Transcript Document

2008 Real Estate Market Forecast
October 17, 2007
Palos Verdes Peninsula AOR
Leslie Appleton-Young
C.A.R. Vice President and Chief Economist
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this report by any means,
including facsimile or computerized formats. Copyright © 2006, CALIFORNIA ASSOCIATION OF REALTORS®
California Real Estate Market: 2007
Sales of Existing Detached Homes Annual Comparison
California, 2006 Sales: 477,460 Units, Down 23.6% Y-T-Y
UNITS
700,000
700,000
600,000
600,000
500,000
500,000
400,000
400,000
300,000
300,000
200,000
200,000
100,000
2006
100,000
SOURCE: California Association of REALTORS®;
The Conference Board
Dec
Nov
Oct
Sept
Aug
Jul
Jun
May
Apr
Mar
Feb
0
Jan
2006
2005
2004
2003
2002
2001
2000
1999
1998
2007
1997
0
2005
Sales of Existing Detached Homes and Pacific West Consumer Confidence
California, August 2007 Sales: 319,200 Units, Down 20.9% Y-T-D, Down 27.8% Y-T-Y
2007 projected: 367,500; lowest since 1995’s 342,540
UNITS
Sales
700,000
Consumer Confidence
650,800
INDEX
160
140
600,000
120
500,000
100
400,000
80
300,000
60
200,000
40
100,000
20
0
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
0
SOURCE: California Association of REALTORS®;
The Conference Board
Statewide Market
Weaker Below $1 Million; High end stable
Below $500,000
– 500K and below - sales down 24.6% YTD
$500,000 to $999,999
– 999 K – 500K - sales down 24.2% YTD
$1 million and above
– Over $1 million - sales down 0.5% YTD
SOURCE: California Association of REALTORS®
Median Price Annual Comparison
California, 2006: $556,640, Up 6.5% Y-T-Y
$600,000
$700,000
$500,000
$600,000
$500,000
$400,000
$400,000
$300,000
$300,000
$200,000
$200,000
$100,000
2007
2005
$100,000
2006
SOURCE: California Association of REALTORS®
Dec
Nov
Oct
Sept
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
2006
2005
2004
2003
2002
2001
2000
1999
1998
$1997
$-
Median Price of Existing Detached Homes
California, August 2007: $588,970, Up 2.0% Y-T-Y
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
SOURCE: California Association of REALTORS®
May-07
Jan-07
Sep-06
May-06
Jan-06
Sep-05
May-05
Jan-05
Sep-04
May-04
Jan-04
Sep-03
May-03
Jan-03
Sep-02
May-02
Jan-02
Sep-01
May-01
Jan-01
Sep-00
May-00
Jan-00
$0
Variability Among Local Markets
Region
Northern California
Sacramento
Central Valley
High Desert
Riverside San Bernardino
Northern Wine Country
Ventura
Orange County
San Diego
Palm Springs/Lower Desert
San Luis Obispo
San Francisco
Santa Clara
Monterey Region
Los Angeles
SOURCE: California Association of REALTORS®
Peak
Month
Aug-05
Aug-05
Aug-05
Apr-06
Jan-07
Jan-06
Aug-06
Apr-07
May-06
Jun-05
Jun-06
May-07
Apr-07
Aug-07
Aug-07
Peak Price
$440,420
$394,450
$363,680
$334,860
$415,160
$645,080
$710,910
$747,260
$622,380
$393,370
$620,540
$853,910
$868,410
$798,210
$605,300
Aug-07
% Chg
Median From Peak
$370,390
-15.9%
$332,510
-15.7%
$309,740
-14.8%
$287,390
-14.2%
$377,130
-9.2%
$600,000
-7.0%
$669,870
-5.8%
$710,380
-4.9%
$595,070
-4.4%
$377,920
-3.9%
$598,400
-3.6%
$832,760
-2.5%
$860,000
-1.0%
$798,210
0.0%
$605,300
0.0%
Annual Percent Change in Median Price
California1982-2008f
22
20
18
16
14
12
10
8
6
4
2
-6
SOURCE: California Association of REALTORS®
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
-4
1984
-2
1982
0
Year-to-Year Price Change By
Number of Bedrooms
Two or fewer bedrooms
Three bedrooms
Four or more bedrooms
25%
20%
High-End
Doing Better
15%
10%
High-End
Hit Harder
5%
0%
SOURCE: California Association of REALTORS®
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
2007 YTD
-10%
1995
1994
1993
1992
1991
1990
1989
1988
-5%
Unsold Inventory Index
California, Aug 2007: 11.8 Months
MONTHS
13
Average Since 1988: Approx. 7 Months
12
11
10
9
8
7
6
5
4
3
2
1
SOURCE: California Association of REALTORS®
May-07
Jan-07
Sep-06
May-06
Jan-06
Sep-05
May-05
Jan-05
Sep-04
May-04
Jan-04
Sep-03
May-03
Jan-03
Sep-02
May-02
Jan-02
Sep-01
May-01
Jan-01
Sep-00
May-00
Jan-00
0
Jan-88
Jul-88
Jan-89
Jul-89
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Unsold Inventory Index
California, August 2007: 11.8 Months
MONTHS
20
18
16
14
12
10
8
6
4
2
0
SOURCE: California Association of REALTORS®
Unsold Inventory Index vs. Price Changes
California, 1982-2007
% Change Annual Median Price
Unsold Inv Index (months)
Long Term Avg = 7 Months
22
20
18
16
14
12
10
8
6
4
2
-6
SOURCE: California Association of REALTORS®
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
-4
1984
-2
1982
0
Listings by Month, Selected Years
California (1982-2007 Average=100)
1983
1992
2004
2006
2007
200
180
160
140
120
100
80
60
40
20
0
Jan
Feb
Mar
Apr
May
SOURCE: California Association of REALTORS®
Jun
Jul
Aug
Sep
Oct
Nov
Dec
CA New Housing Permits: 1988 - 2007
Down 30.0% Y-T-D in 2007
300,000
Single Family
Multi-Family
250,000
Household Growth: 220,000-250,000/yr
200,000
150,000
100,000
50,000
SOURCE: Construction Industry Research Board
2007 YTD
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
0
California Market Stats: 2000-2005
Four Year Housing Boom
2000
2001
2002
2003
2004
2005
535.5
504.0
572.6
601.8
624.7
625.0
% Change
-0.4%
-5.9%
13.6%
5.1%
3.8%
0.04%
Median Price
($ thousands)
$241.4
$262.4
$316.1
$372.7
$450.8
$524.0
% Change
11.0%
8.7%
20.5%
17.9%
20.9%
16.2%
30 YR FRM
8.1%
7.0%
6.5%
5.8%
5.8%
5.9%
Rate of return
2.9%
1.7%
14.0%
12.1%
15.1%
10.3%
SFH Resales
(thousands)
SOURCE: California Association of REALTORS®
Sub-Prime Fall-out and
Foreclosures
Prime, Sub-Prime, & Other Loans
As a Percentage of All Loans Outstanding in California
Prime Conventional
Subprime Conventional
FHA/VA/Other
100%
90%
83%
80%
70%
60%
50%
40%
30%
15%
20%
10%
SOURCE: Mortgage Bankers Association, C.A.R.
Q1/07
Q1/06
Q1/05
Q1/04
Q1/03
Q1/02
Q1/01
Q1/00
Q1/99
Q1/98
0%
Percent of Buyers with Zero Downpayment
First-Time Buyers vs. Repeat Buyers: 1998 - 2006
50%
All Hom e Buyers
Repeat Buyers
First-Tim e Buyers
40%
40.9%
30%
21.1%
20%
10%
11.3%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006
Percent of Buyers with Zero Downpayment
First-Time Buyers vs. Repeat Buyers: 1998 - 2007
50%
All Hom buyers
Repeat Buyers
First-Tim e Buyers
40%
29.4%
30%
17.7%
20%
10%
10.2%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
SOURCE: C.A.R. 2007 Annual Housing Market Survey
Foreclosures per Household
August 2007 RealtyTrac
Foreclosures per
Household (%)
August 2007
Nation = 0.20%
< 0.1%
0.1% - 0.4%
> 0.4%
No Data
Source: RealtyTrac, SF Fed
Mortgage Foreclosure & Delinquency Rates
California
Delinquency Rate
Foreclosure Rate
7%
6%
Delinquencies: LR Avg: 3.9%
5%
4%
3%
2%
Foreclosure Rate: LR Avg: 0.81%
1%
SOURCE: Mortgage Bankers Association
Q3/06
Q2/05
Q1/04
Q4/02
Q3/01
Q2/00
Q1/99
Q4/97
Q3/96
Q2/95
Q1/94
Q4/92
Q3/91
Q2/90
Q1/89
Q4/87
Q3/86
Q2/85
Q1/84
Q4/82
Q3/81
Q2/80
Q1/79
Q4/77
Q3/76
Q2/75
Q1/74
0%
Notices of Default – California
Houses & Condos
2007Q2
2007Q1
2006Q2
Region
Southern
California
30,828 26,748 12,271
San Francisco
Bay Area
7,696
6,730
2,910
QTQ %
Change
YTY %
Change
15.3%
151.2%
14.4%
164.5%
Central Valley
12,964 11,054
4,703
17.3%
175.7%
Statewide
53,943 44,532 20,909
21.1%
158.0%
•Record High NoDs: 61,541 in Q1-1996
•Record Low NoDs: 12,417 in Q3-2007
SOURCE: Data Quick Information Systems
Framing the Sub-Prime Situation
3 Types of Homeowners in Sub-Prime Category:
Right $$$ House & Right Mortgage
– Not in trouble - no fix necessary
Right $$$ House & Wrong Mortgage
– Refinance, but end is not near
Wrong $$$ House & Wrong Mortgage
– Mortgage resets, foreclosures, etc.
Troublesome
Categories
Prime Versus Sub-Prime Past Due
California Q2-2007
Conventional Prime: Past Due
20%
Conventional Subprime: Past Due
18%
16%
14%
12%
Sub-Prime Past Due: LR Avg: 7.0%
10%
8%
6%
4%
Prime Past Due: LR Avg: 1.8%
2%
SOURCE: Mortgage Bankers Association
Q1-2007
Q1-2006
Q1-2005
Q1-2004
Q1-2003
Q1-2002
Q1-2001
Q1-2000
Q1-1999
Q1-1998
0%
Credit/Liquidity Situation
Credit Crunch emerges in July/August
Sub-prime defaults spurred volatility in financial markets
Investors supply credit for mortgage market
Nervous Investors sell off of mortgage-backed securities
– Translates into less money to lending institutions
– Less money to fund home loans
Much tighter lending standards
– Mortgage lenders pulling back – require higher
credit scores, “exotic” products disappear
Impact on CA market: Sales to slow through year end
Bernanke Bounce: September 18, 2007
“…tightening of credit conditions has the potential to
intensify the housing correction and to restrain
economic growth.”
Unexpectedly large .5% cut in Fed Funds rate from
5.25% to 4.75%. First cut in over four years
Dow up 336 points, biggest 1 day gain since 2002
Prime rate cut to 7.75% by key banks – will affect
$800 billion in credit card debt
Goal: Boost confidence and prevent recession
SOURCE: Dow Jones
28-Sep-07
13-Sep-07
29-Aug-07
14-Aug-07
30-Jul-07
15-Jul-07
30-Jun-07
15-Jun-07
31-May-07
16-May-07
1-May-07
16-Apr-07
1-Apr-07
17-Mar-07
2-Mar-07
15-Feb-07
31-Jan-07
16-Jan-07
1-Jan-07
Dow 30 Industrial Index
7/19/07 14,000 ----- Market Turmoil -----10/9/07 14,164
Daily Close
14,500
14,000
13,500
13,000
12,500
12,000
11,500
Economic Fundamentals
Gross Domestic Product
Year 2006: 2.9%; 2007 2.0%
ANNUAL PERCENT CHANGE, CHAIN-TYPE (2000) $
8%
7%
6%
5%
4%
3%
2%
1%
0%
-1%
SOURCE: Bureau of Economic Analysis
2008f
2007p
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
-3%
1990
-2%
Employment Growth, California vs. U.S.
2007P: CA 1.2% US 1.3%
YEAR TO YEAR % CHANGE
6
US
California
5
4
3
2
1
0
SOURCE: CA EDD, Bureau of Labor Statistics
2007P
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
-2
1984
-1
Share of Total Job Growth
Q3 2003 – Q3 2006
Professional
and business
services1
19%
Housing
23%
Health care
and social
assistance
17%
Leisure and
hospitality
16%
Source: Moody’s Economy.com
Note: 1Excluding housing
Retail and
wholesale1
23%
Other
16%
-5.0%
SOURCE: CA EDD, UCLA Anderson Forecast
State & Local
Gov't
Federal Gov't
Other Svcs.
Leisure &
Hosp.
2006
Edu. & Hlth
Safety
Prof Bus. Svcs.
2005
F.I.R.E.
Information
% Change
7.0%
Trade
Trans. Whsg. &
Util.
MFG
Construction
Year-to-Year % Change in Jobs
California 2005-2007
2007F
5.0%
3.0%
1.0%
-1.0%
-3.0%
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Unemployment Rate
California vs. United States
10%
8%
6%
4%
2%
US-CA
SOURCE: CA Employment Development Division
CA
US
0%
-2%
-4%
Nonfarm Employment By Region
(Thousands)
Southern California
Bay Area
Central Valley
Central Coast
North Central
CALFORNIA
Nonfarm
Employment
August-07
Nonfarm
Employment
August-06
Change
Percent
Change
8,545.6
3,270.0
2,042.1
500.8
144.8
15,273.7
8,443.6
3,222.5
2,019.1
497.5
142.8
15,110.4
106.4
56.6
30.5
4.4
3.2
163.3
1.3%
1.8%
1.5%
0.9%
2.2%
1.1%
SOURCE: CA Employment Development Division
Consumer Confidence Index
August 2007: 105.6, Sept 2007: 99.8
INDEX, 100=1985
150
140
130
120
110
100
90
80
70
60
50
SOURCE: The Conference Board
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
Jan-89
Jan-88
40
-3
SOURCE: Bureau of Economic Analysis
1Q-2007
1Q-2006
1Q-2005
1Q-2004
1Q-2003
1Q-2002
1Q-2001
1Q-2000
1Q-1999
1Q-1998
1Q-1997
1Q-1996
1Q-1995
1Q-1994
1Q-1993
1Q-1992
1Q-1991
1Q-1990
Personal Consumption
2007 Q2: +1.4%
QUARTERLY PERCENT CHANGE
7
6
5
4
3
2
1
0
-1
-2
Q1/89
Q3/89
Q1/90
Q3/90
Q1/91
Q3/91
Q1/92
Q3/92
Q1/93
Q3/93
Q1/94
Q3/94
Q1/95
Q3/95
Q1/96
Q3/96
Q1/97
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Taxable Sales
California
ANNUAL PERCENT CHANGE
20%
15%
10%
5%
0%
-5%
-10%
SOURCE: California State Board of Equalization
Consumer Price Index
August 2007: All Items 2.0% Y-T-Y; Core 2.1% Y-T-Y
PERCENT CHANGE FROM A YEAR AGO, 100=1982-1984
16%
All Items
14%
Core
12%
10%
8%
6%
4%
2%
SOURCE: Bureau of Labor Statistics
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-94
Jan-95
Jan-93
Jan-92
Jan-91
Jan-90
Jan-89
Jan-88
Jan-87
Jan-86
Jan-85
Jan-84
Jan-83
Jan-82
Jan-81
Jan-80
0%
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Mortgage Rates
Fed cuts to 4.75% on 9/18/07
10%
9%
8%
7%
6%
5%
4%
3%
FRM
2%
ARM
1%
Federal Funds
0%
SOURCE: Federal Home Loan Mortgage Corporation
Economy through 2008: Razor’s Edge
Sub par economic growth (below 3.0%)
Weak but positive job growth
Unemployment rate up slightly
Inflation a concern but in check
Uncertainty about economy/credit crunch
KEY CONCERN: Will turmoil in the housing market
tip the economy into recession?
Southern California Region
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this report by any means,
including facsimile or computerized formats. Copyright © 2006, CALIFORNIA ASSOCIATION OF REALTORS®
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Southern California August 2007 Sales: 8,329 Units, Down 27.9% Y-T-Y, Down 22.5% Y-T-D
UNITS
Sales
Consumer Confidence
INDEX
18,000
160.0
16,000
140.0
14,000
120.0
12,000
100.0
10,000
80.0
8,000
60.0
6,000
40.0
4,000
20.0
2,000
0.0
Jan-98
Apr-98
Jul-98
Oct-98
Jan-99
Apr-99
Jul-99
Oct-99
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
0
SOURCE: California Association of REALTORS®;
The Conference Board
Home Sales in Southern California Regions
5,000
Aug-06
Aug-07
4,000
3,000
2,000
1,000
0
High
Los
Orange Palm Rivers/SB San
Desert Angeles
Springs
Diego
SOURCE: California Association of REALTORS®
Santa Ventura
Barbara
New Home Sales
Southern California Counties
County
Los Angeles
Orange
Riverside
San Bernardino
San Diego
Santa Barbara
Ventura
So Cal Total
2000
2001
2002
2003
2004
2005
2006
2007 YTD*
6,331
7,478
10,257
5,149
9,259
568
2,965
42,007
7,387
5,928
13,491
5,049
9,570
588
2,935
44,948
8,042
6,256
17,263
5,830
10,591
798
2,439
51,219
9,121
6,436
20,702
8,048
12,131
828
2,244
59,510
9,905
5,840
24,048
9,584
14,812
933
1,385
66,507
12,065
5,494
28,732
10,894
15,902
754
2,192
76,033
12,369
5,204
25,232
10,291
11,659
399
2,154
67,308
5,682
2,089
7,267
3,143
4,351
206
736
23,474
* Thru Q2 2007
SOURCE: C.A.R./DataQuick Information
Systems
Year-to-Year Change in New Home Sales
Southern California Counties
County
Los Angeles
Orange
Riverside
San Bernardino
San Diego
Santa Barbara
Ventura
So Cal Total
2000
2001
2002
2003
2004
2005
2006
7.3%
-4.7%
11.4%
7.8%
-0.8%
25.4%
1.6%
3.9%
16.7%
-20.7%
31.5%
-1.9%
3.4%
3.5%
-1.0%
7.0%
8.9%
5.5%
28.0%
15.5%
10.7%
35.7%
-16.9%
14.0%
13.4%
2.9%
19.9%
38.0%
14.5%
3.8%
-8.0%
16.2%
8.6%
-9.3%
16.2%
19.1%
22.1%
12.7%
-38.3%
11.8%
21.8%
-5.9%
19.5%
13.7%
7.4%
-19.2%
58.3%
14.3%
2.5%
-5.3%
-12.2%
-5.5%
-26.7%
-47.1%
-1.7%
-11.5%
2007 YTD*
-14.2%
-26.2%
-47.2%
-39.3%
-24.6%
-0.5%
-24.0%
-33.6%
* Thru Quarter 2 of 2007
SOURCE: C.A.R./DataQuick Information
Systems
Median Price of Existing Detached Homes
Southern California, August 2007: $576,230 Up 3.8% Y-T-Y
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
$0
SOURCE: California Association of REALTORS®
Median Price of Existing Detached Homes
Southern California Regions
County
High Desert
Los Angeles
Orange
Palm Springs
Riverside/SB
San Diego
Sta. Barbara-So. Coast
Sta. Barbara-North Cnty.
Ventura
Aug-07
Jul-07
Aug-06
$ 287,394
$ 605,305
$ 710,383
$ 377,921
$ 377,127
$ 595,070
$ 1,262,500
$ 390,740
$ 669,871
$ 296,218
$ 592,303
$ 709,717
$ 378,312
$ 393,066
$ 601,731
$ 1,175,000
$ 386,110
$ 682,926
$ 332,897
$ 589,736
$ 698,084
$ 355,327
$ 407,403
$ 598,580
$ 1,190,000
$ 453,488
$ 710,906
SOURCE: California Association of REALTORS®
M-t-M
-3.0%
2.2%
0.1%
-0.1%
-4.1%
-1.1%
7.4%
1.2%
-1.9%
Y-t-Y
-13.7%
2.6%
1.8%
6.4%
-7.4%
-0.6%
6.1%
-13.8%
-5.8%
Notices of Default – So CAL
County/Region
2007Q2
2007Q1
2006Q2
QTQ%Chg
YTY%Chg
Los Angeles
10,393
8,843
4,586
17.5%
126.6%
Orange
2,984
2,644
1,255
12.9%
137.8%
San Diego
4,383
3,931
1,778
11.5%
146.5%
Riverside
6,648
5,750
2,287
15.6%
190.7%
San Bernardino
5,141
4,357
1,839
18.0%
179.6%
Ventura
1,059
965
452
9.7%
134.3%
SoCal*
30,828
26,748
12,271
15.3%
151.2%
* Includes additional counties
SOURCE: Data Quick Information Systems
Non-Residential Permits, Valuations
7 Southern California Counties (1989-2006)
Millions of Dollars
Industrial Bldgs
Retail Bldgs
Office Bldgs
Other(Gap to Non Res Total)
12000
10000
8000
6000
4000
SOURCE: Real Estate Research Council
of Southern California
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
1989
2000
Los Angeles County
Economic Profile
The copyright laws of the United States (Title 17 U.S. Code) forbid the unauthorized reproduction of this report by any means,
including facsimile or computerized formats. Copyright © 2006, CALIFORNIA ASSOCIATION OF REALTORS®
Los Angeles County Profile
Characteristic
Statistic
State Rank
2007 Population Estimate
10,331,939
1
% Population Change 1990-2000
7.4%
47
% Population Change 1980-1990
18.5%
41
% White 2003
29.98%
% Hispanic 2003
46.31%
% Black 2003
8.69%
% Asian & Pacific Islander 2003
13.00%
2005 Per Capita Income
$22,727
2005 Median Household Income
$47,275
2004 Median Age
33.4
Land Area Square Miles
4,061
11
2000 Total Establishments
226,282
1
2004 Civilian Employment
4,710,269
Sales of Existing Detached Homes and Pacific West Consumer Confidence
Los Angeles County, August 2007 Sales: 3,426 Units, Down 15.2% Y-T-D, Down 23.9% Y-T-Y
UNITS
INDEX
Sales
Consumer Confidence
7,000
160
140
6,000
120
5,000
100
4,000
80
60
3,000
40
2,000
20
0
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
1,000
SOURCE: California Association of REALTORS®;
The Conference Board
Sales of Existing Detached Homes Annual Comparison
Los Angeles County, 2006 Sales: 49,662 Units, Down 20.1% Y-T-Y
UNITS
Dec
Nov
Oct
Aug
Sept
SOURCE: California Association of REALTORS®;
The Conference Board
Jul
0
Jun
0
May
1,000
Apr
10,000
2006
2004
2005
2007
Mar
2,000
Feb
20,000
Jan
3,000
2005
30,000
2003
4,000
2001
40,000
1999
5,000
1997
50,000
1995
6,000
1993
60,000
1991
7,000
1989
70,000
Jan-89
Jul-89
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Median Price of Existing Detached Homes
Los Angeles County, August 2007: $605,300, Up 2.6% Y-T-Y
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
SOURCE: California Association of REALTORS®
Median Price Annual Comparison
Los Angeles County, 2006: $584,820, Up 10.5% Y-T-Y
SOURCE: California Association of REALTORS®
Dec
Nov
Oct
Sept
Aug
Jul
$Jun
$-
May
$100,000
Apr
$100,000
2006
2004
2005
2007
Mar
$200,000
Feb
$200,000
Jan
$300,000
2005
$300,000
2003
$400,000
2001
$400,000
1999
$500,000
1997
$500,000
1995
$600,000
1993
$600,000
1991
$700,000
1989
$700,000
Median Home Sales Price Cont.
Los Angeles County
Aug-07
Aug-06
Yearly %
Change
Los Angeles Selected Areas
Westside
$1,047,500
$735,000
42.5%
West LA
$770,000
$799,000
-3.6%
Downtown LA/Central City
$728,250
$750,000
-2.9%
South LA
$428,500
$437,750
-2.1%
North East LA
$455,000
$470,000
-3.2%
SOURCE: C.A.R.; DataQuick Information Systems. The
price statistics are derived from all types of home sales -new and existing, condos and single-family.
Median Home Sales Price Cont.
Los Angeles County
Aug-07
Aug-06
Yearly %
Change
San Fernando Valley (Selected San Fernando Valley areas and cities)
San Fernando Valley
$545,000
$560,000
-2.7%
West San Fernando Valley
$560,000
$579,000
-3.3%
Northeast San Fernando Valley
$520,000
$535,000
-2.8%
Southeast San Fernando Valley
$609,500
$613,750
-0.7%
SOURCE: C.A.R.; DataQuick Information Systems. The
price statistics are derived from all types of home sales -new and existing, condos and single-family.
Median Home Sales Price Cont.
Los Angeles County
Aug-07
Southwest
Beach Cities
Aug-06
Yearly %
Change
Los Angeles Region (Selected Areas and Cities)
$1,150,000
$1,000,000
15.0%
South Bay
$720,000
$625,000
15.2%
Mar Vista
$800,000
$795,000
0.6%
$1,450,250
$1,450,000
0.0%
Palos Verdes Peninsula Area $1,215,000
$1,260,000
-3.6%
$795,000
-3.8%
Palos Verdes Estates
Westchester
$764,500
SOURCE: C.A.R.; DataQuick Information Systems. The
price statistics are derived from all types of home sales -new and existing, condos and single-family.
Jan-88
Jul-88
Jan-89
Jul-89
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Unsold Inventory Index
Los Angeles County, August 2007: 13.3 Months
MONTHS
30
25
20
15
10
5
0
SOURCE: California Association of REALTORS®
Unsold Inventory By Price Range
Los Angeles Existing Homes August 2007 vs. August 2006
Monthly Supply
Price Range (Thousands)
$1,000K+
$750-1000K
Last Year
This Year
$500-750K
$300-500K
$0-300K
0
2
SOURCE: California Association of REALTORS®
4
6
8
10
12
14
16
18
20
Median Time on the Market
Single-Family Homes – Los Angeles County, 2007 Q2: 50.4 Days
120
100
80
60
40
20
SOURCE: California Association of REALTORS®
Q1/07
Q1/06
Q1/05
Q1/04
Q1/03
Q1/02
Q1/01
Q1/00
Q1/99
Q1/98
Q1/97
Q1/96
Q1/95
Q1/94
Q1/93
Q1/92
Q1/91
Q1/90
Q1/89
Q1/88
Q1/87
0
Q1/90
Q3/90
Q1/91
Q3/91
Q1/92
Q3/92
Q1/93
Q3/93
Q1/94
Q3/94
Q1/95
Q3/95
Q1/96
Q3/96
Q1/97
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Q3/06
Q1/07
Foreclosures
Los Angeles County
THOUSANDS
10
9
8
7
6
5
4
3
2
1
0
SOURCE: Real Estate Research Council
Proportion of Foreclosures in Housing Transfers
Los Angeles County
30%
25%
20%
15%
10%
SOURCE: Real Estate Research Council
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0%
1994
5%
Asking Rents for Class A&B Apartments
Los Angeles County, 2007 Q2: $1,660 Up 6.5% Y-T-Y
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
SOURCE: California Association of REALTORS®
Q2/07
Q3/06
Q4/05
Q1/05
Q2/04
Q3/03
Q4/02
Q1/02
Q2/01
Q3/00
Q4/99
Q1/99
Q2/98
Q3/97
Q2/96
1994
$0
1991
$200
Vacancy Rates for Class A&B Apartments
Los Angeles County, 2007 Q2: 4.4%
VACANCY RATE
12%
10%
8%
6%
4%
SOURCE: California Association of REALTORS®
Q1/07
Q2/06
Q3/05
Q4/04
Q1/04
Q2/03
Q3/02
Q4/01
Q1/01
Q2/00
Q3/99
Q4/98
Q1/98
Q2/97
Q4/95
1993
0%
1990
2%
Jan-88
Jul-88
Jan-89
Jul-89
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
New Housing Permits
LA County, August 2007: 1,768 Units, Down 19.3% Y-T-D
5500
5000
Single Family
SOURCE: Construction Industry Research Board
Multi-Family
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Median Price for New Homes
Los Angeles County 2Q07 Detached: $456,229, Attached: $527,000
$700,000
$600,000
$500,000
Detached
Attached
$400,000
$300,000
$200,000
$100,000
Q1/90
Q3/90
Q1/91
Q3/91
Q1/92
Q3/92
Q1/93
Q3/93
Q1/94
Q3/94
Q1/95
Q3/95
Q1/96
Q3/96
Q1/97
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Q3/06
Q1/07
$0
SOURCE: California Association of REALTORS®; Hanley Wood
Q1/90
Q3/90
Q1/91
Q3/91
Q1/92
Q3/92
Q1/93
Q3/93
Q1/94
Q3/94
Q1/95
Q3/95
Q1/96
Q3/96
Q1/97
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Q3/06
Q1/07
New Home Sales
Los Angeles County (Attached), 2007 Q2 Sales: 1,126 Units
1600
1400
1200
1000
800
600
400
200
0
SOURCE: California Association of REALTORS®; Hanley Wood
New Home Sales
Los Angeles County (Detached), 2007 Q2 Sales: 750 Units
2000
1800
1600
1400
1200
1000
800
600
400
200
SOURCE: California Association of REALTORS®; Hanley Wood
Q2/07
Q3/06
Q4/05
Q1/05
Q2/04
Q3/03
Q4/02
Q1/02
Q2/01
Q3/00
Q4/99
Q1/99
Q2/98
Q3/97
Q4/96
Q1/96
Q2/95
Q3/94
Q4/93
Q1/93
Q2/92
Q3/91
Q4/90
Q1/90
0
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Nonfarm Employment
Los Angeles County, August 2007: Up 0.9% Y-T-Y
Y-T-Y PERCENT CHANGE
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
SOURCE: CA Employment Development Division
Q1/89
Q3/89
Q1/90
Q3/90
Q1/91
Q3/91
Q1/92
Q3/92
Q1/93
Q3/93
Q1/94
Q3/94
Q1/95
Q3/95
Q1/96
Q3/96
Q1/97
Q3/97
Q1/98
Q3/98
Q1/99
Q3/99
Q1/00
Q3/00
Q1/01
Q3/01
Q1/02
Q3/02
Q1/03
Q3/03
Q1/04
Q3/04
Q1/05
Q3/05
Q1/06
Taxable Sales
Los Angeles County
ANNUAL PERCENT CHANGE
15%
10%
5%
0%
-5%
-10%
SOURCE: CA State Board of Equalization
Sources of Population Growth
Los Angeles County (1981-2005)
200,000
150,000
100,000
50,000
0
-50,000
Natural Increase
Net Migration
-100,000
SOURCE: CA Department of Finance
04
05
20
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
91
92
19
19
90
19
89
19
88
19
86
87
19
19
85
19
84
19
83
19
82
19
19
81
-150,000
Net Immigration Vs. Domestic Migration
Los Angeles County
200,000
Net Immigration
150,000
Domestic Migration
100,000
50,000
0
-50,000
-100,000
-150,000
-200,000
-250,000
-300,000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
SOURCE: CA Department of Finance
Where are new Los Angeles County
households coming from?
•
•
•
•
•
•
•
•
Orange County (14,943)
San Bernardino (8,963)
San Diego (4,685)
Ventura (4,138)
Riverside (4,118)
Total incoming for 2005: 96,000
Total outgoing for 2005: 136,116
Source: NAR Relocation Report 2005 – IRS Data; Item 187-06061
Top 10 Home Buyer Surnames
Los Angeles County (2005)
KIM
GARCIA
LEE
RODRIGUEZ
HERNANDEZ
GONZALEZ
LOPEZ
MARTINEZ
RAMIREZ
SANCHEZ
0
100
200
300
400
Number of Buyers
SOURCE: DataQuick Information Systems
500
600
2008 Forecast
U.S. Economic Forecast
2003
2004
2005
2006
2007p 2008f
US GDP
2.5%
3.6%
3.1%
2.9%
2.0%
2.7%
Nonfarm Job
Growth
-0.3%
1.1%
1.7%
1.8%
1.3%
1.0%
Unemployment
6.0%
5.5%
5.1%
4.6%
4.6%
4.9%
CPI
2.3%
2.7%
3.4%
3.2%
2.9%
2.3%
Real Disposable
Income
2.4%
3.4%
1.2%
2.6%
3.4%
3.2%
SOURCE: California Association of REALTORS®
California Economic Forecast
Nonfarm Job
Growth
Unemployment
Rate
Population
Growth
Real Disposable
Income, %
Change
2003
2004
2005
2006
2007p
2008f
-0.5%
1.0%
1.8%
1.9%
1.3%
0.9%
6.8%
6.2%
5.4%
4.9%
5.2%
5.7%
1.7%
1.5%
1.3%
1.3%
1.2%
1.1%
2.1%
4.1%
1.0%
2.5%
2.6%
2.6%
SOURCE: California Association of REALTORS®
Sales More Volatile Than Prices
Price Stickiness in Down Market …Most Owners Don’t Sell
Sales of Existing Detached Homes
Median Price
1994
700,000
1978
UNITS/MEDIAN PRICE $
600,000
500,000
400,000
300,000
200,000
100,000
SOURCE: California Association of REALTORS®
2006
2004
2002
2000
1998
1996
1992
1990
1988
1986
1984
1982
1980
1976
1974
1972
1970
0
California Housing Market Forecast
2003
2004
2005
2006
2007p
2008f
SFH Resales
(thousands)
601.8
624.7
625.0
477.5
367.5
334.5
% Change
5.1%
3.8%
0.04%
-23.6% -23.0%
-9.0%
Median Price
$372.7 $450.8 $524.0 $556.6 $576.0 $553.0
($ thousands)
17.9%
20.9%
16.2%
6.2%
3.5%
-4.0%
30-Yr FRM
5.8%
5.8%
5.9%
6.4%
6.5%
6.5%
1-Yr ARM
3.8%
3.9%
4.5%
5.5%
5.5%
5.2%
% Change
SOURCE: California Association of REALTORS®
Thank You
[email protected]