.67 million units. It is the highest level since September 2006.
Another sign of strength in the real estate market is the length of time it takes for listed homes to sell.
“Inventories are historically low, but the real headline is that homes are selling in 17 days on average in December, 25 days less than the previous December,” Zillow CEO Rich Barton told Squawk earlier Thursday on the “street.”
“Houses are flying off the shelves. It’s a really fast market, and that has resulted in the highest house sales we’ve seen in 15 years,” added Barton.