Brad Hunter 30 Cities In 30 Minutes

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Presentation from DRESNY - Distressed Real Estate Summit - New York, September 23

Presentation from DRESNY - Distressed Real Estate Summit - New York, September 23

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  • Added 9400 jobs on 6/07
  • Added 9400 jobs on 6/07
  • Added 9400 jobs on 6/07
  • Added 9400 jobs on 6/07
  • Added 9400 jobs on 6/07

Transcript

  • 1. Brad Hunter www.twitter.com/bradleyhunter Lot-Investment Strategies (And Opportunities in Buying Broken Subdivisions) Brad Hunter Chief Economist/ National Director of Consulting (561) 573-8351 Twitter: bradleyhunter
  • 2. Which Markets Match Your Criteria? (Markets with the Best Investment Potential)
    • What is your investment horizon? (5 years, 8 years?)
    • Are you IRR-driven?
    • These are the characteristics to look for in a target market:
      • Strong long-term high-wage job potential
      • Deep discounts
      • Finished, vacant to decline
      • Long-term land/VDL constraints
      • In-migration (demand) potential
    Brad Hunter www.twitter.com/bradleyhunter
  • 3. A Crisis is a Terrible thing to Waste
    • Finding good lot positions, even in over-lotted submarkets.
    • Create TMA boundaries that are CLOSE TO JOBS,
    • Then look for the ones that have a sustainable lot MOS.
    Brad Hunter www.twitter.com/bradleyhunter
  • 4. Brad Hunter www.twitter.com/bradleyhunter
  • 5. Brad Hunter www.twitter.com/bradleyhunter
  • 6. Demand is Low for Two Reasons
    • Demand “Destruction” (relates to ownership rate)
    • Pent-Up Demand (my “four Fs”)
      • F ear
      • F inancing
      • F alling Home Prices
      • F ailure to Sell Existing Home
    Brad Hunter www.twitter.com/bradleyhunter
  • 7. Some Signs of Improving Sales
    • New home sales up strongly, traffic quality, mortgage rates, confidence, leading indicators, affordability is back, some builders competing ok against REO, some builders raising prices
    Brad Hunter www.twitter.com/bradleyhunter
  • 8. Mortgage Rates
    • Mortgage rates are still very attractive, if you can get approved
    • Bernanke: “The FOMC believes that a highly accommodative stance of monetary policy will be appropriate for an extended period.”
    Brad Hunter www.twitter.com/bradleyhunter
  • 9. Government Data
    • Starts in August were "1.5 percent (±7.9%)* above the revised July est of 589,000" …
    • So, they're 90% sure that starts either rose, or ..not.
    • Sales up 11.0% +/- 13.2%
    • Sales rose in every region except the South (-5.3%, +/- 15.5%)
    • Traffic quality up; cans down.
    • Still a historically puny level
    • Move-ins are down for 2 nd Q. Why the dichotomy?
      • Cancellations edged back up
      • Investors buying and not finding tenants
      • Or, the spike was fleeting, and we’ll be back down again in the next gov’t release.
    Brad Hunter www.twitter.com/bradleyhunter
  • 10. Brad Hunter www.twitter.com/bradleyhunter Pending Sales Up (Tax Credits) Uptick in June (somewhat confirmed by our surveys) … but down in the South
  • 11. Move-Ins are Still Sluggish Nationwide Brad Hunter www.twitter.com/bradleyhunter
  • 12. Brad Hunter www.twitter.com/bradleyhunter Move-Ins (absorption) Starts
  • 13. Brad Hunter www.twitter.com/bradleyhunter
  • 14. Brad Hunter www.twitter.com/bradleyhunter
  • 15. Brad Hunter www.twitter.com/bradleyhunter We now have more of a DEMAND problem than a supply problem South Florida Example The pendulum has swung…
  • 16. Brad Hunter www.twitter.com/bradleyhunter 7.8 MOS Fin Vac 19.0 MOS based upon 2Q
  • 17. Brad Hunter www.twitter.com/bradleyhunter
  • 18. Brad Hunter www.twitter.com/bradleyhunter 3.1 MOS Fin Vac 5.3 MOS based upon 2Q BETTER than most…
  • 19. Brad Hunter www.twitter.com/bradleyhunter
  • 20. Lot Supplies by Market Brad Hunter www.twitter.com/bradleyhunter
  • 21. Brad Hunter www.twitter.com/bradleyhunter Conclusions Brad Hunter Chief Economist/ National Director of Consulting (561) 573-8351 Twitter: bradleyhunter
  • 22.
    • About the Presenter
    • Brad Hunter, Chief Economist/National Director of Consulting
    • Brad Hunter spearheads Metrostudy’s current work with the investment community and national developer/builder clients. A large part of his work lately has been with private equity funds, hedge funds, and pension fund advisors. He supervises the bulk of the company’s multi-market studies, and has orchestrated hundreds of site-specific or area-specific housing market studies over the past twenty-plus years. Metrostudy is the nation’s premier advisor on local and regional housing market conditions. With 24 years worth of experience in real estate analysis and local market economic forecasting, Mr. Hunter is a Full Member of the Urban Land Institute, has authored numerous articles and book chapters for ULI, including Market Profiles, and serves on the Housing Market Forecast Panel for the Housing Market Report. He is regularly cited in local and national journals, and has recently been featured in the Wall Street Journal and on Bloomberg News (including Bloomberg’s “On the Money” and “On the Economy” radio shows). He graduated in 1985 from the Wharton School of the University of Pennsylvania with a degree in economics and has been a guest lecturer at Harvard University. Hunter is a speaker at conferences on real estate opportunities and investing, as well as at ULI conferences, and is frequently called upon by key regulatory agencies of the U.S. government for his insights on the housing sector. Hunter has tracked and forecast housing markets and demographic/economic trends at the local level for 24 years.
    • Follow me on Twitter for regular updates of our original research in local housing markets! (www.twitter.com/bradleyhunter)
    Brad Hunter www.twitter.com/bradleyhunter