LOCAL & NATIONAL FOOTPRINT

April 2017

LOCAL & NATIONAL FOOTPRINT

April 2017

DALLAS BUILDER ASSOCIATION INDUSTRY SUMMIT

APRIL 13, 2017

BEVERLY HILLS | SAN DIEGO | ORANGE COUNTY | BAY AREA | DALLAS | PHOENIX | DENVER | PHILADELPHIA | NEW YORK

April 2017

INTRODUCTION

April 2017

LOCALLY BASED, NATIONALLY EXPERIENCED

bit.ly/1Kmvbxv

Map of offices & studies

Beverly Hills | San Diego | Orange County | Bay Area | Dallas | Houston | Phoenix | Denver | Charlotte | Philadelphia | New York

April 2017

We’ve challenged the status quo

of research practices. Our new

processes bring unmatched data

speed and accuracy.

Our Data:

3:27Typical app

session length

2,377Total

subscribers

650Monthly active

users

April 2017

86,000Active land

listings

30,000Total

projects

50Projects

added daily

With over 25 releases, we

continue to deliver simpler and

more efficient solutions to get

answers faster.

Our Metrics:

ZONDA HIGHLIGHTS

Our clients are today’s leaders

in applying next-generation data

and technology to enhance

operations and opportunities.

Our Impact:

$50,000Estimated amount a divisions

saves on research staffing

10Freed hours a week

for employees

5Days saved on

initial due diligence

April 2017

HOUSING GROWTH

April 2017

DALLAS #2 IN JOBS CREATED LAST 12 MOS

Rank MSA Last 12 Mos Percent

1 New York-Newark-Jersey City 145.8 1.6

2 Dallas-Fort Worth-Arlington 119.3 3.5

3 Atlanta-Sandy Springs-Roswell 95.4 3.6

4 Los Angeles-Long Beach-Anaheim 87.8 1.5

5 Philadelphia-Camden-Wilmington 65.0 2.3

6 Washington-Arlington-Alexandria 62.4 2.0

7 Miami-Fort Lauderdale-West Palm Beach 56.1 2.2

8 Seattle-Tacoma-Bellevue 55.5 2.9

9 Orlando-Kissimmee-Sanford 50.9 4.3

10 San Francisco-Oakland-Hayward 50.4 2.2

11 Phoenix-Mesa-Scottsdale 49.3 2.5

12 Riverside-San Bernardino-Ontario 48.6 3.5

13 Boston-Cambridge-Nashua 44.9 1.7

14 Chicago-Naperville-Elgin 40.5 0.9

15 Detroit-Warren-Dearborn 37.8 2.0

16 Nashville-Davidson--Murfreesboro--Franklin 36.4 3.9

17 Tampa-St. Petersburg-Clearwater 36.1 2.8

18 Charlotte-Concord-Gastonia 35.5 3.2

19 Minneapolis-St. Paul-Bloomington 31.1 1.6

20 Las Vegas-Henderson-Paradise 30.2 3.2

23 Austin-Round Rock 27.0 2.7

29 San Antonio-New Braunfels 21.7 2.2

33 Houston-The Woodlands-Sugar Land 19.3 0.6

Source: Metro Area Employment Series, Bureau of Labor Statistics, Feb 2017

April 2017

DALLAS #2 IN SINGLE FAMILY PERMITS LAST 12 MOS

Source: HUD State of the Cities Data System, Feb 2017

Rank CBSA Name 2017 Permits 2016 Permits Change

1 Houston-Sugar Land-Baytown TX 35,951 36,211 (260)

2 Dallas-Fort Worth-Arlington, TX 30,688 28,307 2,381

3 Atlanta-Sandy Springs-Marietta, GA 23,193 20,478 2,715

4 Phoenix-Mesa-Scottsdale, AZ 18,746 17,513 1,233

5 Orlando-Kissimmee, FL 14,623 12,779 1,844

6 Austin-Round Rock, TX 14,183 11,519 2,664

7 Charlotte-Gastonia-Concord, NC-SC 13,362 11,852 1,510

8 Washington-Arlington-Alexandria, DC-VA-MD-WV 13,130 12,531 599

9 Nashville-Davidson--Murfreesboro, TN 12,375 11,078 1,297

10 Tampa-St. Petersburg-Clearwater, FL 11,016 9,308 1,708

11 New York-Northern New Jersey-Long Island, NY-NJ-PA 10,281 10,761 (480)

12 Denver-Aurora, CO 10,158 9,634 524

13 Raleigh-Cary, NC 9,582 8,837 745

14 Seattle-Tacoma-Bellevue, WA 9,466 8,787 679

15 Las Vegas-Paradise, NV 8,969 7,914 1,055

16 Jacksonville, FL 8,437 7,696 741

17 Chicago-Naperville-Joliet, IL-IN-WI 8,168 7,748 420

18 Riverside-San Bernardino-Ontario, CA 8,046 7,354 692

19 Minneapolis-St. Paul-Bloomington, MN-WI 7,830 6,813 1,017

20 Portland-Vancouver-Beaverton, OR-WA 7,283 7,291 (8)

23 San Antonio, TX 6,684 6,404 280

April 2017

DALLAS MEDIAN NEW HOME CLOSINGS UP 29%

April 2017

DALLAS MEDIAN EXISTING HOME CLOSINGS UP 35%

April 2017

DALLAS MEDIAN NEW HOME PRICE UP 46%

April 2017

DALLAS MEDIAN EXISTING HOME PRICE UP 29%

April 2017

TARRANT SIGNIFICANTLY CHEAPER THAN DALLAS

April 2017

Source: Zonda by Meyers Research, Open Street Map

April 2017

INCOME GROWTH ISN’T KEEPING UP – ONLY 22%

April 2017

• Labor availability

• Material cost increases

• Real Estate construction loans

• Land availability

FACTORS INCREASING COSTS IN DALLAS

April 2017

LABOR

April 2017

99,000

81,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Projected Workers Actual Employment

Source: Meyers Research analysis of data from the BEA, RIMS II multipliers, residential building permit data from Texas A&M Real

Estate Center, commercial data from Dodge Analytics, Public construction data from bidclerk.com for Dallas MSA.

DALLAS IS UNDERSUPPLIED BY 10K-20K CONSTRUCTION WORKERS

April 2017

Source: Bureau of Labor Statistics, Current Population Survey.

Employed persons by detailed occupation and age. 2017.

35%

29%

23%

21%19% 19% 18%

16%15% 15%

14% 13% 13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Total Hourly Wage Increase, 2012-2016

CONSTRUCTION OCCUPATION WAGE GROWTH OUTPACES MSA AVG

April 2017

Source: Bureau of Labor Statistics, Current Population Survey.

Employed persons by detailed occupation and age. 2017.

35

37

39

41

43

45

47

49

2011 2012 2013 2014 2015 2016

Carpenters Carpet & floor installers Cement masons

Construction laborers Equipment operators Drywall installers

Electricians Painters Pipelayers & plumbers

Roofers Structural steel workers Highway maintenance workers

MEDIAN AGE OF SKILLED CONSTRUCTION TRADES UP 5%

April 2017

0%

5%

10%

15%

20%

25%

30%

35%

40%

Pavingequipmentoperators

Highwaymaintenance

workers

Constructionequipmentoperations

Plasterers andstucco masons

Cementmasons

Carpenters Drywallinstallers

Pipelayers &plumbers

Electricians Brickmasons Painters

Millennial Share of Total Employment

Source: Bureau of Labor Statistics, Current Population Survey.

Employed persons by detailed occupation and age. 2017.

MILLENNIALS UNDERREPRESENTED IN SPECIALTY TRADES

April 2017

39% 40%42% 43%

44%46%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Carpet & FloorInstallers

Solar photovoltaicinstallers

Construction laborers Roofers Fence erectors Insulation workers Helpers, constructiontrades

Millennial Share of Total Employment

Source: Bureau of Labor Statistics, Current Population Survey.

Employed persons by detailed occupation and age. 2017.

MILLENNIALS ATTRACTED TO “GREEN” OCCUPATIONS

April 2017

MATERIAL COST INCREASES

April 2017

95

100

105

110

115

120

125

Source: Producer Price Index by Industry: Ready-Mix Concrete Manufacturing:

Ready-Mix Concrete for South Census Region, April 2017

CONCRETE PRICES UP MORE THAN 20%

April 2017

120

140

160

180

200

220

240

260

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Source: Producer Price Index by Industry: Gypsum Product Manufacturing:

Gypsum Building Materials, April 2017

DRYWALL PRICES UP MORE THAN 47%

April 2017

180

185

190

195

200

205

210

215

220

225

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Source: Producer Price Index by Commodity for Nonmetallic Mineral Products:

Glazed Brick and Other Brick, April 2017

BRICK PRICES UP MORE THAN 16%

April 2017

CONSTRUCTION LOANS & DEBT

April 2017

Source: FDIC Statistics on Depository Institutions, St Louis Federal Reserve.

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

19

84

:Q1

19

85

:Q1

19

86

:Q1

19

87

:Q1

19

88

:Q1

19

89

:Q1

19

90

:Q1

19

91

:Q1

19

92

:Q1

19

93

:Q1

19

94

:Q1

19

95

:Q1

19

96

:Q1

19

97

:Q1

19

98

:Q1

19

99

:Q1

20

00

:Q1

20

01

:Q1

20

02

:Q1

20

03

:Q1

20

04

:Q1

20

05

:Q1

20

06

:Q1

20

07

:Q1

20

08

:Q1

20

09

:Q1

20

10

:Q1

20

11

:Q1

20

12

:Q1

20

13

:Q1

20

14

:Q1

20

15

:Q1

20

16

:Q1

Mill

ion

s (

$)

RECONS Loans RECONS Loans, 2016$

US CONSTRUCTION LOAN BALANCES ARE ONLY AT 2000 LEVELS

April 2017

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Dec

-92

Sep

-93

Jun

-94

Mar

-95

Dec

-95

Sep

-96

Jun

-97

Mar

-98

Dec

-98

Sep

-99

Jun

-00

Mar

-01

Dec

-01

Sep

-02

Jun

-03

Mar

-04

Dec

-04

Sep

-05

Jun

-06

Mar

-07

Dec

-07

Sep

-08

Jun

-09

Mar

-10

Dec

-10

Sep

-11

Jun

-12

Mar

-13

Dec

-13

Sep

-14

Jun

-15

Mar

-16

Dec

-16

Tho

usa

nd

s ($

)

Real Estate Construction Loans (RECONS), Dallas-Ft Worth MSA

RECONS, 2016 $ RECONS, Current $

Source: FDIC Statistics on Depository Institutions, St Louis Federal Reserve.

INFLATION ADJUSTED DALLAS LOAN BALANCES WERE HIGHER IN 2000

April 2017

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

Dec

-92

Au

g-9

3

Ap

r-9

4

Dec

-94

Au

g-9

5

Ap

r-9

6

Dec

-96

Au

g-9

7

Ap

r-9

8

Dec

-98

Au

g-9

9

Ap

r-0

0

Dec

-00

Au

g-0

1

Ap

r-0

2

Dec

-02

Au

g-0

3

Ap

r-0

4

Dec

-04

Au

g-0

5

Ap

r-0

6

Dec

-06

Au

g-0

7

Ap

r-0

8

Dec

-08

Au

g-0

9

Ap

r-1

0

Dec

-10

Au

g-1

1

Ap

r-1

2

Dec

-12

Au

g-1

3

Ap

r-1

4

Dec

-14

Au

g-1

5

Ap

r-1

6

Dec

-16

Dallas-Ft Worth Real Estate Construction Loan Balances

National Bank (fed) State Bank (non-Fed) Thrift State Savings Bank State Bank (Fed)

Source: FDIC Statistics on Depository Institutions, St Louis Federal Reserve.

This spike is almost

entirely Comerica Bank

NON-FEDERAL RESERVE MEMBER LENDING IS VIRTUALLY GONE

April 2017

0

20

40

60

80

100

120

140

160

180

200

De

c-9

2

Jul-9

3

Feb

-94

Sep-9

4

Apr-

95

No

v-9

5

Jun-9

6

Jan-9

7

Aug-9

7

Ma

r-9

8

Oct-

98

Ma

y-9

9

De

c-9

9

Jul-0

0

Feb

-01

Sep-0

1

Apr-

02

No

v-0

2

Jun-0

3

Jan-0

4

Aug-0

4

Ma

r-0

5

Oct-

05

Ma

y-0

6

De

c-0

6

Jul-0

7

Feb

-08

Sep-0

8

Apr-

09

No

v-0

9

Jun-1

0

Jan-1

1

Aug-1

1

Ma

r-1

2

Oct-

12

Ma

y-1

3

De

c-1

3

Jul-1

4

Feb

-15

Sep-1

5

Apr-

16

No

v-1

6

Dallas-Ft Worth Institutions with RECONS loans

National Bank (Fed) State Bank (Non-Fed) Thrift State Savings Bank State Bank (Fed)

Source: FDIC Statistics on Depository Institutions

50% FEWER CONSTRUCTION LOANS SINCE 2008

April 2017

INCOME REQUIRED TO BUY MEDIAN PRICED HOME UP 97%

April 2017

LAND

April 2017

Source: Zonda by Meyers Research, Open Street Map

DALLAS-FORTH WORTH PATH OF GROWTH

April 2017

Source: Meyers Research analysis of County Appraisal District data, Great Schools data

LEADING SCHOOL DISTRICTS BY VACANT LAND

7

4

3

6

9

9

7

5

7

8

4

8

7

6

7

7

9

6

8

3

0 10000 20000 30000 40000 50000 60000 70000

Princeton Independent School District

Crowley Independent School District

Dallas Independent School District

Eagle Mountain-Saginaw Independent School District

Aubrey Independent School District

Prosper Independent School District

Community Independent School District

Slidell Independent School District

Anna Independent School District

Farmersville Independent School District

Blue Ridge Independent School District

McKinney Independent School District

Ponder Independent School District

Pilot Point Independent School District

Krum Independent School District

Sanger Independent School District

Celina Independent School District

Denton Independent School District

Northwest Independent School District

Fort Worth Independent School District

April 2017

Source: Meyers Research analysis of appraisal district data and Great Schools rankings.

65% OF LAND IN SCHOOL DISTRICTS RANKED 7 OR LESS

313%

43%

54%

620%

726%

820%

914%

100%

April 2017

CONCLUSION

April 2017

WHAT PEOPLE USUALLY THINK ABOUT AUTOMATION

April 2017

NTTA’S DRONE LAWNMOWER – REPLACES 15 WORKERS

April 2017

“In terms of artificial intelligence taking over the jobs, I think we’re so far away from that that it’s not even on my radar screen. I think it’s 50 or 100 more years.”-Treasury Secretary Steve Mnuchin, 2017

NO LEADERSHIP ON AUTOMATION RISK

April 2017

AUTOMATION IS REPLACING WORKERS IN FINANCE AND INSURANCE

April 2017

0% - 25%23%

25%-50%6%

50% - 75%16%

Greater than 75%46%

Risk Not Classified

9%

Source: Bureau of Labor Statistics, May 2016 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates

Carl Benedikt Frey & Michael A. Osborne, THE FUTURE OF EMPLOYMENT: HOW SUSCEPTIBLE ARE JOBS TO COMPUTERISATION?,

Oxford University, 2013, Analysis by Meyers Research

46% OF DALLAS JOBS FACE 75%+ CHANCE OF AUTOMATION BY 2030

April 2017

BUSINESS, FINANCE, TELECOM, AIR DOMINANT SECTORS

Air transportation

Aerospace products and parts

TelecommunicationsCredit intermediation and

related activities

Computer and electronic products

Finance and insuranceAdministrative and waste

services

Employment services

Information

Insurance carriers

Professional and business services

Professional and technical services

Leisure and hospitality

Durable goods

Local government

Education and health servicesFederal

0

0.5

1

1.5

2

2.5

3

3.5

4

-0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4

Loca

tio

n Q

uo

tie

nt

(20

16

)

Percentage growth 2006-2016

Star

Emerging

Mature

Transitioning

Source: Meyers Research analysis of Texas Workforce Commission, Bureau of Labor Statistics data

April 2017

WHITE COLLAR AUTOMATION IS COMING

Occupation Average

Salary

Risk of

Automation

Insurance Underwriters $73,660 99%

Cargo and Freight Agents $50,870 99%

Claims Adjusters, Examiners, and Investigators $71,900 98%

Insurance Appraisers, Auto Damage $63,410 98%

Credit Analysts $89,050 98%

Loan Officers $81,070 98%

Accountants and Auditors $81,310 94%

Budget Analysts $88,780 94%

Hotel, Motel, and Resort Desk Clerks $20,960 94%

Market Research Analysts and Marketing Specialists $83,310 61%

Cost Estimators $68,180 57%

Compensation, Benefits, and Job Analysis Specialists $77,000 47%

Human Resources, Training, and Labor Relations Specialists $70,950 31%

Business Operations Specialists, All Other $81,930 23%

April 2017

For more information, contact:

SCOTT DAVIS

MEYERS RESEARCH

832.236.5486

SDAVIS@MEYERSLLC.COM

TIM COVER

MEYERS RESEARCH

214.597.7740

TCOVER@MEYERSLLC.COM