1Q2014 Land
Forecast Report
Scott Davis
CASE Commercial Real Estate Partners
May 14, 2014
1Q Sales Activity Double Last Year
$0
$50
$100
$150
$200
$250
$300
$350
$400
2005-…
2005-…
2005-…
2005-…
2006-…
2006-…
200...
1Q13 – 5,795 Acres Sold – Sales Activity Increasing
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005-…
2005-…
20...
1Q: More than 94% of acreage sold outside Beltway
0
2,000
4,000
6,000
8,000
10,000
12,000
Total Outside 610 Outside Beltwa...
Inner Loop Land Sales Slow, but Remain Strong
0
20
40
60
80
100
120
140
160
180
200
Source: CoStar, CASE CommercialSource:...
Sales to List Spread Widens
Source: CoStar, CASE Commercial, 1Q2014
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
2007-Q2
...
Median Days on Market Increases Again in 1Q14
Source: CoStar, CASE Commercial
-
100
200
300
400
500
600
700
800
2005-Q1
20...
What Does the Future Hold?
What Does the Future Hold?
• Houston will continue to grow dramatically
because of jobs
• Our demographic makeup is changi...
Houston is expected to lead the state and nation
in population and employment growth between
’12 and ’40
6.2
6.6
7.2
7.9
8...
40% of population in 10 states
wants to move within 12 months
Source: Gallup, December 2013
Houston
47.7%
Dallas
22.9%
Austin
13.7%
San
Antonio
8.1%
OKC
3.2%
New
Orleans
2.1%
Nashville
1.8%
Salt Lake
0.4%
Only 9 MS...
Business Analysis
Architectural Design
Electrical Engineering
Civil Engineering
Legal Services
Be Prepared for a More Diverse Workforce
and Customer Base
72% 65% 58%
48%
39% 36% 32% 30%
9%
14% 20%
29%
36% 39% 42% 44%
...
Source: HAR.COM, April 2014
Source: Zillow, May 2014
Zip Codes with YOY List Price
increases over 20%
How much higher can home prices
go?
0
50
100
150
200
250
300
1975Q1
1976Q1
1977Q1
1978Q1
1979Q1
1980Q1
1981Q1
1982Q1
1983Q...
Almost 75% of suburban residents
want to stay in suburbs
51.0% 51.5%
49.2%
53.7%
61.2% 59.7%
56.7%
61.8%
50.5%
57.2%
63.1%...
Over half of city residents want
to stay in city
48.6%
54.5%
54.2%
45%
46%
47%
48%
49%
50%
51%
52%
53%
54%
55%
2011 2012 2...
Increasing Numbers Want Small
Urban Home Options
59.1%
36.1%
57.9%
39.2%
47.4%
51.0%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Single ...
Declining Support for Land Use
Regulations
72.0%
22.2%
68.8%
23.0%
64.9%
28.2%
64.0%
32.8%
0%
10%
20%
30%
40%
50%
60%
70%
...
“
”
We are not a Houston whose
provincial understanding of the world
at large is manifested in
clumsy, token ways; we are ...
Upcoming SlideShare
Loading in …5
×

Presentation to O'Connor and Associates Land Forecast 051414

958 views

Published on

A review of trends shaping the land market in Houston, Texas.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
958
On SlideShare
0
From Embeds
0
Number of Embeds
753
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • And they are coming here – for the fifth year in a row Houston has ranked as the #1 destination for movers. In fact, 6 Texas cities ranked among the top 50 cities nationally in 2013. Houston #1 San Antonio #5 Austin #6 Dallas #12 Fort Worth # 25 Plano #26
  • Since 2007, the US has lost more than 1,045,000 “middle skill” or middle class jobs. Only 9 MSAs created net new middle class jobs over that time period, and 48% were in Houston, and 93% were in Texas.
  • There are 42 million freelancers in America today--a third of our workforce--and many have embraced an entirely new economic ecosystem. These workers are turning apartments into hotels, Priuses into cabs, and garages into craft manufacturing and distribution centers. Freelancers are increasingly micro-entrepreneurs, building small business and brands, seizing new opportunities to reach previously inaccessible customers and clients, and adding tremendous value to local communities and the nation’s economy along the way.Likewise, the sharing economy is no longer just a creative way for workers to supplement their sagging paychecks in a struggling labor market. TaskRabbit, Fiverr, Skillshare, and dozens of peer-to-peer platforms are now primary sources of income. A string of micro-gigs is becoming the new normal. Experts predict that the ranks of freelancers will swell to 40% of all workers in America by the end of this decadehttp://www.fastcoexist.com/3021147/its-time-for-the-sharing-economy-to-become-the-sharing-society
  • The region’s population is also growing more diverse. Already in 2000, whites were no longer the majority. Hispanics make up an ever greater share of the region by 2040. 2012 student demographics for HISD are even more dramatic – 92% of HISD students are either non-white or are of two or more races.
  • If there’s a depleted supply of homes for sale in Houston, you wouldn’t know it from the market’s new monthly home sales figures. March brought about the 34th consecutive month of positive home sales, despite the record low 2.6-month supply of inventory that has prevailed throughout 2014.According to the latest monthly report prepared by the Houston Association of Realtors (HAR), home sales rose 3.7 percent year-over-year, with March single-family home sales totaling 5,971. That is the largest one-month sales volume recorded since last September.The supply of homes first reached 2.6 months of inventory in December 2013 and has held steady ever since. However, it is down from the 3.5-month supply in March 2013 and significantly lower than the national supply of 5.2 months of inventory.The average price of a single-family home increased 11.0 percent year-over-year to $261,329. The median price—the figure at which half the homes sold for more and half for less—climbed 9.8 percent to $189,900. Both figures represent the highest prices Houston has ever seen in a March.
  • Region NameMar-147735877%7702647%7709441%7700438%7700938%7733637%7705734%7709234%7707731%7704330%7708030%7703629%7756826%7705424%7705524%7707324%7750624%7701123%7701823%7706723%7749323%7766523%7738022%7747822%7700321%7703421%7732820%7737820%
  • According to the house price index prepared by the FHFA, Houston home prices have increased consistently since the mid-1970s, falling only during the downturn during the mid-1980s. But when adjusted for inflation, real home prices have failed to reach the 1977 peak – and remain 34% below that level. And that’s with interest rates on a 30-year fixed note were 8.9%, compared with about 4.34% for a comparable note today.
  • Presentation to O'Connor and Associates Land Forecast 051414

    1. 1. 1Q2014 Land Forecast Report Scott Davis CASE Commercial Real Estate Partners May 14, 2014
    2. 2. 1Q Sales Activity Double Last Year $0 $50 $100 $150 $200 $250 $300 $350 $400 2005-… 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-… 2013-… 2013-… 2013-… 2014-… Millions Source: CoStar, CASE CommercialSource: CoStar, CASE Commercial, 1Q2014
    3. 3. 1Q13 – 5,795 Acres Sold – Sales Activity Increasing 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2005-… 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-… 2013-… 2013-… 2013-… 2014-… Source: CoStar, CASE CommercialSource: CoStar, CASE Commercial, 1Q2014
    4. 4. 1Q: More than 94% of acreage sold outside Beltway 0 2,000 4,000 6,000 8,000 10,000 12,000 Total Outside 610 Outside Beltway Inside Beltway Inside 610 Source: CoStar, CASE CommercialSource: CoStar, CASE Commercial, 1Q2014
    5. 5. Inner Loop Land Sales Slow, but Remain Strong 0 20 40 60 80 100 120 140 160 180 200 Source: CoStar, CASE CommercialSource: CoStar, CASE Commercial, 1Q2014
    6. 6. Sales to List Spread Widens Source: CoStar, CASE Commercial, 1Q2014 -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1
    7. 7. Median Days on Market Increases Again in 1Q14 Source: CoStar, CASE Commercial - 100 200 300 400 500 600 700 800 2005-Q1 2005-Q2 2005-Q3 2005-Q4 2006-Q1 2006-Q2 2006-Q3 2006-Q4 2007-Q1 2007-Q2 2007-Q3 2007-Q4 2008-Q1 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q2 Source: CoStar, CASE Commercial, 1Q2014
    8. 8. What Does the Future Hold?
    9. 9. What Does the Future Hold? • Houston will continue to grow dramatically because of jobs • Our demographic makeup is changing significantly • Buyers want urban and suburban home options • It needs to come from the market: declining support for urban land use policies
    10. 10. Houston is expected to lead the state and nation in population and employment growth between ’12 and ’40 6.2 6.6 7.2 7.9 8.6 9.4 10.2 2.8 3 3.3 3.6 3.9 4.2 4.4 0 2 4 6 8 10 12 2012 2015 2020 2025 2030 2035 2040 Population Employment World Cities 8-10m Pop: • Rio De Janeiro • Moscow • Shanghai • Karachi • Paris • Istanbul • Nagoya • Beijing • Chicago • London Source: Greater Houston Partnership, 2014
    11. 11. 40% of population in 10 states wants to move within 12 months Source: Gallup, December 2013
    12. 12. Houston 47.7% Dallas 22.9% Austin 13.7% San Antonio 8.1% OKC 3.2% New Orleans 2.1% Nashville 1.8% Salt Lake 0.4% Only 9 MSAs (of largest 60) have created net new middle class jobs since 2007. 48% were in Houston.
    13. 13. Business Analysis Architectural Design Electrical Engineering Civil Engineering Legal Services
    14. 14. Be Prepared for a More Diverse Workforce and Customer Base 72% 65% 58% 48% 39% 36% 32% 30% 9% 14% 20% 29% 36% 39% 42% 44% 19% 18% 18% 17% 17% 17% 17% 17% 3% 3% 7% 7% 8% 9% 10% 1970 1980 1990 2000 2010 2020 2030 2040 White Hispanic Black Other Source: HGAC Demographic Model Millions
    15. 15. Source: HAR.COM, April 2014
    16. 16. Source: Zillow, May 2014 Zip Codes with YOY List Price increases over 20%
    17. 17. How much higher can home prices go? 0 50 100 150 200 250 300 1975Q1 1976Q1 1977Q1 1978Q1 1979Q1 1980Q1 1981Q1 1982Q1 1983Q1 1984Q1 1985Q1 1986Q1 1987Q1 1988Q1 1989Q1 1990Q1 1991Q1 1992Q1 1993Q1 1994Q1 1995Q1 1996Q1 1997Q1 1998Q1 1999Q1 2000Q1 2001Q1 2002Q1 2003Q1 2004Q1 2005Q1 2006Q1 2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 Nominal HPI Real HPI Real HPI Peak: 3Q77 – 278.7 Current HPI: 4Q13 – 206.9 Source: Quarterly House Price Index – Purchase Only, Federal Housing Finance Administration, 1Q14 Real home prices Still 34% below 1977 peak
    18. 18. Almost 75% of suburban residents want to stay in suburbs 51.0% 51.5% 49.2% 53.7% 61.2% 59.7% 56.7% 61.8% 50.5% 57.2% 63.1% 63.3% 71.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 1999 2000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Kinder Houston Area Survey, 2014
    19. 19. Over half of city residents want to stay in city 48.6% 54.5% 54.2% 45% 46% 47% 48% 49% 50% 51% 52% 53% 54% 55% 2011 2012 2013 Source: Kinder Houston Area Survey, 2014
    20. 20. Increasing Numbers Want Small Urban Home Options 59.1% 36.1% 57.9% 39.2% 47.4% 51.0% 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Single family home, drive Smaller urban home, walking 2005 2007 2008 2010 2012 Source: Kinder Houston Area Survey, 2014
    21. 21. Declining Support for Land Use Regulations 72.0% 22.2% 68.8% 23.0% 64.9% 28.2% 64.0% 32.8% 0% 10% 20% 30% 40% 50% 60% 70% 80% Better land use planning Free to build wherever 2005 2007 2008 2010 2012 Source: Kinder Houston Area Survey, 2014
    22. 22. “ ” We are not a Houston whose provincial understanding of the world at large is manifested in clumsy, token ways; we are a Houston of effortless inclusiveness. We are a city of weavers. We are a city of builders and big ideas … -Katherine Shilcutt

    ×