State of the Housing Market in our Region: SacramentoULI Sacramento

www.thegregorygroup.com 1

August 24, 2018

© 2018 The Gregory Group 2Source: US Census, The Gregory Group

Building Permits (Six‐County Sacramento Region)

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500

25,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018pSingle-Family Permits Multi-Family Permits

Long‐Term Average = 12,321 (9,526 SF)(1980 – 2017)

1991 – 1997 (Seven Years)Average = 9,763 (8,655 SF)

2009 – 2014 (Six Years)Average = 3,454 (2,910 SF)

2015 – 2017 (Three Years)Average = 7,942 (6,308 SF)

Category 2011 2012 2013 2014 2015 2016 2017 2018pSingle‐Family Permits: 1,951 2,949 3,693 3,964 5,417 6,392 7,114 6,752Multi‐Family Permits: 686 575 698 475 1,138 1,073 2,695 1,142Total Permits: 2,637 3,524 4,391 4,439 6,555 7,465 9,806 7,894

Percent Change: ‐7.5% 33.6% 24.6% 1.1% 47.7% 13.9% 31.4% ‐19.5%Percent Single Family Permits: 74.0% 83.7% 84.1% 89.3% 82.6% 85.6% 72.5% 85.5%Percent Multi Family Permits: 26.0% 16.3% 15.9% 10.7% 17.4% 14.4% 27.5% 14.5%

© 2018 The Gregory Group 3Source: The Gregory Group

New Home Sales (Six‐County Sacramento Region)

Long‐Term Average = 7,538(2000 – 2017)

2018pUrban Developments (versus Suburban Development): 6.5%

Small‐Lot/Attached Development (vs Traditional Development): 38.3%

SacramentoRegion

Year Sales2000 12,2162001 10,9362002 16,0622003 15,8582004 17,1552005 14,0942006 9,6072007 7,4162008 4,9652009 2,8412010 1,7762011 1,6682012 2,7822013 2,4582014 2,7392015 3,9862016 5,0872017 5,6632018p 5,916

Average: 7,538

Category 2010 2011 2012 2013 2014 2015 2016 2017 2018pNew‐Home Sales: 1,776 1,668 2,782 2,458 2,739 3,986 5,087 5,663 5,916

Percent Change: ‐37.5% ‐6.1% 66.8% ‐11.6% 11.4% 45.5% 27.6% 11.3% 4.5%

© 2018 The Gregory Group 4Source: The Gregory Group

New Home Unsold Inventory (Six‐County Sacramento Region)

0

50

100

150

200

250

300

350

400

450

500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

New-Home Unsold Inventory Number of Projects

802 Units119 Projects

2,326 Units214 Projects

Long‐Term Average1,688 Units185 Projects

© 2018 The Gregory Group 5Source: The Gregory Group

New Home Pricing (Six‐County Sacramento Region)

Category 2010 2011 2012 2013 2014 2015 2016 2017 2018pNew‐Home Pricing: $342,112 $313,056 $353,391 $417,651 $436,058 $472,397 $505,792 $515,562 $528,450

Percent Change: ‐11.2% ‐8.5% 12.9% 18.2% 4.4% 8.3% 7.1% 1.9% 2.1%

Previous High (2Q/2006) = $498,0274Q/2018 Projected Price = $528,450

© 2018 The Gregory Group 6

Sacramento Region (Six‐County) Population Change 2017 ‐ 2027

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Under 25 25 ‐ 34 35 ‐ 44 45 ‐ 54 55 ‐ 64 65 ‐ 74 Over 75

Sacramento Region Population Change and Percentage Change 2017-2027

Population Growth 2017-2027 % Change 2017-2027

MillennialsFirst‐Time/First‐Time Move‐Up

Affordability (smaller lots/apartments)Livable/Walkable Communities

“Entertain at the Pub/Not at the Home”

Gen‐XMove‐Up

Big‐Box/Value RatioA Home to Grow Into (and upgrade)

Master Planned CommunitiesGood Schools

Community/Recreation Focused

Baby‐BoomersMove‐Down/Move‐Across

One‐Story Living (in a 1 – 2 story home)Active‐Adult/Active Lifestyle

Community FocusedWalkability (dog walking)

Close (but not too close) to Family

Ages 25 – 44 years:99,407 person increase

15.8%

Ages 65 years and greater:169,457 person increase

45.4%

Source: California Department of Finance, The Gregory Group

The greatest number of ageing baby‐boomers will be in Sacramento County (an increase of 96,623 people during the next ten years), while Placer County will post the greatest 35 – 44 year old 

number growth (an increase of 14,346).

© 2018 The Gregory Group 7Source: California Department of Finance, The Gregory Group

Category Sacramento Region Bay Area Region Central Valley Region Total

Natural Increase (Births - Deaths) 10,367 36,628 32,480 79,475

Net Immigration (From Outside US) 9,358 51,041 12,447 72,846

Net Domestic Migration (From Inside US) 7,835 -35,812 8,693 -19,284

Total Change 27,560 51,857 53,620 133,037

8

Challenges

• Costs

• Regulation

• Zoning

Challenges and Opportunities

© 2018 The Gregory Group

Opportunities

• A Redefinition of Housing

• Urban Housing in Suburban Locations

• Alternative Types of Housing

Real Estate Information and Consulting Services

Folsom101 Parkshore Drive, Suite 100Folsom, CA 95630(916) 983-3524info@thegregorygroup.comwww.thegregorygroup.com

www.thegregorygroup.com 9

Aliso Viejo120 Vantis, Suite 300Aliso Viejo, CA 92656(949) 382-6414info@thegregorygroup.comwww.thegregorygroup.com

State of Housing in our RegionModerated Panel Discussion

Friday, August 24

RiverchaseWest 

Sacramento

Stone Lock OneWest Sacramento

ANTON MENLO 

2014 – Light Industrial Site Current – 394 Apartment Units

3639 Haven Ave Menlo Park, CA 94025

SUBURBAN SHOWCASE PROJECTS – ANTON MENLO

MENLO PARK, CA (San Francisco Suburb)

394 UNITS;  COMPLET

ED 201

8

Type: Wrap

Density:  42 units/acre

Cost per Door: $252KIf Today: $375K

Land Cost: 15%Gov Fees:  8%Const. Cost: 74%

Rent 2 BR: $4,500 

300 RAILWAY

2016 – Industrial Warehouses Current – 119 Apartment Units

300 Railway Ave, Campbell, CA 95008

SUBURBAN SHOWCASE PROJECTS – 300 RAILWAYCAMPBELL, CA (San Jose Suburb)

119 UNITS;  COMPLET

ED 201

8

Type: Podium Sub T

Density: 65 units/acre

Cost per Door: $450KIf Today: $510K

Land Cost: 27%Gov Fees:  6%Const. Cost: 57%

Rent 2 BR: $4,300 

Current – FCUSD Surplus Site 2019 – 140 Mixed‐Income Units

125 E. Bidwell Street, Folsom, CA 95630

SUBURBAN SHOWCASE PROJECTS – BIDWELL POINTE

RESIDEN

TIAL

 UNITS

SHOWCASE PROJECTS – BIDWELL POINTE

Type: 3 Story Walk Up

Density:  33 units/acre

Cost per Door: $261KIf Today: $275K

Land Cost: 6%Gov Fees:  10%Const. Cost: 58%

Rent 2 BR: $1,300 

WRAP                PODIUM GARDEN STYLE

$375K / DOOR $510K / DOOR $275K / DOOR

50‐65 UNITS / ACRE 100+ UNITS / ACRE 33 UNITS / ACRE

$3,000+ PER MONTH $3,500+ PER MONTH $1,300 PER MONTH

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