YouSaid · the spoken record

Ivy Zelman

lines on the record: 77
first: 2019-05-03
most recent: 2019-05-03
sittings or episodes: 1
sources: podcast

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“Provide shelter for the incremental households growing and those getting knocked down and demolished. That's a pretty strong positive part of the thesis. Now you mentioned half the market for the United States recovered. That's in terms of home prices.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the housing market right now is pretty healthy. 2018 was a tough year. The market decelerated pretty much most of the year, month to month worse than normal seasonality. But by the time we got to the end of the year, it ended with a big thud. And a lot of people thought housing was going to lead us into a recession again, mainly due to the stock market turmoil getting the political turmoil, global uncertainties, sort of perfect storm. So housing came to kind of a screeching halt. And yet the fundamentals actually were pretty favorable. We have strong job growth, consumer confidence is high, and incomes are accelerating. And if you look at the housing market from supply and demand, we actually have a pretty significant deficit of a lack of supply, which we estimate to be about 25%. So when you just look at what we need in order to”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I actually, my husband and I, we owned a home in Florida, and we'd go out to the beach and was in a community. And the guy that was putting the umbrellas in the sand, Chris, he told my husband that he owned about 10, 15 lots. And I was like, and this is probably 2004, 2005. And he was asking my husband, do you want to go look at some lots with me? Because you can buy them with no money down. And I was like, I'm like, David, do you hear this? This is crazy. So, you know, everywhere, you know, but Steve was on it. He had the call. He really did.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, John Paulson was one of our clients that we talk to regularly, Steve Eisman was one of my buddies. I probably spoke with him daily along with his team, Danny Moses and Vinny Daniels. Those guys were every day we were on the phone with them. There were some people that were really convinced as we were that this bearish call at some point was going to work.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The 10 was they were, you know, basically the mortgage market was not sustainable. The fueling of the growth was coming from these ridiculous, these exotic mortgage products. You had land prices were going to crash. We had consumers that were not buying because the investors were buying. I'd have to go back and look at all the specifics.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no write-offs, no write-offs or anything. So that was October 06. That was another sort of flagship report. But in December, the stocks kept going up. So they were rallying in our face. We're getting a lot of backlash. Salesforce was against us. People internally were like, what's the story? And in December, we came out with the 10 reasons to sell homebuilding stocks. Give us a few.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“We're talking billions and billions of dollars. And in actuality, it turned out to be 50 to 60% that they wrote off. So we were way off, but we were so contrarian at this time. Nob”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, this was a managing director running all of the morning call product manager, and I was pretty pissed off. And actually went to my director of research and complained. And actually, the research director was very supportive of me. And so They were great to me, but this particular person, unfortunately, was someone I was pretty upset with. But subsequent to that sort of the Zellman bottom, we published something in October of 06 called Wonderland. And Wonderland was basically saying that the home building industry is going to have to write off equity because they've overpaid for so much land. We actually estimated about a 20% equity write-off.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“And that you need to get with it, and you need to be more bullish. You had your little good time now. Now you need to turn around and be bullish. And I remember publishing, Dennis and I, we had fun writing this report in December of 2006. We wrote 10 reasons to sell home building stocks”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Betrayed, right? Well, we were not very popular, and you know, I was even told by the head of product management from Credit Suisse's perspective that your job could be at risk if you don't make, you know, you had your, I think in 2006, this is what happened. 2006, the stocks were down about 40%. And there was a slowing, and we were right. And then Bob Toll and Toll Brothers said, hey, things are picking up. This is back in September of 06, and they called it the Zellman Bottom.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, my team at Credit Suisse, Dennis McGill, who was my partner associate, and he's the co-founder of Zelman Associates, along with Alan Ratner, who was also working with us on the team Accredit Suisse. We were working as equity analyst really focused on housing, but we were servicing the entire firm because we were such in the eye of the storm. And we had such a controversial call. And I had such an unbelievable network that we created through these private industry contacts that we wanted, we weren't feeling that we were, first of all, we were unfortunately A lot of people internally within the sales force and the traders and the securitization, the ABS guys, they didn't agree with our call. So we were a little bit”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the market was really demanding growth, and they were willing to put the capital to work. You know, it's one of the only businesses that, you know, once you build the factory and then sell it, you have to rebuild your factory. And unfortunately, this is one of a factory that you have to invest 50 cents to 70 cents to make a dollar revenue. Capital-intense business, and you start buying land that won't be, let's say, put into the manufacturing capacity utilization machine for a few years, you can really put some significant risk on the balance sheet.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I think there was a view that the demographics had shifted and that there was support for a secular growth in housing that we hadn't seen in prior cycles. That was what the companies pitched to the investment community. And they really believed in many of them. They also had Wall Street pushing hard to drive top line. So, what had been matching short term assets with short term debt or long-term debt with long-term assets, you know, what you started seeing is builders willingly taking on more leverage, buying larger parcels, because it would feed the machine and enabling them to continue to show strong growth.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Having the ability to talk to private companies and who would be competing with the builder for that land, and the private builders would tell us, oh my God, you cannot believe what these guys are paying for the land. That was another part of our analysis that really led us to understand the risks that these companies were really willing to absorb at the expense of shareholders.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Pretty blunt. I remember a report that we untitled Investors Gone Wild in July of 2005. We had like a thousand people on our conference call across all of Beyond Equities within fixed income and derivatives everywhere. The securitization guys were there. But generally speaking, the amount of investors when you go to, let's say Las Vegas and you're driving from the airport and your taxi driver is telling you he's buying houses and then you go to the nail salon, the woman in the nail salon is doing your nails is buying houses and you realize we got maybe we have a problem. I think that the investors and the magnitude that we're buying both new and existing homes with no money down and understanding the mortgage piece was probably one of the biggest parts of our conviction on why we had a real problem here and mentioning again affordability was clearly way out of reach from any historical perspective. The other aspect of it besides investors gone wild was the amount that the builders were willing to pay for land.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I don't know that you can put pin it on one thing other than greed. Certainly the inability Really take sort of the entire mosaic and see the risks that was so, in our opinion, obvious. A lot of people started, I call it, drinking their own Kool-Aid and believing that there was a secular shift in home ownership rates and that the government was certainly supportive of continued enabling people to have the American dream. But there was an optimism that was not supported by the ingredients that go into creating that opportunity for people. So it just was a, again, as if people just were convinced that it was different this time. Housing was, you know, going to go up forever.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, again, I can't speak on behalf of what other firms are doing, but I know what we don't do And I can tell you that back in the, I guess, go-go days of the housing market in 2003, 04, 05, I wasn't a very popular analyst working at Credit Suisse when I was negative. And certainly the companies didn't see eye to eye with my views. And it's like being the sober person at the party. So I was definitely a lone ranger at times.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Then triangulating it amongst this ecosystem to have a firm view of what's going on in the market. And I don't think it's unique to Zellman. No one else has anything like what we do. And it's been built over the course of the decades that I've been in the business. So I can't say what other firms do, but I think we get it right.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, looking at really our firm, which we think we do get it right, what we've built has enabled us to really differentiate our overall views because we're dependent not upon what economists are predicting or other outside parties' perspectives, meaning publicly traded management teams telling them what they should do. We're really going outside through our own network, which again we channel check, develop relationships. We have nearly a thousand companies that are throughout what I call the housing ecosystem, whether they're a builder, they're a broker, they're a mortgage originator, they're a manufacturing company that makes building products, or they're in the single family rental business as an owner operator apartment. We're taking all of these silos and we're aggregating data that is proprietary data within each silo.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Not that much, to be honest with you. In fact, not to give too much credit to any one person, but it was really, I was assigned a buddy, Solomon Brothers decided that a salesperson and analyst would be become buddies and they would work closely together for the younger analyst to learn from the senior salesperson. And this senior salesperson really said, you know, you need to go dig in the channel. You need to find private companies. And that was really the direction I went. Now it just so happened I happened to have married my buddy, but that's a longer story. But my husband David really was the one who directed me to go find private companies and that will really help differentiate you.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think what I really loved about it initially was the fact the challenge was to really find ways to differentiate the work that I was doing. And when you have a fragmented industry, and housing is something that, you know, I could relate to. I lived in a home. I like the housing market. It was really about finding companies that were privately held that”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely agree with that. And I certainly don't agree with the monkey comment, but it was the beginning of now my nearly 30-year career as an equity analyst.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“An associate, and I was just happy to have a job. People were like, You don't want to be an equity research analyst, they're just like monkeys. They just companies tell them what to write. And I just wanted to get a job and stay at the firm. And there you have it.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“The ship, okay. Pretty much. And prior to Warren Buffett riding the ship, the view was there, you know, the lights were going to go out at Solomon. Oh, really? A lot of people were leaving, and there was an opportunity that opened up in equity research in the housing space and the actually in corporate finance. I worked in transportation group, and gentlemen by the name of Julius Maldudas, who is a famous airline analyst, he's like, you should go work in equity research, you know, and go help them. So I got a job with his recommendation as an associate. At that time, it was Bruce Harding who covered S&Ls and Fannie and Freddie, and he was picking up home building and housing as a favor because Bob Bishop quit said, I'm out of here, as many other people were quitting.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“A two year lifespan, and most of the 70 odd plus or minus will go on to get their MBA and then return, you know, back to Wall Street. And because I had student loans already through undergrad and unfortunately didn't want to take on the responsibility or go back to school after six years, I just was looking for a job to pay my rent. And internally, we had something called the Treasury scandal going on at that time. And unfortunately, John Goodfriend and the firm was in turmoil. So a lot of people.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a lot of fun. I think starting out, first being in a class because I was in a training program. I think I was one of three women of 70 kids. And we were all there for two years. I was intimidated because most of them were from the Ivy League. And so I initially, not even being just a woman, but just having from a state university. But once you're there, you put your head down, you work hard. And it was really just about proving myself and working hard as I can. So I think that today I look back on that time and I had a lot of fun, but it was about just, you know, execution and working as hard as you can to prove yourself.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, actually, I didn't start out interested in housing, admittedly. I was really focused as an undergrad on accounting, and I was working at Arthur Young, now Ernst Young, going to night school. So I went to undergrad for six years, and during the time that I was studying at George Mason University and working at Ernst& Young as an accounting major, I was asking a lot of these accountants that I worked with, do you like what you do? And they hated it. Universally, everyone I talked with said, you don't want to be an accountant. So I was like, well, what should I do? And they basically all said, go get a job on Wall Street. And I'm like, what does that mean? Because at George Mason, Wall Street firms didn't recruit students there. So I had to network and knock on doors. And eventually it led me to Wall Street where I got a job at Solomon Brothers in investment banking. And I was there for a two-year stint as an investment banking analyst prior to be coming into equity research and housing.”
2019-05-03 · Masters in Business · Ivy Zelman Discusses Real Estate · IDENTIFIED FROM THE TRANSCRIPT · source