Residential Investor Q1 11

8/6/2019 Residential Investor Q1 11

1/19

RESIDENTIAL INVESTOR IQRESIDENTIAL INVESTOR IQ

LAS VEGAS, NEVADALAS VEGAS, NEVADA

Q1 2011 UPDATEQ1 2011 UPDATE


2/19

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


3/19

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


4/19

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


5/19

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


6/19

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


7/19

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


8/19

Age Distribution of Valley HomesAge Distribution of Valley Homes

1989 to 20001975 to 19891960 to 1975Older than 1960 2000 to 2010

Source: Mlxchange


9/19

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


10/19

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


11/19

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.


12/19

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


13/19

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


14/19

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


15/19

Notices of DefaultNotices of Default

Nearly16,000

Notices ofDefaultwerecounted in

Q1, 2011

Source: Ticor Title


16/19

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


17/19

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.


18/19

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19/19

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Residential Investor Q1 11

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