The (insert word here) Recovery C Continues ti Maricopa County - - PowerPoint PPT Presentation
The (insert word here) Recovery C Continues ti Maricopa County Board of Supervisors September 9 th , 2013 Presented By: Elliott D. Pollack CEO, Elliott D. Pollack & Company Elliott D. Pollack & Company You Choose You Choose
The (insert word here) Recovery C ti Continues…
Maricopa County Board of Supervisors September 9 th, 2013 Presented By: Elliott D. Pollack CEO, Elliott D. Pollack & Company
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Feeble Feeble Frail Sickly Li tl Listless Weak Insipid p Wishy-Washy Vapid Bland Bland Lackluster Ineffective P th ti
Elliott D. Pollack & Company
Pathetic
Uninspired Uninspired Indifferent Unexceptional Run of the mill Run-of-the-mill Inferior Of poor quality Second rate Bogus Crappy ppy Lousy Poor Rinky Dink
Elliott D. Pollack & Company
Rinky Dink
United States Real Gross Domestic Product*
Annual Growth 1970 - 2014**
Source: U.S. Bureau of Economic Analysis & Blue Chip Economic Indicators
7 3%8%
5.2% 5.6% 5.4% 4.6% 5.6% 4.6% 7.3% 4.2% 3.5% 3.5% 4.2% 3 7% 3 6% 4.0% 3.8% 4.5% 4.5% 4.8% 4.1% 3.8%3 4%4% 6% 8%
0.2% 3.3% 3.2% 2.6% 3.7% 1.9% 3.6% 2.7% 2.7% 3.8% 0.9% 1.8% 2.8% 3.4% 2.7% 1.8% 2.5% 1.8% 2.8% 1.5% 2.6%2% 4%
0%
1 9 7 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 1 9 8 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 2 2 2 4 2 6 2 8 2 1 2 1 2 2 1 4
Elliott D. Pollack & Company
* Based on chained 2009 dollars. ** 2013 and 2014 are a forecast from the Blue Chip Economic Indicators, August 2013
Recession Periods 3.8% = 40-year avg during expansion 3.2% = 20-year avg during expansion
(insert word here) recovery (insert word here) recovery
Elliott D. Pollack & Company
NATIONAL ECONOMY NATIONAL ECONOMY – C ti d b th Continued subpar growth. But, recovery should continue But, recovery should continue and growth should accelerate.
Elliott D. Pollack & Company
Good News – The recovery should continue should continue because there are no significant significant imbalances.
Elliott D. Pollack & Company
Ordinary All right Good Good Fair Acceptable Adequate Tolerable Decent Decent
Elliott D. Pollack & Company
Overall
No irrational exuberance Consumers Consumers
N t th i d
Elliott D. Pollack & Company
Business Business
No capacity issues
Government
No longer a drag on economy
Housing
Elliott D. Pollack & Company
Prices up but only as a rebound
Elliott D. Pollack & Company
Financial Obligation Ratio** Financial Obligation Ratio 1980 – 2013*
Source: Federal Reserve
Recession Periods
19.0% 20.0% 18.0% 17.0% 15.0% 16.0%
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3Elliott D. Pollack & Company
1 9 8 Q 1 1 9 8 1 Q 2 1 9 8 2 Q 3 1 9 8 3 Q 4 1 9 8 5 Q 1 1 9 8 6 Q 2 1 9 8 7 Q 3 1 9 8 8 Q 4 1 9 9 Q 1 1 9 9 1 Q 2 1 9 9 2 Q 3 1 9 9 3 Q 4 1 9 9 5 Q 1 1 9 9 6 Q 2 1 9 9 7 Q 3 1 9 9 8 Q 4 2 Q 1 2 1 Q 2 2 2 Q 3 2 3 Q 4 2 5 Q 1 2 6 Q 2 2 7 Q 3 2 8 Q 4 2 1 Q 1 2 1 1 Q 2 2 1 2 Q 3 *Data through first quarter 2013 **Ratio of mortgage and consumer debt (including auto, rent and tax payments) to disposable income. Elliott D. Pollack & Company
Household Debt Composition Percent Change Year Ago 25% 2004 – 2012
Source: The Federal Reserve Bank of New York Recession Periods
10% 15% 20% 0% 5% 10%
0%
04:Q1 04:Q2 04:Q3 04:Q4 05:Q1 05:Q2 05:Q3 05:Q4 06:Q1 06:Q2 06:Q3 06:Q4 07:Q1 07:Q2 07:Q3 07:Q4 08:Q1 08:Q2 08:Q3 08:Q4 09:Q1 09:Q2 09:Q3 09:Q4 10:Q1 10:Q2 10:Q3 10:Q4 11:Q1 11:Q2 11:Q3 11:Q4 12:Q1 12:Q2 12:Q3 12:Q4
Elliott D. Pollack & Company
Non Mortgage Ex. Auto Auto Loans
Elliott D. Pollack & Company
Real Disposable Personal Income Percent Change Year Ago 7% 2000 – 2013*
Source: The Federal Reserve Bank of St. Louis Recession Periods
4% 5% 6% 2% 3% 4% 0% 1% 2%
End of tax holiday
End of tax holiday
Elliott D. Pollack & Company
*Data through second quarter 2013
US Non-Farm Employment Change from Prior Month (S/A) Change from Prior Month (S/A) June 2010 – July 2013
Source: Bureau Labor of Statistics
400
228 205 304 209 225 230 311 271 205 247 219 332 199
250 300 350 400
144 95 69 196 205 115 209 78 132 166 174 205 112 125 87 153 165 138 160 148 142 199 176 188 162
100 150 200
86
1
(100) (50) 50
(250) (200) (150) (100)
Elliott D. Pollack & Company
US Non-Farm Employment Percent of Persons Working Full Time (S/A) Percent of Persons Working Full Time (S/A) 1970 – 2013*
Source: Bureau Labor of Statistics
87.0%
Recession Periods
85.0% 86.0% 87.0% 83.0% 84.0%
LT Average
80.0% 81.0% 82.0% 78.0% 79.0%
Elliott D. Pollack & Company
77.0%
*Data through July 2013.
Hours Worked P t Ch f Y A Percent Change from Year Ago
1976 – 2013*
Source: Bureau of Labor Statistics Recession Periods
6% 8% 10% 0% 2% 4%
0%
Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1 Q 1
Elliott D. Pollack & Company
1 9 7 6 Q 1 1 9 7 7 Q 1 1 9 7 8 Q 1 1 9 7 9 Q 1 1 9 8 Q 1 1 9 8 1 Q 1 1 9 8 2 Q 1 1 9 8 3 Q 1 1 9 8 4 Q 1 1 9 8 5 Q 1 1 9 8 6 Q 1 1 9 8 7 Q 1 1 9 8 8 Q 1 1 9 8 9 Q 1 1 9 9 Q 1 1 9 9 1 Q 1 1 9 9 2 Q 1 1 9 9 3 Q 1 1 9 9 4 Q 1 1 9 9 5 Q 1 1 9 9 6 Q 1 1 9 9 7 Q 1 1 9 9 8 Q 1 1 9 9 9 Q 1 2 Q 1 2 1 Q 1 2 2 Q 1 2 3 Q 1 2 4 Q 1 2 5 Q 1 2 6 Q 1 2 7 Q 1 2 8 Q 1 2 9 Q 1 2 1 Q 1 2 1 1 Q 1 2 1 2 Q 1 2 1 3 Q 1
*Data through second quarter 2013
WEALTH EFFECT
Housing prices are up Housing prices are up. Stock market is up Stock market is up from a year ago.
Elliott D. Pollack & Company
Wealth Wealth Effect…
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U.S. Household Net Worth (Billions of Dollars, NSA) (Billions of Dollars, NSA) 1970 - 2013*
Source: Board of Governors of the Federal Reserve System Recession Periods
$70,000 $75,000 $55,000 $60,000 $65,000 $35,000 $40,000 $45,000 $50,000 $20,000 $25,000 $30,000 $0 $5,000 $10,000 $15,000
Elliott D. Pollack & Company
*Data through first quarter 2013.
U.S. Household Assets Financial (left) v. Tangible (right) ( ) g ( g ) as a Percent of Total Assets 1970 - 2013*
Source: Board of Governors of the Federal Reserve System Recession Periods
45.0% 75.0% 40.0% 70.0% 35.0% 65.0% 30.0% 60.0% 25.0% 55.0%
Elliott D. Pollack & Company
*Data through first quarter 2013. Financial Tangible
Are you talking to your banker?
Elliott D. Pollack & Company
Net Percentage of Large U.S. Banks Reporting Tougher Standards versus Eased Standards
2007Q1 – 2013Q2
Source: Federal Reserve Board of Governors Source: Federal Reserve, Board of Governors
70% 80% 50% 60% 70% 20% 30% 40% 0% 10% 20%
Elliott D. Pollack & Company
7 Q 1 7 Q 3 8 Q 1 8 Q 3 9 Q 1 9 Q 3 1 Q 1 1 Q 3 1 1 Q 1 1 1 Q 3 1 2 Q 1 1 2 Q 3 1 3 Q 1
Net Percentage of Large U.S. Banks Reporting Tougher Standards versus Eased Standards Reporting Tougher Standards versus Eased Standards
1997 – 2013*
Source: Federal Reserve, Board of Governors Recession Periods 50% 70% Recession Periods
10% 30%
Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Elliott D. Pollack & Company 1 9 9 7 Q 1 9 9 8 Q 1 9 9 8 Q 1 9 9 9 Q 1 9 9 9 Q 2 Q 2 Q 2 1 Q 2 1 Q 2 2 Q 2 2 Q 2 3 Q 2 3 Q 2 4 Q 2 4 Q 2 5 Q 2 5 Q 2 6 Q 2 6 Q 2 7 Q 2 7 Q 2 8 Q 2 8 Q 2 9 Q 2 9 Q 2 1 Q 2 1 Q 2 1 1 Q 2 1 1 Q 2 1 2 Q 2 1 2 Q 2 1 3 Q
* Data as of July 2013 survey.
Net Percentage of Large U.S. Banks Reporting Tougher Standards versus Eased Standards Reporting Tougher Standards versus Eased Standards
1997 – 2013*
Source: Federal Reserve, Board of Governors Recession Periods 70% 80% 90% Recession Periods 30% 40% 50% 60%
Small Firms Large &
0% 10% 20% 30%
g Medium Firms
Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Q 4 Q 2 Elliott D. Pollack & Company 1 9 9 7 Q 1 9 9 8 Q 1 9 9 8 Q 1 9 9 9 Q 1 9 9 9 Q 2 Q 2 Q 2 1 Q 2 1 Q 2 2 Q 2 2 Q 2 3 Q 2 3 Q 2 4 Q 2 4 Q 2 5 Q 2 5 Q 2 6 Q 2 6 Q 2 7 Q 2 7 Q 2 8 Q 2 8 Q 2 9 Q 2 9 Q 2 1 Q 2 1 Q 2 1 1 Q 2 1 1 Q 2 1 2 Q 2 1 2 Q 2 1 3 Q
* Data as of July 2013 survey.
Jobs are being created at a slow rate. Those that have jobs are spending a little more but Those that have jobs are spending a little more but
will remain cautious. Unemployment to remain high but should trend
Unemployment to remain high, but should trend
lower. W lth l l i i
Wealth levels are improving.
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Corporate Net Cash Flow (Billions of Dollars, SA) (Billions of Dollars, SA) 1975-2013*
Source: BEA
2,400
Recession Periods
1,800 2,000 2,200 2,400 1,200 1,400 1,600 , 600 800 1,000 200 400
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Elliott D. Pollack & Company
1975Q1 1976Q1 1977Q1 1978Q1 1979Q1 1980Q1 1981Q1 1982Q1 1983Q1 1984Q1 1985Q1 1986Q1 1987Q1 1988Q1 1989Q1 1990Q1 1991Q1 1992Q1 1993Q1 1994Q1 1995Q1 1996Q1 1997Q1 1998Q1 1999Q1 2000Q1 2001Q1 2002Q1 2003Q1 2004Q1 2005Q1 2006Q1 2007Q1 2008Q1 2009Q1 2010Q1 2011Q1 2012 Q1 2013 Q1
*Data through second quarter 2013
Business Spending on Equipment Percent Change from Prior Quarter Percent Change from Prior Quarter 2005 – 2013*
Source: Bureau of Economic Analysis
Recession Periods
2 0% 4.0% 6.0%
0.0% 2.0%
12 0%
Elliott D. Pollack & Company
*Data through first quarter 2013
Business Spending on Plant Percent Change from Prior Quarter Percent Change from Prior Quarter 2005 – 2013*
Source: Bureau of Economic Analysis
Recession Periods
6.0% 8.0% 10.0% 2 0% 0.0% 2.0% 4.0% 8 0%
Elliott D. Pollack & Company
14.0%
*Data through first quarter 2013 Note: Data smoothed in Q1 & Q2 of 2011
Capacity Utilization Rate 1970 2013*
90
1970 – 2013*
Source: The Federal Reserve Bank of St. Louis Recession Periods
85 80 70 75 65
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*Data through July 2013
B i i b tt h
Businesses are in better shape. Spending on equipment to continue to Spending on equipment to continue to
grow.
Spending on plant will lag until capacity Spending on plant will lag until capacity
utilization goes higher…getting close.
Employment to continue to grow.
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Total Government Expenditures Percent Change Year Ago Percent Change Year Ago
1970-2012
Source: U.S. Bureau of Economic Analysis
20% 15% 20% 10% 15% 5% 10% 0%
Elliott D. Pollack & Company
Recession
Federal Government Expenditures Percent Change Year Ago Percent Change Year Ago
1970-2012
Source: U.S. Bureau of Economic Analysis
25% 20% 25% 10% 15% 5% 10%
0%
Elliott D. Pollack & Company
Recession
State and Local Government Expenditures Percent Change Year Ago Percent Change Year Ago
1970-2012
Source: U.S. Bureau of Economic Analysis
20% 15% 20% 10% 5%
0%
Elliott D. Pollack & Company
Recession
Federal Surplus (+) or Deficit(-) as Percent of GDP 1950-2017*
Source: Office of Management and Budget
4% 0% 2%
3 6 9 2 5 8 1 4 7 3 6 9 2 5 8 1 4 7 3 6
Elliott D. Pollack & Company
1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
*2012-2017 are estimates
Individual Income Taxes as Percent of GDP 1980-2017*
10% 11% Source: Office of Management and Budget 8% 9% 10% 7% 8% 5% 6% 4%
Elliott D. Pollack & Company
Personal Income Payments 30 year average
*2012-2017 are estimates
Federal Outlays as Percent of GDP 1980-2017*
24% 26% Source: Office of Management and Budget 22% 24% 18% 20% 16% 18% 14%
Elliott D. Pollack & Company
Outlays 30 year average
*2012-2017 are estimates
Government no longer a drag on
economy in terms of GDP.
Most major issues still ahead of
us.
Elliott D. Pollack & Company
No major imbalances Consumer income growth to continue to
be slow be slow
But likely to continue Housing recovery likely to continue Business in good shape Federal government still creating
uncertainties uncertainties
Government no longer a big drag on GDP
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Job Growth 2006
Alaska 24
10
Job Growth 2006
Source: US BLS Source: US BLS
9 5 7 10 1 3 23 15 4 5 14 2 3 23 15 11
Hawaii
8 14 11
Jobs growing Top 10
6 50
Elliott D. Pollack & Company
Jobs declining
Job Growth 2010
Alaska 2
48 8
Job Growth 2010
Source: US BLS Source: US BLS
27 39 1
2
18 48 8 7 46 23 41 40 50 39 4 5 6 9 7 32 49 23 41 40 43
Hawaii
10 6 32 3 43
Jobs growing Top 10
Elliott D. Pollack & Company
Jobs declining
Job Growth 2013
Alaska 50 6
Job Growth 2013
YTD July 2013 vs YTD July 2012 Source: US BLS
21 4 1 50 6 10 49 11 5 9 4 2 7 11 5 38 Hawaii 23 3 38 Jobs growing Top 10 8
Elliott D. Pollack & Company
Jobs declining p
Job Growth 2013
Alaska 50 9
Job Growth 2013
July 2013 vs July 2012 Source: US BLS
19 6 2 50 9 16 8 29 24 7 42 6 1 4 24 7 40 Hawaii 35 5 40 Jobs growing Top 10 3 10
Elliott D. Pollack & Company
Jobs declining p
Arizona Rank Employment Growth Employment Growth 1990-2013*
Source: Bureau of Labor Statistics
2 2 2 2 1 2 2 2 2 5 2 2 2 2 1 2 5 9 10 4 2 2 2 8 7 19 23 17 30 30 46 49 49
Elliott D. Pollack & Company
*Year-to-date through July
Phoenix-Mesa Employment Growth
(Ranking among all metro areas greater than 1 000 000)
Year Rank # MSA’s Year Rank # MSA’s
(Ranking among all metro areas greater than 1,000,000)
Source: Arizona State University, U.S. Bureau of Labor Statistics
2003 3 25 2004 3 25 2005 1 26 1991 4 19 1992 4 19 1993 2 19 2005 1 26 2006 1 27 2007 9 28 2008 24 28 1994 1 19 1995 1 20 1996 1 21 2008 24 28 2009 24 25 2010 24 24 1996 1 21 1997 1 22 1998 1 23 2011 14 25 2012 6 27 2013* 5 28 1999 3 24 2000 9 25 2001 7 26
Elliott D. Pollack & Company
2002 5 25
*Year-to-date, July 2013
Greater Phoenix Employment* Greater Phoenix Employment
Source: Bureau of Labor Statistics
Sectors in Decline Net Change % Change Sectors Improving Net Change % Change Sectors in Decline Change Change Other Services
Sectors Improving Change Change Trade, Transp, Utilities 10,400 2.9% Education & Health Services 9,100 3.7% Leisure & Hospitality 8 800 5 0% Leisure & Hospitality 8,800 5.0% Construction 8,400 9.4% Government 5,900 3.0% P f i l & B S i 5 700 2 0% Professional & Bus Services 5,700 2.0% Financial Activities 5,000 3.4% Information 400 1.3% Manufacturing 200 0.2% Natural Resources & Mining 0.0%
Elliott D. Pollack & Company
*July 2013/ July 2012
Top Sources of New Jobs p Arizona
Source: Bureau of Labor Statistics
Job Growth Wage Total 67,600 $45,237 1 Food Services 10 100 $16 452 1 Food Services 10,100 $16,452 2 Health Care 8,900 $47,847 3 Construction 8,200 $47,020 4 Financial Activities 7,400 $59,564 5 Wholesale Trade 6,200 $69,918 6 Administrative Services 5,700 $32,741 7 Retail Trade 4,400 $29,843
Elliott D. Pollack & Company
*Job growth July 2013/ July 2012
Top Sources of New Jobs p U.S.
Source: Bureau of Labor Statistics
Job Growth Wage Total 2,296,000 $49,200 1 Food Services 387 800 $16 242 1 Food Services 387,800 $16,242 2 Administrative services 354,700 $34,870 3 Retail Trade 353,200 $27,729 4 Health Care 322,200 $45,407 5 Professional services 237,900 $83,357 6 Construction 166,000 $52,294 7 Financial activities 124,000 $80,097
Elliott D. Pollack & Company
*Job growth July 2013/ July 2012
Greater Phoenix- Jobs Finally in the Black Jobs Finally in the Black
Over last 12 months: 53,100 12 months before that: 40,600 , 12 months before that: 18,100 12 months before that: (24,700) ( , ) 12 months before that: (151,700)
Elliott D. Pollack & Company
* As of July 2013
U S Has Gained 77% of Lost Jobs U.S. Has Gained 77% of Lost Jobs
2 Million Jobs (23%) Still to Recover
140,000 138,000 140,000
Peak 138 million Jan. 2008
6.7 Mil. Jobs
134,000 136,000
6 Jobs Regained (77%)
130,000 132,000
8.7 Million U.S. Jobs Lost (6.4%)
128,000
Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted Slide stolen from Lee McPheters…
Arizona Has Gained 47% of Lost Jobs Arizona Has Gained 47% of Lost Jobs
167,000 Jobs (53%) Still to Recover
2,750 2,650 2,700 2,750
Peak 2,687,000 Oct. 2007
147,000 Jobs
2,550 2,600
,000 Jobs Regained (47%)
2 400 2,450 2,500
314,000 Arizona Jobs Lost (12%)
2,350 2,400
Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted
Greater Phoenix Has Gained 47% of Lost Jobs Greater Phoenix Has Gained 47% of Lost Jobs 133,000 Jobs (53%) Still to Recover
2,000 1,900 1,950 2,000
Peak 1,932,000 July 2007
118,000 Jobs
1,800 1,850 1,900
8,000 Jobs Regained (47%)
1,700 1,750 1,800
251,000 Phoenix Jobs Lost (13%)
1,650 1,700
( )
Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted
Employment Levels: p y Greater Phoenix back to Peak in late-2015 or early 2016?
Source: ADOA Recession Periods 2,200.0 2,400.0
Peak
1,800.0 2,000.0
Peak
1,400.0 1,600.0 1,000.0 1,200.0
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*Based on seasonally unadjusted monthly data
Arizona Job Losses Exceeded U S Arizona Job Losses Exceeded U.S.
Source: Bureau of Labor Statistics, Seasonally Adjusted Data
6 3%
Manufacturing Construction Overall
21 4% 55.3% 11.7% 19.7% 29.7% 6.3%
Trans./ Warehousing Retail Trade Manufacturing
13.3% 12.4% 21.4% 8.0% 8.2%
U S Financial Information
12.5% 20.5% 11 8% 8.6% 14.2%
U.S AZ State Gov Leisure & Hospitality Business Services
13 6% 9.3% 16.8% 3.6% 9.0% 11.8%
Peak to trough job declines within each
Elliott D. Pollack & Company
Local Gov. State Gov.
12.1% 13.6% 4.0%
within each industry.
(1) Significant declines in population flows (2) Steeper housing decline
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Arizona Population Growth Was p Slow But Still Top 10 in 2012
1 9 4 6 5 3 9 4 7 6 2 8
10
Percent Change 2012
Elliott D. Pollack & Company
8
Arizona Rank Population Growth Population Growth 1991-2012
Source: Census Bureau 4 2 2 2 2 2 2 2 2 3 2 2 2 2 2 6 4 3 5 8 14 16 7 19 16
Elliott D. Pollack & Company
Slow job growth High unemployment Delayed retirement
y
Difficulty in selling home Difficulty in qualifying for a loan Difficulty in qualifying for a loan
Elliott D. Pollack & Company
SRP Residential Utility Hookup Percentage Growth SRP Residential Utility Hookup Percentage Growth Greater Phoenix 2003 – 2013*
Source: SRP
5.0% 4.0% 3.0% 1 0% 2.0% 0.0% 1.0%
3 3 3 3 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 1 1 1 2 l t 3
Elliott D. Pollack & Company
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*Data through April 2013.
APS: Slowest Growth in over 50 years APS: Slowest Growth in over 50 years 1954 – 2013*
8% 6% 7% r Prior Year 4% 5%
2% 3% ential Custo 0% 1%
4 6 8 2 4 6 8 2 4 6 8 2 4 6 8 2 4 6 8 2 4 6 8 2
Reside
Elliott D. Pollack & Company
1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
*Data through second quarter 2013 Source: APS
Greater Phoenix Population Annual Percent Change 1976–2014*
Source: Arizona State University & Department of Commerce, Research Administration
6%
4.7% 5.1% 4.6%4%
3.7% 4.2% 3.9% 3.3% 3.0% 3.1% 4.3% 4.2% 4.4% 2.9% 2 8% 3.5% 4.3% 4.2% 4.2% 3.8% 4.3%4.3% 2 7% 3.1% 3.6% 3.8% 3.7% 3.0%2%
2.1% 2.5% 1.3% 2.4% 2.8% 2.6% 2.7% 1.9% 1.5% 1.8%0%
0.5% 0.3% 0.6% 1.1%Elliott D. Pollack & Company . * 2013 & 2014 forecast is from Elliott D. Pollack & Co. Recession Periods
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Housing Housing
Not a light switch…
Good Bad
A dimmer switch…
Not great OK Mediocre Bad Not great OK Good
Elliott D. Pollack & Company
Great Terrible
WHAT WE HAVE BEEN SAYING WHAT WE HAVE BEEN SAYING…
through as the same as any manufacturer that finds themselves with excess that finds themselves with excess inventory…
is absorbed is absorbed, prices increase.
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Greater Phoenix Single Family Permits
Source: RL Brown Year Permits % chg 2004 60,872 27.6% 2005 63 570 4 4% 2005 63,570 4.4% 2006 42,423
2007 31,172
2008 12,582
2009 8,027
2010 6 822 15 0% 2010 6,822
2011 6,794
2012 11,615 71.0%
Elliott D. Pollack & Company
2013* 8,009 7.9%
*Data YTD July 2013 v. July 2012
compared to
Elliott D. Pollack & Company
Single Family Permits g y Greater Phoenix 1975–2016*
Source: RL Brown & Elliott D. Pollack & company
# Permits
60.9 63.6
60 70
(000)
31.7 36.0 35.3 34.7 36.2 38.9 47.7 42.4 31 2
40 50
11 1 22.3 28.9 18.8 11.5 11.6 19.4 18.1 22.6 23.2 17.9 15.1 12.0 10 6 13.7 18.4 22.7 27.4 28.5 29.6 31.2 12.6 11 6 13.5 16.0 20.0 25.0
20 30
8.7 11.1 10.6 10.6 8.0 6.8 6.8 11.6
10
9 7 5 9 7 7 9 7 9 9 8 1 9 8 3 9 8 5 9 8 7 9 8 9 9 9 1 9 9 3 9 9 5 9 9 7 9 9 9 1 3 5 7 9 1 1 1 3 1 5 Elliott D. Pollack & Company 1 9 7 1 9 7 1 9 7 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 2 2 2 2 2 2 1 2 1 2 1
*2013 – 2016 forecast is from Elliott D. Pollack & Company
Greater Phoenix Employment* p y Annual Percent Change 1975–2014**
Source: Department of Commerce, Research Administration
13.3%
14%
4 9% 8.7% 10.4% 5.8% 11.2% 9.3% 4.8% 5.9% 4 9% 6.6% 7.2% 7.3% 5 4% 5.4% 4 6% 6.2% 5.4%
6% 8% 10% 12%
4.9% 3.7% 3.0% 3.5% 2.5% 2.2% 1.1% 4.9% 5.4% 4.6% 3.5% 1.2% 1.5% 3.9% 1.6% 1.5% 2.4% 2.6% 3.0%
0% 2% 4% 6%
8%
1 9 7 5 1 9 7 7 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 1 2 3 2 5 2 7 2 9 2 1 1 2 1 3
Elliott D. Pollack & Company
*Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990. ** 2013 & 2014 forecast is from Elliott D. Pollack & Co.
Recession Periods
Arizona Jobs Regained Since Bottom of Cycle g y Most Industries Yet To Regain Lost Jobs
T t l N F Financial Leisure and Hospitality Total Non Farm
75% 104% 47%
Prof Services State Gov Local Gov
38% 54% 59%
R t il Trade Trans Utilities Information Prof Services
32% 35% 38%
Construction Manufacturing Retail
12% 21% 22%
Elliott D. Pollack & Company
Arizona Construction Employment is Up by 14,700 Jobs p y p y , And 13% Since Summer of 2011
130 125 130
July 2013 124,900
115 120 105 110
June 2011 110,200
100
Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted
But is Still Down by …But is Still Down by 119,400 Jobs (49%) Since Peak
260 220 240 260
June 2006 244,300
180 200 120 140 160
July 2013 124,900
100 120
Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted
Greater Phoenix Employment p y
Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project
YEAR EMPLOYMENT YEAR EMPLOYMENT
1950 74,400 1960 181 700 1960 181,700 1970 327,200 1980 636,200 1980 636,200 1990 1,013,300 2000 1,578,400 2010 1,686,800 2020 2,312,700
Elliott D. Pollack & Company
(forecast)
Greater Phoenix Population p
Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project
YEAR Population YEAR Population
1950 374,000 1960 726,183 6.9% 1970 1,039,807 3.7% 1980 1 600 093 4 4% 1980 1,600,093 4.4% 1990 2,238,498 3.4% 2000 3 251 876 3 8% 2000 3,251,876 3.8% 2010 4,192,887 2.6% 2020 5 011 767 1 8%
Elliott D. Pollack & Company
2020 (forecast) 5,011,767 1.8%
2010 4,192,887 2020 5,011,767 Net Change 818,880 g , Based on 2.7 persons per HH, Based on 2.7 persons per HH, Greater Phoenix will need 303 000 new housing units 303,000 new housing units this decade.
Elliott D. Pollack & Company
If you believe that population forecast, population forecast, it implies an average of more than 22 500 single family units more than 22,500 single family units will be built each year f 2014 th h 2020 from 2014 through 2020.
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Distressed Residential Inventory* May 2009 July 2013
70,000May 2009 - July 2013 Greater Phoenix
Source: Information Market
50,000 60,000 30,000 40,000 10 000 20,000 30,000 10,000Elliott D. Pollack & Company
*Distressed residential inventory includes pending residential foreclosures and residential REO properties
Single Family Active Listings Greater Phoenix
Source: Cromford Report
55,000 65,000
46,158 55,083 53,760 41 976
35,000 45,000
23 113 22 820 37,327 41,976 28,718
15,000 25,000
23,113 22,820 14,431 11,744 20,523 20,034
5,000
Elliott D. Pollack & Company
Greater Phoenix Months Supply
9.7
Single Family Residential
Source: Cromford Report
8 9 10
9.2
5 6 7
6.4 4.0 4.6
2 3 4
3.2 2.9 1.6 1.1 3.0 2.4 2.2
1
Elliott D. Pollack & Company
New Residential Foreclosure Notices Greater Phoenix
Source: Information Market
8,000 10,000
8,675 7,800
6,000
6,062 4 014
2 000 4,000
1 087 1 095 983 2,367 4,014 3,221 1,274
2,000
1,087 1,095 983 682 772
Elliott D. Pollack & Company
Total Pending Foreclosures Greater Phoenix
Source: Information Market
40,000 50,000
47,144 42,152
30,000
24,469 24,393
10,000 20,000
6,894 4,936 5,002 7,312 16,829 7,066
10,000
, 3,141 2,483
Elliott D. Pollack & Company
Greater Phoenix Single Family L d O d S l * Lender Owned Sales* June 2003 – June 2013
Source: TheWilcoxReport.com
3 500 4,000 4,500
4,247
2,500 3,000 3,500
2,384 3,008
1 000 1,500 2,000
1,381 720
500 1,000
84 121 9 2 104 348 Elliott D. Pollack & Company
Arizona Negative Equity Share Arizona Negative Equity Share 2010 Q2 – 2013 Q2
Source: CoreLogic 60 0% 52.2% 51.0% 50.0% 60.0% 39.7% 31.3% 40.0% 20.0% 30.0% 10.0%
Elliott D. Pollack & Company
0.0%
2010 Q2 2011 Q2 2012 Q2 2013 Q2
US Total Vacant Housing Units 1965-2013*
Source: US Census Bureau
Recession Periods (000)
18,000 20,000
Recession Periods
Longer term trend
(000)
14,000 16,000
g
8,000 10,000 12,000 4,000 6,000 8,000
Elliott D. Pollack & Company 1 9 6 5 Q 1 1 9 6 7 Q 2 1 9 6 9 Q 3 1 9 7 1 Q 4 1 9 7 4 Q 1 1 9 7 6 Q 2 1 9 7 8 Q 3 1 9 8 Q 4 1 9 8 3 Q 1 1 9 8 5 Q 2 1 9 8 7 Q 3 1 9 8 9 Q 4 1 9 9 2 Q 1 1 9 9 4 Q 2 1 9 9 6 Q 3 1 9 9 8 Q 4 2 1 Q 1 2 3 Q 2 2 5 Q 3 2 7 Q 4 2 1 Q 1 2 1 2 Q 2 *Data through 2013 Q2
Single-Family Vacant Units g y Greater Phoenix 1993–2011
Source: PMHS 120,000
102,275 101,625 83,475
100,000 ,
51 650 58,050
60 000 80,000
19 800 23,825 24 450 19,325 29,775 51,650
40,000 60,000
13,681 15,425 14,975 13,72513,750 14,725 17,525 19,800 17,525 24,450 17,125 19,325
20,000
Elliott D. Pollack & Company
1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1
More Existing Homes will be
102 275
110,000
More Existing Homes will be Occupied over the Next Few Years
102,275
80 000 90,000 100,000 ,
60,000 70,000 80,000
30,000 40,000 50,000 10,000 20,000
Elliott D. Pollack & Company
1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 1 2 3 2 5 2 7 2 9 2 1 1 2 1 3 2 1 5
Median Price of New Homes as a Percent of the Median Price of Resale Homes Maricopa County 2000–2013*
Recession
Source: Information Market
200.0% 220.0% 160.0% 180.0% 200.0% 120.0% 140.0% 60 0% 80.0% 100.0%
Elliott D. Pollack & Company
*data through July 2013
Number of Active Subdivisions Greater Phoenix
Source: CRA
600 700 800
568 574 597 607 663 665 672 687 693 710
400 500 600
536 568 5 512
200 300
322 275 255 181 208
100 Elliott D. Pollack & Company
Greater Phoenix Active Subdivision Count Active Subdivision Count October 2009 – August 2013
Source: Belfiore Consulting
500 450 400 350 250 300
Elliott D. Pollack & Company
50
Greater Phoenix Median Sales Price New and Resale Single Family
Source: Cromford Report
$250,000 $300,000
$255,000 $260,000 $255,000
$150,000 $200,000
$142,000 $155,000 $168,950 $190,061 $125,000 $125,000 $145,000 $184,000
$ $100,000 $150,000
$125,000 , $109,000
$0 $50,000
Elliott D. Pollack & Company
Growth in Single Family Home Median Prices July 2013 / July 2012
Source: Information Market
Phoenix Phoenix New Homes: 30.8% Resale Homes: 22.7%
Elliott D. Pollack & Company
NOTE: Resale includes normal and distressed single family home prices (MLS)
Home Prices Indices
Greater Phoeni Greater Phoenix
1989 – 2013*
Source: Macro Markets, LLC; AMLS
240
Recession Periods
200 220 240 140 160 180 80 100 120 60
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A p r
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5 Elliott D. Pollack & Company
MLS Index Case-Shiller Index Trendline (4.0%)
*Data through July 2013.
Total Single Family Units Occupied by Renters 2000 - 2011 Greater Phoenix
Source: American Community Survey 20% 25%
18 1% 20.3% 21.8%
15% 20%
11.7% 12.4% 11.6% 11.3% 11.7% 11.7% 14.1% 15.3% 16.4% 18.1%
10%
11.3%
0% 5%
Elliott D. Pollack & Company
Investor Activity: Going Down Investor Activity: Going Down
Percent of Non-Owner Occupied Sales of Total Sales Greater Phoenix
So rce DataQ ick
50%
Source: DataQuick
30% 40% 20% 0% 10%
Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1 Q 3 Q 1Elliott D. Pollack & Company
1 9 9 8 Q 1 1 9 9 8 Q 3 1 9 9 9 Q 1 1 9 9 9 Q 3 2 Q 1 2 Q 3 2 1 Q 1 2 1 Q 3 2 2 Q 1 2 2 Q 3 2 3 Q 1 2 3 Q 3 2 4 Q 1 2 4 Q 3 2 5 Q 1 2 5 Q 3 2 6 Q 1 2 6 Q 3 2 7 Q 1 2 7 Q 3 2 8 Q 1 2 8 Q 3 2 9 Q 1 2 9 Q 3 2 1 Q 1 2 1 Q 3 2 1 1 Q 1 2 1 1 Q 3 2 1 2 Q 1 2 1 2 Q 3 2 1 3 Q 1 Many renting will buy. Many doubled-up will buy. Some population growth is back. Employment growth is occurring. R ti l ti d t t h Retirees less tied to current homes.
Elliott D. Pollack & Company
Greater Phoenix H i Aff d bilit I d Housing Affordability Index 2004 – 2013*
Source: National Association of Realtors 100
76.4 73 5 83.6 80.8 83.6 77.7 76.2
80 100
66.5 60.3 70.9 63.0 68.6 67.0 67.0 73.5 64.4 68.8 69.0 69.5 69.7 49 3 65.3
60
49.3 27.4 32.4
40 20
Elliott D. Pollack & Company
1991 Q2 1992 Q2 1993 Q2 1994 Q2 1995 Q2 1996 Q2 1997 Q2 1998 Q2 1999 Q2 2000 Q2 2001 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2
A h i i As housing prices go up, more and more people will be more and more people will be able to sell their homes because they aren’t underwater underwater.
Elliott D. Pollack & Company
Until credit markets become l more normal and housing prices continue and housing prices continue to increase, h f l i h the rate of population growth will remain lower than will remain lower than normal….
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Household Formations Household Formations Lower during recessions recessions
(doubling up, living at home with mom & dad, etc)
Elliott D. Pollack & Company
Percent of 25-34 Year Olds Living With Parents vs. Homeownership Rate Under 35 Years Old Homeownership Rate, Under 35 Years Old U.S.: 1983 – 2012
Source: US Census Bureau
15.0% 44% 13 5% 14.0% 14.5% 42% 43% 12.5% 13.0% 13.5% ng w/ Parents 40% 41% wnership Rate 11.0% 11.5% 12.0% % Livin 38% 39% Homeow 10.0% 10.5% 11.0%
9 8 3 9 8 4 9 8 5 9 8 6 9 8 7 9 8 8 9 8 9 9 9 9 9 1 9 9 2 9 9 3 9 9 4 9 9 5 9 9 6 9 9 7 9 9 8 9 9 9 1 2 3 4 5 6 7 8 9 1 1 1 1 2
36% 37% Elliott D. Pollack & Company
1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 1 9 9 2 2 2 2 2 2 2 2 2 2 2 1 2 1 2 1
% Living w/ parents Homeownership Rate
In a weak economy In a weak economy, population growth fails to t l t i t h h ld th translate into household growth, but when the economy begins to y g strengthen, there is pent up demand for housing pent-up demand for housing.
Elliott D. Pollack & Company
Source: Linneman Letter
Elliott D. Pollack & Company
Multi-Family Year-End Vacancy Rates Maricopa County 1975–2014*
Source: ASU Realty Studies / Hendricks & Partners** 18%
Recession Periods
13.0% 14.1% 13.4% 12.5% 13.4%15% 18%
6 2% 6 1% 6.9% 7.7% 10.1% 10.6% 10.0% 9.5% 8.0% % 6.8% 8.2% 9.4% 9.6% 7.9% 6.8% 7.8% 10.2% 10.8% 7.5% 6 3% 7.1% 6 6%9% 12%
6.2% 4.1% 3.3% 2.8% 3.9% 6.1% 4.4% 6.1% 4.0% 3.8% 4.5% 4.5% 4.8% 5.1% 5.9% 6 8% 6.3% 6.6%3% 6% 0% 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 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
Elliott D. Pollack & Company
*2013 -2014 are forecasts from the Greater Phoenix Blue Chip **Data prior to 2005 is from ASU
Multi-Family Housing Market
Absorption Completions
Multi-Family Housing Market
Source: PMHS and Hendricks Berkadia
Absorption Completions
2007 (3,121) 3,800 2008 (4,466) 5,900 2009 9,100 6,231 , , 2010 11,619 200 2011 7 729 303 2011 7,729 303 2012 2,960 774
Elliott D. Pollack & Company
2013 Q2 3,300 1,090
Multi-Family Housing Market
Source: CBRE as of Second Quarter 2013
2013 2014 2015 2013 2014 2015 Projected Completions* 2,920 4,716 6,425
Elliott D. Pollack & Company
*Complexes with 100+ units
Greater Phoenix Multi-Family
$900
Average Monthly Rent 1993 – 2013*
Source: Hendricks Berkadia
$740 $786 $799 $782 $767 $772 $765 $781 $805
$800 $900
$572 $602 $628 $651 $676 $686 $691 $697 $703
$600 $700
$460 $504 $540 $572
$500 $600 $300 $400
Elliott D. Pollack & Company
*Data through second quarter 2013.
Elliott D. Pollack & Company
Office Space Year End Vacancy Rates Office Space Year-End Vacancy Rates Maricopa County 1986–2014*
Source: CBRE
Recession Periods
26.7% 26.7% 26.4% 25.4% 26.2% 25.5%30% 35%
22.8% 24.0% 22.7% 18.8% 14 8% 16.0% 18.8% 18.3% 16.4% 19.1% 24.5% 25.5% 23.9% 22.0% 19.0%20% 25%
14.8% 11.7% 9.5% 9.2% 9.5% 10.0% 9.9% 12.6% 11.1% 13.9%10% 15% 0% 5% 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Elliott D. Pollack & Company
1986 1987 1988 1989 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 *2013 -2014 are forecasts from the Greater Phoenix Blue Chip
G t Ph i Offi M k t* Greater Phoenix Office Market*
Source: CBRE
Year Absorption (sf) Chg in Inventory (sf) 2005 3,119,293 7,987 2006 3 245 888 **2 320 302 2006 3,245,888 2,320,302 2007 1,500,704 4,905,374 2008 (603,112) 3,402,646 ( , ) , , 2009 (667,329) 1,798,415 2010 233,670 2,011,404 2011 1 857 433 3 144 910 2011 1,857,433 3,144,910 2012 2,020,529 973,282 2013*** 521,566 138,145
Elliott D. Pollack & Company
2013 521,566 138,145
*Only includes multi-tenant space greater than 10,000 SF ** A number of buildings in downtown and mid-town are being converted to office condos. ***Data through second quarter 2013
As of second quarter 2013, there are 150 001 square feet there are 150,001 square feet
under construction.
Elliott D. Pollack & Company
Source: CBRE
Under any reasonable employment growth scenario employment growth scenario, we believe it will be at least 2016 before any significant office t ti construction occurs
(although some sub-markets will be sooner).
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Industrial Space Vacancy Rates p y Maricopa County 1980 – 2014*
Source: CBRE
Recession Periods
16.4% 15.2% 14.6% 14 0% 14.8% 16.1% 14.7%
15% 20%
8 4% 9.4% 11.1% 9.7% 12.8% 13.2% 12.8% 14.0% 13.6% 10.8% 8 1% 9.8% 10.3% 9.7% 8.5% 8 4% 12.5% 12.4% 10.9% 11.0% 10.0%
10% 15%
8.4% 7.4% 6.6% 5.7% 7.0% 7.1% 8.1% 7.4% 8.5% 5.6% 6.7% 8.4%
5% 0% 0%
980 981 982 983 984 985 986 987 988 989 990 991 992 993 994 995 996 997 998 999 000 001 002 003 004 005 006 007 008 009 010 011 012 013 014
Elliott D. Pollack & Company
198 198 198 198 198 198 198 198 198 198 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200 200 200 20 20 20 20 20
* 2013 - 2014 are forecasts from the Greater Phoenix Blue Chip
Greater Phoenix Industrial Market
Absorption (sf) Chg in Inventory (sf)
Greater Phoenix Industrial Market
Source: CBRE
Absorption (sf) Chg in Inventory (sf) 2005 12,339,591 7,071,477 2006 6,032,175 7,829,959 006 6,03 , 5 ,8 9,959 2007 8,359,835 13,914,181 2008 629,838 13,467,215 2009 (4,649,352) 4,753,218 2010 4,455,097 2,451,202 2011 7,753,111 1,954,037 2012 7,405,168 1,226,150 2013* 1 806 359 2 960 064
Elliott D. Pollack & Company
2013* 1,806,359 2,960,064
*Data through second quarter 2013
As of second quarter 2013, there are 6 4 million square feet there are 6.4 million square feet
under construction.
Elliott D. Pollack & Company
Source: CBRE
Big box / small space
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Retail Space Vacancy Rates Retail Space Vacancy Rates Maricopa County 1985–2014*
Source: CBRE**
Recession Periods
13 1% 14.2% 13 5% 12 2%
15% 20%
8.9% 10.0% 11.8% 13.1% 13.5% 12.7% 11.1% 9.8% 8.7% 7.9%7 5% 7 4% 7 5% 11.4% 12.2% 12.2% 11.0% 10.9% 10.2%
10% 15%
6.6% 7.5% 6.3% 5.5% 5.3%6.6%7.3% 7.4% 6.1% 5.3% 5.1% 6.2% 7.5%
5% 0%
1985 1986 1987 1988 1989 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
Elliott D. Pollack & Company * 2013-2014 are forecasts from GPBC ** Data prior to 1992 is from Grubb & Ellis
G t Ph i R t il M k t Greater Phoenix Retail Market
Source: CBRE
Year Absorption (sf) Chg in Inventory (sf) 2006 5,244,597 4,582,618 2007 9,424,362 11,104,865 , , , , 2008 3,395,986 6,229,205 2009 (1,117,100) 4,405,985 2009 (1,117,100) 4,405,985 2010 (75,352) 902,380 2011 (152 647) 24 543 2011 (152,647) 24,543 2012 1,879,005 184,932 2013* 739 894 116 691
Elliott D. Pollack & Company
2013 739,894 116,691
*data through second quarter 2013 NOTE: 325,000 sf were deleted from inventory during 2011 and 175,000 through q2 2012 due to market data updates and demolitions.
As of second quarter 2013 As of second quarter 2013, there are 95,000 square feet , q
d t ti under construction.
Elliott D. Pollack & Company
Source: CBRE
Maricopa County Retail Sales P t Ch Y A * Percent Change Year Ago* 1999 – 2013**
Source: Arizona Department of Revenue
Recession Periods
15% 20% 25%
Recession Periods
5% 10% 15%
0%
10%
9 9 9 9 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 1 1 1 1 1 2 1 2 1 2 1 3 Elliott D. Pollack & Company J a n
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*Data through May 2013 **3-month moving average Note: January 2010 and March 2010 retail sales are estimates.
Maricopa County Motor Vehicle Retail Sales Percent Change Year Ago
40%
Percent Change Year Ago 2006 – 2013*
Source: Arizona Department of Revenue
20% 30% 40% 10% 0% 10%
n-06 r-06 l-06 t-06 n-07 r-07 l-07 t-07 n-08 r-08 l-08 t-08 n-09 r-09 l-09 t-09 n-10 r-10 l-10 t-10 n-11 r-11 l-11 t-11 n-12 r-12 l-12 t-12 n-13 r-13
Elliott D. Pollack & Company
Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr Ju Oct Jan Apr
Motor Vehicle/Misc Automotive
*Data through March 2013 **3-month moving average Note: January 2010 and March 2010 retail sales are estimates.
Arizona At Risk For Spending Cuts
Federal Spending as Percent of State GDP
Elliott D. Pollack & Company
Pew Center for the States
CONCLUSIONS: How will it all turn out?
Elliott D. Pollack & Company
What? No recession!!??!
Elliott D. Pollack & Company
Elliott D. Pollack & Company
Elliott D. Pollack & Company
ARIZONA– Slow but mildly accelerating Slow but mildly accelerating recovery. y
2013 will be slightly better than 2012. g y 2014 will be better than 2013. 2014 will be better than 2013. 2015 should be a good year.
Elliott D. Pollack & Company
g y
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Elliott D. Pollack & Company
ELLIOTT D. POLLACK & Company
K t S ki
Elliott D. Pollack & Company
7505 East Sixth Avenue, Suite 100 Scottsdale, Arizona 85251
480-423-9200 P / 480-423-5942 F / www.arizonaeconomy.com / info@edpco.com