Allen Matkins Real Estate Development Law Update h February 15 th, 2012 Jeff Meyers Principal Meyers LLC (949) 640-0050 x200
JOB TRENDS Job Postings per Capita, 4Q11 Rank (Last Qtr Rank) Metropolitan Area Job Postings per 1000 People 1 (1) SanJose Jose, CA 199 2 (2) Washington, DC 141 3 (8) Hartford, CT 125 4 Raleigh, NC 111 5 (6) Baltimore, MD 107 6 (11) Boston, MA 100 7 (12) Columbus, OH 98 8 (7) Cleveland, OH 98 9 (16) Milwaukee, WI 94 10 (4) San Francisco, CA 91 SOURCE: http://www.ritholtz.com
CALIFORNIA NONFARM EMPLOYMENT New Home Market Trends Year-over-year Percent Change 3.00% 8, 2.00% 200 6 1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 5 6.00% Source: BLS; 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 California United States www.meyersllc.com
ANNUAL NONFARM JOB CHANGES BY STATE Dec. New 2010 Home vs. Market Dec. Trends 2011 +263,200 +204,500 Source: Bureau of Labor Statistics
% CHANGE IN NONFARM EMPLOYMENT New Home Market Trends Sept. 2009 vs. Dec. 2011 4.36% 0.86% 1.09% 4.77% 1.62% 1.55% 3.32% Source: HousingEcon.com
MULTIFAMILY PERMITS History New and Home Forecast Market Trends Historical Total Annual Permit Average = 477 1960 s 4.9 Million 1970 s 6.7 Million 1980 s 5.6 Million 1990 s 3.1 Million 2000 s 3.9 Million 2010 s (Forecast) 4.3 Million Permits (in thou usands) 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 70.0 69.0 68.0 67.0 66.0 65.0 64.0 63.0 62.0 61.0 60.00 59.0 58.0 Homeown nership Rate 1959 1962 1965 1968 Multi Family 1971 1974 1977 1980 1983 Homeownership Rate 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013F 2016F 2019F Source: Census; Meyers LLC
REALFACTS/MEYERS MF INDEX February New Home 2011 Market Trends Top Tier Middle Tier Bottom Tier Thursday, September 28, 2006 7.3 San Francisco 5.7 Denver 3.8 Las Vegas 6.8 Washington D.C. 5.7 Charlotte 3.1 Detroit 6.7 San Jose 5.7 Los Angeles 6.4 Boston 5.5 Chicago 61 6.1 New York/New Jersey 55 5.5 Orange County 6.2 Austin 5.4 Minneapolis 6.2 Oakland 5.1 Phoenix 6.0 Dallas 5.1 Houston 5.9 Seattle 5.1 Miami 5.8 Baltimore 4.8 Sacramento 5.8 Portland 4.7 Atlanta 5.8 San Diego 4.6 Tampa 4.6 United States 2/ 4.2 Inland Empire 4.1 Jacksonville Source: RealFacts/Meyers
HOUSING AFFORDABILITY & NEW HOME SALES United States New Home Market Trends HAI INDEX SC CORE 80 Annual Mortgage Rates: 1988 10.34 % Thursday, September 28, 2006 75 1993 7.31% 70 2002 6.54% 65 2009 5.04% Currently 3.87% 60 55 50 45 40 35 30 1400 1200 1000 800 600 400 200 0 NEW SFD HOME SALES 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CAR, Census, Freddie Mac, HWMI US New Home Sales US Affordability
MORTGAGE STANDARDS TIGHTENING FICO New Scores Home Market & Down TrendsPayment Requirements FICO SCORES S 775 750 725 700 675 650 625 600 Average FICO score is 711 Thursday, September 28, 2006 2007 2011 FICO Score Down Payment 35% 30% 25% 20% 15% 10% 5% 0% Dow wn Payment % Source: Harvard Americas
FANNIE MAE & FREDDIE MAC LOSSES/GAINS Single-Family New Home Versus Market Trends Multifamily Thursday, Fannie Mae September 28, 2006 Freddie Mac 2Q11 3Q11 2Q11 3Q11 Single Family $5 Billion $3.7 7 Billion $2.4 4 Billion $3.5 5 Billion Multifamily $87 Million $72 Million $200 Million $205 Million Source: Fannie Mae, Freddie Mac
Southern California.
EXISTING HOME SALES BY COUNTY Attached New Home and Market Detached: Trends 2001-2013F 350,000 300,000000 Average (2001 2011): 256,181 250,000 200,000 150,000 100,000000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Los Angeles Orange Riverside San Bernardino San Diego Ventura 2011E 2012F 2013F Source: Dataquick
NEW HOME SALES BY COUNTY Attached New Home and Market Detached: Trends 2001-2013F 80,000 70,000 60,000 50,000 40,000 Average (2001 2011): 43,482 30,000 20,000 10,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Los Angeles Orange Riverside SanBernardino SanDiego Ventura 2011E 2012F 2013F Source: Dataquick
S&P CASE-SHILLER HOME PRICE INDICES % Change Nov. 2011 vs. Nov. 2010 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% MI Detroit DC Washington CO Denver TX Dallas OH Cleveland MA Boston NC Charlotte NY New York Composite 10 AZ Phoenix Composite 20 FL Miami OR Portland MN MinneapolisMi CA San Diego CA Los Angeles CA San Francisco IL Chicago FL Tampa WA Seattle NV Las Vegas GA Atlanta Source: Standard & Poors; www.meyersllc.com
FINISHED LOT LAND INDEX Southern California SOURCE: DataQuick
TRUSTEES DEEDS RECORDED Southern New Home California Market Trends by County 4Q10 4Q11 % Change Los Angeles County 5,597 5,380 3.9% Orange County 1,693 1,508 10.9% San Diego County 2,433 2,044 16.0% Riverside County 3,942 3,397 13.8% San Bernardino County 3,272 2,718 16.9% Ventura County 630 595 5.6% Imperial County 243 194 20.2% Southern California 17,810 15,836 11.1% 1% Thursday, September 28, 2006 Distribution ib i of 4Q11 Ven, 4% SB, 17% Imp, 1% LA, 34% SoCal = 51% of the states foreclosures Riv, 21% SD, 13% OC, 10% Source: DataQuick
TOP 10 HOMEBUILDERS Orange County - 2010 2010 Rank (Previous Rank) Company Total Closings Yearly % Change 1 (5) Brookfield Home Corp (p) 227 99% 2 (2) Lennar Corp. (p) 192 18% 3 (1) J.F. Shea Co. 176 7% 4 (NR) Van Daele Homes 172 N/A 5 (7) KB Home (p) 142 54% 6 (6) William Lyon Homes, Inc. 139 26% 7 (4) Shapell Homes 135 6% 8 (9) Toll Brothers, Inc. (p) 81 19% 9 (NR) Tri Pointe Homes, Inc. 78 N/A 10 (NR) Irvine Pacific LP 75* N/A (P) Denotes publicly traded builder * Denotes OCBJ estimate SOURCE: OCBJ
MAP OF NEW FOR-SALE DEVELOPMENTS Orange County SOURCE: HW
Capital Markets.
Apartments are the favored food group SOURCE: Meyers LLC
Equity returns have moved Apartments are the favored down slightly food group 20% vs. 25% SOURCE: Meyers LLC
High barrier Apartments are the favored to entry markets food group High barrier SOURCE: Meyers LLC to entry markets
Apartments Co Invest is are the favored mandatory food group Debt is starting to reappear. mainly recourse SOURCE: Meyers LLC
G&A is stingy. Apartments are the favored food group SOURCE: Meyers LLC
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