1 / 33

Washington County Market Summary January 2010

Washington County Market Summary January 2010. Morley & McConkie. Introduction: Southern Utah commercial market is tied to new housing construction activity Demand for housing is a function of net population growth

francois
Download Presentation

Washington County Market Summary January 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Washington CountyMarket SummaryJanuary 2010

  2. Morley & McConkie Introduction: • Southern Utah commercial market is tied to new housing construction activity • Demand for housing is a function of net population growth • Commercial activity tends to lag behind the residential market by about one year • Commercial recovery will not occur until after residential markets improve

  3. Residential Housing Price Per Square Foot

  4. Single Family Residential Housing Average sales price per square foot for single family house has decline from Mid 2006 to the end of 2009 by an average of 35%

  5. Residential Trends Sales activity has increased as the average sales price has declined Current prices are back to the price level of mid 2004

  6. Residential Lot Trends Average residential lot prices are back to the price level of mid 2004 with a 57% average price decline from the peak of the market. Sales activity for residential building lots has not increased despite the significant price declines as existing homes are currently being sold below replacement cost.

  7. Foreclosure Analysis

  8. Net migration in 2009 is in decline with overall growth at ½% per year based on natural increase.

  9. Forecast Housing Demand

  10. Residential Lot Demand Demand for new residential development of building sites will not likely occur before 2012 assuming no new lots are introduced into the market. Note: A one and a half year standing inventory is required to prevent a shortages and maintain price stability.

  11. National CAP Rate Overview Year End 2009

  12. Economic Rent Analysison General Office Space

  13. CONCLUSION Average quality office space is viable for with market rent of $.95/SF/Mo at a total cost of $140 per square foot with a CAP rate of 8% Good quality office space where total cost is $190 per square foot is NOT feasible with CAP rates between 7% and 9%

  14. Economic Rent Analysis for Industrial Space

  15. CONCLUSION New industrial space is NOT economically feasible under given current rent rates. Rent rates will have to increase a minimum of 25% to 35% to support rental income that will provide an adequate return on capital to support new construction.

  16. Market Conclusions Residential Construction is expected to see modest increases in new construction activity in 2010 with slow but steady increases into 2011. No new residential subdivision development is warranted until after 2012. Residential construction activity is likely to be most active for homes under $350,000.

  17. Office Market: No significant improvement is expected in 2010 with gradual improvements projected in 2011. Retail Market: No significant improvement is expected in 2010 with gradual improvements projected for 2011.

  18. Industrial Market: Industrial market is the weakest of the three commercial segments in the Greater St. George area and will take the longest to see recovery. Improvements are not expected until 2012 provided the there increased construction activity providing increased construction related employment.

  19. COMMERCE CRG Retail Property Travis Parry tparry@comre.com

  20. Commerce CRG Industrial Property Jeremy Dickamore jdickamore@comre.com

  21. Tonaquint Center Office Property Stan Perkins, MBA

More Related