California: Housing Bellwether or Not?

Transcription

1 California: Housing Bellwether or Not? GSU Economic Forecasting Conference November 19, 2014 Robert A. Kleinhenz, Ph.D. Chief Economist,, LAEDC

2 Outline Economic Comparisons: California Georgia Los Angeles - Atlanta Housing Market Conditions Atlanta, L.A., San Francisco, San Jose Conclusion: California s Leading Role?

3 Georgia & California

4 Population- State and Metro Millions Source: Census Bureau, 2013 Figures

5 Gross Product- State and Metro Billions of 2009 Dollars 2,500 2,000 2,051 1,500 1, Source: Census Bureau

6 Gross State Product GA & CA follow US Annual % Change California Georgia U.S. 5% 4% 3% 2% 1% 0% -1% % -3% -4% -5% Source: BEA

7 Nonfarm Jobs GA outpaced CA 1990 = CA GA US Source: BLS

8 15% California, Georgia U-Rates Above US U.S. CA GA 10% 5% 0% Source: US BLS, CA EDD

9 CA Adding Jobs Faster than U.S. 4% 3% CA GA US 2% 1% 0% -1% -2% -3% -4% -5% -6% -7% Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Source: US BLS, CA EDD

10 Comparing Atlanta and Los Angeles

11 Los Angeles County - Gateway to America s Largest Consumer Market Los Angeles Metropolitan Area Los Angeles County* Orange County Riverside County San Bernardino County Ventura County Population: 18.5 Million California Population: 38.3 Million Southern California Los Angeles Metro Area + San Diego County Population: 21.2 Million * If LA County were a state, it would be larger than 43 other states in US. Source: CA Department of Finance, Demographic Research Unit

12 Population Millions LA-LB-Ana-Riv- Oxnard CSA Source: Census ATL-Athens- Clarke County-- Sandy Springs CSA LA-LB Metro Area (LA County) Atlanta-Sandy Springs-Roswell, GA Metro Area City of LA City of Atlanta

13 Compare Industries: Atlanta & L.A. 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% GOODS Atlanta LA SERVICES Source: BLS, Sept 2014

14 Job Trends by Industry L.A. Year-to-Year Percentage Change in Nonfarm Jobs, Sept to Sept 2014 Construction Mining and Logging Professional and Business Services Information Education and Health Services Retail Trade Transportation and Warehousing Leisure and Hospitality Other Services Government Financial Activities Wholesale Trade Durable Goods Nondurable Goods -6.2% -0.6% -0.7% -1.3% 4.5% 4.1% 2.5% 2.3% 2.1% 2.1% 1.7% 0.4% 8.8% 7.7% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Source: BLS

15 Job Trends by Industry Atlanta Year-to-Year Percentage Change in Nonfarm Jobs, Sept to Sept 2014 Construction Transportation and Warehousing Leisure and Hospitality Nondurable Goods Wholesale Trade Professional and Business Services Durable Goods Financial Activities Retail Trade Information Education and Health Services Government Mining and Logging Other Services -2.5% 4.1% 3.5% 3.5% 3.4% 3.4% 3.0% 2.7% 2.2% 2.1% 1.5% 0.9% 0.6% 0.0% -4% -2% 0% 2% 4% 6% 8% Source: BLS

16 Housing Market Analysis

17 Home Sales & Median Prices Sales, Thousands, SAAR California Existing, single-family homes Price, Thousands $700 $600 $500 $400 $300 $ Home Sales Median Home Price Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 $100 $0 Source: California Association of Realtors

18 Median Prices Existing Single-Family Homes Metro Area 2014.Q3 YTY % Change Anaheim/Orange Cnty, CA $697, % Atlanta, GA $167, % Los Angeles $481, % Riverside-San Bern., CA $275, % San Diego, CA $517, % San Francisco, CA $744, % San Jose, CA $860, % Source: National Association of REALTORS

19 Affordability Existing Single-Family Homes Metro Area 2014.Q3 Qualifying Income* Affordability Index* Anaheim/Orange Cnty, CA $697,000 $130, Atlanta, GA $167,500 $31, Los Angeles $481,900 $90, Riverside-San Bern., CA $275,700 $51, San Diego, CA $517,800 $96, San Francisco, CA $744,400 $139, San Jose, CA $860,000 $161, Source: National Association of REALTORS *annual 2013

20 Household Income by County HH Income $56,241 Los Angeles, CA $75,566 $63,373 $73,802 Orange, CA San Diego San Francisco, CA $90,747 Santa Clara (San Jose), CA $57,664 Fulton, GA Source: Census

21 California s Leading Role?

22 Home Prices Atlanta Los Angeles San Diego San Jose Source: FHFB

23 Nonfarm Jobs Atlanta vs SD, San Jose Annual % Change LA Atlanta SD San Jose Source: BLS

24 Building Permits 120 ATL SD LA Source: Census

25 CA Housing Demand & Supply New HHs Permits

26 Building Permits 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 GA Single Family CA Single Family 2013 YTD 2014 YTD +9.3% 5.5% -6.5% +5.0% +4.7% GA MultiCA Multi Family Family GA Total +5.3% CA Total Source: Census Bureau

27 Conclusion Housing volatile: new over existing, coastal over inland Home prices highly correlated with income as well as: demographics, employment growth, density, scarcity of land, land use regulations, entitlement/permitting costs National trend with LOCAL variation

28 California: Housing Bellwether or Not? Thank You!