Equipping California Investors for Tomorrow s Challenges
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Radio Show Leslie Appleton-Young, CAR Frank Nothalf, Freddie Mac Christopher Thornberg Alan Nevin Gary Watts Ward Hanigan Mike Cantu Tony Alvarez Mark Dotour Center for Responsible Lending
28% 37% 32% 30% 22% 23% 40% 39% 40% 33% 26% 23% 17% 24% 27% 23% 31% 29% 18% 17% 24% 36% 45% 30% 32% 16%16% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Annual Housing Affordability
First-time Buyer Housing Affordability Index California Vs. U.S. 2003-2007 Source: CAR, 2008 Real Estate Market Outlook, April 2008.
Unsold Inventory Index California, February 2008: 14.3 Months Source: CAR, 2008 Real Estate Market Outlook, April 2008.
Unsold Inventory Index vs. Price Changes Source: CAR, 2008 Real Estate Market Outlook, April 2008.
U.S. Homeownership Numbers in Percentages 70% 69% 68% 67% 66% 65% 64% 63% 67.9% Jan-81 Sep-83 Jun-86 Feb-89 Nov-91 Aug-94 Apr-97 Jan-00 Sep-02 Jun-05 Mar-08 Homeownership Rates Source: U.S. Census Bureau.
Homeowner Vacancy Rate 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2.9% Jan-95 Apr-96 Aug-97 Nov-98 Mar-00 Jul-01 Oct-02 Feb-04 May-05 Sep-06 Jan-08 Homeowner Vacancy Rate Source: U.S. Census Bureau.
Construction at a Glance Seasonally Adjusted Annual Rate in Millions of Dollars 800,000 700,000 600,000 500,000 $445,021 400,000 300,000 $382,341 200,000 100,000 0 Jan-93 Jul-94 Jan-96 Jul-97 Jan-99 Aug-00 Feb-02 Aug-03 Feb-05 Aug-06 Mar-08 Residencial Source: U.S. Census Bureau, Construction Spending, March 2008 Non-Residencial
Year-to-Year % Change in Jobs California 2007-2009 Source: CA EDD, LAEDC Forecast.
Non-Farm Employment (thousands) Los Angeles Orange County Riverside/ SB Non-Farm Employment Feb 2008 Non-Farm Employment Feb 2007 Change Percent Change 4,088.4 4,103.5-15.1 -. 4% 1,490.4 1,512.2-21.8-1.4% 1,253.1 1,267.4-14.3-1.1% San Diego 1,297.4 1,297.1.3 0.0% Ventura 290.0 295.4-5.4-1.8% Total 8,419.3 8,475.6-56.3% -0.7% Source: CA EDD, LAEDC Forecast.
Prime, Subprime, & Other Loans As a Percentage of All Loans Outstanding in California
Prime vs. Subprime Past Due California Q4-2007
Mortgage Foreclosure & Delinquency Rates California
~$800 Billion of Subprime Mortgages to Reset Source: LoanPerformance, Deutsche Bank.
Notices of Default Recorded Southern California 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Trustees Deeds Recorded Southern California 160,000 150,000 140,000 120,000 100,000 80,000 70,513 60,000 40,000 28,500 20,000 0 2,905 7,182 3,000 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales S. CA 300,000 250,000 200,000 150,000 100,000 50,000 251,590 7,182 2.85% 210,430 15,758 7.49% 186,803 17.01% 31,781 184,590 28.03% 51,745 208,532 27.99% 58,372 182,950 30.82% 56,380 209,407 33.25% 69,625 75.00% 200,000 150,000 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0 1990 1991 1992 1993 1994 1995 1996 2008 0.0% Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales Riverside 50,000 45,000 40,000 35,000 172.09% 37,000 30,000 25,000 20,000 15,000 10,000 22,219 9,889 44.51% 24,229 11,160 46.06% 21,500 5,000 0 1996 1997 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales Orange County 50,000 45,000 40,000 35,000 32,117 36,883 90.86% 30,000 25,000 20,000 15,000 10,000 23.74% 7,626 6,574 17.82% 17,500 15,900 5,000 0 1996 1997 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales Los Angeles 120,000 111.78% 100,000 87,079 95,951 80,000 60,000 40,000 33,373 38.32% 33,279 34.68% 45,000 50,300 20,000 0 1996 1997 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales San Bernardino 30,000 25,000 23,550 26,043 189.66% 27,500 20,000 15,000 10,778 12,563 14,500 10,000 45.77% 48.24% 5,000 0 1996 1997 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
Sales vs. Trustee Sales San Diego 40,000 35,000 30,000 30,413 35,894 94.37% 25,000 20,000 21,300 20,100 15,000 10,000 5,000 19.71% 5,994 5,136 14.31% 0 1996 1997 2008 Source: Real Estate Research Council Cal Poly Pomona, First Quarter Data 2008.
California Housing Market Forecast Source: C.A.R., 2008 Real Estate Market Forecast.
C.A.R. Projections for California Sales for 2008 334,500 Trustee Sales 250,000 NODs 360,000 % of all California Sales vs. Trustee 74.74% Sales
Median Price Existing Detached Homes California, February 2008: $409,240, Down 26.2% Y-T-Y Source: CAR, 2008 Real Estate Market Outlook, April 2008.
Before Credit Crunch-Peak vs Current Price Region Peak Month Peak Price Aug-07 Median % Chg From Peak Northern California Aug-05 $440,420 $370,390-15.9% Sacramento Aug-05 $394,450 $332,510-15.7% Central Valley Aug-05 $363,680 $309,740-14.8% High Desert Apr-06 $334,860 $287,390-14.2% Riverside San Bernardino Jan-07 $415,160 $377,130-9.2% Northern Wine Country Jan-06 $645,080 $600,000-7.0% Ventura Aug-06 $710,910 $669,870-5.8% Orange County Apr-07 $747,260 $710,380-4.9% San Diego May-06 $622,380 $595,070-4.4% Palm Springs/Lower Desert Jun-05 $393,370 $377,920-3.9% San Luis Obispo Jun-06 $620,540 $598,400-3.6% San Francisco May-07 $853,910 $832,760-2.5% Santa Clara Apr-07 $868,410 $860,000-1.0% Monterey Region Aug-07 $798,210 $798,210 0.0% Los Angeles Aug-07 $605,300 $605,300 0.0% Source: CAR, 2008 Real Estate Market Outlook, April 2008.
Peak vs Current Price February 2008 Region Peak Month Peak Price Feb-08 Median % Chg From Peak Sacramento Aug-05 $394,450 $258,680-34.4% High Desert Apr-06 $334,860 $220,380-34.2% CALIFORNIA Apr-07 $597,640 $409,240-31.5% Northern Wine Country Jan-06 $645,080 $449,000-30.4% Riverside San Bernardino Jan-07 $415,160 $289,660-30.2% San Diego May-06 $622,380 $450,710-27.6% Ventura Aug-06 $710,910 $520,270-26.8% San Luis Obispo Jun-06 $620,540 $471,740-24.0% Los Angeles Aug-07 $605,300 $467,200-22.8% Monterey Region Aug-07 $798,210 $619,790-22.4% Northern California Aug-05 $440,420 $347,650-21.1% Orange County Apr-07 $747,260 $596,520-20.2% San Francisco May-07 $853,910 $706,880-17.2% Palm Springs/Lower Desert Jun-05 $393,370 $334,910-14.9% Central Valley*(Aug 2007) Aug-05 $363,680 $309,740-14.8% Santa Clara Apr-07 $868,410 $780,000-10.2% Source: CAR, 2008 Real Estate Market Outlook, April 2008.
Sales by Price Range Southern California Existing Homes
Proportion of First-Time Homebuyers - California Source: C.A.R., 2008 Real Estate Market Forecast.
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