california: housing bellwether or not? · san diego county . population: 21.2 million * if la...
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Robert A. Kleinhenz, Ph.D. Chief Economist, Kyser Center for Economic Research, LAEDC
California: Housing Bellwether or Not?
GSU Economic Forecasting Conference November 19, 2014
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Economic Comparisons: California – Georgia Los Angeles - Atlanta
Housing Market Conditions
Atlanta, L.A., San Francisco, San Jose
Conclusion: California’s Leading Role?
Kyser Center for Economic Research
Outline
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Kyser Center for Economic Research
Georgia & California
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38.3
26.4
19.7 19.6 18.4
12.9 12.8 11.6 10.0 9.9 9.8 6.2
05
1015202530354045
Kyser Center for Economic Research
Population- State and Metro
Source: Census Bureau, 2013 Figures
Millions
-
2,051
425
776
288
0
500
1,000
1,500
2,000
2,500
Kyser Center for Economic Research
Gross Product- State and Metro
Source: Census Bureau
Billions of 2009 Dollars
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Gross State Product –GA & CA follow US
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
California Georgia U.S.
Kyser Center for Economic Research
Source: BEA
Annual % Change
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Kyser Center for Economic Research
Nonfarm Jobs –GA outpaced CA
121
133
0
20
40
60
80
100
120
140
160
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
CA GA US
Source: BLS
1990 = 100
-
0%
5%
10%
15% U.S. CA GA
California, Georgia U-Rates Above US
Source: US BLS, CA EDD Kyser Center for Economic Research
PresenterPresentation Noteshttp://www.bls.gov/news.release/empsit.nr0.htm
Rak 11/13/14
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-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
CA GA US
CA Adding Jobs Faster than U.S.
Source: US BLS, CA EDD Kyser Center for Economic Research
PresenterPresentation NotesRAK 11/13/14
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Comparing Atlanta and Los Angeles
Kyser Center for Economic Research
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Kyser Center for Economic Research
Los Angeles County - Gateway to America’s Largest Consumer Market
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
Los Angeles Metropolitan Area • Los Angeles County* • Orange County • Riverside County • San Bernardino County • Ventura County
Population: 18.5 Million
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18.4
6.2
10.0
5.5 3.9
0.45 02468
101214161820
LA-L
B-A
na-R
iv-
Oxn
ard
CS
A
ATL
-Ath
ens-
Cla
rke
Cou
nty-
-S
andy
Spr
ings
CS
A
LA-L
B M
etro
Are
a(L
A C
ount
y)
Atla
nta-
Sand
yS
prin
gs-R
osw
ell,
GA
Met
ro A
rea
City
of L
A
City
of A
tlant
a
Kyser Center for Economic Research
Population
Source: Census
Millions
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Compare Industries: Atlanta & L.A.
0%2%4%6%8%
10%12%14%16%18%20%
Atlanta LA
GOODS SERVICES
Source: BLS, Sept 2014
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Source: BLS Kyser Center for Economic Research
Job Trends by Industry – L.A.
-6.2% -1.3%
-0.7% -0.6%
0.4% 1.7% 2.1% 2.1% 2.3% 2.5%
4.1% 4.5%
7.7% 8.8%
-8% -6% -4% -2% 0% 2% 4% 6% 8% 10%
Nondurable GoodsDurable Goods
Wholesale TradeFinancial Activities
GovernmentOther Services
Leisure and HospitalityTransportation and Warehousing
Retail TradeEducation and Health Services
InformationProfessional and Business Services
Mining and LoggingConstruction
Year-to-Year Percentage Change in Nonfarm Jobs, Sept. 2013 to Sept 2014
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Source: BLS Kyser Center for Economic Research
Job Trends by Industry – Atlanta
-2.5% 0.0%
0.6% 0.9%
1.5% 2.1% 2.2%
2.7% 3.0%
3.4% 3.4% 3.5% 3.5%
4.1%
-4% -2% 0% 2% 4% 6% 8%
Other ServicesMining and Logging
GovernmentEducation and Health Services
InformationRetail Trade
Financial ActivitiesDurable Goods
Professional and Business ServicesWholesale Trade
Nondurable GoodsLeisure and Hospitality
Transportation and WarehousingConstruction
Year-to-Year Percentage Change in Nonfarm Jobs, Sept. 2013 to Sept 2014
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Kyser Center for Economic Research
Housing Market Analysis
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$0
$100
$200
$300
$400
$500
$600
$700
0
100
200
300
400
500
600
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Home SalesMedian Home Price
Home Sales & Median Prices California
Existing, single-family homes Sales, Thousands, SAAR Price, Thousands
Source: California Association of Realtors Kyser Center for Economic Research
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Source: National Association of REALTORS Kyser Center for Economic Research
Median Prices Existing Single-Family Homes
Metro Area 2014.Q3YTY % Change
Anaheim/Orange Cnty, CA $697,000 3.9%
Atlanta, GA $167,500 10.0%
Los Angeles $481,900 7.3%
Riverside-San Bern., CA $275,700 10.7%
San Diego, CA $517,800 6.8%
San Francisco, CA $744,400 7.0%
San Jose, CA $860,000 6.8%
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Source: National Association of REALTORS *annual 2013 Kyser Center for Economic Research
Affordability Existing Single-Family Homes
Metro Area 2014.Q3Qualifying Income*
Affordability Index*
Anaheim/Orange Cnty, CA $697,000 $130,555 67.8
Atlanta, GA $167,500 $31,374 251.6
Los Angeles $481,900 $90,265 79.9
Riverside-San Bern., CA $275,700 $51,641 128.8
San Diego, CA $517,800 $96,989 80.9
San Francisco, CA $744,400 $139,433 72.6
San Jose, CA $860,000 $161,086 70.1
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Household Income by County
$56,241
$75,566 $63,373
$73,802
$90,747
$57,664
0100002000030000400005000060000700008000090000
100000
Los Angeles,CA
Orange, CA San Diego SanFrancisco,
CA
Santa Clara(San Jose),
CA
Fulton, GA
HH Income 2008-2012
Source: Census
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California’s Leading Role?
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Kyser Center for Economic Research
Home Prices 1995-2014
0
50
100
150
200
250
300
350
1995
.1
1996
.1
1997
.1
1998
.1
1999
.1
2000
.1
2001
.1
2002
.1
2003
.1
2004
.1
2005
.1
2006
.1
2007
.1
2008
.1
2009
.1
2010
.1
2011
.1
2012
.1
2013
.1
2014
.1
Atlanta Los Angeles San Diego San Jose
Source: FHFB
-
Kyser Center for Economic Research
Nonfarm Jobs –Atlanta vs SD, San Jose
-12-10-8-6-4-202468
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
LA Atlanta SD San Jose
Source: BLS
Annual % Change
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Kyser Center for Economic Research
Building Permits
0
20
40
60
80
100
120
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
ATL SD LA
Source: Census
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CA Housing Demand & Supply
-50000
0
50000
100000
150000
200000
250000
199119931995199719992001200320052007200920112013201520172019
New HHs Permits
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Building Permits
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
GASingleFamily
CASingleFamily
GA MultiFamily
CA MultiFamily
GATotal
CATotal
2013 YTD 2014 YTD
+9.3% +4.7% 5.5% -6.5% +5.0%
+5.3%
Source: Census Bureau
PresenterPresentation NotesPrivately Owned Housing Units Authorized
% SFH: CA 52%GA 73%
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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
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California: Housing Bellwether or Not?
Thank You!
Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Gross State Product –GA & CA follow USNonfarm Jobs –GA outpaced CASlide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Compare Industries: Atlanta & L.A.Slide Number 14Slide Number 15Slide Number 16Home Sales & Median Prices �California�Existing, single-family homesSlide Number 18Slide Number 19Household Income by CountySlide Number 21Home Prices 1995-2014Nonfarm Jobs –Atlanta vs SD, San JoseBuilding PermitsCA Housing Demand & SupplyBuilding PermitsConclusionSlide Number 28
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