Doug Bauer, CEO of TRI Pointe Homes, spoke at Building Industry Association/Orange County Chapter Outlook 2015, presented at Marriott Hotel in Irvine, Calif. on Jan. 26. He said that targeting Millennials (born between 1980 and 2000) could be the next opportunity for the housing industry.
Photo: Courtesy of Larry Shield

Our country has just recovered from the worst economic times since the Great Depression and now the housing industry is one its way back to rebound and grow. More than 800 professionals attended the Building Industry Association/Orange County Chapter Outlook 2015, presented on Marriott Hotel in Irvine, Calif. on Jan. 26.

"I'm excited about the future of the home building industry," said Doug Bauer, CEO of TRI Pointe Homes. "Millennials will drive this next generation and we can serve them for several years.

This well-educated and diverse group gets married later and has children later in life, said Bauer. They don't want to live in cities, but 55 percent would prefer to live in the suburbs.

"Customization is the key as they want a functional house, not lots of gadgets," said Bauer. "Going green is OK, but they don't want to pay for it. The solar has to already be a part of the house. Eighty percent of them are scared to buy a house, so it's our job to make purchasing a house a great experience."

Dr. Esmael Adibi, Chair of Economic Analysis at Chapman University, gave the economic forecast. When comparing academic and banks' forecast accuracy of the past six years, Chapman comes out No. 1.

"Our export market will grow 1.9 percent in 2015, which is the best growth rate since the recession," said Adibi. "Generating 2.9 million jobs will result in expansion. When you build homes you invest in this country because there are so many other residual expenses."

After the Great Recession, this country started to rebound in the second quarter of 2011, said Adibi. The growth in gross domestic product is up 8.1 percent from its previous peak. That's a decent number, but not as high as the expected 15 percent jump from a deep recession.

Adibi said corporations have invested an increase of 5.5 percent from the previous year. In 2006 this country built 1.8 million houses, which declined to 554,000 just two years later. Last year was the first time that more than 1 million houses were built.

"Is the housing market normalizing?" said Adibi. "A fixed housing market should be about 2 or 3 percent above inflation. "There's no way we could justify an annual increase of 20 percent housing prices in Orange County each year. We jumped from an average house costing $412,000 in 2002 and then going up to $786,000 in 2007. Then it dropped 31 percent the next year.