Volume XXIII/#5 Dec 2014 / Jan 2015

Bowden’s

MARKET BAROMETER

™

All the trends that are fit to follow . . .

____________________________________________________________________________________________________________ ______________________________________________________________________________________________

Barometric Beat Happy New Year! Postscripts, Prognostications, and Resolutions Last year was good for some, better than expected for others, and a promise of things to come for all. Economists are going on record en masse, predicting that 2015 will exhibit the fastest economic growth in a decade, supported by the strongest job growth since 1999 and constrained inflation instigated by the Fed’s continued love affair with near zero short-term interest rates. And if/when the Fed does begin raising rates, most economists agree that gradual increases will put the short-term rate at less than 1% by the end of 2015. The latest ManpowerGroup Employment Outlook Survey shows a continuation of U.S. employers’ increased optimism with respect to the labor market, the result of which is a seasonally adjusted “Net Employment Outlook” of +16% for Q115, higher than its been in seven years. Of the more than 18,000 U.S. employers surveyed, 19% anticipate increasing staff levels during Q115 while 73% anticipated no significant change. All 50 states, the District of Columbia and Puerto Rico reported positive hiring outlooks, with Hawaii, North Dakota, Delaware, Michigan and Texas showing the strongest pro-hiring inclinations. As the Boomers enjoy an appreciating housing market and a burgeoning stock market, retirements will accelerate, and within a few short years the rhetoric will turn to labor shortages as jobs begin to chase people. The Millennial generation will experience the greatest benefit from this shift and the housing industry will rejoice as the members of this massive generation take their rightful place in the housing hierarchy as first-time homebuyers.

Inside . . . Trends In . . . Resort Real Estate Fall 2014 Kelsey & Norden Report Highlights

Golf Gallery Conditions, Achievements, Trends and Golf Industry Happenings

Bulletin Board A Compendium of Current Economic, Development, and Tourism Trends and Events

Regional Trends A Potpourri

~ “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires.” John Steinbeck American Author (1902 – 1968)

___________________________________________________________________________________ A Newsletter Focusing on Recreational and Resort Community Development Published by Ralph Stewart Bowden, Inc., Real Estate Counselors

___________________________________________________________________________________

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Barometric Beat (Continued) The classic principles of supply and demand have begun to re-balance for most development genres. In recent years, public builders have quietly acquired large amounts of raw land that are now deemed “lot deliveries,” i.e., ready to build in communities replete with roads and infrastructure. On a national basis, lot deliveries still trail housing starts by a small margin, but the gap is closing and in some markets, the lines have crossed. In Southern California, deliveries are running at an annual pace of 17,587 (Q314), well above the pace of a year ago and also above the annual pace of the region’s housing starts (15,817), factors that suggest forthcoming increases in home construction volume. Salt Lake City, Tampa, Northern California and Phoenix are just a few reporting marked increases in lot deliveries, indicating expectations of an upward trajectory for housing demand and home building in the coming year. The urbanization of America has revitalized cities into 18-hour destinations. Downtown transformations combining housing, retail, dining and all types of workspace(s), are being embraced by all generations, spurring increased investment and development, and providing buyers with more and more markets from which to choose. The positive performance of the U.S. commercial real estate industry is expected to sustain through 2015, fueled by a combination of an improving economy, and hungry investor appetite, both domestic and foreign. Healthcare is one of the fastest growing segments of our economy, fueled by the aging Baby Boomer and the growing popularity of medical tourism. From the investor viewpoint, it can serve as a hedge against asset classes that are more typically prone to fluctuation. Medical office building (MOB) tenants tend to have more dependable revenue streams to service debt and provide returns to owners. The current trend is the segment’s expansion into suburban submarkets where a single destination may house multiple targeted medical specialties. While banks are reportedly loosening lending standards, funding is becoming increasingly diverse and creative. With a combined $12.6 trillion in capital, individual retirement accounts (IRAs) and defined contribution (DC) funds identify and take advantage of the benefits of including high-quality commercial property in a mixed-asset portfolio, thereby helping participants to achieve better investment outcomes. Crowdfunding continues to gain momentum. This relatively new form of funding was initially launched in 2003. As with most equity investments, the backer/investor receives shares of a company in exchange for money pledged. Crowdfunding websites assisted companies and individuals worldwide in raising $89 million in 2010, increasing significantly to $2.66 billion in 2012, $1.6 billion (60.2%) of which was raised in North America. In 2012 more than one million individual campaigns were established globally and the industry reportedly grew to more than $5 billion by 2013. A May 2014 report, released by the UK-based The Crowdfunding Centre entitled "The State of the Crowdfunding Nation," revealed that during the month of March 2014 more than $60,000 an hour was raised via global initiatives.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 2

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Barometric Beat (Continued) Perhaps the most productive form of non-bank property financing is the EB-5 Visa Program. Created by Congress in 1990 to spur job creation through foreign investment, the program had been used infrequently. But as banks pulled away from funding new projects during the Great Recession, developers scoured for nontraditional funding sources. In 2009, government Administrators clarified an EB-5 rule to allow temporary construction jobs to be counted toward the ten jobs per investor requirement, an action that opened the door for developers. New York’s biggest real estate project in a generation has been funded in part by the EB-5 program. Developer Related Cos. claims to have raised $600 million from foreign families who receive green cards in return for investing at least $500,000 that is intended and directed to create at least ten jobs per investor for the 17 million square foot Hudson Yards project. In San Francisco, home builder Lennar Corp. has raised about $200 million through the EB-5 program for more than 12,000 housing units on former naval shipyard land in San Francisco. Developer Forest City Ratner Cos. has received more than $475 million for a project connected to Brooklyn’s Barclays Center, and World Trade Center developer Larry Silverstein is in the throes of raising $250 million for a Four Seasons Hotel and condominium project. In total, 10,928 foreign investors applied to invest through the program in the fiscal year ending September 30, 2014, up 72% from 6,346 a year earlier and from just 486 in 2006. Chinese nationals are the biggest source of EB-5 funds, accounting for more than 85% of visas approved in the 12 months ending September 2014. The EB-5 program caps the number of visas allowed per year at 10,000. Typically, more than four-fifths of applicants are approved, becoming eligible for a temporary visa. At that rate, the investors who applied this year alone would invest nearly $4 billion if all projects go forward. Related Cos.’ Hudson Yards project is expected to exceed $20 billion, much of which will come from traditional debt and equity resources, but the $40 million to $50 million the firm raises each month in EB-5 money continues to play a significant role in the projects’ success. It’s a brave new world out there and more and more resources and creative, outside-the-box thinking make the “new” obstacles surmountable. Stay with us this year as we follow them . . . Wishing you a very Happy, Healthy and Prosperous New Year!

Ralph Stewart Bowden Editor-in-Chief

Judith A Shé Managing Editor

~ _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 3

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Trends In . . .

Market Barometer™

Resort Real Estate

Veteran developers Christopher Kelsey and David Norden recently released their Fall 2014 Resort Real Estate Report. The first Kelsey & Norden Resort Real Estate report was launched in 2009, in the wake of the Great Recession. In an effort to get a handle on where the industry was headed, the team went straight to the “horse’s mouth,” a method that has consistently provided a solid annual perspective. In lieu of polling, research is conducted through a series of “round-table” discussions with 25 resort industry professionals focusing on what they are currently experiencing. After six years of sluggish sales and elusive financing, the resort industry is up and at ‘em again. The Kelsey & Norden data and commentary reveal a significantly improved outlook with nearly all participants busy preparing new residential products and programs for their respective resort communities. All participants expressed enthusiasm for new product sales activity, citing a marked uptick driven by affluent buyers seeking to purchase top tier properties in “Grade A” destinations. The general consensus was that most markets had improved within the previous 12 months and 25% of the participants opined that their market had improved “significantly.” Nearly 64% of participants said that pricing in their respective market areas had increased from 1% to 10% while another 18.2% of participants experienced increases in the 11% to 20% range. Perhaps most importantly, roughly 50% believe that their market’s increase is at a sustainable pace over the near term, while 40% believe it is just beginning of appreciation. Interesting consumer trends cited include the widening of the age range of purchasers -extending up to age 75 and encompassing a relatively even mix of Baby Boomers and Gen-Xers. Gen-X buyers (ages 35 to 49 years) are active in most markets, but dominate locations that are fed by tech-oriented businesses. At the other end of the spectrum are more remote communities that may provide tax benefits, a plus on the retirees’ checklist. Add to the mix the huge upcoming Millennial generation and today’s resort developer is challenged to be all things to all people going forward. While the demographic changes will alter purchase motivations and methodologies, the desire for the second home to be a magnet for family gatherings and the development of family traditions has not changed, but in fact is expanding as the popularity of multi-generational travel and tourism grows.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 4

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Trends In . . . (Continued) Today’s second home/vacation home shopper is experience driven. In order for resorts to compete, they must offer copious and diverse programs, services and activities, which may transcend the boundaries of the resort. Cultural events, education, and volunteerism are becoming mainstays of resort programming efforts as Gen-X and the ensuing Millennials have been raised on a diet of lifelong learning and giving back. Successful Baby Boomers are beginning to repurpose their lives rather than take traditional retirement, often focusing on volunteer work, and what better place to begin the renaissance than within their own community? On the financial side, buyers have begun to view their real estate investments in the same light as their financial portfolios. At one time growth/income was the key investment criterion. In today’s economic environment, mitigation of downside risk takes center stage. “Intelligent Consumption” is defined as the need to be convinced of the value, utility and long-term stability of the investment. In other words, an acquisition that will satisfy personal needs while keeping pace with inflation. In this regard, many consumers perform their own “underwriting” and resorts need to be prepared to respond to some pretty sophisticated questions about the property’s business plan and how improvements may be capitalized going forward. The foregoing is just the tip of the iceberg. The Kelsey & Norden report goes on to discuss and exemplify a myriad of topics, including but not limited to:  Resort Location – Still the most important factor. Price ranks second, but amenities rank a relatively close third.  Architectural Trends – Light, bright, contemporary is in -- dark and rustic are out.  Instant gratification is in, satisfied with high quality Built-for-Sale units.  Multi-bedroom unit options satisfy the multi-generational vacation trend.  Pricing -- Hitting the precise price point in a given market is challenging. There are sweet spots however. In general, “A” destination entry-level pricing is in the $1.0 million range as opposed to $750,000 in drive-to locations.  Lower and Middle Tier Demand – How deep are the segments and is there opportunity? Mid-tier remains constrained by access to financing while high-density micro-unit pre-fabrication is serving the lower tier well.  Millennials – Renters or Buyers? Members of this market segment are share-minded and spontaneous and tend to enjoy multiple destinations as opposed to returning to the same location each year. Their numbers and attitudes will impact the Timeshare/Fractional Resort Industry.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 5

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Trends In . . . (Continued)  Amenity and Programming Trends –Adventure Centers, Toy Boxes/Barns, ropes and ziplines, and all things “Wellbeing.”  Marketing Trends – The new digital world produces hyper-informed and misinformed customers.  Social Media – Is it worth the effort?  Two “Old-School” marketing methods that still work – referrals and try before you buy  Reinvestment Required – To keep current even the best resorts must reinvent – and reinvest. With capital again available, top-tier resorts are evolving into true four-season destinations.  In other trends, micro-resorts on infill sites are gaining momentum in either drive-to or “A” rated destinations that have existing high quality amenities and consistent customer flow.

The report is also loaded with anecdotes and quotes from some of the industry’s most prolific and successful movers and shakers. To download the full report, click here.

~ Trends In . . . Is a regular feature by Judith Shé

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 6

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

GOLF GALLERY

Hear Ye, Hear Ye! Charleston, SC has been named “Golf Destination of the Year” by the International Association of Golf Tour Operators. The site of America’s first golf club more than 200 years ago, Charleston is home to 19 championship courses including the Kiawah Island’s famed Ocean Course, 60 miles of coastline, and an historic downtown. Troon is pleased to announce that 39 of its affiliated courses have been named to “Golfweek’s Best Courses” rankings for 2015. Eight (8) Troon-managed golf courses were represented in the “Top 100 Resort Courses,” led by #16 Kapalua Plantation on Maui in Hawaii, and six (6) Troonmanaged facilities were included in the “Top 100 Residential Courses” led by Pronghorn’s Fazio Course, coming in at #12. www.troongolf.com Both Jack Nicklaus Signature Golf Courses to finish construction in the U.S. in 2014 have been named to Golf Digest’s “Best New Courses” rankings, and both finished in the Top 10. Trump National Golf Links at Ferry Point, located adjacent to the Whitestone Bridge in the Bronx, came in at #5 while Potomac Shores Golf Club in northern Virginia came in at #8. The Potomac Shores project sat idle for about six years until SunCal brought the course to completion. The par-72 layout is the first public access Jack Nicklaus Signature course in the Washington, DC metro area. Ferry Point, which was transformed from reclaimed land to an Irish Links-style layout, will officially open in spring 2015. Golf Inc. magazine announced it will honor six golf courses from five countries in this year’s Development of the Year competition, including Trump Golf Links at Ferry Point, the only US course to make the cut. The 14th annual contest will judge new courses based on development vision, aesthetics, routing, and sustainability. www.golfincmagazine.com In other Golden Bear news, Congress recently passed legislation to award the golf great the Congressional Gold Medal. Other Gold Medal honorees have included Neil Armstrong, Jesse Owens, Rosa Parks and Arnold Palmer. Northbrook, IL-based KemperSports has been recognized for the third consecutive year as the Club Management Company of the Year by BoardRoom magazine. Being honored for three consecutive years is unprecedented in the 16-year history of the magazine’s “Excellence in Achievement” awards. www.kempersports.com

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 7

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Golf Gallery

Market Barometer™

(Continued)

Toscana Country Club in Indian Wells, California is finally adding the last eight holes of the North Course. Bill Bone’s Sunrise Company opted to listen to the members who opined that more golf was better than another clubhouse. Two 18-hole layouts were planned for Toscana in 2003, but when it opened, only the front nine and the 18th hole of the North Course were built. The addition will be the first holes built in the golf-rich desert in three years. The North Course at Shadow Hills in Indio added its final nine in 2012. Toscana recently announced 65 property sales, year-to-date, up 25% from 52 in 2013, while total sales volume so far this year is $128M, representing a significant 64% year-over-year increase. The community has released for sale the final phase of lots in the Via Pisa neighborhood, which will overlook the back nine. Prices range from $475,000 to $1,050,000. www.toscanacc.com Omni La Costa Resort & Spa recently opened its Golf Performance Institute (GPI). In addition to providing the latest technology for teaching, swing analysis and club fitting, GPI offers health and fitness programs directed by PFC Fitness Camp, which has a private workout center and complete coaching staff on site. Other elements include lifestyle courses coordinated through the Chopra Center, seminars and guest lectures. Omni La Costa is Southern California's only GOLF magazine Gold Medal Golf Resort. http://golf.lacosta.com And speaking of practice, Golf Property Analysts recently posted a blog on the subject that is well worth the read. Click here. Pellucid Corp will present the 12th Annual “State of the Industry” on January 22, 2015, at the 2015 PGA Merchandise Show in Orlando, FL. This year’s discussion will be hosted by the International Network of Golf (ING) and held in their ClubING Hospitality Suite.

Architectural Achievements – Keswick Hall’s new Pete Dye-designed “Full Cry” has been named to Golf Digest’s ‘Best New Courses’ for 2014. Located in Charlottesville, VA, the acclaimed 600-acre resort opened the facility to play in September. The layout has been described as “An intriguing seamless synthesis of modern golf course architecture and the bucolic hunt country of Virginia. The new 18 traverse the scenic rolling terrain tumbling below Keswick Hall's perch on the property's high ground. Playing between 5,000 and 7,000 yards from the multiple tees, the course is thoroughly enjoyable for any and all golfing abilities.” http://www.keswick.com/golf.aspx ClubCorp recently acquired Oro Valley County Club, a previously member-owned private club located in northwest Tucson at the foot of the Santa Catalina Mountains. Club Corp’s portfolio has increased 35% since the company’s IPO in September of 2013, and now stands at more than 200 clubs in 26 states, the District of Columbia, Mexico and China, serving more than 430,000 members. The acquisition includes a parkland-style 18-hole layout, and a 28,000 square foot clubhouse. www.clubcorp.com www.orovalleycountryclub.com

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 8

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Golf Gallery

Market Barometer™

(Continued)

Tiger Woods’ El Cardonal course in Cabo San Lucas, MX opened December 16th and Woods is reportedly designing another 18-hole championship course at Trump World Golf Club Dubai within the Akoya Oxygen community, which is being developed by DAMAC Properties. Site preparation is underway and the course is slated to open in 2017.

Acquisition Activity – Massachusettsbased Southworth Development has acquired The Abaco Club on Winding Bay in the Bahamas from Marriott Vacations Worldwide in an all cash deal in early December. The company purchased the 534-acre golf community in partnership with a consortium of the club’s members and homeowners. The Abaco Club features a 7,183-yard linksstyle layout designed by Donald Steel and Tom Mackenzie, developed by the club’s founder Peter de Savary in 2004. www.myabacoclub.com www.southworthdevelopment.com

Integrity Golf has added Harmony Golf Preserve to its portfolio, bringing the total number of Orlando-area clubs in its portfolio to 19. Designed by Johnny Miller and Fredrick Bliss, Harmony Golf Preserve opened in 2002 as part of the master-planned Town of Harmony – Central Florida’s largest Green Certified Community. Harmony is currently home to 1,250 residents and features a town center, a school, fire station, 12.5-miles of trails, and a 500-acre lake. The Golf Preserve is a Certified Audubon Cooperative Sanctuary facility encompassing 260 secluded acres, featuring practice facilities and an 18,000-square foot clubhouse. www.integritygolfco.com www.harmonygolfpreserve.com Troon Golf has acquired Honours Golf in an all cash deal, taking its portfolio to more than 250 courses. The 16-golf courses are located in Alabama, Florida, Mississippi and North Carolina. Bob Barrett, CEO of Honours Golf will remain at the helm and Troon will retain the Honours brand. www.honoursgolf.com

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 9

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Golf Gallery

Market Barometer™

(Continued)

GreatLife Golf & Fitness has purchased Drumm Farm Golf Course in Independence, MO from Landscapes Unlimited, for an undisclosed sum. Kansas-based GreatLife plans to add a state-ofthe-art fitness center to the 280-acre, semi-private club, in keeping with its concept of combining gym membership with golf for one low membership fee. In addition to the par-72 Michael Hurdzan-designed layout, Drumm Farm features a par-30 nine-hole Executive Course. Just a week after announcing the acquisition of Drumm Farm, the company reported that it will also fulfill its Letter of Intent to acquire Worthington Country Club in Worthington, Minnesota on February 1st. The club is located about 60 miles from Sioux Falls, South Dakota — one of the company’s primary regions. www.greatlifegolf.com Raleigh, NC-based McConnell Golf has acquired The Country Club of Asheville (CCA), bringing its portfolio to ten 18-hole, private facilities and one nine-hole layout. McConnell is now the largest owner of private clubs in the Carolinas. Established in 1894, CCA is the oldest private club in North Carolina and features a Donald-Ross-designed layout. www.mcconnellgolf.com

Property Prospects – Golf Property Analysts (GPA) (www.Golfprop.com) recently listed Stone Harbor Golf Club in Cape May Courthouse, New Jersey for sale at $4.9 million. Stone Harbor is a Desmond Muihead-designed, 18-hole private club located six miles from the beach community of Stone Harbor and 35 minutes from Atlantic City. GPA recently facilitated the sale of the Heritage Creek Golf Course in Bucks County, PA to Worcester Golf LLC, and was recently retained to assist in the acquisition of golf course property within the metro New York City area. For more information, call Larry Hirsh at 610-397-1818. www.stoneharborgolf.com The Business of Golf – For the month of October, rounds played were up 1.3% year-over-year, on a national basis, while the number of days open declined 0.4%. Year-to-date, rounds played showed a two-tenths of one percent improvement to -1.2% for the year. October 2014 served to maintain the trend of the highest number of rounds played per day open in the last five years. Expectations are for 2014 rounds played to come in at or near a 1.0% decline y/y. On a regional basis, rounds were up in the Mountain, West North Central, East North Central, South Atlantic and South Central Regions, with increases ranging from 1.8% in the South Atlantic to 10.6% in the West North Central region. North and South Dakota saw the greatest increase, averaging 27.7%. The Pacific, New England and Mid Atlantic regions were down in October, ranging from -2.0% in New England to -3.5% in the Mid Atlantic where New York took the biggest hit, down -8.6%. Source: NGF/GolfDatatech PGAPerformanceTrak reports that 23 states had y/y increases in the number of rounds played ranging from 0.6% in West Virginia to 73.0% in Wyoming. Of these, eight states increased play with fewer days open or with no change in the number of days open when compared to October 2013. Top performers for the month were North Dakota, Wyoming, South Dakota, Nebraska and Minnesota. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 10

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Golf Gallery

Market Barometer™

(Continued)

With respect to the number of days open, 23 states saw increases ranging from 0.3% in South Carolina to 29.4% in Wyoming. Decreases in the number of days open ranged from -0.4% in New York to -8.2% in Rhode Island. Kansas reported no change. Year-to-date, golf fee revenue was up 0.8% y/y in October facilitated solely by the resort sector, merchandise revenue was up 1.2% and food and beverage revenue was up a significant 4.7%, boosting the median total revenue 2.4%. Pellucid Corp reports on the month of November, which saw a “sharp dip” with Golf Playable Hours (GPH) down -16% year-over-year at the national level. The year-to-date regional breadth ratio also slipped, albeit slightly, remaining nevertheless in positive territory at 2:1 with 18 regions having favorable weather against nine (9) regions with unfavorable weather and 18 in the neutral zone. The National Golf Foundation’s (NGF) latest Golf Facilities Database shows that more than 1,400 golf facilities have closed (permanently) since 2001. While this feeds the concern about golf losing ground, it’s deceiving in that the net change in supply is actually up by more than 120 18hole equivalent golf courses for the period. Further, since 2006 the industry has seen a net reduction of 500 18HEQs, representing just 3.3% of peak supply. While overbuilding within the high end daily fee sector has been blamed for an oversupply, NGF’s analysis determined that within the universe of facility closures “value priced” (less than $40 peak green fee including cart) Daily Fee 9-hole facilities were disproportionately represented while premium residentially driven clubs were under-represented. Private clubs comprise 25% of existing supply but just 8% of facility closures. In other NGF news, the recently developed NGF International Golf Facility Database now has 18,686 facilities in 203 countries outside the U.S. The database was created for the purpose of tracking golf’s global growth, identifying the most active and emerging markets and facilitating communication between golf facilities and suppliers. There are another 600+ golf projects currently in development around the world including “first-ever” locations such as Azerbaijan, Belarus and the nation of Georgia. Club Corner – A recent report produced by The Club Managers Association of America in conjunction with Club Benchmarking shows that the club industry contributed $21 billion in direct economic impact in 2013. Clubs . . .    

Served between 1.8 million and 2.1 million members and total income was $20 billion. Employed 363,000 employees and club payrolls equaled $95 billion. Hosted an estimated 17,000 charitable events raising an estimated $150 million. Spent $2.8 billion on goods and $2.2 billion on services in their local communities and paid $2.5 billion in taxes.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 11

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Golf Gallery

Market Barometer™

(Continued)

In Closing . . . “Golf is the closest game to the game we call life. You get bad breaks from good shots; you get good breaks from bad shots – but you have to play the ball where it lies.” Bobby Jones (1902 - 1971) Robert Tyre "Bobby" Jones Jr. was an American amateur golfer, and a lawyer by profession. Jones founded and helped design the Augusta National Golf Club, and co-founded the Masters Tournament. Bobby Jones was often confused with the prolific golf course designer, Robert Trent Jones, with whom he worked from time to time. "People always used to get them confused, so when they met, they decided each be called something different," Robert Trent Jones Jr. said. To help avoid confusion, the golfer was called "Bobby," and the golf course designer was called "Trent."

~

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 12

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Hear Ye, Hear Ye – Long-time colleagues Lil Miller-Fox and Marie Roberts, the power and the prowess behind PrivateCommunities.com, recently launched a new information portal -- Community Sales and Marketing News. Lil and Marie have for many years provided highly effective Internet marketing and exposure for luxury residential and resort communities. It will be our privilege to point our readers in their direction for pertinent commentary and periodically contribute to the content. www.privatecommunities.com/marketing Registration is now open for the 40th annual Mountain Travel symposium, a weeklong business-to-business event that will take place at Whistler/Blackcomb from April 12th – 18th, 2015. http://www.mtntrvl.com

Current Climate | Housing Highlights Now online

Click here to read.

The National Council of State Housing Agencies’ (NCSHA) annual “Housing Credit Connect” will be held June 1-4, 2015 at the JW Marriott in Los Angeles. The industry event brings leaders and top development and compliance staff from the state Housing Credit allocating agencies together with government officials, developers, lenders, syndicators, investors, attorneys, accountants, property managers, compliance experts, owners, and nonprofit organizations to deliver the latest news on how to make the system work. Click here for more information. The Urban Land Institute (ULI) members-only Spring Meeting will be held at the Hilton AmericasHouston, May 13th and 14th, 2015 (www.uli.org/events/spring-meeting). ULI Fall meetings will be held in San Francisco October 6th–8th and Dallas October 25th–27th. www.uli.org/events/fall-meeting

Affluent Attitudes – Ron Kurtz’s American Affluence Research Center recently released the findings

of its twice-yearly survey of the wealthiest 10% of US households. The Fall 2014 survey is the 26th in the continuing series that focuses on the 12.2 million wealthiest households based on net worth, as determined by the Federal Reserve Board. Based on the Fed’s data, the wealthiest 10% of U.S. households have a minimum net worth of $942,000, an average net worth of $4.0 million, and an average annual income of $361,000. The most recent survey was derived from 359 respondents located within 39 states and the District of Columbia; 83% were married and the average age of respondents was 57.5 years. The surveys serve to monitor and track anticipated changes in spending for a variety of products and services, changes in rates of saving and investment, and consumer sentiment, perception, and expectations. Select highlights from the comprehensive findings include:

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 13

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board  The assessment of current business conditions was essentially unchanged from the Spring 2014 survey.  The Confidence Index and expectations/future outlook scores were slightly higher than the previous period.  Those under the age of 50 and/or earning in excess of $200,000 were most inclined to expect an increase in household net worth over the ensuing 12 months. 

The indices for changes in spending for 17 products and services remained relatively static.

 When given five choices as possible priorities for spending discretionary income, 42% said they prefer to divide discretionary income among durable goods and local experiences or travel. 

The second most important choice was saving and investing, cited by 32% of respondents.

 Among 13 vacation activities, the top three most frequently mentioned were return to a favorite destination (53%), use reward points to purchase or upgrade (52%), and travel with adult children and/or grandchildren (40%).  Those between the ages of 50 and 59, and/or earning in excess of $200,000 were most inclined to consider the purchase of an existing home as a vacation retreat.  Those over the age of 60 and earning in excess of $200,000 were most inclined to consider building a new primary residence.

Our thanks go out to Ron for once again sharing this important data. To download the Executive Summary and/or purchase the full report, click here.

Amenity Alert – Move over walkers, the bikers are taking over the trails. Our friends at Flourish (http://www.startflourishing.com) tell us that bike-friendly communities and amenities within multifamily buildings are the new “it” amenity. Everything from bike concierges, to bike valets that offer tune-ups and tire changes, to guided rides with professional bikers are now de rigueur.

A few examples: Cliffs Communities has enlisted champion cyclist George Hincapie as Director of Cycling for its seven Carolina Mountain-area properties. At upscale rental complex Velo North Loop in Minneapolis, tenants have access to the “bike kitchen,” a repair area with tire pumps and spare chain links as well as a bike wash. When it opens in summer 2016, the Ritz-Carlton Residences Miami Beach will have a bike share program in which residents and their guests can reserve and access bikes by using a Smartphone application. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 14

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Commuting by bike grew 62% in the US between 2000 and 2013. According to MetroBike, there were seven (7) bike-sharing programs world-wide in 2002 – today there are 750. CycleHop (www.cyclehop.com) a company that funds, plans and operates bike-share programs, is receiving requests from developers and home builders who are planning bike-oriented community amenities designed to entice a broad age spectrum of bike riders including 20 and 30-somethings as well as the aging, but interminably agile Baby Boomer. As the bike trend has burgeoned, fewer hallways and balconies are being cluttered with bikes as multi-family developers have expanded bike storage. Portland, OR recently increased its requirements for bike storage. Areas around the CBD must have 1.5 long-term bike parking spaces per apartment unit or condo, up from one space for every four units.

Builder Bits – Toll Brothers continues on a roll with Q414 net income up 39% to $131.5 million, yearover-year. Q4 revenues of $1.35 billion and home building deliveries of 1,807 units rose 29% and 22%, respectively while net signed contracts for 1,282 units represented a 10% increase and a 16% jump to $970.8 million over the year. Backlog of $2.72 billion and 3,679 units were relatively flat, but nevertheless portend a busy 2015. The average price of backlogged homes was $739,000 compared to $715,000 the year prior. For the year, Toll saw net income rise 99% to $340 million, while revenues of $3.91 billion and deliveries of 5,397 units represented 46% and 29% y/y increases, respectively. Scottsdale, AZ-based Taylor Morrison Home Corporation will sell its Canadian operations to an affiliate of Mattamy Homes Limited for a cash purchase price that is estimated at approximately CAD$570 million. Net proceeds of the transaction will be used for “general corporate purposes resulting in increased flexibility for Taylor Morrison to invest further in U.S. operations.” Minto Communities LLC is expanding its reach in Central Florida with plans for a new 1,600-acre active adult community in Volusia County in relative proximity to the 1.1 million square foot One Daytona entertainment complex in Daytona Beach. Minto is buying the land from Daytona Beachbased Consolidated Tomoka Land Co. to build 3,000 single-family and paired villa residences to be amenitized with parks, walking and biking trails, a town center, clubhouse and recreational and fitness facilities. Construction is expected to commence mid-2015. Pulte Homes – One of Central Florida’s top selling production homebuilders and No. 6 in the region in 2013 housing starts – Pulte is addressing regional demand for family-oriented resort homes with Windsor at Westside in Kissimmee. Construction is expected to commence early this year on 600 single-family and townhome units. Single-family homes will range in size from 3,100 square feet for a six-bedroom/4.5 bath unit to 4,400 square feet for a nine-bedroom/6.0 bath unit. Two-story townhomes will offer four bedrooms and 3.5 baths in the 2,100 square foot size range. Single-family homes start in the high $300s and townhomes are priced from the high $200s. The project will include an 8,000 square foot clubhouse, a swimming pool with lazy river and water slide, a Tiki bar and a fitness center. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 15

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Business Bits – We mentioned “crowdfunding” in our cover story and find it to be an apt analog for “outside the box” pro-activity. Since the Jumpstart Our Business Startups (JOBS) Act was created in 2012, the practice of funding a project by raising small amounts of money from a large number of people, primarily via the Internet, has gained traction. Successful projects typically receive from 25% to 40% of their revenue from their first, second and third degree connections, i.e., friends, family members, work acquaintances and others related to the owner(s) of the business. While this seems appropriate for small mom and pop businesses, the practice is apparently doable for large, commercial real estate projects as well, and there are a number of crowdfunding platforms that have raised more than $100 million for real estate projects across the U.S., in China, Japan, Australia, Canada and France. The top five crowdfunding real estate platforms are: Realty Mogul Fundrise Groundbreaker CrowdStreet GroundFloor

www.realtymogul.com www.fundrise.com www.groundbreaker.co www.crowdstreet.com www.groundfloor.us

Realty Mogul has reportedly completed 58 deals in 14 states totaling over $14 million as of March 2014. Fundrise has facilitated over $10 million in real estate investments since the beginning of 2014, and CrowdStreet has ongoing senior housing and apartment projects in Indiana and Texas totaling nearly $3.0 million. 

There’s a new player in the single-family rental market. Starwood Waypoint Residential Trust (SWAY), a spinoff of Starwood Property trust, is prepping its first securitization based on income producing single-family rental homes. The offering will be collateralized by a $531 million loan secured by first priority mortgages on 4,095 single-family homes, making it the fourth-largest singlefamily rental bond in terms of property count.



According to a recent study conducted by Preferred Hotel Group, kids are the “big drivers” of decisions on multi-generational trips, one of the fastest growing sustainable segments of the travel business. Forty (40%) percent of grandparents and parents say their kids “actively participate in or influence” vacation planning, specifically with respect to activities (77%) and destination (62%). Nearly one-half of all multi-generational travelers say their grandchildren influence the selection of the hotel or resort.



Before the Recession, South Florida developers were selling boat storage and dockage on a condominium basis. When the financial crisis struck, demand dissipated, but as the economy continues to recover, sales of “dockominiums” are making a comeback. According to our colleague Glenn Gerena of Greenberg Traurig, “The long dormant boat slip and storage unit sales market is re-emerging after years of dismal sales. Marinas such as Sunset Harbour Yacht Club in Miami Beach, which had long disposition lists just a couple of years ago, now have waiting lists to acquire slips.” To read more, click here. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 16

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Condo Corner – In 2005, condo sales surged to represent 12.7% of all home sales. By 2009, the ratio had fallen to 10.7%. But the current rebounding is a seemingly sustained trend with condominiums accounting for 12.3% of home sales in 2014 after a relatively strong 2013 when 22 of the 25 major metros saw year-over-year increases in sales. In Q413, condo completions reached 2,100 buildings, up 11% from 1,900 in 2012 and +90% from the trough of 1,100 in Q212. Current activity may be a fraction of the 20,000 completions in Q1 2008, but the market is absorbing new condos more quickly. In 2013, the absorption rate reached 82%, more than twice the 36% rate of mid-2008. An apt analog is 10 Rittenhouse Square, the $300 million Philadelphia project that took nearly 2.5 years to come to market, pushing its entry from early 2007 to late 2009. By the end of 2010, the project was in foreclosure. But a new developer and a brighter economy served the project well. In 2011, 16 units were sold at an average price of $721 per square foot. By 2012, sales had tripled with 49 units moving at $755 per square foot. And in 2013, larger units were brought to market resulting in 27 more sales at $841 per square foot, on average. By 2014, just 14 units remained for sale that brought $1,082 per square foot, reflecting a 50% increase in price in just three years. New condominium construction is at about 10% of the pace it was during the late 1970s and early 1980s when Boomers were in their early 20s. Housing analysts predict that the market is poised for a huge rebound over the next five to ten years as the Millennials finally become first-time homebuyers. While financing continues to be a drag on the process, Fannie and Freddie’s new 3% downpayment loans may just do the trick. Stay tuned . . .

Lodging Logistics – Denver-based KSL Capital Partners has acquired the Village Urban Resorts hotel chain from De Vere Group in a deal valued at approximately $761 million. The transaction includes a portfolio of 25 properties located in the UK comprising some 3,100 rooms and three more properties under construction in Aberdeen, Edinburgh and Glasgow, Scotland. The principals of Mandahl Bay Holdings have signed an agreement with the U.S. Virgin Islands to develop a 400-acre, $487 million resort on the north coast of St. Thomas. The centerpiece of Port of Mandahl will be a 300-room Hyatt Regency Hotel, the first new hotel to be built on St. Thomas in more than 20 years. Phase I will also include a 50-slip marina, private estates and marina townhomes, and a commercial component. Phase II will focus on improvements to the Mahogany Run golf course and the addition of a 30,000 square foot conference facility. Six Senses Resorts & Spas will add three new hotels and eight spas to its portfolio in 2015. The first will be a conversion of Aquapura in Portugal’s Douro Valley. The 60-key property will include suites and villas, a wine academy and a 20,000 square foot wellness center. By mid-year, Six Senses will develop 15 two-, three-, and four-bedroom villas in the Seychelles, and by the end of the year, Six Senses Qing Cheng Mountain will open. Located in Chengdu, China within 15 minutes of the panda reserve, the property is Six Senses’ largest to date, patterned as a “contemporary Chinese Village.” Founded in 1995, Six Senses Resorts and Spas is an award winning eco-conscious luxury resort and spa management company owned by Pegasus Capital Advisors, with branded properties in Asia, the Middle East, the Americas and Europe. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 17

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board A $1B price tag is becoming “no big deal” in today’s lodging market. UK-based IHG is reportedly looking for $1 billion for its InterContinental Hong Kong hotel and has hired Jones Lang laSalle to find a buyer for the 503-room property. Assuming the asking price is achieved would mean a per key price of about $1.9 million. IHG reportedly had a “stellar” third quarter with RevPAR up 8.7%, its strongest quarterly growth in eight years. The 17-story Hong Kong property opened in 1980 and was sold in 2001 for $346 million. A recent PKF Hospitality Research report indicates that overall worldwide economic recovery is resulting in all hotel performance indicators rising at record rates. The firm is projecting demand growth to outpace changes in supply in the U.S. through 2016, resulting in industry-wide occupancies at or above record levels through 2017.

New Developments – Salamander Resort & Spa will begin offering private residences for sale this year. The residences will be rolled out in a phase of ten to twelve homes to be delivered in 2016. Located in Middleburg in Northern Virginia, Salamander Resort will offer Estate Homes adjacent to a 200-acre conservation preserve, Village Homes, which will be in close proximity to the quaint town of Middleburg, and Cottages that will be developed on the westernmost portion of the property at a future date. Prices are expected to range from $1.5 million to $3+ million. www.salamanderresort.com

Florida continues to be a hotbed of activity. In Broward County, Metropica will be a four million square foot master-planned community on 65 acres in the heart of Sunrise, west of Sawgrass Mills, the seventh largest mall in the U.S. The plan calls for up to 2,500 condominium apartments, 300 townhomes, more than 1.2 million square feet of commercial space and, potentially, a 125-room hotel. Metropica’s first high-rise will be designed by YOO Studio and contain 263 units and a full complement of luxury amenities. The one-, two- and three-bedroom units will range in size from 609 to 1,582 square feet, priced from $230,000 to $538,000. In keeping with current trends, the project will offer a bike-share and repair facility and pet boarding and grooming facilities. www.livemetropica.com Denver-based Prosper Farms has proffered plans to develop a 5,144-acre MPC bordering the eastern edge of Aurora in unincorporated Arapahoe County for approximately 9,000 residences and eight million square feet of commercial space. “Prosper” will be funded through a combination of developer private equity and up to $1.3 billion in bonds issued by a collective of eight metro districts. Assuming all conditions are agreed to and met, the project will be built over 30 years with the first buildings to be completed this year.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 18

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Miami WorldCenter will combine retail, hospitality and residential spaces, including a 3-level, 765,000 square foot mall, anchored by Bloomingdale’s and Macy’s, on a 30-acre site minutes from downtown Miami. The Marriott Marquis World Convention Center Hotel will feature 1,800 rooms, 600,000 square feet of meeting space and an 80,000 square foot outdoor event deck. Paramount Miami WorldCenter will be a 55-story residential tower containing 470 condominium residences, all with private elevator access and private foyers. One- two- and three-bedroom units will range in size from 1,294 to 2,376 square feet and prices will start at $690,000. Amenities include a resort-style swimming pool featuring floating cabanas, and a state-of-the-art fitness center replete with boxing and aerobic studios. Residents will also enjoy an on-site fullservice spa, and 4.5 acres of open space and dedicated walking trails. www.miamiworldcenter.com Florida’s West Coast is gearing up for not one but four Crystal Lagoons. Metro Development Group is partnering with Chile-based Crystal Lagoons Corp. to develop their humongous lagoons in four planned communities in Hillsborough, Pasco and Lee counties. Accessible to a combined 10,000 homes, the four lagoons will range in size from five to ten acres each. For perspective, a five-acre lagoon is about the size of four football fields. For further comparison, an Olympic size swimming pool typically occupies 0.3 acres. There are more than 100 Crystal Lagoons in 41 countries, including a 19.77-acre property in Chile, but the four pools in Florida will be the first in the U.S. Metro plans to open the first community in Pasco late this year, with home prices starting in the $250s.

Crystal Lagoons / CITYSTARS / SHARM EL SHEIKH, EGYPT

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 19

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Quivira Los Cabos, a 1,850-acre luxury residential resort community with a Jack Nicklaus Signature Golf course and an oceanfront Beach Club will offer Copala Residences and Condominiums at Quivira. The new enclave will feature 85 single-family homes and seven sixstory multi-family buildings with 36 condominium apartments each on a 24-acre site overlooking the Pacific Ocean and the Sea of Cortez. The three-bedroom single-family villas range in size from 1,800 to 2,400 square feet. The condominium apartments range in (approximate) size from 970 square feet for a one-bedroom unit, to 1,250 square feet for a two-bedroom unit, to 1,750 square feet for a three-bedroom unit. www.copalaloscabos.com

Property Prospects – CBRE Hotels offers the Waldorf Astoria Park City for acquisition consideration. The luxury resort hotel condominium is located in the base village of the Canyons Resort, surrounded by Utah’s Wasatch Mountains. The property contains 105 condominium units including 66 lockout rooms to create a 171-key hotel operation. Amenities include a 16,000 square foot award-winning Spa and Fitness Center, a restaurant and bar, heated outdoor pool and a 115-space underground parking garage. The offering includes 48 unsold condominium units and an adjacent 3.4-acre parcel that is entitled for additional units, parking and/or commercial space. For more information contact [email protected]

Sales Skills – Bald Head Island Limited Real Estate Sales reports that as of Thanksgiving, 114 homes, homesites, and fractional ownership properties had been sold Island-wide. In just the 30 days preceding Thanksgiving, five homes and four homesites closed, three homes and two homesites went to contract, and five Hammocks fractional shares were sold. www.bhirealestate.com East West Communities purchased the undeveloped portion of Hallsley in Midlothian, VA in 2013; 200 of the 740 planned homes are currently occupied -- but not for long. The company reports that in the first ten months of 2014, five new neighborhoods were opened, traffic increased from 3,000 to 10,000, annual home sales increased over 300% with 89 sales as of November 16th, and lot sales registered a 400% increase to 165. East West also completed and opened the $3.5 million Hallsley Residents Club in 2014. Hallsley was voted the “2014 Best Community” by readers of Richmond Magazine. www.hallsley.com A Southern Living Custom Builder Showcase Home by Creative Home Concepts

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 20

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Bulletin Board Island Acquisitions Kapalua, LLC and Lantern Asset Management recently announced that the Montage-branded Residences Kapalua Bay on Maui have met with enthusiastic demand with phase one sales totaling more than $42.5 million in just four months. The three and fourbedroom residences start at $3.4 million and are nestled on a 24-acre site, steps from Kapalua Bay, within the well-known Kapalua Resort, home to two championship golf courses, miles of hiking trails and an array of recreational and social amenities. www.montageresidenceskapaluabay.com

Ski Scene – Vail Resorts, which recently acquired Utah’s Park City Mountain Resort, has announced plans to spend $50 million to link it with its Canyons Resort, and upgrade both properties. Both mountains will now be known as Park City Mountain Resort and recognized as the country’s largest ski resort when the improvements completed prior to the 2015/16 season. The combined ski area will have more than 7,300 skiable acres. Four southwestern ski areas have chosen to consolidate: With a combined 3,088 acres, 26 lifts, more than 200 trails and 13 terrain parks, the merger will form the largest mountain collective in the Southwest. Colorado’s Purgatory at Durango Mountain Resort and Arizona Snowbowl inked a deal to sell 100% of their respective ski areas for an undisclosed sum to James Coleman, Managing Partner, Sipapu Ski and Summer Resort and Pajarito Mountain Ski Area of New Mexico. www.sipapunm.com

Travel and Tourism – According to a survey conducted by Choice Hotels International, Americans plan to spend 8% more on leisure travel in 2015 than they did in 2014, and seniors say they will spend 33% more, while Millennials will increase spending by 5%. Europe is the largest draw, led by London. The survey further revealed that American travelers are willing to splurge for unique travel experiences including culinary tourism, which is projected to see a 30% increase. Hawaii’s tourism industry remained on a record-setting pace through November with year-overyear increases in both visitor arrivals and spending. Through the first 11 months of 2014, Hawaii welcomed more than 7.5 million travelers, up 1% y/y, and visitor expenditures grew 2.3% to more than $13.3 billion. The U.S. West continues as the Islands’ largest source market. November’s 267,000 visitors represented a 4.3% y/y increase while total visitor spending jumped 7.4% to $398.9 million.

~

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 21

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends We’re getting old -- and the real estate market is about to experience a profound change because of it. At the present time Baby Boomers play a strong role in what we sell and how we market it. The leading edge of this generation is now 69 years of age, while the youngest of the group is a comparatively young 51. This massive senior segment will continue to provide significant demand for housing well into the 2030s, but products will need to change and not all markets will benefit from the burgeoning elderly segments. While some traditional retirement meccas will continue to see growth, as housing becomes less affordable in those markets, more seniors will opt to stay put. By-market sector growth over the last decade largely reflects aging in place rather than migration. According to Census data, seniors move to another state five times less frequently than those between the ages of 25 and 34, a trend that is expected to sustain. NewGeography (www.newgeorgraphy.com) data directs us to where the biggest changes in senior household growth occurred between 2000 and 2013. While metros in Florida, Nevada, California and Arizona are represented, the largest expansions of senior populations have been, for the most part, in the same markets that have seen significant net domestic in-migration of Millennials, Gen-X families and working adults. In other words, many of today’s seniors moved to these markets, seeking employment when they were younger and have aged there. The table lists the top ten markets, ranked by the rate of change in the total number of seniors that occurred between 2000 and 2013.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 22

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued) All exhibit a higher share of senior populations than the average national rate of approximately 14%. On the basis of market depth, those that have grown the most are still far behind the likes of New York with its nearly 2.8 million seniors, Los Angeles with nearly 1.6 million and Chicago with approximately 1.2 million. Based on National Association of Realtor (NAR) data, US metros with a lower cost of living and sunnier weather are still expected to see an increase in Baby Boomer residents going forward. Analyzing current population trends, housing affordability and local economic conditions across the U.S. NAR concluded that the top markets going forward will be: Albuquerque, NM Boise, ID Denver, CO Ft. Myers, FL Greenville, SC

Orlando, FL Phoenix, AZ Raleigh, NC Sarasota, FL Tucson, AZ

 Other markets with strong “potential” include Chattanooga, TN, Dallas, TX, McAllen, TX, Riverside, CA and Tampa, FL.  Baby Boomers represented 30% of all buyers in 2013, had a median household income of $92,400 and bought a home that cost $210,000. The Next Generation – The first-time homebuyer segment took a big hit in the recession. Home buying among young adults under the age of 35 declined to 36% in Q114, down from a peak of 43% in 2005. The condition is due in large part to limited job prospects, heavy student loan debt and flat wage growth, exacerbated by tightened credit conditions resulting in magnet cities such as New York and San Francisco losing numerous prospective residents. But according to NAR, there are metros where job growth is strong and homeownership more attainable to which Millennials are flocking. The following markets are purportedly well-positioned to experience a rise in first-time buyers as the economy continues to improve: Austin, TX Denver, CO Grand Rapids, MI New Orleans, LA Salt Lake City, UT

Dallas, TX Des Moines, IA Minneapolis, MN Ogden, UT Seattle, WA

 Other markets showing strong potential include Madison, WI, Nashville, TN, Omaha, NE, Raleigh, NC, Washington, DC. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 23

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued) Entrepreneur-Friendly Markets – Big business is not the only magnet for attracting new residents, Millennials or otherwise. According to the 19th annual “Small Business Policy Index 2014,” the top five entrepreneur-friendly states are: 1. 2. 3. 4. 5.

South Dakota Nevada Texas Wyoming Florida

 Rounding out the top ten are Washington, Alabama, Indiana, Colorado and North Dakota. At the bottom of the list are California, New Jersey, New York, Hawaii and Minnesota. Home Prices and Appreciation - Home price appreciation continues in a majority of metropolitan areas, but growth has slowed with all four major regions seeing increases at or below 5% from a year ago in Q314. Nevertheless, CoreLogic opines that home prices in over half the country will have reached or surpassed levels last seen at the height of he housing bubble sometime in mid-2015. The five states with the highest home price appreciation, including distressed sales are: 1. 2. 3. 4. 5.

Michigan South Dakota Montana Texas Colorado

10.5% 10.4% 9.1% 8.7% 8.6%

When excluding distressed sales, the top five are: 1. 2. 3. 4. 5.

South Dakota Massachusetts Maine Texas Michigan

10.4% 9.7% 8.4% 8.1% 8.0%

Based on NAR data, the most and least expensive markets are as shown in the table on the following page.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 24

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued)

The epicenter of the housing meltdown has been cited as being California’s Central Valley. But recent reports have the market area making significant strides toward recovery, as shown in the table below.

 The latest FNC Residential Price Index indicates that of the top 30 MSA’s, 11 have seen increases of more than 30% since January of 2012, suggesting that they are in full recovery mode and potentially overvalued. FNC Residential Price Index

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 25

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued)  While Fitch Ratings agrees that California is one of the most overvalued states in the nation, it also marks Texas as overvalued, based on Houston, Austin and Dallas each reporting appreciation of more than 20% since 2011. But not to worry -- the recent downward adjustment to oil prices is expected to bring housing values back into perspective. Good Schools AND Affordable Housing – What a combination! RealtyTrac recently compiled a list of markets with the best schools and the most affordable homes. There were 489 Zip codes with elementary schools reporting 2013 test scores at least one-third higher than their respective state averages and coordinately the average residential property price required one-third or less of the median household income. These Zip codes also had a maximum unemployment rate of 5.9% in September. The list of communities with the highest number of affordable zip codes with good schools was led by Orlando, Florida with nine (9), Raleigh, North Carolina with eight (8) and Phoenix, Arizona with six (6), followed by five cities, each with five (5) affordable Zip codes with good schools: Chandler, AZ, Colorado Springs, CO, Grand Rapids, MI, Lexington, KY and Wilmington, NC. The Job Markets - According to the latest Bureau of Labor Statistics (BLS) report, Regional, State and Metropolitan Area employment conditions improved in October. On a Regional basis, the West continues to have the highest unemployment rate (6.5%) while the Midwest continues to exhibit the lowest (5.6%), relatively static since our last report in September. All four regions saw significant y/y decreases ranging from -0.7% in the South, to 1.4% in the Midwest and Northeast. Among the nine geographic Divisions, the Pacific had the highest jobless rate (7.0%) and the West North Central had the lowest (4.5%). All nine divisions had significant rate declines from a year earlier. The largest of these occurred in the East North Central (-1.9%) and Mountain (-1.4%) regions. Forty-two states and the District enjoyed y/y unemployment rate decreases, five states suffered increases, and three registered no change. Georgia had the highest unemployment rate among the states at 7.7% and North Dakota again had the lowest (2.8%). Sixteen (16) states had unemployment rates significantly lower than the U.S. figure of 5.8%, 12 states and the District of Columbia had measurably higher rates, and 22 states reported no appreciable difference. Unemployment rates were lower in October than a year earlier in 354 of the 372 metropolitan areas, higher in 14 and unchanged in four (4). Yuma, AZ saw the largest y/y decrease (-5.5 percentage points) followed by Decatur, IL (-4.2 points). Eight other areas had rate decreases of at least two (2.0) percentage points while Alexandria, LA had the largest over the year jobless rate increase (-0.5 percentage point). By the numbers, the largest y/y metro area employment increases occurred in New York (+123,900), Houston (+120,600) and Dallas (+111,900). _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 26

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued) Here and There – Plenty to talk about where much of the action is . . . Florida is seeing major changes in agricultural land usage driven by demographic, economic and environmental factors. Citrus greening continues to plague grove owners, and older farmers with no heir apparent are now considering the demand for developable land as an opportunity to retire. Recent auctions have included 1,944 acres in Saint Lucie County, 2,620 acres in Martin County, and 7,377 acres that extend from Martin into Manatee, Hillsborough and Polk counties. At the opposite end of the development spectrum, Miami-Dade is considering rezoning more than 60 acres on both sides of Northwest 20th Street, north of the Miami River, from light industrial to general commercial to accommodate the development of a mixed-use project, and a Jacksonville developer is moving forward with plans to develop a project on Sarasota Bay in downtown Sarasota. GreenPointe Communities, the development arm of GreenPointe Holdings has closed on “The Quay”, a 15-acre parcel nestled between the Ritz-Carlton and the Hyatt Regency. The Sunshine State’s unemployment rate fell to 5.8% in November, down from 6% in October with the addition of 41,900 jobs. Florida is now up by 715,700 private sector jobs since December 2010 with Monroe County enjoying the lowest unemployment rate in the state of 3.5% in November. Hendry County, in the center of the state, suffered the highest rate in November, 9.7%. In spite of maintaining its lofty position as the foreclosure capital of the U.S., Florida continues to build, leading the nation in new construction jobs in October with the addition of 40,100 jobs over the year for a 10.4% increase. Growth was particularly evident in South Florida. Miami-Dade construction payrolls jumped 12.3% with 4,400 new jobs, followed by Palm Beach County, up 7.6% with 2,100 more construction positions. Florida reported 117,853 foreclosures during the 12-month period ending October, 160% more than runner-up Michigan. Texas – The Lone Star state has had a good year, putting it on point to surpass 2013 in job, population and housing growth. According to the 2014 Texas Association of Realtors Annual Housing Report, Texas gained more out of state residents than any other state, and is a leader in home sales from international buyers, noting that 584,000 people moved to Texas from out of state and its share of international buyers reached a five-year high, adding more than $11 billion to the Texas economy in 2013. Luxury home sales reportedly surged last year to become one of the fastest growing price classes with an average 35% y/y rate of appreciation. On the jobs front, the Texas economy gained 436,700 nonagricultural jobs from October 2013 to October 2014 for an annual growth rate of 3.9% and the state’s seasonally adjusted unemployment rate fell to 5.1% in October. All industries benefited and Midland ranked first in job creation, followed by Longview, Houston-Sugar Land Baytown, Odessa, and Dallas-PlanoIrving. _________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 27

Vol. XXIII/#5 | December 2014 / January 2015

Bowden’s

Market Barometer™

Regional Trends (Continued) California – The tech industry has greatly affected the Lake Tahoe real estate market. Executives from Apple, Barracuda, EBay, Google, etc., have recently purchased property in North Lake Tahoe. Vail Resorts has pumped more than $30 million into its Northstar Resort in an effort to appeal directly to young tech families, and Surf Air recently announced service from the Bay to the Truckee Tahoe private airport. Mountainside Northstar reports sales of more $40 million this year while Martis Camp has sold 136 properties for $246 million. Source: Aleksandra Baranova, Castillo & Ruig Communications (www.discovercrc.com)

Colorado – Aspen has seen some significant year-over-year increases in both sales and pricing. At the end of Q314, 75 single-family units had been sold representing a 15% year-over-year increase and a 36% increase in median sold price from $3.75 million in 2013 to $5.1 million this year. Townhome products are doing well with 25 sales reported compared to 11 last year with the median sales price jumping 62.5% to $3.225M from $1.985M. While condominium apartment sales were flat at 80 sales, the median sold price ($952,500) is nearly 13% higher than last year. Source: Carol Hood, Aspen Snowmass Sotheby’s (www.aspensnowmasssir.com)

Washington, DC – The capital’s suburbs are attracting a disproportionate share of Millennials. Based on RealtyTrac data, Arlington, VA now has the highest percentage of Millennials among all U.S. cities, at approximately 40%. The Washington, DC suburb saw its share of residents born between 1977 and 1992 climb 78% between 2007 and 2013. The city of Washington, DC’s share is 35%, up from 30% in 2007 and neighboring Alexandria, VA now stands at 34%, up 80% since 2007. While Millennials still prefer to rent, median home prices in the greater capital region are relatively affordable -- in the $450,000 to $500,000 range – in comparison to $800,000+ in other Millennial magnet cities such as Manhattan and San Francisco. Oregon - For the second year in a row, Oregon saw the highest percentage of inbound moves among all U.S. states in 2014. According to United Van Lines, 66% of the Beaver State’s 4,121 total moves were inbound. The Carolinas tied for second with 61% inbound moves, and Vermont came in third at 59%. Meanwhile, New Jersey finished No.1 for the largest percentage (65%) of out-bound moves for the third year in a row. New York was second at 64%, followed by Illinois at 63 percent.

~ “Geography is an earthly subject, but a heavenly science.” Edmund Burke (1729 – 1797) Edmund Burke was an Anglo-Irish statesman, author, orator, political theorist, and philosopher who served in the British House of Commons as a member of the Whig party. Remembered for his support of the American colonies in the dispute with King George III and Great Britain that led to the American Revolution, Burke is regarded by conservatives as the philosophical founder of Anglo-American conservatism.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

___________________________________________________________________________________ Page | 28

Bowden’s

Market Barometer Colleagues

http://dmbrealtynetwork.com

http://www.whitetailclub.com

http://www.segroup.com

http://www.clubtaxnetwork.com

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Bowden’s

Market Barometer Colleagues

http://www.thelandings.com

http://www.harthowerton.com

http://www.redearthcorp.com

http://www.laresortsolutions.com

http://www.integritygolfco.com/

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Bowden’s

Market Barometer Colleagues

http://www.privatecommunities.com

http://beaconld.com/

Chaffin | Light Associates

U

http://www.chaffinlight.com

http://www.davidpearsonassociates.com

H

http://www.garyplayer.com

H

http://www.myclubresource.com

http://www.hotelandclub.com

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Bowden’s

Market Barometer Colleagues

http://www.ideal-living.com

http://www.southeastdiscovery.com

http://www.rpisales.com

http://www.carolinaliving.com

http://www.gtlaw.com

http://www.walkermarketingassociates.com

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Bowden’s

http://www.loweenterprises.com

Market Barometer Colleagues

http://www.eastwestcommunities.com

http://www.benchmarkadvisors.com

http://www.uli.org

http://www.blueridgemountainclub.com

http://www.thegolfguy.biz

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Bowden’s

Market Barometer Colleagues

http://www.golfcommunityreviews.com

http://replayresorts.com

http://www.starresortgroup.com

All the trends that are fit to follow . . . www.bowdensmarketbarometer.com ___________________________________________________________________________________________________________

Market Barometer

Bowden’s ™ ________________________________________________________________________________ ________________________________________________________________________________

A Message from the Editors “The good news is that THERE IS GOOD NEWS, although one would hardly know it from what we read and hear from the media at all levels. The traditional media maxim that bad news sells newspapers may be true, but this philosophy also contributes to negative attitudes and erodes confidence which is a vital intangible in our industry’s economy. The constant promotion of bad news influences our decision making processes, resulting in a paralysis within key component areas of our industry, due to decision makers being afraid to commit themselves. It has been our observation that this paralytic effect has infected the financial sector of our industry, which in turn causes an unwilling paralysis in the development sector. The contagious quality of this epidemic, left unchecked, may very well cripple even healthy sectors of the industry. This newsletter has been developed in response to this situation in which only one side of the story is told. There are positive events occurring in the residential development industry. The fundamentals of demand have not evaporated; sales are being made, money is being made, and there are developments that are setting record sales levels. We want to tell these stories. We want to let you know that all is not lost. We want decision makers to have the facts that do not make headlines, but are the basis of good business decisions. We want you to be able to use this information to counteract the doom and gloom that dominates our information networks. We believe that there is a crying need for this side of the story to be told. And so, we intend to report on the bright spots of our industry. You will find out that there are buyers for your products; you will find out who is succeeding, and why. You will have solid information to help you influence decisions. The content of this newsletter will report on demographic trends, focusing on the number of people, which are old enough and wealthy enough to buy your products, and we will report on the products that are satisfying these needs. We will provide reports on sales performance in discreet regions of the country. We will provide periodic reports on what is being planned within regional markets. And, we’ll have timely articles by noted industry professionals who are doing today’s deals, as well as tomorrow’s.” Bowden’s Market Barometer, April 1992

The foregoing represents the genesis of the Market Barometer and was taken, in its entirety, from our inaugural issue in April of 1992. It is as compelling today as it was then. The mission of the Market Barometer has not changed throughout its two decades in publication. We continue to strive to usurp the negatives with positive feedback gleaned from our on-going research activities. The success of our efforts depends upon you, the decision maker. Many of our subscribers are also contributors. It is through this spirit of cooperation and solidarity that our industry will continue to gain strength. After reading this issue, you decide if we meet our goals. If we do, please join your colleagues in receiving “All the trends that are fit to follow . . .”

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com _______________________________________________________________________________________________________________________

Market Barometer

Bowden’s ™ _______________________________________________________________________________ _______________________________________________________________________________

SUBSCRIBE NOW and join your colleagues in staying in touch with the latest trends. The Market Barometer is a timely compendium of industry news compiled with an “insiders” perspective and delivered monthly, directly to your email box in PDF format. Our annual subscription rate is $195.00 -- for a limited time. To order, visit our website at www.bowdensmarketbarometer.com and click on “Subscribe” or send an email to [email protected] if you prefer to pay by check, and we’d be happy to invoice you. Thank you for your interest in Bowden’s Market

Barometer

All the trends that are fit to follow . . . Judith Shé, Managing Editor

Ralph S. Bowden, Editor-in-Chief

Bowden's Market Barometer is a publication of Ralph Stewart Bowden, Inc., Real Estate Counselors, specialists in recreational and resort community development. The publication does not render legal, investment or tax advice. All such decisions should be made with the assistance of qualified professionals. RSB, Inc. makes every effort to use sources that are determined to be accurate and reliable. However, no guarantee or warranty with regard to the information contained in this publication is intended or implied.

_________________________________________________________________________________ All the trends that are fit to follow . . . www.bowdensmarketbarometer.com

_______________________________________________________________________________________________________________________