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Economic and Real Estate Activity

Economic and Real Estate Activity

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  • White alone Hispanic Medianage (33 ) 40.2 24.8 Median income (48,700) 54,400 36100 55-65 years old (9%) 82 percent 12 percent Under 5 (8%) 44 percent 45 percent 51 percent of hispnaicsare under age 25 ,while30 percent of ahitw lone are under age 25 Hoemownership 76 percent 53 percent
  • Between 2000 and 2004, added 96,500 jobs 55,100 in 2004 Constructionadded 16,800 jobs (2005 +7,500) retail trade added 15,300 jobs (2005 -1,800) Financial activities added 11,200 jobs (2005 +3,100) Health care added 15,400 jobs (12,400 added before 2003) (2005,+1,100) Education 11,800 (2005 +6,900)
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    • 1. realty.wpcarey.asu.edu
    • 2.
      • Single-family 1.2 million homes
      • Townhouse/condos 150,000 units
      • Apartments 340,000 units
      • Retail 148 million Sq.Ft.
      • Office 63 million Sq.Ft.
      • Industrial 229 million Sq.Ft.
    • 3.
      • Success built on failure
      • Game of checkers
      • After slow start, local economy and real estate market should structurally strengthen throughout the year.
    • 4.
      • To build capital for education, retirement and lifestyle (middle-class investment)
      • Money was cheap and available
      • What have you done for me lately.
      • Hyped information and guidance
    • 5.
      • Just because the bottom is found does not mean that recovery is imminent.
        • The Titanic found bottom .
      • Recovery will not be even or include everyone.
      • What is the driving force for recovery?
      • What will recovery look like?
    • 6.
      • Census
        • Growth?
        • Demographic
      • Role of Housing Ownership—American Dream?
        • Tax deduction
        • Secondary market
        • Buy vs. rent
          • Mobility
          • Affordability
    • 7.
      • Housing market
        • Value recovery
        • Financial services
        • Over hang of homes for sale, vacant and foreclosed
      • Commercial real estate
        • Increasing foreclosures
        • Loss of tenants
        • Loss of revenue
    • 8.
      • Economic and job (income recovery)
      • International, Federal and State deficits
        • Revenues vs. expenses
    • 9.
      • Immigration
      • Infrastructure
      • Education
      • Alternative fuels
      • Sustainable development
    • 10.
      • Success built on failure
      • Deal is the name of the game
      • Understand closely
        • Condition of property
        • Condition of neighborhood
        • Potential demand
        • Competition
      • Idea(s) might not be unique
      • Look at trend
    • 11.
      • Homes are an investment
        • Owner/occupant investor
        • Owner/landlord investor
        • Owner/speculator investor
      • Motivation
        • Long-term: self-sufficiency
        • Short-term: lifestyle enhancement
      • Return
        • Income: Rental, Value-added, Financing
        • Appreciation
    • 12.
      • Stricter underwriting
      • Satisfied homeowner
      • Income concerns
      • Rental vs. owning
      • Consumer confidence
      • Low or no equity—difficulty to sell
    • 13.
      • 2000 2010
      • Population 3,251,876 4,192,887
      • White Only 66 percent 60 percent
      • Hispanic 25 percent 30 percent
      • Black 3.5 percent 4.6 percent
      • Asian 2.0 percent 3.2 percent
    • 14.
      • White Hispanic
      • Only
      • Growth (941,011) 34 percent 45 percent
      • 18+ (74%) 80 percent 62 percent
    • 15.
      • YEAR TOTAL ABSOLUTE PERCENT
          • CHANGE CHANGE
          • 2008 1,868,000 ( 47,000 ) - 2.4
          • 2009 1,841,850 ( 26,150 ) -1.4
          • 2010 1,803,170 ( 38,680 ) -2.1
          • 2011F 1,819,400 16,230 0.9
          • 2012F 1,848,510 29,110 1.6
    • 16. Apr Mar Apr Change Change 2010 2011 2011 Yr to Yr Mo to Mo Total Nonfarm 1,703.8 1,704.3 1,714.8 11.0 10.5 Total Private 1,459.7 1,464.5 1,474.8 15.1 10.3 Goods Producing 195.9 191.4 194.5 -1.4 3.1 Service-Providing 1,507.9 1,512.9 1,520.3 12.4 7.4 0.0 Construction 82.7 77.8 80.4 -2.3 2.6 Manufacturing 110.2 110.6 111.1 0.9 0.5 Retail Trade 205.6 205.9 206.5 0.9 0.6 Health Care 194.5 205.0 206.4 11.9 1.4 Tourism 152.8 156.4 157.9 5.1 1.5 Education 101.2 100.1 100.3 -0.9 0.2 Business Services 272.4 262.6 262.9 -9.5 0.3
    • 17.
      • Instrument May May 2010 2011
      • 30 year Mortgage 5.0% 4.6%
      • 1-year Index 0.37 0.19
      • Prime Rate 3.25 3.25
      • 10-year Treasury 3.42 3.46
    • 18.
      • Permits Maricopa Pinal Pima
      • 2011 ytd 1,323 184 185
        • 2010 5,612 1,500 1,000
        • 2009 6,355 2,130 1,865
        • 2008 10,348 4,027 2,630
        • 2007 21,882 8,147 3,715
        • 2006 27,976 10,788 8,115
        • 2005 43,256 18,191 11,035
        • 2004 48,136 11,495 9,585
        • 2003 39,652 6,730 8,010
        • 2002 34,309 4,433 6,500
    • 19.
      • Optimistic Pessimism Consensus
      • 2010 Actual: 7,112
      • 2011 16,900 6,000 12,260
      • 2012 27,800 10,000 18,290
      • Source: Greater Phoenix Blue Chip
    • 20.
      • Major issue is competition with foreclosed homes
      • Market simulation:
      • Entry level
      • Infill
      • Age restricted
      • Green
    • 21.
      • Area First Qtr. First Qtr. 2010 2011
      • Maricopa County $ 227,250 $221,900
      • Peoria 264,440 210,000
      • South Phoenix 155,700 144,180
      • Surprise 167,990 167,840
      • Gilbert 227,025 218,130
      • Avondale 149,615 146,640
      • Goodyear 209,315 219,995
    • 22.
      • Area First Qtr. First Qtr.
      • 2010 2011
      • Pinal County $133,100 $163,500
      • Apache Junction 162,585 167,920
      • Casa Grande 114,000 124,355
      • Maricopa 120,370 124,355
      • Queen Creek 139,900 150,235
    • 23.
      • SALES ACTIVITY Maricopa Pinal
        • 2011 27,950 4,080
        • 2010 106,975 12,765
        • 2009 112,725 12,140
        • 2008 81,700 9,985
        • 2007 54,570 3,580
        • 2006 67,035 3,860
        • 2005 110,835 6,110
      • MEDIAN PRICE
          • 2010 $142,000 102,500
        • 2009 140,000 105,000
        • 2008 186,000 134,000
        • 2007 255,000 193,500
        • 2006 260,600 205,000
    • 24.
      • Area First Qtr. First Qtr. 2010 2011
      • Maricopa County $145,500 $130,050
      • Peoria 165,245 149,665
      • S. Phoenix 114,750 96,840
      • Maryvale 64,395 52,000
      • Surprise 139,125 125,000
      • Mesa 135,675 119,000
      • Glendale 119,000 100,000
    • 25.
      • Median Market Market Market Sales Price Share Share Share (%) (%)
      • Total 10,265 125,000
      • Foreclosed 3,745 126,645 36
      • Traditional 6,520 125,000 64
      • REO 2,610 114,465 40 25
      • Foreclosure
      • related 6,355 62
    • 26.
      • 2008 2009 2010
      • Maricopa County 3.3% 3.8% 3.9%
      • Pinal County 4.8 5.3 5.6
    • 27.
              • 2008 2009 2010
      • Maricopa 7.6% 7.3% 9.4%
      • Casa Grande 2.7 2.6 4.4
      • Apache Junction 7.1 8.7 9.3
      • Maryvale 9.3 8.9 7.8
      • Gilbert 2.9 3.5 4.8
      • Surprise 6.5 7.3 6.9
      • Avondale 8.0 8.0 6.9
      • Buckeye 11.6 15.9 14.6
    • 28.
      • Areas 2009 2010
      • United States $172,100 $176,900
      • Phoenix 137,000 144,700
      • San Diego 350,500 392,800
      • Las Vegas 142,900 142,300
      • Dallas 140,500 134,700
      • Atlanta 123,500 122,700
      • Source: NAR
    • 29.
      • Area First Qtr. First Qtr. 2010 2011
      • Maricopa County 156 178
      • Peoria 159 178
      • Avondale 225 251
      • Surprise 159 180
      • Glendale 190 229
      • Chandler 154 175
    • 30.
      • Permits
        • 2011 337
        • 2010 353
        • 2009 561
        • 2008 1,085
        • 2007 7,203
        • 2006 6,187
      • Median New Unit Sales Price
        • 2010 201,960
        • 2009 169,475
        • 2008 170,875
        • 2007 245,155
    • 31.
      • Sales Activity
        • 2011 ytd 4,560
        • 2010 16,955
        • 2009 13,735
        • 2008 9,420
        • 2007 11,550
      • Median Resale Home Price
        • 2011 $ 85,000
        • 2010 95,000
        • 2009 108,000
        • 2008 150,000
        • 2007 179,000
    • 32.
      • Area First Qtr. First Qtr. 2010 2011
      • Maricopa County $100,040 $ 85,000
      • Peoria 77,280 74,865
      • North Scottsdale 170,840 156,990
      • South Scottsdale 125,000 107,520
      • Downtown 99,390 102,550
      • Union Hills 110,000 81,833
      • Glendale 54,900 46,000
    • 33.
      • UNITS AUTHORIZED
        • 2011 ytd 4
        • 2010 408
        • 2009 637
        • 2008 6,365
        • 2007 6,676
        • 2000’s 51,680
        • 1990s 51,608
        • 1980s 137,436