outline - marineconomicconsulting.com€¦ · 6/5/15 2 the great recession 1-2 punch of credit...

6/5/15

1

Jon Haveman Founding Principal, Beacon Economic

BACEI/San Francisco – November 19, 2010

Recovery, Wherefore Art

Thou?

Outline

•  US & CA Economies – What just happened? – Why did it happen? – Where do we stand now? – Where do we go from here?

•  Bay Area Forecast •  San Francisco MD Forecast

6/5/15

2

The Great Recession 1-2 Punch of Credit Crisis and Consumer Retrenchment

-‐8

-‐6

-‐4

-‐2

0

2

4

6

8

Q1-‐06

Q2-‐06

Q3-‐06

Q4-‐06

Q1-‐07

Q2-‐07

Q3-‐07

Q4-‐07

Q1-‐08

Q2-‐08

Q3-‐08

Q4-‐08

Q1-‐09

Q2-‐09

Q3-‐09

Q4-‐09

Q1-‐10

Q2-‐10

Q3-‐10

(%)

Source: Bureau of Economic Analysis

GDP Growth (SAAR) to Q3-‐10

Recession

Recovery

US Unemployment

Source: Bureau of Labor StaEsEcs Source: Bureau of Labor StaEsEcs

2

3

4

5

6

7

8

9

10

11

Jan-‐05

Aug-‐05

Mar-‐06

Oct-‐06

May-‐07

Dec-‐07

Jul-‐0

8

Feb-‐09

Sep-‐09

Apr-‐10

(%)

Unemployment Rate to October

64.0

64.5

65.0

65.5

66.0

66.5

67.0

67.5

Jan-‐00

Feb-‐01

Mar-‐02

Apr-‐03

May-‐04

Jun-‐05

Jul-‐0

6 Au

g-‐07

Sep-‐08

Oct-‐09

(%)

ParEcipaEon Rate to October Onset of Recession

Onset of Recession

6/5/15

3

Jobs, Jobs, Jobs Jan-‐03 to Dec-‐07

Dec-‐07 to Dec-‐09

2010 Change

Total Nonfarm 7,685 -‐8,363 874 EducaYon/Health 2,121 791 324 Prof/Business 2,127 -‐1,563 307 Admin Support 709 -‐1,114 294 Health Care 1,814 661 270 Leisure/Hosp 1,362 -‐544 178 Manufacturing -‐1,141 -‐2,192 135 Retail Trade 612 -‐1,206 128 Other Services 115 -‐200 88 Wholesale Trade 406 -‐474 36 Transport/UYl. 340 -‐377 29 Federal Government -‐34 69 19 UYliYes -‐30 0 -‐4 STATE GOVERNMENT 106 38 -‐14 InformaYon -‐241 -‐275 -‐33 ConstrucYon 787 -‐1,795 -‐71 Financial AcYviYes 314 -‐570 -‐82 LOCAL GOVERNMENT 679 -‐3 -‐246

-‐800

-‐600

-‐400

-‐200

0

200

400

Jan-‐07

Jun-‐07

Nov-‐07

Apr-‐08

Sep-‐08

Feb-‐09

Jul-‐0

9

Dec-‐09

May-‐10

Oct-‐10

Chan

ge in Payrolls (T

housan

ds)

Source: Bureau of Labor StaEsEcs

NaEonal Change in Payrolls to October

Source: Bureau of Labor StaEsEcs

Change in Payrolls by Sector (000s)

California: A widespread hit

4 5 6 7 8 9 10 11 12 13

13,000

13,500

14,000

14,500

15,000

15,500

Jan-‐98

Nov-‐99

Sep-‐01

Jul-‐0

3

May-‐05

Mar-‐07

Jan-‐09

(%)

Thou

sand

s

State Labor Markets to Sept.

Employment Unemployment Rate

LocaYon Sep-‐10 Peak to Current (%)

Inland Empire 1,085.9 -‐15.0 Santa Rosa 168.2 -‐12.2 Oakland (MD) 929.8 -‐11.6 Stockton 187.5 -‐11.6 Modesto 142.8 -‐11.5 Orange County (MD) 1,358.4 -‐11.0 Ventura 268.6 -‐10.0 Los Angeles (MD) 3,735.3 -‐9.6 SAN FRANCISCO (MD) 913.5 -‐8.9 Bakersfield 220.2 -‐8.2 San Diego 1,210.0 -‐7.9 Santa Barbara 160.6 -‐7.9 San Jose 849.2 -‐7.8 Salinas 121.2 -‐6.4

Source: California Employment Development Department Source: California Employment

Development Department

6/5/15

4

Why did it happen?

•  Housing •  Consumers •  Financial Markets

Roots of the Great Recession

2.5

3.0

3.5

4.0

4.5

5.0

Q4-‐51

Q4-‐53

Q4-‐55

Q4-‐57

Q4-‐59

Q4-‐61

Q4-‐63

Q4-‐65

Q4-‐67

Q4-‐69

Q4-‐71

Q4-‐73

Q4-‐75

Q4-‐77

Q4-‐79

Q4-‐81

Q4-‐83

Q4-‐85

Q4-‐87

Q4-‐89

Q4-‐91

Q4-‐93

Q4-‐95

Q4-‐97

Q4-‐99

Q4-‐01

Q4-‐03

Q4-‐05

Q4-‐07

Q4-‐09

RaEo

Net Wealth of the U.S. to Q2-‐10 RaEo of Household Net Worth/GDP

Source: Federal Reserve Board, Bureau of Economic Analysis

6/5/15

5

National Housing Markets Case-Shiller US National Values to Q2-10

60

80

100

120

140

160

180

200

Q1-‐87

Q2-‐88

Q3-‐89

Q4-‐90

Q1-‐92

Q2-‐93

Q3-‐94

Q4-‐95

Q1-‐97

Q2-‐98

Q3-‐99

Q4-‐00

Q1-‐02

Q2-‐03

Q3-‐04

Q4-‐05

Q1-‐07

Q2-‐08

Q3-‐09

Inde

x = 100 in Q1-‐00, SA

Source: Standard and Poor's

National Consumer Imbalance

0

1

2

3

4

5

6

7

8

Q1-‐90

Q4-‐91

Q3-‐93

Q2-‐95

Q1-‐97

Q4-‐98

Q3-‐00

Q2-‐02

Q1-‐04

Q4-‐05

Q3-‐07

Q2-‐09

% of D

ispo

sable Income

BEA U.S. Personal Savings Rate to Q3-‐10


73

75

77

79

81

83

85

Q1-‐66

Q2-‐69

Q3-‐72

Q4-‐75

Q1-‐79

Q2-‐82

Q3-‐85

Q4-‐88

Q1-‐92

Q2-‐95

Q3-‐98

Q4-‐01

Q1-‐05

Q2-‐08

(%)


Spending as % of Income to Q3-‐10

6/5/15

6

The Credit Bubble

Source: Federal Reserve Board

0

10

20

30

40

50

60

70

80

Q1-‐52

Q3-‐56

Q1-‐61

Q3-‐65

Q1-‐70

Q3-‐74

Q1-‐79

Q3-‐83

Q1-‐88

Q3-‐92

Q1-‐97

Q3-‐01

Q1-‐06

(%)

Consumer Debt as % of GDP to Q2-‐10

Mortgage Other Consumer Credit

10 12 14 16 18 20 22 24 26 28 30

Q1-‐65

Q1-‐69

Q1-‐73

Q1-‐77

Q1-‐81

Q1-‐85

Q1-‐89

Q1-‐93

Q1-‐97

Q1-‐01

Q1-‐05

Q1-‐09

(%)


Household Debt as % of Net Worth to Q2-‐10

Financial Sector Imbalance


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Q1-‐52

Q2-‐57

Q3-‐62

Q4-‐67

Q1-‐73

Q2-‐78

Q3-‐83

Q4-‐88

Q1-‐94

Q2-‐99

Q3-‐04

Q4-‐09

RaEo

Total Debt/GDP to Q2-‐10

Public Private Financial

6/5/15

7

Where do we stand now?

•  Signs of improvement –  Industrial producYon growing…but slowing

•  Signs that the improvement is tenuous

– Private sector employment growth slowing

US Industrial Production to October

85

87

89

91

93

95

97

99

101

103

Jan-‐07

Mar-‐07

May-‐07

Jul-‐0

7 Sep-‐07

Nov-‐07

Jan-‐08

Mar-‐08

May-‐08

Jul-‐0

8 Sep-‐08

Nov-‐08

Jan-‐09

Mar-‐09

May-‐09

Jul-‐0

9 Sep-‐09

Nov-‐09

Jan-‐10

Mar-‐10

May-‐10

Jul-‐1

0 Sep-‐10

Inde

x = 100 in 2007


6/5/15

8

More: Jobs, Jobs, Jobs

Source: Bureau of Labor StaEsEcs Source: Bureau of Labor StaEsEcs

0

50

100

150

200

250

300 Jan-‐10

Feb-‐10

Mar-‐10

Apr-‐10

May-‐10

Jun-‐10

Jul-‐1

0 Au

g-‐10

Sep-‐10

Oct-‐10

Thou

sand

s

Change in Private Nonfarm Payrolls to October

-‐300

-‐200

-‐100

0

100

200

300

400

500

Jan-‐10

Feb-‐10

Mar-‐10

Apr-‐10

May-‐10

Jun-‐10

Jul-‐1

0

Aug-‐10

Sep-‐10

Oct-‐10

Change in Government Employment to October

Federal State and Local

Declining State Jobs Picture

30

40

50

60

70

80

90

38

39

40

41

42

Jan-‐06

Sep-‐06

May-‐07

Jan-‐08

Sep-‐08

May-‐09

Jan-‐10

Sep-‐10

Thou

sand

s of C

laim

s

Man

ufacturin

g Ho

urs

State Hours and Claims to September

Hours Unemployment Claims California Department of Finance

13000

13500

14000

14500

15000

15500

Jan-‐08

May-‐08

Sep-‐08

Jan-‐09

May-‐09

Sep-‐09

Jan-‐10

May-‐10

Sep-‐10

Thou

sand

s of Job

s

Source: California Employment Development Department

State Payrolls to September

6/5/15

9

US Consumer Markets

310

320

330

340

350

360

370

380

390

Jan-‐07

Jun-‐07

Nov-‐07

Apr-‐08

Sep-‐08

Feb-‐09

Jul-‐0

9

Dec-‐09

May-‐10

Oct-‐10

Billion

s ($)

Source: Census Bureau

Nominal Retail Sales to October

8 9

10 11 12 13 14 15 16 17 18

Jan-‐07

Jun-‐07

Nov-‐07

Apr-‐08

Sep-‐08

Feb-‐09

Jul-‐0

9

Dec-‐09

May-‐10

Oct-‐10

Millions


Auto and Light Truck Sales to October, SAAR

CA: Spending

110

115

120

125

130

135

140

145

Q1-‐04

Q2-‐04

Q3-‐04

Q4-‐04

Q1-‐05

Q2-‐05

Q3-‐05

Q4-‐05

Q1-‐06

Q2-‐06

Q3-‐06

Q4-‐06

Q1-‐07

Q2-‐07

Q3-‐07

Q4-‐07

Q1-‐08

Q2-‐08

Q3-‐08

Q4-‐08

Q1-‐09

Q2-‐09

Q3-‐09

Q4-‐09

Q1-‐10

Q2-‐10

Billion

s ($)

California State Board of EqualizaEon

California Taxable Sales to Q2-‐10

6/5/15

10

National Credit Markets Cleared?

0 1 2 3 4 5 6 7 8 9

10

Q1-‐87

Q1-‐89

Q1-‐91

Q1-‐93

Q1-‐95

Q1-‐97

Q1-‐99

Q1-‐01

Q1-‐03

Q1-‐05

Q1-‐07

Q1-‐09

Rate

Bank Porgolio Problems to Q2-‐10

Losses Delinquencies


0

200

400

600

800

1,000

1,200

Jan-‐08

May-‐08

Sep-‐08

Jan-‐09

May-‐09

Sep-‐09

Jan-‐10

May-‐10

Sep-‐10

Billion

s ($)


US Bank Excess Reserves to October

US Housing Markets

Note: Includes single-‐family homes and condo coops

0

2

4

6

8

10

12

14

Jan-‐00

Feb-‐01

Mar-‐02

Apr-‐03

May-‐04

Jun-‐05

Jul-‐0

6

Aug-‐07

Sep-‐08

Oct-‐09

RaEo

of Inven

tory to

Sales

Months Supply of ExisEng Single-‐Family Homes to

September

Source: NaEonal AssociaEon of Realtors

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

Jan-‐00

Jan-‐01

Jan-‐02

Jan-‐03

Jan-‐04

Jan-‐05

Jan-‐06

Jan-‐07

Jan-‐08

Jan-‐09

Jan-‐10

Thou

sand

s


ExisEng Home Sales SAAR to September

6/5/15

11

How Many Underwater? as of Q2-10

Source: CoreLogic

CBSA Name # Mortgages NegaYve Equity Share

Las Vegas-‐Paradise NV 449,205 72.83 Stockton CA 129,100 62.36 Vallejo-‐Fairfield CA 92,418 57.93 Phoenix-‐Mesa-‐Glendale AZ 966,635 56.03 Bakersfield-‐Delano CA 153,522 52.04 Riverside-‐San Bernardino-‐Ontario CA 861,023 51.33 Fresno CA 153,362 46.85 Visalia-‐Porterville CA 69,237 44.81 Sacramento-‐-‐Arden-‐Arcade-‐-‐Roseville CA 494,024 43.41 Salinas CA 61,704 41.57 Oakland-‐Fremont-‐Hayward CA 547,903 32.44 San Jose-‐Sunnyvale-‐Santa Clara CA 347,365 19.79 San Francisco-‐San Mateo-‐Redwood City CA 324,164 9.48

CA Housing Sales to Q3-10

Source: DataQuick

150

200

250

300

350

400

450

500

550

150

200

250

300

350

400

450

500

550

Q1-‐05

Q2-‐05

Q3-‐05

Q4-‐05

Q1-‐06

Q2-‐06

Q3-‐06

Q4-‐06

Q1-‐07

Q2-‐07

Q3-‐07

Q4-‐07

Q1-‐08

Q2-‐08

Q3-‐08

Q4-‐08

Q1-‐09

Q2-‐09

Q3-‐09

Q4-‐09

Q1-‐10

Q2-‐10

Q3-‐10

Sales (Th

ousand

s)

Prices (T

housan

ds)

Prices Sales (SAAR)

6/5/15

12

CA Real Estate Markets

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000 Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

Defaults and

Foreclosures

California Defaults and Foreclosures to Q3-‐10

Defaults Foreclosures Source: DataQuick

What comes next?

•  Double Dip? •  Slow Recovery? •  The typical post-‐recession bounce?

6/5/15

13

US GDP and Unemployment Forecasts

Source: Bureau of Economic Analysis Forecast by Beacon Economics

Source: Bureau of Labor StaEsEcs Forecast by Beacon Economics

-‐8

-‐6

-‐4

-‐2

0

2

4

6

Q1-‐08

Q4-‐08

Q3-‐09

Q2-‐10

Q1-‐11

Q4-‐11

Q3-‐12

Q2-‐13

Q1-‐14

Q4-‐14

Q3-‐15

(%)

GDP Growth to Q4-‐15

0

2

4

6

8

10

12

Q1-‐98

Q3-‐99

Q1-‐01

Q3-‐02

Q1-‐04

Q3-‐05

Q1-‐07

Q3-‐08

Q1-‐10

Q3-‐11

Q1-‐13

Q3-‐14

(%)

Unemployment Rate to Q4-‐15

What about a Double-Dip? •  Need some sustained shock to the system •  There is potenYal (worry scale: 1-‐10):

– Housing (3) – Consumers (4) – Deficit/Bond Markets (5)

•  Only through gross negligence on the part of policymakers is this possible – Policy signals deficits over the long term – Tax cuts expire on Jan 1, 2011

6/5/15

14

National Housing Bounce

-‐20

-‐15

-‐10

-‐5

0

5

10

15

20

Jan-‐01

Aug-‐01

Mar-‐02

Oct-‐02

May-‐03

Dec-‐03

Jul-‐0

4

Feb-‐05

Sep-‐05

Apr-‐06

Nov-‐06

Jun-‐07

Jan-‐08

Aug-‐08

Mar-‐09

Oct-‐09

May-‐10

(%)

Year on Year Growth Median Prices to September


National Housing Bounce

Price Trough to Aug-10 (Case-Shiller)

Price Trough to Aug-10 (Case-Shiller)

CA-San Francisco 16.3 NY-New York 2.3 CA-San Diego 11.0 TX-Dallas 2.1 MN-Minneapolis 10.1 IL-Chicago 2.0 DC-Washington 9.8 CO-Denver 1.8 CA-Los Angeles 8.0 WA-Seattle 1.7 OR-Portland 6.3 GA-Atlanta 0.9 MA-Boston 5.0 FL-Miami 0.6 OH-Cleveland 4.8 FL-Tampa 0.0 AZ-Phoenix 2.5 NC-Charlotte 0.0 MI-Detroit 2.4 NV-Las Vegas 0.0

Source: Standard and Poor’s

6/5/15

15

National Spending Fumes?


10,000

10,500

11,000

11,500

12,000

12,500

13,000

Jan-‐06

Aug-‐06

Mar-‐07

Oct-‐07

May-‐08

Dec-‐08

Jul-‐0

9

Feb-‐10

Sep-‐10

Billion

s ($) SAA

R

Personal Income to September


1,450 1,470 1,490 1,510 1,530 1,550 1,570 1,590 1,610 1,630 1,650

800 820 840 860 880 900 920 940 960 980

1,000 Jan-‐06

Oct-‐06

Jul-‐0

7

Apr-‐08

Jan-‐09

Oct-‐09

Jul-‐1

0

Billion

s ($)

Billion

s ($)

Consumer Credit to September

Revolving Non-‐Revolving

Attack the Deficit Now?

6/5/15

16

What to do with the Bush tax cuts?

Permanent? Expire? Temporary extension? Top 2%?

US Summary  The Recession is Over… not in the clear yet –  Consumer weakness will likely conYnue –  Housing bounce is ending – Most likely scenario-‐ slow recovery for two years (+?)

 Tax Policy, both short and long run, is crucial –  Short run sYmulus, long run danger – Must convince bond markets of long run fiscal sanity

 It’s not permanent –  It’s just going to take some Yme—PATIENCE!! –  No inflaYon worries –  Lending pracYces must loosen for real progress

6/5/15

17

What is needed?

•  ConYnued SYmulus – Tax breaks – Spending – infrastructure

•  Debt Management – Less snorkeling

•  QuanYtaYve Easing – Not clear it will work – Pushing on a string

8

9

10

11

12

13

14

15

16

Q1-‐93

Q3-‐94

Q1-‐96

Q3-‐97

Q1-‐99

Q3-‐00

Q1-‐02

Q3-‐03

Q1-‐05

Q3-‐06

Q1-‐08

Q3-‐09

(%)

Taxes as % of Income to Q3-‐10


CA Summary  California has been part of the recession’s epicenter –  Housing, exports, business investment

 Early employment gains have ceased –  Should resume soon, but may be too slow to affect unemployment in the near term

 Decisions now will affect economy long term –  Budget –  EducaYon, infrastructure, regulatory environment

 Years before recovery is complete –  Catching up to potenYal could be 5+ years

6/5/15

18

What About Tomorrow? •  Economic

–  NO -‐ ProposiYon 19: Marijuana •  Risky to state coffers -‐ Feds

–  NO -‐ ProposiYon 23: Suspend AB 32 •  Stunts growth in new technologies in CA

–  YES -‐ ProposiYon 24: Business Tax Liability •  Not going to hurt business climate

•  PoliYcal – WHY NOT -‐ ProposiYon 25: Budget/Taxes

•  Half (1/3?) measure –  NO -‐ ProposiYon 26: 2/3 vote for State and Local Fees

•  Not working so well for budgets and taxes –  NO -‐ ProposiYon 27: RedistricYng

•  C’mon…

San Francisco Metropolitan District Economic Forecast: 2009-2013

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6/5/15

19

Nonfarm Employment


Sep-‐10 Employment

Drop from Peak to

Trough (%)

Increase Since Trough

(%) Inland Empire 1085.9 -‐15.0 -‐ San Rosa 168.2 -‐13.3 1.2 Sacramento 799.0 -‐11.9 -‐ East Bay (MD) 929.8 -‐11.6 -‐ Vallejo 115.5 -‐11.4 -‐ Fresno 278.4 -‐10.1 0.4 Los Angeles (MSA) 5093.7 -‐9.9 -‐ Napa 59.2 -‐9.9 -‐ San Francisco (MD) 913.5 -‐9.0 0.1 San Jose 849.2 -‐8.9 1.1 San Diego 1210.0 -‐8.1 0.2

Unemployment Rate and Labor Force

Sep-‐10 Unemployment

Rate (%)

Unemployment Rate Low to Peak Change

Peak to Trough % Drop in Labor

Force Fresno 18.0 10.6 No Drop Inland Empire 14.6 10.2 -‐2.3 Sacramento 12.9 8.4 -‐1.8 San Jose 11.5 7.9 -‐2.0 Vallejo 12.5 7.9 -‐0.7 Los Angeles (MSA) 11.8 7.8 -‐2.8 East Bay (MD) 11.6 7.6 -‐2.3 San Diego 10.7 7.2 -‐0.5 Santa Rosa 10.8 7.1 -‐3.2 Napa 10.3 6.7 -‐3.8 San Francisco (MD) 9.5 6.1 -‐2.7


6/5/15

20

Taxable Sales LocaYon Q2-‐10

(Millions) Drop from Peak to

Trough (%) Increase since Trough (%)

Bay Area 26,600 -‐20.5 7.3 SACOG Region 7,155 -‐23.2 2.6 SCAG Region 55,300 -‐23.2 4.5 SANDAG Region 10,300 -‐20.1 7.4

San Francisco (MD) 7,261 -‐19.0 7.3 San Jose (MSA) 7,572 -‐22.1 12.1 Oakland (MD) 8,323 -‐21.8 5.4 Vallejo 1,301 -‐26.2 2.4 Napa 562 -‐17.2 3.4 Santa Rosa 1,579 -‐24.4 2.9

Source: California Board of EqualizaEon

State Housing Markets Sales Volume Median Price

Sep-‐09 Sep-‐10 % Chng Sep-‐09 Sep-‐10 % Chng Santa Clara 1,907 1,477 -‐22.5 450,000 500,000 11.1 Contra Costa 1,607 1,323 -‐17.7 262,000 289,500 10.5 Marin 223 216 -‐3.1 636,000 702,500 10.5 Riverside 4,312 3,292 -‐23.7 185,000 200,000 8.1 San Bernardino 3,023 2,454 -‐18.8 150,000 160,000 6.7 Sonoma 509 472 -‐7.3 320,000 332,000 3.8 Orange 2,828 2,524 -‐10.7 429,000 445,000 3.7 Alameda 1,681 1,226 -‐27.1 358,000 371,000 3.6 Los Angeles 7,138 6,070 -‐15.0 330,000 340,000 3.0 Solano 678 543 -‐19.9 199,000 205,000 3.0 San Diego 3,454 3,069 -‐11.1 325,000 330,500 1.7 San Mateo 624 517 -‐17.1 570,000 571,500 0.3 Ventura 784 682 -‐13.0 371,750 370,000 -‐0.5 San Francisco 536 442 -‐17.5 650,000 620,000 -‐4.6 Napa 114 118 3.5 360,000 337,000 -‐6.4

Source: DataQuick

6/5/15

21

% of Single-Family Homes in Default and Foreclosure

Q3 % in Default

Peak % in Default

Q3 % in Foreclosures

Peak % in Foreclosure

Inland Empire 1.53 2.48 0.86 1.67 Vallejo 1.40 2.10 0.85 1.47 East Bay(MD) 0.83 1.37 0.43 0.90 Fresno 1.10 1.46 0.72 0.87 San Diego 0.86 1.37 0.41 0.78 Los Angeles (MSA) 0.84 1.28 0.35 0.60 Napa 0.55 0.85 0.26 0.60 Sonoma 0.63 0.85 0.31 0.56 San Jose (MSA) 0.57 1.03 0.24 0.51 San Francisco (MD) 0.45 0.61 0.17 0.21

Source: California Department of Finance, DataQuick

Bay Area Forecast (SF, EB, and SJ)

Current Level (2010 Q2)

Peak Level (Various) Return to Peak

NF Employment 2,710 2,962 2015 Q4

Taxable Sales 23,155 26,872 2015 Q1

Home Prices

-‐ San Francisco (MD) 695,093 891,542 90% in 2015 Q4

-‐ East Bay (MD) 350,475 646,658 69% in 2015 Q4

-‐ San Jose MSA 552,695 779,001 98% in 2015 Q4

6/5/15

22

A hard time for SF…

Unemployment – It’s Grim


0

2

4

6

8

10

12

Jan-‐90

Dec-‐91

Nov-‐93

Oct-‐95

Sep-‐97

Aug-‐99

Jul-‐0

1

Jun-‐03

May-‐05

Apr-‐07

Mar-‐09

(%)

San Francisco (MD) Unemployment Rate to Sept.

Unemployment (%) LocaYon Sep-‐08 Sep-‐09 Sep-‐10 California 7.8 12.1 12.4

Bay Regions San Francisco (MD) 5.3 9.4 9.5 San Jose (MSA) 6.6 12.0 11.5 Oakland (MD) 6.7 11.3 11.6

Other Regions San Diego 6.4 10.4 10.7 Los Angeles (MD) 8.2 12.2 12.6 Inland Empire 9.0 14.0 14.6 Salinas 8.9 13.5 14.7

6/5/15

23

Payroll Employment


-‐30 -‐25 -‐20 -‐15 -‐10 -‐5 0 5

ConstrucYon InformaYon

Financial AcYviYes Transport/UYl.

Prof/Bus. Total Nonfarm

EducaYon/Health Other Services

Wholesale Trade Leisure/Hosp. Retail Trade

Manufacturing Government

Change from Dec (% Annualized Rate)

San Francisco (MD) Employment by Sector, YTD to Sept.

2010 2009

Payroll Employment


-‐35 -‐30 -‐25 -‐20 -‐15 -‐10 -‐5 0 5 10

Government ConstrucYon

Financial AcYviYes Transport/UYl. Total Nonfarm Other Services

InformaYon Retail Trade

EducaYon/Health Manufacturing

Prof/Bus. Wholesale Trade

Leisure/Hosp.

Change from Dec, (% Annualized Rate)

San Jose (MSA) Employment by Industry, YTD to Sept.

2010 2009

6/5/15

24


Manufacturing

80

90

100

110

120

130

140

150

160 Q1-‐95

Q2-‐96

Q3-‐97

Q4-‐98

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

Q2-‐11

Q3-‐12

Q4-‐13

Q1-‐15

Inde

x = 100 in Q4-‐07

Manufacturing Employment to Q4-‐15

San Francisco (MD) San Francisco (MD) Forecast

California California Forecast

- 9,632 Jobs (-20.7%) jobs lost from peak to current. - No further job losses are expected.

Beyond the Recession: Manufacturing

2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

13

14

15

16

17

18

19

1987

1990

1993

1996

1999

2002

2005

2008

Trillions ($

)

Num

ber o

f Job

s (Millions, SA)

US Manufacturing Sector to 2008

Employment Output Output Trend

Source: California Employment Development Department, Bureau of Economic Analysis

Source: Bureau of Labor StaEsEcs, Bureau of Economic Analysis

0 5 10 15 20 25 30 35

130

140

150

160

170

180

2001

2002

2003

2004

2005

2006

2007

2008

Outpu

t (Billion

s $)

Employmen

t (Th

ousand

s)

San Francisco (MSA) Manufacturing ProducEvity

to 2008

Gross Output Employment

6/5/15

25

Construction’s Loss

•  15,543 (-33.5%) jobs lost to date •  0.6% decline left.

•  Infrastructure stimulus? Not much help here.

50

60

70

80

90

100

110

120 Q1-‐95

Q2-‐96

Q3-‐97

Q4-‐98

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

Q2-‐11

Q3-‐12

Q4-‐13

Q1-‐15

Inde

x = 100 in Q4-‐07

ConstrucEon Employment to Q4-‐15

San Francisco (MD)

San Francisco (MD) Forecast

California

California Forecast


Housing Market Growth

Source: DataQuick Source: ConstrucEon Industry Research Board

0 100 200 300 400 500 600 700 800 900

1,000

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

Thou

sand

s ($)

Single-‐Family Median Home Prices to Q3-‐10

San Francisco (MD) California

0 20 40 60 80

100 120 140 160 180 200

Jan-‐00

Feb-‐01

Mar-‐02

Apr-‐03

May-‐04

Jun-‐05

Jul-‐0

6 Au

g-‐07

Sep-‐08

Oct-‐09

Inde

x = 100 in Ja

n-‐00, Smoo

thed

Single-‐Family Building Permits to October


6/5/15

26

Housing Market

San Francisco MD: •  Currently

Down $179,476 (-21.0%) from peak in Q2-2007 to current.

•  Peak to trough decline:

$282,885 (-31.8%) by Q1-2009

• Prices flat to up rising over the next couple of years

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

200

300

400

500

600

700

800

900

1,000 Q1-‐95

Q4-‐96

Q3-‐98

Q2-‐00

Q1-‐02

Q4-‐03

Q3-‐05

Q2-‐07

Q1-‐09

Q4-‐10

Q3-‐12

Q2-‐14

Sales (Th

ousand

s)

Thou

sand

s ($)

Housing SituaEon to Q4-‐15

Sales Sales Forecast

Prices Prices Forecast

Source: DataQuick

Residential Real Estate

Source: DataQuick, Department of Finance Source: DataQuick, Department of Finance

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6

Q1-‐02

Q4-‐02

Q3-‐03

Q2-‐04

Q1-‐05

Q4-‐05

Q3-‐06

Q2-‐07

Q1-‐08

Q4-‐08

Q3-‐09

Q2-‐10

(%)

Percentage of Single-‐Family Housing Units in Default

to Q3-‐10

San Francisco (MD) Oakland (MD)

San Jose (MSA) Los Angeles (MD)

0.0

0.2

0.4

0.6

0.8

1.0

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

(%)

Percentage of Single-‐Family Housing Units in Foreclosure

to Q3-‐10


San Jose (MSA) Los Angeles (MD)

6/5/15

27

Residential Real Estate

Source: DataQuick Source: DataQuick

0 100 200 300 400 500 600 700 800 900

1,000 Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

Thou

sand

s ($)

Single-‐Family Median Home Prices to Q3-‐10

San Francisco (MD) San Jose (MSA)

Oakland (MD) Los Angeles (MD)

20

40

60

80

100

120

140

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

Inde

x = 100 in Q1-‐00

Single-‐Family Home Sales to Q3-‐10



Finance & Insurance

• Late start in SF •  10,688 jobs (-15.6%) lost to date

•  No additional job losses are expected

80

85

90

95

100

105

110

115

120

125

Q1-‐95

Q2-‐96

Q3-‐97

Q4-‐98

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

Q2-‐11

Q3-‐12

Q4-‐13

Q1-‐15

Inde

x = 100 in Q4-‐07

Finance and Insurance Employment to Q4-‐15




6/5/15

28

Business & Professional

•  20,125 jobs lost (-9.5%) to date •  9.9% total decline •  Currently at bottom

• Late start, late recovery 70

75 80 85 90 95

100 105 110 115

Q1-‐95

Q1-‐96

Q1-‐97

Q1-‐98

Q1-‐99

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

Q1-‐11

Q1-‐12

Q1-‐13

Q1-‐14

Q1-‐15

Inde

x = 100 in Q4-‐07

Professional and Business Services Employment to Q4-‐15




Leisure & Hospitality

•  7,168 jobs (-5.6%) lost to date

•  No additional job losses are expected.

70

75

80

85

90

95

100

105

110

Q1-‐95

Q2-‐96

Q3-‐97

Q4-‐98

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

Q2-‐11

Q3-‐12

Q4-‐13

Q1-‐15

Inde

x = 100 in Q4-‐07

Leisure and Hospitality Employment to Q4-‐15




6/5/15

29

Big Story: The Consumer

•  Strong driver of the recession.

• 19.0% decline from peak to trough

•  13.2% decline from peak to current level • Continued pressure on state and local government budgets.

Source: California Board of EqualizaEon

6.5

7.0

7.5

8.0

8.5

9.0

Q1-‐05

Q4-‐05

Q3-‐06

Q2-‐07

Q1-‐08

Q4-‐08

Q3-‐09

Q2-‐10

Q1-‐11

Q4-‐11

Q3-‐12

Q2-‐13

Q1-‐14

Q4-‐14

Q3-‐15

Billion

s ($)

San Francisco (MD) Taxable Sales Forecast to Q4-‐15

Taxable Sales Forecast

Retail Trade

•  9,063 (9.5%) jobs lost to date.

•  No additional job losses are expected

80

85

90

95

100

105

110

Q1-‐95

Q1-‐96

Q1-‐97

Q1-‐98

Q1-‐99

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

Q1-‐11

Q1-‐12

Q1-‐13

Q1-‐14

Q1-‐15

Inde

x = 100 in Q4-‐07

Retail Trade Employment to Q4-‐15




6/5/15

30

San Francisco (MD) Retail Market

Source: Property and Porgolio Research Source: Property and Porgolio Research

0

2

4

6

8

10

12

14

-‐1,500

-‐1,000

-‐500

0

500

1,000

1,500

2,000

2,500 Q1-‐00

Q3-‐01

Q1-‐03

Q3-‐04

Q1-‐06

Q3-‐07

Q1-‐09

Q3-‐10

(%)

Net Abs (T

housan

ds of S

q. Ft.)

Retail Net AbsorpEon and Vacancy Rate to Q3-‐10

Net AbsorpYon Vacancy Rate

110

115

120

125

130

135

140

5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

Inde

x = 100 in Q4-‐97

(%)

Retail Rent and Cap Rates to Q3-‐10

Cap Rates Rental Rate Index

Net Affect on the Labor Market

•  Unemployment peak: 9.6% in Q4-2009.

Trough to Peak: +5.9 % pts

•  Employment trough: 914,170 in Q4-2010

Peak to Trough: 86,317 jobs lost.

2

3

4

5

6

7

8

9

10

850

900

950

1,000

1,050

1,100

Q1-‐95

Q3-‐96

Q1-‐98

Q3-‐99

Q1-‐01

Q3-‐02

Q1-‐04

Q3-‐05

Q1-‐07

Q3-‐08

Q1-‐10

Q3-‐11

Q1-‐13

Q3-‐14

(%)

Employees (Th

ousand

s)

San Francisco (MD) Employment SituaEon to Q4-‐15

Total Nonfarm Nonfarm Forecast

Unemployment Rate Unemployment Forecast Source: California Employment Development Department

6/5/15

31

Forecast Summary Peak to

Current (%) Borom

Reached In Recovery Of

Peak Home Prices (County) Marin -‐23.1 Q1-‐09 Aser Q4-‐15 San Francisco -‐15.9 Q1-‐09 Aser Q4-‐15 San Mateo -‐22.8 Q1-‐09 Aser Q4-‐15 Taxable Sales (County) Marin -‐15.8 Q2-‐09 Q2-‐15 San Francisco -‐12.8 Q2-‐09 Q2-‐14 San Mateo -‐13.7 Q2-‐09 Aser Q4-‐15 Personal Income -‐4.5 Q4-‐09 Q3-‐11 Nonfarm Employment -‐8.9 Q2-‐10 Aser Q4-‐15 Unemployment Rate +5.7 Q4-‐09 Aser Q4-‐15

Source: Forecasts by Beacon Economics

Secondary Factors

•  Airport •  Tourism and travel

6/5/15

32

Ports

Source: WiserTrade Source: RITA

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800 Jan

Feb

Mar

Apr

May

Jun Jul

Aug

Sep

Oct

Nov

Dec

Millions ($

)

SF InternaEonal Airport Total Exports

2008 2009 2010

400

450

500

550

600

650

700

750

1,500

1,700

1,900

2,100

2,300

2,500

2,700

Jan-‐01

Apr-‐02

Jul-‐0

3 Oct-‐04

Jan-‐06

Apr-‐07

Jul-‐0

8 Oct-‐09

Intl Pa

ss (0

00s, Smoo

thed

)

DomesEc Pass (000s, Smoo

thed

)

San Francisco InternaEonal Airport Passengers to May

DomesYc InternaYonal

Tourism


50

55

60

65

70

75

80

85

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

(%)

Hotel Occupancy Rates to Q3-‐10



50

70

90

110

130

150

170

190

210

Q1-‐97

Q2-‐98

Q3-‐99

Q4-‐00

Q1-‐02

Q2-‐03

Q3-‐04

Q4-‐05

Q1-‐07

Q2-‐08

Q3-‐09

Inde

x = 100 in Q4-‐97, SA

Hotel RevPAR Index to Q3-‐10



6/5/15

33

Other Regional Features

•  Aging Population •  Education •  Income Trends •  Venture Capital

Age Related Challenges

•  San Francisco’s large share of Baby Boomers is a challenge

• Rising retirements over the next 20 yrs • Less workplace experience.

0 5

10 15 20 25 30 35 40

5 to 20 21 to 34 35 to 54 55 to 64

Percen

t of P

opulaE

on

2009 PopulaEon by Age


0 5

10 15 20 25 30 35 40

5 to 20 21 to 34 35 to 54 55 to 64

Percen

tage of P

opulaE

on

PopulaEon Forecast by Age

2009 2020

Source: CA Department of Finance

Source: CA Department of Finance

6/5/15

34

Educational Attainment

0 10 20 30 40 50 60

San Bernardino Riverside

Sacramento Los Angeles California Ventura

San Luis Obispo San Diego

Orange Contra Costa

Alameda San Mateo Santa Clara

San Francisco Marin

Source: U.S. Census Bureau, American Community Survey

2009 Share of PopulaEon with Bachelors' Degree or Higher

Real Per Capita Income to 2008

30

40

50

60

70

80

90

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2008 Dollars (T

housan

ds)

California San Francisco (MD)

Linear (California) Linear (San Francisco (MD))


6/5/15

35

Venture Capital

Q2-‐10 Value of All Deals

(Millions) % of Total US VC

Silicon Valley 3,029 44

California 3,902 56

United States 6,943

Q3-‐10 Value of All Deals

(Millions) % of Total US VC

Silicon Valley 1,750 36

California 2,220 46

United States 4,820

20

25

30

35

40

45

50

55

60

Q1-‐95

Q2-‐96

Q3-‐97

Q4-‐98

Q1-‐00

Q2-‐01

Q3-‐02

Q4-‐03

Q1-‐05

Q2-‐06

Q3-‐07

Q4-‐08

Q1-‐10

(%)

California's Share of U.S. Venture Capital to Q3-‐10

Amount Deals

Source: PricewaterhouseCoopers

Venture Capital

County Marin San Francisco San Mateo

$ (Mil) Rank $ (Mil) Rank $ (Mil) Rank

Q4-‐09 5.9 73 260.6 5 682.4 2

Q1-‐10 0.0 -‐ 257.2 4 313.1 3

Q2-‐10 20.3 44 434.1 3 630.0 2

Q3-‐10 8 67 201.4 6 445.2 2 Source: PricewaterhouseCoopers

6/5/15

36

Biggest VC Investments in Q3-10 San Francisco (MD)

City Name $ (Mil) Industry Redwood City Trilliant Inc. 106 Sosware

South San Francisco Solazyme Inc. 60 Biotechnology

Menlo Park Pacific Biosciences of California Inc. 59 Biotechnology

San Francisco Nexant Inc. 43 Industrial Energy

San Carlos Aster Data Systems Inc. 30 Sosware

Belmont PowerVision Inc. 21 Medical Devices and Equipment

Foster City VSS Monitoring Inc. 20 TelecommunicaYons

Belmont Sezmi CorporaYon 17 Media and Entertainment

Source: PricewaterhouseCoopers

Forecast Summary •  Housing has boromed, but growth will be slow •  Unemployment Rate peaked at 9.6% in Q4-‐2009 •  Employment will borom out in Q4-‐2010 •  Exports and business investment will be key drivers of recovery

•  For most aspects of the economy, recovery is 5+ years off

•  Local budgets will be strained for some Yme •  Region is adaptable and recovery will be robust once it comes!

6/5/15

37

•  YES -‐ Prop A: School District Parcel Tax – Need the revenues

•  YES -‐ Prop B: Earthquake Safety Bond – Again: revenue issue

•  YES -‐ Prop D: Public Employee Pensions – Good step in the right direcYon

•  NO -‐ Prop F: Rent Increase Appeal – Meaningless

Can’t Stop Thinking About Tomorrow

Apartment Vacancies to Q3-10

Source: Property and Porgolio Research

2

3

4

5

6

7

8

9

Q1-‐98

Q3-‐98

Q1-‐99

Q3-‐99

Q1-‐00

Q3-‐00

Q1-‐01

Q3-‐01

Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

(%)

San Francisco (MD) Oakland (MD) San Jose (MSA)

6/5/15

38

Apartment Market


700

900

1,100

1,300

1,500

1,700

1,900

2,100

Q1-‐98

Q3-‐98

Q1-‐99

Q3-‐99

Q1-‐00

Q3-‐00

Q1-‐01

Q3-‐01

Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

$ Pe

r Unit P

er M

onth

Apartment Cost of Rent to Q3-‐10


Commercial: Office


0

5

10

15

20

25

30

Q1-‐98

Q3-‐98

Q1-‐99

Q3-‐99

Q1-‐00

Q3-‐00

Q1-‐01

Q3-‐01

Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

(%)

Office Vacancy Rates to Q3-‐10


6/5/15

39

Commercial: Office


5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

10.0 Q1-‐98

Q2-‐99

Q3-‐00

Q4-‐01

Q1-‐03

Q2-‐04

Q3-‐05

Q4-‐06

Q1-‐08

Q2-‐09

Q3-‐10

(%)

Office Cap Rates to Q3-‐10


San Jose (MSA)

0

10

20

30

40

50

60

70

Q1-‐98

Q1-‐99

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

$ Pe

r Sq. Ft. Pe

r Yr.

Office Cost of Rent to Q3-‐10


San Jose (MSA)

Commercial: Retail


0

2

4

6

8

10

12

14

16

18

20

Q1-‐98

Q3-‐98

Q1-‐99

Q3-‐99

Q1-‐00

Q3-‐00

Q1-‐01

Q3-‐01

Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

(%)

Retail Vacancy Rates to Q3-‐10


6/5/15

40

Commercial: Retail


5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5

10.0 Q1-‐98

Q1-‐99

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

RaEo

Retail Cap Rates to Q3-‐10


San Jose (MSA)

15

17

19

21

23

25

27

29

31

Q1-‐98

Q1-‐99

Q1-‐00

Q1-‐01

Q1-‐02

Q1-‐03

Q1-‐04

Q1-‐05

Q1-‐06

Q1-‐07

Q1-‐08

Q1-‐09

Q1-‐10

$ pe

r Sq. Ft. Pe

r Yr

Retail Cost of Rent to Q3-‐10


San Jose (MSA)

Net Absorption


-‐2,000

-‐1,500

-‐1,000

-‐500

0

500

1,000

1,500

2,000

2,500

Q1-‐98

Q2-‐99

Q3-‐00

Q4-‐01

Q1-‐03

Q2-‐04

Q3-‐05

Q4-‐06

Q1-‐08

Q2-‐09

Q3-‐10

Thou

sand

s of S

q. Ft.

Retail Net AbsorpEon to Q3-‐10


San Jose (MSA)

-‐2,500

-‐2,000

-‐1,500

-‐1,000

-‐500

0

500

1,000

1,500

2,000

Q1-‐98

Q2-‐99

Q3-‐00

Q4-‐01

Q1-‐03

Q2-‐04

Q3-‐05

Q4-‐06

Q1-‐08

Q2-‐09

Q3-‐10

Thou

sand

s of S

q. Ft.

Office Net AbsorpEon to Q3-‐10


San Jose (MSA)

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Hotel Occupancy Rates to Q3-10


50

55

60

65

70

75

80

85 Q1-‐00

Q3-‐00

Q1-‐01

Q3-‐01

Q1-‐02

Q3-‐02

Q1-‐03

Q3-‐03

Q1-‐04

Q3-‐04

Q1-‐05

Q3-‐05

Q1-‐06

Q3-‐06

Q1-‐07

Q3-‐07

Q1-‐08

Q3-‐08

Q1-‐09

Q3-‐09

Q1-‐10

Q3-‐10

(%)

Hotel Occupancy Rates to Q3-‐10

San Francisco (MD) San Jose (MSA) Oakland (MD)

Metro Area Hotels

Occupancy Rate (%) Q3-‐09 Q3-‐10 Absolute Change

San Francisco (MD) 71.0 74.7 3.7

Oakland (MD) 56.8 61.2 4.4

San Jose (MSA) 56.5 63.0 6.5

RevPAR Index, SA Q3-‐09 Q3-‐10 % Change

San Francisco (MD) 107.5 118.4 10.1

Oakland (MD) 90.6 100.6 11.0

San Jose (MSA) 88.0 97.1 10.3


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