by: anirban basu sage policy group, inc. january 12 th, 2015 the pit and the pendulum on behalf of...

By: Anirban Basu Sage Policy Group, Inc. January 12 th, 2015 The Pit and the Pendulum On Behalf of MAR Board of Directors

Dawn of the Dead

Real GDP Growth, 20 Fastest and Slowest Growing Countries Projected 2014, Annual Percent Change (for available nations) RankCountryRegion% RankCountryRegion% 1 Turkmenistan Central Asia 10.1 169 Netherlands Europe 0.6 2 Chad Africa 9.6 170 France Europe 0.4 3 Mongolia Asia 9.1 171 Brazil South America 0.3 4 Democratic Republic of the Congo Africa 8.6 172 Russia Eastern Europe 0.2 5 Cte d'Ivoire Africa 8.5 173 Solomon Islands Pacific Islands 0.1 6 Myanmar Southeast Asia 8.5 174 San Marino Europe 0.0 7 Mozambique Africa 8.3 175 Italy Europe -0.2 8 Ethiopia Africa 8.2 176 Finland Northern Europe -0.2 9 Sierra Leone Africa 8.0 177 Serbia Eastern Europe -0.5 10 China Asia 7.4 178 Barbados Caribbean -0.6 11 Lao P.D.R. Southeast Asia 7.4 179 Croatia Eastern Europe -0.8 12 The Gambia Africa 7.4 180 St. Lucia Caribbean -1.1 13 Tanzania Africa 7.2 181 Argentina South America -1.7 14 Cambodia Southeast Asia 7.2 182 Equatorial Guinea Africa -2.5 15 Uzbekistan Central Asia 7.0 183 Iraq Middle East -2.7 16 Sri Lanka Southeast Asia 7.0 184 Venezuela South America -3.0 17 Nigeria Africa 7.0 185 Cyprus Europe -3.2 18 Mauritania Africa 6.8 186 Ukraine Eastern Europe -6.5 19 Burkina Faso Africa 6.7 187 South Sudan Africa -12.3 20 Panama Central America 6.6 188 Libya Middle East -19.8 Source: International Monetary Fund, October 2014 WEO Database

Estimated Growth in Output by Select Global Areas 2015 Projected* Source: International Monetary Fund, October 2014 WEO Database *The IMFs global and regional growth figures for 2014 are based on new purchasing power parity (PPP) weights derived from the recently released 2011 International Comparison Program survey. **For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices.

What Lies Beneath Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance *Through June 2014

Source: U.S. Bureau of Labor Statistics Median Weekly Earnings, Full-Time U.S. Workers* 2000Q3 through 2014Q3 *SA, Constant 1982-1984 dollars (adjusted to CPI-U) Wage and salary workers ages 16+

Source: Moodys Economy Recession Watch as of September 2014

Industrial Production January 2001 through November 2014 Source: Federal Reserve The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

Gross Domestic Product 1990Q1 through 2014Q3 Source: Bureau of Economic Analysis

Contributions to GDP Growth by Component 2013Q3 2014Q3 Source: Bureau of Economic Analysis

Invasion of the Body Snatchers

Source: U.S. Bureau of Labor Statistics December 2014: +252K Net Change in U.S. Jobs, BLS January 2002 through December 2014

National Nonfarm Employment by Industry Sector December 2013 v. December 2014 All told 2,952K Jobs gained Source: U.S. Bureau of Labor Statistics

Maryland Nonfarm Employment by Industry Sector Groups (SA) November 2013 v. November 2014 Absolute Change MD Total: +12.1K; +0.5% US Total (SA): +2,681K; +2.0% Source: U.S. Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series MD added 4,281 jobs between November 2013 and November 2014.

Baltimore-Towson MSA Nonfarm Employment by Industry Sector Groups (NSA) November 2013 v. November 2014 Absolute Change Baltimore MSA Total: +14.5K; +1.1% MD Total (SA): +12.1K; +0.5% US Total (SA): +2,681K; +2.0% Source: U.S. Bureau of Labor Statistics

Washington, DC-Arlington-Alexandria MSA Nonfarm Employment by Industry Sector Groups (NSA) November 2013 v. November 2014 Absolute Change DC MSA Total: +18.9K; +0.6% US Total (SA): +2,681K; +2.0% Source: U.S. Bureau of Labor Statistics

U.S. Year-over-year Percent Change: 2.0% Employment Growth, U.S. States (SA) November 2013 v. November 2014 Percent Change R ANK S TATE %R ANK S TATE %R ANK S TATE % 1NORTH DAKOTA4.817MINNESOTA1.934MAINE1.1 2TEXAS3.917TENNESSEE1.936IOWA1.0 3UTAH3.417WISCONSIN1.936MICHIGAN1.0 4DELAWARE3.021MASSACHUSETTS1.838NEW YORK0.9 4FLORIDA3.021NEW MEXICO1.838WEST VIRGINIA0.9 4OREGON3.023ALABAMA1.740NEW HAMPSHIRE0.8 7WASHINGTON2.823DISTRICT OF COLUMBIA1.740WYOMING0.8 8ARIZONA2.623IDAHO1.742SOUTH DAKOTA0.7 8NORTH CAROLINA2.626HAWAII1.643ILLINOIS0.6 8SOUTH CAROLINA2.627ARKANSAS1.543NEBRASKA0.6 11GEORGIA2.427CONNECTICUT1.543PENNSYLVANIA0.6 12COLORADO2.327MISSOURI1.546KANSAS0.5 12NEVADA2.330MONTANA1.446MARYLAND0.5 14CALIFORNIA2.231VERMONT1.348VIRGINIA0.4 15KENTUCKY2.132OHIO1.249NEW JERSEY0.3 16OKLAHOMA2.032RHODE ISLAND1.250MISSISSIPPI-0.1 17INDIANA1.934LOUISIANA1.151ALASKA-0.4 Source: U.S. Bureau of Labor Statistics

U.S. Unemployment Rate: 5.8% Unemployment Rates, U.S. States (SA) November 2014 RANKSTATE%RANKSTATE%RANKSTATE% 1NORTH DAKOTA2.717VIRGINIA5.035ILLINOIS6.4 2NEBRASKA3.119PENNSYLVANIA5.135NEW JERSEY6.4 3SOUTH DAKOTA3.320WISCONSIN5.235NEW MEXICO6.4 4UTAH3.621MARYLAND5.638CONNECTICUT6.5 5MINNESOTA3.721MISSOURI5.638LOUISIANA6.5 6IDAHO3.923INDIANA5.740ALASKA6.6 7HAWAII4.023MAINE5.741MICHIGAN6.7 8COLORADO4.125ARKANSAS5.841SOUTH CAROLINA6.7 8NEW HAMPSHIRE4.125FLORIDA5.843ARIZONA6.8 10IOWA4.325MASSACHUSETTS5.843TENNESSEE6.8 10KANSAS4.325NORTH CAROLINA5.845NEVADA6.9 10MONTANA4.329NEW YORK5.946OREGON7.0 10VERMONT4.330ALABAMA6.047RHODE ISLAND7.1 14OKLAHOMA4.430DELAWARE6.048CALIFORNIA7.2 15WYOMING4.530KENTUCKY6.048GEORGIA7.2 16TEXAS4.933WASHINGTON6.250MISSISSIPPI7.3 17OHIO5.034WEST VIRGINIA6.351DISTRICT OF COLUMBIA7.4 Source: U.S. Bureau of Labor Statistics

Unemployment Rates, 20 Largest Metros (NSA) November 2014 RankMSAUR RankMSAUR 1 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area 3.011 St. Louis, MO-IL Metropolitan Statistical Area 5.6 2 Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area 4.512 Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area 5.8 2 Washington-Arlington-Alexandria, DC-VA-MD- WV Metropolitan Statistical Area 4.512 New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area 5.8 4 Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area 4.612 San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area 5.8 5 Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA 4.712 Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area 5.8 6 San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area 5.016 Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area 5.9 7 Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area 5.117 Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area 6.5 8 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area 5.218 Detroit-Warren-Livonia, MI Metropolitan Statistical Area 7.0 9 Baltimore-Towson, MD Metropolitan Statistical Area 5.519 Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area 7.2 9 Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area 5.520 Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area 8.0 Source: U.S. Bureau of Labor Statistics

MD County Unemployment Rates November 2014 RankJurisdictionURRankJurisdictionUR 1Howard County4.012Prince George's County5.5 2Montgomery County4.112Talbot County5.5 3Calvert County4.415Garrett County5.8 3Carroll County4.416Kent County5.9 5Cecil County4.617Allegany County6.0 5Frederick County4.618Caroline County6.2 7Anne Arundel County4.718Washington County6.2 7St. Mary's County4.720Wicomico County7.1 9Queen Anne's County4.821Somerset County7.9 10Charles County5.022Dorchester County8.0 10Harford County5.023Baltimore City8.2 12Baltimore County5.524Worcester County12.6 Source: U.S. Bureau of Labor Statistics

Nightmare on Elm Street

15-Year & 30-Year Fixed Mortgage Rates February 1995 through January 2015* Source: Freddie Mac *Week ending 1/8/2015

U.S. New Home Sales January 1999 through November 2014 Source: U.S. Census Bureau

U.S. Housing Starts January 1999 through November 2014 Source: U.S. Census Bureau

U.S. Housing Building Permits January 1999 through November 2014 Source: U.S. Census Bureau November 2014: 1 Unit: 639K 5 Units or more: 367K

S&P/Case-Shiller Home Price Indices for Select Metros October 2014, 12-Month Percentage Change Source: Standard & Poors

Maryland Housing Unit Sales January 2005 through November 2014 Source: Maryland Association of Realtors Nov 2013 v. Nov 2014: +7.0%

Maryland Median Home Sale Prices January 2005 through November 2014 Source: Maryland Association of Realtors Nov 2013 v. Nov 2014: -2.8%

Housing Inventory by Suburban MD+ November 2013 v. November 2014 Source: Maryland Association of Realtors Maryland Nov. 2013: 5.9 months; Nov. 2014: 6.2 months

Housing Inventory by Baltimore MSA+ Jurisdictions November 2013 v. November 2014 Source: Maryland Association of Realtors Maryland Nov. 2013: 5.9 months; Nov. 2014: 6.2 months

Housing Inventory in Select Other Maryland Counties November 2013 v. November 2014 Source: Maryland Association of Realtors Maryland Nov. 2013: 5.9 months; Nov. 2014: 6.2 months

Psycho

Conference Board Leading Economic Indicators Index August 2007 through November 2014 Source: Conference Board

Tell-Tale Heart Economy gained momentum over the course of last year; Tailwinds included booming stock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like autos; The current year is associated with greater certainty regarding monetary policy that helps; The world is not perfect - black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP; Market is nervous, but perhaps for the wrong reasons; and More people benefit from lower oil prices than are hurt more contractors and developers are helped than hurt frankly, low oil prices just dont make me that nervous.

Thank You Follow us on Twitter @SagePolicyGroup You can always reach me at [email protected] [email protected] Please look for updates of information at www.sagepolicy.com. www.sagepolicy.com Also, if you need us in a hurry, we are at 410.522.7243 (410.522.SAGE) Please contact us when you require economic research & policy analysis.

by: anirban basu sage policy group, inc. january 12 th, 2015 the pit and the pendulum on behalf of...

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