Plainview Housing Study Overview Presented to: Plainview Economic - - PowerPoint PPT Presentation

Plainview Housing Study Overview

Presented to: Plainview Economic Development Authority Presented by: Matt Mullins | Maxfield Research Inc.

May 12, 2015

Maxfield Research Inc. is a full-service real estate advisory company providing strategic value to our private and public sector client’s real estate activities. Overview

• 30 years experience
• Diverse client base
• Multi-Industry Capable

residential commercial public + private sectors

Who we are

OBJECTIVE Provide custom comprehensive housing study APPROACH Identify current & future housing needs for residents in Plainview and provide framework for meeting housing needs PROJECT DELIVERABLES

• Short and long-term housing needs
• Recommendations guiding future housing development
• Tools/policies to implement the plan

KEY DATES

• Data collection: 4th Quarter 2014 and 1st Quarter 2015
• Draft: February 2015
• Presentation: May 12, 2015
• Final: TBD

Project Scope

End User Benefits

• Guide policy making decisions
• Assist the Comprehensive Planning process
• Assists area banks and lending-institutions to streamline the

financial component

• Solicit interest from builders/developers and help streamline the

process

• Help raise funding for housing and community development

programs

• Better define the relationship between housing and economic

development

• Create framework for accommodating future growth
• Help deliver strategic housing priorities

Demographics Employment Household Characteristics Rental Market Analysis Senior Housing Market Analysis Housing Affordability For-Sale Market Analysis Development Pipeline Housing Programs Housing Demand Analysis Challenges & Opportunities Recommendations

Housing Study Components

Deep-dive into Property Types

• Single-family
• Multifamily
• Affordable
• Subsidized
• Market rate
• Subsidized/affordable
• Active adult
• Congregate
• Assisted living
• Memory care
• Skilled Nursing

GO Rental Housing

Senior Housing For-Sale

Residential Lot Supply

Market Area

• Defined as:
• Plainview
• 7 Townships
• 2 Cities
• Market Area will

account for about 75%+ of Demand

Steady growth through 2020

• Plainview last decade
• Population +150 (+4.7%)
• Households +121 (+10.5%)
• Market Area last decade
• Population +276 (+3.7%)
• Households +252 (+9.5%)

Historic Findings Projections (2010-2020)

• Stronger growth projected over the

current decade Plainview

• Population +200 (+6.0%)
• Households +132 (+10.3%)

Market Area

• Population +390 (+5.0%)
• Households +329 (+11.3%)

3,190 3,340 3,540 4,314 4,440 4,630 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2000 2010 2020 Population Year

Population Trends

Remainder of PMA Plainview 1,157 1,278 1,410 1,497 1,628 1,825 500 1,000 1,500 2,000 2,500 3,000 3,500 2000 2010 2020 Households Year

Household Trends

Remainder of PMA Plainview

Younger adults & younger seniors driving growth

• Population (2014-2020):
• 35-44 projected to have largest growth

(+57%) of total population

• Strong growth in school-aged children
• Growth in specific older age cohorts:
• 55-64 projected to grow by 47 (15%)
• 65-74 projected to increase by 44 (21%)
• Household size is decreasing:

2000: 2.76 | 2010: 2.61 | 2020: 2.51

• 82% Home ownership rate (2010)
• 83% Remainder of Market Area
• 82% Plainview
• 73% Minnesota

9.4%

• 4.7%
• 5.3%

24.6%

• 11.3%

13.5% 19.0%

• 6.6%
• 1.8%
• 15.0%
• 10.0%
• 5.0%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Under 18 18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 to 84 85+

• Pct. Change

Plainview Age Distribution 2014 to 2020

Age Group

Household Income

• Median Income (2014):
• $52,797 – Plainview
• $60,227 – Market Area
• $60,500 – Olmsted Cty.
• $58,634 - Minnesota
• Highest earners between 45-54 age cohort

(2014)

• $66,234 – Plainview
• $76,397 - Market Area
• 2014 Median income (Plainview)
• Non-seniors: $58,865
• Seniors: $44,222
• 2012 Income disparity by tenure (Plainview):
• $56,574 (owner) vs. $25,495 (renter)
• Projected increase by 2020:
• +10.9% to $58,558 (Plainview)
• +14.7% to $69,060 (Market Area)

51 224 249 235 205 148 176 54 227 314 222 239 177 177

$22,733 $54,333 $63,380 $66,234 $58,321 $43,407 $28,525

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 100 200 300 400 Under 25 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75+ Income Households Age of Householder

Growth and Income Trends by Age of Householder Plainview: 2014 & 2020

2014 2020 2014 Median Income

Employment

• Wabasha County: historically slightly

lower unemployment rate than MN.

• Key Wabasha Co. Industry Sector Jobs:
• Manufacturing: 25%
• Trade, Transportation, & Utilities:

20%

Plainview is a job exporter

• Plainview is an exporter of workers
• 30% of Plainview residents

work in Plainview

• 37% commute to Rochester
• -322 net outflow
• Avg. weekly wages
• Plainview: $627
• Wabasha County: $636
• Olmsted County: $1,023
• Minnesota: $964

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 00' 01' 02' 03' 04' 05' 06' 07' 08' 09' 10' 11' 12' 13' 14' Unemployment Rate Year

Annual Average Resident Unemployment Rate Wabasha County, Rochester MSA and Minnesota 2000 to 2014

Wabasha County Rochester MSA Minnesota

Slowdown in housing starts since recession…

• 208 housing units constructed in Plainview

(2000-2013)

• Avg. 15 units/year
• 2008-2013: 5 units/year
• 90+% of total permits for single-family

homes

American Community Survey (2012)

• Housing stock (Plainview):
• 25% built prior to 1940
• 15% built in the 1990s
• 14% built in the 2000s
• Single Family Detached: 82% of all
• wner-occupied housing structures
• 71% of Plainview owners have

mortgage

New Construction Activity

10 20 30 40 50 60 Units Year

New Construction (Units) City of Plainview, 2000-2013

Multifamily Single-family

Few rental market properties in Plainview

Market Rate

• Smaller rental complexes

(8 units or under)

• Rent range:
• 2BR: $550 to $600
• Est. price per sq. ft. $0.65
• Olmsted Cty: $0.97

Subsidized/ Affordable

• 52 units | 3 projects
• 0% vacancy rate
• 14 vouchers in Plainview---

administered by SEMMHRA

5% Vacancy = Market Equilibrium

Eastwood Apartments

American Community Survey (2012)

• Single-family rentals |28% of all

renter units in Plainview

• Single-family + duplexes | 39% of

all renter-units in Plainview

• Mobile homes account for 16% of

all renter units in Plainview

Housing Cost Burden % lower than state averages

Rental:

• 35% of Plainview renters are cost burdened
• 49% Wabasha Co. | 49% Minnesota
• 47% of renter HHDS > $35k are cost burdened
• 68% Wabasha Co. | 77% Minnesota

Owners:

• 23% of owners are cost burdened
• 23% Wabasha Co. | 25% Minnesota
• 50% of owners HHDS > $50k are cost

burdened

• 45% Wabasha Co. | 52% Minnesota

Cost Burden: more than 30% of gross income allocated to housing

Low senior vacancy rates

Market Rate

• 18 units congregate
• 18 units assisted living
• All units located at Greenwood Prairie Place

Subsidized/disabled

• 40 units | 0% vac. rate
• Rents based on income

5%-7% Vacancy = Market Equilibrium

Market Area Overall

• 76 units | 3 projects
• 0% vacancy rate

Plainview Senior Housing Greenwood Prairie Place

Home pricing improving and near last decade’s peak

• Median sales price:
• Peaked in 2005: $142,382
• Resales peaked in ‘05: 70
• +41%: 2000 to 2014
• PSF: $72 (2014)

Resales Overall

• Market activity improving
• Low inventory
• New construction market slow in

Plainview

43 42 44 57 47 70 60 65 53 43 48 49 53 40 47

10 20 30 40 50 60 70 80 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Resales Sales Price Year

Plainview Housing Resales - 2000 to 2014

Resales Median Sold Price Average Sold Price

Supply Side

Active Listings (October 2014)

• 20 listings in Plainview
• Median price: $135,200
• Average price: $172,975
• All single-family listings
• Avg. Price Per Sq. Ft.
• Single-family: $114/PSF
• PSF by type:
• 1.5-story: $74/PSF
• Two-story: $103/PSF

6 5 3 2 2 1 1 1 2 3 4 5 6 7

Under $100k $100k to $149.9k $150k to $199.9k $200k to $249.9k $250k to $299.9k $300k to $399.9k $400k to $499.9k $500k+

# of Listings List Price

Plainview Active Listings - October 2014

New Construction is stagnant since recession

Lot Inventory/Supply

• 35 vacant lots | 5 subdivisions
• Most vacant lots platted for townhomes
• No new lots platted since 2003
• Newer subdivisions

 Avg. lot cost: $32,600  Home value w/lot: $162k (per Assessor)  Avg. lot size: 0.33 acres

New Construction Market

• Few housing starts in Plainview
• Spec too risky in today’s market
• Lack of quality move-up lots
• Build-to-suite premium ($150 PSF+)
• No pending projects in development

pipeline

Demand Overview

• Household growth & tenure
• Turnover
• Income-qualified households
• Demand by product | Preferences

Demand Driver Examples

• Demographics
• Economy & Job Growth
• Consumer Choice | Preferences
• Turnover/Mobility
• Supply (i.e. Existing Hsg. Stock)
• Replacement need (i.e.

functionally /physically obsolete)

• Financing

Demand Assumptions/Methodology

• Household growth adjusted for local factors (i.e. building permits, etc.)

Demand Summary

Demand for 258 General-Occupancy units through 2025

48 18 17 123 52 20 40 60 80 100 120 140 Rental - Market Rental - Aff Rental - Subs. For-Sale - SF For-Sale - MF Units

General-Occupancy Demand by Type - Plainview 2014 to 2025

Demand for 103 senior housing units in 2019

16 16 11 14 30 16 18 14 11 11 27 14 10 20 30 40 Affordable Memory Care Assisted Living Congregate Adult - Rental Adult - Owner Units

Senior Housing Demand by Type - Plainview 2014 & 2019 2014 2019

• Maintain three- to- five-year lot

supply

• Demand for 123 new single-

family units after existing lots have been absorbed

• Demand for entry-level, move-up,

& executive homes

Single-Family Development Recommendations

Entry-level split example move-up example

• Demand for 52 units
• Potential housing types:
• Townhomes/row homes
• Twin homes/duplex
• Quads
• Detached townhomes

Multifamily For-Sale Development Recommendations

Standard twin home example Executive Detached TH example

• Demand for 83 units
• 48 market rate
• 18 affordable
• 27 subsidized
• Demand for all incomes, HH

types, and product types

• Recommend the following types:
• Market rate rental – both

apartment & townhome style

• Affordable – townhome style

Rental Housing Recommendations

Townhome rental example Harvest Ridge Townhomes

Senior Housing Recommendations

• Demand for 103 units | Demand

across all service-levels

• Recommend the following:
• Active adult rental (30 units)
• Affordable rental (16 units)
• Catered Living (22 to 26)
• Memory care (12 to 24 units)

Plainview Senior Housing Green Prairie Place

• Steady, yet stronger population and household growth this decade
• Growth in younger adult households and baby boomers; aging boomers will

impact alternative housing types

• Household sizes continue to shrink | Household types changing
• Job exporter; 37% of Plainview resident’s commute to Rochester
• Few rental projects in Plainview | low vacancy rates
• For-sale market continued improvement | lack of supply
• New construction market soft since recession | Need for new lots
• Demand for most housing types this decade & beyond
• Low-cost housing market; difficulty cash flowing new development

Key Takeaways…

Matt Mullins Maxfield Research Inc. 612.904.7971 mmullins@maxfieldresearch.com

www.maxfieldresearch.com http://twitter.com/realestatedev https://www.facebook.com/pag es/Maxfield-Research-Inc/ http://www.linkedin.com/co mpany/maxfield-research-inc

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