School District Housing Squeeze
wayne simonetti@wayne
−2.1%
since Sep 29
The idea
I believe great school districts stay expensive because almost nobody sells while family demand never stops, and that pressure spills into building just outside those boundaries. This basket owns large single-family landlords as the core, spreads the spillover bet across six homebuilders so no one call has to be right, and adds land, materials, and aggregates as ballast tied to suburban construction. I keep a small cash cushion and built this for a slow multi-year grind, not a quick trade.
What it owns
- Families priced out of the best districts buy new houses in nearby areas, and these builders are the ones constructing that new supply where existing homes cost too much. · D.R. HortonThe biggest builder of entry-level homes, it serves families priced out of top districts, making its order volumes a direct measure of spillover demand staying strong., Toll BrothersIt builds luxury homes inside and next to the best school districts for buyers willing to pay whatever it costs to get in, showing pricing power if those districts truly are the scarcest housing in America., LennarIt builds entry-level homes at national scale, so it captures spillover demand in nearly every major metro where existing homes have become too expensive for first-time buyers., PulteGroupIt builds move-up homes for families stretching their budgets to stay near good schools rather than settling for entry-level, holding up as the price squeeze pushes families to buy new construction., NVRIt options lots instead of owning land outright, which makes it more flexible through a long grind and lets it weather rough patches in construction better than builders sitting on large land holdings., Meritage HomesIt focuses on affordable new homes in fast-growing Sunbelt suburbs where families spilling out of expensive districts land, depending on affordability-driven demand staying firm.35%
- Suburban landlords · American Homes 4 RentIt owns and builds suburban rental houses for families priced out of expensive districts, so it benefits from both rising home values and climbing rents as the housing squeeze tightens., Invitation HomesThe largest owner of single-family rentals concentrated in suburbs where families want to live, it gains value as home prices rise and captures rent growth from tenants who cannot buy.22%
- The scarcest thing in a good suburb is buildable land, and these companies own tracts they develop into neighborhoods, schools and complete communities. · Howard Hughes HoldingsIt develops entire master-planned communities and new suburbs built around new schools, making it a long-term bet on land bought cheap becoming neighborhoods sold at higher prices., Green Brick PartnersIt owns land and builds on it in Texas metros where priced-out families keep arriving, with land holdings that appreciate as suburban prices climb., Forestar GroupIt turns raw land into finished lots that builders buy, getting paid whenever new suburban construction moves forward and builders keep purchasing lots at healthy prices., St. Joe CompanyIt owns huge tracts of Florida land it develops into communities as families move in, with land that appreciates and developments that fill as long as suburban demand keeps grinding.16%
- All builders buy lumber, insulation and materials from the same suppliers, so these companies earn on every new house built regardless of which builder wins. · Builders FirstSourceIt sells lumber, trusses and components to nearly every major homebuilder, so it earns on every spillover house built regardless of which builder puts it up., Installed Building ProductsIt puts insulation and finishing work into new homes, so its revenue tracks how many suburban houses actually get completed and reflects the pace of spillover building.10%
- Crushed stone and gravel go into every new road, driveway and foundation, creating steady revenue as suburbs expand outward. · Vulcan MaterialsIt supplies the crushed stone under every new road, driveway and foundation, earning steady revenue as building out suburbs for priced-out families continues., Martin Marietta MaterialsIt supplies aggregates across the Sunbelt metros where spillover suburbs grow fastest, earning as ground keeps being broken and collecting pricing power from local market strength.9%
- Cash8%