1 / 42

By: Anirban Basu Sage Policy Group, Inc. November 8, 2006

Are Those Gray Clouds or Silver Linings? What the Data Tell Us about the Economy. Multi-family & Senior Housing Conference. By: Anirban Basu Sage Policy Group, Inc. November 8, 2006. I. Worsening Economic Imbalances. Components of GDP, 2006Q3. Source: Bureau of Economic Analysis.

lars-randolph
Download Presentation

By: Anirban Basu Sage Policy Group, Inc. November 8, 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Are Those Gray Clouds or Silver Linings? What the Data Tell Us about the Economy Multi-family & Senior Housing Conference By: AnirbanBasu Sage Policy Group, Inc. November 8, 2006

  2. I. Worsening Economic Imbalances

  3. Components of GDP, 2006Q3 Source: Bureau of Economic Analysis

  4. University of Michigan Consumer Sentiment SurveySeptember 2001 through October 2006 Between Aug. 2005 and Sept. 2005, the consumer sentiment index dropped 12.2 points, the largest one-month decline since December 1980. Source: Economy.com, The Conference Board

  5. Retail & Food Services SalesJanuary 2001 through September 2006 Source: Dismal.com

  6. Change in Gross Domestic Product vs. Real Disposable Personal Income, 2004Q2 – 2006Q2 2005 GDP: 3.5% 2005 RDI: 1.4% Source: BEA

  7. Corporate Profits* (SAAR)2001Q1 through 2006Q2 Source: BEA *With inventory valuation and capital consumption adjustments

  8. 15-Year Fixed Mortgage Rates, January 1995 through September 2006 Source: Freddie Mac

  9. U.S. New Home SalesJanuary 1999 through September 2006 Source: Economy.com, Census Bureau

  10. U.S. New Residential Construction January 1999 through September 2006 Source: Economy.com

  11. U.S. Existing Home Sales September 2001 through September 2006 Existing median home prices fell 2.5 percent, the largest decline in nearly four decades Source: Economy.com

  12. Current Hot Metro Housing Markets (154)Annual Existing Single-Family Home Price Appreciation 2006Q2 vs. 2005Q2 Baltimore: 7.7% New York: 8.4% Philadelphia: 11.4% Boston: 0.6% Washington, D.C.: 3.3% Source: National Association of Realtors

  13. Housing Opportunity Index1993Q1 through 2006Q2 Source: National Association of Home Builders Housing Opportunity Index: the share of homes affordable for median income—lower index indicates less affordability

  14. Active Housing Inventory by Suburban MD Jurisdiction, September 2005 vs. September 2006 Source: Maryland Association of Realtors Maryland = September 2005: 22,909; September 2006: 41,405

  15. 2005 Residential Building Permits per 100 Households (2005 estimates) by select Regions Source: U.S. Census Bureau BW Corridor includes: Anne Arundel, Howard, Montgomery and Prince George’s counties

  16. Average Home Price by Suburban MD Jurisdiction, September 2006 Source: Maryland Association of Realtors

  17. Average Single-Family Home Price by Northern VA Jurisdiction, September 2006 Source: Maryland Association of Realtors

  18. II. Silver Linings

  19. Dow Jones Industrial Average June 8, 2006 through October 25, 2006

  20. Gross Domestic Product1990Q1 through 2006Q3 2006Q3: 1.6% Source: Bureau of Economic Analysis

  21. Net Change in U.S. JobsJanuary 2000 through October 2006 10/06: 92,000 Between March 2001 and July 2002, the nation lost nearly 2.4 million jobs. Over the last 12 months (Oct. to Oct.) the U.S. added 1.967 million jobs Source: Economy.com, Bureau of Labor Statistics

  22. National Nonfarm Employmentby Industry Sector GroupsOctober 2006 v. October 2005Absolute Change +1,967k All Told Bush Scorecard Private Sector: +2,126,000 Public Sector: +1,247,000 Total: +3,373,000 Source: Economy.com, Bureau of Labor Statistics

  23. Maryland Nonfarm Employmentby Industry Sector GroupsSeptember 2006 v. September 2005Absolute Change MD Total: +27.3K; +1.1% US Total: +1,912K; +1.4% Source: Bureau of Labor Statistics

  24. Baltimore MSA Nonfarm Employmentby Industry Sector Groups (NSA) September 2006 v. September 2005Absolute Change Baltimore MSA Total: +11.8K; +0.9% MD Total: +27.3K; +1.1% US Total: +1,912K; +1.4% Source: Bureau of Labor Statistics

  25. Washington, D.C. MSA Nonfarm Employmentby Industry Sector Groups (NSA)September 2006 v. September 2005Absolute Change DC MSA Total: +72.2K; +2.5% US Total: +1,912K; +1.4% Source: Bureau of Labor Statistics

  26. Employment Growth by Maryland Metro- and Micropolitan Areas, September 2006 vs. September 2005 Source: Bureau of Labor Statistics

  27. Employment Growth by Virginia Metro- and Micropolitan Areas, September 2006 vs. September 2005 Source: Bureau of Labor Statistics

  28. Unemployment Rates, U.S. States (SA) September 2006 Source: Bureau of Labor Statistics * U.S. unemployment rate: September = 4.6%

  29. Unemployment Rates (NSA), Maryland CountiesAugust 2006 Source: Maryland Department of Labor, Licensing and Regulation; Bureau of Labor Statistics

  30. Unemployment Rates (NSA), Northern Virginia Jurisdictions August 2006 Source: Maryland Department of Labor, Licensing and Regulation; Bureau of Labor Statistics

  31. Lowest Apartment Vacancy Rates Among Major Metro Areas, Year-End 2005 Source: Delta Associates

  32. U.S. Apartment Market Tightness Index2001Q1 through 2006Q2 “Tight” markets are those with low vacancy rates and high rent increases Source: National Multi Housing Council A Market Tightness Index reading above 50 indicates that, on balance, apartment markets around the country are getting tighter; a reading below 50 that market conditions are getting looser.

  33. The D.C. Metro Apartment Market is Still the Hottest in the Nation in 2006 • Stabilized vacancy rates, at 1.4%, are lowest in the nation; • Rent growth is up 7.5% from last year (Sept. 2005); • So far in 2006, over $1 billion of multi-family Class A building sales closed, along with another $147 million of land to construct new apartments or condominiums. Source: Delta Associates

  34. New Condominium Prices per Square FootWashington Metro, Year-End 2005 vs. Year-End 2004 Inside Beltway Outside Beltway Source: Delta Associates

  35. Condominium Market Pipeline in the Washington, DC Metropolitan Area, 2004-2005 Source: Delta Associates

  36. A brief word about senior demographics

  37. Population Growth in the D.C. Metro1990 through 2011* Source: Census Bureau; ACCRA *Data for 2011 are projections

  38. Assisted Living Demand and Costs • According to the Wall Street Journal, occupancy at the 36,000 assisted living facilities nationwide has reached “near saturation” at 95 percent in 2005; • According to MetLife, the average annual cost for assisted living facilities – without health care expenses – reached nearly $35,000 in 2005, a 33% increase from 2002.

  39. Average Monthly Assisted Living Costs Select Regions, 2005 Source: MetLife Market Survey of Assisted Living Costs, 2005

  40. “This is the healthiest the senior housing industry has ever been…conditions are very favorable now.” – David Schless, president of the Washington, D.C. – based American Seniors Housing Association Source: Chicago Tribune, “Senior Housing Prices are Rising.” October 15, 2006.

  41. Conclusions • Soft landing the most likely outcome for 2007; • Risks remain (oil/energy, the dollar, interest rates and the flu); • The macroeconomic imbalances are huge and widening; • The Federal Reserve Chairman will come under enormous criticism; • Portions of the multi-family market may stand to benefit from the transition taking place in the region’s housing market.

  42. Thank You • You can always reach me at abasu@sagepolicy.com • You’ll be hearing a lot from us the balance of the year. • Also, if you need us in a hurry, we are at 410.522.7243 (410.522.SAGE) • Please contact us when you require economic research & policy analysis.

More Related