Summary of JUNE 2010 Existing Home Sales Statistics
Matthew Gardner Economic Report
1. Economic & Real Estate
Trends and Outlook
Presented to
d
Windermere Eastside
February 8th, 2011
y
815 Western Avenue, Suite 400
Presented by:
Matthew Gardner Seattle, WA 98104
Managing Principal 206.442.9200
2. Have We B
H W Been Here B f
H Before…?
?
Not Necessarily!
7. U.S. Job Losses Have Turned
Positive…
Positive
4,000
2,000
A Recovery
Appears to Be
Underway;
U d 0
However, the
Pace of -2,000
-2 000
Improvement
is Under Par.
-4,000
-6,000
Economic & Real 12-month payroll job changes; in thousands
Estate Forecast -8,000
February 8 2011 Source: BLS – Seasonally Adjusted Figures – Data through January 2010
8. Monthly U.S. Payroll Change
600 000
600,000 11%
Net Jobs Added
500,000
Unemployment Rate
400,000 10%
Need 150,000-
300,000
300 000
175,000 New
175 000 N
Positions Per 200,000
9%
Month for 100,000
Unemployment Rate
Unemployment
ed
0
Net Jobs Adde
Rate to Drop. 8%
-100,000
Recent Declines -200,000
7%
Due to So Called 300,000
-300,000
“Disenchanted” -400,000
Workers. This 6%
-500,000
Will Likely Push
Up Again Before ,
-600,000
It Comes Down. -700,000 5%
-800,000
-900,000 4%
Economic & Real
Estate Forecast
February 8 2011 Source: BLS – Seasonally Adjusted Figures – Data Through January 2011
9. How Many Years to Get the
Job Market Back to Normal?
J bM k B k N l?
Jobs added per Assumed new jobs
month needed for growing How many years?
population per
month
Treading water
100,000
100 000 100,000
100 000 and never back to
normal!
200,000 100,000 6.3 years
y
300,000 100,000 3.2 years
400,000 100,000 2.1 years
Economic & Real
Estate Forecast
February 8 2011
10. Private Sector Showing
Job Growth!
400
200
The Private
Sector Added 0
2005 - Apr
2006 - Apr
2007 - Apr
2008 - Apr
2009 - Apr
2010 - Apr
2005 - Jul
2006 - Jul
2007 - Jul
2008 - Jul
2009 - Jul
2010 - Jul
2005 - Jan
2006 - Jan
2007 - Jan
2008 - Jan
2009 - Jan
2010 - Jan
2005 - Oct
2006 - Oct
2007 - Oct
2008 - Oct
2009 - Oct
2010 - Oct
Jobs Every
Month Since
In 000’s
-200
Last March.
March
0
-400
-600
-800
Economic & Real Monthly payroll job changes
Estate Forecast -1,000
February 8 2011 Source: BLS – Seasonally Adjusted Figures – Data Through January 2011
11. Upswing In the Job Market
Apparent?
1974 1981 1990
We Have 2001 2008
Swung 1.0%
elative to Peak Employment 0.5%
Upward but 0.0%
It Will Take -0.5%
E
1 0%
-1.0%
Years To get -1.5%
Back to Pre- -2.0%
Recession -2.5%
th
ative Job Loss Re
Mont
-3.0%
Levels. -3.5%
-4.0%
-4.5%
Is the
Percent Cumula
-5.0%
Recovery √- -5.5%
shaped? -6.0%
-6.5%
-6 5%
P
-7.0%
Economic & Real 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Estate Forecast Number of Months After Peak Employment
February 8 2011 Source: BLS & Gardner Economics –Data through January 2011
13. Consumer Confidence
200
Confidence
180 Present Situation
160 Expectation Index
140
Expectations
Have 120
Improved, as 100
has Overall
Confidence. 80
60
Nice Uptick
in January! 40
20
0
Jan-00
0
Feb-04
4
Jan-07
7
Aug-00
0
Mar-01
Oct-01
May-02
2
Dec-022
Jul-03
3
Sep-04
4
Apr-05
5
Nov-05
5
Jun-06
6
Aug-07
7
Mar-08
8
Oct-08
8
May-09
9
Dec-099
Jul-10
0
Economic & Real
Estate Forecast
February 8 2011 Source: Conference Board – Data through January 2011
14. U.S. Economic Forecast
• Moderate GDP Expansion 2.5% in the Next 2
2 5%
Years. (Historical Average is 3%.)
• 1.5 Million Job Additions Annually in the
Next 2 Years.
• Unemployment Rate of 8% in 2012… and
back to a Normal 6% by 2015.
• Inflation Concerns?
19. Fact 5.
I’m Not the Only Economist Who
Im
Sees a Better Future!
20. Macromarkets Surveys 100 Economists about
the H
h Home P i O l k
Price Outlook.
Expected Home Price Change by Year
(Case Shiller Index)
Year YoY Change Cumulative
2010 -1.13% -1.13%
2011 -0.17%
0 17% -1.27%
1 27%
2012 1.94% 0.69%
2013 2.86%
2 86% 3.61%
3 61%
2014 3.45% 7.21%
2015 3.67% 11.18%
22. Median Family Net Worth
2007
$300,000
$250,000
$250 000 2007
2010 data to
be published $200,000
2001 2004
in 2012 by 1998
the Federal
$150,000
Reserve. 1995
$100,000
$50,000
1995 1998 2001 2004 2007
$0
Economic & Real Renter Homeowner
Estate Forecast
February 8 2011 Source: Federal Reserve
24. Seattle’s Employment Situation
60
40
Year-over-Year 20
we See
Employment
E l t 0
201 - July
000 - Jul
001 - Jul
002 - Jul
003 - Jul
004 - Jul
005 - Jul
006 - Jul
007 - Jul
008 - Jul
009 - Jul
000 - Jan
001 - Jan
002 - Jan
003 - Jan
004 - Jan
005 - Jan
006 - Jan
007 - Jan
008 - Jan
009 - Jan
010 - Jan
Growth, but
-20
Improvement
10
20
20
20
20
20
20
20
20
20
20
is
i Still Under
U d
20
20
20
20
20
20
20
20
20
20
20
-40
Par.
-60
-80
-100
Economic & Real
12-month payroll job changes; in thousands
-120
Estate Forecast
Source: BLS – Seasonally Adjusted – Through December 2010
February 8 2011
25. Private Sector Employment
60
Gains 40
Regionally
have Been 20
Driven by
0
the P i t
th Private
2010 - July
2000 - Jul
2001 - Jul
2002 - Jul
2003 - Jul
2004 - Jul
2005 - Jul
2006 - Jul
2007 - Jul
2008 - Jul
2009 - Jul
2000 - Jan
2001 - Jan
2002 - Jan
2003 - Jan
2004 - Jan
2005 - Jan
2006 - Jan
2007 - Jan
2008 - Jan
2009 - Jan
2010 - Jan
Sector, -20
Where We
2
2
2
2
2
2
2
2
2
2
2
Have Seen
H S
2
-40
Positive
-60
Growth
Since Last
Si L -80
August.
-100
12-month payroll job changes; in thousands
Economic & Real -120
Estate Forecast
Source: BLS – Not Seasonally Adjusted – Through December 2010
February 8 2011
26. Local Employment Situation
NET EMPLOYMENT CHANGE BY NAICS CLASSIFICATION
Professional & Business Services 4,600
Declines are Trade 2,400
Improving. Education & Health Services 1,700
Information 1,300
I am H
Happy t
to Other Manufacturing 1,300
See Growth in State Government -100
the Leisure & Hospitality -100
Professional Local Government -600
Services & TWU 1/ -600
Information Federal Government -1,000
Sectors.
Sectors Aerospace Product and Parts Manufacturing -1,100
Other Services -1,200
Financial Activities -2,200
Construction -5,300
Economic & Real
Estate Forecast -6,000 -4,000 -2,000 0 2,000 4,000 6,000
February 8 2011 Source: WA State – Seasonally Adjusted YoY Growth - Data Through December 2010
27. Unemployment Rate Still Below
the National Average
PERCENTAGE POINTS ABOVE/(BELOW) NATIONAL RATE
1.0%
0.5%
0.5% 0.4% 0.4%
0.2%
In a Holding
Pattern for 0.0%
Now. -0.1% -0.2% -0.2%
-0.5% -0.3%
-0.4% -0.4% -0.4%
-0.5%
-0.7%
-0.8% -0.8%-0.8%
-1.0% -0.9%
-1.0%
-1.5%
-1.6% -1.6%
-1.8%
-2.0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Economic & Real
Estate Forecast
February 8 2011 SOURCE: BEA & WA ESD
28. We Will Start Regaining Jobs This
Year
HISTORIC AND PROJECTED ANNUAL EMPLOYMENT CHANGE
80,000
Employment 60,000
Growth Will
G th
be Slow, but 40,000
YMENT
Still Positive.
EMPLOY
20,000
0
-20,000
-40,000
Economic & Real
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 f
2012 f
Estate Forecast
February 8 2011 SOURCE: WA ESD & Gardner Economics Forecast
29. Puget Sound Employment Situation
g p y
Job Growth Will Be From the Center Out.
We Will Still Fare Better Than All West Coast
States.
Job Drivers? The 5 B’s…..
33. Resale Inventory Levels
King County
Ki C
12,000
December
b
10,000
Inventory =
6,868 Units.
6 868 Units 8,000
8 000
Last There in 6,000
Jan ‘10 and 4,000
May ‘07.
2,000
2 000
0
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
34. Resale Inventory Levels
Eastside
E id
4,500
December
b 4,000
Inventory = 3,500
2,268 Units.
2 268 Units 3,000
3 000
2,500
Last There in 2,000
,
Jan ‘10 and 1,500
December
1,000
‘07
07.
500
0
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
35. Resale Sales Transactions
King County
Ki C
3,500
Decemberb 3,000
Sales =
2,500
1,200 Units.
1 200 Units
2,000
Classically
1,500
1 500
Cyclical
Pattern but 1,000
Now Off the 500
Bottom
0
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
36. Resale Sales Transactions
Eastside
E id
December 1,200
Sales = 403 1,000
Units.
800
Another
600
Classically
Cyclical 400
Pattern, but
Clearly Off 200
the Bottom.
0
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
37. Average List Prices
King County
Ki C
$800,000
List Prices $750,000
are Still In $700,000
Decline.
Decline
$650,000
Last Seen in $600,000
April ‘04. $550,000
$500,000
$450,000
$400,000
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
38. Average List Prices
Eastside
E id
$1,200,000
At $
$845,000, $1,100,000
List Prices
$1,000,000
are Back at
October $900,000
2004 Levels.
$800,000
$800 000
$700,000
$600,000
$500,000
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
39. Average Sale Prices
King County
Ki C
$650,000
$456,0000
$ $600,000
in $550,000
December; $500,000
$500 000
last Seen $450,000
July 2005. $400,000
,
$350,000
$300,000
$250,000
$200,000
02
03
04
05
06
07
08
09
Oct-10
02
03
04
05
06
07
08
09
Apr-10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
40. Average Sale Prices
Eastside
E id
$900,000
$609,000 i
$ in
$800,000
December;
Prices have $700,000
$700 000
Been Bouncing
Around but we $600,000
Can See
Tangible $500,000
Improvement.
$400,000
$400 000
$300,000
02
03
04
05
06
07
08
09
10
02
03
04
05
06
07
08
09
10
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-0
Oct-1
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-0
Apr-1
Economic & Real
Estate Forecast
February 8 2011 Source: NWMLS & Gardner Economics LLC – SF Resale Product
41. Transactions by Type
King County
Ki C
Housing Transaction Volume By Type
6,000
Distressed 5,000
5157
Units Have
3971
Increased 4,000 3780
but Sales 3,000
Appear to
be Slowing. 2,000
1297
972 826
1,000 670 812
582 447 591
434
0
Sep '08 to Dec '08
08 08 Sep '09 to Dec '09
09 09 Sep '10 to Dec '10
10 10
Economic & Real Resale New Foreclosure Fore. Sale
Estate Forecast
February 8 2011 Source: Gardner Economics LLC
42. Transactions by Type
King County
Ki C
Sep '08 to Dec '08 Sep '10 to Dec '10
Further 8.16% 12.47% 6.66%
10.62%
Declines in 12.23%
19.91%
New
Construction
Activity.
New
68.99% Resale
60.96% Foreclosure
Fore. Sale
Economic & Real
Estate Forecast
February 8 2011 Source: Gardner Economics LLC
43. Real Estate Conclusions
• Buyers Are Still Looking For Deals &
Uncertainty Remains?
• Continued Job Growth Will Add
Confidence to the Market.
• Uncertainty in the Condo Market Remains
Remains.
44. Real Estate Conclusions
Cont….
Cont….
• Price Stability Should Continue with the
Eastside Fairing Better than Most.
• Expect Transactional Velocities to Be
Modestly Higher than 2010
2010.
• Distressed Units Will Still Weigh on the
Market.
• Interest Rate Increases May Get Buyers Off
the Fence.
45. Punxsutawney Phil Saw His Shadow
Yesterday, So I am P di i an E l Th
Y d S Predicting Early Thaw
in the Economy!
46. Follow My Thoughts!
www.MasterBuildersInfo.com
http://blog.windermere.com/
SeattleEcon