BRAR-The Economy and Housing Market - Nov 3

Blue Ridge Association of Realtors

November 3, 2011

The U.S. and Washington AreaEconomic Performance and Outlook

John McClain, Senior FellowCenter for Regional Analysis

School of Public PolicyGeorge Mason University

GDP Percent Change, 1930-2010(Real Dollars)

1930

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

%

Annual Change in Jobs – US1940 - 2010

194019441948195219561960196419681972197619801984198819921996200020042008

-7000

-5000

-3000

-1000

1000

3000

5000THOUSANDS

0 1 2 3 4 5 6 7 8 90

2

4

6

8

10

12

14

16

1975-Q11982-Q31991-Q12001-Q42009-Q2

Quarters After Trough

% C

ha

ng

e in

GD

P

Recession Recovery Patterns of GDPPast Five Recessions

Sources: BEA, GMU Center for Regional Analysis,

2007

-1 3

2008

-1 3

2009

-1 3

2010

-1 3

2011

-1 3

2012

-1 3

2013

-1 3

2014

-1-10

-8

-6

-4

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2014

% Forecast > > > > > >

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

30

35

40

45

50

55

60

65

MfgN-Mfg

ISM Manufacturing and Non-Manufacturing Indices

Annual Change in Payroll Jobs - US

Feb-01Sep-01Apr-02Nov-02Jun-03Jan-04Aug-04M

ar-05O

ct-05M

ay-06Dec-06Jul-07Feb-08Sep-08Apr-09Nov-09Jun-10Jan-11

-7000

-5000

-3000

-1000

1000

3000

THOUSANDS

Sep =+ 1.46 M

Source: BLS Establishment Survey, NSA

20

07

20

07

20

07

20

07

20

08

20

08

20

08

20

08

20

09

20

09

20

09

20

09

20

10

20

10

20

10

20

10

20

11

20

11

20

11

-800

-600

-400

-200

0

200

400

600

000s

US Job ChangeMonth-to-Month, Seasonally Adjusted

Sep= 103

Source: BLS

Annual Change in Employed - U.S.

Feb-01Sep-01Apr-02Nov-02Jun-03Jan-04Aug-04M

ar-05O

ct-05M

ay-06Dec-06Jul-07Feb-08Sep-08Apr-09Nov-09Jun-10Jan-11

-8000

-6000

-4000

-2000

0

2000

4000

THOUSANDS

Sep = 787

Source: BLS Household Survey, NSA

20072008

20092010

2011

200

250

300

350

400

450

500

550

600

650

700

Initial Claims for Unemployment4-Week Moving Average

405

Source: Bureau of Labor Statistics

Feb-0

4

Feb-0

5

Feb-0

6

Feb-0

7

Feb-0

8

Feb-0

9

Feb-1

0

Feb-1

14

5

6

7

8

9

10

11

U.S. Unemployment Rate

Source: BLS, Seasonally Adjusted

Sep = 9.1

%

GI FCST11 – 9.112 – 9.213 – 8.914 – 8.115 – 7.316 – 6.8

U.S. Housing TrendsNew & Existing Home Sales

Sep-07D

ec-07M

ar-08M

ay-08A

ug-08N

ov-08Feb-09M

ay-09A

ug-09N

ov-09Feb-10M

ay-10Jul-10O

ct-10Jan-11A

pr-11Jul-11

3500

4000

4500

5000

5500

6000

6500

7000

7500

200

300

400

500

600

700

800

Existing(left scale)

New

(Right Scale)

(000s) (000s)

Nov-0

6

Mar

-07

Jul-0

7

Nov-0

7

Mar

-08

Jul-0

8

Nov-0

8

Mar

-09

Jul-0

9

Nov-0

9

Mar

-10

Jul-1

0

Nov-1

0

Mar

-11

Jul-1

196.0

101.0

106.0

111.0

116.0

121.0

L.I.

C.I.

U.S. Coincident and Leading IndicesNov 2006 – Sep 2011

RECESSION >

U.S. Leading Index

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

-6-4-202468

101214

2006 2007 2008 2009 2010 2011

U.S. Coincident Index

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

-8

-6

-4

-2

0

2

4 2006 2007 2008 2009 2010 2011

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

-1

0

1

2

3

4

5

Consumer Prices2001 - 2015

Forecast > > > > > >%

Source: BLS, Global Insight

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

1

2

3

4

5

6

7

8

Fed 30-Yr

Interest Rates2001 - 2015

Forecast > > > > > >

Oil Prices$ per barrel

20042005

20062007

20082009

20102011

20122013

20142015

0

20

40

60

80

100

120

140

$/barrel

Source: Global Insight

Forecast > > > > > > > >

Consumer Confidence

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

20

40

60

80

100

120

140

160

100

Present Situation

Expectations

Source: Conference Board, GMU Center for Regional Analysis

Growth in Total Consumption Outlays

20002002

20042006

20082010

20122014

-3

-2

-1

0

1

2

3

4

5

6

4.7

2.5 2.7 2.83.3 3.4

2.92.3

-0.6

-1.9

2.0 2.1 1.9 1.8 2.02.5

%

Source: Global Insight, GMU Center for Regional Analysis

Forecast > > > > >

U.S. Job Change by SectorSept 2010 – Sept 2011

Information

Federal Govt.

Transp. & Util.

Other Services

Wlse Trade

Construction

Financial

Manufacturing

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

Educ & Health Svcs

State & Local Govt

-600 -400 -200 0 200 400 600

-41

-30

79

64

84

37

-13

196

120

162

561

450

-259

(000s) Total = 1,490

Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis

Ranked by Size in 2010

U.S. Job Change by SectorAug 2011 – Sept 2011

Information

Federal Govt.

Transp. & Util.

Other Services

Wlse Trade

Construction

Financial

Manufacturing

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

Educ & Health Svcs

State & Local Govt

-100 -80 -60 -40 -20 0 20 40 60 80 100

34

-1

-1

-3

-6

26

-8

-13

-4

14

48

45

-33

(000s) Total = 103

Source: BLS March 2010 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis

Ranked by Size in 2010

The Washington Economy

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Washington MSA Leading Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

Aug

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

Washington MSA Coincident Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

Aug

1991 1996 2001 2006 2011-100

-50

0

50

100

150

200

000s

Annual Job Change – MOTYCWashington MSA

Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis

Annual Job ChangeWashington MSA

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

-80

-60

-40

-20

0

20

40

60

80

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis

15 Largest Job MarketsJob Change Sep 2010 – Sep 2011

New York

Los Angeles

Chicago

Dallas

Philadelphia

Houston

Boston

Miam

i

Atlanta

Detroit

SF-Oakland

Minneapolis

Phoenix

Seattle

-100-80-60-40-20

020406080

100(000s)

Washington +8,500

Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis

Job Change by SectorSept 2010 – Sept 2011

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

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

1

0

-4

-2

5

-4

-5

1

-3

2

3

0

12(000s) Total = 8,500

Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis

Annual Job ChangeNorthern Virginia

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

-40

-30

-20

-10

0

10

20

30

40

50

60

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS March 2011 Benchmark, GMU Center for Regional Analysis

Job Change by SectorSept 2010 – Sept 2011

Northern Virginia

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

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

-1

0

0

-2

1

-3

1

0

1

2

0

-3

5(000s) Total + 600

Source: BLS March 2010 Benchmark, GMU Center for Regional Analysis

Sep-04

Sep-05

Sep-06

Sep-07

Sep-08

Sep-09

Sep-10

Sep-11

0

2

4

6

8

10

12

14

11.0 – DC

9.1 – U.S.

6.3 – SMD6.1 – MSA4.9 - NVA

Unemployment Rate

Source: BLS, Not Seasonally Adjusted

15 Largest Job MarketsRanked by Unemployment Rate

September 2011

Minneapolis

Washington

Boston

Phoenix

New York

Dallas

Philadelphia

Seattle

Houston

SF-Oakland

Chicago

Atlanta

Miam

i

Los Angeles

Detroit

0

2

4

6

8

10

12

14%

US 9.1

Source: BLS, NOT Seasonally Adjusted

6.1

2006 2007 2008 2009 2010 20110

2

4

6

8

10

12

ClarkeFrederickWarrenShenandoahVAUS

Unemployment Rate – August Each YearBRAR Counties

%

Housing Market Trends

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

2000

4000

6000

8000

10000

12000

14000

Existing Home SalesWashington MSA

Through September 2011

12-Month Moving Average

Source: RBIntel, GMU Center for Regional Analysis

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

100

150

200

250

300

350

400

450

500

Median House Sales PriceWashington MSA

Source: RBIntel, GMU Center for Regional Analysis

$315,200 Sept 2011

Percent Change in Inventories of Existing Homes

Month-Over-the-Year-Change2000 – 2011, MSA

2000

2000

2000

2001

2001

2002

2002

2002

2003

2003

2004

2004

2005

2005

2005

2006

2006 july

dec

May oc

tM

arA

ug20

10 Jun

Nov Apr

-40

-20

0

20

40

60

80

100

120

140Jan-May, 2006 >100 %

Source: RBIntel, GMU Center for Regional Analysis

%

Sep = - 29%

Total Active Listings Per SaleSeptember Each Year

19992000

20012002

20032004

20052006

20072008

20092010

2011

0.0

5.0

10.0

15.0

20.0

25.0

LDNFFX

ARL

PW

Source: RBIntel, GMU Center for Regional Analysis

Total Active Listings Per SaleSeptember Each Year – Metro Area

19992000

20012002

20032004

20052006

20072008

20092010

2011

0.02.04.06.08.0

10.012.014.016.0

Source: RBIntel, GMU Center for Regional Analysis

Average Sales Price Percent ChangeWashington MSA

All Housing Types

20002002

20042006

2008Apr

OctApr

OctApr

-30

-20

-10

0

10

20

30

6

111414

2022

20

-16

-24-26

-20-18

-14

-10-9-7

0

-4

3

96 6

46

5 47

54

8 9

2 2 13

13 4

-1

1 2

%

Source: RBIntel, GMU Center for Regional Analysis

Annual Change Annual Change by Month

2009 2010 2011

Average Sales Price Percent ChangeNorthern Virginia

All Housing Types

20002002

20042006

2008Apr

OctApr

OctApr

-40

-30

-20

-10

0

10

20

30

5

101414

2223

1

-2

-25-28-28

-22-19

-12

-8

-2 -1

9

5

11

1519

161716

12119 9

61010

40

62

4 4 6

0

3

7

%

Source: RBIntel, GMU Center for Regional Analysis

Annual Change Annual Change by Month

2009 2010 2011

20002001

20022003

20042005

20062007

20082009

20102011

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Washington MSABuilding Permits

2000 – 2011, 3-Month Mvg Avg

Source: U.S. Census Bureau, Center for Regional Analysis

2004 2005 2006 2007 2008 2009 2010 20110

50,000

100,000

150,000

200,000

250,000

300,000

Blue Ridge Association of Realtors RegionMedian Sales Price – Sept Each Year$

Source: RBIntel, GMU Center for Regional Analysis

2004 2005 2006 2007 2008 2009 2010 20110

50

100

150

200

250

300

350

400

Blue Ridge Association of Realtors RegionSales – Sept Each Year

Source: RBIntel, GMU Center for Regional Analysis

2004 2005 2006 2007 2008 2009 2010 20110

500

1,000

1,500

2,000

2,500

3,000

3,500

Blue Ridge Association of Realtors RegionListings – Sept Each Year

Source: RBIntel, GMU Center for Regional Analysis

Employment Change bySub-state Region (000s)

2008 2009 2010 2011 2012 2013 2014 2015

D.C. 10.1 -2.2 9.5 3.3 5.7 8.6 9.3 9.8

Sub. MD -3.3 -25.1 -5.9 4.6 7.5 11.3 14.1 16.2

No. VA 6.1 -23.0 8.7 15.7 17.1 19.6 21.5 22.1

REGION 12.9 -50.3 11.3 23.6 30.3 39.5 44.9 48.1

Average Annual Change 1990-2010 = 36,000

Source: BLS, GMU Center for Regional Analysis, 2009-2014 based on 2010 Benchmark data from BLS, Revised 8/26/11

• Debt Ceiling Resolution & Federal Budget• Housing Market

– Foreclosures– Fannie and Freddie– Home Ownership

• Corporate Earnings• Jobs

OUTLOOK - Factors

2007

-1 3

2008

-1 3

2009

-1 3

2010

-1 3

2011

-1 3

2012

-1 3

2013

-1 3

2014

-1-10

-8

-6

-4

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2014

% Forecast > > > > > >

Source: IHS Global Insight

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