The Suburban Chicago Residential Market -- An Overview -- Presented - - PowerPoint PPT Presentation

The Suburban Chicago Residential Market

• - An Overview --

Presented by G. Tracy Cross President, Tracy Cross & Associates, Inc. September 20, 2012

New Home Sales

2004 1,203,000 31,843 Year-Over-Year +10.6% +13.1% 2005 1,283,000 33,287 Year-Over-Year +6.7% +4.5% 2006 1,052,000 25,105 Year-Over-Year

• 18.0%
• 24.6%

2007 776,000 15,377 Year-Over-Year

• 26.2%
• 38.7%

2008 485,000 6,361 Year-Over-Year

• 37.5%
• 58.6%

2009 374,000 3,552 Year-Over-Year

• 22.9%
• 44.2%

2010 322,000 3,101 Year-Over-Year

• 14.1%
• 12.7%

Variance From 2005

• 74.9%
• 90.7%

2011 305,000 2,932 Year-Over-Year

• 5.3%
• 5.4%

Variance From 2005

• 76.2%
• 91.2%

2012 358,000(2) 3,196 Year-Over-Year +17.3% +9.0% Variance From 2005

• 72.1%
• 90.4%

U.S.(1) Chicago

(1) Single family home sales. (2) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc.

Trends in Production New Home Sales by Product Type

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 34,000 36,000 1Q94 1Q95 1Q96 1Q97 1Q98 1Q99 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 Total Single Family Townhome/Condominium Total Sales (SAAR) Note: DeKalb County, IL and Kenosha County, WI included starting 2nd Quarter 2003. Source: Tracy Cross & Associates, Inc.

New Home Sales Chicago Region

• - Suburban Area --

Year Total 1993 15,815 8,925 6,890 1994 15,161 8,424 6,737 1995 16,919 9,329 7,590 1996 17,027 9,822 7,205 1997 17,135 9,807 7,328 1998 18,840 11,069 7,771 1999 19,742 11,556 8,186 2000 20,132 11,727 8,405 2001 22,717 12,820 9,897 2002 23,185 13,995 9,190 2003 24,861 14,281 10,580 2004 25,699 14,208 11,491 2005 25,761 14,374 11,387 2006 19,354 10,392 8,962 2007 11,302 5,873 5,429 2008 4,880 2,655 2,225 2009 2,913 1,464 1,449 2010 2,508 1,219 1,289 2011 2,326 1,203 1,123 2012(1) 2,667 1,622 1,045

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. Condominium Family Single Townhome/

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Single Family Townhome/Condominium Total Sales

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc.

New Home Sales Chicago Region

• - Suburban Area --

(1)

Source: Tracy Cross & Associates, Inc. Northern Corridor Northwestern Corridor Western Corridor Southwestern Corridor Southern Corridor City of Chicago DeKalb County, IL Kenosha County, WI

McHenry County Kenosha County, WI Northern Lake County South Central Lake County North Shore

Near North City of Chicago

Southern Corridor Southwestern Corridor

Eastern DuPage County/ Western Cook County

Southwestern DuPage County/Aurora/ Kendall County

• St. Charles/

Batavia/ Geneva DeKalb County

Northern DuPage County

Arlington Heights/ Palatine/Wheeling Schaumburg/ Hoffman Estates/ Streamwood/Elk Grove Village Northern Fox Valley

The Chicago Region’s 17 Representative Submarkets

Chicago Metropolitan Area 14,598 1,229 1,638

• 91.6
• 88.8

City of Chicago 224 26 16

• 88.4
• 92.9

Suburban Area 14,374 1,203 1,622

• 91.6
• 88.7

Northern Corridor 1,463 224 275

• 84.7
• 81.2

Northwestern Corridor 3,687 436 531

• 88.2
• 85.6

Western Corridor 3,134 290 436

• 90.7
• 86.1

Southwestern Corridor 4,277 165 320

• 96.1
• 92.5

Southern Corridor 1,118 31 38

• 97.2
• 96.6

DeKalb County 385 15 9

• 96.1
• 97.7

Kenosha County, WI 310 42 13

• 86.5
• 95.8

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. 2011 2011 2012(1) Percent Change 2012(1) Total Single Family Sales 2005 - 2005 - Corridor 2005

Single Family Sales Trends by Area 2005, 2011, and 2012

Per Project Sales Rates – The Single Family Sector

• - Suburban Chicago --

0.00 3.00 6.00 9.00 12.00 15.00 18.00 21.00 24.00 27.00 30.00 33.00 36.00 39.00

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. Average Annual Sales by Development

31.12 29.95 33.45 35.19 32.47 32.44 30.46 21.99 13.36 6.91 4.75 5.17 5.98 8.57 Suburban Year Area Average ANNUAL Sales by Development 1999 2000 2001 2002 2003 2010 2012(1) 2004 2005 2006 2007 2008 2009 2011

Suburban Single Family Sales Leaders

• - YTD June 2012 --

Program Location Autumn Creek Fields Yorkville Pulte $205,990 49.14 Blackberry Crossing-West Montgomery Ryland 200,190 41.86 Winchester Glen-Meadows Carpentersville Pulte 223,190 40.98 Liberty Lakes Wauconda

• K. Hovnanian

245,138 40.84 Churchill Club-Derby/Arlington Oswego

• K. Hovnanian

229,852 36.40 Symphony Meadows-Prairie Volo D.R. Horton/Cambridge 214,561 36.40 Lakewood Crossing-Meadows Hampshire Ryland 169,990 34.61 Cambridge Lakes-Meadow/Prairie Pingree Grove D.R. Horton/Cambridge 207,323 34.58 Providence-Cape Cod Estates Elgin

• K. Hovnanian

297,648 32.76 Talamore-Landmark Huntley Ryland 229,390 32.76 Providence-Blackstone Elgin

• K. Hovnanian

248,995 32.69 Talamore-Hartford Huntley Ryland 285,323 30.94 Grande Park-Anfield Plainfield Ryan 268,865 30.94 Whitmore Place

• St. Charles

M/I 267,323 29.12 Carillon at Stonegate Aurora D.R. Horton/Cambridge 220,990 27.30 Cambridge at Heatherstone-Horizon Beach Park D.R. Horton/Cambridge 195,178 27.30 Mill Creek-Tanna Geneva ShoDeen 303,390 27.30 Misty Ridge Romeoville Beechen Dill 237,490 27.30

(1) Seasonally adjusted, annualized rate.

Source: Tracy Cross & Associates, Inc. Sales Price Average Base SAAR YTD June Builder 2012(1)

Chicago Metropolitan Area 18,689 1,703 1,558

• 90.9
• 91.7

City of Chicago 7,302 580 513

• 92.1
• 93.0

Suburban Area 11,387 1,123 1,045

• 90.1
• 90.8

Northern Corridor 2,294 236 266

• 89.7
• 88.4

Northwestern Corridor 2,676 275 237

• 89.7
• 91.1

Western Corridor 3,158 430 351

• 86.4
• 88.9

Southwestern Corridor 1,710 124 111

• 92.7
• 93.5

Southern Corridor 1,110 45 75

• 95.9
• 93.2

DeKalb County 308 4 5

• 98.7
• 98.4

Kenosha County, WI 131 9

• 93.1
• (1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. Corridor 2005 2011 2012(1) Percent Change 2005 - 2005 - 2011 2012(1) Total Townhome/ Condominium Sales

Townhome/Condominium Sales Trends by Area 2005, 2011, and 2012

Townhome/Condominium Sales Trends

• - The New Construction Sector – Suburban Chicago --

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 Total Sales 7,967 337 23.63 8,547 324 26.35 10,012 318 31.51 9,141 325 28.16 10,935 376 29.11 11,489 392 29.32 11,276 436 25.84 8,613 471 18.30 5,098 484 10.54 2,181 448 4.87 1,423 373 3.82 1,287 289 4.46 1,123 213 5.26 1,044 171 6.12

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. 2009 2011 2012(1) Number

• f Active

Communities 2003 2004 2001 2002 2010 2005 2006 2007 2008 Year Sales Community 1999 2000 Average Annual Total Volume Per

Moderate Density Condominium Sales Trends

• - The New Construction Sector – Suburban Chicago --

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 Total Sales 1,345 62 21.67 1,391 64 21.85 1,763 60 29.25 1,450 60 24.00 2,067 80 25.85 2,367 94 25.13 2,389 109 21.95 2,009 117 17.17 759 120 6.30 292 106 2.76 185 84 2.20 301 65 4.63 197 47 4.16 120 37 3.22

(1) Seasonally adjusted, annualized rate YTD June.

Source: Tracy Cross & Associates, Inc. 2011 2012(1) 2005 2006 2007 2008 2009 2010 1999 2000 2001 2002 2003 2004 Total

• f Active

Volume Per Year Sales Communities Community Average Number Annual

Suburban Attached Sales Leaders

• - YTD June 2012 --

Program Location Regency at The Glen-Villas Glenview Pulte $431,240 127.86 Mayfair-Grant Park Naperville M/I 260,240 41.86 Talamore-Towns Huntley Ryland 139,990 38.22 Sheffield Square-Uptown Orland Park M/I 215,240 37.93 Patriot Square-Seaboard Plainfield D.R. Horton/Cambridge 150,000 30.94 Regency at The Glen-Townes Glenview Pulte 325,740 29.06 Shelbourne Crossing Winfield M/I 215,240 27.30 Mayfair-Uptown Naperville M/I 226,240 25.48 Arlington Crossings Arlington Heights Pulte 276,990 24.24

(1) Seasonally adjusted, annualized rate.

Source: Tracy Cross & Associates, Inc. Builder Sales Price 2012(1) SAAR Average Base YTD June

0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 32.0 36.0 40.0 44.0 48.0 52.0 56.0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000 27,000 30,000 33,000 36,000 39,000 42,000

New Construction Home Sales By Public And Private Companies

Percent Capture Public Builders (Line) Total Sales Region (Bar)

24,327 2,641 10.9 21,686 89.1 25,615 3,690 14.4 21,925 85.6 27,012 4,692 17.4 22,320 82.6 26,616 5,849 22.0 20,767 78.0 28,158 6,943 24.7 21,215 75.3 31,843 7,952 25.0 23,891 75.0 33,287 9,369 28.1 23,918 71.9 25,105 7,466 29.7 17,639 70.3 15,377 4,783 31.1 10,594 68.9 6,361 2,294 36.1 4,067 63.9 3,552 1,722 48.5 1,830 51.5 3,101 1,374 44.3 1,727 55.7 2,932 1,451 49.5 1,481 50.5 3,196 1,787 55.9 1,409 44.1 Source: Tracy Cross & Associates, Inc. Public Builders Private Builders Percent Year Sales Sales Capture Sales Capture Total Percent Total

(1) Seasonally adjusted, annualized rate YTD June.

2012(1) 2003 2006 2007 2001 2008 2009 2011 2010 2004 2005 Total 2002 1999 2000

The Suburban Rental Market

• - An Overview --

“Not all households like these choose to live in the city.”

Rental Apartment Vacancy Trends

• - Suburban Chicago --

All Communities

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 Percent Vacant

(1) As of June.

Source: Tracy Cross & Associates, Inc.

$0.85 $0.90 $0.95 $1.00 $1.05 $1.10 $1.15 $1.20 $1.25 $1.30 $800 $850 $900 $950 $1,000 $1,050 $1,100 $1,150 $1,200 $1,250 Average Monthly Rent Rent Per Sq. Ft. Average Monthly Rent (Bar) Source: Tracy Cross & Associates, Inc. Rent Per Sq. Ft. (Line)

(1) As of June 2012.

Monthly Rent Trends

• - Suburban Chicago --

Post 1985 Rental Communities

Rent/Value Analysis – A Composite Summary

• - Suburban Chicago Apartment Communities --

Number of Programs 71 49 21 Number of Units 16,092 9,077 3,361 Average Per Program 227 185 160 Average Year Built 1997 2003 2006 Average Plan Size (Sq. Ft.) 991 967 1,007 Average Monthly Rent $1,315 $1,307 $1,681 Per Sq. Ft. $1.33 $1.35 $1.67 Slope (Average Rent Movement $0.89 $0.99 $1.22 Per Incremental Sq. Ft.) Average Monthly Rent: @ 600 Sq. Ft. $967 $944 $1,184 @ 700 Sq. Ft. 1,056 1,043 1,306 @ 800 Sq. Ft. 1,145 1,142 1,428 @ 900 Sq. Ft. 1,234 1,241 1,550 @ 1,000 Sq. Ft. 1,323 1,340 1,672 @ 1,100 Sq. Ft. 1,412 1,439 1,794 @ 1,200 Sq. Ft. 1,501 1,538 1,916 @ 1,300 Sq. Ft. 1,590 1,637 2,038 Source: Tracy Cross & Associates, Inc. Attribute

• r Later
• r Later
• r Later

All Programs All Programs Mixed-Use Programs Built in 1995 Built in 2000 Constructed in 2000 Mid-Density/

Rental Apartment Absorption Trends

• - Suburban Chicago --
• 800
• 400

400 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 4,000 Net Absorption in Units

(1) Annualized pace for the first six months of the year.

Source: Tracy Cross & Associates, Inc.

Some Final Comments