According to a new report by the Home Builders Institute, the construction industry needs more than 61,000 new hires every month if the industry is to keep pace with growth. That would equate to 2.2 million additional construction workers by 2024. At the present time, it is estimated that there are 300,000 to 400,000 unfilled positions each and every month as skilled tradesmen continue to retire-out of the industry. Industry Aid – In response to the foregoing conundrum, one small step: The Home Builders Institute ( recently opened a new jobs training facility in Orlando, Florida. The BuildStrong Academy of Orlando will train and place area students who want to pursue careers in the skilled trades for the building industry. Officials expect the training center to serve approximately 500 new trainees by year-end 2022.  

New Residential Construction – Building permit issuance in September was at an annual rate of 1,589,000, 7.7% below the revised August rate but virtually flat year-over-year.

Housing starts were at an annual rate of 1,555,000 in September, 1.6% below the revised August rate but 7.4% above the September 2020 rate.

And housing completions reflected supply chain and labor issues — down 4.6% month-over-month and 13% year-over-year.   

On a year-over-year basis, permit issuance was up in all regions led by the Midwest (+3.7%), followed by the Northeast (+3.3%), the West (+3.1%) and the South (+0.9%).

For the September period, permits authorized but not started were up 12.4% nationally, year-over-year, and were the most prevalent in the Northeast (+63.2%) compared to +36.0% in the Midwest, +18.0% in the West and +15.6% in the South.

Builder Bits – Builder sentiment increased to a reading of 80 in October, up from 76 in September, which ended a three month decline, according to the NAHB/Wells Fargo Housing Market Index (HMI).  This compares to a reading of 83 one year prior.

Builder sentiment has been gradually cooling since hitting an all-time high of 90 in November 2020. While supply chain/material issues persist, the rate of cost escalation has eased with regard to some products resulting in builder confidence rebounding slightly.

On a regional basis, builder sentiment registered the highest in the South and West (80 and 83, respectively) with the Northeast increasing from 67 to 72 and the Midwest remaining static at 69. Base price increases are reportedly starting to plateau.

BuilderOnline reports that 38% of builders did not raise base prices in September and nearly half raised base prices $5,000 or less. More than 80% of builders continue to report labor shortages, up from 69% in August and more than half noted land disruptions, up from 40% the month prior while supply shortages in several product categories continue to cause construction delays.

New Homes v. Existing Homes – Lots of chatter about how new home and existing home prices appear to be married lately with both median prices coming in in the low $300,000s. But on a per-square foot basis within comparable markets, new home prices remain higher. Two factors to consider: 1) The existing home sector is skewing toward the higher price brackets as owners seek to retrieve their equity, and 2) New home construction is increasingly drawing more first-time home buyers, requiring builders to construct more affordable homes.

Custom Home Starts Wane – According to the Census Bureau’s most recent Survey of Construction (SOC), the share of custom homes started in 2020 (17.8%) is the lowest since 2005. Quarterly statistics show that the declining share of custom homes that began in 2020 continued into Q1 2021. When analyzed by Census Divisions, the data show that the highest custom home share in 2020 was 44.4% in the Mid-Atlantic Division, followed by the East South-Central Division and the New England Division at 36.8% and 36.7%, respectively. The lowest shares of custom homes were found to be in the South Atlantic Division (10.8%), followed by the Mountain Division at 12.5%.

Buyer Motivation – While the pandemic prompted a surge in home buying as workers enjoyed the option of working from home, the combination of Millennial, Gen-X and Baby Boomer buyers collectively shopping for homes at the same time pushed sales across all price points. Gen-Xers, the market segment most scarred by the Great Recession, have now become a dominant player in the housing market due, in large part, to burgeoning home equity. CoreLogic Q221 data reveal that homeowners with mortgages (63% of all properties) have seen their equity increase by $2.9 trillion+/- or 29.3% year-over-year.



The advent, and unfortunate continuation of the COVID-19 pandemic has had a positive effect on the game of golf. As one of the few recreational pursuits that can be played nearly year-round, is naturally socially-distanced, and does not require a mask, increased interest in the game has raised rounds activity and membership levels over the last 18 months. And the reach is broad. Not only has it enjoyed elevated activity by core players, it has brought newbies to the game and prompted the return of former golfers as well. But COVID-19 is not the sole motivator.

Golf and Entertainment – While the pandemic has been cited as spurring the most recent resurgence in golf activity, over the last few years it has not been the only influence. That honor goes to Topgolf, the golf and entertainment venue that has taken the world by storm. Purchased
by Callaway Golf earlier this year, Topgolf now has 70 locations in the United States, United Kingdom, Australia, Mexico and Dubai. While drinking, socializing and golf have long been symbiotic, Topgolf and its chief competitor Drive Shack have taken the concept to new heights.
The technology-rich indoor driving range operations have an emphasis on sociability with a nightclub vibe — eat, drink, and party hearty — all the while perfecting your golf skills.

Putting Pursuits – Taking the golf and party theme a step further, the most recent trend is the putting-oriented entertainment venue, aka minigolf. Both Drive Shack and Topgolf have developed putting facility business plans that have recently launched in the U.S. and the U.K.
Drive Shack has enlisted three-time PGA Tour Player of the Year Rory McIlroy to assist in opening 50 Puttery-branded venues in the U.S. by the end of 2024. Topgolf owns three Puttshack putting venues in London and one stateside in Atlanta, and has plans for more in Miami and Nashville, among other major metros. The next one slated to open will be Houston in 2022. Swingers, with two adults-only minigolf venues in London, recently opened a facility in DuPont Circle in
Washington, D.C. and has plans for another in New York City.

PopStroke, a Florida-based entity that is 50% owned by Tiger Woods, has unveiled two 36-hole venues in Florida. Much like the aforementioned enterprises, PopStroke integrates putting
courses with trendy F&B, a nightclub vibe and technology-enhanced competition, but unlike its competitors, PopStroke is played outdoors, on synthetic-turf tracks that resemble actual golf courses. Jackson Kahn Design created the courses at the first PopStroke in Port St. Lucie,
Florida, and Woods’ TGR design is responsible for the courses in Fort Myers, Florida. PopStroke plans for more venues include Orlando, Delray Beach and Sarasota, Florida, and Scottsdale and Glendale, AZ either this year, or early 2022. Projections call for 40 to 50 more facilities to open by the end of 2025, all in warm-weather locations for year-round enjoyment.

The latest iteration of minigolf is being taken to a new level with tech-driven balls. Similar to Puttshack’s Trackaball, PopStroke will have a sensor-embedded, Bluetooth-enabled “iPutt” ball.
The ball will count strokes and send scores to smartphone apps and to PopStroke’s electronic leaderboards, enabling players to compete virtually with others who play at different times and/or locations.

Communities and Minigolf – The growing popularity of “short game” and “no-experience-necessary” golfing has encouraged private and resort residential communities to add new minigolf experiences to their amenity portfolios. One example of blending minigolf with private
golf is The Peninsula on the Indian River Bay in Millsboro, Delaware. The Peninsula is an upscale country club community set on 800+/- acres surrounded by water on three sides. Home prices range from approximately $300,000 to more than $1.0 million. The new 9-hole minigolf course will complement the 18-hole, 7,200-yard Jack Nicklaus-designed championship golf facility, among other amenities.

Other examples of diverse residential environments that include minigolf are:

Sun City Summerlin, Las Vegas, NV

Blue Lagoon Condominiums, Miami, FL

Abacoa TND, Jupiter, FL

Reunion Resort & Golf Club, Orlando, FL

The Villages, Central Florida

A Brief History – Minigolf was initially documented in the June 8, 1912 edition of The Illustrated London News. Four years later Pinehurst, North Carolina introduced the Thistle Dhu as the first official standardized minigolf course in the U.S. “Thistle Dhu” is a play on words connoting “this will do,” meant to reflect a concept that a minigolf course “would do” if a regulation golf course were not accessible. Throughout the decade and into the next, the concept flourished.

In 1922, golf aficionado Thomas McCullough Fairborn developed an artificial turf made of cottonseed hulls, sand, oil and dye and by the late 1920s, New York City boasted more than 150 rooftop mini golf courses. In 1927, John Garnet Carter patented his version of the game on
Lookout Mountain, Georgia. Carter called it “Tom Thumb Golf” and within a few years, thousands of Tom Thumb Golf facilities had opened across the country.

The Great Depression took the wind out of the industry’s sails in the early 1930s, and it wasn’t until the 1950s/1960s that the concept resurged, replete with wishing wells, castles, windmills
and other fanciful obstacles. In 1988, Rich Lahey purchased the most prolific miniature golf development company – Harris Miniature Golf Courses Inc. – with the vision of transforming the
industry. At the time, most minigolf courses comprised portable plywood tracks dominated by windmills and clown faces. The pastime had lost its appeal and sales were dismal. But Lahey did not give up. Envisioning a landscaped layout with dramatic features and curb appeal, he designed a layout with undulating banked greens and holes with challenges and rewards ultimately restoring the curiosity in the concept and integrity in the industry that would return it to profitability.

And so here we are today — developing minigolf courses in highly profitable entertainment venues, upscale resorts, and private country club communities. The practice of “something for everyone” reminds us that diversity is tantamount to success.

Connecting the Dots . . .


Housing has been on a roll since last summer when the spring buying season finally emerged. The result is a decimated inventory, sky-high prices and no end in sight. But before coming to a
conclusion, let’s connect the dots.

Existing Homes – Existing home sales decreased for the fourth straight month in May to an annual rate of 5.8 million reflecting a deceptive 44.6% year-over-year increase. The expert believe lack of inventory to be the overwhelming factor for the four-month inertness but there
are other factors at play.

Total housing inventory at the end of May stood at 1.23 million units. While down 20% year-over-year, it’s up 7.0% month-over-month resulting in a slim 2.5-month supply at the current sales pace. Properties typically remained on the market for just 17 days in both April and May, down from 26 days in May 2020, and 89% of the homes sold this May were on the market for less than one month compared to 88% in April suggesting continuing demand.

That said, the Redfin Homebuyer Demand Index indicated a drop of 1% year-over-year the week ending June 20 th , taking it below 2020 levels for the first time in 2021 and bringing it down from
its high point of 18% which was achieved during the week of March 28 th . Further, the Mortgage Bankers Association Home Purchase Index declined 11% since March 24 th and pending home sales were reportedly down 10% from the 2021 peak (May 30 th .)

The real culprit appears to be price. The median existing home price for all housing types in May was $350,300, up 2.5% month-over-month and 23.6% year-over-year. By the week ending June 20 th , Redfin reports that the median home sale price reached a record level of $361,750.

The most active price range in the month of May was $250,000 to $500,000 accounting for 42% of existing home sales, up 47.9% year-over-year. The most popular price range was followed by $100,000 to $250,000 accounting for 26% of sales, down 1.7% from a year prior, reflecting the continuous constraint of inventory in this price range. For perspective, the $500,000 to $750,000 price range exhibited a 121.7% y/y increase; the $750,000 to $1.0 million range exhibited a 178% increase and the $1.0M+ category increased a whopping 244.5% year-over-year in May.

According to ATTOM’s Q2 Home Affordability Report, the trend toward declining affordability continues to gain traction with median home prices less affordable than historical averages in three of five U.S. counties as home prices outpace wage growth. This has resulted in ownership costs consuming 25.2% of the average national wage $63,986) in Q2, up from 22.7% in Q1 2021 and representing the highest ratio since Q3 2008.

While location plays a role in the degree of home value-to-income disparity, the trend is nationwide. On a regional basis, year-over-year price increases ranged from 17.1% in the Northeast, to 18.1% in the Midwest, to 22.6% in the South and 24.3% in the West, which, counter-
intuitively, also saw a 61.6% increase in the number of existing home sales, the highest of all regions for which the average rate of sales growth was 45.7%.

In the Seattle metro area, an astounding 580 homes have sold for $300,000 or more above their asking prices so far in 2021. According to Redfin, 4,078 homes in Seattle have sold for $100,000 to $299,999 above asking price and more than 6,300 have sold for $25,000 to $99,999 above asking price. The median home sales price in Seattle rose 26.1% year-over-year to a record $737,800 in May and more than 74% of Redfin offers faced a bidding war while the typical home sold in just five days.

New Homes – Sales of new single-family houses in May 2021 were at a seasonally adjusted annual rate of 769,000, 5.9% below the revised April rate but 9.2% higher year-over-year. Home sales increased in two of the four regions, growing 33% in the Northeast and 6.7% in the West. New
home sales were flat in the Midwest and down 14.5% in the South.

The seasonally adjusted estimate of new houses for sale at the end of May was 330,000 representing a 5.1-month supply at the current sales pace. Based on past performance, as we approach the 6.0-month supply mark, expect builders to slow the pace of construction even further.

The median sales price of new houses sold in May 2021 was $374,400 reflecting an 18% year-over-year increase. The average price exhibited a similar growth characteristic (+17%) at $430,700. The most active price range for new home sales was $300,000 to $399,999. In May, just one in
four new homes for sale (25%) were priced under $300,000. This compares to 44% in May 2020. While building material costs continue to shoulder the blame, lumber prices have come down in recent weeks.
So let’s connect the aforementioned dots:

Low inventory = Higher prices
Higher prices = Lower demand
Less Demand = Slower building
Slower building = Lower inventory
Lower inventory = Higher prices

Looks like a circular firing squad. Stay tuned . . .


Following the trends . . .

Under the “New Residential Construction” portion of the most recent Current Climate column, we noted that construction activity appeared to be in seasonal moderation in April. To recap: building permits stood at 1.76 million for a 60.9% year-over-year increase; housing starts were at 1.569 million, up 67.2% year-over-year; and, housing completions were at an annual rate of 1.449 million for a 21.7% y/y jump. However, all indicators reflected comparisons to a bleak 2020 in which COVID-19 ruled. On a month-over-month basis, all were either flat or down, hence the seasonal moderation observation.

Based on May activity, the observation appears appropriate. Building permits in May dropped to an annual rate of 1.681 million, down 3.0% month-over-month and just 34.9% above the May 2020 rate, reflecting a decrease of 26 percentage points, while housing completions dropped to an annual rate of 1.368 million, down 4.1% month-over-month and representing a 16.1% year-over-year increase for a 5.6 percentage point loss. However, while housing starts exhibited a 16.9 percentage point decline in growth year-over-year, on a month-over-month basis starts were up 3.6% to an annual rate of 1.572 million units.

Coincidentally, homebuilder confidence fell to its lowest level since August 2020 by June, to a reading of 81 for single-family homes, reportedly due in part to material shortages. However, the hypothesis doesn’t really sync with the increase in housing starts. Something to keep an eye on.

Further, at this writing Bloomberg reports that lumber prices posted the largest-ever weekly decline as sawmills ramped up output and buyers held off on purchases. Prices in Chicago fell 18% during the week of June 11th and according to the report, lumber futures have now dropped nearly 40% from the record high reached on May 10th.

In the Mortgage Activity portion of the Current Climate column, we reported on the week ending May 21st, when, after two weeks of increases, mortgage applications had dropped 4.1%, followed by two more weeks of declines. But what goes down, eventually goes up and applications did increase 4.2% in the week ending June 11th.

Nevertheless, purchase applications were down 17% from a year ago mid-month, theoretically due to mortgage interest rates that stubbornly hover above the 3%+ level.

Stay tuned . . .



In the most recent edition of BMB, we had the pleasure of announcing the inaugural Meyer’s Research LLC New Home Pending Sales Index. The index, published mid-month, showed a significant 14.3% increase in new home sales, year-over-year.

Two weeks later, the National Association of Realtors (NAR) Pending Homes Sales Index (PHSI) was published, showing a much lower 7.4% year-over-year increase. The disparity between the two piqued our interest, so we began to dig.

In addition to a two-week swing in publication dates, the primary distinction between the two indices is, obviously, the product analyzed. The Meyer’s NHPSI measures new homes under contract while the NAR PHSI measures existing home pending transactions.

A comparison of the two indices suggests that new construction is being welcomed by the consumer, translating to stronger building activity. Privately-owned housing units authorized by building permits in December were at an annual rate of more than 1.4 million for a 6%+/- year-over-year increase, while housing starts came in at more than 1.6 million, reflecting a whopping 40.8% y/y increase. In both cases, approximately two-thirds of the activity was for single-family homes.

Zillow reports that there were more than 120,000 fewer homes for sale at the end of the year, reflecting a 7.5% year-over-year decline. Low for-sale housing inventory has become the bane of our industry’s existence as household formations have far outpaced housing starts for several years now, resulting in potential first-time buyers becoming renters. Estimates show more than 123 million household formations as of September 2019, while the average number of single-family housing starts has hovered just above 820,000 for the last five years, suggesting a shortage of more than 400,000 units per year, on average.

New home construction activity is a prerequisite to our industry’s health. Just 3.5% of all U.S. housing units have been constructed since 2014 and approximately two-thirds of standing inventory is more than 30 years old, suggesting a significant amount of both functional and economic obsolescence.  So . . . let’s keep those housing starts coming!