IRVINE, CA—Time is of the essence when it comes to winning land bids, so access to the proper data and advice in real time is crucial, Market InSite Real Estate Advisors' new managing director Bob McFarland tells GlobeSt.com exclusively. As we reported earlier this month, Market InSite is launching as a new residential real estate development advisory and data firm dedicated to exclusively representing the needs of builders, developers, investors and debt and equity providers. We spoke with McFarland about the launch, his role at the firm and some of the biggest areas of challenge and opportunity in this sector.
GlobeSt.com: Why was now the right time to launch this residential real estate development advisory and data firm?
McFarland: The launch of Market InSite seemed to make sense given our exclusive access to the most-comprehensive statewide subdivision land-sales database available in the industry as compiled by Land Advisors Organization. This data enables our clients to be ahead of their competition by fine tuning an analysis of a subject property and confirming what market values competitive builders will have to set for their future new homes or apartments.
GlobeSt.com: What are your goals in this new role?
McFarland: My goal is to provide clients who are in active land acquisition due-diligence time frames with immediate access to our advice and database—that can be via a phone call and/or online. Purchasing subdivision land in Southern California is so competitive that our clients cannot successfully operate a land-acquisition business if they have to wait to communicate with the proper consultants much beyond a same-day time frame.
GlobeSt.com: What are the biggest challenges residential real estate developers face in today's economy?
McFarland: Stagnant wage growth and “over-the-top” stringent mortgage-loan qualifying criteria are certainly challenges. Another challenge is an increase in no-growth or limited-growth local-government entitlement policies due to state environmental agencies—such as CEQA—that can shut down development due to environmental issues.
GlobeSt.com: Where do the greatest opportunities lie in residential real estate today?
McFarland: In Southern California, it is clear that infill sites within the three principal coastal counties of Los Angeles, Orange and San Diego provide the greatest potential upside for developers in terms of posting the most-profitable rates of market absorption and highest market values.
GlobeSt.com: In which geographical markets is residential real estate strongest and weakest?
McFarland: The first rule of real estate value, “location, location, location,” includes proximity to jobs, and it is one of the most important drivers of new-home demand. Clearly, any new-home development locations along the coastal beach cities have little trouble generating consumer demand. Because coastal communities usually feature households with relatively high incomes, the public schools are usually high quality, crime is usually low and the weather is highly esteemed.
In addition, communities with historical reputations for discretionary and high-priced housing—both along the coast and inland within the coastal counties—and that are typically situated within proven and acceptable commute patterns near employment are development targets for home builders and apartment developers.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
