South Bay Estate Planning Council Kimberly Ritter-Martinez, - - PowerPoint PPT Presentation
South Bay Estate Planning Council Kimberly Ritter-Martinez, Economist LAEDC Institute for Applied Economics May 11, 2017 Outline U.S. Economy California and Southern California Southern California Housing Market Conclusion Los
South Bay Estate Planning Council Kimberly Ritter-Martinez, Economist
LAEDC Institute for Applied Economics May 11, 2017
▪ U.S. Economy ▪ California and Southern California ▪ Southern California Housing Market ▪ Conclusion
Los Angeles County Economic Development Corp.
2 4 6 2008q1 2008q3 2009q1 2009q3 2010q1 2010q3 2011q1 2011q3 2012q1 2012q3 2013q1 2013q3 2014q1 2014q3 2015q1 2015q3 2016q1 2016q3 2017q1 (f) 2017q3 (f)
% Annual Growth Rate, Quarter-Quarter
Sources: Bureau of Labor Statistics, Forecasts by Wells Fargo
2016 Real GDP Growth 1.6%; Forecast for 2017 2.1%
Sources: Bureau of Economic Analysis, forecasts by Wells Fargo
First Quarter Stumble
Annual Growth Rate, Quarter-Quarter
2 4 6 2008q1 2008q3 2009q1 2009q3 2010q1 2010q3 2011q1 2011q3 2012q1 2012q3 2013q1 2013q3 2014q1 2014q3 2015q1 2015q3 2016q1 2016q3 2017q1
Source: US Bureau of Economic Analysis
Annual % Change
5 10 15 20 25 Total Structures Equipment Intellectual Property Residential 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1
Sources: Bureau of Economic Analysis
Contribution to % Change in Real GDP
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
2014q1 2014q2 2014q3 2014q4 2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1
Consumer Spending Gross Fixed Investment
Source: US Bureau of Labor Statistics
Kyser Center for Economic Research
Percent change from a year ago, 100 = 1982-1984
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017
All Items Core
March 2016: All Items 2.4%; Core +2.0%
1 2 3 4 5 6 7 8 9 2000-01 2001-01 2002-01 2003-01 2004-01 2005-01 2006-01 2007-01 2008-01 2009-01 2010-01 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01
Fed Funds Rate 10-Year Treasury 30-Year Fixed Mortgage
Source: Federal Reserve; Forecasts by Wells Fargo
Kyser Center for Economic Research
Forecast
Interest rate %
Source: Bureau of Labor Statistics
MONTH TO MONTH CHANGES IN THOUSANDS, SEASONALLY ADJUSTED
200 400 600
Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17
March 2017: 98,000 Jobs, up by 1.5% Y/Y
Sources: Bureau of Labor Statistics
March, Percent Unemployed (SA)
2 4 6 8 10 12 14 16 18 “Headline” Unemployment Rate 4.5% U-6 Unemployment Rate 8.9%
Source: Atlanta Federal Reserve Wage Tracker
3-Month Moving Average of Median Wage Growth
Recession
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
1/1/2007 5/1/2007 9/1/2007 1/1/2008 5/1/2008 9/1/2008 1/1/2009 5/1/2009 9/1/2009 1/1/2010 5/1/2010 9/1/2010 1/1/2011 5/1/2011 9/1/2011 1/1/2012 5/1/2012 9/1/2012 1/1/2013 5/1/2013 9/1/2013 1/1/2014 5/1/2014 9/1/2014 1/1/2015 5/1/2015 9/1/2015 1/1/2016 5/1/2016 9/1/2016 1/1/2017
Overall Services Full-Time
Month to month changes in thousands, seasonally adjusted
Source: CA EDD, Labor Market Information Division
50 100 150
Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17
March 2017: 19,300 Jobs m/m and 346,400 | 2.1% y/y
Source: CA EDD, Labor Market Information Division
200 400 600
Health Care Leisure & Hospitality Professional Business Srvs. Trade, Trans, Utilities Educational Srvs. Information Other Services Mining & Logging Financial Activities Construction Manufacturing
10 year 1 year Jobs, Thousands
Source: CA EDD, Labor Market Information Division
Metro Area (YTY Job Gain March) Annual percentage change in nonfarm jobs (SA) 0.6% 1.3% 1.7% 1.9% 2.0% 2.0% 2.0% 2.7% 2.8% 2.8% 3.4% 3.5%
Bakersfield (1,600) Orange County (20,500) Los Angeles (72,800) Stockton (2,500) San Jose (21,200) Sacramento (18,900) San Diego (28,200) Fresno (8,800) Oakland (31,400) Ventura (8,300) Modesto (5,800) Inland Empire (48,800)
Source: CA EDD, Labor Market Information Division
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Jan-07 Jun-07 Nov-07 Apr-08 Sep-08 Feb-09 Jul-09 Dec-09 May-10 Oct-10 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 Oct-15 Mar-16 Aug-16 Jan-17 Los Angeles County (4.3%) Orange County (3.7%) Inland Empire (5.3%) Ventura County (4.6%)
March 2017
Source: CA EDD, Labor Market Information Division
Industry, Annual % Change Number of Jobs, Thousands
0.7 0.9 1.5 2.3 4.3 4.9 6.6 8.2 8.6 8.7 9.5 13.7 26.2
Information (-2.2%)
Minining & Logging (-8.1%) Finance & Insurance (-0.1%) Retail Trade (0.2%) Mgmt of Companies (1.6%) Trans, Warehousing, Utilities (0.8%) Real Estate (2.9%) Wholesale Trade (1.9%) Construction (3.7%) Admin & Support (2.5%) Other Services (5.4%)
Government (1.5%) Prof, Sci, Tech Services (3.5%) Leisure & Hospitality (2.8%) Health Care (4.1%)
March 2017: Gain +1.9%, +84,300 jobs (y/y), NSA
80 100 120 140 160 180 200 220
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 2017f 2018f 2019f 2020f
U.S. California L.A. County
Source: US Bureau of Economic Analysis, IHS
Kyser Center for Economic Research
Annual % Change
Indexed 1990 = 100
Fewer manufacturing jobs Ave Wage: $52K
More jobs in food services Ave Wage: $20K
Fewer manufacturing jobs Ave Wage: $135K
More Internet Jobs Ave Wage: $295K
Ave wage in 2015 for all workers: $57,000
Ave wage in 2015 for all workers $117,000
County % High School % Bachelors or Higher
San Bernardino 78.6% 19.0% Riverside 80.1% 20.9% Los Angeles 77.3% 30.3% Ventura 83.1% 31.7% San Diego 86.0% 35.7% Orange 84.3% 37.7% Santa Clara 87.0% 47.9%
Source: Census, ACS Estimates 5-Yr Averages 2011-2015
Population 25 years and older
84.6% 77.3% 75.6% 71.2% 34.1% 31.7% 28.9% 26.5% 25-34 Years 35-44 Years 45-64 Years 65 Years & up
High School Graduate or Higher BA Degree or Higher
Source: U.S. Census Bureau, ACE 2010-2014 5-Year Estimates
Educational Attainment by Age in L.A. County
Source: California Association of Realtors
Kyser Center for Economic Research
County Mar-17 Mar-16 YTY % Change Los Angeles County $465,810 $441,700 5.5% Orange County $760,000 $720,200 5.5% Riverside County $375,000 $350,000 7.1% San Bernardino County $263,100 $237,350 10.8% Ventura County $672,220 $620,020 8.4% California $517,020 $484,120 6.8%
Source: US Census ACS 5-year estimates, C.A.R.
Kyser Center for Economic Research
California Santa Clara
(Silicon Valley)
Los Angeles Median Home Price (4q16)
Single-Family Homes
$511,360 $1,005,000 $503,400 Median HH Income
(2011-2015)
$61,818 $96,310 $56,196 Minimum Qualifying Income (4q16) $100,800 $198,100 $99,230 Housing Affordability Index (4q16) 31 22 28
Kyser Center for Economic Research
Source: Real Estate Research Council, Harvard Joint Center for Housing Studies
$2,180 $1,965 $1,367 $1,418 $1,890 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 05Q1 06Q1 07Q1 08Q1 09Q1 10Q1 11Q1 12Q1 13Q1 14Q1 15Q1 16Q1 Los Angeles Orange Riverside San Bernardino Ventura
Source: CIRB, California Home Building Foundation, forecast by LAEDC
Kyser Center for Economic Research
61.3 63.9 48.7 26.4 11.0 8.6 9.4 8.2 10.5 13.8 15.4 16.5 17.6 30.2 24.3 27.6 23.3 15.8 6.3 8.1 12.9 13.5 21.9 25.2 28.2 26.3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Single-Family Multi-Family Units permitted, thousands
Job and income growth are positive Lending standards are reasonable Household formation is rebounding Homeownership rates stabilizing?
Supply well below long-run average Boomers are not moving Share of first-time buyers is LOW Affordability-constrained Millennials looking outside California
Source: American Community Survey 2011-2015
14.8% 18.1% 29.2% 25.1% 13.7% 22.7% 20.7% 26.4% 19.8% 10.5% <HS HS Diploma Some Collage or AA BA Degree Graduate/Professional Degree
South Bay Educational Attainment Los Angeles County Educational Attainment
Source: American Community Survey, 2011-2015
Hispanic 48.2% White 26.9% Asian 14.0% Black 8.0% Two or More Races 2.2% Pacific Islander 0.2% Other 0.3% Native 0.2%
Hispanic;
32.2% White 30.7% Asian 17.5% Black 14.6% Two or More Races 3.9% Pacific Islander 0.6% Other 0.4% Native 0.2%
South Bay Los Angeles County
Source: CA EDD, Labor Market Information Division
6.9% 6.8% 5.2% 5.2% 5.0% 4.7% 4.4% 3.7% 3.6% 3.2% 3.0% 2.9% 2.5% 2.5% 2.2% 2.1% 0.8% Inglewood Carson Gardena Los Angeles County Lawndale Hawthorne Avalon Lomita Torrance Redondo Beach Rolling Hills El Segundo Rancho Palos Verdes Rolling Hills Estates Hermosa Beach Manhattan Beach Palos Verdes Estates
Average for 2016
8.1% 11.2% 17.9% 14.2% 2004 2014 Health Services Manufacturing
% share of total employment
Sources: California EDD., LMID ES202 data
518 525 530 541 509 509 514 531 543 553 561 568
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e
Annual average employment, thousands
Sources: California EDD., LMID ES202 data
Source: California Home Building Foundation
Number of Units Permitted
200 400 600 800 1,000 1,200 1,400 1,600 1,800 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Single-Family Multi-Family
Source: California Homebuilding Foundation
Value of all non-residential construction, $ Thousands
100,000 200,000 300,000 400,000 500,000 600,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: California Board of Equalization
0.0% 5.0% 10.0%
2,000 4,000 6,000 8,000 10,000 12,000 14,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Taxable Sales Y/Y % Change $ Millions
8.7% 8.8% 8.9% 9.0% 9.1% 9.2%
Share of L.A. County Retail Sales
0.0 5.0 10.0 15.0 20.0 25.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 South Bay Los Angeles County
% Vacancy, quarterly average
Source: CBRE
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 South Bay Los Angeles County
Source: CBRE
% Vacancy, quarterly average
▪
Slightly faster economic growth this year
▪
Job gains solid
▪
Consumer momentum holding
▪
Real estate/construction outlook good
▪
Low but rising energy prices
▪
Consumer credit is expanding
▪
Fed policy firming but will be cautious
But.....
▪ Geopolitical risks ▪ Political gridlock/policy uncertainty in U.S. ▪ Health care, Tax reform ▪ Housing shortage in California
Thank you!
For Further Insight into the Local Economy Visit: LAEDC Research & Data:
http://laedc.org/research-data/