california: housing bellwether or not? · san diego county . population: 21.2 million * if la...

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

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


Georgia & California

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


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


Gross Product- State and Metro

Source: Census Bureau

Billions of 2009 Dollars

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.


Source: BEA

Annual % Change


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

-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

Comparing Atlanta and Los Angeles



Los Angeles County - Gateway to America’s Largest Consumer Market

California

Population: 38.3 Million

Southern California

Los Angeles Metro Area +

San Diego County


* 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


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


Population

Source: Census

Millions

Compare Industries: Atlanta & L.A.

0%2%4%6%8%

10%12%14%16%18%20%

Atlanta LA

GOODS SERVICES

Source: BLS, Sept 2014

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

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


Housing Market Analysis

$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

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%

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

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

California’s Leading Role?


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


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


Building Permits

0

20

40

60

80

100

120

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

ATL SD LA

Source: Census

CA Housing Demand & Supply

-50000

0

50000

100000

150000

200000

250000

199119931995199719992001200320052007200920112013201520172019

New HHs Permits

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%

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

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

california: housing bellwether or not? · san diego county . population: 21.2 million * if la...

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