Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with Taylor Morrison CEO, Sheryl Palmer, about how the housing market is faring amid COVID-19.

Video Transcript

SHERYL PALMER: Good morning. Good to see you, Brian, as well. Great to be here.

We are. You know, since COVID began, we started talking to our customers on a very regular basis. So over the last, what, I would say five months, every week we've done research.

And we've done it with our new buyers. We've done it with our customers that have walked into our sales offices and our customers that have come through our internet, you know, that traffic, to try to understand the way they're thinking about home-ownership in this post, this new kind of COVID environment.

And one of the things that has continued to be so strong is their attention and concern about their wellness. And so to your point, we did introduce TM Live Well just a few weeks ago. And it's a new set of standard features that will be in all of the homes that we build beginning kind of about now.

So we're pretty excited about it. The consumer is very excited about it. It's a real focus on air quality, water quality, paint. And like you said, we'll be having a news touchless faucet at the kitchen sink as well.

But if you think about the time you spend, most of your time's at home. And you should be most concerned about the health and safety of your home.

ALEXIS CHRISTOFOROUS: So that's going to be just part of the regular package? Or is this a premium package that folks will have to pay for?

SHERYL PALMER: No, Alexis. This is a new standard in our homes. And we introduced it in August, but obviously it was for homes that we had not started building yet. So it's really new construction that's beginning now. We needed to get everything finalized.

But all of the customers that picked their home site and their plan for future start, it's included in their home.

ALEXIS CHRISTOFOROUS: You know, when you look at the states that you do most of your business-- Arizona, California, Texas, Florida-- these are states that have been hit hard by natural disasters, fires and hurricanes, on top of the pandemic. Just give us an idea of what demand has been like, especially in those markets.

SHERYL PALMER: You're so right. You look around the country today, and it doesn't matter if it was a few weeks ago, the threats of hurricanes, or the fires we're seeing in the Pacific Northeast, and certainly California, air quality-- I mean, it's just been so difficult.

And I'll be honest, to my surprise, that has not had a real negative impact on demand at all. Now, part of that, Alexis, is I really think, if you go back a few months to where we introduced all of these tools, virtual tools and how we communicate with our customers, we've made it so easy that they don't really have to come in to our sales offices anymore.

In fact, so much of our business is happening virtually. They're touring homes virtually. They're going through our design center virtually. They're signing contracts virtually. So I think that's part of it.

But I also think it's reinforcing what's really important to them. And I think that's why we're seeing so much migration into other markets, partly because, you know, kind of the inner city, just want to get out of the crowds. I think part of it's just, I want more space. I don't have to work-- I don't have to drive into work every day, so I have more flexibility in where I can live.

BRIAN SOZZI: Sheryl, coming out of your most recent quarter you saw gains, sales gains, what, close to 80%? I've never seen those type of gains before at a homebuilder. What is driving that, and has that continued into September?

SHERYL PALMER: So Brian, the last few months have been tremendous. Now, in all fairness, we acquired a new company and closed on that back in February. So a portion of those gains are the year-over-year improvement that having this new combined company provides.

But having said that, that might be a piece of it. The demand has been tremendous. And it's not just one thing, Brian. It's all the things we're talking about.

We've seen a bit of a flight out kind of urban cores. But I see that very carefully, because we're seeing demand in urban cores as well. So I think that flight out is, I was considering a decision to move. Maybe I was getting married. Maybe I have a child on the way.

It was something maybe in my plans over the next year or two. Interest rates are so low. Why not do it now? So I don't think it's just a pure flight, but I do think that's part of it.

We're absolutely seeing a desire for more space, more flexibility in homes, in your home. It could be more flexible spaces, office spaces. I think that people just want more outdoor space. I think we're seeing a great demand for kind of that indoor-outdoor living. So I think there's a number of different things driving it. And really, it's across the US.

BRIAN SOZZI: Or the Peloton bike training room, Sheryl.

SHERYL PALMER: You know, there's been a great demand for home gyms. You know, I put that in the category of, is that a sustainable change or is that kind of today's need because the gyms have been closed? Although, your Peloton can go anywhere, right?

BRIAN SOZZI: So true. All right, let's leave it there. Taylor Morrison Homes CEO Sheryl Palmer, good to see you.

SHERYL PALMER: Take care. Thank you.