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2015ForecastPresentation
RegionalIndicators
Source:DETR
Unemployment Rates JobGrowthRates(Y‐O‐Y)
Nov ‘13 Nov ‘14 Nov ‘13 Nov ‘14
Nevada 9.0% 6.9% 1.8% 2.3%
LasVegas‐ParadiseMSA 8.6% 7.1% 2.4% 2.5%
Reno‐SparksMSA 8.2% 6.4% 0.9% 1.6%
UnitedStates 7.0% 5.8% 1.7% 2.0%
California 8.7% 7.2% 1.6% 2.2%
RegionalIndicators
Jobs
• NewJobsinNorthernNevada• 4,292NewJobsovernext2to4years(includes700Teslajobs)• 136SiteVisits• 13Headquarters
• SeveralNewAnnouncementsfromEDAWNcoming1Q2014
• LargestNewEmployersInclude:
• Tesla |6,500Jobs|5.8Msquarefeet
• Petco |150Jobs|770,000squarefeet
• Zulily |1,000Jobs|708,000squarefeet
• CenntroMotors|300Jobs|Headquarters
• GhostSystems|150Jobs|HeadquartersSource:EDAWN
RegionalIndicators
Jobs(EDAWN 2014Highlights)
RegionalIndicators
ResaleMarket
Source:NorthernNevadaMLS
1.5MonthsofActiveInventory
13%JumpintheMedianPricein2014
Source:TheWhitneyGroup/CaliforniaEmploymentDevelopment
Employment GainsCaliforniaMSA NovemberY/Y2014Oakland 39,800
SanJose 34,900
SanFrancisco 38,300
SantaRosa 8,300
Vallejo/Fairfield 5,000
Sacramento 27,300
Modesto 4,500
Stockton 5,600
Fresno 8,300
RegionalIndicators
California
Source:TheWhitneyGroup
AverageY/YResalePriceChangeCaliforniaMSA ResaleHomesAverageSalePrice
4Q13 4Q14 Percent Change
SouthBay $1,011,000 $1,118,667 10.6%
EastBay $618,000 $680,667 10.1%
Sacramento $318,000 $335,667 5.6%
RenoMSA $282,367 $302,154**Oct/NovWtAvg
7.0%
PositiveIndicators
California
0.90
0.77
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
01 02 03 04 05 06 07 08 09 10 11 12 13 14
United States Reno, NV
NAHB/First American Leading Markets Index (LMI)
*Comparescurrentpermit,homeprice&employmentdatawith“normal”years
*
RegionalIndicator
Confidence(LeadingMarketIndex)
PositiveIndicators
BuilderConfidence
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
10
20
30
40
50
60
70
80
90
100
Housing Market Index
Single-Family Starts
Chart: NAHB/Wells Fargo Housing Market Index (HMI) and New Single-Family Starts
Source: NAHB/Wells Fargo Housing Market Index.U.S. Census Bureau.
Hou
sing
Mar
ket I
ndex
New
Single-Family Starts (in thousands of units)
0
1000
2000
3000
4000
5000
6000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F
NewHomeSales SFPermits
15YearAvg=2172
1550
1850
NewHomes
Reno/SparksSales&Permits
⬆ 27%⬆ 22%
967
1228 1227
1495
0
50
100
150
200
250
2006 2007 2008 2009 2010 2011 2012 2013 2014
Fernley Dayton
4
117
13
87
NewHomes
Fernley&DaytonSFPermits
20132014
2005
<$200,0002% $200,000‐
$250,0006%
$250,000‐$350,00064%
>$350,00028%
<$200,0007%
$200,000‐$250,00011%
$250,000‐$350,00057%
>$350,00025%
<$200,0000%
$200,000‐$250,000
0%
$250,000‐$350,00028%
>$350,00072%
NewHomes
SalesbyPriceRange
AveragePriceIncreaseinTenActiveCommunities
Area 4Q13AvgPrice 4Q14AvgPrice Increase
West Reno $294,990 $309,990 $15,000
SouthReno $289,900 $313,000 $23,100
South Reno $302,490 $314,490 $12,000
Spanish Springs $256,368 $266,868 $10,500
Sparks $254,450 $268,950 $14,500
SouthReno $303,950 $320,450 $16,500
SouthReno $303,450 $319,450 $16,000
SpanishSprings $326,400 $338,950 $12,550
Spanish Springs $294,990 $314,990 $20,000
Spanish Springs $314,990 $349,990 $35,000
AvgPrice/SF$141
Avg Price/SF$149
AvgIncreasePerHome$17,515
Top10Communitiesthathavebeenactivesince4Q13
0
50
100
150
200
250
300
350
400
450
500 38%
7%
16%
5%
0%
35%
NewHomes
2014SalesbyArea
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F
58
12YearAvg=55
NewHomes
ActiveCommunities
51
4) DRHorton
2) TollBrothers
1)LennarHomes
5) PulteHomes
1) SierraCanyon,PulteHomes
ByBuilder ByCommunity
2)LaCasata,DiLoretoHomes
3)Aurora@Cyan,DRHorton
5)LaTierra,RyderHomes
3)JenuaneCommunitiesRyderHomes
4)GoldenHills,LennarHomes
NewHomes
TheTopFive‐ 2014
0
100
200
300
400
500
600
700
800
900
4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15‐F
103
193225
NewHomes
UnsoldNewHomeInventory
80%UnderConstruction!
201339Deals
4970Lots
2600Acres
$66.4Million
numbersareestimatesonly
ExcludesCustomLots!123 LotsSoldin2014
MedianSalePriceof$145,000
201436Deals
6817Lots
2865Acres
$96.9Million
EXCLUDESMulti‐Family!1188Lots92Acres
$11.9Million
ResidentialLand
Reno/SparksLandDeals
Cyan
Where’stheAction?
SaddleRidge&DoradoHills
Presidio&Regency
Esplanade
2014ResidentialLandSalesSouthReno
BrightonPark
Wintercreek
Where’stheAction? 2014ResidentialLandSalesWestReno
VerdiNoteSale
GoldenHighlands
Where’stheAction? 2014ResidentialLandSalesNorthValley
LaderaRanch
SkyVistaPkwy
Wildcreek
GalleriaStation
LaTierra
Where’stheAction? 2014ResidentialLandSalesSparks
Pinnacles
Kiley40&41
SonomaHighlands
Where’stheAction? 2014ResidentialLandSalesSpanishSprings
Wingfield2
Stoneridge
PioneerMeadows3&4
RiataKiley38
2,040TotalHomesites*1.32Years(2015ForecastedSales).94Years(15‐YearAverageSales)
*asof12/31/14
ByOwnershipByArea
ResidentialLand
2014FinishedLotSupply
NorthValley14%
Southwest/Central2%
Northwest/West16%
SouthReno20%
Sparks/SpanishSprings48%
EastReno0%
Investor11%
Private38%
Public50%
Bank/Lender1%
2091TotalHomesites*1.35Years(2015ForecastedSales).96Years(15‐YearAverageSales)
*asof12/31/14
ResidentialLand
2014FinalMapLotSupplyByOwnershipByArea
NorthValley32%
Southwest/Central2%
Northwest/West11%
SouthReno24%
Sparks/SpanishSprings31%
EastReno0%
Investor37%
Private39%
Public24%
Bank/Lender0%
NorthValley19%
Southwest/Central0%
Northwest/West6%
SouthReno37%
Sparks/SpanishSprings38%
EastReno0%
Investor67%
Private14%
Public19%
Bank/Lender0%
8,346TotalHomesites*5.38Years(2015ForecastedSales)3.84Years(15‐YearAverageSales)
*asof12/31/14
ByOwnershipByArea
ResidentialLand
2014TentativeMapLotSupply
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015‐F
Basedonanaverage5,500SFHomesite
8.4%10.2%
16.5%
44.2%
26.3% ‐16.5%
‐19.7%
‐36.2%
‐22.7%
‐5.9% ‐6.0% 9.5%
39.1%
16.9%
28.8%
$69,000forecastedforyear‐end2015
$59,000atyear‐end2014
ResidentialLand
AverageFinishedLotPrice
2014$250,000($147/sf)
$115,600($68/sf)
$50,000
$25,000
$59,400
23.8%
Withchangeinhouseprice(assume1,700SFhome)
2005$350,000($206/sf)
$127,500($75/sf)
$70,000
$35,000
$117,500
33.6%
BaseHousePrice(usingmedianhomeprice)
TotalHardCost
TotalSoftCosts(20%)
BuilderProfit(10%)
FinishedLotValue
PercentageofHousePrice
2010$169,000($99.50/sf)
$93,500($55/sf)
$33,800
$17,000
$24,700
14.5%
-52%
-79%
48%
140%
ResidentialLand
LandValueBreakdown
NewHomeSupplyanddemand
LandBuys
ActiveBuilders
Home&LandPrices
ConstructionLenders
Topography
LotSupply
BrokerVacations
2013/2014 2015/2016
SupplyDown/DemandUp
BigLiftOfftheBottom
SupplyUp/DemandUpper
SlowerMovetotheTop
StartingtoBookStartingtoLook
“A”LocationsOnly “B”&“C”WillDo
BackinSecondGear ShiftingintoThird
StayintheFlats TheHillsareAlive
WorkonDemand WorkonSupply
RenoStaycationMexicoAllInclusive
Conclusion
30‐SecondOverview
Jan1978
Jan1985
Jan1992
Jan1999
Jan2006
Jan2013
Jan2020
ThankYou!MyGrandfather’sRealEstateCycle