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Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
Houston 1Q2013 Land Market Presentation
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Houston 1Q2013 Land Market Presentation

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Presentation given at the O'Connor & Associates Land Forecast Luncheon on May 28, 2013.

Presentation given at the O'Connor & Associates Land Forecast Luncheon on May 28, 2013.

Published in: Real Estate, Business
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  • Blue line is population. Currently we have about 6M. In 2040 we will have over 9M. We add over 100,000 residents each year.
  • Nationally, Gen Y represents a “pig in the python” – number of 22 year olds nationally peaked last year so, that should represent the beginning of peak apartment demand, and we would would expect the peak to hit in about three years for single family demand as they start to hit age 25.
  • Gen Y shows an inclination to prefer city living
  • In fact, 2010 census data indicates that people between 20 and 29 years old were less inclined to live in more urban and walkable neighborhoods than their predecessors. In 2000, 19 percent of people aged 20 to 29 lived in the core municipalities of major metropolitan areas, where transit service and walkable neighborhoods are concentrated. Only 13 percent of the increase in 20 to 29-year-old population between 2000 and 2010 was in the core municipalities. By contrast, the share of the age 20 to 29 living  in the suburbs of major metropolitan areas was 45 percent, higher than the 36 percent living there in 2000
  • Joel Kotkin - The entrepreneurial drive in Houston is clearly not a response to economic disaster – the city has a culture that encourages striking out on your own, and low costs and lighter regulation make it easier. Indeed over the past decade, the Texas powerhouse also led the nation in the growth of its 1099 economy, which expanded by a remarkable 51%.
  • Transcript

    • 1. Land Forecast LunchScott DavisCASE Commercial Real Estate PartnersMay 29, 2013
    • 2. Total Land Sales Volume Remains Steady in Q1$0$100$200$300$400$500$600$700$8002005-…2005-…2005-…2005-…2006-…2006-…2006-…2006-…2007-…2007-…2007-…2007-…2008-…2008-…2008-…2008-…2009-…2009-…2009-…2009-…2010-…2010-…2010-…2010-…2011-…2011-…2011-…2011-…2012-…2012-…2012-…2012-…2013-…MillionsSource: CoStar, CASE Commercial
    • 3. 4Q12 – Most Acres Sold Since Peak02,0004,0006,0008,00010,00012,00014,00016,0002005-…2005-…2005-…2005-…2006-…2006-…2006-…2006-…2007-…2007-…2007-…2007-…2008-…2008-…2008-…2008-…2009-…2009-…2009-…2009-…2010-…2010-…2010-…2010-…2011-…2011-…2011-…2011-…2012-…2012-…2012-…2012-…2013-…Source: CoStar, CASE Commercial
    • 4. Almost 85% of acreage sold outside Beltway01,0002,0003,0004,0005,0006,0007,0008,0002009- Q12009- Q22009- Q32009- Q42010- Q12010- Q22010- Q32010- Q42011- Q12011- Q22011- Q32011- Q42012- Q12012- Q22012- Q32012- Q42013- Q1Total Outside 610 Outside Beltway Inside Beltway Inside 610Source: CoStar, CASE Commercial
    • 5. Still Huge Interest in Inner Loop Properties0204060801001201401601802009- Q12009- Q22009- Q32009- Q42010- Q12010- Q22010- Q32010- Q42011- Q12011- Q22011- Q32011- Q42012- Q12012- Q22012- Q32012- Q42013- Q1Source: CoStar, CASE Commercial
    • 6. Sales to List Spread Narrows to 2010-2011 LevelsSource: CoStar, CASE Commercial8.2%-49.2%-22.9%-50.0%-40.0%-30.0%-20.0%-10.0%0.0%10.0%2006-Q32006-Q42007-Q12007-Q22007-Q32007-Q42008-Q12008-Q22008-Q32008-Q42009-Q12009-Q22009-Q32009-Q42010-Q12010-Q22010-Q32010-Q42011-Q12011-Q22011-Q32011-Q42012-Q12012-Q22012-Q32012-Q4
    • 7. Median Days on Market Decreased in Q1/13Source: CoStar, CASE Commercial-1002003004005006007008002005-Q12005-Q22005-Q32005-Q42006-Q12006-Q22006-Q32006-Q42007-Q12007-Q22007-Q32007-Q42008-Q12008-Q22008-Q32008-Q42009-Q12009-Q22009-Q32009-Q42010-Q12010-Q22010-Q32010-Q42011-Q12011-Q22011-Q32011-Q42012-Q12012-Q22012-Q32012-Q42013-Q1
    • 8. What Does the Future Hold?
    • 9. 2.23.13.74.75.97.08.19.20.91.6 1.82.3 2.63.23.74.11970 1980 1990 2000 2010 2020 2030 2040PeopleJobsRegion will grow by 3.3 MillionSource: HGAC Demographic ModelIn Millions
    • 10. Gen Y: Millions of 22YO By Year3,400,0003,500,0003,600,0003,700,0003,800,0003,900,0004,000,0004,100,0004,200,000Age 22 Age 25Peak Rental Demand Peak Owner DemandSource: US Centers for Disease Control and Prevention
    • 11. Houston #2 Destination For MillennialsRank Metro AreaWage Change forGen YMedian Pay for GenYCommuteTime forGen Y % Gen YGen Y MetroScore1 Seattle 4.4% $ 44,000 24.3 0.22 1.612 Houston 4.3% $ 44,000 24.8 0.22 1.523 Minneapolis 3.3% $ 42,800 20.4 0.23 1.464 Washington, DC 3.2% $ 49,500 30 0.26 1.255 Boston 3.3% $ 46,200 29.9 0.25 1.166 Dallas 2.9% $ 41,200 20.6 0.21 1.117 New York 2.9% $ 46,900 30.6 0.26 1.048 Tampa 2.7% $ 36,600 20.7 0.19 0.839 - Tie Philadelphia 2.6% $ 42,000 28.7 0.23 0.819 - Tie San Francisco 2.2% $ 51,300 29.3 0.22 0.81Source: Best Cities for Gen Y, www.payscale.com, 2012
    • 12. Where People Want to Live, byGeneration14% 15% 14% 18%31%39% 38% 38%47%42%46% 47% 47%34%25%0%20%40%60%80%100%60+ (Silent + GI) 50-59 (Boomer) 40-49 (Boomer &Gen X)30-39 (Gen X &Gen Y)18-29 (Gen Y)City Suburban Small TownSource: 2011 National Community Preference Survey, NAR, March 2011
    • 13. Where Do They Actually Live?0%10%20%30%40%50%Core Municipalities Suburbs Outside Major Metropolitan Areas2000% of Age 20-29 2010% of Age 20-29Source: Wendell Cox, www.newgeography.com
    • 14. Gen Y Still Want Single FamilyFall 2007 “HomeType Likely toChoose”Summer 2010“AnticipatedHousing in 2015”March 2011“Home TypePreference”Apartment/Condo 12% 25% 15%Rowhouse/Townhouse 12% 6% 6%Single-Family 70% 64% 74%Other 5% 5% n/aSource: RCLCO Survey, 207, ULI/Lachman Survey 2010, NAR ConsumerPreference Study 2011
    • 15. Gen X & Gen Y Favor LifestyleFactors – Close to Work, Shopping71%55%52%42%51%62%46%43%49% 47%0%20%40%60%80%Small Lot, Walk toWorkSmall Lot, Walk toShopLess than IdealHome, Close toShopLess than IdealHome, Close toWorkUrban SettingGen Y Gen X15Source: Robert Charles Lesser Co.
    • 16. 16Job Growth in Suburban CentersMarket 2013 2020 GrowthInside LoopBellaire 34,438 38,320 11.3%Greenway 63,143 68,148 7.9%CBD 148,117 153,970 4.0%TMC 107,344 116,272 8.3%Galleria 134,162 136,999 2.1%Inside BeltwayGreenspoint 91,343 100,042 9.5%Brookhollow 25,526 26,271 2.9%Northwest Crossing 53,149 56,065 5.5%Sharpstown 39,327 40,360 2.6%Westchase 96,223 100,183 4.1%Outside BeltwayClear lake 48,897 50,628 3.5%Katy 18,707 21,591 15.4%The Woodlands 48,805 55,398 13.5%West Houston 102,795 108,760 5.8%Sugar Land 86,934 101,129 16.3%Total Market 2,959,033 3,275,509 10.7%Source: HGAC, 2035 Regional Transportation Plan
    • 17. Houston #1 in Self-Employment GrowthRank Region Growth in Self-employed, 2008-20111 Houston-Sugar Land-Baytown, TX 12.20%2 Riverside-San Bernardino-Ontario, CA 11.80%3 Phoenix-Mesa-Glendale, AZ 11.50%4 Seattle-Tacoma-Bellevue, WA 10.00%5 Baltimore-Towson, MD 8.60%6 San Antonio-New Braunfels, TX 8.10%7 Tampa-St. Petersburg-Clearwater, FL 6.50%8 Dallas-Fort Worth-Arlington, TX 6.30%9 Boston-Cambridge-Quincy, MA-NH 5.60%10 Miami-Fort Lauderdale-Pompano Beach, FL 4.90%
    • 18. Land Growth Trends• Houston will grow dramatically over the nexttwo decades• Gen Y will drive some inner-city interest butstill has overwhelming suburban preference• Real preference by Gen X and Gen Y is for ashorter commute and close to shopping• Most job growth will be in the suburbs

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