Time Out! Rethinking Homeownership? Or Rethinking Newsweeklies?

The people that bring you People have too much spare Time on their hands, or so it seems. Maybe it’s just the month of August, but it strikes us that the editors at the nation’s remaining significant and viable newsweekly go off their rockers each summer as they pick their dog days issue cover topics.

This one, for instance.

This cover ran August 17, 2009. The story tells Time’s audience of millions that the widely held belief, or myth, that exercise and cupcakes lead to weight loss is untrue. “It’s what you eat that really counts” is the contrarian, myth-busting revelation of this story. This really goes to prove that hell hath no fury–for an editorial staff of a news weekly–like a slow news month in an off election year.

This year, of course, it’s not an off election year. It’s a big-time mid-term election year, when every seat in the House is up for election, and important Senate seats are in play, and very likely, a politically unbalanced equation in Washington will wind up more balanced after the first week in November. 

Still, in August, here’s what Time’s editors came up with as their thought-leading cover idea for the month’s last week:

 

Now, it’s not exactly news that 1) people who should not have bought houses bought them, 2) bankers who should not have lent money to those people who should not have bought houses lent it, 3) GSEs that should not have securitized those mortgages securitized them, and 4) Wall Street firms that should not have structured investment vehicles full of those securitizations did that, and 5) AIG should probably have not insured credit default swaps at such huge profits either.

What we’re missing here, is the same thing we’re missing when Time informs us that cupcakes, exercise, and weight loss don’t go together. The editors suggest that lots of exercisers are getting fat because they don’t know they can’t overeat, and in the same way, they implicate Americans’ long-held dream of homeownership in the monstrous mess that our economy is in. That’s logic befitting the people who bring us People, so we can hardly blame them.

We have been reporting for months now that home building company managements were really nervous in anticipation of the end of the tax credit’s run on April 30, but they are mostly in favor now of a clear and definitive statement from our elected officials that there will be no further federal tax credits for home buyers.

As a raft of negative headlines that ended August gives way to a sputtering smattering of positive tidings this week–PMI, weekly unemployment claims, retailers same-store sales, existing home inventory decline, and signs of stabilization in pending home sales–some building managements remain nervous about two key drivers.

One–which will get clearer tomorrow after the Bureau of Labor Statistics releases its month of August jobs report–is the most important factor affecting those who might want to join the ranks of homeownership. The other is access to credit, which will remain in the thrall of considerations and deliberations on the fate of the government sponsored enterprises and their role in home finance.

We don’t believe–despite the rhetoric of lobbyists who are out to debunk the myth of homeownership the way some folks feel they need to destroy the myth that exercising and eating dessert with impunity should still result in weight loss–that people will ever heed the people that bring them People when it comes to suppressing their desire for the benefits of owning their own home.

The trillion-plus-dollar problem with household finance gone amuck that sits on our collective balance sheets did not occur during the slow news month of August. It was a decade in the making.

The big question for all of us is how to get people, as in the people who People goes to, to save money and spend money in ways that don’t come back at them in the form of new taxes. That balance–saving and spending–needs to occur even as so many Americans repair their household balance sheets, and the U.S. repairs its own.

Clearly, as the behavior of households increasingly mirrors that of companies, we’re going to go through a limbo period for home buying trends that will last through the mid-term elections. Yale economist Robert Shiller explains this as can’t-help-it psychologically driven behavior when elections are imminent. “People just like to know” before they commit to a big-ticket item like a home, he says.

So, when the re-balancing of the political spectrum occurs, and corporations stop parrying on whether to reinvest their troves of cash into their businesses, we may begin to see home buying demand enter its next phase.

So far in 2010, we’ve seen “surprising” turn to “choppy” turn to “sluggish.” What comes next will queue up what may be the long-awaited return of housing’s prodigal child, a Spring Selling Season in 2011, and better yet, unabetted by Uncle Sam.

So, what’s the over under on what Time will have as its cover story in August 2011?

News Flash: Ashton Woods Puts $75 Million to Work for Home Builder Acquisition

Correction–An earlier version of this post contained two incorrect statements: One of Ashton Woods’ banks was misstated. The correct name is Regions Bank. Also, Cory Boydston’s title while serving at Beazer Homes was incorrect. The correct title was senior vice president and treasurer at Beazer. We regret the errors.

Ashton Woods, the Roswell, Ga.-based, No. 24-ranking home builder in the nation, completed a re-capitalization with investors 40 days ago that will provide the company with $50-to-$75 million over a five-year period, to target acquisition and set up or strengthen beachheads in five or more markets.

“We’ve been able to do a couple of things in a very tough market,” said Ashton Woods CEO Tom Krobot in an interview. “We extended our revolver with Wells Fargo and Regions Bank for two years, and we went to Wall Street and were able to get capital to expand our business. We really have a very good story,” Krobot added. “In our fiscal year–May to May–we made money.”

Krobot is under a confidentiality agreement with his new investors, and as a private company, doesn’t need to disclose them.

He said the adrenaline infusion of acquisition capital will go immediately toward beefing up Ashton Woods’ fledgling position in Raleigh, where it has a single subdivision open with a new model, and just closed on a second subdivision. Additionally, Ashton Woods recently hired a land acquisition person in Austin, and will look to quickly grow in that market, as well as San Antonio,  Charlestown, S.C., and Minneapolis.

“We’re also looking at opportunity in Charlotte and Denver,” Krobot said. Currently, Ashton Woods operates in seven cities in five states: Arizona, Florida, Georgia, North Carolina, and Texas, and reported $320 million in 2009 revenue on closings of 1,319 homes, according to Builder magazine.

Ashton Woods has hired San Francisco-based home building and developer mergers and acquisitions consultancy Avila Advisors to identify both home building company candidates and land position opportunities that could represent a fit within Ashton Woods.

“We’ve put together a list of 100 company targets with strength in these markets,” said Tony Avila, CEO of Avila Advisors. He and the firm’s president, Hector Calderon, will head up the match-making initiative, looking not only for operators, but for land and lot positions that suit Ashton Woods’ strategic aims.

“It’s a first- and second-move up emphasis, so purely entry-level players probably won’t be a strong fit,” said Avila.

If you want to contact Tony Avila, click on this link.

Krobot attributes the company’s acquisitive mode to four positives that position Ashton Woods for opportunism just as many of its peers are fighting for dear life.

• strong locations and a conservative land strategy during the run-up. “We never exceeded three-and-a-half years of land supply,” said Krobot, “and we’ve never followed the crowd when it came to land acquisition. Right now, we’ve got less than a three year supply, which is a bit of a concern, but we’ll work with that now.”
• Redesigned product: “We dropped more than 80 floor plans and now we’ve got about 210 to 220 houses that have been value engineered to open up living space and take out costs, and they look pretty darn good inside,” said Krobot.
• Unit pricing: Ashton Woods converted to this method of sourcing and purchasing to pay for materials based on the actual unit price of the material so that it can manage vendors’ mark-ups more precisely.
• Customer satisfaction: Krobot asserts that although the latest J.D. Power rankings haven’t come in, Ashton Woods has ranked as the first, second-, or third-best builder in home buyer customer satisfaction in its markets. “We’ve been able to maintain a strong service level through it all, and that’s helped,” said Krobot.

In early 2009, Ashton Woods negotiated a swap of all $125 million of its senior subordinated notes that carried a 9.5% interest rate and were due in 2015 for 11% senior subordinated notes due the same year, but that carry no interest charges for the first three years. The pot for the note holders was also sweetened by giving them Class B interest in the company equaling 19.728% of the company’s equity. In addition, Ashton Woods amended its senior credit facility to provide as much as $95 million in borrowing capacity. The restructuring also included the infusion of $20 million by the company’s original owners. By mid-2009, the company brought on finance heavyweight Cory Boydston, who signed on after serving as CFO of Starwood Land Ventures and senior VP/treasurer at Beazer.

Ashton Woods, which like Mattamy Homes, has a Canadian parent company, the Great Gulf Group, which builds both towers and single family residences in Canada. The Canadian residential real estate market has held up fairly solidly and may account for the fact that both Ashton Woods and Mattamy have acquisitive strategies in the U.S. market right now.

As for the U.S. market, Krobot sees continued headwinds in the near future. As the company’s fiscal first quarter drew to a close in August, Krobot said his firm’s closings decline about 6% year-on-year vs. 2009, which, he said, he’ll take.

“When you look at the overall market drops of 20% or 27% versus this period last year, 6% is pretty good,” he said.

Home Builders Eye the Gap Between New and Existing Sales

It’s one of the things that makes home building executives lose sleep these days (or nights). It’s what no home building company executive alive ever had to contend with in all of his or her downturns past. It’s the yawning divide between existing home sales and new home sales.

Bill, the rock-star economics and housing analysis blogger formally known as Calculated Risk, calls the widening spread between resales and new sales The Distressing Gap.  In fact, he traces the ratio of new to existing home sales going back to the 1960s, and finds that for most of that time, the relationship between new and existing has been pretty steady, “until recently.”

So, you can see that no matter how many cycles any active home building executive tells you he or she has been through, none has been through one whose plot line has run like this one.

SAI Consulting principal Fletcher Groves plots the ratio a slightly different way. It looks this way.

An interesting way to state the ‘distressing gap’ is the ratio of new home
sales to sales of existing houses. 

EOY    Approx. Ratio   
1994    1:7.0   
1995    1:5.8   
1996    1:5.3   
1997    1:4.8   
1998    1:5.5   
1999    1:5.0   
2000    1:5.9   
2001    1:5.6   
2002    1:5.7   
2003    1:5.5   
2004    1:5.2   
2005    1:5.7   
2006    1:5.4   
2007    1:7.4   
2008    1:7.9   
2009    1:12.5   
2010    1:13.1   

The ratio was in a narrow range of 1:5 to 1:6 for about 12 years, starting
in about 1995, until 2006.  In 2007, the ratio widened by about 40%, from
1:5.4 to 1:7.4, and has since widened by almost 80%, from 1:7.4 to 1:13. 

The ratio has widened by almost 150% since 2006.  If homebuilders didn’t
know it before, they know it now;  they don’t just compete with other new
home builders. 

We know that Calculated Risk says that sales of distressed and foreclosure homes are the cause of the gaping gap, and that’s fairly evident. His concern is that until–many, many months from now, the inventory of troubled-loan homes finally gets cleared–new homes, and their contribution to GDP via the residential investment component will be a non-starter.

We asked Fletcher about whether he sees a return to the norm in the ratio anytime soon, as we have a hunch that younger buyers hitting the market in the next two to five years will begin to bias the trend back toward new.

Here’s his reply.

I think it is fundamentally about the relationship between supply and demand.  I am not sure how the demand component works, but builders exercise more control over the supply of new homes than owners exercise over the supply of existing homes.  And, to a degree, the control that builders exercise over supply is actually lenders exercising control over builders. 

 I think that factor has resulted in the declining percentage of new home sales to total sales.  But, I also spoke with David McCain at MPKA this morning, and we both concluded that supply in the absence of demand is irrelevant. 

 Somewhere in all of this is the issue of how much capacity remains, or will remain, in the homebuilding industry, and – here is where my interest comes in – how productively that capacity will be utilized when demand finally returns. 

 I think you can say, for whatever reason, the ‘normal’ ratio (or maybe the historic ratio) of new homes sales to sales of existing homes has been about 1:5, and, right now, it is at 1:13.  Where does it inflect?  I don’t know.  CR thinks the current ratio is a reflection of the current level of distressed sales.  I don’t know if I agree or disagree. 

 I think you can also say – unless there is some kind of socio-economic plate shift going on in homeownership – that the demographics point to a much higher long-term level of demand for new housing than the level of demand that is present now.

We agree that builders can and do control supply right now and that the only thing missing from the low supply equation is a prevailing sense of scarcity. Aligning with folks like SAI, builders can use velocity to overcome some of the price and profitability hurdles they encounter in a market where value is still on a slippery slope.

It used to be that marketing and selling skills played a role in creating need and urgency where there once was none. But that was when banks were more willing to loan money for home mortgages.

We’ll conclude that certain home builders will find ways to exploit the wide gap between existing and new home sales as their opportunity–some have already begun to do that by widening the value margin in the total cost of home ownership with energy and water efficiency new homes.  This is one area where existing home sellers can not gain an advantage over new home builders.

Does Rupert Murdoch’s US Flagship Have Something Against Home Building?

News flash. The Wall Street Journal is anti-home builder.

Or else why this cynical piece of snittishness in the Op-Ed pages of the WSJ today?

If a housing recovery is finally upon us, it will be no thanks to Washington’s serial interventions, nor to the home builders who have cheered so vigorously for them. Together with the Realtors and mortgage bankers, the home builders form a lobbying army of the Potomac. The mission is to secure ever higher federal subsidies for housing. The strategy is to convince politicians of both parties that a robust economic recovery can only occur if residential real estate is booming again. This is false.

Read More

• Plunge in Home Sales Stokes Economy Fears

With the exception of temporary bubbles caused by reckless monetary policy, rising home prices are merely a symptom of a vibrant economy, not a cause. The true cause of economic growth and higher living standards is rising productivity, which occurs when societies wisely invest in many things, such as new technologies and new ways of doing business. Housing is just one of those things. Setting as a goal the maintenance of high levels of investment in housing has obvious political appeal, but it’s junk economics for a nation that wants to innovate and grow.

Here, this afternoon, the Journal’s Developments blog features young Robbie Whelan writing about home building company woes seems to have some confusion about exactly what an annual rate or a run rate of new-home sales is, plus he mixes up new-home sales (orders) terminology with “closings,” then runs rough-shod with the industry implications with an illogical segue over to Toll Brothers’ earnings story.

To follow Whelan’s logic, the public builders, who represent more than one in five new homes sold in today’s market, wouldn’t regard the collapse in the market as very significant. At least, that’s the way his story reads:

….buyers were closing on between 350,000 and 400,000 new home a year in 2009, a doldrum year for the U.S. economy. For each month between April 2003 and June 2006, Americans were buying new homes at a rate of more than 1 million houses per year. From 1998-2001, perhaps a more normal time in the U.S. housing market, most months showed an annual sales pace of 850,000 to 950,000 homes.So what do these record lows mean for builders?

For the publics, maybe not much. Toll Brothers Inc., a standout in the sector because it’s a company that only builds high-end, luxury residences, posted its first quarterly profit since 2007, and stock analysts from Standard & Poor’s and Stifel Nicolaus maintained “buy” and “hold” ratings on the company’s stock, suggesting that its price could go north. Every public builder’s stock price was up on the New York Stock Exchange at 11:30, despite a slight decline in the Dow Jones Industrial Average.

Guess we’re to infer here that if public builders’ share prices are doing okay, their business is fine.

A string of analysts’ quotes on the outlook for public builders’ stocks devolves into an entirely incomprehensible, disconnected, and none-too-flattering series of quotes from NAHB CEO Jerry Howard, patched together with little context and no conclusion save the obligatory, “Obviously we have to be more prudent than we were, but no one knows how it’s going to play out.”

Glad we read that piece.

Don’t you agree, though, that the Wall Street Journal is progressively anti-home builder/developer?

The New-Home Absolute Inventory Endgame–Steal Share or Perish

You should be concerned about two groups of people who may not buy your new homes today.

One of those groups, you may be able to do something about before the end of the year; the other, probably not.

One group is the afraid. They fear that evil in the U.S. economy lurks in nearby waters, and could strike a lethal blow to household income prospects at any moment with no warning. Private companies have no conviction about whether to conserve cash or invest it in 2011 growth. Public agencies and local governments are taking a chain saw to their budgets, pink-slipping scores of workers each day. If a household eluded the mass layoffs of 2008, its earners can hardly take comfort from the pulse of the U.S. economy’s current recovery. Plus, more likely than not, people have immediate friends, family, and colleagues who number among the unemployed, the unemployable, or the growing ranks of those who don’t even hope to work.

GDP’s faintest flicker of recovery didn’t do much of anything to assuage that fear. So, one of your buyer groups–count them among those you can regard as “pent-up demand” for some future economic cycle–is, after all, not going to respond to the appeal of owning a new home in today’s (i.e. the balance of 2010, through 2011, and into 2012) housing enviroment.

Which leaves the other group who may not buy your new homes this year. Opportunists. They could buy, and they don’t suffer the paroxysm of fear that the other group does, but they still may not pull the trigger on a purchase. Why?

Prices. They’re waiting. Waiting now proves to be the smart thing because if they wait, prices go down, and then they can wait some more, so that prices can go down some more.

Opportunists are your best hope for the moment on the margin. They’re motivated, but just as the Uncle Sam home buyer tax credit pulled buyers forward to meet the cutoff deadlines, the probability that prices will succumb to downward pressure for an undetermined time in the future is pulling buyers backward from today’s market.

Overcorrections hurt.

Still, when we talked with home building company executives in December 2009 and January 2010, we got a clear sense from most of them that this week’s existing homes and new-homes sales data was a distinct possibility they were trying to gird themselves for. So, we don’t think many in the ranks of home building company managements are surprised by the headlines.

New-home sales for July, on a not seasonally adjusted basis, came in at 25,000. An industry community whose capacity in July 2005 was 117,000 not-seasonally-adjusted sales is wondering just what to do with itself, having lost almost 80% of its business.

In 2005, the top 25 home builders probably sold 25,000 homes in a single month, and now, thousands of companies are trying to remain viable while half of the demand pool is in duck-and-cover mode and the other half is playing hide-and-seek as prices erode. Absolute inventory is low–at 210,000 or so–and a good sales month or two will change that number from bloated to undernourished. Scarcity is a Spring Selling Season away from right now.

What to do?

Well, even the reactive Wall Street analysts are reporting that their in-the-trenches home builder sources are telling them that there’s a widening spread between government-released national data and what’s happening at the store level.

Hanley Wood’s own Hanley Wood Market Intelligence–which this week unveiled its new Housing IntelligencePro market analytics tool–notes that public home builders, through the first half, anyway, notched impressive year-over-year gains, and are continuing to report that same-store sales (sales per month per community) are holding somewhat steady after a downward gyration in May.

What we see ahead for enterprise home builders–perhaps woefully–is a two-year share war. Advantage goes to whomever can 1) take dead-aim on the likes of the 25,000 intrepid souls who remained in the market as buyers in July, 2) win over a share of probably an equal number of the Opportunists who are apt to await the best deal in kingdom come.

Those who can bring the Opportunitists back in–even against a heavy tide of foreclosure and distressed sales–will be guaranteed a seat at the table when the cards get dealt this time next year.

A tactic that may be worth trying is this. Don’t give in on pricing. Focus your best sales associates and your biggest marketing push on communities that have kept up a pulse and push them for all their worth without conceding pricing. On the other communities, do what the rest of the world is doing–extend and pretend. Don’t capitulate.

Let buyers–especially the Opportunists–know the bottom is in. If it’s not going to get better than it is now, then there’s no reason to wait.

If the bond market’s in a bubble and the equity markets continue to underdeliver, homes’ value may start looking like a good healthy place for dollars.

Just a thought.

Taylor Morrison’s Sheryl Palmer Unplugged

Earlier this week at our DC offices, we got elating tidings that our treasured and indispensable co-worker, Boise-based Christine Serlin, gave birth to her second child, Ella Jane. Like her mother, Ella Jane seems to like to do things a bit ahead of schedule, which Ella Jane’s older brother, 3-year-old Oliver, and her mother and father were all for. But when someone who’s “indispensable” goes out a week earlier than planned, it has a Charlie Chaplin-like domino effect that can be amusing to witness, but not if you’re the one who all the dominos fall on.

At any rate, we’ve been busier these past few days than we’d ever imagined, especially for the Dog Days of August. But that shouldn’t add up to punishing you, so we’re going to do something a little different—and hopefully compelling—to thank you for your continued loyalty and your inadvertent tolerance in light of our insanely overmatched bandwidth. We’re going to give you something extra today, just for being interested enough to open this post.

It’s this. On Monday, we wrote about Taylor Morrison president and CEO Sheryl Palmer’s No. 1 point of focus, getting her team in tact to Calendar 2011. We tipped you off as to why we are drawn to the Taylor Morrison story. It’s an entity and a set of land assets that are attracting interest among potential acquirers who can afford to take a longer ramp way to dominance in housing’s next “up” cycle. At the same time, Taylor Morrison’s UK-based parent company Taylor Wimpey LLC, may (or may not) find it advantageous to spin off or sell its North American unit if the bid price is right.

With the new-home business in such a state of limbo, and with share prices of home builders so undervalued right now, one would hardly think of now as the time either buyer or seller would find motivation. But that’s precisely when these dramas tend to occur—when few expect them. Witness flashes of mergers and acquisition appetite in other industries, witness painfully inconsequential returns on many conventional investments, witness historically favorable rates on borrowing costs for big deals, and witness home builders sitting-duck caches of “dry powder” that will vanish into dust eventually if time and a non-starter housing market drag on into 2011.

If a snap-back in pace, or at least a resurgence in consumer sentiment doesn’t enter the 2010 4^th Quarter zeitgeist, we’re betting on another round of shrinkage in the key cast of home builder characters in the drama.

Citibank home building analyst Josh Levin appears to agree. From a note he wrote earlier this week—following, of course an earlier blast we put out on the prospect of home builder m&a—Levin says:

“We think that the likelihood of consolidation has increased for five reasons: (1) new home sales have dropped to levels almost none of the management teams anticipated and have demonstrated no recovery so far (2) in sharp contrast to the 1Q10 earnings calls, on the 2Q10 calls managements sounded rather discouraged about the industry’s near-term growth prospects (3) most managements are now focusing more on gaining market share (4) the broader economic outlook, particularly the prospects for job creation, has deteriorated markedly and (5) as discussed below, size confers an advantage. Although it is difficult to quantify, our best assessment is that some consolidation is more likely than not if the outlook for job creation were to materially worsen or if the next spring selling season shapes up to be a bust.”

So, we think you’ll be interested in our extensive verbatim interview with Sheryl Palmer below, where you’ll get to know who she is, how she thinks, and what her take is on the drivers of operational success for both Taylor Morrison and home builders in general.

During the course of over an hour, we talked about Taylor Morrison’s working relationship with its UK parent, the company’s post-merger integration issues, strengths, and weaknesses, operational threats and opportunities of the moment, its geographical footprint, its land-buying strategy, its headquarters-to-field balances, and the constant rumor-mill that has them on the block, as well as more personal Palmer insights, motivations, and ambitions.

(Editor’s Note: this transcript is faithful to the conversational, stream-of-thought exchange that occurred and hasn’t been air-brushed for grammatical correctness.)

Enjoy.

BB: What brought you to Taylor Morrison in 2007, and what were your initial challenges?

SP: I was looking to the company because of the international presence. When I actually joined Morrison, I had kind of left home building business for a while. I wasn’t sure what the next chapter was going to be.

I went over and met with the team. First I interviewed with the management, and then I interviewed with the Chairman Norman Askew, and I was really intrigued.

Within my private and public prior lives, I’ve had some just remarkable experiences that I wouldn’t trade for a moment, between Blackhawk and Del Webb and Pulte… Vast experience and fabulous people I have gotten to work with and experience.

But there was something quite unique about the international presence. Even though I had worked with Pulte, which had international, I certainly was never involved in it. So with my eyes probably half open to it, two things happened for me.

One, I thought the company was at a fast rate of change in its maturation process. It really needed both help and sophistication to get to the next level, especially given the market dynamic. Two, I thought there was so much to be learned from a company that does the same thing we do differently.

So, I jumped in.

Six months later, the discussion started – now the discussion of the merger had started even earlier… years earlier according to the rumors.

So that was why I came in. It’s actually exceeded all my expectations.

BB: How does a North American home building operation with a UK parent work? Is it a comfortable set up? Does everybody get it on both sides of the oceans?

SP: It’s different, but different is good. We’ve had the opportunity on both sides of the pond–and looking at our UK, Canadian, and US business—to learn from each other.  In a perfect world, you wish the cycle was different in every market. Don’t you wish that you were hedged all over the place… isn’t that the diversification story?

If you go back decades, I don’t think we’re as counter cyclical as we might hope to be, but there is some difference. Certainly within our Canadian business it is. In the short term, there’s been differences within the UK and US businesses…. If you look at it over a span of time, maybe not too different, but still different.

BB: Tell us about your marching orders as you stepped into leadership here at Taylor Morrison.

SP: So when I first started and I had the opportunity to spend some time over there and look at structure … it’s just different… culture… it’s just different. But the opportunity was to look at those differences and ask, ‘what works there that we don’t even contemplate?’ If it’s the way that we handle mortgages, if it’s the way we handle the Realtor relationships (they don’t even exist)… they don’t even exist here… it’s just so different.

It’s kind of taking the pieces apart…that can make sense, that can actually be tweaked and then work within our business.

When the UK market really started changing, we had—at that point, depending on where you were in the country—two to three good years of difficult times under our belt. And what it did for the UK with Pete Redfern, who’s our Group CEO, was that it allowed him to really recognize – there were many markets here in the US where you were knee-deep before you really believed it was happening to you, even if it happened to you in other places, you still didn’t believe as an operating team that it was happening right here.

From a more global perspective, Pete could see that, and it allowed us to make very good decisions in the UK on our building, on our spec inventory, on our land acquisitions, … the same decisions we made in Canada, because we kind of planned for the worst and hoped for the best.

So from a macro standpoint, that’s why it’s been quite enjoyable. From a day-to-day, I’ve just loved it.

BB: You were talking about ‘doing the same thing, only differently.’ Is that a case you’d describe as knowing it when you see it, but can’t necessarily articulate the difference?

SP: Some of that. I’ll give you a more operational example. I remember when I was touring the UK and … walked into a sales office and talking with the sales consultant, and talking about their buyers, their traffic, where’s it coming from? The level of ownership the sales person had for the buyer walking in that door was almost 100%. Now that’s a very different experience.

She pulled out her map of literally the marketplace and the market’s divided differently because of the different concentration levels. She goes and she pulls out her map and it’s got hundreds of these little… and it might sound archaic, but candidly, it was just fabulous…. Hundreds of these little dots, colored dots… and she says, ‘well these are my buyers,’ and ‘these are my customers,’ and ‘this is the publication circulation,’ and it was almost like going back to the old days, and she says, ‘if I don’t get an ad this Sunday in the Christian News, I’m going to lose traffic, and I’m going to lose sales this week.’

Now how many sales people in the US could really tell you that.

That also carried through to the customer service relationship. It was and still is all managed at the local level with the sales person and the superintendent. You came in through the sales office…

In many instances, in the US, we try to keep the customers out of the sales office in case they’re upset. What they do is make sure that relationship never gets to a point where you don’t want your customer in your sales office. So basic and fundamental.

On the flip side, we have a program where we have internet sales consultants, who do a significant portion of our sales. That relationship is something the UK never would have contemplated that they’d been able to build into their system.

So it’s looking and wanting to find the gems that can make a difference.

BB: How does that ladder up to cultural differentiation, in terms of what you try to promulgate here that is part of the meta – this is who we are?

SP: Pride. Pride is as much as anything, as being part of this international organization. Proud to be different. Proud when we can do something unordinary.

We have this internship program…where there would be four interns that would come over from the UK… (we’re actually talking about executing it the other way)… and they would be in our division for 8 weeks 10 weeks. The company would have them live over here, and they would be part of that team.

So there’s this camaraderie… we do these divisional presidents meetings on an annual basis…and we swap countries…

So it’s about pride. These times have changed the way people desire and acknowledge help and support. In organization, I’m proud that it’s not about it has to be my idea, it has to be the right idea for the business. And when you actually get to experience that, … because three years ago, the UK was just kicking butt, and we’d go over there an our heads would be hanging pretty low.

We’re looking for every trick they can share. And the next year, they’re starting to feel it and what can we do to help our way through this and to prevent.

So the culture in the company is very different in every single location we do business. And that’s just perfect in my opinion.

It works under a core of pride and passion and enthusiasm for what we do and doing the right thing. That’s what we carry collectively.

BB: You’ve been glancing off this issue of integration… can you benchmark us as far as the integration…the merger? We’re three years into it—is it done? You’ve gotten to witness another more vaunted merger take place.

SP: You know I’ve been through a number of them, and I’m quite grateful for that. There’s a reason all the M&A books are written the way they are. They’re not easy.

I was with Del Webb, left Del Webb, was with Blackhawk, … and then resigned from Blackhawk to go to Pulte… and while I was in my two-month notice period to go to Pulte, put together the deal to buy the holdings of Blackhawk, so I was actually on both sides of that transaction.  

But then left the team because I moved to Arizona, so I kind of watched that one from a distance, but I’d built that team 10 years earlier… then, six months later, the Pulte-Del Webb merger happened. I think I was the only individual at the time that had actually been at both companies. Went to the Pulte corporate office–that was the old Del Webb corporate office… so yeah… you learn from the good and the bad…

We [Taylor Morrison] definitely, I believe, did it different. I think there were a couple of things that were absolutely critical. I don’t think the word merger is used in the company today….We’re Taylor Morrison… and really everybody’s a Taylor Morrison person today.

I think you have to stay true to the reason you made the business decision. The core honesty in that decision process and in that communication is fundamental to your success. What I mean by that is that if you’re buying the assets, then you’re going to approach the structure and the management differently. If you’re buying the company or merging two companies because of differences in skills and complement… for example, like Del Webb and Pulte did, then, in my opinion, you want to hold dearly the things that you want to protect in both those companies.

We brought these two companies together because they had two very different skill sets. There were certainly financial implications… But at the end of the day, the thing that made this complement is that you had a quick-turn production builder in Morrison and you had a master-plan developer in Taylor Woodrow.

We had skills that were quite different and quite complementary geographically. We had great overlay, but that didn’t mean that Company A all of a sudden – because they got these assets that they had that experience.

It didn’t mean that just because you had a Pulte subdivision, now you could go run a Sun City because it was in the same market.

You had to appreciate what the differences are.

When we started the integration process, we were going to hold ‘what is our go-forward strategy?’ and ‘what are we?’ and make sure that we had the skills to deliver on that.

So, first we created the structure, and recognized what these new divisions and businesses were going to look like. Once we did that, absent of any names, then we started filling in boxes, and interviewing for those positions.

We interviewed, from a management standpoint, for every single position. It was an incredibly onerous, rigorous process. We didn’t do it for optics. We did it to make sure… because Management Team A couldn’t have an appreciation of the skills of the others because they didn’t know them. So, we started at the top, at the division president. But even that division president, we had to make sure, within our process, it wasn’t about, ‘I’m comfortable with this team.’ That’s part of the equation, no doubt about it. ‘But I’m comfortable that I have the skills now amongst the team.’

We actually had a panel conducting interviews to make sure that that process was pure.

We were able to communicate that process very succinctly to the organization. It does make it easier when you understand what you have.

BB: Can you give me a sense of what the picture you had in mind when you populated the organization chart with the talent? You have a master plan developer expertise and you have the quick-turn production builder, so the new operation on the ground boil down to in that marriage of skill sets?

SP: We made sure we had the talent on the ground that could execute on the business that was there today, and had the strategic ability to see the business looking forward. So, for example, you might have had a division, where almost the whole management team, let’s say, was finance. Even though they were construction, sales … they’re all finance folks. They couldn’t view the business holistically the same way. There are certain things that they’re going to be 100% on target about, but there are pieces and parts missing. Now the market starts changing and you don’t understand the consumer, you don’t understand from a merchandising standpoint …your execution isn’t quite as important because it’s all about the dollar. Now that’s an extreme example, but we had to make sure we had the complement of skill sets.

There wasn’t one vision for the company. We actually had to do that market by market because the dynamics of that business was going to be different. If I looked at a market like Phoenix, we’re still continue to be a master planned developer with high-turn, very production oriented business. … but not high amenity… a more traditional community builder.

Where we’ll have other markets, say Austin or Southwest Florida where the make up was long term assets which were highly amenitized…. Planning and building… and that was a different skill-set that we needed to exist here.

So, truly, it was making sure we understood the one to five year plan and making sure we had the skills within the team and the camaraderie, the dynamic chemistry within the time to get us where we needed to go.

So it was a wearing process. People that had worked with folks for a long time…. And thought that “this was what they needed.” As they began to open their mind to “wow, there are other ways to do something that might give us a strength that we don’t have in the organization today.

That’s a very healthy process.

It was great for the folks that ended up in those seats. But, as important, it was great for the balance of the staff to appreciate… because some of those folks lost their mentors and their bosses, but they recognized and could actually—this was so transparent—see why we made the decisions we made.

What we did at the very same time, which was also key—our communications to understand at the employee base wanted in this new organization… through focus groups, through surveys, through outside resources coming in and interviewing people to understand what is the core value set in this new company that we’re creating, because we kind of have this blank sheet of paper.

Let’s together make sure that it’s consistent with our internal value system. It came from the bottom up and the top down, and kind of met in the middle. So people can own their decisions in the company because they feel they’ve helped shape them.

BB: Is your signature on that integration story?

SP: August 2007. Day One of me taking over was me creating the North American Leadership Team with that same process I described at the Division Level, I stayed pure to at the National Level. We might have had 6 regional presidents and I needed 3. I hate to say it was my stamp, because I think our team created it and executed it, and that’s where the success came from. It truly was the team.

I think my style and openness with people and my flexibility to seek to understand was probably – this is hard for me to say–was probably what we needed at that point, because it’s traumatic for folks. It doesn’t stop you from having to make the right decision. But you have to understand what people are feeling, because if I could say, the absolute signature value we brought to that process, all the way through the integration, for three years, has been honest communication.

You might like always like the message, but you know that if you’re getting the message, and that management’s transparent and honest with you, people can deal with that.

Nobody likes what’s happened to us. It’s no different than the process of having to downsize the company, and not be able to say that we put as much energy into the folks that we let go as the folks that were staying… And those communications equally had to feel okay.

BB: If all of the public builders had regarded their situation and challenge as a turnaround, they’d be in better shape.

SP: If they had been proactive instead of reactive, I think that’s very true. We were in a different place that actually created our ability to look at the business as a do over. Because we actually had to. As difficult as something like this is, I felt blessed that the market – this is a horrible thing to say – that the market wasn’t moving at 200 miles an hour. It gave us the chance to set the structure. It let the culture be created. To put the process in place, to plan for the future. When you’re running like that, you just kind of let it happen, and we didn’t, we planned for it. We planned for this day as the market was going to turn to be ready to be able to take advantage of that.

BB: Can you talk about what the company has been doing, strategic moves, land acquisitions, dealing with trying to find the right balance in geographies and footprint, etc.?

SP: It cracks me up when everyone has their predictions. Eventually, somebody’s going to be right. We are a different company, with being privately held U.S., publicly traded UK. It does put us in a little bit different space. We’re financed completely out of the UK. If I look at some of the challenges US private builders have… we might have those on a more macro level but it’s quite different. I don’t actually have to deal with that on a day to day basis. We finance Canada locally. We have a little bit of everything. So it’s allowed us to focus.

The message to the team is to control what you can control, and just do that as best as you can.

On the market: I’m an optimist at heart. But I’ve become quite the realist and pragmatic as well. This for me is well past the 6^th year anniversary of … starting in Las Vegas with Pulte… getting there 30 days before the market crashed. It seems like it’s become a way of life.

There are disciplines within the organization that have become a way of life. It’s not a matter of it’s a good market or a bad market. Getting away from those fundamentals is what got much of our sector in trouble. We didn’t have to understand the market and the consumer, because people just came and they bought.

At some point that just doesn’t work. At some point, location, location, location… what’s worked for us for 50 or 100 years is pure.

So our operating model is to make sure that the underlying data – there has to be some business acumen and overlay that goes into that decision process – supports our position on market on acquisitions.

Our approach over the last 6 to 12 months has been quite different than any of the other builders. We haven’t subscribed to the ‘I’m going to buy land to [kind of] bridge us to that promised day. I don’t know when that is. Things will be better in six months, so I’ll buy now and get some appreciation.’

We just haven’t subscribed to that. We’re in a different place and I understand that everyone is making different decisions in their board room on what’s right for them, given their company needs and dynamics and covering overheads can be the right approach.

It hasn’t been for us. Our approach has been, we’re going to right size the business no matter painful that’s been… Market by market, and every business is going to be profitable. You can’t have land burdening the balance sheet. We all had our share, but we’re not going to go there again. We can’t have land burdening the balance sheet that’s not going to deliver profitability to the business.

So our underwriting process / rigor and team ownership of – everybody wants to grow their business, but we want profitable growth – that task is fundamental to our success to date and to our go-forward strategy.

It has prevented us from participating in the finished lot run up through the 4^th quarter. We just didn’t play there, because fundamentally, we weren’t going to come to market in Summer ’10 with lots that had to be impaired. We just weren’t going to do it.

What we did was we took more of a mid-term approach because that was a space that actually we didn’t have to compete in.

As you’ve seen we’ve bought some good-sized partially developed/partial raw – about 1800 units here. We just bought 1,200 units in Austin. That’s working really really well. In the short term, store count isn’t what we want it to be, so we’re having to re-grow the business profitably. But we believe strategically that was the right thing to do…

I don’t personally, necessarily believe we’re going to see another leg down. But I personally don’t know for sure that’s true.

We can’t put ourselves in the position–there’s a lot of inventory that was bought that’s coming to market now and it just doesn’t work.

I’m real pleased with all of our acquisitions. I wish there was more of it over the last 12 months. But I’m pleased because that mix in our portfolio is absolutely our future.

We’re still working through some of our troubled assets. We have some of those that are at market, some of those that are in mothballed state,  … the ones that we didn’t believe were going to give us the value over the midterm, we divested of…we’ve had two years making sure we’ve right-sized that portfolio market by market and made some real tough decisions. Some of those decisions required us to lose people… because we didn’t have the store count.

But we couldn’t just sit there and hope. For three years, if you go back into all the forecasting, the next quarter was going to be much better. We couldn’t make that bet. And I’m an optimist at heart, don’t get me wrong.

Events, random issues, fundamentals all overlay one another ….

It’s the first time in my life I should be on the debate team. I feel like I can get on both sides of the debate and win. I say that to our board in the UK when I try to articulate where the market’s at… I can give you all the good reasons that we’re going to start to see improvement. But I can also give you all the reasons that this is going to stay with us for a while. I think they probably balance themselves out, but I will tell you, if debate teams across the country in high school are not using this as tool to understand how different the economic factors and what that does to people’s psyche…

That’s the piece that nobody can estimate, that nobody can plan for. It’s fascinating.

It’s not that we’re risk-averse. In fact we would never grow the business if we were. It’s ‘we’re going to get paid for that risk.’

BB: So there are two affirmations when you’re buying land… one is that is that it pencils and it gets you what you’re looking to do in terms of your own business plan and scope. And the other is that if you are competing with other builders, then you’re in that game of competing to buy versus competing to sell, so you’re not paying the price for that competitive bid up…

SP: We’re not in it to be the biggest. We don’t feel that’s necessary. You have to have size and some level of scale, obviously, to get ahead in the business, right. So, there’s the practical application. But, a lot of people have entered that mid-term space now out of need.

We kind of traveled alone there for a while. We’re okay to stay quiet and off the radar. I don’t normally or typically agree to interviews. We’re okay staying off the radar. Because it’s just about running the business, and doing the things we’re supposed to do and making it right for the shareholders.

BB:  In the markets you’re in, talk about where you’re at and what you’re responding to…

SP: Culturally, we have relentless view on cost control. Healthy… you have to spend money to make money. So it’s not just about saving money; it’s about spending money where it counts. That really runs through the entire organization. And everybody feels that responsibility. We do things, … we had a contest one year about the big idea. What are the things we can do that aren’t done out there? and how do we drive efficiency through the organization? I think culturally, the relentless approach on cost is one. The responsibility and empowerment of every individual in the organization to make the right decision and to have the support of the organization, even if that decision is not right.

It allows people the courage to go the extra mile, because they feel good about it. I think about, down to the community level, cost…. And it’s about living in the moment. And if the plan is 3 sales a month or 2 sales a month that divisional team… that community team has a responsibility and the power to go find those 2 sales a month. And they get the support on the divisional level.

And the next layer that’s so important…. I come from the field…and having been through the different environments and cultures… is it local decision-making? Is it command control? I’ve been involved in all of them. To me, none of them are right or wrong. Obviously, everybody’s got a different style.

It’s about finding a balance.

I think that’s what we’ve done very very well. We have a very flat organization. It was flat three years ago. It didn’t come out of need. It came out of… we believe the right way to run the business.

This is a local business and we believe that heartfelt. Having the opportunity to put the folks in every seat that wanted to do the right thing about the business allowed them to utilize resources in the organization and not have to have every single local lead approved… and feel okay, because that’s what makes the business better.

Finding that balance – decisions are made locally, and ‘there are things I just don’t have to worry about because those resources are there for me,’ and actually believe it… It sounds silly, but it’s age-old: Corporate vs. Field.  I think our environment’s really quite different, and I’m quite proud of that.

If our underwriting plan guy has found something in a deal that didn’t make sense, it wouldn’t be that this guy screwed up this deal, it would be he saved me from making a lot of decisions. That’s a really different attitude. It permeates through the organization and starts down at the field level. If the superintendent’s got issues, he’s gonna go find that resource. It just is a really healthy place.

BB: How do you manage the inflection point that occurs shifting emphasis from adversity management to the next set of challenges to grow…?

SP: That doesn’t worry me to be honest. It’s not one of the things that keeps me awake at night. The reason is, naturally this business attracts some very aggressive group of entrepreneurs. At the most senior level, that’s a very healthy part of our mix. So the instincts are there to want to grow the business, but the discipline to make sure we do it the right way. We’re actually planning for–we have an involved strategic planning process on an annual basis, reviewed on a quarterly basis – that time.

But we’re making sure that the controls and the processes are well established in place. As the market improves, we’ll have the best of both worlds, because there will be another cycle.

It scares me, to be honest, when I look and see what happened in the Fall. There was three years of pain, and builders beating land sellers and banks over the head, trying to convince them that market values weren’t there… and had to get to a psychological adjustment on what market values needed to because when you residual it back, their perspective on what the values were just didn’t work. And overnight we made that go away.

We just said, ‘poof!’ and it was gone. Because, now after the big Fall, everybody says, ‘those really are worth what I thought they were.’ But guess what, when it comes through the cycle, the house isn’t going to appraise there.

So the discipline and foundation of kind of building it from the ground up … but having the strategic ability to see the end is a good balance.

BB: How have you evolved the sales culture? Do you see tangible disciplines that are a level greater than you would have seen when you first started?

SP: Our national VP of sales is from the UK. He’s the one person on my leadership team who’s actually from the UK. He’s been with Taylor Wimpey 25 years or so. 20 plus years… his name’s Graham Hughes. He joined us over here… he actually came over on a stint to work with me when I was with Morrison about two months before this all started. He’s now here permanently.

He brings a different perspective. One of the things that we’ve done internally… we’ve had two in-house trainers. One could argue that that is a luxury in today’s environment. We don’t believe so, because, fundamentally, if we’re not selling houses, the machine stops. If we’re not buying land, the machine stops.

Everyone’s obviously got their input to the process, but fundamentally, the resources to make sure that our teams are properly motivated, properly educated, and they have the resources in these difficult times.

If you think about the success of the sales person, it does come down to the psyche of the sales person. It’s been critical. So we do a significant amount of group training, one-on-one, encounters, as well as, we’ve complemented that with things like the internet sales consultant…

BB: Just the knowledge base – the moving target on home finance has been hard to stay current with…

SP: That was one of the changes we did…as we had a number of different mortgage relationships around the organization… We consolidated it to one three years ago, and then last year, we brought it in as Taylor Morrison… it was a JV and we bought the rest of it…now it’s 100% wholly owned….

Her name is Tawn Kelley–Mortgage Funding Direct. She’s the largest table-sending mortgage broker in the country–for two or three years–she emulates everything that’s good about our culture. She makes sure that her builder and her customers are taken care of… and our capture is close to 90% company-wide. It’s remarkable.

Once, the sales force sees mortgage as a sales role, something ‘I have to do’ … it’s like ‘can you help me how to figure out how to sell this house?’ So we were the first to market with ‘dollar-down’ and go back a couple of years with forward commitments… Tawn’s actually at the helm of that.

JM: What’s happening with product? How has that evolved with respect to market demand?

SP: We’re a curious organization. We’re really seeking to understand what the future buyers’ needs are. The only thing we know for sure is they’re changing. How? I don’t think we can exactly appreciate. What are the trade-offs consumers are going to be willing to make? What is the meaning of homeownership and house, going forward? Some pretty basic, but spatial questions. We’re really trying to understand.

We’ve retooled. I’ve read where builders don’t understand the consumer, and that’s okay… we’ve certainly as an organization had our fair share of houses out there in the marketplace that weren’t properly targeted to the consumer need.

From an existing portfolio, we’ve gone through and made sure that the positioning of the product–we’ve shut down models where it made sense; we’ve restarted; we’ve retooled; we’ve done the same things everybody else has done to make sure that our product in the market is matched to the consumer need. Obviously, as we’ve seen across the country, affordability, value—an overused word, they’re different to everybody. We need to make sure to have an appreciation of the needs and wants of lifestyle choices that people need to make in every market.

So, one of the other things we’ve held very purely in the organization is our underlying market research function. Right now we’re going through a pretty significant national survey to try get a greater perspective on what the macro economy has done to consumers at different stages of life. Where they are today and how that’s changed their perceptions on homeownership and what’s going to be important.

It’s an important exercise, but it’s not everything, because with all the market research – I guess that’s where I started 25 years ago, in marketing–you have to take all of that as a tool to help us to guide us to make the right decisions. But I think fundamentally, it’s a bigger question than–it’s not just a flight to affordability… it’s a flight to understanding what people’s needs are. Once again, affordability to you and to me and to someone else is different. The tradeoff I’m willing to make … we’re seeing a lot of flight back to the basic needs. I don’t want the nice things in my house; I’m willing to give up square footage, but location and time with family … there are things that are becoming more important.

Locations are becoming different. How people use that product … you think about the new generation of folks who 50% of them seeing themselves traveling internationally to work… What does that mean in their homeownership decisions? Do we have to look at homeownership differently? Is there a different model for homeownership?

We’re exploring all of that… what about the boomerang kids? They’re all coming home! I’ve got two of them… Multigenerational is huge…

BB: Some of the limbo comes from the fact that we were stamped with things that were easy to get because the money was easy.

SP: There’s a lot of people who believe ‘this is just a phase we’re going through.’ And ‘Homeownership will continue to be the dream.’ I don’t subscribe to that. I think– without being overly dramatic–this recession is forever changing the mindset of people’s brains on what’s important in life. The way we spend. Our value system.

For decades, homeownership has been a way and place to plan for one’s retirement. Coming out of the Del Webb environment, where this is a safe harbor for my family, I trust Del Webb.

Then you think of people coming out of the Great Depression and how long it took for them–our parents and grand parents–to … my grandparents still hid money under the mattress. I don’t think we’ll do that…. but I think it’s going to forever change…

If I were to be honest… I’m not smart enough to know what those answers are…but we’re certainly trying to get ahead of them. I don’t also think we have a perspective yet on what actions will happen politically that will change people’s view on homeownership. Think of the impact of some of these tax changes and what that’s going to do to people’s discretionary dollars. One of the things that just fascinates me about working in the UK and Canada is that it’s a very different view. You make a commitment to a property, that commitment follows you, not the property.

How are we going to change? I don’t think we know all that yet. There’s a lot of maturing that we still have to do.

BB: Can you tell us more about you and your background… what influences you?

SP: I moved a lot. It’s hard for me to even say what I would have called home.Born in LA. Lived in Atlanta, New York, back to LA in high school, San Diego for college, … continued that pattern as an adult… lived in Arizona, Northern California, Nevada, …three tours of duty in Arizona…. so probably flexibility was something I grew up with, and when you’re a little kid, sometimes, it’s tough, sometimes when you’re a kid and you have a Southern drawl and you live in New York…and you come back to LA and you’ve got a Southern/New York accent, you learn to be flexible.

And you learn to look at some of the good in people because some of the bad comes out really fast.

I grew up in an environment where my parents traveled a lot. It was a very successful household. I probably grew up wanting to be different from my mom and not work and be a house mom… just like they say, I probably grew up just like her. She traveled internationally, was never home, … she was a designer/manufacturer of clothes.

I didn’t really understand why my parents weren’t really present. What was impressionable? I think there was a point where I was living in New York… where I had to do some assignment for school, and I was probably 12 or 13… and I had to do some news clippings, and I found this article on my mom.

It gave me a different appreciation of what she was doing in terms of impact, and how she wanted to make a difference in the world of design. It forever changed my perspective on, how do you find balance in your life and the mission she set out on…What they taught us–I don’t know if it was a conscious mission–was to be very caring and to be flexible. And there are no victims. We make those decisions and we carry that core responsibility. This served me very well. Because I think you have to be flexible.

Our organization is one that is incredibly flexible. I have a genuine appreciation for people, and a genuine tolerance for adversity. That whole victim thing comes from a sense of responsibility and wanting to make a difference.

Probably the last thing that my parents gave us as children growing up is that it’s okay to be me. It was okay that I had a Southern New York accent in LA and nobody could understand me. It allows you to establish relationships on a different level. It sounds kind of corny, but it’s what I really believe.

San Diego State University… Special Education… that came with the flexibility. When I was going to school, I was working for McDonald’s Corporation. I did a lot of work with less fortunate children with McDonald’s and that’s what I wanted to do, was to be a special-ed teacher… kind of grew through the marketing environment at McDonald’s …. Had aspirations of working at the big Golden Arches in the sky, so I needed agency experience. I ended up on the agency side, here in Phoenix with Phillips-Ramsey.

Then, lo and behold, through taking every moment, and living in the present moment, I ended up with Del Webb as my account…and eventually I was asked to come be the marketing manager for Del Webb. I left the agency world.

I was a pretty free spirit. You kind of took it as it came. The corporate environment just wasn’t me back then. I was in my early 20s and, when you work in the agency world, it’s pretty footloose and fancy free. And now I’m in this environment that it was hose seven days a week, it wasn’t me… I was thinking about going back to the agency side, but I loved the business.

It was somebody in the field here in Phoenix who said, ‘You know, it’s just so different here in the field. You just can’t appreciate it… and I loved the experience of working with the field… I didn’t like the corporate world. He said, “You got to come and be a sales manager.’  And I said, ‘A what?’ … 20 days later, I had my real estate license and I was the sales manager at Sun City West, and I had 25 agents who probably had an average of 10 or 15 years under their belt working for me. I could never know more than they did, I just knew different. Once you get into the field, it’s remarkable. The rest just happened.

I didn’t set out to run a home building company. I actually set out to be a special-ed teacher.

But I took it one day at a time. Just had incredible mentors along the way.

Rich Vandermeer, Sun City West… saw something in me… he said, ‘You’re meant to be in sales management… I can teach you sales… you do it every day, Sheryl, you just don’t realize that.’ He was remarkable… A year at Sun City is like five years somewhere else… you’re doing 1200 homes in a year in one community… a lifetime’s experiences…

He took some of my natural instincts around my care for people and properly focused them. It was like seek to understand, explore, investigate, take in all the information… cause I might have been just, pretty quick to just go do it, just get it done. He helped me to take a step back and understand, appreciate, and then execute on that. He always believed in me that my instincts and trust with people … where I was a kid coming in and a team of 25 people were wondering “how are you going to help us” and within the next three months we have a team of people who took things to the next level.

What he was masterful at was understanding my own personality traits and how to work those within a business environment.

Then when I went to Blackhawk in a private environment, I was able to round out the business side of it from the sales and marketing side. I’ve probably had confidence and fear rolled up in one little ball, so when I had the opportunity at Blackhawk to open and run these new active adult communities for them, I was just young and cocky enough to think that I could do it, but I really had no idea what I was getting myself into. But once again, I was surrounded by a group of really talented people and had the desire and curiosity… that’s probably what Rich gave me… I think the character and the creativity were attributes I brought, but the curiosity to go and seek more information to make the best decisions probably the gift Rich gave me.

It’s okay not to know. The humility comes pretty easy. Very early in my career, I surrounded myself with the best people, and it’s so okay that they are so much better than me. It’s perfect; it’s what I want. So I’m going to have the best finance talent around me, and the best land talent; because I’m going to look at it different. It’s that complement that makes us as a team better.

It’s the permission to be okay with that.

BB:… what do you like to read… cultural passions…?

SP: I love to travel.  Two weeks ago I was in Tenerife, which is in the Canary Islands… I was in Barcelona and Madrid for my 25^th Anniversary… it’s a big deal.

My husband says he’s a happy single married man… we only see each other on weekends. I leave Sunday night or Monday morning, and get home Friday night, … it’s different… we’ve been doing it for about four years.

I really do my best to protect my weekends with my husband and kids – I have three children… Diane is 30, and married (stepdaughter). Lindsay…22… and Randy will be 21… (boy)… they’re the support system … my kids moving like I did and being okay with it… has just been remarkable.

I love to golf, travel…

This week I’m in four time zones… I actually get a high on that. Four years running I still do. I do like… what the traveling does for me… people ask, ‘well, how do you go to the UK every month?’ I say, ‘well, that’s my 10 hours on that plane.’ That’s truly my personal time. If it’s reading junk… watching a movie…if it’s getting caught up on email, I get to choose that… when you run at the pace we do…

The last thing that I do personally that’s really important to me is working out. It gives me that hour, ideally, … gym… running, doing something… take the time to clear my mind… it’s a little bit of everything on the reading side…

I just read, The Big Short. It’s everything. I enjoy sometimes a good James Patterson murder mystery just to complete waste… I love motivational reading. It’s a blend…whatever my time allows. I don’t get to enough… it’s really my trips overseas or vacation is where I reserve my enjoyable reading…

JM : What makes you tick? What keeps you up?

SP: Getting to 2011. It’s making sure we continue to do the right thing. I think I have a great will to win and to make an impact, and that Taylor Morrison has the ability to make a footprint on our industry. That we can do things the right way. It’s not to suggest that others don’t, it’s just it’s a tough world out there right now.

Everyone’s got different definitions of good leadership. To create an environment where people can see themselves and their future moving forward together is what we’re about. If you think about the power of people all going in the same direction to accomplish the same thing and if they’ll do their piece of the pie it actually makes a difference is what we want to be and what we are. You can compare it to a football team charging down the field and they have to be in synch… My vision and dream is our whole organization charges collectively that way and has the passion to get there together.

That’s pretty powerful.

JM: what can you say about the company and or its assets being in play?

SP: It’s [supposedly] been in play since I got here… that’s what I’ve been told… I think I heard last week that we got bought by two different builders. It’s not true.

The way you worded it–staying for the long haul vs. an exit strategy–the board has a responsibility to continue to understand its options, as the management team has a responsibility looking at the options within a market and how you diversify. For some reason there’s a lot of … I’m sure there’s a good chunk of it because of the environment that we’re in… I don’t know if it’s the intrigue of the UK… I’m sure it’s somewhat the refinancing that we went through. But that rumor’s been out there a long time.

And at some point in our future, it will likely be true.

When that is I can’t tell you. What I can tell you right now is, nobody’s bought us; the company’s not on the market  today; and the rumors keep going.

Do we continue to explore all of our options? Absolutely. That’s our obligation.

The market has sure changed in the last couple of months, huh?

So when I tell you the speculation will be true … what I tell the team a lot … because I think there were rumors about Taylor Woodrow and Morrison for about three years… is eventually it happens. Eventually there will be a strategy that will make sense for this organization that could be different than what we are today. But it’s not something I can let myself get caught up with day to day… I’m on the board; I’m involved with the day-to-day decisions from a group perspective. We’re going to continue to operate our business.

BB: What does the balance of 2010 feel like to you?

SP: 2010: it’s been a tough first half and it’s been an emotionally challenged first half. People really kind of took an exhale at the end of the year. Because it’s like, finally… we’re an optimistic bunch and we’re always looking for that good news. Life was good. The first half was difficult because it was like a 2 by 4 over the head that people really didn’t anticipate.  That’s hard. That hurt. So when you look forward, I’m a real believer that some level of predictability and stability is actually great success for 2010.

I actually think it’s pretty good success for 2011. I think there’s a lot of indicators – I do believe the phrase that we’ve bumped along the bottom … I think we have. I think there’ll be some markets that will have some further challenges and there’ll be some that will fight back better than others. But there will be a control around that because I think there are some larger factors, and it might be the mortgage industry that will prevent us realizing too much of that benefit.

We have to be careful–and I said this to the team yesterday–not to let any piece of bad news make us think that the world’s falling apart, and any piece of good news make us think that we’re going to have 10% appreciation next year.

Because I think we’re going to operate in this flux. But actually the knife’s not falling anymore, and that’s success. I’m not one personally that subscribes to the V… I think as it comes back, it could come back good, but I don’t think it will be overnight.

So I think we have to plan for the worst and be ready for the best.

Making sure that the workforce has pride in what we’ve sustained… now, we’ve turned the corner. But have we rounded 2^nd or 3^rd yet? I’m not sure yet. But we’ve rounded the corner. I feel very comfortable with that.

What I said at the division presidents last meeting … ‘Our greatest success is We are Here, you guys and we are here in a big way!…’

We’ve gained market share in every market we do business in. We done more than hold our own in sales pace per community, our cancellations, areas from an accounting standpoint we shouldn’t have excelled in we excelled in. So be really proud of what we have accomplished… but now how do we get better and take advantage of what we can?

Thanks to Christine Serlin and her early-arriving, lovely 7-pounder Ella Jane, you heard it all here first.

Taylor Morrison’s Sheryl Palmer Shifts Balance of Power to Power in Balance

Ask Sheryl Palmer what keeps her up at night, and the president and CEO of Taylor Morrison, the nation’s No. 13 home building company, says flatly: “Getting to 2011.” Getting to next year means surviving this one. This may sound trite, but being around and able to say, “We’re still here!” in mid-summer, 12 months from now will be a real battle for many who still count themselves a going concern in home building, so much so that their mantra in Summer of ‘11 may only change by one digit to: “Getting to 2012.”

Sheryl Palmer and Taylor Morrison are three years into their current incarnations, and by aligning these stars in early 2007–as the jaws of the housing downturn had begun to widen dramatically–British parent firm Taylor Wimpey gave North American home building one of its most intriguing dramas of the moment. 

For Palmer–a 25-year marketing and sales maven whose public and private pedigree includes coming-of-age and rising-to-power terms in the Del Webb, Blackhawk, and Pulte academies of home building–has designed, populated, and directed an org chart and operation that balances the forged proficient track builder Morrison Homes and land development and design specialist Taylor Woodrow into a single entity that otherwise might have made sense only on Excel spreadsheets among bean counters.

Today, Taylor Morrison Homes not only works as an operation tantalized–like many of its U.S.-based public home building peers–by the whiff of its own profitability, but as a billion-plus-dollar jewel that somebody–either another home builder or a financial company–may crave to own.

Say this for the balances that Palmer and her team have struck. The North American may be for sale, but the sellers are by no means desperate. Owner Taylor Wimpey motivations lie somewhere between the long-haul recognition that global home building operations may never make sense and a mid-term realization that England’s masterplan for residential development may trigger an expensive scramble for a constrained lot supply, for which the company would need a lot of liquidity.

In other words, they may have a fair bit of runway, which makes them different than most of what else is for sale these days. Also, contrary to almost 100%  of what else is on the block in 2010 and very likely 2011, Taylor Morrison has managed to remain greater than the sum of its land assets. Post Palmer’s total reorg in 2007 in the wake of the merger, the company competes close to peer leaders in SG&A efficiency, plus design and construction quality continue to set standards, and customer satisfaction ratings have held up well even amid the radical downsizing.

This doesn’t make Palmer’s job that much easier.  She not only has to manage a $1.3 billion company in an adverse market, but has to sustain focus amid questions and intrigue about present potential valuations and future potential owners. Since Taylor Morrison ranks not just as an agglomeration of 20,000 lots, but as a well-run operation, steeped in local real estate intel, and high-quality products, the method behind Palmer’s obsession with a healthy headquarters-to-field operation balance seems to fit the moment.

“This is a local business and we believe that heartfelt,” says Palmer. “Having the opportunity to put folks in every seat [in the company], who wanted to do the right thing about the business, allowed them to utilize resources in the organization and not have to have every single local lead approved… and [that way, they are able to] feel okay, because that’s what makes the business better.”

Rather than to patently deny speculation that her company may be for sale, Palmer patently admits that speculation and realities converge. “Eventually,” she says, “there will be a strategy that will make sense for this organization that could be different than what we are today. But it’s not something I can let myself get caught up with day to day.”

Day to day, Palmer’s job is just like that of her peer CEOs, who, these days serve as Chief Anti-distraction Officers as much as anything else. That’s how tossing and turning at night turn into “Getting to 2011.”

Where Housing Meets the Beach

Happily for our co-workers, we availed of four bona fide paid holidays to skip town on you last week, but promise that’s the last time off we’ll enjoy for the balance of this year. We won’t tell you precisely where on the Northern California coast we vacated, because it should remain a best-kept-secret.

Still, we will attest to feeling especially calmed, cheered, and comforted at clear evidence we were neither the laziest nor the one with the biggest gut on the beaches we visited–those distinctions claimed unreservedly by a host of lolling fish-fed denizens, lying glimmering in their sealy torpor as the foamy tides crashed upon their rock beds below.

Along the cliff trails were a slow motion thunder of waves, the silent sun that played hide and seek with the fog, the sweet smell of salt and distant campfires, a smart wind out of the northwest, and a vast bouquet of muted coastal flora that blanketed the upper ground and draped over the lichened cliffs that plunged to the sea.

92% Blackberry-free for a week, we kept email-induced bad moods to a tidy minimum, and tried our best to stoke the grown-local economy with dollars we felt were better meted out to add to our store of fond memories than on a yet-to-be needed big screen TV.

Still, perversely perhaps, the Housing Crisis and our infatuation with what lies beneath it [and, in turn, what the Housing Crisis lies beneath] was never entirely expunged from our thoughts, even during such a blissful retreat. California freeways glutted with bicycle-laden recreational traffic and tourist packed restaurants notwithstanding, we were struck equally by none-too-subtle evidence of swelling ranks of the displaced, from the streets of San Francisco to the streets of Guerneville.

With more than one in five work-capable souls unable to secure gainful employment, and another hefty bunch of folks not even hopeful enough to try to find it, northern California is like a super-sized You Tube home video of our economy not at work.

Clearly, the bygone tax credits for home buyers and their April 30 expiration, aside from a fleeting manic fillip, played little to no part in the state of the market straits that face housing’s developers and builders. 

Our vacation thought was this, and it was even before we caught up on some financial pages reading that we’ll reference below:

Let’s hope China and India get a middle class in time so that we don’t lose ours.

That notion came of at least three or more years of hearing that jobs, jobs, jobs should be everybody’s priority No. 1, but also hearing no one much talk intelligibly about where and how jobs will get created in the United States economy. No shortage of smart people have spoken. Recently, Intel founder and former chief Andy Groves offered his view of America’s job creation deficiencies in a Business Week piece. Here’s a key indictment:

Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

Further, in today’s New York Times, Bill George, a Harvard Business School professor and former chairman and CEO of Medtronic, comes out blasting consumer targeted tax stimulus programs in favor of a series of business tax incentives and inducements that would encourage U.S. investment and hiring. No sooner does the government get lambasted for interference and heavy-handedness after its trillion-dollar American Recovery and Reinvestment Act than a new barrage of critics call for policy’s helping hand to move the dollars from the household to the business community.

To get the country growing and Americans back to work, the government must shift course to invest in America. Tax policies and incentives should stimulate private sector companies to invest domestically in research, innovation, manufacturing, infrastructure and exports

From vacation’s remove, the red v. blue fray over policy and the nation’s treasury seems only slightly more imbecilic than press tidings that America has yet, actually, to take its medicine for The Great Recession and that we’ve instead tried to glean the nobler parts of The Depression with a great deal less of the pain and agony of that earlier slump. Such a Puritanical manifesto seems to underlie the analysis Judith Warner offers in yesterday’s Sunday New York Times.

Our nostalgia for the Depression speaks volumes about how we feel not just about the past but also about our lives today. A creaving for a simpler, slower, more centered life, one less consumed by the soul-emptying crush of getting and spending, runs deep within our culture right now.

Warner’s theory–which seems to suggest someone is to blame for something but won’t say whom or what–is not so unlike another piece that published while we were lazing with the seals. It appeared July 30 in the Financial Times, and was highlighted in Barry Ritholz’s The Big Picture blog.

The FT piece reads as a stop-action report on the giant You Tube video we mentioned earlier. It does what newspapers do best and worst. It gets all or most of the facts right and gets the story at least somewhat wrong.

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.

If that’s not an editor saying, “find me story for why the rise of Tea Party America,” then we don’t know what would be.

Again, we lay out  in the sun among the napping seals, but we couldn’t help but think that all the accusatory noise about one political party or the other being to blame for the present state of the economy is just that, noise.

At issue is that it’s currently cheaper to scale manufactured goods and a growing number of services in overseas lands than it is to do that here. Either until consumers in those overseas lands begin to buy enough of what the U.S. produces, or when workers in those places get powerful enough and scarce enough to charge more for their labors, there’ll be a natural shift by companies toward sourcing materials, products, and services from non-domestic markets.

If the industrial age made what people needed more attainable and the post-industrial age made what people wanted more attainable, the question is how we follow that act. 

Assuming for a moment that we haven’t gotten things quite as wrong as Sunday Times writer Judith Warner would suggest, nor that the U.S. middle class simply will go by the boards, we’ll have to figure out a decade or so bridge to when the Indian and Chinese economies become true consumer-led economies that will demand U.S. produced goods, services, and talent.

Or so the sleepy seals would have us think.

New Home Economy Works Slowly from the Bottom Upward

The story behind new home sales data out today, we believe, is that home builders collectively are managing seriously adverse economic conditions about as well as one can imagine in the limbo of  a thus-far jobless recovery.

Look, for three years, the outspoken veteran home building company executives said the housing market was the worst they’d seen in their lifetimes. It could hardly come as a surprise to see unstimulated new-home demand revert to historical lows.

Remember, the absolute number of people who are out of a job is the highest it’s ever been, and the absolute number of homes in or headed for default is the highest it’s ever been as well. The multiplier effect of both of those trends hammers consumer spending, and bruised consumer spending translates into more pink slips.

So how could the new-homes number have eluded the economy’s wrecking ball once the U.S. government removed its tax support for purchases?

One of the more negative headlines, from blogger Calculated Risk, cites an all-time record low for June 2010, vs. a prior non-seasonally adjusted June of 1982.

Again, we’ll say that if you’ve got some of the sales associates who actually took deposits in May, June, or this month on new homes, you’d better do what you can to hang on to those sellers in the months ahead.

In the teeth of this adversity, small, medium-sized, and larger home building organizations have gotten yeoman’s work from their many-hat wearing associates.

Collectively, they’re turning inventory faster and they’ve ratcheted down both the absolute supply number (to 210K, down from 213K), and months’ supply, from 9.6 months to 7.6 months.

What’s more, analysts have observed the beginnings of a return to the market of first time buyers, as well as those in higher price points, indicating that contingency sales have begun to pan out for a number of folks in the new-home arena.

Even in the unlikely event that the unseasonally adjusted number of 1,000 new-home sales a day were to continue at its slow pace, and if the absolute supply number falls at the current level of 1.4% a month, we’ll be inside of six months’ supply by the end of 2010.

That’s hard work. And that sets up better times in 2011.

The very big question to think about, even if there’s little home builders can do about it, is job growth. A true housing recovery remains a ludicrous notion in the vacuum of a consumer-driven economic and jobs recovery, even if there are positives in home builders’ collective management of the supply of their wares.

Too, home builders can spark demand–like rubbing sticks together–if they can buy land cheap enough, which is not, for the most part, what they did in 2009 and the first part of this year.

Many of the finished lots purchased in the past 18 months were at rates that may reconcile to divisional operational overheads, but hardly pencil to a reset in the cost of homeownership that one may still reasonably expect after the dislocation and financial trauma of late 2008.

Strategically, just as home builders need–as a group–to learn more about who their home buyers are and what makes them tick, they’ve got to make strides on the buy-side of the equation as well.

When it comes to land buying, too often home builders get played for chumps. They are too easily played against one another, and too often they get tricked into not playing their own game.

Right now, for private home builders anyway, the ones to beat are not other home builders; the ones to beat are the banks. The banks hold (or rather, they’re mired in) assets, real and paper, for which they have no clue about how to get dollars. What they will get for the REO properties they’ve taken over from builders and developers are fines, headaches, taxes, lawsuits, lost money as entitlements expire, and grief.

A couple of home building companies–Lennar’s Rialto and Toll Brothers’ new Gibraltar unit–have set up to work with the FDIC at the bottom-dollar level to get value from holdings like this.

But, among banks who are still solvent, home builders may play at least a small role in their redemption from the hell of assets that can take on an evil life of their own if they’re not in the hands of someone who knows what to do with them.

Now that there’s beginning to be flashes of capital availability, home builders–particularly ones that can help banks work out of the myriad petty jams that some of their unintentionally acquired real estate holdings represent–may finally get their opportunity to buy low enough to sell something for a profit. 

At least banks have staffed up their special services departments, and they’re said to be moving real estate deals to resolution, versus playing extend and pretend possum with the assets.

It figures home builders would have to take on yet even more risk as investors in recovery before they’ve got true visibility on its arrival.  But that’s what it means when your industry sector is called the engine of the economy.

Somebody has to start spending money first, so hire a land expert who can get a bank out of a broken, messy, legally troublesome deal, and you’re on your way for dimes on a dollar.

FDIC Release on $1.8B AmTrust Deal with Toll’s Gibraltar and Oaktree May Come Tomorrow

The Federal Deposit Insurance Corp. could announce as soon as tomorrow its auction of a $1.8 billion portfolio of distressed loans under the now-defunct AmTrust Bank to a joint venture of Toll Brothers’ new Gibraltar  Capital and Asset Management unit and Los Angeles-based private equity player Oaktree Capital Management, according to an executive familiar with the transaction.

“Normally, the FDIC would have put out an announcement by now, but they’ve been busy with a lot of issues these days,” said this executive, who asked to remain anonymous. “The press release may come as soon as Thursday this week. We think they’re paying about 30-plus cents on the dollar.”

Here’s an excerpt from an FDIC release on the award of another $898 million AmTrust pool of residential mortgages to a consortium of financial players led by Residential Credit Solutions, CarVal, and RBS Financial Products.

AmTrust bank failed on December 4, 2009, and the FDIC immediately entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all the deposits and approximately $9 billion of the assets. This transaction completes the sale of the majority of the remaining assets of AmTrust Bank.

• See related story from Big Builder’s Teresa Burney on Toll Brothers’ new Gibraltar unit.

Word is, the AmTrust 280 loan portfolio with an average of $6,000 per loan encompasses 1800 properties, primarily in the Nevada, Arizona, California, Florida, Georgia, and the D.C. Metro/Maryland markets.

The Oaktree-Gibraltar JV’s assumption is that, after combing through the 1800 properties, they–like Lennar’s Rialto–have an opportunity to profit at least three different ways on the financial disposition of the property assets covered under the loans.

• They earn management fees as they move some properties through to foreclosure and an ultimate sale;
• They can selectively sell properties to home builders or developers;
• They can rehab or develop the properties through the Toll Brothers operation and put more value on deals that may have failed sheerly due to lack of adequate capital access.

The Gibraltar-Oaktree JV, just like in the Rialto case, will have to cover its nut with the F.D.I.C. before it can write profits on to its balance sheet and flow them through to Toll Brothers’ Corp.

We hear that Oaktree’s deal with Toll Brothers taps into a different fund than the acquisitions joint venture it had formed last year with Ryland Homes. “Other home builders are not part of this AmTrust/FDIC deal,” according to the executive we spoke to.

Now that Lennar has triggered a financial skill-set it had developed during earlier downturns and Toll Brothers has established a captive unit to play in the distressed paper and hard asset arena, it may be a question as to whether other home builders explore adding such capabilities to their repertoire. This question surfaces especially as conventional home building operations continue to battle lack of visibility and low absorption rates.

No doubt public home building companies will explore all means possible to generate cash and write new profitable business onto their balance sheets, but most are set up with more limited financial resources and expertise than Lennar and Toll, and would have too much to learn too quickly to avail of the opportunities in so sophisticated a financial/legal game.

We’ve head KB Home is taking a look at partnering and that M.D.C. Holdings has had a conversation or two, but most companies will focus short term on opening stores and taking share, primarily from the nine out of 10 home buyers these days who are opting for a resale vs. a new home.

“Problem is, we’re competing with resales that were built in more and more cases in 2005 and 2006, so we have to do better than ever at getting our share,” said the CEO of one of the nation’s leading public home building companies.

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  Welcome to HousingCrisis.com, a unique source for what you need to know about the real estate and construction economy--with helpful news, data, and conversation about your smartest options. We'll highlight exclusive articles, related stories, and linked resources real-time so that you'll have information you need, hopefully a step ahead of the moment you need it.

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