Volusia Real Estate Outlook A Florida and Regional Perspectivevcpa.vcgov.org/vreo2012.pdf ·...
Transcript of Volusia Real Estate Outlook A Florida and Regional Perspectivevcpa.vcgov.org/vreo2012.pdf ·...
VolusiaVolusia Real Estate OutlookReal Estate Outlook
A Florida and Regional PerspectiveA Florida and Regional Perspective
•• General Market ConditionsGeneral Market Conditions•• VolusiaVolusia’’s Early 2012 Tax Roll Estimatess Early 2012 Tax Roll Estimates•• Mass Appraising In Declining MarketsMass Appraising In Declining Markets•• LandLand--Use Utilization ModelUse Utilization Model
Halifax Plantation, June 8, 2012Halifax Plantation, June 8, 2012
Morgan B. Gilreath, Jr., MA, ASA, CFAMorgan B. Gilreath, Jr., MA, ASA, CFA
Property Appraiser, Volusia County, FloridaProperty Appraiser, Volusia County, Florida
Volusia CountyVolusia County
1204 Square Miles1204 Square Miles
494,593 Population494,593 Population
47 miles of Ocean Front Property47 miles of Ocean Front Property
16 Cities16 Cities
85 miles of St. Johns River Frontage85 miles of St. Johns River Frontage
288,000 Parcels of Real Property288,000 Parcels of Real Property
45,000 Parcels of Personal Property45,000 Parcels of Personal Property
2007 Valuation: $62.5 Billion2007 Valuation: $62.5 Billion
2012 Valuation: $35.0 Billion2012 Valuation: $35.0 Billion
The Real Estate MarketThe Real Estate Market
The Wall Street The Wall Street Journal says weJournal says we’’re re ““therethere”” nownow……
April 29,2012April 29,2012
…… and then, and then, ““this week,this week,””they predict the ending they predict the ending of the world as we know of the world as we know itit……
……lesson, donlesson, don’’t turn t turn loose of that you hold loose of that you hold with a good gripwith a good grip……
June 2June 2--3, 20123, 2012June 4, 2012June 4, 2012
Volusia Market Volusia Market down, overall, down, overall,
1.97%1.97%
…… ThatThat’’s a s a ““netnet””market reduction market reduction of 2.1%of 2.1%
(excludes New (excludes New Construction)Construction)
Single Family ResidentialSingle Family Residential
In FloridaIn Florida
Source: Realty Trac
20112011 20122012
The The newnew--normalnormal Financial Mix (below) isFinancial Mix (below) is……49% REO49% REO’’ss…… 35% Cash35% Cash…… 16% Finance16% Finance……
The The oldold--normalnormal Financial Mix used to beFinancial Mix used to be……
5% REO5% REO’’ss…… 15% Cash15% Cash…… 80% Financed80% Financed
The The ““Bubble & Burst MarketBubble & Burst Market”” of 2001 of 2001 -- 20122012
(Excluding New Construction)(Excluding New Construction)
How do we value a real estate market How do we value a real estate market moving in all directions (upmoving in all directions (up--downdown--level)?level)?
……very carefullyvery carefully……
Number of SalesIncreasing
Numbers of Residential Sales 1998Numbers of Residential Sales 1998--20112011
{some} East Volusia Cities{some} East Volusia Cities
CountyCounty--wide 2011 wide 2011
Median Sales Median Sales Price Per Sq FtPrice Per Sq Ft
CountyCounty--wide 2011wide 2011
Median Sales Median Sales PricePrice
-- 1.3%1.3%
-- 2.8%2.8%
2010 SFR Market(Countywide, DeLand,
Ormond, Pt. Orange, New Smyrna, Deltona)
2011 SFR Market(Countywide, DeLand,
Ormond, Pt. Orange, New Smyrna, Deltona)
Residential MarketResidential Market is is slowly stabilizingslowly stabilizing……
……even rising in some even rising in some areas of the Countyareas of the County
Lets look at some Volusia Lets look at some Volusia neighborhood examplesneighborhood examples……
{{of this crazy market}of this crazy market}
New Smyrna Beach AreaNew Smyrna Beach Area
Neighborhood Market-Prices going up, down, leveling…Mass Appraisal Madness… i.e. Appraisal “Fun-City”
Ponce Inlet & the Atlantic Ocean
Turnbull
BayGolf Nbhd H2O-Front
Nbhd
Inland Nbhd
Condo Nbhd
Intercoastal
Waterway
7 Valuation Neighborhoods7 Valuation Neighborhoods
““Turnbull BayTurnbull Bay””(Connects into the Intercoastal some miles away)
Sales Statistics for years Sales Statistics for years 2010 and 2011 on above 2010 and 2011 on above
neighborhoods:neighborhoods: 2.7% of parcels sold
Halifax Halifax Plantation, Plantation,
Ormond Beach, Ormond Beach, FloridaFlorida
Neighborhoods Neighborhoods 3577 & 35993577 & 3599
PriorPrior--Current Year Current Year Value Comparison Value Comparison (%Difference) to Sales (%Difference) to Sales Data Data (in this case 2010(in this case 2010--2012)2012)
A raw comparison of A raw comparison of new valuations on new valuations on ““soldsold”” to to ““unsoldunsold””properties properties (in terms of % (in terms of % increase from last year to increase from last year to this year).this year).
20102010--2012 per year 2012 per year mean ratios illustrate mean ratios illustrate a 3a 3--year increasing year increasing
market trend.market trend.
WeWe’’ve verified an ve verified an upward market trend upward market trend indicating that, in indicating that, in these neighborhoods, these neighborhoods, the market has turned the market has turned around.around.
Commercial MarketCommercial Market
Commercial Property Tax Values: 2010 Commercial Property Tax Values: 2010 –– 20122012{2012 Estimated}
Residential Multi-Family Residential
Agricultural Lands All Vacant Land Open Land, Acreage
Commercial Improved Industrial
During final four months of preparation, we look weekly at During final four months of preparation, we look weekly at sales and revaluation statisticssales and revaluation statistics…… first by Stratum (property first by Stratum (property type), then by geographic areatype), then by geographic area……
County-wide
…… and a view of sales & revaluation statistics by geographic and a view of sales & revaluation statistics by geographic area throughout the county.area throughout the county.
Ormond Beach
Daytona Beach
Daytona Beach Shores
Ponce Inlet
New Smyrna Beach
Cape Canaveral
DeLand
Orange City
DeBary
Deltona
VolusiaVolusia’’s construction history shows s construction history shows us factually how we have evolved...us factually how we have evolved...
What we have found has led to an What we have found has led to an intriguing intriguing LandLand--Use Utilization ModelUse Utilization Model
VolusiaVolusia’’s History of Real Estate Development 1850 s History of Real Estate Development 1850 -- 20112011
Residential, Commercial, Industrial, Institutional & GovernmentaResidential, Commercial, Industrial, Institutional & Governmental Buildingsl Buildings
From 1950 From 1950 –– 2011 2011 ““Residential ConstructionResidential Construction”” …… 88% 88% -- 92% of growth92% of growth
Is our growth typical?Is our growth typical?
Compare VolusiaCompare Volusia’’s Growth to 10 other Florida Countiess Growth to 10 other Florida Counties
GeoGeo--Demographic Mix Typical of FloridaDemographic Mix Typical of Florida
Population Range:Population Range: 22,570 22,570 –– 2.45 Million2.45 MillionPersons Per Property:Persons Per Property: .9 .9 –– 2.82.8Value Range:Value Range: $1 $1 -- $237 Billion$237 BillionNumber of Properties:Number of Properties: 19,697 19,697 –– 889,935889,935
Coastal Counties:Coastal Counties: Brevard, Duval, MiamiBrevard, Duval, Miami--Dade, VolusiaDade, Volusia
Inland Inland –– Urban:Urban: Alachua, Marion, PolkAlachua, Marion, Polk
Inland Inland –– Rural:Rural: Bay, Levy, TaylorBay, Levy, Taylor
Metropolitan:Metropolitan: Duval (Jacksonville), MiamiDuval (Jacksonville), Miami--DadeDade
Mixed Urban/Rural:Mixed Urban/Rural: Volusia, Brevard, PascoVolusia, Brevard, Pasco
The following numbers represent the The following numbers represent the ““MixMix”” of of property uses generated from the property uses generated from the ““freefree--
enterprise real estate marketsenterprise real estate markets”” of 11 Florida of 11 Florida Counties (given that each building was Counties (given that each building was ““permittedpermitted”” by appropriate authorities)by appropriate authorities)
This presents factual This presents factual ““LandLand--Use UtilizationUse Utilization””reflecting 60 years of freereflecting 60 years of free--market decision of citizens market decision of citizens
and businesses.and businesses.
Global, national and local economic events:Global, national and local economic events:
…… The Korean WarThe Korean War
…… The Vietnam WarThe Vietnam War
…… Economic Inflations and Recessions over 6 decadesEconomic Inflations and Recessions over 6 decades
…… GovernmentGovernment’’s role in the building industry has gone froms role in the building industry has gone from
very little to very hands on (growth management, planvery little to very hands on (growth management, planning,ning,
zoning, permitting, comprehensive planning, etc.).zoning, permitting, comprehensive planning, etc.).
AND YETAND YET…… there is an there is an incredible consistencyincredible consistency in the in the relationship of relationship of ““what was built,what was built,”” throughout the varying sizes throughout the varying sizes and demographic differences.and demographic differences.
WHICH MEANS THATWHICH MEANS THAT…… this analysis results in a this analysis results in a LandLand--Use Use Utilization ModelUtilization Model that that should be applicable decision makers at should be applicable decision makers at all levels of government and all levels of the investing privateall levels of government and all levels of the investing privatesector.sector.
Historical Building Construction vs. Actual Existing Buildings Historical Building Construction vs. Actual Existing Buildings PercentagesPercentages
Similar landSimilar land--use utilization conclusions will occur from use utilization conclusions will occur from analyzing either historical building data or numbers of analyzing either historical building data or numbers of
existing improved properties.existing improved properties.
Who might use this information?Who might use this information?
Would knowing Would knowing thresholdthreshold and/or and/or saturation saturation land use levelsland use levelsbefore planning a building be useful information to before planning a building be useful information to developers and/or investors? developers and/or investors? ……
““Where, in the saturation level for this land use am I Where, in the saturation level for this land use am I building this project ? Is this location in the middle of the building this project ? Is this location in the middle of the saturationsaturation--range or is the number of strip shopping range or is the number of strip shopping centers, apartments, etc. already at the top of the range centers, apartments, etc. already at the top of the range (at saturation point level)?(at saturation point level)?””
The answer can affect investment decisions.
Looking back at Commercial Property for all Looking back at Commercial Property for all 11 counties11 counties……
……letlet’’s see what the data tells us about s see what the data tells us about ““Commercial Property.Commercial Property.””
Percentage of Total Improved Properties for Percentage of Total Improved Properties for 30 Commercial Land Uses30 Commercial Land Uses
Land Use Utilization Model Land Use Utilization Model
Example #1: Community Shopping Center Investment Example #1: Community Shopping Center Investment
An out of state investor has contacted a local realtor. An out of state investor has contacted a local realtor. He is interested in investing in a Community Shopping He is interested in investing in a Community Shopping Center in Volusia County...Center in Volusia County...
The Realtor has two properties for sale, one in Ormond The Realtor has two properties for sale, one in Ormond Beach, Florida; the other in Port Orange, Florida.Beach, Florida; the other in Port Orange, Florida.
Can historical building data be of any assistance in the Can historical building data be of any assistance in the decision making process for both the Realtor and the decision making process for both the Realtor and the investor?investor?
Community Shopping Centers
Office & Professional Service Buildings
OrmondOrmond BeachBeach
23%23%--25%25%
Port OrangePort Orange
12%12%--15%15%
Port Orange 14%Port Orange 14%
OrmondOrmond Beach 3 %Beach 3 %
Land Use Utilization Model Land Use Utilization Model
Example #2: Commercial Property Impact of a Large Example #2: Commercial Property Impact of a Large Scale Residential DevelopmentScale Residential Development
A development company owns a large tract of properly A development company owns a large tract of properly zoned land wants to build 5,000 residential homes. zoned land wants to build 5,000 residential homes. There are no There are no ““concurrency issuesconcurrency issues”” outstanding.outstanding.
How will this impact the local community?How will this impact the local community?
How many other commercial properties will be needed How many other commercial properties will be needed to service this new development?to service this new development?
What types of properties will be needed?What types of properties will be needed?
Using historical percentage landUsing historical percentage land--use utilization data to assist in use utilization data to assist in projected future land use.projected future land use.
The The ““Nbr Bldgs indicatedNbr Bldgs indicated”” refers to refers to ““need.need.”” These could be additions These could be additions to existing businesses or newly to existing businesses or newly constructed buildings. The data is constructed buildings. The data is also of use, therefore, to existing also of use, therefore, to existing property owners as they plan for property owners as they plan for expansion.expansion.
Land Use Utilization ModelLand Use Utilization ModelExample #2: Example #2: Assistance in Urban Revitalization ProjectAssistance in Urban Revitalization Project
We are working a We are working a ““SubSub--ModelModel”” for an innerfor an inner--city city district at the request of a Daytona Beach City district at the request of a Daytona Beach City Commissioner. The goal is to help document why Commissioner. The goal is to help document why ““incentivesincentives”” would foster additional investment would foster additional investment and revitalization from:and revitalization from:
(a) Existing residents or others who might want (a) Existing residents or others who might want to be on the ground floor of rebuilding to be on the ground floor of rebuilding ““Old Old Daytona BeachDaytona Beach”” andand……
(b) Existing or new businesses who may, through (b) Existing or new businesses who may, through using the model, see future demand for their using the model, see future demand for their product. product.
Zone 3 was Zone 3 was ““Original Daytona Beach.Original Daytona Beach.”” …… It has suffered It has suffered from from ““urban flighturban flight,,”” with high vacancies in the old with high vacancies in the old ““corecore--citycity””commercial areas, etc. commercial areas, etc.
Land Use Utilization in this area is shown below:Land Use Utilization in this area is shown below:
% of Homesteaded Property to Total Properties% of Homesteaded Property to Total Properties
Daytona Holly Ormond CountyDaytona Holly Ormond County
Beach Beach Zone 3Zone 3 Hill Beach Wide Hill Beach Wide
37 %37 % 21 % 21 % 40 % 60 % 45 %40 % 60 % 45 %
““HomeownersHomeowners”” are a prerequisite to functional neighborhoodsare a prerequisite to functional neighborhoods
Land Use UnderLand Use Under--UtilizationUtilization: Financial Institutions; Office Buildings; Professional : Financial Institutions; Office Buildings; Professional Service Buildings; Community Shopping Centers;Service Buildings; Community Shopping Centers;
Land Use OverLand Use Over--UtilizationUtilization: Parking Lots; Multi: Parking Lots; Multi--Family < 10 Units; Nightclubs, Lounges, Family < 10 Units; Nightclubs, Lounges, Bars; One Story StoresBars; One Story Stores
The model clearly indicates that Zone 3 has potential demand forThe model clearly indicates that Zone 3 has potential demand foradditional Light Manufacturing.additional Light Manufacturing.
Zone 3, County, Daytona Beach, Holly Hill, Ormond BeachZone 3, County, Daytona Beach, Holly Hill, Ormond Beach
Relative Land Use Utilization: Industrial PropertyRelative Land Use Utilization: Industrial Property
Would Economic Development opportunities be Would Economic Development opportunities be enhanced if enhanced if ““GovernmentGovernment”” viewed the world viewed the world through the eyes of investors?through the eyes of investors?