Finance & Economy

Real Estate

Demographics = destiny? Ivy Zelman and Dennis McGill challenge the housing orthodoxy

October 20, 2021

Demographics = destiny? Ivy Zelman and Dennis McGill challenge the housing orthodoxy

Ivy Zelman

CEO & Co-Founder of Zelman & Associates

Zelman & Associates CEO Ivy Zelman and Director of Research Dennis McGill discuss why they are bearish on the housing market and the areas they'd invest in.

If there is one thing that housing is defenseless against, it's demographics. Zelman & Associates CEO Ivy Zelman and Director of Research Dennis McGill joined us on the latest Walker Webcast to discuss why they are bearish on the housing market, the areas they'd invest in, Ivy's memoir, Gimme Shelter, and more.


The webcast begins with Ivy diving into the three biggest lessons she learned in her career, as discussed in her new memoir, Gimme Shelter. These lessons, such as asking for help, networking, paying it forward, and taking risks, are the reason Ivy is the success she is today. Ivy then speaks of the importance of networking and treating others as you would wish to be treated yourself. In Gimme Shelter, Ivy recounts her own experience with sexism and sexual harassment and her experience being a woman in the industry. Ivy urges everyone to draw the line in terms of what's appropriate.

Then, Ivy shares her more relaxed method of watching the stock market now, a big change from the anxiety it used to give her. A large part of their job at Zelman & Associates is to be up to date on the market and understand current trends. Collectively, the data represents a larger overall story but individually equates to noise. Dennis believes that if you get too caught up in the noise, the bigger picture becomes harder to see.

In 2005, Dennis and Ivy published Investors Gone Wild containing many controversial statements for the time about the housing market. Despite the pushback, Ivy and Dennis stood firmly beside their research, which proved to be accurate. Dennis stresses the conviction one must have, which is so necessary for this line of work. Shifting gears to discussing Zelman & Associates' more recent research, Willy highlights a line from Dennis stating that housing is defenseless against slowing demographics. The pandemic has created all kinds of distortions around housing, but when the dust settles, Dennis expects we will be witnessing a lowering of housing demand due to demographic shifts. Recent reports show fertility rates in the U.S. will be negative for the first time in history, which will undoubtedly impact the housing market. Here, however, immigration gives us a chance to prevent a further decline in populations.

The biggest rebuttal heard at Zelman & Associates is that population decline is only happening in specific markets. To this claim, Dennis points out that as the population shrinks or grows at a slower pace, the incremental supply needed is less than what is historic. Right now, investors are very prevalent in the marketplace again and represent a large percentage of buyers. Many people concerned about being in dense markets have opted for the suburbs of cities and own more than one home. The net worth of a homeowner has inflated during the pandemic, which increases the desire for newly built homes. Most of the land available now is in underdeveloped areas, forcing some people to compromise location to secure this new housing.

Finally, they discuss the opportunity to be made in the housing sector in the context of renting. Everyone in the industry knows how localized housing markets are. Ivy shares that understanding supply and demand and employment is key. She urges build-for-rent investors to look towards markets that are less popular and find opportunities without the competitive pressure.


Purchase Gimme Shelter
Learn more about Ivy Zelman.
Learn more about Dennis McGill
Check out Walter & Dunlop's website

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