Q2 21 Land Reno nevada research & forecast Report Land Market Review Land Sales Increase for the first half of 21 market indicators Q2-1 LAND SALES LAND PRICES NEW DEVELOPMENT LAND LISTINGS Projected Q3-1 Now that 29 is behind us, we are all looking forward to 21. Early indications are that 21 is already off to a good start for land sales and activity, although, pricing for some transactions appear to be low. During 29, nearly 4, lots transferred ownership in Washoe County. During the first half of 21, more than 3, lots have transferred ownership. Of those 3, transfers, roughly 212 involved land returning to the lenders or banks. Because of low land prices, developers purchased 978 lots in Washoe County during the first half of 21. This is another good sign of the market starting to turn around, albeit slowly. The community development departments are on pace with the number of building permits issued last year at this time. Single family residential building permits have increased for the City of Reno by 43% over the same time last year. Who is PURCHASING LAND IN 21? Developers purchased about a third of the lots during the first and second quarters of this year. They purchased 978 lots for an average per-lot cost of $18,883. This price may not be representative of all of the lots sold as the maximum per-lot cost was $1, (8 Bella Serra finished lots) and the minimum per lot cost was $7,322 for the Villa Toscana Townhouse project which was rough graded. The upper range values of the cost-per-lot is attributed to finished lots or pads with all improvements, while the low end values may be more representative of raw land. Some of the more notable residential developer purchases for the first and second quarter are noted in the table on page two. A number of other parcels were bought and sold during the first and second quarters of 21 throughout Washoe County, with a few of the most notable transactions listed by price in the table on page two. Washoe County economic data Q2 1 Q1 1 Reno/Sparks single family residential sales Unemployment Rate 14.2% 13.5% Visitor Volume 385k 361k Gaming Revenue $7.43 M $64.43 M Taxable Sales YTD $395 M $443 M Residential Permits 39 18 Commercial Permits 13 7 Source: The Center for Business & Economic Research, UNLV 6 5 4 3 2 1 28 29 21 (Q1 & Q2) Traditional Sales REO Homes Short Sales Total Sales
research & forecast report Q2 21 LAND 8 395 West Reno Northwest Reno Downtown Southwest Airport Reno Meadowood South Meadows 395 PyramidHighway Sparks 8 Banks and lenders played a role in 212 lot transfers. Some of the more notable developments returning to the lenders are also in the table on page two. In Fernley, five commercial properties were sold. They ranged in size from.5-12.6 acres. The average price per acre was $113,55. In the Tahoe-Reno Industrial Center, it appears sales and resales are flat. The same can be said about Carson City s commercial land sale market. Entitlement Activity On the entitlement side of land development, submittals are still flat or slow. Only two subdivision maps were recorded in the first half of 21. One final map was for Curti Ranch #4 consisting of 44 lots. The other map was a commercial industrial condominium for Greg Street Partners for 36 lots. Fourteen (14) parcel maps and eight (8) reversion to acreage maps were also recorded. In addition, several boundary line adjustment maps were recorded. Developers have been requesting extensions from the local agencies for their developments until the new home buying market improves. Some developers are also submitting smaller units for approval. The planning departments have been busy with code amendments, handbook revisions and a few special use permits. The local community development departments are doing their best to deal with reduced staffing levels that are reminiscent of fifteen years ago. These staff reductions are a result of budget reductions as well as early retirement of employees. Building Permit Activity City of Sparks single family residential (SFR) building permits appear to be on par with last Significant activity for first and second quarter 21 Residential developer Sale activity Purchaser Seller Development Location # of Lots David Pick Family Partnership Branch Banking & Trust Riata Subdivision Wingfield Springs 162 Reno Golden Hills Inv. Cartron Ranch Owner Golden Hills Damonte Ranch 15 DR Horton Sharlands Nevada LLC Villa Toscana Townhouses Reno 239 Tannager Investments Bright Development Foothill Meadows Wingfield Springs 64 SJ&R Amber Properties ILD Assets LLC Amber Meadows Sun Valley 117 Somersett Ledges 21 JPO Inc. Ledges of Sommersett Reno 25 ALSB ltd. Montreux Development Gr. Montreux Reno 12 Lennar Reno LLC LP Pioneer Copper Pioneer Meadows V2 Wingfield Springs 33 Lennar Reno LLC BGU Associates Grand Summit Subd. Reno 24 significant sale activity purchaser development location # of lots Price Nevada Pacific Dev. James Stack Incline Village 5 $12,687, O Neal Family Trust Flintlock Trust Incline Village 2 $11,8, EAA Holdings LLC SGP Development North Valleys 1 $ 5,5, Cox Family LLC BJ s Restaurants Inc. Sparks 1 $ 2,5, Williams Electronics Games SP Partners Trademark Reno 1 $ 2,9,25 Northern Nevada Asset Silver Club Sparks 7 $ 2,, Banaszak Heuer LLC API Properties 49 LLC Somersett 1 $ 1,671,254 Significant bankruptcies lender development location value Cruz Family Trust Keystone Canyon Reno $ 1,5, Wells Fargo 14 Lots in Lightning W Washoe Valley $ 1,45, Umpqua Bank 2.6 Ac parcel Reno $ 1,5, First Citizens Bank & Trust Villas at the Sparks Marina Sparks $ 891,36 p. 2 Colliers International - RENO
research & forecast report Q2 21 LAND year, demonstrating little or no growth in the numbers. For the first and second quarters of 29, Sparks had approved 65 SFR permits compared with 64 for the first half of 21. However, the City of Reno experienced an increase of 43% in SFR building permits. In the first half of 29, the City of Reno approved 134 SFR permits. By comparison, the City of Reno approved 192 SFR permits, in the first half of 21, putting them ahead of the 29 pace. The graph below illustrates the building permit trends for Reno, Sparks and Washoe County. We expect that Sparks and Washoe County may have similar numbers of permits as last year, but it appears that the City of Reno will have a net increase in permit numbers. Home Buying Activity Homebuilders will tell you that analyzing the current home buying market, coupled with buyer beliefs and perceptions, is similar to looking into a cloudy crystal ball. A number of groups and individuals all analyze the market and attempt to quantify where we are at presently and where we will be in the next few months. Some of the more reliable sources for information are: UNR Center for Regional Studies (www.centerforregionalstudies.org) Northern Nevada Regional Multiple Listing Services (MLS) Washoe County Recorder & Assessor s Offices Builders Association of Northern Nevada (BANN) The Greater Reno-Tahoe Real Estate Report by Mitch Argon (www.calnevarealty.com) The main difference between these groups is how they collect and analyze data. UNR takes information from the Washoe County Assessor s and Recorder s offices and scrutinizes the data. The Northern Nevada Regional Multiple Listing Service relies on real estate agent members, to report each transaction. What may not be included in their numbers are private party transactions that take place between owners without the assistance of real estate agents. In addition, the MLS may not track all of the new home sales. BANN only tracks new home construction and uses the cities and county building permit information for their data. Data collection and analysis aside, what we do know is that short sales posted the highest number of sales in June. According to the MLS, 43.2% of the sales in June were short sales, 33.6% were traditional sales and 23.3% were bank owned property sales. After the housing peak in 25-26, followed by a sharp decrease in numbers in 27-28, the region experienced an increase in 29. This increase was likely fueled by lower home prices, more distressed properties coming onto the market and federal tax incentives for first time home buyers. Financial Activities Professional & Business Services Health Care & Social Assistance Employment May 21 May 29 Change 39,6 43, -3,4 1,3 99,6 +7 62,4 61,4 +1, TOTAL 22,3 24, - 1,7 Source: Nevada Department of Employment, Training and Rehabilitation. Building Permits Reno/Sparks/Washoe County 6, 5, 4, 3, 2, 1, 23 24 25 26 27 28 29 21 Reno Building SF Permits Sparks SF Permits Reno MF Permits Sparks MF Permits Washoe County SF Permits Washoe County MF Permits Total SF Permits Total MF Permits Colliers International - RENO p. 3
research & forecast report Q2 21 LAND Reno/Sparks Single family home sales lender 28 29 21 (Q1 & Q2) Traditional Sales 2,57 1,734 1,37 REO Homes 1,33 2,58 889 Short Sales 388 1,199 1,127 Total Sales 3,775 5,513 3,323 Reno/sparks single family residential sales 6 5 4 48 offices in 61 countries on 6 continents United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95 3 2 1 Traditional Sales REO Homes Short Sales Total Sales > $1.9 billion in annual revenue > 2.4 billion square feet under management > Over 15, professionals 28 29 21 (Q1 & Q2) According to The Greater Reno-Tahoe Real Estate Report by Mitch Argon, home sales for the Reno-Sparks area are doing slightly better in number of units sold and we appear to be on track with increased sales for the calendar year. However, the median price has fallen in the month of June to almost that of January s median price of $17,. UNITED STATES: Colliers International - Reno 1765 Double R Blvd. Suite 1 Reno, Nevada, 89521 FAX +1 775 823 4699 Single family home sales q1 & q2 21 - Other areas in northern nevada lender Lyon County Carson City Lake Tahoe Traditional Sales 268 148 43 REO Homes 18 73 8 Short Sales 147 41 52 Total Sales 595 262 13 Single family home sales q1 & q2 21 - Other areas in northern nevada 3 25 2 15 Tim Ruffin Managing Partner tim.ruffin@colliers.com CONTRIBUTING AUTHOR: Scott T. Barnes, P.E. Associate Land Services Group scott.barnes@colliers.com RESEARCHER: John Stater Research Director john.stater@colliers.com TEL +1 72 836 3781 1 5 Lyon County Carson City Lake Tahoe Traditional Sales REO Homes Short Sales This report and other research materials may be found on our website at www.colliers.com. This quarterly report is a research document of Colliers International Las Vegas, NV. Questions related to information herein should be directed to the Research Department at 72-836-3781. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Please note that these numbers may or may not include new home sales. In some cases, new homes have been listed through the MLS. New home sales according to the University of Nevada, Reno Center for Regional Studies, amounted to 555 sales during the first half of 21. This number includes single family residences and condominiums. Overall, the homebuilding climate does appear to be improving (albeit very slowly) giving us all something to quietly cheer about! Accelerating success. Colliers International - RENO p. 4
Q2 21 LAND COLLIERS INTERNATIONAL 1765 Double R Bvld. Suite 1 Reno, NV 89521 tel + 1 775 823 9666 fax + 1 775 823 4699