Carlos Gonzalez, Regional President, Lennar Homes, LLC

Carlos Gonzalez, regional president of Lennar Homes, LLC., spoke with Invest: about the homebuilding company’s growth in the Jacksonville area, navigating the unpredictable real estate market, and how the company uses technology to streamline operations and improve customer service.

What have been some major highlights and milestones for Lennar Construction in Jacksonville and the eastern Florida area over the past year? 

Lennar Construction is a Florida-based company founded in 1954. We’re focused on building great quality homes. Quality, value, and integrity are three hallmarks for us. We do an in-depth study of the marketplace, employment, and demographics to understand entry into new markets. We entered the Jacksonville market over 10 years ago. There is a great military base here. It’s a great market to serve. 

Over the past year, we’ve continued to grow our operations here in both size and scale. Community outreach is also important to us. We’re proud to be part of Jacksonville. We’re optimistic that the area will continue to grow. It’s a great place to live and work, and it’s a wonderful way of life. 

What impact does Lennar Construction have on the community and what characteristics allow it to endure the recent highs and lows of the real estate market? 

We’re committed to bridging the gap of affordability for buyers. Incomes have not kept pace with expenses. Interest rates have gone up. There’s an incredible shortage of housing across the country. We want to serve the working family. We’re not building multimillion-dollar homes. Our business model is to build in any environment. We’ve migrated to being a homebuilder and a manufacturing platform. Ebbs and flows in the marketplace are not going to detract from our pace. We will toggle our pricing to react to the market. We have also been doing interest rate buy-downs to make homes more affordable for working families. 

Which market segments have seen heightened demand over the past 12 months, and what areas are slowing?  

There’s some softening going on in marketplaces across the country. Jacksonville continues to be a resilient market. People are employed and want to buy homes. We’ve continued to see growth in Jacksonville and across Florida. Our mission is to continue to build consistently, to build five homes per community, to build through the ebbs and flows of the market. 

Inventory is coming up in most markets across the country. Those are headwinds. We need to pull the buyers. Our strategy is to price our homes according to the market and continue to build homes.

In addition to market fluctuations, what are the primary challenges facing the residential real estate industry in Jacksonville and South Florida?

The availability of land is a significant problem in the industry. Government regulation is also a big issue. The delays caused by government regulation add significant cost to any community. It drives costs up. That’s problematic. In addition, the housing shortage is well-documented. Fixing that means adding supply. However, if supply is being constrained by government regulation, that’s a problem. The process needs to be expedited. The current presidential administration doesn’t seem to be focused on improving things on the government level. There should be a focus on facilitating businesses, not slowing them down.

Do you think the new administration could create new opportunities?

The previous Trump administration wanted to eliminate government bureaucracy to expedite permits. Some permits take up to a year and half to obtain. That’s a huge delay when trying to bring housing to a new marketplace. I don’t know if the new administration will help, but we’re hopeful. 

What significant residential development opportunities is Lennar pursuing in the Jacksonville region?

We are focused on growing our land position in Jacksonville and the markets surrounding the city. We want to be deliberate and strategic about the acquisitions we make, and that they fit what the buyer is looking for. We need to find a way to bring housing to the marketplace affordably. That’s tricky. Land prices have gone up and the cost of development has gone up. Inflation has gone up. The questions we ask include what are the right opportunities that are out there, and how do we bring housing to the marketplace and make it affordable to the normal consumer?  

To what extent is Lennar Construction leveraging emerging technologies and implementing innovative practices?

Over the last decade, we’ve seen a profound transformation at Lennar, from a relatively rudimentary use of technology, to really leaning into technology. Today, we have a multitude of sophisticated software that helps us manage our vertical and horizontal development and to see relevant data and insights at the click of a button. We use a term called our “funnel” to describe our digital perspective. We’ve assembled a team of great thinkers that corrals data. We have an internet sales team that is charged with converting leads into appointments in the field for our salespeople. All of these data analytics are available to all the leaders in our company. We’re also starting to have a greater focus on AI and how it can improve our performance. We need to be careful when introducing AI and understand its limitations. For example, we can use AI to look at data points to help us develop home pricing as the market fluctuates, but the AI needs to learn the nuances of the market to be effective. 

What is your perspective on the real estate market outlook in Jacksonville over the next two to three years?

It’s difficult to predict what’s going to happen in the housing market. Interest rates and permits are big factors. The demand side of the equation is unpredictable. If interest rates decline, the finance commitments we make to buy a buyer’s interest rate down could expand our buyer pool. The level of inventory is also going to play a role. From a macro standpoint, Jacksonville is a great place to live and a great place to work. It has all the right ingredients. There is no state tax. People are moving from all over the country to Jacksonville. That creates a macroeconomic state that I think will persist. Regardless of how the market moves, we will continue to adapt. 

What are your priorities, plans, and strategies for the near term?

We want to continue our migration. Over the next 12 months, we need to continue to execute our path – we’ll build through any market cycle and let our pricing be our shock absorber. Treating our customers better and giving them world-class service is an ongoing and evolving commitment. We want to improve on every facet of service the customer has come to expect. 

Additionally, buying land is essential to growth. We want to make strategic land acquisitions that are a win-win for the seller and for Lennar. We want the economics to work, and to bring affordable housing to the marketplace. Accomplishing this is difficult in an environment where certain markets have limited land availability, and an abundance of land in others. We have to be careful and deliberate in how we grow. It’s not about how big you grow, but how you grow big. It’s about the quality of the homes, the quality of the experience for our customer, and the returns to our shareholders.