Transcript Mar. 18 - The Accounting Circle

Real Estate Forecast
What’s in store for us this year?
March 18, 2014
Welcome
Thomas Francl, MBA, CNE, CMA
Associate Faculty
School of Business and Management
Introduction
Dr. Michael R. Cunningham
President, National University
Chancellor, National University System
Guest Speaker
Alan Nevin
Director of Economic and Market Research
Xpera Group
UP
The Next 5 Years
Alan Nevin
Xpera Group
Consultants to the Development, Legal, Investment
and Estate Planning Industries
(619) 417-1817 [email protected]
www.xperagroup.com
“The situation is hopeless,
but not serious.”
Count Leopold Bercktold - 1912
www.xperagroup.com
Change in Gross Domestic Product
United States
1988-2013
Year
1988-1992
1993-1997
1998-2002
2003-2007
2008-2013
Avg. % Change
6.0%
5.6%
5.0%
5.7%
2.5%
Bureau of
Economic
Analysis
www.xperagroup.com
First Time Unemployment Claims
(Not Seasonally Adjusted)
United States
1995 - 2013
1,200,000
Lehman
Bros
1,000,000
Lehman Bros.
Collapse
800,000
600,000
400,000
200,000
0
1/7/1995
1/7/1996
1/7/1997
1/7/1998
1/7/1999
1/7/2000
1/7/2001
1/7/2002
1/7/2003
1/7/2004
1/7/2005
Torrey Pines Bank
1/7/2006
1/7/2007
1/7/2008
1/7/2009
1/7/2010
1/7/2011
1/7/2012
1/7/2013
www.xperagroup.com 8
Source: U.S Department of Labor
Torrey Pines Bank
www.xperagroup.com
4
THE FUTURE OF AMERICA
Economic Strength Ratings by State
ECONOMIC STRENGTH
HIGHER INDICATOR VALUE = STRONGER ECONOMIC STRENGTH FACTORS
2450
1950
1450
Systemic Downturn
Cyclical Downturn
Where the Action isn’t
Where the Action is
950
www.xperagroup.com
LA
MI
OH
WV
MS
IA
OK
IN
PA
KS
NE
IL
AR
MO
KY
WI
AL
CT
MN
TN
NJ
SC
MA
NY
AVERAGE
NC
MD
CO
NM
VA
CA
TX
GA
OR
WA
FL
UT
AZ
-50
NV
450
Population Change – U.S. – 1980-2010 – 62 Million People
80%
70%
60%
76%
50%
47 million
40%
30%
20%
10%
3%
0%
Top 15 States
Bottom 15 States
www.xperagroup.com
THE WINNERS AND LOSERS
EMPLOYMENT GAINS
DECEMBER 2012 – DECEMBER 2013
 The
States
 Top
15
 Bottom

% of All Job Gains
73.0%
15
4.3%
Bureau of Labor Statistics
www.xperagroup.com
Single Family Home Price Change (1)
Ten Top and Bottom States
(Population over 1,000,000)
2012-2013
Highest % change
% Change
State
Lowest % change
% Change
State
Nevada
California
Michigan
Oregon
Georgia
Arizona
Maine
Utah
Washington
New York
23.9%
19.7%
14.0%
13.7%
12.8%
12.4%
11.7%
10.4%
10.1%
9.6%
Pennsylvania
Delaware
Iowa
West Virginia
Connecticut
Wisconsin
Kentucky
Mississippi
New Mexico
Arkansas
3.3%
2.7%
2.5%
2.1%
1.8%
0.8%
0.2%
-0.2%
-1.3%
-1.5%
Average
13.8%
Average
1.0%
(1 Including Distressed Sales
Source: Corelogic
www.xperagroup.com
Change In Employment, Percent Gain
Top 20 States
2012-2013
Metropolitan Area
San Jose-Sunnyvale-Santa Clara
Orlando-Kissimmee-Sanford
Tampa-St. Petersburg-Clearwater
Houston-Sugar Land-Baytown
Austin-Round Rock-San Marcos
Seattle-Tacoma-Bellevue
Phoenix-Mesa-Glendale
Atlanta-Sandy Springs-Marietta
Miami-Fort Lauderdale-Pompano
Beach
Denver-Aurora-Broomfield
Portland-Vancouver-Hillsboro
Dallas-Fort Worth-Arlington
Sacramento--Arden-Arcade-Roseville
Boston-Cambridge-Quincy
Las Vegas-Paradise
Minneapolis-St. Paul-Bloomington
San Diego-Carlsbad-San Marcos
New York-Northern New JerseyLong Island
Los Angeles-Long Beach-Santa
Ana
San Francisco-Oakland-Fremont
California
Florida
Florida
Texas
Texas
Washington
Arizona
Georgia
Florida
Colorado
Oregon
Texas
California
Massachusetts
Nevada
Minnesota
California
New York/New Jersey
California
California
Thousands
Year End
Change
2012
2013
No.
%
Rank % Gain
924
955
31
3.35%
1
1,059
1,091
32
3.05%
2
1,179
1,215
35
3.00%
3
2,755
2,837
82
2.98%
4
842
866
24
2.81%
5
1,736
1,781
45
2.59%
6
1,804
1,849
45
2.52%
7
2,392
2,451
59
2.46%
8
2,322
2,378
1,266
1,015
3,093
1,297
1,039
3,160
828
845
2,540
839
1,788
1,280
2,594
855
1,823
1,303
8,707
8,842
5,371
5,452
2,023
2,052
57
31
23
67
2.44%
2.43%
2.27%
2.17%
9
10
11
12
18
54
17
35
23
2.15%
2.11%
1.99%
1.95%
1.81%
13
14
15
16
17
135
1.55%
18
81
29
1.50%
1.43%
19
20
Source: Bureau of Labor Statistics
www.xperagroup.com
New Jobs Created in California
2009-2013
17,200,000
17,036,100
17,000,000
16,800,000
16,600,000
16,400,000
16,200,000
16,000,000
15,949,600
1,086,000 Jobs
Created between
2009 and Oct 2013
15,800,000
15,600,000
15,400,000
2009
2010
2013
Civilian Employment
Torrey Pines Bank
www.xperagroup.com15
Demography is our Destiny
United States
 This past year, 1.15 million households were formed in
the United States (twice the previous year).

6.5 million persons doubled up during the recession.

2.2 million people got divorced.
2.2 million people got married.

www.xperagroup.com
Do you sense the air is different
in the Silicon Valley?
“There’s an enormous rejection
of constraints.”
An interview with Larry Summers in Fortune
Magazine
www.xperagroup.com
NEVINOMICS 101: The Basics of Employment
Basic Jobs (Economic Drivers) (1/3rd of All Jobs)
Definition: Jobs whose source of revenues come
from outside the metropolitan area
Support Jobs (2/3rds of All Jobs)
½ are jobs that serve businesses
½ are jobs that serve consumers
www.xperagroup.com
NEVIN ECONOMICS 101:
Great Basic Jobs in California
•
•
•
•
•
•
•
•
Military
Tourism
Manufacturing
Import/Export
High Tech
Universities
Retirees
Federal and State Government
www.xperagroup.com
Comparison of Union Membership
California and Texas
1964-2012
California
1964
1977
1983
1990
2000
2012
Texas
23.5%
23.5%
13.50%
8.0%
21.9%
18.4%
16.0%
17.2%
9.7%
6.4%
5.8%
5.7%
www.xperagroup.com
Now let’s talk real estate!
www.xperagroup.com
www.xperagroup.com
Single-Family Detached Homes Resale Prices
Selected Areas
California
December 2011-December 2013
Year End
CA
Los Angeles
Dec-11
Dec-12
$288,950
$366,930
Dec-13
$438,090
San Diego
Orange
$306,950
$359,930
$484,630
$367,400
$439,830
$418,290
$479,690
$582,930
$677,660
16%
15%
20%
16%
Percent Change
2011-2012
2012-2013
27%
19%
20%
20%
Source: Cal. Assoc. of Realtors
www.xperagroup.com
www.xperagroup.com
www.xperagroup.com
www.xperagroup.com
www.xperagroup.com
www.xperagroup.com
Now, here’s the 2014 forecast
www.xperagroup.com
www.xperagroup.com
California- 2014 Nevinomics Forecast
• Population growth will continue at 300,000+
• New jobs will total more than 250,000
•
75,000 new housing units will be permitted
www.xperagroup.com
• There will be 400,000 single family
homes resold
• Condo conversions will return, a little
• Foreclosures and short sales will reach
new lows.
• Interest rates will remain low, Very low.
• Home prices will increase 8-10%
www.xperagroup.com
Xpera Group -- the West Coast’s largest source of
experts in construction and real estate.
•
•
•
•
Expert Witness Services
Market Studies
Construction Quality Assurance
Construction Management
Alan N. Nevin
Director, Economic and Market Research
(619) 417-1817
[email protected]
www.xperagroup.com
www.xperagroup.com
Next Event: May 20, 2014
Ron Roberts
Supervisor, San Diego County
Register at:
www.NU.edu/SOBM-Events