residential investor q1 11
TRANSCRIPT
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RESIDENTIAL INVESTOR IQRESIDENTIAL INVESTOR IQ
LAS VEGAS, NEVADALAS VEGAS, NEVADA
Q1 2011 UPDATEQ1 2011 UPDATE
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MARKET IQReal estate investors demand up-to-date market intelligence to make informeddecisions. Resources available to you and your investor clients include:
- Monthly Market Synopses- Regional Economic and Housing Summary (Quarterly)
- Consumer demand reports
- Detailed rental analysis
With the tools assembled byMarket IQ, Coldwell Banker Premier Realty canassist clients in understanding the macro and micro economic and housingdetails in assisting investors in the timely disposition of their properties, evenin challenging markets.
Residential Activity Synopsis - Monthly Residential Rental Report Southern Nevada Economy
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Housing Stock Vacancy RateHousing Stock Vacancy Rate
11.38%
11.53%
8.00%
10.00%
12.00%
14.00%
%
Vacancy Rates by Housing Type
Source: Clark County.
2.04%
2.58% 2.58%
2.62%
3.64%
2.77%
3.78%4.28%
6.38%
5.18%
5.75%
6.50%6.16% 6.16%
7.22%
5.64%
6.38%6.87% 6.93% 6.84%
0.00%
2.00%
4.00%
6.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Vaca
nc
Single Family Multi-Family
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Rental Property Vacancy Rate
11.8
10.8
11.912.1
15.2
12.9
15.2
16.0
16.7
15.0
12.9 12.813.0
15.1
13.6
13.5
12
14
16
18
Rental Vacancy Rate (%) - Las Vegas
Source: U.S. Census Bureau
8.3
7.8
8.4
.
8.3
9.0 9.5
9.9
0
2
4
6
8
10
1Q
2005
2Q
2005
3Q
2005
4Q
2005
1Q
2006
2Q
2006
3Q
2006
4Q
2006
1Q
2007
2Q
2007
3Q
2007
4Q
2007
1Q
2008
2Q
2008
3Q
2008
4Q
2008
1Q
2009
2Q
2009
3Q
2009
4Q
2009
1Q
2010
2Q
2010
3Q
2010
4Q
2010
Vacancy
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Rental Property Days on Market
55
60
6664
68 6870
65
57 5755
58
54 55
95
6160
70
80
90
100
Market
Rental Property Average Days on Market
Source: Mlxchange.
Note: Averages can be greatly skewed by outliers. Extreme observations have been removed by analyst.
49 47 46 47
29
40
50
42
46 44
3640
42
0
10
20
30
40
Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011
Days
on
Condominium Single Family
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Average Rental RatesAverage Rental Rates
$1.54
$0.76
High-Rise
Average All Types
Source: Mlxchange, Coldwell Banker Premier Realty.
$0.71
$0.75
$0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25
SFR
Condo
$/Sq.Ft
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Relationship between Cap Rates, Sale Prices and Rents
1.5
2.0
2.5
6%
8%
10%
12%
SalePriceIndex
CapRate
Capitalization Rates, Sale & Rent Prices (Indexed)
With rents being fairly flat, cap rates are largely a function of sale price declines.Source: Mlxchange, Clark County
0.0
0.5
1.0
0%
2%
4%
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Ren
t&
Cap Rate Rent Index Sale Index
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Age Distribution of Valley HomesAge Distribution of Valley Homes
1989 to 20001975 to 19891960 to 1975Older than 1960 2000 to 2010
Source: Mlxchange
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Rental Price Per Square FootRental Price Per Square Foot Single FamilySingle Family -- Q1Q1
$1.30+$.85 to $1.30$.70 to $.85Less than $.70
Source: Mlxchange
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Rental ReturnsRental Returns MonthlyMonthly Q1Q1
$300+$0 to $300-$400 to $0-$420
Source: Mlxchange.Calculated using 75% LTV at 5.0%, insurance, taxes, special improvement and management fees.
Source: Mlxchange
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Cap Rates on Sold Homes with Tenants in PlaceCap Rates on Sold Homes with Tenants in Place Q1Q1
16%+11% to 16%7.5% to 11%4 to 7.5%4% or less
Note: Based on natural breaks in the data.
Source: Mlxchange.
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Cap RateCap Rate Sales Price RelationshipSales Price RelationshipRental Properties ClosedRental Properties Closed Q1 2011Q1 2011
15%
20%
25%
te
Single Family Rental Cap Rates vs. Sale Price
Source: Mlxchange
-5%
0%
5%
10%
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000
Cap
Ra
Sale Price
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Bank Owned PropertiesBank Owned Properties
Nearly14,200 homesare currently
held bylenders
6,295 are on
the multiplelisting serviceas listed,undercontract or a
pending sale
Source: Clark County
Source: Clark County
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Short Sale PropertiesShort Sale Properties There are 7,034short sale homeson the marketthat are not
under contract.This represents47% of the activefor-saleinventory.
8,244 shortsales are undercontract. Amajority of theseare contingent onbeing approvedby the lender.
12% of the shortsales that gounder contract
actually close.Source: Ticor Title Active Under Contract
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Notices of DefaultNotices of Default
Nearly16,000
Notices ofDefaultwerecounted in
Q1, 2011
Source: Ticor Title
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Short Sale and REO Active ListingsShort Sale and REO Active Listings
5,000
6,000
7,000
8,000
9,000
10,000
Homes
Source: Mlxchange
-
1,000
2,000
3,000
4,000
Numbero
Short Sale REO
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GLOSSARY OF TERMSThere are numerous investment terms to be familiar with:
Adjusted cost basis: The investors cost of the property for tax purposes.
Depreciation: An expense deducted from income for tax purposes whichallows the owner to recapture the investment in an asset over its economic lifeby a periodic deduction from the income generated by the asset on a before-tax basis.
Feasibility study: An analysis based upon estimates to determine if theinvestment makes sense and whether or not to proceed with it.
Net operating income: Gross scheduled income less vacancy allowance andannual operating expenses.
Capitalization rate: An indicator of value and the rate at which investors arewilling to invest their capital. Divide net operating income by the desired rateequals the purchase price the investor is willing to pay.
Rate of return on equity: The rate which equates the present value of the netcash flow inflows to the initial equity investment.
A glossary of terms is available. Please see your CBPR professional.
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INVESTMENT SERVICES
Facilitate the acquisition and disposition of distressed real
estate assets including residential, commercial and land. Engaged with numerous asset sources in a direct or
intermediary role.
commercial assets, performing and non-performing notes andfailed real estate or entitled land developments.
United Auction/Exchange: Strategic partnership to purchase
at the trustee auction, bulk investment portfolio opportunitiesand more.
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Every day. In every way.
Your success is OUR business!