2012 SUMMARY OF CALIFORNIA LAND SALES
2017 Market Trends Seminar
Appraisal Institute – Southern California ChapterThursday, January 26, 2017 – 3:20 p.m.
Cerritos, CA
Presenter:
Tom Reimers
Senior Vice President – CA Division
Land Advisors Organization
2017 Land Market Update
2016 Headline NumbersCALIFORNIA LAND SALES
Source: Land Advisors Organization research
129 91 80 53$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
0
20
40
60
80
100
120
140
Q1-2016 Q2-2016 Q3-2016 Q4-2016
353 Total Transactions (-16.2%)
$4.17B Total Sales (-8.5%)
$11.8M Avg. SP (+9.1%)
Nu
mb
er o
f Tr
ansa
ctio
ns
Bill
ion
s o
f $
in S
ales
102 167 154 219 260 216 215 136 231 390 291 243 320 260 256 164 220 133$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
H1 '08 H2 '08 H1 '09 H2 '09 H1 '10 H2 '10 H1 '11 H2 '11 H1 '12 H2 '12 H1 '13 H2 '13 H1 '14 H2 '14 H1 '15 H2 '15 H1 '16 H2 '16
Ave
rag
e Tr
ansa
ctio
n S
ize
(in
Mill
ion
s o
f $)
Tota
l Tra
nsa
ctio
n C
on
sid
erat
ion
(in
Bill
ion
s o
f $)
Total Consideration Average Deal Size
Slower deal flow has been a consistent
trend for the last couple years as public
builders grapple with priorities for spending
cash and consistent sources of land
development/home building capital remain
tough to come by for private builders. Most
eyes are on spring new home selling season
of 2017. Nearly all public builders are
eyeing shortfalls in lot pipelines in
2018/2019.
CALIFORNIA LAND SALES
Source: Land Advisors Organization research
2016 in Perspective
S. CALIFORNIA LOT VALUES
Source: Land Advisors Organization research
2016 in Perspective
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
Q1
20
04
Q2
20
04
Q3
20
04
Q4
20
04
Q1
20
05
Q2
20
05
Q3
20
05
Q4
20
05
Q1
20
06
Q2
20
06
Q3
20
06
Q4
20
06
Q1
20
07
Q2
20
07
Q3
20
07
Q4
20
07
Q1
20
08
Q2
20
08
Q3
20
08
Q4
20
08
Q1
20
09
Q2
20
09
Q3
20
09
Q4
20
09
Q1
20
10
Q2
20
10
Q3
20
10
Q4
20
10
Q1
20
11
Q2
20
11
Q3
20
11
Q4
20
11
Q1
20
12
Q2
20
12
Q3
20
12
Q4
20
12
Q1
20
13
Q2
20
13
Q3
20
13
Q4
20
13
Q1
20
14
Q2
20
14
Q3
20
14
Q4
20
14
Q1
20
15
Q2
20
15
Q3
20
15
Q4
20
15
Q1
20
16
Q2
20
16
Q3
20
16
Q4
20
16
W. Riv. Co San Bern. Basin
L.A. Co. -Ant. Valley Ventura Co.
San Bern. High Des Coachella Valley
L.A. Co. - Santa Clarita San Diego
Avg. Value Peak-> Trough-> Current as Year-Over-Year Lot Value Change
AREA Q4 '16 Peak Trough Trough Current % of Peak Q4 ‘15 Q1 ‘16 Q2 ‘16 Q3 ‘16 Q4 ’16
NORTHERN CENTRAL VALLEY
(14 Markets)$159,417* $241,000 $90,500 (62.4%) 91.9% 71.8% 13.0% 13.4% 15.6% 12.6% -
BAY AREA
(15 Markets)$498,125* -- $193,333 -- 189.6% -- 16.7% 10.4% 9.3% 2.1% -
LOWER CENTRAL VALLEY
(10 Markets)$73,000 $115,000 $44,850 (58.6%) 61.8% 67.0% 0.0% 3.5% 3.5% 3.5% 3.5%
VENTURA CO.
(8 Markets)$235,625 $413,750 $189,000 (64.4%) 36.9% 48.5% 4.8% 2.4% 0.0% 0.0% 0.0%
LOS ANGELES – ANTELOPE VALLEY
(4 Markets)$91,250 $165,000 $41,250 (74.8%) 121.2% 54.6% 1.4% 0.0% 0.0% 3.5% 16.1%
LOS ANGELES – SANTA CLARITA
(4 Markets)$240,000 $313,750 $130,000 (57.7%) 73.8% 72.9% 4.5% 3.2% 0.3% (1.3%) (1.3%)
SAN BERNARDINO – HIGH DESERT
(4 Markets)$72,250 $128,750 $41,250 (68.0%) 75.7% 56.3% 3.1% 0.1% (0.2%) 6.9% 6.9%
SAN BERNARDINO – BASIN
(11 Markets)$219,773 $282,727 $111,932 (60.5%) 94.1% 76.4% 7.1% 5.3% 2.4% 0.7% 0.4%
RIVERSIDE – WESTERN
(17 Markets)$145,500 $204,211 $71,316 (65.4%) 103.3% 69.8% 4.7% 5.0% 3.8% 3.0% 3.7%
RIVERSIDE – COACHELLA
(12 Markets)$151,083 $217,917 $81,708 (64.7%) 105.9% 71.9% (5.1%) (7.6%) (9.3%) (2.0%) (4.7%)
SAN DIEGO
(9 Markets)$422,778 -- -- -- -- -- 6.7% 1.3% 0.0% 0.0% 0.0%
CALIFORNIA STATEWIDE
(107 Markets)$230,103 $238,998 $105,385 (63.6%) 95.3% 65.2% 9.2% 4.0% 2.7% 3.1% 1.1%
CALIFORNIA FINISHED LOT VALUE METRICS
*Data only available for Q3 ‘16
Source: Land Advisors Organization research
Selected Regions – 2003 through 2016
0%
10%
20%
30%
40%
50%
60%
70%
Lender Public Builder BK Estate Developer Investor Institution/Govt.
Private Builder
2010
2011
2012
2013
2014
2015
2016
By Seller ProfileCALIFORNIA LAND SALES
Source: Land Advisors Organization research
0%
10%
20%
30%
40%
50%
60%
Public Builder Institution/Govt.
Investor Private Builder Developer
2010
2011
2012
2013
2014
2015
2016
By Buyer ProfileCALIFORNIA LAND SALES
Source: Land Advisors Organization research
By RegionCALIFORNIA LAND SALES
Source: Land Advisors Organization research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Southern California Central California Northern California
2010
2011
2012
2013
2014
2015
2016
By Site ConditionCALIFORNIA LAND SALES
Source: Land Advisors Organization research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Unimproved Partially Improved Finished
2010
2011
2012
2013
2014
2015
2016
By Transaction SizeCALIFORNIA LAND SALES
Source: Land Advisors Organization research
0%
10%
20%
30%
40%
50%
60%
70%
$0 - $3,000,000 $3,000,001 - $5,000,000 $5,000,001 - $10,000,000 +$10,000,001
2010
2011
2012
2013
2014
2015
2016
CALIFORNIA BUILDING PERMITS
Source: Census & Land Advisors Organization research
Region
2016 Current Current % Current %
@ 12/1/ 2016 % of Total Peak of Peak Trough of Trough
Bay Area 18,915 23.0% 35,855 52.8% 5,161 366.5%
Central Coast 576 0.7% 7,481 7.7% 576 100.0%
Central Valley 6,271 7.6% 39,897 15.7% 4,119 152.2%
Northern California 1,093 1.3% 6,866 15.9% 457 239.2%
Sacramento Region 6,486 7.9% 23,236 27.9% 2,055 315.6%
Southern California 48,864 59.4% 117,541 41.6% 16,441 297.2%
Totals/Averages 82,205 100.0% 230,876 26.9% 28,809 245.1%
26,0
50
29,2
19
36,6
66
38,9
79 4
4,5
93
43,4
79
46,8
02
54,1
59
61,1
94
69,1
71
69,1
72
51,8
76
29,1
96
12,9
82
10,1
65
11,3
55
10,2
45
11,0
72 16,1
24
16,6
21
17,9
71
17,6
76
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16P
Recession
S. CALIFORNIA SINGLE-FAMILY PERMITSRecession
Southern California includes Los Angeles, Orange, San Bernardino, Riverside, and San Diego counties
Source: U.S. Census, Land Advisors Organization research, through November 2016
1995-1999
175,507(35,101/year)
2010-2016P
101,064(14,438/year)
2000-2009
448,196(44,820/year)
5,8
96
6,5
99
10,2
37
10,8
50
17,1
56
22,9
84
23,2
76 2
6,2
43
30,7
45
37,0
88
29,7
57 3
2,7
03
26,1
41
18,1
36
7,3
63
8,8
34
15,5
48
16,6
68
27,4
12
28,4
11
35,7
53
30,1
26
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16P
Recession Recession
S. CALIFORNIA MULTI-FAMILY PERMITS
1995-1999
50,738(10,147/year)
2000-2009
254,436(25,444/year)
2010-2016P
162,752(23,250/year)
Southern California includes Los Angeles, Orange, San Bernardino, Riverside, and San Diego counties
Source: U.S. Census, Land Advisors Organization research, through November 2016
31,9
46
35,8
18
46,9
03
49,8
29
61,7
49
66,4
63
70,0
78
80,4
02
91,9
39
106,2
59
98,9
29
84,5
79
55,3
37
31,1
18
17,5
28
20,1
89
25,7
93
27,7
40
43,5
36
45,0
32 5
3,7
24
47,8
02
0
20,000
40,000
60,000
80,000
100,000
120,0001
99
5
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16P
Recession Recession
S. CALIFORNIA TOTAL BUILDING PERMITS
1995-1999
226,245(45,249/year)
2000-2009
702,632(70,263/year)
2010-2016P
263,816(37,688/year)
Southern California includes Los Angeles, Orange, San Bernardino, Riverside, and San Diego counties
Source: U.S. Census, Land Advisors Organization research, through November 2016
2017 UNDERWRITING CHALLENGES
1) COST CONTROL
2) CAPITAL SOURCES
3) PUBLIC BUILDER OPTIONS FOR USE OF CASH
4) MATCHING BUILDER BUSINESS PLANS/
RISK PROFILES