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MODULE 0. Real Estate Markets & The Economy:. An Empirical View. Real Estate Markets & The Economy:. A Conceptual View. Digital Economy Paradigm. Information Flows @ All Levels Integration & Globalization of Markets Securitization of Debt & Equity Speed of Adjustment & Volatility.

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MODULE 0

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  1. MODULE 0

  2. Real Estate Markets & The Economy: An Empirical View

  3. Real Estate Markets & The Economy: A Conceptual View

  4. Digital Economy Paradigm • Information Flows @ All Levels • Integration & Globalization of Markets • Securitization of Debt & Equity • Speed of Adjustment & Volatility

  5. Three Evaluation Elements • Efficiency • Effectiveness • Equity

  6. The Three Stages of IT Economic Development • Development of Technology • Gestation for Aggregation, Access, Integration, Implementation, Adoption and Branding • Maturation- Reintegration of Cyberspace with Bricks and Mortar

  7. Real Estate Investment Analysis IS Risk Management

  8. Risk Management • Identify Risks • Risk Modification Strategies • Alter Risk • Evaluate Risk Removal Strategies

  9. Yes, Virginia, there are three things that matter in Real Estate Investment Decision Making LOCATION, LOCATION, LOCATION

  10. LOCATION LOCATION LOCATION Macro-Environment Sub-Region, City Level, Neighborhood Property Specific

  11. GDP Growth % Source: Dept. of Commerce

  12. Consumer Confidence Index Source: Conference Board

  13. Personal Consumption Growth Rate % Source: BEA, DOC

  14. Real Retail Sales Growth:Less Autos % Source: US Census

  15. Growth in Consumer Credit % Source: Federal Reserve

  16. Unemployment Rates: US & California % Source: BLS

  17. Employment Growth Rate by Sector: December 1998 to December 1999 % Source: BLS

  18. Annual Employment Change, California and US, 1973-Q2 2000 Source: FCREUE from BLS data.

  19. Capacity Utilization in Manufacturing % Source: Federal Reserve

  20. Growth Rate of Real NonResidential Fixed Investment % Source: Bureau of Economic Analysis

  21. Fixed Business Investment AsProportion of GDP (Including Structures & Equipment) Source: BEA

  22. Residential Fixed Investment AsProportion of GDP Source: BEA

  23. Interest Rates: 6 month vs. 30 year % Source: Federal Reserve

  24. Spread Between MBS and 10 yr. Treasuries % Source: FNMA, Federal Reserve

  25. Change In Consumer Price Index & Producer Price Index % Source: Bureau of Labor Statistics

  26. Change in Labor Productivity in Manufacturing % Source: BLS

  27. Change in Unit Labor Costs: Nonfarm Business Sector % Source: BLS

  28. US Exports & Imports as Percentage of GDP % Source: Dept. of Commerce

  29. US Trade Balance in Goods & Services $, Bill. Source: US Census Bureau

  30. US Export Performance1999 % Change Source: US Census Bureau

  31. US Import Performance1999 % Change Source: US Census Bureau

  32. Growth Rate for Prices of Asian Imports % Source: DOC

  33. Growth Rate of Export and Import Price Indices (EPI & IPI) % Source: DOC Note: EPI is ex-agricultural goods & IPI is ex-oil

  34. Asian Exchange Rates: 1989=1 Source: Asian WSJ

  35. Asian Exposure: US vs. California Percent of trade with Asia in total foreign trade ? Source: FCREUE calculations from US Dept. of Commerce & Census Bureau data

  36. California's Computer Industry & Asia $,Bill. Source: FCREUE from MISER

  37. Countervailing Drivers For US Economy • Consumer is Happy (For the Moment) • Employment Growth is Uneven • Fixed Business Investment Remains Strong • Housing Sector is Relatively Robust

  38. Countervailing Drivers For US Economy • Stable Energy Prices • World-wide Generated Price Inertia • High Real Interest Rates • Low Nominal Interest Rates

  39. Countervailing Drivers For US Economy • Monetary & Fiscal Policy Prerogatives • Export-Import Imbalance

  40. Debt Owed By Non-Financial Sectors: As of 4th Quarter 1999 Source: Federal Reserve Flow of Funds

  41. Commercial Mortgages: Assets Held by Sector $, Bill. Source: FRB

  42. Net Commercial Mortgage Flows $, Bill. Source: Federal Reserve; Annualized quarterly data

  43. CMBS Issuance $, Billions Source: Commercial Mortgage Alert, Lehman Brothers, CMBS Quarterly

  44. Equity Capital Raised By REITS $, Millions Source: NAREIT, Lehman Brothers

  45. Source: FHLMC

  46. Median Sales Price of Existing Homes: US & California $, Thousands Source: NAR, CAR

  47. Existing Single Family Home Sales Millions Source: NAR

  48. US Housing Starts: Single Family & Multi-Family In Thousands. Source: US Bureau of the Census

  49. Home Price IndexNorthern and Southern California Price Index, April 1990=100 Source: Real Estate Research Councils of Northern/Southern CA

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