This document summarizes a presentation on fundamental market analysis for a hypothetical subdivision appraisal. It outlines a six-step process for analyzing demand and supply factors to forecast the subject property's market capture and absorption rate. Statistical data on population trends, unemployment, home prices, and inventory is presented to analyze the local market. Absorption is estimated to be approximately 4 years based on an inferred comparable analysis and equal-share capture method.
The document provides a 6-step process for conducting a fundamental market analysis of a hypothetical subdivision. It summarizes demographic and economic indicators of the local market, analyzes demand and supply factors, and estimates the subject property could absorb lots at a rate of 4 lots per year following a 2-year holding period based on an equal-share capture method. The presentation aims to help bankers with development timing decisions and determining financial feasibility.
Commercial Real Estate Market Trends - 2017cutmytaxes
The document summarizes commercial real estate market trends for the first quarter of 2017 according to a survey by the National Association of REALTORS. Key points include:
- Sales volume declined 4.4% year-over-year while prices rose 7.2%, indicating a tight market.
- Inventory shortage remained the top challenge.
- Leasing volume rose 2.3% quarter-over-quarter while rates increased 3.8% and concessions fell 11.1%.
- Financing availability returned as a top concern.
Embedded workshop 12 follow the money infuse 2013Justin Barer
Slide presentation from Embedded Workshop #12 at the Canadian Institute of Planning's INFUSE 2013 conference in Vancouver. The workshop discussed the market and financial basis of planning and urban design.
2014 Real Estate Market Update and 2015 Forecast PhilippinesKMC Savills, Inc.
What's next for Philippine real estate? The sentiment on the Philippine economy remains generally positive. Despite the slowdown, the Philippine economy is still seen as the fastest-growing among the ASEAN-6, as it claims the highest GDP forecast in the region for 2014 to 2015. It is likely to trail behind China (or even India) as among the robust economies in Asia. And it looks like the expansion and growth of the local economy will continue through next year.
The property market in the Philippines is still in a sweet spot. This year, we have seen some big investments rise from the ground with local developers and foreign investors creating a new landscape, doing their best to deliver to the increasing demand and activity in the market. Metro Manila's central business districts and other prime locations in the city have become home to new residential communities and have been the hot spots for expanding office developments and booming retail markets. The third quarter property market update reflects high investor confidence. With the upcoming developments and launches and ongoing constructions, the industry is in an upward spiral. The office market is the most active and popular of all the assets and property types. Residential real estate hasn't lost steam, although market interest is shifting towards the lower segment. The steady flow of OFW (overseas Filipino workers) remittances, booming IT-BPO industry, increasing domestic demand, and growth in tourist arrivals over the next few years drive growth in the property market. With the Philippines' fast-growing economy, it is slated to become a top real estate market in the coming years.
Office market
It's a landlord market for the office and commercial property sector, and it is likely to stay this way because of the shortage in supply. The office market has an impressive third quarter performance. We can see an early upswing for the office market and commercial property sector. There's an increasing demand and decreasing vacancy, resulting in a price increase. In central business districts, there are single-digit vacancy rates below five percent. Take-up is rather impressive. We can see new and upcoming supplies putting some pressure on rental prices and vacancy rates. However, rental growth will be at a more conservative pace. As prime office supply in CBDs stays low through 2016, the demand in the leasing market and interest particularly on serviced offices will be sustained, especially with the IT-BPO and KPO industry's expansion and SMEs wanting to test the market first. Investors and developers should explore the idea of developing new CBDs as BGC, Makati, and Ortigas start to fill to the brim and become saturated. Great locations would be Quezon City and Bay City. CBDs can also be developed in other parts of the country, with the rise of Next Wave Cities that have turned into promising investment destinations.
This document discusses several topics related to business economics and property management. It begins by defining business economics and its characteristics, which include its microeconomic nature and use of economic theories. It also discusses the importance of business economics. Next, it defines real estate economics and discusses housing demand and supply scenarios in Malaysia. It then covers components of a management plan such as property information, objectives, inventory, and scheduling activities. The document also discusses market analysis, including defining it and covering its key components such as demand analysis. It concludes by listing several references.
This document discusses real estate and land valuation from an economic perspective. It begins by defining land and real estate, then covers classical and neoclassical economic theories related to land. The key principles of land economics are discussed, including supply and demand, anticipation, balance, conformity, and substitution. External factors that can influence land value are also addressed.
project on construction of house report.Hagi Sahib
The document provides details of a project to construct a house including the project charter, scope, schedule, and resources. The project has defined activities to construct the house over a 1 year period within a budget of Rs. 14,365,047. Key stakeholders include the customer Mr. Ali Hamza and supplier vendors. The project manager developed a work breakdown structure and activity list to plan and track the house construction.
Lancaster County PA Economic Forecast--High Associates Ltd. 02-12-2014highadmin
This document summarizes 2013 macroeconomic assumptions and national real estate market conditions. For 2013, GDP growth was estimated at 2.7% with unemployment projected to decline from 7.9% to 6.7% nationally. Across real estate sectors, apartments rents exceeded pre-recession peaks while industrial saw strong absorption. Office occupancy recovered in central business districts with suburban office on a slower recovery path. Cap rates declined across all sectors as equity investment remained abundant seeking "core" and "value added" deals.
The document provides a 6-step process for conducting a fundamental market analysis of a hypothetical subdivision. It summarizes demographic and economic indicators of the local market, analyzes demand and supply factors, and estimates the subject property could absorb lots at a rate of 4 lots per year following a 2-year holding period based on an equal-share capture method. The presentation aims to help bankers with development timing decisions and determining financial feasibility.
Commercial Real Estate Market Trends - 2017cutmytaxes
The document summarizes commercial real estate market trends for the first quarter of 2017 according to a survey by the National Association of REALTORS. Key points include:
- Sales volume declined 4.4% year-over-year while prices rose 7.2%, indicating a tight market.
- Inventory shortage remained the top challenge.
- Leasing volume rose 2.3% quarter-over-quarter while rates increased 3.8% and concessions fell 11.1%.
- Financing availability returned as a top concern.
Embedded workshop 12 follow the money infuse 2013Justin Barer
Slide presentation from Embedded Workshop #12 at the Canadian Institute of Planning's INFUSE 2013 conference in Vancouver. The workshop discussed the market and financial basis of planning and urban design.
2014 Real Estate Market Update and 2015 Forecast PhilippinesKMC Savills, Inc.
What's next for Philippine real estate? The sentiment on the Philippine economy remains generally positive. Despite the slowdown, the Philippine economy is still seen as the fastest-growing among the ASEAN-6, as it claims the highest GDP forecast in the region for 2014 to 2015. It is likely to trail behind China (or even India) as among the robust economies in Asia. And it looks like the expansion and growth of the local economy will continue through next year.
The property market in the Philippines is still in a sweet spot. This year, we have seen some big investments rise from the ground with local developers and foreign investors creating a new landscape, doing their best to deliver to the increasing demand and activity in the market. Metro Manila's central business districts and other prime locations in the city have become home to new residential communities and have been the hot spots for expanding office developments and booming retail markets. The third quarter property market update reflects high investor confidence. With the upcoming developments and launches and ongoing constructions, the industry is in an upward spiral. The office market is the most active and popular of all the assets and property types. Residential real estate hasn't lost steam, although market interest is shifting towards the lower segment. The steady flow of OFW (overseas Filipino workers) remittances, booming IT-BPO industry, increasing domestic demand, and growth in tourist arrivals over the next few years drive growth in the property market. With the Philippines' fast-growing economy, it is slated to become a top real estate market in the coming years.
Office market
It's a landlord market for the office and commercial property sector, and it is likely to stay this way because of the shortage in supply. The office market has an impressive third quarter performance. We can see an early upswing for the office market and commercial property sector. There's an increasing demand and decreasing vacancy, resulting in a price increase. In central business districts, there are single-digit vacancy rates below five percent. Take-up is rather impressive. We can see new and upcoming supplies putting some pressure on rental prices and vacancy rates. However, rental growth will be at a more conservative pace. As prime office supply in CBDs stays low through 2016, the demand in the leasing market and interest particularly on serviced offices will be sustained, especially with the IT-BPO and KPO industry's expansion and SMEs wanting to test the market first. Investors and developers should explore the idea of developing new CBDs as BGC, Makati, and Ortigas start to fill to the brim and become saturated. Great locations would be Quezon City and Bay City. CBDs can also be developed in other parts of the country, with the rise of Next Wave Cities that have turned into promising investment destinations.
This document discusses several topics related to business economics and property management. It begins by defining business economics and its characteristics, which include its microeconomic nature and use of economic theories. It also discusses the importance of business economics. Next, it defines real estate economics and discusses housing demand and supply scenarios in Malaysia. It then covers components of a management plan such as property information, objectives, inventory, and scheduling activities. The document also discusses market analysis, including defining it and covering its key components such as demand analysis. It concludes by listing several references.
This document discusses real estate and land valuation from an economic perspective. It begins by defining land and real estate, then covers classical and neoclassical economic theories related to land. The key principles of land economics are discussed, including supply and demand, anticipation, balance, conformity, and substitution. External factors that can influence land value are also addressed.
project on construction of house report.Hagi Sahib
The document provides details of a project to construct a house including the project charter, scope, schedule, and resources. The project has defined activities to construct the house over a 1 year period within a budget of Rs. 14,365,047. Key stakeholders include the customer Mr. Ali Hamza and supplier vendors. The project manager developed a work breakdown structure and activity list to plan and track the house construction.
Lancaster County PA Economic Forecast--High Associates Ltd. 02-12-2014highadmin
This document summarizes 2013 macroeconomic assumptions and national real estate market conditions. For 2013, GDP growth was estimated at 2.7% with unemployment projected to decline from 7.9% to 6.7% nationally. Across real estate sectors, apartments rents exceeded pre-recession peaks while industrial saw strong absorption. Office occupancy recovered in central business districts with suburban office on a slower recovery path. Cap rates declined across all sectors as equity investment remained abundant seeking "core" and "value added" deals.
Foreclosure Effects on Neighborhood Property Assessments RWVentures
RW Ventures' recent analysis of the impact of foreclosures on neighborhood property values has begun to garner attention from civic sector stakeholders. Bob Weissbourd and Michael He have presented the findings of the firm's work for the Cook County Assessor's office in addresses to both the National League of Cities' Community and Economic Development Committee and the City of Milwaukee's Community Economic Development Committee.
Foreclosure Effects on Neighborhood Property Assessments: National League of ...RWVentures
RW Ventures' recent analysis of the impact of foreclosures on neighborhood property values has begun to garner attention from civic sector stakeholders. Bob Weissbourd and Michael He have presented the findings of the firm's work for the Cook County Assessor's office in addresses to both the National League of Cities' Community and Economic Development Committee and the City of Milwaukee's Community Economic Development Committee.
The document provides information on a private equity real estate fund managed by LaSalle Investment Management. It introduces the team managing the fund and provides an executive summary and overview of the US macroeconomic environment, real estate market trends, proposed fund structure, investment strategy, and target markets. The fund will target a 13-16% return through investments in multifamily, office and data center properties in high growth markets like Austin, TX, Atlanta, GA, Charlotte, NC, Raleigh-Durham, NC and Omaha, NE.
The document summarizes a presentation by Travis Fling, Chief Economist at the Madison County Chamber of Commerce, on current leading economic indicators and unemployment. Fling discusses national and global economic factors, components of the US economy like GDP and consumer spending, leading economic indicators for the US, Ohio, and Madison County, and offers advice to business owners on managing through the economic recession.
5 predictions for commercial real estate, risk management and lending in 2018. Presented by Dianne Crocker, EDR Insight in her opening comments at the Environmental Bankers Association Conference in Long Beach, CA on January 15, 2018.
The document defines real estate markets and submarkets, including residential, commercial, industrial, and agricultural. It discusses market trends like cycles and fluctuations. A market analysis studies supply and demand factors like absorption rates. Economic influences on real estate include national and local indicators like incomes, inflation, and demographics. Analyzing competition identifies other brokerages and direct sellers in the local market. Statistics can show market share and conditions. A SWOT analysis evaluates a company's strengths, weaknesses, opportunities, and threats to identify a niche. A business plan describes a company's concept, marketplace analysis, and financial projections.
The document provides an update on the commercial real estate market and keys to navigating an uncertain market. It notes that while transaction volumes are up slightly from last year, the rate of growth has declined in recent quarters. Multifamily and class A office properties are driving most deals. Lending is also up but remains cautious, with tighter underwriting for any assets perceived as risky. Risk aversion is high among investors and lenders. The document outlines some areas of opportunity in the recovering market and strategies for environmental professionals to adopt to succeed.
Commercial real estate outlook remains positive but slow growth is expected in 2014 and 2015. Job growth around 1.6% is projected to drive modest increases in GDP of around 2.3% in 2014. Residential real estate sales are expected to be flat with modest home price increases. Commercial real estate transaction volume and prices are recovering from the recession with office, apartment and retail properties leading the recovery. Overall moderate economic expansion and job growth should support continued strengthening in commercial real estate markets.
This document analyzes commercial real estate transaction and pricing trends in April 2015. Key points:
- Total commercial property sales were $29.5 billion in April, unchanged from the prior year. Apartment sales paused while other sectors grew.
- Cap rates are generally flat year-over-year except industrial, which increased 30 basis points.
- Portfolio and entity-level deals accounted for 28% of April volume, down from 37% in Q1 2015.
- The Moody's/RCA national composite price index was up 16% in Q1 2015 from a year ago, with prices now 8.5% above pre-crisis peaks on average. Price recovery has varied by sector and location
1) Current residential real estate data lacks sophistication and comprehensive localized information that professionals need to make investment decisions. Big data is growing exponentially and will revolutionize real estate like other industries.
2) Real estate involves huge volumes of local, macroeconomic, and household-level data. Applying this data reveals shifts in demographics, increasing dispersion of returns between local markets, and faster market cycles.
3) Case studies show how analyzing shifting demographics can help understand where demand is moving and what products consumers need. Analyzing dispersion of returns between local markets shows the need to refine investment strategies for different market clusters.
Successful Investment in Office and Industrial Properties: Risks and BenefitsREISA
This session will provide an analysis of investment in the largest segment of commercial real estate.
Panelists will discuss the risks of office building and industrial property acquisitions and factors of
analysis including location, target tenants, amenities, classes and types of assets, environmental
issues and local laws and regulations.
Moderator Coni Rathbone, Zupancic Rathbone Law Group, P.C.
Panelists Paul Getty, First Guardian Group; Scott McKibben, Brennan Investment Group
This document provides an overview of the spring 2015 real estate market outlook. It discusses indicators that the macroeconomy is slowly improving. It also notes that home prices are projected to rise modestly in 2015 and 2016, inventory remains low, and rent growth is strongest in tech cities and parts of the South and Southwest. Student debt is more prevalent across all age groups but impacts credit scores of millennials. New housing demand is shifting to higher-priced homes while inventory of new homes remains tight. Reform of the housing finance system is discussed along with private capital involvement through risk sharing transactions.
This document provides data and analysis on the real estate market. It discusses topics such as overly leveraged households in 2000 and 2007, spatial correlation between high loan-to-income ratios and unemployment/home price declines, new construction rates, record low mortgage rates, and the increasing number of households renting. It emphasizes that real estate is local and case-by-case, and that data can help with prospecting, pricing strategies, assessing competition, and making informed decisions. Data sources include the USA Today, NAR, BLS, and more.
Current Market Intelligence - Copy Edited 090426 (DBM-Court Final)Court Bradley
This document discusses the current state of the commercial real estate market and outlines several challenges facing investors, including:
1) Declining cash flows from weakening tenants and falling rental rates. Unemployment has risen significantly which is weakening many tenants' ability to pay rent.
2) Changes to tax benefits such as carried interest that could reduce incentives for investment. Proposed changes may decrease development activity.
3) Rising capitalization rates and falling property values, pointing to continuing price erosion. Distressed assets are increasing and further pulling down surrounding property values.
4) Stricter lending standards with higher down payments required and interest-only loans no longer available are limiting leverage capabilities. This constraints investment activity
Gauging Stakeholder Interest in Residential Property Management ProgramsAndy Carswell
The presentation highlights recent research conducted by the University of Georgia's Department of Financial Planning, Housing, & Consumer Economics. The specific focus is on an emphasis that the department made to implement residential property management classes within the general housing curriculum. The results are dual track, in that they cover responses given by both students and apartment industry members, two important stakeholders in the overall development of a successful program. The research team would also like to thank Maureen Lambe of the National Apartment Association for her help in making available NAA membership lists to make such industry surveys possible.
Foreclosure Effects on Neighborhood Property Assessments RWVentures
RW Ventures' recent analysis of the impact of foreclosures on neighborhood property values has begun to garner attention from civic sector stakeholders. Bob Weissbourd and Michael He have presented the findings of the firm's work for the Cook County Assessor's office in addresses to both the National League of Cities' Community and Economic Development Committee and the City of Milwaukee's Community Economic Development Committee.
Foreclosure Effects on Neighborhood Property Assessments: National League of ...RWVentures
RW Ventures' recent analysis of the impact of foreclosures on neighborhood property values has begun to garner attention from civic sector stakeholders. Bob Weissbourd and Michael He have presented the findings of the firm's work for the Cook County Assessor's office in addresses to both the National League of Cities' Community and Economic Development Committee and the City of Milwaukee's Community Economic Development Committee.
The document provides information on a private equity real estate fund managed by LaSalle Investment Management. It introduces the team managing the fund and provides an executive summary and overview of the US macroeconomic environment, real estate market trends, proposed fund structure, investment strategy, and target markets. The fund will target a 13-16% return through investments in multifamily, office and data center properties in high growth markets like Austin, TX, Atlanta, GA, Charlotte, NC, Raleigh-Durham, NC and Omaha, NE.
The document summarizes a presentation by Travis Fling, Chief Economist at the Madison County Chamber of Commerce, on current leading economic indicators and unemployment. Fling discusses national and global economic factors, components of the US economy like GDP and consumer spending, leading economic indicators for the US, Ohio, and Madison County, and offers advice to business owners on managing through the economic recession.
5 predictions for commercial real estate, risk management and lending in 2018. Presented by Dianne Crocker, EDR Insight in her opening comments at the Environmental Bankers Association Conference in Long Beach, CA on January 15, 2018.
The document defines real estate markets and submarkets, including residential, commercial, industrial, and agricultural. It discusses market trends like cycles and fluctuations. A market analysis studies supply and demand factors like absorption rates. Economic influences on real estate include national and local indicators like incomes, inflation, and demographics. Analyzing competition identifies other brokerages and direct sellers in the local market. Statistics can show market share and conditions. A SWOT analysis evaluates a company's strengths, weaknesses, opportunities, and threats to identify a niche. A business plan describes a company's concept, marketplace analysis, and financial projections.
The document provides an update on the commercial real estate market and keys to navigating an uncertain market. It notes that while transaction volumes are up slightly from last year, the rate of growth has declined in recent quarters. Multifamily and class A office properties are driving most deals. Lending is also up but remains cautious, with tighter underwriting for any assets perceived as risky. Risk aversion is high among investors and lenders. The document outlines some areas of opportunity in the recovering market and strategies for environmental professionals to adopt to succeed.
Commercial real estate outlook remains positive but slow growth is expected in 2014 and 2015. Job growth around 1.6% is projected to drive modest increases in GDP of around 2.3% in 2014. Residential real estate sales are expected to be flat with modest home price increases. Commercial real estate transaction volume and prices are recovering from the recession with office, apartment and retail properties leading the recovery. Overall moderate economic expansion and job growth should support continued strengthening in commercial real estate markets.
This document analyzes commercial real estate transaction and pricing trends in April 2015. Key points:
- Total commercial property sales were $29.5 billion in April, unchanged from the prior year. Apartment sales paused while other sectors grew.
- Cap rates are generally flat year-over-year except industrial, which increased 30 basis points.
- Portfolio and entity-level deals accounted for 28% of April volume, down from 37% in Q1 2015.
- The Moody's/RCA national composite price index was up 16% in Q1 2015 from a year ago, with prices now 8.5% above pre-crisis peaks on average. Price recovery has varied by sector and location
1) Current residential real estate data lacks sophistication and comprehensive localized information that professionals need to make investment decisions. Big data is growing exponentially and will revolutionize real estate like other industries.
2) Real estate involves huge volumes of local, macroeconomic, and household-level data. Applying this data reveals shifts in demographics, increasing dispersion of returns between local markets, and faster market cycles.
3) Case studies show how analyzing shifting demographics can help understand where demand is moving and what products consumers need. Analyzing dispersion of returns between local markets shows the need to refine investment strategies for different market clusters.
Successful Investment in Office and Industrial Properties: Risks and BenefitsREISA
This session will provide an analysis of investment in the largest segment of commercial real estate.
Panelists will discuss the risks of office building and industrial property acquisitions and factors of
analysis including location, target tenants, amenities, classes and types of assets, environmental
issues and local laws and regulations.
Moderator Coni Rathbone, Zupancic Rathbone Law Group, P.C.
Panelists Paul Getty, First Guardian Group; Scott McKibben, Brennan Investment Group
This document provides an overview of the spring 2015 real estate market outlook. It discusses indicators that the macroeconomy is slowly improving. It also notes that home prices are projected to rise modestly in 2015 and 2016, inventory remains low, and rent growth is strongest in tech cities and parts of the South and Southwest. Student debt is more prevalent across all age groups but impacts credit scores of millennials. New housing demand is shifting to higher-priced homes while inventory of new homes remains tight. Reform of the housing finance system is discussed along with private capital involvement through risk sharing transactions.
This document provides data and analysis on the real estate market. It discusses topics such as overly leveraged households in 2000 and 2007, spatial correlation between high loan-to-income ratios and unemployment/home price declines, new construction rates, record low mortgage rates, and the increasing number of households renting. It emphasizes that real estate is local and case-by-case, and that data can help with prospecting, pricing strategies, assessing competition, and making informed decisions. Data sources include the USA Today, NAR, BLS, and more.
Current Market Intelligence - Copy Edited 090426 (DBM-Court Final)Court Bradley
This document discusses the current state of the commercial real estate market and outlines several challenges facing investors, including:
1) Declining cash flows from weakening tenants and falling rental rates. Unemployment has risen significantly which is weakening many tenants' ability to pay rent.
2) Changes to tax benefits such as carried interest that could reduce incentives for investment. Proposed changes may decrease development activity.
3) Rising capitalization rates and falling property values, pointing to continuing price erosion. Distressed assets are increasing and further pulling down surrounding property values.
4) Stricter lending standards with higher down payments required and interest-only loans no longer available are limiting leverage capabilities. This constraints investment activity
Gauging Stakeholder Interest in Residential Property Management ProgramsAndy Carswell
The presentation highlights recent research conducted by the University of Georgia's Department of Financial Planning, Housing, & Consumer Economics. The specific focus is on an emphasis that the department made to implement residential property management classes within the general housing curriculum. The results are dual track, in that they cover responses given by both students and apartment industry members, two important stakeholders in the overall development of a successful program. The research team would also like to thank Maureen Lambe of the National Apartment Association for her help in making available NAA membership lists to make such industry surveys possible.
1. Fundamental Market
Analysis
Hypothetical Subdivision Appraisal
Presenter:
Patrick M. Lamb
Lamb Hanson Lamb Appraisal Associates, Inc
2. Why is this topic relevant?
Relevance for Bankers:
• Helps answer TIMING questions
Aids in decision making process about timing of
development, (finalizing plat vs. prelim.)
Aid in cash-flow management issues.
• Helps determine financially feasible.
Un-entitled vs. Entitled
• Specific task that can be requested in the
scope of work…
3. Agenda
Introduction
• LHL past and future
What we hope to accomplish today:
• Present Hypothetical Subdivision
• Six-step process of F.M.D.
Heber will present statistical analysis
Patrick will present methodology & technique
Q & A, and other related topics
• Value of entitlements Then vs. Now
4. LHL Overview
(LambHansonLamb.com)
Four Generations-
• 1916 (Ross J. Loranger),
• 1957 (Berkley A. Lamb),
• 1970 (Michael B. Lamb),
• 2010 (Patrick M. Lamb)
Currently 20 Employees (plus 2 to 4 in external network):
• 2 MAI/SRA or SRWA
• 1 SRA
• 8 General Certified (3 MAI Candidates for 2010/2011)
• 4 Residential Certified
• 3 Trainees
• 2 Office staff
Employees are Specialized by Property Type & Location:
• Development Land, Industrial, Office/retail, Multi-family, Special Use,
Residential Form, FHA, USDA, Reviews, Development Projects,
Government…Locations are picked by familiarity and background.
Product Types:
• Self-Contained, Summary, Restrictive
• Replacement Reserve Studies for HOA/Condo Associations.
5. Six-Step Process to F.M.D.
Step 1: Define the subject property
• (Productivity Analysis)
Step 2: Define the user
• (Market Delineation)
Step 3: Forecast Demand Factors
Step 4: Inventory & Forecast Competitive Supply
Step 5: Analyze interaction of Supply & Demand
Step 6: Forecast subject Capture
These steps can be achieved by following the diagrams on the next
two page…
9. Subject Property Overview
Physical Characteristic
• 5-acre tract, +8,000 to 10,000 sf lots,
Legal Characteristics
• R4 zone, 16-lot yield (20% deductions for streets, open, etc.)
• No views
• Level topography
• Utilities in street
• Location:
• Established residential neighborhood
• Special Note: SR 2 has the most traffic accidents in the State.
• Proximity to Pass, Everett, and Eastside Employment Centers
Overall Productivity
• Average, typical for area
10. Subject Market Overview
Criteria for analysis:
• Demographics:
Population Trends:
• Components of Change
Births, Deaths, Net Migration
Projected Growth over next 5 years
• Economic Health Indicators
CPI
Employment Stats
• Commercial Property Overview
• SFR Housing Overview
11. Population Trends: Rate of Change
Population
Rate of Change
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2001 2002 2003 2004 2005 2006 2007 2008 2009
WA State 1.12% 0.94% 1.14% 1.44% 1.91% 1.76% 1.54% 1.22% 1.00%
Sno. Co. 2.08% 1.52% 1.51% 1.15% 1.71% 2.44% 2.16% 1.50% 1.11%
Monroe 3.01% 3.24% 3.34% 2.11% 2.84% 1.57% 0.74% 1.60% 0.97%
12. Note on Net Migration
Net Migration: the majority of interstate population
movements are job related.
When local employment turned negative, like much of the
rest of the nation, Snohomish and Monroe loses some of its
“pulling” strength…Negative job growth offers very limited
opportunities for people to relocate to the area.
The City of Monroe has a stable employment base provided
by the reformatory. As a result, Monroe tends to fair better
than the County as a whole. (Last reports states 9.3%
unemployment).
15. Commercial Market Overview
2010 Emerging Trends in Real Estate report,
(PricewaterhouseCoopers and the Urban Land Institute ).
• Lackluster economic recovery
• Rents and occupancies will continue to fall well into
2010/2011
• Probably cannot gain much traction until late 2011 or 2012
• Debt-burdened consumers continue to rein in shopping
• Companies delay rehiring while looking to shave occupancy
costs and improve productivity
16. • Slack demand pushes up vacancies, new projects can’t meet
leasing projections or debt-service obligations.
• Values sink well below replacement cost
• Construction loans are getting extremely expensive
• Development doesn’t pencil out when investors can buy
existing real estate in the bargain basement
• Metro market prospects decline from coast to coast
• Cap rates in these cities rise close to or above historic
norms from unsustainably low levels.
• Buyers and Sellers in a Stalemate
• Troubled Assets Remain/Growing on Bank Balance
Sheets
17. SFR Housing Market Overview
Data sourced from NWMLS & New
Home Trends.
Summary of Discussion Topics:
• Review of Average Pricing
• Marketing Periods
• Total Unit Sales
• Snohomish vs. Monroe (Finished
Homes)
22. Market Area Concepts
Thought Process
Drive time, neighborhood continuity, features
Competitive Boundaries; City of Monroe
Distinct transportation linkage/nexus
• SR’s 522, 2
Distinct proximity to Everett & Greater Eastside
employment centers make it unique
Major hub for travel through the Pass
Physical Isolated from other cities
• based drive times
Unique Commercial node/town center
Distinct influence of reformatory
24. Consumer Profile
These characteristics provide evidence of the types of
consumers who are typically of the subject market area
and are consistent with consumers who typically desire a
housing project like those characterized by the subject
subdivision.
Political and economic conditions impact ownership ratio:
• Housing boom, pricing, tax credits, government loan
programs, (FHA, USDA), Interest write off’s, etc…
26. Criteria of Demand Forecast
Sources:
• WA Office of Financial Management
• STDB statistical trends, Census data (New census #’s coming soon).
Predicted population growth over 5 years = 1,027 people
Average household size= 2.91 people/HH
Determine single-family ownership ratio = 65.2%
Segment Demand by:
• Affordability Index
• What income level can afford these homes?
Opposite of what a broker does for home buyers…
Typical lending terms
• $225k to $440K homes, 90% LTV, (30-year/5.5%), 10% costs, 30% PITI (principle, interest, taxes,
insurance).
• Income Distribution Table
31. Supply
Summary of Discussion Topics:
• Resale Market (Existing, vacant homes)
• New Homes for sale
• Current Lot Supply
• Unrecorded Lot Supply
32. Resale & New Home Market
Within the 3-mile radius of the City of
Monroe, according to NWMLS…
35 active listings of existing, vacant, older
homes.
2 active listings of new construction
homes.
All are within the $225,000 to $440,000
range of value.
39. Methods of Absorption/Capture
Inferred analysis
• Compare performance of most comparable
competition.
• Compare average performance of competitive
subdivision.
• Base it on current subject activity.
Inferred method is subjective, most intuitive, and
most commonly used by market participants…yet will
be less reliable in current (turbulent) market.
Equal-Share method
• Statistical based…can be influenced by
productivity.
43. Equal Share Capture
There is currently an over supply in the market. Existing
competition should capture 100% of demand for at least 2
to 3 years before it is prudent to develop new lots.
Once conditions are right to build, using the equal-share
method for estimating capture, the subject property should
anticipate selling 26% of the units demanded in year 3;
16% in year 4; and 12% in year 5…(3 lots will remain to be
sold in year 6).
This indicates a subject absorption of roughly 4 years,
following a 2-year holding period, (6 years total).
47. Why is this topic relevant?
Relevance for Bankers:
• Helps answer TIMING questions
Aids in decision making process about timing of
development, (finalizing plat vs. prelim.)
Aid is cash-flow management issues.
• Helps determine financially feasible.
Un-entitled vs. Entitled
• Specific task that can be requested in the
scope of work…
48. Lamb Hanson Lamb Appraisal
Associates, Inc
Patrick M. Lamb
• (206) 838-1216
• plamb@lambhansonlamb.com
Heber Kennedy III
• (206) 838-1242
• hkennedy@lambhansonlamb.com