A presentation made at the AREAA networking event on 6/28/14 in Las Vegas, NV. Las Vegas is coming up in Real Estate again!

2. PLEASE WELCOME
RANDY CHAR, SVP, ONE QUEENSRIDGE PLACE 2014
AREAA LAS VEGAS CHAPTER PRESIDENT

3. THANK YOU TO OUR EVENT SPONSORS

4. THANK YOU TO OUR JADE SPONSORS
THANK YOU TO OUR 2014 DRAGON SPONSOR

5. THANK YOU TO OUR BUILDER SPONSORS

6. PLEASE WELCOME
JAMAL PARKER, GENERAL SALES MANAGER

7. PLEASE WELCOME
SEAN HULSEY, AREA SALES MANAGER

9. ####1111 Purchase LenderPurchase LenderPurchase LenderPurchase Lender
it’s what we do!
19 years19 yearsoverover

10. Housing Inventory is Declining
Applying Upward Pressure on Home Prices in Some Markets
Source: National Association of Realtors (NAR).
Existing U.S. Home Supply in Months

11. Freddie Mac’s Primary Mortgage Market Survey
April 1971 - March 20, 2014 Weekly Average
30-Year Fixed Rate Mortgage
Source: Freddie Mac
1971 1976 1981 1986 1991 1996 2001 2006 20142011

12. U.S. Unemployment Rate
2004 Through January 2014
Source: Economy.com, U.S. Bureau of Labor Statistics. Latest release published 2/2014.
10.0%
6.6%

13. Case-Schiller Home Price Indices
Through December 2013
(released February 25, 2014)
Source: S&P Dow Jones Indices and
CoreLogic.
10-City Composite
Recovery March 2012
+23.00% from trough
10-City Composite peaked
June 2006
10-City Composite peak to
trough of -35.28% over 69
months
2007 2008 2009 2010 2011 20122005 2006 20142013
200
250
175
200
125
150
20-City Composite
10-City Composite

14. Homebuyer Affordability Index
1990 Through December 2013
Source: NAR. Affordability Index is a function of Price, Rates, and Income.
Affordability Continues to Remain Strong Relative to History

15. Annual Existing Home Sales
Source: National Association of Realtors (NAR). Note the data above reflects NAR’s “re-benchmarked” data set released in December
2011.
5.0
4.1
4.3
4.2 4.3
4.7
2007 2008 2009 2010 2011 2012
Note: Tax credit spurred demand in 2009-2010
6.2
5.7
2005 2006
(# Units in Millions)
5.1
2013

16. Exclusive Mortgage Programs

17. Mortgage Programs for
New Construction

18. What Makes a Home?

19. PLEASE WELCOME
BOB HAMRICK, CHAIRMAN/CEO

20. AREAA REAL ESTATE TRENDS UPDATE
Robert H. Hamrick
Chairman / CEO
702.460.8090
Bob.Hamrick@cbvegas.com

21. MOVING CLOSER TO NORMAL
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
#OFHOMES
Acquisitions Dispositions REO inventory Notices of Default
• REO remains in a flat trend
• NODs hover near the lowest number on record
• REO pipeline is only being added to at a
moderate pace near the level of dispositions
DISTRESSED MARKET SIGNIFICANTLY DOWN

22. MOVING CLOSER TO NORMAL
GOOGLE TRENDS
INTEREST OVER TIME – TERM: “SHORT SALE HOME”

23. MOVING CLOSER TO NORMAL
• Majority of sales
are now traditional
• In 2014, Short Sale
and REO accounted
for only 24%of
overall sales
• We have traded
through nearly
176,000 short sales
and REOs
• “Sell and
Buys” are
back!
TRADITIONAL SALES

24. MOVING CLOSER TO NORMAL
• We are approximately where we would have expected
to be if we did not experience the housing bubble
• Price is a big part of the story - but so is affordability,
which is driven, in part, by interest rates
Source: Standard & Poor’s.

25. EXISTING HOME SALES
Source: GLVAR. Does not include High-Rise.
EXISTING HOME SALES 2014
YEAR-OVER-YEAR CHANGE IN EXISTING HOME SALES
After a
concerning
January and
February,
closings have
rebounded

26. SO WHILE CHALLENGES CONTINUE FOR
SOME HOMEOWNERS, WE HAVE
LARGELY MOVED INTO A NEW BUSINESS
TERRITORY
WHAT’S NEXT?…

27. HOMEBUYERS OF THE NEAR FUTURE
FIRST-TIME HOMEBUYERS
• Challenged by coming into the labor market in the middle of a recession
• Employment has stunted household formation
• High levels of student loan debt
• Lack of credit history
SOLUTIONS
• Gifted funds
• FHA
• Naturally, job growth, which has finally returned

28. HOMEBUYERS OF THE NEAR FUTURE
BOOMERANG BUYERS
• Foreclosures and short sales impacting credit reports
• Some may be hesitant to buy after a painful foreclosure
• Many were victims of job loss and lack down payments
SOLUTIONS
• FHA “Back to work” program
• Lenders are looking beyond FICO in specialized loans
• Increased values, while still affordable, helps confidence
• Relative purchase affordability vs. rental

29. HOMEBUYERS OF THE NEAR FUTURE
MOVE-UP BUYERS
• Relatively less scathed by the recession
• Some may be challenged by negative equity and of homes with mortgages –
Nevada has a negative equity share of 29.4% (Corelogic Q1, 2014)
• Contingent offers are increasing!
SOLUTIONS
• Homebuilders are very well suited for this market
• Interest rates remain favorable

30. PRICE FORECASTS
Zillow ranks Las Vegas number one for expected home price increases
with nearly 11% expected over the next year
• Feb 2015 CME futures contracts are
pointing towards a 6.7% gain
• NAR survey shows expectations
between 3%-5% at the state level

31. 135
140
145
150
155
160
165
170
0
100
200
300
400
500
600
700
800
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14
ActiveSubdivisions
NumberofNewHomeClosings
Active Subdivision Closings
0
100
200
300
400
500
600
700
800
900
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14
NumberofNewHomePermits
Permits
NEW HOMES
Source: Salestraq , Coldwell Banker Premier Realty
NEW HOME CLOSINGS AND ACTIVE SUBDIVISIONS
NEW HOME PERMITS
• The number of actively
selling new home
communities has increased
• This should help the market
regain some closings
• Permits have rebounded

32. DEVELOPMENT
Convention Center
Expansion
Genting
Construction expected late 2014
Mandalay Bay Convention
Center Expansion
Construction expected late 2014
Wyndham Desert Blue
Nearing Completion
The Linq
Open
Park District &
MGM-AEG Arena
Broke Ground
The Cromwell
Open
Grand Bazaar Shops
Under Construction
SLS
Late summer 2014

33. NEARLY $8 BILLION IN NEW DEVELOPMENT OR
LARGE SCALE RENOVATIONS ON THE STRIP…
WHY?
TOURISM IS BACK!
DOWNTOWN, HENDERSON AND SUMMERLIN
ARE ALSO EXPERIENCING DEVELOPMENT…

34. DEVELOPMENT
Opens Fall 2014
125 Shops and Restaurants
SAHARA CENTER TIVOLI VILLAGE PHASE II
Opens Fall 2014
220,000 sq.ft of retail
DOWNTOWN SUMMERLIN – HOWARD HUGHES

35. DEVELOPMENT
HOWARD HUGHES & DISCOVERY LAND CO JOINT VENTURE
Just Announced!
• South of The Ridges
• Nearly 555 acres
• Low-Density Luxury Development

36. DEVELOPMENT
NEW MASTERPLANS
CADENCE
• Amenity-rich project in Henderson
• 13,250 homes planned
SKYE CANYON
• 1,700 acres near I-95 and Kyle Canyon Road
• 9,000 home planned
PARK HIGHLANDS
• 2600 acres in North Las Vegas
• 15,000 homes estimated

37. DOWNTOWN LAS VEGAS
• Home to online retailer
Zappos, who is leading the
way in East Fremont
Development
• Brought over 1,200 employees
to downtown Las Vegas

38. DOWNTOWN LAS VEGAS

39. DOWNTOWN LAS VEGAS
FY 2013 Projects Completed: $85.5 Million
FY 2013 Projects Under Construction: $263 Million
Planned Downtown Projects Est. Cost: $457 Million
2,417 permanent employees are estimated to be
working when the planned projects are completed
*Source: City of Las Vegas

40. THE PREVIOUSLY MISSING INGREDIENT…JOBS
• In addition to gaming, Las Vegas is known for modern companies
like Zappos, Solar City, VadaTech and Switch
• Financial Times ranks Las Vegas 8th in American Cities of the Future
for Business Friendliness
• Las Vegas MSA employment is up by 27,300 in 2014 YTD
• Unemployment peaked in July 2010 at 14.5% - Current official
unemployment rate is now 7.9%

41. THE PREVIOUSLY MISSING INGREDIENT - JOBS
LEISURE AND HOSPITALITY EMPLOYMENT – LAS VEGAS MSA
June 2007 Peak
• Leisure and hospitality employment is
almost back to the pre-recession peak
• Current hospitality construction will
likely push this back to peak levels

42. COMMERCIAL REAL ESTATE
OFFICE
Lagging other sectors in occupancy
but seeing surprising price increases
over just a couple of years ago
RETAIL
Looking better: Taxable sales at $2.85
billion in March – up 5.8% over the
previous year
Some centers continue to struggle
while “A” locations and “NNN”
projects are relatively stronger
INDUSTRIAL
High vacancy remains but we are
seeing meaningful interest from firms
attempting to expand or relocate
MULTIFAMILY
Extremely HOT asset class
Over $278 Million Class A/B Buildings
traded this year, outpacing last year
which had $150 Million by May
2013*.
Cap Rates between 4.8% and 6.1%
*Excludes non-arms length transactions.

43. IN SUMMARY
• Market is normalizing – away from distressed
• Home price forecasts are 3-5% in the low range and as high as 11%
• More new home inventory and more to come
• There is strong interest in several commercial real estate asset classes
• Development has returned, driving job growth
The long-term outlook
for Las Vegas is
VERY POSITIVE!

44. PLEASE WELCOME BACK
RANDY CHAR, SVP, ONE QUEENSRIDGE PLACE 2014
AREAA LAS VEGAS CHAPTER PRESIDENT

46. THANK YOU FOR ATTENDING
PLEASE STAY FOR THE POST EVENT MIXER AND…
THE AFTER PARTY INCLUDING THE CONCERT AND BOWLING
COURTESY OF