Transcript: Ivy Zelman


The transcript from this week’s MIB: Ivy Zelman on Real Estate and Housing-Related Industries is below.

You can stream/download the full conversation, including the podcast extras on Apple iTunesBloombergOvercast, and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast, and Bloomberg.



This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Her name is Ivy Zelman and I have been following her research and writing for the better part of a decade plus.

She has had a series of phenomenal calls within various aspects of the real estate industry be it the homebuilders, the mortgage originators, the credit underwriters. She is definitely a contrarian. She is somebody who is extremely astute as to the economic cycle and how it affects housing.

If you were or at all interested in real estate, credit, homes both single-family and multifamily and all of the latest innovations in either technology or financial innovations and financing of — especially from the private equity side, we just spent some time talking about eye buying the instantaneous buyers that have appeared that facilitate transactions of sellers, I think you’re going to find this conversation filled with wonky goodness.

So, with no further delay, my conversation with real estate and equity analyst expert Ivy Zelman.

I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio. My special guest this week is Ivy Zelman. She is the CEO and Founder of Zelman & Associates, a boutique research firm focusing exclusively on the housing industry. She is an institutional investor Hall of Fame equity analyst. The All-American Research Team rankings placed Ivy and her team with 11 first-place rankings between 1999 and 2013.

Ivy Zelman, welcome to Bloomberg.

IVY ZELMAN, CEO AND FOUNDER, ZELMAN & ASSOCIATES: Thank you, for having me, Barry.

RITHOLTZ: So, you cover one of my very favorite areas because it’s so fascinating especially in the United States, housing, the pursuit, construction, financing of it, let’s talk about the early days of your career and how you became a housing analyst. You began on Wall Street 1990, is that about right?

ZELMAN: That’s right.

RITHOLTZ: What path led you there?

ZELMAN: Well, actually, it 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.

They — almost universally everyone I’m talked with said, you don’t want to be an accountant. So, I was like, what should I do, and they basically also go get a job in Wall Street and I’m like, what does that mean, because at George Mason, Wall Street firms send recruit students there.

So, I had to network and knock on doors and eventually it led me to Wall Street where I got the job at Salomon Brothers, an investment banking, and I was there for a two-year stint as an investment banking analyst prior to be coming in — going into equity research in housing.

RITHOLTZ: So, all told, you there from 1990 to 1997 …

ZELMAN: Right.

RITHOLTZ: … is that about right?


RITHOLTZ: Kind of overlapping with the Michael Lewis’ “Liar’s Poker” era.

ZELMAN: Right. One of my favorite books. That’s right.

RITHOLTZ: So, that is a very much a male dominated period in Wall Street, not that Wall Street has really done enough to even the gender levels, but back in the ’90s, that had to be kind of a wild place to work.

ZELMAN: It was a lot of fun. I think starting out first being in class because there were — 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.

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 execution and working as hard as you can to prove yourself.

RITHOLTZ: So, how did you transition from investment banking analyst to housing analyst?

ZELMAN: After two years, you’re out of a job which you know that’s the case when you took the job.

RITHOLTZ: It’s a two-year lifespan.

ZELMAN: It’s a two-year lifespan and most of the ’70 odd plus or minus will go on and get their MBA and then return 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 Gutfreund in the firm was in turmoil. So, a lot of people …

RITHOLTZ: Is this the period where Warren Buffett came in and ride in the ship.

ZELMAN: Right.


ZELMAN: Pretty much and prior to Warren Buffett riding the ship, the view was the lights were going to go out at Salomon and …


ZELMAN: … and 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 a gentleman by the name of Julius Maldutis, who’s a famous airline analyst, he’s like, you should go work in equity research and go help them.

So, I got a job with his recommendation as an associate in the — at that time, it was Bruce Harding (ph) who covered S&Ls and Fannie and Freddie and he was picking up homebuilding and housing as a favor because Bob Bishop quit and said, I’m out of here, as like many other people were quitting.

So, I became an associate and I was just happy to have a job. People like, you don’t want to be an equity research analyst. I mean, they’re just like monkeys. They’re just companies telling them to write and I just wanted to get a job and stay at the firm and there you have it.

RITHOLTZ: To be fair, some of them are not monkeys, some of them are insightful researchers who put forth intelligent, actionable, wealth-generating research.

ZELMAN: I absolutely agree with that. And I certainly don’t agree with the monkey comment. But I — it was the beginning of now my nearly 30-year career as an equity analyst.

RITHOLTZ: So, not as a monkey but …

ZELMAN: Not as a monkey.

RITHOLTZ: … actually generating research. So, you’re kind of thrown into housing, how did you suddenly discover such a proficiency for it, what made you so astute as someone without a background in housing going into that space?

ZELMAN: 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 I could relate to, I live in a home, I like the housing market, it was really about finding companies that were privately held that are in the business of housing whether they were a homebuilder or a realtor like your mom or building product manufacturer and talking to them about the business and learning from them and then you using that analysis to then try to correlate or predict what public companies would do.

RITHOLTZ: Were other people delving into private companies at that time as a way to give them a little more color into what the reality of the public corporate situation was?

ZELMAN: 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. Salomon Brothers decided that a salesperson and analyst would become buddies and they would work closely together for the younger analysts to learn from the senior salesperson.

And this senior salesperson really said, you need to go dig in the channel, you need to find private companies, and that was really the direction I went. Now, just so happen, I happen to have married my buddy but that’s a longer story. But my husband David really was the one who took directed me to go find private companies and that will really help differentiate you.

RITHOLTZ: Quite fascinating. So, let’s talk a little bit about Wall Street and housing. I think for the most part, Wall Street has not done a distinguished job covering housing in general, covering the retail and department store sector.

Certainly, the credit companies that are associated with residential housing, what’s your view? Is Wall Street — am I overstating this or does Wall Street not do a great job getting housing right?

ZELMAN: Well, 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 meeting 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 builder, they’re broker, they’re 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 and we’re 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 Zelman 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.

RITHOLTZ: Well, it sounds like Wall Street is generally a little too close with corporate management than they’re looking for guidance and not doing a sort of deep outside-the-box research dive into various aspects with housing or, again, am I’m overstating that?

ZELMAN: 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 ’03, ’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 looks like being the sober person at the party. So, I was definitely a Lone Ranger at times.

RITHOLTZ: So, let’s talk about that period. Financial engineering was endemic, securitization was a giant revenue source and we ended up seeing that eventually spiral out of control into the great financial crisis. So, what is it about that era that led so many people astray especially the supposed smart guys doing the quantitative research?

ZELMAN: I don’t know they can put — pin it on one thing other than a greed. Certainly, the inability to really take sort of the entire mosaic and see the risk 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 and homeownership 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 in to creating that opportunity for people. So, it just was, again, as if people just were convinced that it was different this time and that housing …

RITHOLTZ: Expensive works.

ZELMAN: Housing was going to go up forever.

RITHOLTZ: So, I want to point out, this is not a case of hindsight bias where, of course, the risks were obvious says everybody today. In real time, I recall reading some of your research ’04, ’05, ’06, when did you leave, ’07?

ZELMAN: May of ’07.

RITHOLTZ: So, in real time, before the bust, you were effectively saying there’s a problem with credit, there’s a problem with housing, this is unsustainable, what was the research that you were putting out at that time saying? How blunt were you?

ZELMAN: Pretty blunt. I remember a report that week titled “Investors Gone Wild” in July of 2000. I think we had like a thousand people in 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 who’s doing your nails says, he’s buying houses, and you realized maybe we have a problem.

I think that the investors in 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 for many historical perspective.

The other aspect of it besides the investors gone wild was the amount that the builders are willing to pay for land and 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, 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 understanding the risks that these companies were really willing to absorb at the expense of shareholders.

RITHOLTZ: You put your finger on a couple of things I want to bring up. One of which is historically, most builders are pretty cognizant of the real estate cycle and the business cycle and they get aggressive when things are cheap and when things get expensive, they pull back.

But for some reason, it seemed that a lot of people sort of stopped doing that in ’05, ’06, ’07. What was it about that period that made them forget, no, we don’t want to pay up for lands, it will come back down when the cycle turns?

ZELMAN: Well, 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 the — that was what the companies pitched to the investment community and they really believed many of them.

They also had Wall Street pushing hard to drive topline. So, what had been matching short-term assets with short-term debt or long-term debt with long-term assets, 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.

And so, the market was really demanding growth and they were willing to put the capital to work. It’s one of the only businesses that once you build the factory and then sell it, you have to rebuild your factory. And unfortunately, this is one factory that you have to invest $.50 to $.70 to make a dollar revenue.

It’s 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.

RITHOLTZ: Quite interesting. So, let’s talk a little bit about the timing of the launch of Zelman & Associates. You do this was it later in ’07, is that right?

ZELMAN: We left Credit Suisse in May and started Zelman on October 3, 2007.

RITHOLTZ: Okay. So, October 5, 2007, the equity markets …

ZELMAN: October 3rd — sorry.

RITHOLTZ: No. October 5, 2007 is when the equity markets peaked that it would not see the level again until 2013. So, your timing was kind of interesting and coincidental. You, obviously, saw some variation of what was coming. Why launch into that sort of mayhem or was the expectation, hey, nobody’s job is safe, we might as well do it ourselves or what were you thinking?

ZELMAN: Well, my team at Credit Suisse, Dennis McGill who was my partner associate and he’s the cofounder of Zelman & Associates along with Alan Ratner who is also working with us in the team at Credit Suisse, we were working as equity analyst really focused on housing but we were servicing the entire firm because we were as such in the eye of the storm.


ZELMAN: And with 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’re a little bit …

RITHOLTZ: Somebody has to be on the wrong side of the trade, right?

ZELMAN: Well, we were not very popular and 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 had your — I think in 2006 this is what happened.

2006, the stocks were down about 40 percent and there was slowing and we were right and then Bob Toll and Toll Brothers say things are picking up. This is back in September of ’06 and they called it the Zelman bottom 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 2006, we wrote 12 reasons or the 10 reasons to sell home building socks.

RITHOLTZ: Wait, let me — let’s just make sure I understand the timing here. So, you’re negative on homebuilders and housing stocks, the full 40 percent over the next 24 months, is that fair?

ZELMAN: I think it was July of ’05 was when they — we started releasing inventory strain to …

RITHOLTZ: So, 12 months.

ZELMAN: Let’s say 12 months.

RITHOLTZ: So, this is a fierce bear market and it’s only the beginning down 40 percent and somebody, not your direct boss, but somebody in the firm says, all right, you’ve had your little fun, you’ve had your little pullback, you better flip bullish. And your contrarian response is, bullish, watch this.

ZELMAN: Right.

RITHOLTZ: No hesitation, not wondering about, hey, these guys can get me fired. There was no thought about that. What was there?

ZELMAN: Well, this was a managing director running all of the morning call, a 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, with that, it was — they were great to me but this particular person unfortunately was someone I was pretty upset with.

But subsequent to that sort off they called the Zelman bottom, we published something in October of ’06 called Wonderland and Wonderland was basically saying that the home-building industries going to have to write off equity because they’ve overpaid for so much land. We actually estimated about a 20 percent equity write-off.

RITHOLTZ: How much was that in actual dollars?

ZELMAN: I don’t remember …

RITHOLTZ: But we’re talking billions and billions of dollars.

ZELMAN: Yes. In actuality, it turned out to be 50 percent to 60 percent that they wrote off.


ZELMAN: So, we were way off but we were so contrarian at this time. So, that was …

RITHOLTZ: Nobody else was saying 20 percent write-off.

ZELMAN: No. No write-offs.

RITHOLTZ: And starting out to triple that.

ZELMAN: Yes. 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.


ZELMAN: So, they’re rallying in our face. We’re getting a lot of backlash. Sales force was against us. People internally were like what’s the story. And in December, we came out with the 10 reasons to sell home building stocks and …

RITHOLTZ: Give us a few reasons out of the 10.

ZELMAN: The ten was they were basically the mortgage market was not sustainable. The fueling of the growth was coming from these ridiculously exotic mortgage products. You had land prices were going to crash. We had consumers that were not buying because the investors were buying. I have to go back and look at all the specific but …

RITHOLTZ: Any big clients say, I don’t care about that this is contrarian, I’m going to do this and put giant bets to work?

ZELMAN: Sure. John Paulson was one of our clients that we talked to regularly. Steve Eisman was one of my buddies. I probably spoke with him daily along with his team, Danny Moses and Vinny Daniel. 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.

RITHOLTZ: So, the Selma [sic] Gomez character in “The Big Short” that was supposed to be you, is that right?

ZELMAN: I got one quote in there but not that one.

RITHOLTZ: You did? What was the quote in “The Big Short”?

ZELMAN: I don’t remember the quote but Mike Lewis did stick me in there.

RITHOLTZ: You mentioned the cab driver in Vegas on the way back from the airport. My favorite scene with Steve Carell is he’s — I don’t remember if it was a stripper or a waitress but it was in a strip club and he’s asking her, they’re talking about real estate, and he’s saying, how do you afford the mortgage on that house, and she goes, that house, I own — I have four houses.

And that’s the moment where, Okay, I think I have to — I don’t remember what character he was, who he was playing in real life.

ZELMAN: He was playing Steve Eisman.

RITHOLTZ: He was Steve Eisman. Okay.


RITHOLTZ: So, that character …

ZELMAN: Absolutely.

RITHOLTZ: … that’s the moment. It’s a little more dramatic in the strip club than speaking to a Wall Street analyst about …

ZELMAN: Well, I actually — my husband and I, we owned a home in Florida and we go out to the beach in the community and the guy that was putting the umbrellas in sand, Chris (ph), 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 to hound and I was like, David, do you hear this, this is crazy. So, everywhere — but Steve was on it. He had the call. He really did.

RITHOLTZ: So, a friend of mine called that era the so-called home owners were really renters with an option to default, which I thought was kind of amusing.

ZELMAN: Yes. Interesting.

RITHOLTZ: Let’s talk a little bit of where we are in the housing market today. I’ve seen a couple of things that remind me a little bit of the early 2000s. HGTV is going strong and “Flip This House” is back and although these days it seems to be more about renovating than it is about buying and selling them.

But the housing market seems to have mostly recovered in about half the country, I’m ballparking that. Where do you see the housing market today and does it remind you at all of the bad old days?

ZELMAN: I think the housing market right now is pretty healthy. 2018 was a tough year. The market decelerated pretty much most of the year, more 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, the 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 percent.

So, when you just look at what we need in order to 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 United States recovered, that’s in terms of home prices. So, about half of the country is actually below its prior peak.

As you think about pricing, the pricing in the housing market is a little bit now more challenging. So, builders are in fact and brokers, real estate agents, are seeing a momentum in spring pick back up from the thud now with the stock market close to record highs again, the political turmoil has settled down.

But spring selling season actually is definitely pretty good. Now, the entry level is much stronger than the move up in luxury and depending on a market where job growth might be stronger versus another city where it’s not as strong so all real estate it doesn’t necessarily move in tandem.


ZELMAN: But right now, I’d say it’s healthy and affordability is still reasonable. I don’t see a lot of concerns at this point, things that we’re watching. I’m happy to elaborate. But generally, I’d say we feel pretty good about the market today.

RITHOLTZ: So, we have constrained supply relatively low rates even after the past (ph) year of increases. Rates are still historically — what is the mortgage today, four percent, 4.5 percent?

ZELMAN: Four and a quarter. Four and a quarter.

RITHOLTZ: I mean, that’s pretty reasonable, isn’t it? So, given the limited supply and low rates, was does that mean for home prices over the next couple of years?

ZELMAN: Well, home prices have been up. The first year they increase was 2012 and since 2012, we’ve been running at about a five to six percent growth CAGR and what we’re seeing right now is some moderation in home price appreciation.

The inventories available for sale in the United States if you look at it over a long period of time and we look at it inventory — those homes listed for sale as a percent of households which we think it provides a trendline unlike most realtors and your mom probably talked about months’ supply.


ZELMAN: What we tell you is that inventories in the U.S. are actually nearly at 30-year lows. So, inventories nationally are very, very low and what that means is that there is more demand and supply so prices continue to increase. But we’re starting to see some moderation and how much pricing power there really is, more that being skewed to more challenging environment at the higher end.

Some cities for example in the luxury price point are actually seeing pretty significant deflation like New York City, Miami and others are just challenged and buyers or, sorry, sellers need to capitulate especially on older stock that’s boxy or dated that needs to be rehab and hasn’t been. So, those sellers are need to be more — they need to be more realistic.

RITHOLTZ: What about the ultrahigh ends? My friends, we both know Jonathan Miller, he calls that aspirational pricing when people slap a 40 or 50 or a hundred million dollars price tag on something that’s really worth a fraction of it. What’s happening with the ultrahigh ends end of the market? Is that finding a little reality or do we still see crazy prices?

ZELMAN: I think the markets, in general, are still seeing crazy prices. There has been some capitulation where the sellers in Greenwich for example are starting to recognize. It’s been three years. The home is not moving. Let me lower the price of it.

So, we do see some capitulation but not nearly as much as we need to. In fact, yesterday, I was with a client visiting in New York and that, when are New York City prices going to go down more, and I said, well, they’ve come down quite a bit from their aspirational peak like Jonathan like to say from 2014.

He says developers aren’t willing to lower their prices. They’re giving me 10 years of no maintenance and no taxes but they won’t lower the price. I said, stay tuned, they will.

RITHOLTZ: You think that will eventually — they’ll be forced to.

ZELMAN: I think they have to. I think otherwise there might be distrust for some of these developers. I mean, the sales for the luxury in New York City in the first quarter is like nonexistent.


ZELMAN: It’s very, very weak.

RITHOLTZ: So, what about the thud part of the distribution of housing? The let’s call half a million to a million-dollar homes more than — and by the way, that’s my New York bias price or San Francisco or Chicago’s more reasonable, lots of places in the rest of the country more reasonable. But more than a starter home less than the really high-end houses, how is that area doing?

ZELMAN: It’s really more market dependent. I can tell you in Dallas for example over 400,000 to 600,000. It’s very competitive and you’re probably seeing a little pressure there. Builders being forced to use more concessions whereas if you go into let’s say a market like Phoenix, the four to six is very healthy and you might even see some pricing power.

So, generally, that segment of the market has been more I think mature in terms of the cycle and when you think back to 2000 — really 2011 was the bottom, so, as we saw growth, really the fat of the market really has had now 78 years recovery. Whereas the entry level, believe it or not, the builders did not want to build that through affordable product where we call it building out in the exurbs, the pioneers where you’d have to try to qualify.

Part of which is because the mentality was that consumers only want to walk to work or you can’t get a mortgage. Now, the mortgage market was so tight, builders were concerned about building affordable for lower credit quality.

So, really, the entry-level, true entry-level price point didn’t start getting constructed until really in earnest until 2016. In fact, we would argue that today the entry-level portion new home sales is still materially below where it — what would be perceived normal.

So, it’s a bit of a tale of two markets. We have one meat at the market still has some legs but it’s later stage and it’s still reasonably healthy in terms of inventories, still six months so that’s a balanced market. The move up is still below six months. But you are seeing the low and the entry-level where there’s real robust demand but just not enough product.

RITHOLTZ: Quite interesting. What — you mentioned how regional real estate is. What areas stand out either for good or bad reasons as interesting or unusual around the country?

ZELMAN: I was just in Nashville last week and I was just — unbelievable booming market with really a pro-business stance that companies continue to move there and the migrations moving there. But just top of mind because having just been there, we were there, I was speaking as a guest for real estate conference and I was sort of blown away by the growth.

What we’re seeing a lot though, we studied the markets, we understand where migration patterns importantly, which states are winning and which are losing and Florida is just a winner both with …

RITHOLTZ: Across the board.

ZELMAN: … millennials and with the boomers.


ZELMAN: And you’re seeing a tremendous amount of migration into Florida and despite Miami Beach is softest right now at the higher price point, I think Florida’s going to continue to be a winner. You continue to see winners out West and Southwest strength in Vegas, Arizona and Colorado.

California, on the other hand, is where we see some concern and we’ve lost foreign national buyers there, the foreign national Chinese buyers, pretty much all, they’re gone. People that are there Chinese buyers are buying but the foreign nationals have gone.

The Bay Area despite Silicon Valley and the benefits there seems to be just not re-accelerating like the rest of California off of what was the weaker period of ’18 and some that, is it related to tax reform, SALT, is it concern just in terms of the continued pressure on consumers.

RITHOLTZ: Literally my next question. So, we keep reading about the egress from New York to Florida and from California to Arizona and I know some of that is just normal retirement at a certain age. If you live in Westchester, Long Island, you want to go to Florida but it’s the law. You have to move them there.

But the David Tepper story leaving New Jersey because it saved him a bajillion dollars in taxes, how significant are those most recent tax changes and the loss of the state and local tax deduction to the real estate market?

ZELMAN: Well, first, you have to look at it in totality and appreciate that about 84 percent of tax filers actually had a reduction in the taxes that they pay.


ZELMAN: So, really …

RITHOLTZ: But that’s on a gross number. Is it is a big deduction? Is it a little deduction? You mean, after all the state local.

ZELMAN: If you took all off — if you took everything into consideration …

RITHOLTZ: Got you.

ZELMAN: … the benefit is actually — the majority actually had a benefit. Now, where the negative impact had — is that the higher price for the higher income brackets. So, where the risk would be is for that 80 to 85th percentile incomes to percentile.


ZELMAN: So, where if you’re in the highest income bracket but really the question will be if you assumingly are in let’s say Rye, New York or Scarsdale or you’re living out in Long Island and your kids are in high school or your kids are in elementary school, are you really picking up where you work and leaving the state because of taxes?


ZELMAN: No. Could you start to see some pricing pressure because maybe my buddy and his wife that are empty-nesters and they can — everybody’s mobile today with today’s technology, you can work from their home, they’re going to pick up and leave so you’re going to see more inventory start to build for that marginal person that can leave that will put some more pressure on prices.

So, I think the levers price and I don’t think that it will create a collapse. But I think the coastal sort of tri-state area California markets are going to see some more incremental inventory lead to moderation in pricing.

RITHOLTZ: Quite interesting. Can you stick around in a bit?


RITHOLTZ: I have a ton more questions for you.


RITHOLTZ: We have been speaking with Ivy Zelman, CEO and co-Founder of Zelman & Associates. If you enjoy this conversation, be sure and come back for the podcast extras where we keep the tape running and continue discussing all things real estate. You can find that wherever finer podcasts are sold, Apple, Stitcher, Overcast,

We love your comments, feedback, and suggestions. Write to us at You could check out my daily column on Follow me on Twitter @Ritholtz. I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.

Welcome to the podcast. Ivy, thank you so much for doing this. I’ve been looking forward to this for a long time.

ZELMAN: Thank you.

RITHOLTZ: I am a real estate junkie not only because it was dinner-table conversation every night back in the days when mortgage rates were 15 percent but it’s just fascinating. Everybody has to live somewhere, why not live someplace fun, interesting, neat in a house that is sort of representative of your style and tastes and values and interests, and it’s really a fascinating space. You have to be thrilled that you found your way into real estate even though that was never your intention when you began.

ZELMAN: I am. I’m thrilled. I love it.

RITHOLTZ: So, let’s go through a few of the questions we missed during the broadcast section before we get to our favorite questions in a few minutes. I have to ask about the launch of Zelman & Associates.

So, October of ’07, we were talking about the date. You said you launched October 3rd, I believe October 5th was the all-time high back then at least for the Dow. What was it like launching right into the teeth of the rollover and slide down for the next 18 months?

ZELMAN: Well, my partner and I, Dennis McGill, we recruited our partners in crime at Credit Suisse, Alan Ratner and Melinda Greenwich (ph) who was my secretary at that time, kind of pulled her over from Credit Suisse, and my husband was also in the beginning.

So, it’s really the five of us and it was 24/7. We were working our butts off in order to be prepared for our big date that we set. But I think it was so much fun as well because we, at this point, already had taste a victory where we knew that what we had predicted was actually not only coming to fruition but way worse than we had ever considered or predicted.

And so, while we were in the teeth of the storm, it was not clear certainty which direction and how much more severe the storm could be, we had just a fantastic times circling investors and interest. We were in the sweet spot. So, it was so much fun.

I mean, we had crazy days and nights and it was all consuming. I can tell you that it was difficult with three little babies running around but it was like where you’d wake up at four in the morning and you just couldn’t wait to get in front of your computer. So, it was just thrilling, really thrilling.

RITHOLTZ: So, I remember, I’m trying — I want to do the — get the years right. I could be doing the — my memory could be faulty. In I think it was ’05, the homebuilders rolled over and I don’t remember if that was 40 percent that year but it was clear they were under stress where the rest of the market was going higher.

And then the next year, the banks and brokers, ’06, started to come under pressure. And, again, the market kept going up. And then ’07, I don’t remember what segment rolled over.

ZELMAN: It was New Century.

RITHOLTZ: Is that what it was?

ZELMAN: March of ’07.

RITHOLTZ: So, mortgage underwriter.

ZELMAN: Right.

RITHOLTZ: So, it’s the mortgage underwriters in ’07 and the market kept going up. So, when you’re launching the firm, these are three calls that you had previously talked about as a contrarian, as an outlier who turned out to be correct. When you launched the firm, I have to assume a lot of clients came along with you.

ZELMAN: Fortunately, they did. It was a very strong launch and we have had the ability to continue to recruit new clients and really provide what we think is unique proprietary research that no one else on Wall Street is anything like we do. So, we really provide significant advantages and stories to show investors and private equity firms that use Zelman.

RITHOLTZ: So, private equity are also clients.

ZELMAN: Yes. Mostly, its hedge funds and mutual fund. So, we also have some private equity clients as well.

RITHOLTZ: So, let’s talk a little bit about that network. How do you go about — because the only thing I can even remotely compare it to in the early days, Ed Hyman started on an economic side building out a network of private companies that would report their data to him and basically part of the reason he was so successful in the economic space as a non-economist is his data was better than what BLS was generating.

ZELMAN: Right.

RITHOLTZ: It sounds like you created something similar within the real estate space. Builders, brokers, real estate developers, who else was in that network and how do you go about reaching out to these folks?

ZELMAN: So, we do follow Ed’s model in going after sort of understanding what is happening in various silos within the economy but ours is dedicated just to housing and housing related. So, we’ve got survey of private homebuilders, a survey of land developers, a quarterly survey for banks to discuss their lending to acquisition and development financing for builders.

We have an apartment survey, a building product manufacturing distribution survey, we just published that today, single-family rental and a home center survey, we just published that one as well today. (Inaudible) forget one, the broker survey which we survey about 10 percent of existing home sales.

So, if you look at each silo, the homebuilding survey is the most mature and most significant probably in sample size. I forgot the mortgage originator survey which is also very significant in size. But all of them, we have — not to discount what a survey does but that has a very few questions. Most of the surveys we have will be anywhere from 20 to 30 questions.

RITHOLTZ: So, how do you reach out to somebody and say, hey, listen, I want you to participate in a quarterly thing. Don’t worry, it’s only eight pages of questions. It will take you less than a week to fill it out. How do you make that pitch?

ZELMAN: Well, first, you go back 25, 30 years and you have a survey that’s done over the phone and you build and cement relationships. And over time with technology, you create a platform where you — they could do it online, it’s all automated.

But the exchange with the C-suite executives that tallied nearly a thousand throughout the ecosystem is we will give you the research …

RITHOLTZ: For free.

ZELMAN: … for free if you fill out the survey.

RITHOLTZ: And everybody who participates want to know what’s happening in the adjacent silos.

ZELMAN: Right.

RITHOLTZ: So, that works out pretty well.

ZELMAN: Well, they want to know what’s going on within their peers, within their own silo.


ZELMAN: But they want someone that can triangulate all of it and in fact, our institutional investors are so data-driven that sometimes the C-suite executives, our information is almost too much for them, which is one of the reasons we developed a newsletter called the Z report which is a much higher level bimonthly report that just gives you really that 30,000-foot perspective, 78 articles and all the pieces of the mosaic because some of them are like, Ivy it’s just too much. So, they prefer that.

RITHOLTZ: So, when you say bimonthly, it’s every other month, not …

ZELMAN: I’m saying biweekly.

RITHOLTZ: Biweekly.

ZELMAN: I’m sorry.

RITHOLTZ: So, twice a month proactively.

ZELMAN: Correct. Correct.

RITHOLTZ: I never know which is which that’s why I have to ask.

ZELMAN: No. I said bimonthly but it’s twice a month.

RITHOLTZ: And that — how big of a document is that? Is that something that can be ready quickly or?

ZELMAN: I’d say you can read it in 10, 15 minutes and it has some charts. But whether the articles are on rising healthcare costs as an impediment to homeownership or affordability, reaching a new high or low, whatever the topic might be on demographics, millennials, accelerate family formation, we take each of the pieces of our puzzle and we take articles that we think are timely and it allows people again to walk away from a 10 to 15-minute read with a hopefully nice hot cups here of coffee with, well, I really get what’s going on now in the housing market overall.

RITHOLTZ: That’s very, very interesting. So, if you want to express an idea in a trade, how do you go about doing it? Is it long or short? The homebuilders? The credit side? How does do some of these hedge funds — we know what happened in ’08-’09, but how to hedge funds today take your research and apply it to capital?

ZELMAN: Well, because we are equity research firm, so our recommendations are to buy, hold, or sell equities. Whether they’re going to do something that’s outside of the equities we don’t recommend. So, our — we’re strictly going to recommend whether they short or go long stock. So, that’s all really the firm provides.

RITHOLTZ: So, what sort of stocks do you cover? Obviously, the homebuilders are going to be one group. The mortgage originators are another. Do you further afield to REITs or anything like that?

ZELMAN: So, we have homebuilders, building product manufacturers, and distributors. We have real estate brokers. We follow Redfin, Zillow, Realogy, RE/MAX. We follow mortgage insurers, mortgage title companies, and mortgage tech.

We follow the home centers. We follow single family rental REITs and apartment REITs. And I think …

RITHOLTZ: Do you do office space or storage or retail?

ZELMAN: No. We only do residential. So, that’s one of the — I guess, the way we think of our niche that it has to be within residential.

RITHOLTZ: So, let me take you a little off of that niche a bit. There’s a giant article in “The Wall Street Journal” about the big malls, how they continue to have some of their anchor stores going away and then once that goes way, everybody else starts to fade and then it becomes problematic.

And there was some place, I’m going to get this wrong, I don’t remember if it was Minneapolis or somewhere where the mall essentially gets sold to a developer who raises it and now is putting in apartments, homes. It’s a whole multi use. So, is there something worth tracking on the retail apocalypse side relative to housing or is that just so distant and so far removed it, it’s not worth paying close attention to?

ZELMAN: Well, I think it makes sense to assume it’s getting repurposed. And as we think about shelter, really, you have to think about it with the complete eyes — with a complete view of rental as well as for sale.

And so, if gets repurposed for sale or for rent in single-family where we have a deficit, then we’ll be able to track that through the land development survey that we’re doing and tracking that will enable us to see where the growth is going to be and whether or not the growth is justified.

But today, if you look at shelter, we believe the multifamily market is actually above normal and …

RITHOLTZ: Meaning there’s plenty of supply of that.

ZELMAN: It’s above where it should be. In fact, there is — if you look at multifamily of five plus units, so multi-family, high-rise, generally.


ZELMAN: Where the problem is predominantly urban core. Multifamily is at multi-decade highs with what — with the amount of inventory in backlog. Whereas suburban is not as, let’s say, problematic but there’s a real core urban is where the inventories for, we believe, multifamily market is actually significantly above normal.

RITHOLTZ: So, if we had to guess, coming out of the crises, people were either reluctant to buy or unable to qualify for mortgage so there was a ton of renters and it seemed the builders went a little hog-wild over there. Is it safe to assume that the pendulum is going to start swinging in the other direction or do — does this really have to — do they really have to run out the rope and see some problems before they adjust what they’re building?

ZELMAN: So, if I understand your question correctly, you’re asking will the builders start to build affordable product again?

RITHOLTZ: When will they shift from multifamily to single-family? If there is a plethora of multifamily and a dearth of single family?

ZELMAN: Well, they’re completely different operators. Different developers, different operators from the perspective that they’re within their silos, the multifamily operators would never just go do single-family.

Very unusual. You’ll sometimes have, like Lennar Corporation is a publicly-traded company and they’re known for their single-family building but they also have a multifamily business.


ZELMAN: But very few organizations, companies, have in the multifamily space, do single-family as well.

RITHOLTZ: So, when you — really, what I’m wrestling with is if there’s way too much multifamily, multifamily builders, they’re not going to say, hey, there’s too much supply. Let’s take a year off.

ZELMAN: Right.

RITHOLTZ: Do they just keep building? Do they move towards luxury? What do they do in the phase of excess supply?

ZELMAN: Well, right now, what you’ll start to see is that they have pressure on rents and their underwriting requirements or what the way they underwrote the land, they won’t be hitting their hurdle rates at some point if the supply that we believe is still in backlog, actually gets delivered and pressures their returns.

So, right now, there’s a lot of capital chase in this asset class because when you compare it to malls or other REITs, it’s actually a tall midget in many respects. Even though …

RITHOLTZ: Tallest midget in the group.

ZELMAN: Right. Even though it’s expensive, it’s actually one of those very consistent businesses, doesn’t have the kind cyclicality that the single-family for-sale markets, so it’s still a very good business but what may happen from the supply being, in our opinion, at excess levels is that they won’t get the returns that they underwrote if rents start to come under pressure.

We do think they get leased up but the question is will that speaketh (ph) of growth starts to slow as those lease rates come under pressure, that in itself will start to slow the growth.

RITHOLTZ: And before I get to my favorite questions, any other things standing out within the residential real estate market that’s unusual or interesting, be it regional or what are you kind of going, “huh, that’s surprising”?

ZELMAN: Well, there’s a few things. I can talk about the iBuyer market which …

RITHOLTZ: iBuyer being?

ZELMAN: iBuyer, today we have companies that are offering consumers to buy their homes for cash within a few days. So, instant buyer. And Opendoor which is a private company is the leader in this business where at a discount to, they have an algorithm that basically will determine the price that they’re willing to pay for home, allowing that person to be able to move — to a move-up home.

And, actually, Lennar with an investor in Opendoor and the reason they invested in Opendoor’s concept and these guys are Silicon Valley — Eric Wu is the CEO, is because they found that a lot of our buyers cancel their homes to move at our home. So, that was conceptually why they did it.

RITHOLTZ: So, what happens? Someone comes along and says we’ll pay you cash theoretically at a discount to …

ZELMAN: Yes. Say, 5 percent, 7 percent discount to what is retail.


ZELMAN: And then …

RITHOLTZ: And then they’ll turn around and sell it …

ZELMAN: They’ll put with that money. They’ll fix it up and then they’ll sell it. Now, Zillow’s in the business now. Zillow offer, Redfin now, Offerpad, Knock. It’s really growing to be a very big business.

In fact, Zillow, how we have a sell rating on, is actually changing their entire business model to go after this iBuyer market. So, that’s a big interesting thing going on. And generally speaking …

RITHOLTZ: Professional flippers.

ZELMAN: Yes. Professional flippers.

Another interesting thing that’s going on is to build to rent market. So, I mentioned that we have a deficit of housing but not everyone can afford to buy a home. So, what consumers want today, though, is they want the American dream, they want the backyard, they want their own home, but in many cases, they can’t, for whatever reason, either get approved from mortgage or they don’t want to be committed and they don’t want — they want to have flexibility.

So, the build to rent market is actually accelerating to help close the gap and if you look at the build for rent market, it could be builders that are willing to sell the last few units in a phase to a build or a single-family rental operator or they, in fact, are keeping the asset themselves on the balance sheet and renting them out to generate cash flow.

But I believe that the build for rent market will accelerate to become a bigger portion of today’s household. So, roughly 12 percent of the households in this country live in a single-family rental home.

RITHOLTZ: Rental home, not in a multifamily unit?

ZELMAN: No. Single-family rental.


ZELMAN: And one of the misnomers in the marketplace is that you either live in an apartment or you live in a single-family home and that — what people don’t appreciate is that if you just look at, like, living alone, do you have any idea how many people that live alone live in a single-family home? Forgetting if they rent it or own it, just a guess. What percent?

RITHOLTZ: Five percent?

ZELMAN: Thirty-eight percent.

RITHOLTZ: Really? That’s a giant …


RITHOLTZ: … number.

ZELMAN: That’s a giant number.

RITHOLTZ: Well, I guess if you start thinking about the older demographic, the second person, the survivor ones, one of the husband-wife Bezos (ph) way, that’s got to be a pretty hefty number and then divorces and then people who just want to own a house. But I would never have guessed 38 percent.

ZELMAN: Well, keep in mind, this is — we’re not distinguishing between owning versus renting. So, just 38 percent. So, then when you think about lifestyle, if you go, Okay, then roommates, then they get married, then they have children, by the time our data shows — by the time you’re married with two children, 82 percent live in a single-family home.


ZELMAN: And that, in fact, is, again, not distinguishing renting versus owning. But when you think about millennials, millennials today, call them, 75 million. I’ve got two millennials. They’re young, 14, 16 — hi, Zoe (ph) and Zach (ph). I’ve got Zia (ph), too, she’s the youngest but she’s not a millennial.

When you start to see these millennials, actually, get married or cohabitate and have families, this — they’re the early — they’re in their early 30s right now. There are 75 million of them. We’re just at the beginning of this wave of what will be an unbelievable tailwind to further demographics for the need for single-family shelter assuming you believe that people will continue to get married and have children.

And we have some fun ways to analyze this, so we do some, obviously, studying birth rates. A lot of people see the national birth rate for the country is going down. But when you look at the 25-plus year old women, that birth rate has been growing at a very fast rate. We call it the good birth rate. Because nationally, birth rates are going down because teenage birthrates are down over 50 percent since ’07.

RITHOLTZ: Which is a good thing.

ZELMAN: Which is a good thing, right? So, what we really look at, and I think just to reiterate, it’s about lifestyle. Lifestyle drives the need for shelter or changes in the type of shelter.

So, when we look at build for rent and we see that phenomena is a growing trend, I think that you’ll hear more about it and there’s more Wall Street money contemplating it and builders that are selling to the single family REITs and doing it themselves, the iBuyer market and then just technology, in the real estate industry is one that is being disrupted.

If you think about you know your mother is a real estate broker, it’s a very, very tough time. They’re being attacked from all angles.

RITHOLTZ: Right. I mean, she is retired but the days of 6 percent commissions, that’s pretty much gone, right?

ZELMAN: I think that certainly has yet to be eliminated, but there is a lot going on that can continue to pressure margin, pressure splits. The market as is being disrupted from a lot of different angles.

RITHOLTZ: Quite fascinating.

So, the firm is called Zelman & Associates. Is this really the Ivy Zelman show or is it something else?

ZELMAN: Actually, thank you for asking. No, this is not just the Ivy Zelman show. In fact, I’ve got probably close to 30 employees. We have about a dozen analysts. Each analyst is responsible for their silo and are very successful in aggregating data and analyzing the industry that they’re responsible for.

So, it’s really — I’m the small piece of what really Zelman $ Associates is and there’s a lot more of a strength behind the person you see sitting here and whether it’s Alan Ratner, our senior home building analyst, Justin Spear. these people work their tails off and I really appreciate all the work and I get a lot of credit, but they’re the power behind the firm.

So, before I let you go, I have to get to my favorite 10 questions. We ask all our guests …

ZELMAN: Okay. Okay.

RITHOLTZ: … sort of a speed round. Are you ready for this?

ZELMAN: Ready.

RITHOLTZ: Tell us the first car you ever owned, year, make, and model?

ZELMAN: Toyota Corolla, 1980.

RITHOLTZ: What’s the most important thing we don’t know about you?

ZELMAN: That I live in Cleveland and I have three beautiful children and they are my life.

RITHOLTZ: So, you went over Cleveland pretty quick. How do you like living in Cleveland?

ZELMAN: Well, I, admittedly, went kicking and screaming, married a Cleveland boy who I met at Salomon Brothers, David.


ZELMAN: But it’s a wonderful place to raise a family. And I get to be with my husband’s family all the time and it’s great for the kids and if we could just get the sun to come out …

RITHOLTZ: Yes, the weather is not great in Cleveland, is it?

ZELMAN: Yes. But the Browns are supposed to be good this year, so.

RITHOLTZ: Yes, they are supposed to be.

ZELMAN: We’ll see.

RITHOLTZ: So, tell us — tell us about your early mentors. Who affected the way you did analytics and thought about housing?

ZELMAN: Well, I already credit David, my buddy at Salomon. But I have to say …

RITHOLTZ: Buddy/Husband?

ZELMAN: Yes. Husband was later. But when you think about your life in the A-list of people I had the pleasure of working with whether we’re talking about people on the sell side of Credit Suisse and Solly (ph), as well as all the clients that I’ve interreacted with, I can give you 10 people that come to my top of my head.

But one that really stands out is Melinda Greenwich (ph) who was really my mentor early on in my career. She’s my secretary but she had been at Drexel and she was with me for over 20 years and is a friend, business, family, life every day. And she no longer works with me. Now, Kim Gray (ph) is my mentor.

And people think about mentor where you call someone up and you have a challenge, you want to talk something through. These women are there for me through thick and thin, call in the middle of the night. Those are the people that I want to highlight, the people that mean everything to me.

RITHOLTZ: Quite interesting. What fill in the blank investors, analysts, managers helped shape of your thinking about the housing market?

ZELMAN: Give me your list again? Investors?

RITHOLTZ: Could be anybody. Investors, strategists, analysts, economists. Who has influenced the way you approach the real estate market?

ZELMAN: Well, so many. I think that builders themselves, a lot of the private builders in the market that really helped me to understand the business and give me from an unbiased perspective and they’re — the quality of information and being able to absorb from the perspective of an open sort of whiteboard. The builders, the private builders, Bert Selva, who’s a good friend and a CEO in the home building industry. I just learned a tremendous amount from him.

In the investment world, I think about today some of my top clients. Certainly, Richard Chilton at Chilton Advisers, learning about to go after the best in class managements and understand just the long-term investing. There’s an art to it and it doesn’t necessarily mean you day trade and that there ways to differentiate.

Bob Bishop at Impala who was originally Salomon Brothers housing analyst who is now a client. He taught me a lot about the business. Ricky Sandler at Eminence Capital whose someone I grew up with. But he was ahead of the curve from — versus where I was, taught me a lot about the business.

So, I can keep going. But …

RITHOLTZ: No. That’s a healthy list.

So, let me shift gears on you. What do you do for fun? What do you do when you’re out of the office?

ZELMAN: Well, I love to walk my beautiful Australian Shepherd, go for long walks. Hike. I do a lot of puzzles, jigsaw puzzles. I like the new wood puzzles. That’s been my new thing.

And also, doing brain games which has been fun. And hanging out and watch my kids and — watch the kids play sports. My daughter’s a great soccer player and she runs track and she keeps us every weekend very busy.

And my oldest is off to University of Miami. So, hopefully I’ll be there and seeing the sun more.

RITHOLTZ: Yes. That’s right. In the winter.

Tell us about a time you failed and what you learned from the experience?

ZELMAN: Well, I would say that I was convinced I was going be an investment banker. And I was going to Wall Street to be an investment banker and I found that it wasn’t the right fit for me and I was pretty devastated.

And what I learned from that experience was that your first job won’t necessarily be your last and that even though you’re convinced you think you know what you are going to do with the rest of your life, you actually can evolve into something else and be successful. So, for me, that’s really the path that led me to where I am today

RITHOLTZ: So, what has you most excited about what’s going on in the real estate industry these days?

ZELMAN: The uncertainty of what’s next from technology, from disruption, from sustainability. It always is changing every day. What’s — unfortunately, a lot of it is dependent upon the economic backdrop, but there’s a lot of interesting new things that are going on in our sectors, so we have to stand top of them. And obviously, continue to guide our clients down the right path for where to steer their investments and sizing and getting out before the market turns is going to be the next goal.

RITHOLTZ: So, everybody’s favorite question. Tell us some of your favorite books, be they fiction, nonfiction, real estate related or whatever.

ZELMAN: I’ve got eclectic, a number, but I enjoyed and it was life-changing a book called, “Thrive” by Arianna Huffington.

RITHOLTZ: Okay. I remember …

ZELMAN: And that was really impactful.

RITHOLTZ: Life changing.

ZELMAN: Life changing.


ZELMAN: From a person who work 24/7 and learned a little more balance from — thanks, Arianna. I read and loved life-changing while from a person who work 24 seven and learned a little more balance from the areata I read and loved Anna Quindlen’s “Plenty of Cake, Plenty of Candles [sic]” which really gave me a renewed optimism on aging.

RITHOLTZ: Much better than the alternative.

ZELMAN: Much better than the alternative. I can’t help but mention “Liar’s Poker” and “The Big Short,” my — one of my friends and favorite author is Michael Lewis.

“All the Light You [sic] Cannot See” by Anthony Doerr which is World War II fiction but an incredible read if you like that period. And then just lastly, I’ve read a lot because I’m a mother of teenage children and Leonard Sax, the books that he’s written for parents, “Girls on the Edge” is a must read and I’m a little bit anti-social media for our children. And so, I would recommend that, highly for parents.

RITHOLTZ: What sort of advice would you give to a millennial or someone interested in finance or real estate who is just beginning their career?

ZELMAN: I think that everyone should find a mentor. Everyone should appreciate your first job isn’t your last and read a lot. I think, for me, it was networking as well. Never stop networking.

I remember folding towels in the gym at 6 a.m. to pay for school and I would talk to every gym member and asked them if they knew anybody. So, network, network, network.

RITHOLTZ: Our final question, what do you know about the world of real estate related investing today that you wish you knew 25 or so years ago when you were first starting out?

ZELMAN: Well, I wish I understood — I wish I had the benefit of hindsight and appreciating cycles and being willing to tolerate more risk, that there’s opportunities and when there is disruption in the market to take advantage of it. I think I’m way too conservative and I was way too risk-averse.

RITHOLTZ: Makes perfect sense.

We have been speaking with Ivy Zelman of Zelman & Associates. If you enjoy this conversation, well, look up an inch or down an inch on Apple iTunes and you could see any of the other 250 or so such conversations we’ve had over the previous five or so years.

We love your comments, feedback, and suggestions. Write to us at Be sure and give us a review on Apple iTunes. We love your feedback, comments, and suggestions. Write to us at

I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Madena Parwana is my producer/audio engineer, Michael Boyle is our Booker, Michael Batnick is our head of research, Atika Valbrun is our project manager.

I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.

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