WEBVTT - HomeAdvisor's Hunter: Homebuilders Will Feel Squeeze (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

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<v Speaker 1>d C. Bloomber to Boston, Bloomberg twelve hundred to San Francisco,

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<v Speaker 1>Bloomberg nine to the countries, Jus General one nine and

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<v Speaker 1>around the globe the Bloomberg Radio Plus happened, Bloomberg got gone.

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<v Speaker 1>This is taking stock. Coming up on taking stock, We're

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<v Speaker 1>gonna take stock of home ownership. We'll also talk about

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<v Speaker 1>a shift that's going on toward long deferred major renovations

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<v Speaker 1>and remodeling projects. Talk about kitchens, bathrooms, and whole house remodels.

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<v Speaker 1>That's all coming up with Brad Hunter, chief Economist, Home Advisor.

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<v Speaker 1>Right now, let's go to Charlie Pellett to the Bloomberg

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<v Speaker 1>news room for Bloomberg Business Flag, and I thank you him.

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<v Speaker 1>Fox the Bulls getting a remodeling right now. Trading Laura

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<v Speaker 1>the dalv smp NESDAK all declining companies including Intel and

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<v Speaker 1>Southwest Airlines, disappointing investors, casting doubt on whether corporate earnings

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<v Speaker 1>will be healthy enough to keep equities trading at records.

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<v Speaker 1>Southwest Airlines prominent example, down right now by eleven point

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<v Speaker 1>one percent. It's said heightened competition is driving down airfares

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<v Speaker 1>more than in previous quarters as the industry's capacity expansion

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<v Speaker 1>outstrips demand. CEO Gary Kelly was on Bloomberg Television this

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<v Speaker 1>morning talking about the latest quarter. Up. We had all

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<v Speaker 1>time record earnings, earnings per share, We're up fifteen and

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<v Speaker 1>a half percent, so as a stellar quarter. We had

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<v Speaker 1>revenue growth of about five percent on a unit basis.

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<v Speaker 1>Our revenues were also up, so we're outperforming the industry

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<v Speaker 1>in every way. And again we've got Southwest down eleven percent,

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<v Speaker 1>dropping four sixty four thirty nine right now on shares

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<v Speaker 1>of Southwest Mario drawn. He says the European Central Bank

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<v Speaker 1>will not hesitate to add fresh stimulus if needed once

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<v Speaker 1>it has a clearer picture of the economic impact from

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<v Speaker 1>the UK's vote to leave the European Union, and the

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<v Speaker 1>National Retail Federation says US back to school spending will

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<v Speaker 1>grow eleven percent this year, a sign that families are

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<v Speaker 1>more confident about the economy and ready to stock up

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<v Speaker 1>on supplies. X on Mobile buying natural gas explorer inter

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<v Speaker 1>Oil Corp. For more than two and a half billion dollars.

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<v Speaker 1>X on Mobile down three tenths of one percent, crude

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<v Speaker 1>is down two and a half percent. West Texas Intermediate

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<v Speaker 1>crewde to forty four sixty of barrel Laura now by

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<v Speaker 1>one point one percent. Gold up thirteen dollars the ounce

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<v Speaker 1>the thirteen thirty two, a gain there of one percent

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<v Speaker 1>ten year of six thirty seconds, the yield one point

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<v Speaker 1>five SMP down ten to sixty two, a drop of

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<v Speaker 1>point five percent. And now let's take a look at

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<v Speaker 1>other stories making news. Thank you, Charlie from the Bloomberg newsroom.

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<v Speaker 1>I'm Jill Schneider. This news update is brought to you

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<v Speaker 1>by the Jeep Grand Cherokee, the most awarded suv ever.

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<v Speaker 1>your local jeep dealer today. Texas Senator Ted Cruz says

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<v Speaker 1>he will listen to Donald Trump's speech tonight, but Willie

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<v Speaker 1>endorse him for that. We turned to Bloomberg's Michael Barr.

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<v Speaker 1>Texas Senator Ted Cruz says he has not committed to

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<v Speaker 1>voting for Donald Trump, but he definitely won't be voting

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<v Speaker 1>for Hillary Clinton. Crews speaking to the Texas delegation in Cleveland,

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<v Speaker 1>was asked by a delegate why he didn't stick to

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<v Speaker 1>the pledge to support the party's eventual nominee. I am

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<v Speaker 1>not in the heaven of supporting the people who attacked

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<v Speaker 1>my wife and attack my father. Crews was vooed by

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<v Speaker 1>delegates after he refused to endorse Trump in his speech

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<v Speaker 1>at the Republican National Convention. Michael Barr Bloomberg Radio. The

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<v Speaker 1>White House is responding to comments Donald Trump made about NATO.

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<v Speaker 1>Trump said he might reconsider America's commitment to the Allies

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<v Speaker 1>in the event of a possible attack by Russia. Here's

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<v Speaker 1>White House spokesman Josh Ernest. NATO is the cornerstone of

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<v Speaker 1>American national security is a policy that the United States

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<v Speaker 1>has pursued under every post World War Two president Democratic, Democratic, Republican.

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<v Speaker 1>The n y p D says a man suspected of

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<v Speaker 1>tossing a hoax bomb through the window of a police

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<v Speaker 1>car is in custody after an overnight standoff. Chief James

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<v Speaker 1>O'Neil says the object was thrown from another vehicle. It

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<v Speaker 1>turned out to include a candle and a harmless electrical component.

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<v Speaker 1>Global News twenty four hours a day, powered by more

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<v Speaker 1>than journalists and analysts in more than one twenty countries.

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<v Speaker 1>I'm Jill Schneider, and this is Bloomberg, Charlie, and we

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<v Speaker 1>thank you. And again recapping the SMP five hundred indecks

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<v Speaker 1>down nine at one sixty three, a drop there of

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<v Speaker 1>five tenths of one percent. And again the down industrials

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<v Speaker 1>trading lower by eighty nine points, drop of five tenths

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<v Speaker 1>of one percent. I'm Charlie, PA, that's a Bloomberg business

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<v Speaker 1>flash you're listening to. Taking stocked with Pim Fox and

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<v Speaker 1>Kathleen Hayes on Bloomberg Radio. Housing getting its groove back.

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<v Speaker 1>Housing market has been show more signs of life. Sales

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<v Speaker 1>of previously owned homes last month hit their highest level

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<v Speaker 1>since two thousand seven. This all according to the National

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<v Speaker 1>Association of Real Chairs. Mortgage applications aimed at purchasing a

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<v Speaker 1>home have been on the rise, and hard housing stock

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<v Speaker 1>figures earlier this week showed that groundbreaking on new homes

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<v Speaker 1>rebounded in June. Here to tell us more about the

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<v Speaker 1>home building sector is Brad Hunter. He's chief economist for

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<v Speaker 1>Home Advisor and he can be followed on Twitter at

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<v Speaker 1>Bradley Hunter. Brad thanks very much for coming in. Good

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<v Speaker 1>to see him. All right. Tell people, first of all,

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<v Speaker 1>before we get into the details of housing, tell us

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<v Speaker 1>what is home Advisor. Home Advisor is an online marketplace

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<v Speaker 1>where we connect people who are homeowners that need help

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<v Speaker 1>from a professional to do some sort of home improvement project. So,

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<v Speaker 1>for example, if you're looking for someone to do the

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<v Speaker 1>electrical work on your house, or trying to maybe get

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<v Speaker 1>a carpenter or a subcontractor and of that. Yeah, a

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<v Speaker 1>remodel of a room or any kind of repair even

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<v Speaker 1>made services. Okay, And it is a division, separate business

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<v Speaker 1>division of I A c interactive correct, right, chief exactly,

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<v Speaker 1>Barrett Dialer. Maybe he calls for some who same as

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<v Speaker 1>match dot Com, same same parent companies match dot Com.

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<v Speaker 1>So in a sense, you're matching up the home build

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<v Speaker 1>the home improvement expert with with the customer. All right,

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<v Speaker 1>what's your take right now on the on the home

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<v Speaker 1>building industry in the United States, the state of housing,

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<v Speaker 1>The home building business is still proceeding a pace. You know.

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<v Speaker 1>I think that we're gonna be up twelve for single family.

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<v Speaker 1>I think that we're probably topping out on multi family.

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<v Speaker 1>I think we're hitting a saturation point now. It's hard

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<v Speaker 1>to make deals pencil nowadays on multi family where land

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<v Speaker 1>prices are. It's getting harder with the single family with

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<v Speaker 1>land prices too, So the builders are going more to

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<v Speaker 1>the remote locations and UH but as a consequence, they're

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<v Speaker 1>able to buy the land cheaper and they're able to

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<v Speaker 1>bring product in that sometimes is under two hundred thousand

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<v Speaker 1>dollars for a new house, let's express homes, that kind

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<v Speaker 1>of thing. So the demand is there, but the supply,

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<v Speaker 1>at least in the areas that are most most desirable,

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<v Speaker 1>are lacking. Demand is growing and supply is growing, but

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<v Speaker 1>it's a struggle to keep up in a sense because

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<v Speaker 1>of the land shortages and then the UH land prices.

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<v Speaker 1>We're back above previous peak land prices for for developed

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<v Speaker 1>lots now and a lot of markets around the country,

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<v Speaker 1>And of course we're not anywhere near well getting near

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<v Speaker 1>previous peak home prices. But the builders are feeling a squeeze,

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<v Speaker 1>and I think they're gonna feel a little bit more

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<v Speaker 1>of a margin squeeze going forward. All right, Let's say

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<v Speaker 1>you actually already have a home to live in UH

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<v Speaker 1>and you're looking for renovation and remodeling statistics to help

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<v Speaker 1>you understand some of the trends. You say that you've

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<v Speaker 1>noticed a shift that's going on. Yeah, we uh. We

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<v Speaker 1>track about ten million service requests going through our network

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<v Speaker 1>each years, so we have a lot of granularity, a

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<v Speaker 1>lot of detail on what's going on with home improvement,

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<v Speaker 1>and we're seeing a shift towards more major renovations that

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<v Speaker 1>is not so many of the sort of basic maintenance

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<v Speaker 1>and repair operations, but more like you know, entire kitchen

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<v Speaker 1>remodels and more of the bathroom remodels. Garage remodels are

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<v Speaker 1>up sixty percent. We're seeing multi room major remodels up

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<v Speaker 1>over the last year. You noted that the number one

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<v Speaker 1>fastest growing type of service request is for moving services. Yeah.

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<v Speaker 1>What does that tell you, Well, if you look at

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<v Speaker 1>what happened with the home sales number that came out

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<v Speaker 1>this morning, strong one point one pc increase um, there's

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<v Speaker 1>more churn, as I call it, and when there's churn,

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<v Speaker 1>there's more need for home improvement. What happens is the

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<v Speaker 1>person is getting ready to sell the house. They have

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<v Speaker 1>to get some contractors to come in, fix things up,

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<v Speaker 1>get it ready to pass the inspection, and get it

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<v Speaker 1>ready to show. So they're putting on fresh paint and

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<v Speaker 1>everything like that. And then when the new person comes

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<v Speaker 1>and buys it, they want to personalize it, they want

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<v Speaker 1>to make it their own place. So they say, well,

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<v Speaker 1>I don't like these cabinets, are going to replace those

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<v Speaker 1>in flooring and whatever. What is the Homeowner Happiness Intacts.

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<v Speaker 1>That's something that's actually officially coming out tomorrow, so you

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<v Speaker 1>and your listeners are getting a little bit of a

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<v Speaker 1>sneak preview of it. We surveyed eighteen thousand homeowners around

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<v Speaker 1>the country and we asked them questions across a spectrum

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<v Speaker 1>of three major categories, which is the dwelling, the community

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<v Speaker 1>they live in, and accessibility and convenience. So how happy

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<v Speaker 1>are you among across those those factors? And San Francisco

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<v Speaker 1>is the place where in the country people are the

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<v Speaker 1>happiest with where they live. Couldn't have something to do

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<v Speaker 1>with the weather. The weather is actually one of the

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<v Speaker 1>one of the strong indicators there. And uh, you know,

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<v Speaker 1>it's a it's overall, just across the board almost every

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<v Speaker 1>category of what people like. Uh. The one thing that

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<v Speaker 1>they did say that they didn't like so much is

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<v Speaker 1>the commuting. The commuting all right, so all right, So

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<v Speaker 1>if you go down from not down, but the next

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<v Speaker 1>city that you've found to be in the happiness index.

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<v Speaker 1>Where else? If you're not in San Francisco, where do

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<v Speaker 1>people want another? Another couple of popular places are Seattle, Denver. St.

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<v Speaker 1>Louis very strong in terms of the homeowner hack happiness

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<v Speaker 1>index in all of those cities. All right, give us

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<v Speaker 1>the worst, the one at the at the at the bottom.

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<v Speaker 1>What is it. I think it's a Washington d C. Yeah, Washington,

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<v Speaker 1>it's one of the words. And also commuting is a problem.

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<v Speaker 1>Milwaukee is also on your list. Yeah, not not high community.

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<v Speaker 1>That was not very high either. Brad Hunter, thank you

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<v Speaker 1>very much, Chief economist for a Home Advisor. You can

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<v Speaker 1>follow him on Twitter at Bradley Hunter. I'm pim Fox

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<v Speaker 1>and this is Bloomberg coming up on taking stock. It's

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<v Speaker 1>been thirteen months since the last time the SMP five

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<v Speaker 1>hundred broke new records. We've got Hillary Kramer, the president

0:11:10.400 --> 0:11:14.160
<v Speaker 1>chief investment officer of A and G Capital Group. Next.