Land and Home(s) No Longer Four Letter Words?
•Download as PPTX, PDF•
2 likes•1,170 views
A look at the Southern California residential market.
Recommended
More Related Content
What's hot
What's hot (17)
Viewers also liked
Similar to Land and Home(s) No Longer Four Letter Words?
Similar to Land and Home(s) No Longer Four Letter Words? (20)
More from Allen Matkins
More from Allen Matkins (20)
Recently uploaded
Recently uploaded (20)
Land and Home(s) No Longer Four Letter Words?
- 1. Allen Matkins Real Estate Development Law Update Land and Home(s) No Longer Four Letter Words? February 27, 2013 Jeff Meyers, President Meyers LLC, a Kennedy Wilson Company (310)887-6297
- 2. 2009 & 2010
- 3. 2011 & 2012
- 4. 2013
- 5. E/P RATIO Trends New Home Market California State of California Price Appreciation and E/P Ratio Thursday, September 28, 2006 30% 30 25% 25 20% 20 15% 15 10% 8.1% Annual Average 10 Michelle Wolkoys Year-over-Year Price Change 5% 5 Principal 0% 0 E/P Ratio Builder Advisors, LLC (Meyers Group) -5% -5 (949) 640-0050 x207 -10% -10 (714) 357-6005 mobile -15% -15 -20% -20 -25% -25 -30% -30 -35% -35 -40% -40 2011F 2013F 2015F 1973 2009 1971 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Year CA Price Appreciation 40-Year CA Historical Average E/P Source: NAR; CAR; www.meyersllc.com
- 6. BAY AREA HOUSING MARKET New Home Market Trends Existing Single-Family Median Sales Price (Q4 2012 vs. Q4 2011) SOURCE: DataQuick Note: Median prices of completed sales of existing single-family homes.
- 7. New Home Market Trends Agenda 1. The Recovery 2. A Few Samples 3. What to Watch For
- 8. 1. New Home Market Trends The Recovery Still some mixed macro signals, but from the ground up, this recovery is gaining momentum. Excess Supply – REO is moving through system Stopped New Construction – Five Year Absence Economic Fundamentals – Improving Source: BLS, Moody’s Analytics
- 9. New Home Market Trends Agenda 1. The Recovery 2. A Few Samples 3. What to Watch For
- 10. ANNUAL NONFARM JOB CHANGES BY STATE New Home Market Trends December 2012 vs. December 2011 +123,600 +225,900 +260,800 Source: BLS
- 11. 2. New FewMarket Trends A Home Samples Job Trends – Job Postings per Capita Rank (Last Qtr Rank) Metropolitan Area Job Postings per 1000 People 1 (1) San Jose, CA 153 2 (2) Washington, DC 112 3 (3) Raleigh, NC 106 4 (4) Hartford, CT 102 5 (5) Boston, MA 92 6 (6) Baltimore, MD 88 7 (7) Denver, CO 82 8 (8) San Francisco, CA 77 9 (10) Seattle, WA 73 10 (9) Austin, TX 73 Source: Indeed.com
- 12. 2. New FewMarket Trends A Home Samples California Employment Growth by Industry 3-Month Moving Average, Nov. 2012 Source: Wells Fargo Securities
- 13. 2. New FewMarket Trends A Home Samples California Employment Growth by County 3-Month Moving Average, Nov. 2012 Source: Wells Fargo Securities
- 14. 2. New FewMarket Trends A Home Samples California Single Family Permits (in thsds) 200 Recession Recession Recession Recession 180 Added 13.3M people since ‘82 160 140 120 100 80 60 40 20 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Census
- 15. FINISHED LOT VALUES, LOS ANGELES COUNTY MappedHome Market Trends New Assumes a home size of 2,000 square feet and directs of $45/ft. Soft costs estimated at 20% with a targeted profit margin of 15%. Source: DQ News, Meyers Research
- 16. FINISHED LOT VALUES, LOS ANGELES COUNTY Top andHome MarketMarkets New Bottom Trends Median Resale Est. Median New Est. Median New Community Est. Finished Lot Finished Lot, % ZIP Code Home Price/ Sq. Home Price/ Sq. Ft (+ Home Price (2,000 Name Value Home Price Ft 15%) SF) Snta Monica 90402 $1,042 $1,198 $2,396,600 $1,467,790 61% Snta Monica 90403 $952 $1,095 $2,189,600 $1,333,240 61% LA/Brentwd 90049 $856 $984 $1,968,800 $1,189,720 60% Beverly Hills 90212 $855 $983 $1,966,500 $1,188,225 60% Venice 90291 $816 $938 $1,876,800 $1,129,920 60% Snta Monica 90405 $810 $932 $1,863,000 $1,120,950 60% P Palisades 90272 $805 $926 $1,851,500 $1,113,475 60% Malibu 90265 $801 $921 $1,842,300 $1,107,495 60% Beverly Hills 90211 $768 $883 $1,766,400 $1,058,160 60% Hermosa Bh 90254 $742 $853 $1,706,600 $1,019,290 60% Palmdale 93551 $97 $112 $223,100 $55,015 25% Lancaster 93536 $87 $100 $200,100 $40,065 20% Littlerock 93543 $84 $97 $193,200 $35,580 18% Palmdale 93550 $79 $91 $181,700 $28,105 15% Palmdale 93552 $78 $90 $179,400 $26,610 15% Lancaster 93535 $72 $83 $165,600 $17,640 11% Lancaster 93534 $71 $82 $163,300 $16,145 10% Palmdale 93591 $66 $76 $151,800 $8,670 6% Llano 93544 $57 $66 $131,100 ($4,785) -4% Pearblossom 93553 $50 $58 $115,000 ($15,250) -13% Assumes a home size of 2,000 square feet and directs of $45/ft. Soft costs estimated at 20% with a targeted profit margin of 15%. Source: DQ News, Meyers Research
- 19. New Home Market Trends Agenda 1. The Recovery 2. A Few Samples 3. What to Watch For
- 20. Peak to Trough Source: RCA and Moody’s Investors Service
- 21. MARKET SHARE BY GENERATION Gen Y captures 25% of population Generation Echo Boom/ Generation Silent Baby Boomers X Gen Y Years Born 1925 – 1945 1946 – 1964 1965 – 1979 1980 - 2000 Age Range 65 to 85 46 to 64 31 to 45 10 to 30 US Population 34M 82M 62M 84M % of Population 13% 31% 23% 32% Source: Census
- 22. PREFERRED COMMUNITY TYPE National Association of Realtors 2011 If you could choose where to live, in which type of the following locations would you most like to live? City + Suburban Mixed-Use = 47% Rural Area 22% Small Town 18% Suburb - housing only 12% Suburb - mix of housing, businesses 28% City - Residential Area 11% City - Downtown Area 8% 0% 5% 10% 15% 20% 25% 30% SOURCE: NAR
- 23. HOUSING AFFORDABILITY & NEW HOME SALES United States Trends New Home Market 1,400 Annual Mortgage Rates: 90 1988 – 10.34 %Thursday, September 28, 2006 1,200 1993 – 7.31% 80 2002 – 6.54% HOUSING AFFORDABILITY INDEX 1,000 2009 – 5.04% 70 NEW SFD HOME SALES Currently – 3.41% 800 60 600 50 400 40 200 30 0 20 1990 2006 1988 1989 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2007 2008 2009 2010 2011 *2012 US New Home Sales US Affordability Source: CAR, Census, Freddie Mac *Housing Affordability Index score thru Q3 2012
- 24. AVERAGE FICO OF AGENCY MBS ORIGINATIONS – October 2012 September 2003 Trends New Home Market Source: CoreLogic Loan Performance
- 25. CASH BUYERS California Market Trends New Home 700,000 40.0% 600,000 33.8% 35.0% 31.3% 29.4% 500,000 30.0% 27.6% % of Cash Buyers Total Resales 400,000 25.0% 20.1% 300,000 20.0% 200,000 13.1% 15.0% 10.3% 10.7% 11.0% 10.1% 100,000 10.0% 0 5.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 All Resales % Cash Source: DQ News
- 26. CASH BUYER ACTIVITY IN CALIFORNIA New Home Market Trends Market Share by Region Southern California 53.48% Central Valley 21.71% Bay Area 18.00% Coast 2.90% North Calif* 2.41% Mountains* 1.49% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Source: DQ News
- 27. CASH BUYER ACTIVITY IN SO CAL New Home Market Trends Market Share by County Los Angeles 32% Riverside 20% San Diego 17% San 14% Bernardino Orange 14% Ventura 3% Imperial 1% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% Source: DQ News
- 28. MULTIFAMILY PERMITS History and Market Trends New Home Forecast Historical Total Annual Permit Average = 469 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s (Forecast) 4.9 Million 6.7 Million 5.6 Million 3.1 Million 3.9 Million 4.3 Million 1,200 70.0 1,100 69.0 1,000 68.0 900 67.0 Permits (in thousands) 800 66.0 Homeownership Rate 700 65.0 600 64.0 500 63.0 400 62.0 300 61.0 200 60.0 100 59.0 0 58.0 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013F 2016F 2019F Multi-Family Homeownership Rate Source: Census; Meyers LLC
- 29. MULTIFAMILY PERMITS Top 10 By Metro Trends 2012 vs 2011 New Home Market Area, Rank Metro Area 2012 2011 % Ch. 1 NY-North NJ-Long Island NY-NJ-PA 20,137 15,138 33.02% 2 Dallas-Fort Worth-Arlington TX 15,976 10,443 52.98% 3 Houston-Baytown-Sugar Land TX 14,883 8,127 83.13% 4 Los Angeles-Long Beach-Santa Ana CA 12,486 10,197 22.45% 5 Wa. DC-Arlington-Alexandria DC-VA-MD-WV 11,382 9,633 18.16% 6 Austin-Round Rock TX 11,249 4,025 179.48% 7 Seattle-Tacoma-Bellevue WA 9,400 5,150 82.52% 8 Denver-Aurora CO 8,156 2,902 181.05% 9 Miami-Fort Lauderdale-Miami Beach FL 7,578 3,279 131.11% 10 Raleigh-Cary, NC 6,460 1,613 300.50% Source: Census
- 30. TOP 10 RENTAL MARKETS IN CALIFORNIA RankedHomeAverage Rent New by Market Trends Area Avg. Rent Yr/Yr Change Purchase Power Avg. Occupancy Santa Monica $3,041 2.10% $656,640 96.70% San Francisco $2,741 -0.70% $591,861 95.60% Palo Alto $2,714 -1.00% $586,031 95.50% Los Gatos $2,455 0.40% $530,105 96.40% Marina del Rey $2,454 0.70% $529,889 95.90% Berkeley $2,368 -12.10% $511,319 86.10% Cupertino $2,357 0.70% $508,944 94.90% Foster City $2,307 -0.30% $498,148 95.20% South San Fran. $2,296 -0.40% $495,773 95.10% Newport Beach $2,263 -0.90% $488,647 94.60% Note: only includes areas with at least 5 communities Source: RealFacts
- 31. TOP SELLING ATTACHED PROJECTS New Home Market Trends Vicino by KB Home, San Jose, CA • 3 floor plans ranging from 1,507 – 1,812 SF • 3 Bedrooms with 3 or 3.5 Bathrooms • Mid $700,000s to low $800,000s • YTD/Overall sales: 21/51 homes • YTD/Overall monthly sales rate: 13.0/9.14 Source: The Ryness Report, February 17, 2013
- 32. CAPITAL STACK Term Sheet Summary • Co-invests: 10% to 20% • Preferred Returns: 12% (Pari Passu) • Waterfalls: 75/25 to a 22%-25% IRR with a multiple of 1.5X • Capital Management Fees: 0.5% to 1% • G&A Fees: 3% SOURCE: Meyers LLC
- 33. Trended Rents will increase Lease up for NEW projects at a decreasing rate and Home will continue to be robust Prices will accelerate
- 34. Job growth will continue but Multifamily development Lease up for NEW projects probably at a to be the next several years willcontinue decreasing rate will increase over robust
- 35. 4. New Home Market Trends Going Forward Consensus Forecasts:
- 36. Allen Matkins Real Estate Development Law Update Land and Home(s) No Longer Four Letter Words? February 27, 2013 Jeff Meyers, President Meyers LLC, a Kennedy Wilson Company (310)887-6297
Editor's Notes
- DONE
- Close in to jobs, etc.. Is 47% 92% of the market is resales
- You want to run sensitivities against this and see what happens. Load up capital management fees, because you’ll run your numbers, and it looks great. Then you load up their fees, and some of the management fees are upfront which will affect your returns. The G&A fees again 3%, but they typically will have holdbacks and various terms.
- If you’re not in one of the core markets, you’ll have a tougher job trying to sell your project.