real estate economics as presented by robert kleinhenz, ph.d

Economic StatisticsKyser Center for Economic Research

Real Estate Educators’ ConferenceOctober 18, 2013

Robert A. Kleinhenz, Ph.D.Chief Economist, Kyser Center for Economic Research, LAEDC

Kyser Center for Economic Research

Outline

• U.S. Economy

• California Economy

• Southern California Economy

• Forecast & Conclusion

Due to the lapse in government funding, census.gov sites, services, and all online survey collection

requests will be unavailable until further notice….

Special Notice:This website is currently not being updated due to the suspension of Federal government services….

U.S. Economy


U.S. Unemployment Rate

Source: US Bureau of Labor StatisticsKyser Center for Economic Research

Jan-

90

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

130%

2%

4%

6%

8%

10%

12%Seasonally Adjusted, Aug. 2013: 7.3%

Employment Fell Faster and Longer than in Prior Recessions...

…and Recovered More Slowly!

0 5 10 15 20 25 30 35 40 45 50 55 60 65 7092

94

96

98

100

102

104

106

10811/1973 - 3/1975

1/1980-7/1980

7/1981-11/1982

7/1990-3/1991

3/2001-11/2001

12/2007-6/2009

Source: Bureau of Labor Statistics


U.S. Nonfarm Job GrowthJa

n-0

8

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

Jul-

13

-800

-600

-400

-200

0

200

400

600MTM Job Changes Moving average (MTM Job Changes)

MTM Changes in Thousands, Seasonally Adjusted

Recession Job Losses: 8.7 millionSince December ’09: +6.8 million

Source: US Bureau of Economic AnalysisKyser Center for Economic Research

Gross Domestic ProductAnnual % Change, Chain-Type (2005) $

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

12

-Q2

12

-Q4

13

-Q2

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%Averaging ~2% YTY, need 3.5-4% YTY

Annual Quarterly


Consumer Price Index

-5.0%

0.0%

5.0%

10.0%

15.0%

All Items Core

% Change from a Year Ago, 100 = 1982-1984

Aug. 2013: All Items +1.5%; Core +1.8%


U.S. Total New Vehicle Sales

Millions of Vehicles

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

2

4

6

8

10

12

14

16

18

2008

2009

2010

2011

2012

2013

Source: US Bureau of the CensusKyser Center for Economic Research

U.S. Retail Trade & Food SalesJa

n-0

7

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

-16.0%-14.0%-12.0%-10.0%

-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%

10.0%YTY % Change – Aug. 2013: +4.6%

Source: Office of Management and BudgetKyser Center for Economic Research

Federal Budget Receipts and Outlays as % of GDP

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0Receipts Outlays


Key Interest RatesJa

n-9

1

Jan

-92

Jan

-93

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Fed Funds Fixed Rate Mort 10-Year T-Bond

Forecast Source: LAEDCKyser Center for Economic Research

U.S. Economic Forecast

2010 2011 2012 2013f 2014f

GDP - Annual % Chg.

2.4% 1.8% 2.2% 1.8% 2.4%

Nonfarm Jobs - Annual % Chg.

-0.7% 1.2% 1.7% 1.6% 1.7%

Unemployment Rate 9.6% 8.9% 8.1% 7.6% 7.2%

Consumer Prices - Annual % Chg.

1.6% 3.2% 2.1% 1.4% 1.7%

U.S. Recap

Labor Market Quality of jobs

Healing Consumer Sector Housing continues to improve, Durable goods up

Business Sector Investment spending interest sensitive

Government Federal budget cuts = drag; but will cut deficit State/local fiscal situation improving

International Trade Trading partner economies improving



California Economy

Source: US Bureau of Economic Analysis; forecasts by LAEDCKyser Center for Economic Research

California Growth Tracks U.S.

2007 2008 2009 2010 2011 2012 2013 2014-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

US GDP CA GSP

2007

.01

2007

.04

2007

.07

2007

.10

2008

.01

2008

.04

2008

.07

2008

.10

2009

.01

2009

.04

2009

.07

2009

.10

2010

.01

2010

.04

2010

.07

2010

.10

2011

.01

2011

.04

2011

.07

2011

.10

2012

.01

2012

.04

2012

.07

2012

.10

2013

.01

2013

.04

2013

.07

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

8.9%

Nonfarm YTY % Change

Unemployment Rate

Source: CA EDD, Labor Market Information DivisionKyser Center for Economic Research

California Unemployment Rate & Nonfarm Jobs

Aug. 2013: 14.7 million jobs, +1.5% YTY; U.S.: +1.7% YTY

Unemployment Rate in %YTY % Change, Nonfarm Jobs


Job Trends by Industry – CA

Government Information

Durable Goods Nondurable Goods

Retail Trade Finance & Insurance

Health Care & Social Assistance Professional, Scientific & Technical Services

Transportation, Warehousing & Utilities Real Estate & Rental & Leasing

Management of Companies & Enterprises Educational Services

Administrative & Support & Waste Services Wholesale Trade

Leisure & Hospitality Construction

-2% -1% 0% 1% 2% 3% 4% 5% 6%

-0.5%-0.4%

-0.1%0.0%

0.2%1.5%

1.7%2.0%

2.3%2.6%2.8%2.9%3.0%3.1%

4.1%5.0%

Aug. 2013: +223,900, +1.5% YTY


Job Trends by Industry – CA

Government Information

Durable Goods Nondurable Goods

Retail Trade Management of Companies & Enterprises

Real Estate & Rental & Leasing Finance & Insurance Educational Services

Transportation, Warehousing & Utilities Wholesale Trade

Professional, Scientific & Technical Services

Health Care & Social Assistance Administrative & Support & Waste Services

Construction Leisure & Hospitality

-30,000 -10,000 10,000 30,000 50,000 70,000 90,000-12400

-1800-1100

-1002800

5600670079001000011400

2120022500

264002780029100

66200

Aug. 2013: +223,900, +1.5% YTY

(thousands)


California Professional and Business Services Employment

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13200,000

700,000

1,200,000

1,700,000

2,200,000

2,700,000Aug. 2013 YTY: +55,900, +2.5%


California Private Education & Health Services Employment

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

3

Jul-1

30

500,000

1,000,000

1,500,000

2,000,000

2,500,000Education Services Health Services

Aug. 2013 YTY: Health Svcs. +26,400, +1.7%; Education: +10,000, +2.9%


California Leisure and Hospitality Employment

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000Aug. 2013 YTY: +66,200; +4.1%


California Manufacturing Employment

Jan-

07

May

-07

Sep-0

7

Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

Sep-1

2

Jan-

13

May

-13

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000Durable Goods Nondurable Goods

Aug. 2013 YTY: Durable -1,100; -0.1%; Nondurable -100; -0.02%

Source: BEA, Global InsightKyser Center for Economic Research

Value of Manufacturing Output – California

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

0

25

50

75

100

125

150

175

200

225

250Durable Goods Nondurable Goods

$ Billions


California Transportation and Warehousing Employment

Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

Sep-1

2

Jan-

13

May

-13

40,000

90,000

140,000

190,000

240,000

290,000

340,000

390,000

440,000

490,000

540,000Aug. 2013 YTY: +11,400, +2.3%


Job Trends by California Metro Area

Sacramento

Riverside-San Bernardino

OaklandSan Diego

ModestoLA

BakersfieldFresno MSA

VenturaStockton MSASan Francisco

Orange CountySan Jose

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

0.2%0.6%

0.8%1.1%

1.3%1.7%1.7%1.7%

1.8%2.1%

2.1%2.2%

2.9%

Aug. 2013 – California: +223,900 jobs, +1.5% YTY

Annual % Change in Nonfarm Jobs

Source: CA EDD, Labor Market Information Division


Unemployment Rates by MSABay Area

MSA Aug. '12 Aug. '13 Chg.

Napa 7.4 5.8 -1.6

San Francisco-Oakland-Fremont 7.1 5.4 -1.7

San Jose-Sunnyvale-Santa Clara 8.7 6.8 -1.9

Santa Rosa-Petaluma 8.6 6.6 -2.0

Vallejo-Fairfield 10.1 8.2 -1.9


Unemployment Rates by MSACentral Valley


Bakersfield-Delano 12.3 10.9 -1.4

Chico 12.1 10.0 -2.1

Fresno 14.2 11.9 -2.3

Merced 15.8 13.3 -2.5

Modesto 14.2 11.9 -2.3

Sacramento--Arden-Arcade--Roseville 10.4 8.5 -1.9

Stockton 14.6 12.2 -2.4

Visalia-Porterville 15.3 13.1 -2.2


Unemployment Rates by MSACentral Coast


Salinas 9.3 7.8 -1.5

San Luis Obispo-Paso Robles 8.2 6.6 -1.6

Santa Barbara-Santa Maria-Goleta 7.8 6.3 -1.5

Santa Cruz-Watsonville 9.8 7.9 -1.9

Southern California Economies



Employment Rates by MSASouthern California


Los Angeles-Long Beach-Santa Ana 10.9 10.1 -0.8

Oxnard-Thousand Oaks-Ventura 9.5 7.8 -1.7

Riverside-San Bernardino-Ontario 12.6 10.4 -2.2

San Diego-Carlsbad-San Marcos 9.2 7.4 -1.8


Local Unemployment Rates

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%LA - 10.2% OC - 6.2% IE - 10.4%Aug. 2013


Southern California Professional & Business Services Employment

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Y

TD

0

200

400

600

800

1,000

1,200Los Angeles Orange Inland Empire VenturaThousands



Southern California Leisure & Hospitality Employment

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Y

TD

0

100

200

300

400

500

600

700

800

900

1,000Los Angeles Orange Inland Empire San Diego VenturaThousands


SoCal Manufacturing Employment2

00

0

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Y

TD

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000Durable Goods Nondurable Goods


Southern California Transportation and Warehousing Employment

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Y

TD

0

50

100

150

200

250

300Los Angeles Orange Inland Empire VenturaThousands

157,200

44,500

35,000

7,500

Los Angeles CountyOrange CountyInland EmpireVentura County

International Trade-Related Employment in LA 5 County Area

Source: LAEDC 2010 Cluster Analysis ProjectKyser Center for Economic Research


Annual TEU Throughput San Pedro Bay Ports

Source: Ports of Los Angeles and Long Beach; forecast by LAEDC

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F0

2

4

6

8

10

12

14

16

18

11.813.1

14.2

15.8 15.714.3

11.8

14.1 14 14.1 14.34

August 2013: +2.4% YTDmillions of TEUs


L.A. County Motion Picture & Sound Recording Employment


Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

3

Jul-1

30

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000Aug. 2013 YTY: -6,800 jobs, -5.6%


Where is the Motion Picture & Sound Industry Located?


34.6%

6.1%

59.3%

LA

Rest of CA

Rest of US

Share of employment in U.S.


On-Location Film Production Days by Type

Source: Film LA

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 YTD

2013 YTD

0

10

20

30

40

50

60Feature Films Television Commercials OtherProduction Days,1000s

2012: + 1.7% YTY2013: +11.9% YTD (Q3)

Home Sales & Median Prices – CA2

00

3.0

12

00

3.0

52

00

3.0

92

00

4.0

12

00

4.0

52

00

4.0

92

00

5.0

12

00

5.0

52

00

5.0

92

00

6.0

12

00

6.0

52

00

6.0

92

00

7.0

12

00

7.0

52

00

7.0

92

00

8.0

12

00

8.0

52

00

8.0

92

00

9.0

12

00

9.0

52

00

9.0

92

01

0.0

12

01

0.0

52

01

0.0

92

01

1.0

12

01

1.0

52

01

1.0

92

01

2.0

12

01

2.0

52

01

2.0

92

01

3.0

12

01

3.0

5

0

100

200

300

400

500

600

700Sales (000s) Price ($000s)

Source: California Association of Realtors

Existing Detached Homes – September 2013Price: $428,810 +24.4% YTY - - - Sales: 412,880 -2.6% YTY


Home Sales & Median PricesLos Angeles County

Source: CA Real Estate Research Council; DataQuick

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$100

$200

$300

$400

$500

$600

Home SalesMedian Home Price

Sep. 2013: $425,000, +25.0% YTY, Sales: 5.0% YTY

New and existing, single-family homes and condos

Source: CA Real Estate Research Council; DataQuickKyser Center for Economic Research

Home Sales & Median PricesOrange County

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

$0

$100

$200

$300

$400

$500

$600

$700

Home Sales

Median Home Price


(Sales) (Price, Thousands)

Sep. 2013: $550,000, +22.2% YTY, Sales: +8.9% YTY


Home Sales & Median PricesRiverside County

Source: CA Real Estate Research Council; DataQuick

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450




Sep. 2013: $269,000, +26.6% YTY, Sales: 7.6% YTY


Home Sales & Median PricesSan Bernardino CountyNew and existing, single-family homes and condos

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

$0

$50

$100

$150

$200

$250

$300

$350

$400



Sep. 2013: $225,000, +32.4% YTY, Sales: 15.4% YTY


Home Sales & Median PricesVentura County

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-130

200

400

600

800

1,000

1,200

1,400

$0

$100

$200

$300

$400

$500

$600

$700




Sep. 2013: $445,000, +18.8% YTY, Sales: +0.2% YTY

Source: CA Association of RealtorsKyser Center for Economic Research

Unsold Inventory (Months)Existing Single Family Homes

County/Region Aug-12 Jul-13 Aug-13

Los Angeles 3.0 2.9 2.9

Orange County 3.6 3.0 3.3

Riverside County 3.2 3.1 3.2

San Bernardino 3.4 3.1 3.0

San Diego 3.7 3.3 3.4

Ventura 4.0 3.5 3.2

Source: CA Real Estate Research CouncilKyser Center for Economic Research

Southern California Unsold New Housing

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Ventura

San Bernardino

Riverside

Orange

Los Angeles

Total Units

Note: For Apartments with > 100 unitsSource: Real Facts; CA Real Estate Research Council


L.A. Five-County Region Apartment Vacancy Rates & Average Rental Rates

1Q07

3Q07

1Q08

3Q08

1Q09

3Q09

1Q10

3Q10

1Q11

3Q11

1Q12

3Q12

1Q13

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

$1,200

$1,250

$1,300

$1,350

$1,400

$1,450

$1,500

Vacancy Rates Rental Rates

Source: Grubb and Ellis Research Services; CA Real Estate Research CouncilKyser Center for Economic Research

Office Vacancy Rates in Southern California

07Q1

07Q3

08Q1

08Q3

09Q1

09Q3

10Q1

10Q3

11Q1

11Q3

12Q1

12Q3

13Q1

2.0

6.0

10.0

14.0

18.0

22.0

26.0

Los Angeles Orange Inland EmpireVentura San Diego

% Vacant, Quarterly Averages


Industrial Vacancy Rates – Southern California

3q

07

4q

07

1q

08

2q

08

3q

08

4q

08

1q

09

2q

09

3q

09

4q

09

1q

10

2q

10

3q

10

4q

10

1q

11

2q

11

3q

11

4q

11

1q

12

2q

12

3q

12

4Q

12

1Q

13

2Q

13

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Los Angeles Orange Inland Empire Ventura San Diego

Source: Grubb and Ellis Research Services

% Vacant, Quarterly Averages

Source: CIRB; CA Homebuilding Foundation; forecast by LAEDCKyser Center for Economic Research

Residential Building Permits Issued in California

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f0

50

100

150

200

250

123.9 138.8 151.4 155.3

108.0

68.433.1 25.5 25.1 21.8 26.1 41.0

66.6

43.9

56.961.5 53.7

56.3

44.6

31.911.0 19.5 25.6

33.5

41.0

54.5

Multi-Family

Single-Family

Permits issued, Thousands


Residential Building PermitsIssued in Orange County

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

5.9 6.45.6

4.4 4.1 3.72.2

1.3 1.4 1.5 1.9 2.33.8 4.3

2.7

5.6

3.74.9

3.14.6

4.9

1.90.8

1.72.9

3.8

5.96.5

Multi-Family

Single-Family

Permits Issued, Thousands


Residential Building PermitsIssued in Inland Empire

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f0

10

20

30

40

50

60

19.5 22.829.8

36.043.5 45.3

33.3

16.0

5.8 4.8 5.1 3.8 4.7 6.811.1

2.54.2

3.5

7.0

9.2 5.5

5.8

4.5

3.3 2.5 1.2 1.5 1.72.3 3.7

Multi-FamilySingle-Family


Source: CIRB; CA Homebuilding Foundation; forecast by LAEDC


'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

3.2

2.2 2.31.7

2.6

1.6

0.70.3

0.2 0.20.2

0.1 0.3

0.4

0.3

0.3

1.3

0.9

1.9

0.9

1.1

0.5

0.2 0.40.5

0.2 0.3

0.3

Multi-Family

Single-Family


Residential Building PermitsIssued in Ventura County

Source: CIRB; CA Homebuilding Foundation; forecast by LAEDC


Residential Building PermitsIssued in San Diego County

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

9.3 9.7 9.5 9.67.9

4.83.5 2.3 1.8 2.2 2.4 2.2

3.96.0

6.3 6.08.9 7.8

7.4

6.0

3.9

2.81.2 1.1

2.9 4.2

4.4

5.2

Multi-FamilySingle-Family



Southern California Construction Employment

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Y

TD

0

100

200

300

400

500

600Los Angeles Orange Inland Empire San Diego VenturaThousands


California Forecast2013-14

Forecast Source: LAEDCKyser Center for Economic Research

California Economic Forecast

2010 2011 2012 2013f 2014f

Nonfarm Jobs - Annual % Chg.

-1.1% 1.2% 2.1% 1.7% 1.7%

Unemployment Rate 12.4% 11.8% 10.5% 9.1% 8.7%

Personal Income - Annual % Chg.

3.1% 5.2% 4.0% 2.3% 5.0%

Taxable Retail Sales - % Chg.

5.0% 8.8% 6.6% 4.5% 3.1%

Housing Permits - thousands of units

44.8 47.3 59.6 82.0 121.0

Source: CA EDD, Labor Market Information Division; forecast by LAEDCKyser Center for Economic Research

California Employment

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13f '14f13,000

13,500

14,000

14,500

15,000

15,500

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%Total Nonfarm Employment Unemployment Rate

Annual average in thousands, 2012 benchmark

Source: CA Board of Equalization, Department of Commerce; estimate & forecast by LAEDCKyser Center for Economic Research

California Personal Income & Retail Sales

'01 '02 '03 '04 '05 '06 '07 08 '09 '10 '11 '12 '13f '14f0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Total Personal Income Taxable Retail Sales Growth

Billions of $

California Recap

Faster growth than US But more ground to make up

Silicon Valley/Bay Area Leading Driving up housing prices

Southern California Mixed OC in the lead

Housing Supply-constrained home prices up sharply Slower gains in 2014 as supply increases

Construction recovering from steep decline


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