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On the subject of expert witness services, nearly every litigation action needs someone to compute economic losses. Please keep in mind that this is one of the many services at which Xpera Group excels. On your future cases, we would greatly appreciate it if you would introduce this valuable service to your to your clients.
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www.xperagroup.com
2014
Economic Outlook
Torrey Pines Bank
(619) 417-1817 [email protected]
1
Torrey Pines Bank
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Torrey Pines Bank
Section 1: National Economic Trends
Section 2: California Economic Trends
Section 3: California Residential Construction
Section 4: California Commercial Construction
Section 5: Comparison of Home Prices in Silicon Valley
and West Los Angeles
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Section 1: National Economic Trends
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Position Points – National Economic Trends
• The Nation is Growing Far More slowly than it should be
• First Time Unemployment Claims are much higher than they should be at this point in the recovery
• But the unemployment rate is down to 7.0%
and
• Interest rates are staying low, so at least we are moving in the right direction.
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Change in Gross Domestic Product 1988-2012
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Year Avg. % Change
1988-1992 6.0%
1993-1997 5.6%
1998-2002 5.0%
2003-2007 5.7%
2008-2012 2.3%
Source: Bureau of Economic Analysis
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0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
United States Initial Claimants for Unemployment Insurance Seasonly Adjusted
Weekly Jan 2004 - Dec 2013
Lehman Bros. Collapse
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UNITED STATES Monthly Unemployment Rate 2000 - 2013
Source: U.S Department of Labor
3.8%
10.0%
7.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Lehman Bros. Collapse
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Section 2: California Economic Trends
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Position Points – California Economic Trends
• California has gained almost 900,000 jobs in the past 3 years
• The unemployment rate has moved steadily downward
• Only the dearth of construction jobs is holding back the economy.
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Unemployment Rate California
2000-2013 (thru Nov.)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
3.97%
Lehman Bros. Collapse
6.84%
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New Jobs Created in California 2010-2013 (thru Oct.)
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15,600
15,800
16,000
16,200
16,400
16,600
16,800
17,000
17,200
Oct-10 Oct-11 Oct-12 Oct-13
16,319
16,994
910,000 Jobs Created between Oct 2010
and Oct 2013
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Construction Jobs California
2005-2013 (thru Nov.)
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0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
905,300
636,700
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Section 3: California Residential Construction
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Position Points – Residential Construction
• Single family construction lags way behind what it should be
• Multi-family is doing well, but it is virtually all rental housing
• Renovation still plays a major role in the construction market
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Residential Units Permitted California
2005-2014 (Projected)
15
-
50,000
100,000
150,000
200,000
250,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 F
Total
Single Family
Multi-Family
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Single Family Units Permitted Selected Metropolitan Areas
California 2009-2013 (thru October)
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0
500
1000
1500
2000
2500
3000
3500
4000
4500
2009 2010 2011 2012 2013
Riverside
Los Angeles
San Diego Orange County
San Bernadino
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Multi - Family Units Permitted Selected Metropolitan Areas
California 2009-2013 (thru October)
17
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2009 2010 2011 2012 2013
Riverside
Los Angeles County
San Diego
Orange County
San Bernadino
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Renovation/Alterations as % of Total Valuations Selected Metropolitan Areas
California 2009-2013 (thru October)
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2009 2010 2011 2012 2013
Riverside
Los Angeles County
San Diego
Orange County
San Bernadino
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Section 4: California Commercial Construction
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Position Points – Commercial Construction
• In most of California, office, retail and industrial construction is moving forward
• Renovations account for more than half of all dollars expended
• Since 2011, commercial construction is up 20% in SoCal and 35% in NorCal
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Total Permit Valuation Commercial Construction Major Metropolitan Areas 2009-2013 (thru October)
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$-
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
$8,000,000,000
2009 2010 2011 2012 2013
Southern Cal Northern Cal San Diego
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Office Building Permit Valuation Major Metropolitan Areas
California 2009-1013 (thru October)
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$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
2009 2010 2011 2012 2013
Southern Cal
Northern Cal
San Diego
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Retail Building Permit Valuation Major Metropolitan Areas
California 2009-1013 (thru October)
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$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
2009 2010 2011 2012 2013
Southern Cal
Northern Cal
San Diego
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Industrial Building Permit Valuation Major Metropolitan Areas
California 2009-1013 (thru October)
24
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
2009 2010 2011 2012 2013
Southern Cal
Northern Cal
San Diego
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Building Alterations Permit Valuation Major Metropolitan Areas
California 2009-1013 (thru October)
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$-
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
$3,000,000,000
$3,500,000,000
$4,000,000,000
2009 2010 2011 2012 2013
Southern Cal
Northern Cal
San Diego
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Alterations/Renovations as % of Total Commercial Permit Valuation
2009-2013 (thru October)
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0%
10%
20%
30%
40%
50%
60%
70%
80%
2009 2010 2011 2012 2013
Southern Cal
Northern Cal
San Diego
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Commercial Lending California Real Estate Lending All California-Based Commercial Banks
(loans in millions $)
2008-2013(through October)
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$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
3Q 2008 3Q 2009 3Q 2010 3Q 2011 3Q 2012 3Q 2013
1-4 Family
Commercial
Construction/Land Development
Multi-Family
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Commercial/Industrial Equipment Loans ($Millions) by California Based Banks
( Indicating Growing Business Confidence)
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$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
3Q 2008 3Q 2009 3Q 2010 3Q 2011 3Q 2012 3Q 2013
$58,514
$46,998
$66,421
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No. of California Based Banks
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0
50
100
150
200
250
300
350
3Q 2008 3Q 2009 3Q 2010 3Q 2011 3Q 2012 3Q 2013
287
210
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Section 5:
Comparison of Home Prices
Silicon Valley & West Los Angeles
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Position Points – Santa Clara Co. vs. West L.A.
Battle of the Bulge
• Detached home prices are up more than 20% since 2008 in both markets.
• Home sales in 2009-2013 in Santa Clara County have been a steady 15,000 annually.
• Both markets have average detached home prices of $1,000,000.
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Resale Prices Index
West Los Angeles & Silicon Valley (Santa Clara Co.) 2009-2013 (thru Nov.)
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$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
2009 2010 2011 2012 2013 (thru Nov.)
West Los Angeles
Santa Clara County
