U.S. and Bay Area Housing UpdateAndrew Borsanyi, Principal
May 8, 2012
National Household Growth
2,500
Average Annual Household Formation (000s)
1,9312,000
1,193
1,544
1,203
1,312
1 129 1 143
1,510
1 144
1,500
927
1,129 1,143 1,144
1,000
378500
THE CONCORD GROUP
01961 ‐ 1965 1966 ‐ 1970 1971 ‐ 1975 1976 ‐ 1980 1981 ‐ 1985 1986 ‐ 1990 1991 ‐ 1995 1996 ‐ 200 2001 ‐ 2008 2009 ‐ 2010 2011
2Source: US Census Bureau
U.S. EmploymentJobs
Value Growth000s Num. # %
Annual3,000
4,000
Annual1990 109,4871991 108,374 ‐1,113 ‐1.0%1992 108,726 352 0.3%1993 110,844 2,118 1.9%1994 114,291 3,447 3.1%
0
1,000
2,000
), ,1995 117,298 3,007 2.6%1996 119,708 2,410 2.1%1997 122,776 3,068 2.6%1998 125,930 3,154 2.6%1999 128,993 3,063 2.4% -2,000
-1,000
0G
row
th (0
00s)
2000 131,785 2,792 2.2%2001 131,826 41 0.0%2002 130,341 ‐1,485 ‐1.1%2003 129,999 ‐342 ‐0.3%2004 131,435 1,436 1.1%2005 133 703 2 268 1 7% 5 000
-4,000
-3,000Job
G
2005 133,703 2,268 1.7%2006 136,086 2,383 1.8%2007 137,598 1,512 1.1%2008 136,790 ‐808 ‐0.6%2009 130,807 ‐5,983 ‐4.4%2010 129,874 ‐933 ‐0.7%
-7,000
-6,000
-5,000
THE CONCORD GROUP3Source: US Bureau of Labor Statistics
2010 129,874 933 0.7%2011 131,359 1,485 1.1%1Q12 131,169 ‐190 ‐0.1%
U.S. New Home Sales and Prices
1 337
1,426$240
$260
1,400
1,600
984 978 9741,009
1,081
1,207
1,337
1,168
$200
$220
1 000
1,200
e (0
00s)
(000
s)
678740 744 741
841893
984 978 974
862
$180
$200
800
1,000
e M
edia
n Pr
ice
w H
ome
Sale
s (
593 566 539
417359 340 368 $140
$160
400
600
New
Hom
e
U.S
. New
$100
$120
0
200
THE CONCORD GROUP4Source: US Census Bureau
* 2012 estimate based on 1Q 2012 sales
U.S. New Home Inventory
1,300,000
1,400,000Mar. 2012
Demand Units
1,000,000
1,100,000
1,200,000LTM Sales 352,222
Recovery Rate 621,027
TCG Annual Demand 889,832
700,000
800,000
900,000
al S
uppl
y SupplyStanding Inventory 163,000
L i A i l M k d P j 210 000
400,000
500,000
600,000TotaLots in Actively Marketed Projects 210,000
Competitive Foreclosures 299,400
Total Supply 672,400
100,000
200,000
300,000Market OutlookMonths Supply 23
Sales Recovery 1Q 14
THE CONCORD GROUP
0Oct. 2010
Jan. 2011
April 2011
July 2011
Oct. 2011
Mar 2012
5Sources: US Census/HUD, NAR, RealtyTrac, HanleyWood, DataQuick, TCG
y
New Lot Development 1Q 13
U.S. Multifamily Performance
Annual Effective Rent Growth Annual Vacancy
10% 9.0%
6%
7%
8%
9%
7 0%
8.0%
3%
4%
5%
6%
al Growth
6.0%
7.0%
ge Vacan
cy‐1%
0%
1%
2%
Ann
u
4.0%
5.0%
Averag
‐4%
‐3%
‐2%
1%
2.0%
3.0%
THE CONCORD GROUP6Source: REIS
Bay Area Employment
150
200Jobs
Value Growth000s Num. # %
50
100
Annual1990 2,9271991 2,914 ‐14 ‐0.5%1992 2,867 ‐47 ‐1.6%1993 2,871 4 0.1%
‐50
0
owth (0
00s)
1994 2,879 8 0.3%1995 2,950 71 2.5%1996 3,060 110 3.7%1997 3,187 128 4.2%1998 3,288 101 3.2%1999 3 378 90 2 7%
150
‐100
50
Job Gro1999 3,378 90 2.7%
2000 3,530 152 4.5%2001 3,495 ‐35 ‐1.0%2002 3,312 ‐183 ‐5.2%2003 3,214 ‐98 ‐3.0%2004 3,196 ‐17 ‐0.5%
250
‐200
‐1502004 3,196 17 0.5%2005 3,226 30 0.9%2006 3,285 59 1.8%2007 3,331 45 1.4%2008 3,318 ‐13 ‐0.4%2009 3,123 ‐195 ‐5.9%
THE CONCORD GROUP7
‐2502010 3,083 ‐40 ‐1.3%L12M 3,106 23 0.7%
Source: US Bureau of Labor Statistics* L12M ending November 2011
Bay Area New Home Sales and Prices
10,513
9 464$600
$650
10,000
11,000
8,0948,334
8,096
7,553
9,0579,464
8,940
7,951$500
$550
8,000
9,000
e (0
00s)
es (0
00s)
7,274
5,8375 417
6,9237,168
6,279
,
6,020$400
$450
6,000
7,000
e M
edia
n Pr
ice
ew H
ome
Sale
4,758
5,3645,417
4,709
3,738 $300
$350
4,000
5,000
New
Hom
e
Bay
Are
a N
e
3,1212,929
3,132
$200
$250
2,000
3,000
THE CONCORD GROUP8Bay Area new home sales based on aggregation of five‐county area: San Francisco, San Mateo, Marin, Alameda and Contra Costa
Source: DataQuick
Bay Area Market Performance
MetricSan
Francisco AlamedaContra Costa San Mateo Marin
Total/ Average
Demographics
Households 2012 348 525 549 474 380 208 259 800 103 828 1 641 835Households 2012 348,525 549,474 380,208 259,800 103,828 1,641,835% of Total 21% 33% 23% 16% 6% 100%
Annual HH Growth Rate ('12 ‐ '17) 0.4% 0.4% 0.7% 0.3% 0.3% 0.5%
Median HH Income 2012 $69,224 $67,773 $75,551 $84,030 $86,864 $73,227% of Total 95% 93% 103% 115% 119% 100%% of Total 95% 93% 103% 115% 119% 100%
All New Homes For‐Sale (L4Q)
New Home Closings 507 1,256 1,024 267 33 3,087% of Total 16% 41% 33% 9% 1% 100%
Home Closings Per 1,000 HHs 1.5 2.3 2.7 1.0 0.3 1.9
Median Price $629,609 $424,042 $343,621 $662,393 $647,000 $454,126% of Total 139% 93% 76% 146% 142% 100%
All Resale Home Sales (L4Q)All Resale Home Sales (L4Q)
Resale Closings 5,044 15,406 15,927 6,953 2,876 46,206% of Total 11% 33% 34% 15% 6% 100%
% Buy New vs. Existing 9% 8% 6% 4% 1% 6%
THE CONCORD GROUP9Sources: DataQuick, Claritas, US Census
Median Price $638,105 $326,130 $246,540 $566,418 $600,610 $385,994
Resale Price as % of New Home Price 101% 77% 72% 86% 93% 85%
Bay Area New Home Inventory
Projected RecoveryTotal (Blended Rate)
New Home Sales Same Prod. New Home Sales New LotLast 12 % Chg Price Chg Competitive Months Recovery DemandLast 12 % Chg Price Chg Competitive Months Recovery Demand
Market Months 2005 YOY Inventory Supply Date Rate
United States 352,222 ‐76% 2.0% 672,405 18 4Q 13 4Q 12
Orange County 1,921 ‐67% 1.0% 1,886 10 1Q 13 1Q 12g y , , Q QSan Diego 2,699 ‐80% ‐2.0% 3,225 11 1Q 13 1Q 12San Jose 1,116 ‐68% ‐1.0% 1,612 13 2Q 13 2Q 12Raleigh 5,340 ‐56% ‐4.0% 9,326 19 4Q 13 4Q 12Inland Empire 4,316 ‐87% 1.0% 14,668 22 1Q 14 1Q 13Washington D.C. 10,051 ‐69% 4.0% 21,342 21 1Q 14 1Q 13Dallas 12,003 ‐72% ‐1.0% 28,345 21 1Q 14 1Q 13Santa Clarita 256 ‐82% 0.0% 1,024 21 4Q 13 4Q 12Sacramento 2,163 ‐86% ‐4.0% 9,488 25 2Q 14 2Q 13Seattle 7,070 ‐63% ‐2.0% 15,566 22 1Q 14 1Q 13Seattle 7,070 63% 2.0% 15,566 22 1Q 14 1Q 13Denver 5,137 ‐73% ‐2.0% 12,978 22 1Q 14 1Q 13Tampa 4,806 ‐82% 1.0% 15,473 25 2Q 14 2Q 13Las Vegas (Detached) 3,479 ‐92% ‐4.0% 16,293 25 2Q 14 2Q 13Orlando 4,859 ‐86% 2.0% 25,502 30 3Q 14 3Q 13
THE CONCORD GROUP10Sources: US Census/HUD, NAR, RealtyTrac, HanleyWood, DataQuick, TCG
Phoenix 9,055 ‐83% 0.0% 49,949 33 4Q 14 4Q 13Coachella Valley 453 ‐86% ‐1.0% 9,247 53 3Q 16 3Q 15
Bay Area Future Supply
San San San MateoFrancisco Oakland Alameda Emeryville Dublin Livermore Pleasanton Ramon County
Under Construction 4,521 436 0 240 2,228 788 669 0 275dApproved 19,705 2,172 0 401 3,786 114 339 1,166 623
Pending 8,902 4,414 1,990 180 3,079 0 365 21 10,291
Total Planned 33,128 7,022 1,990 821 9,093 902 1,373 1,187 11,189
THE CONCORD GROUP11Sources: TCG
Bay Area Multifamily Performance
Annual Effective Rent Growth Annual Vacancy
22% 6.0%
14%
16%
18%
20%
4.5%
5.0%
5.5%
6%
8%
10%
12%
l Growth
3.0%
3.5%
4.0%
e Va
cancy
4%
‐2%
0%
2%
4%
Ann
ua
1 5%
2.0%
2.5%
Average
12%
‐10%
‐8%
‐6%
‐4%
0 0%
0.5%
1.0%
1.5%
THE CONCORD GROUP12Source: REIS
‐12% 0.0%
San Francisco Multifamily Performance
Annual Effective Rent Growth Annual Vacancy
20%
22% 6.0%
12%
14%
16%
18%
20%
4.5%
5.0%
5.5%
4%
6%
8%
10%
12%
ual G
rowth
3.0%
3.5%
4.0%
ge Vacan
cy‐4%
‐2%
0%
2%Ann
u
1.5%
2.0%
2.5%
Averag
‐12%
‐10%
‐8%
‐6%
0.0%
0.5%
1.0%
THE CONCORD GROUP13
Source: REIS, TCG
Note: 2011 rent growth (15.1%) based on TCG survey of institutional apartment communities in Core San Francisco neighborhoods
Bay Area Multifamily Performance
Sales Trends (Per Unit)
$240
2011 Highlights
• Expansion of high‐tech and professional and business service sectors
$210
r Unit ($000s)• Rent growth across market pushing
halted projects forward
C t f t ti t b l 5%
$180Med
ian Price Pe• Cap rates for top‐tier assets below 5%
• Increased demand for high‐quality Class B and value‐add
M
• Sales trends near 2007 levels
THE CONCORD GROUP14Sources: Marcus & Millichap, CoStar Group, Inc., RCA
$1502007 2008 2009 2010 2011
Bay Area Ownership vs. Renting
$3,800
$4,200
Median Monthly Payment based on Home Ownership
Median Monthly Rent
$3,000
$3,400
$2,200
$2,600
Mon
thly Cost
$1,400
$1,800
M
$600
$1,000
THE CONCORD GROUP15Source: REIS
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12
San Francisco Ownership vs. Renting
$4,200
$4,600Median Monthly Payment based on Home Ownership (1)Median Monthly Rent (2)
$3,400
$3,800
$2,600
$3,000
Mon
thly Cost
$1,400
$1,800
$2,200M
$600
$1,000
$1,400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12
THE CONCORD GROUP16
(1) Northern San Francisco zip codes
(2) Institutional apartment product in core San Francisco neighborhoods
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12
The Concord GroupNewport Beach • San Francisco • BostonNewport Beach • San Francisco • Boston
Andrew Borsanyi
Principal
415 397 5490415.397.5490
THE CONCORD GROUP