A LO O K AT T H E WA S H I N G TO N M E T R O A R E A ......0 20 40 60 80 100 120 140 160 NY LA...
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A LOOK AT THE WASHINGTON METRO AREA ECONOMY AND HOUSING MARKET FEBRUARY 2014 PREPARED FOR:
Transcript of A LO O K AT T H E WA S H I N G TO N M E T R O A R E A ......0 20 40 60 80 100 120 140 160 NY LA...
A L O O K AT T H E W A S H I N G T O N M E T R O A R E A E C O N O M Y A N D
H O U S I N G M A R K E T
F E B R U A R Y 2 0 1 4
P R E P A R E D F O R :
A L O O K A T T H E W A S H I N G T O N M E T R O A R E A E C O N O M Y A N D H O U S I N G M A R K E T
P R E P A R E D F O R :
R E G I O N A L E C O N O M Y
-10
-5
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10
15
20
25
20
03
20
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JanFe
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gSe
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ov
Dec
JanFe
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pr
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Jul
Au
gSe
pO
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ov
Dec
JanFe
bM
arA
pr
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Jul
Au
gSe
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DecP
AY
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B C
HA
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E I
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HO
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AN
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A N N U A L M O N T H - O V E R - T H E - Y E A R
Annual 2011 2012
Source: U.S. Bureau of Labor Statistics, Delta Associates; February 2014.
2013
A U S T E R I T Y B E G A N 2 Y E A R S A G O Federal Government Payroll Job Change
Washington Metro Area
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Source: GMU CRA, U.S. Census, Delta Associates; February 2014.
Down $12 billion over 3 years
BIL
LIO
NS
OF
DO
LL
AR
S
Federal Procurement Spending Washington Metro Area – 1980-2013
A U S T E R I T Y B E G A N 2 Y E A R S A G O
*Estimated.
0
20
40
60
80
100
120
140
160
NY LA Basin Hou DFW Chi SF Bay Atl South FL Bos Phx Denver Was
TH
OU
SA
ND
S O
F N
EW
PA
YR
OL
L J
OB
S
Source: U.S. Bureau of Labor Statistics, Delta Associates; February 2014.
25.8
PAY R O L L J O B G R O W T H Large Metro Areas 12 Months Ending December 2013
0% 10% 20% 30% 40% 50%
Technology Infrastructure
International Market Access
Quality of Life
Federal Government Access
Skilled & Educated Workforce
S H A R E O F R E S P O N D E N T S
Source: MWCOG, Delta Associates; February 2014. Note: Totals more than 100% because of multiple responses.
P R I VAT E S E C TO R G R O W T H Primary Reasons Companies Relocate to Area Washington Metro Area
$50,157
$83,803
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
United States Washington Metro Area
ME
DIA
N H
OU
SE
HO
LD
IN
CO
ME
Source: U.S. Census Bureau, Delta Associates; February 2014.
P R I VAT E S E C TO R G R O W T H Median Household Income | 2012
40% 29%
4% 7%
56%
64%
$0
$200
$400
$600
2010 2017
Balance
Health/Education
Federal Sector
$425 Billion
$572 Billion
SH
AR
E O
F G
RP
IN
BIL
LIO
NS
OF
DO
LL
AR
S
Source: Dr. Stephen Fuller, Delta Associates; February 2014.
T H E C H A N G I N G E C O N O M Y Washington Metro Area | 2010-2017
Source: U.S. Bureau of Labor Statistics, Dr. Stephen Fuller, Delta Associates; February 2014.
Washington Metro Area | 2000-2018
P R O J E C T E D J O B G R O W T H
-60
-40
-20
0
20
40
60
80
100
120
140
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
20-Year Annual Average = 42,400/Year
5-Year Projected Average = 59,300/Year
PAY R O L L J O B G R O W T H Washington Metro Area 12 Months Ending December 2013
(8,400)
(28,000)
62,200
-40,000
-30,000
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Federal Government Procurement/Contractors All Other
JO
B G
RO
WT
H
Total = 25,800
Source: Bureau of Labor Statistics, Dr. Stephen Fuller, Delta Associates; February 2014.
Source: U.S. Bureau of Labor Statistics, Dr. Stephen Fuller, Delta Associates; February 2014.
Washington Metro Area | 1998 - 2018
C O M PA R I N G E X PA N S I O N C Y C L E S
TH
OU
SA
ND
S O
F N
EW
PA
YR
OL
L J
OB
S
-60
-40
-20
0
20
40
60
80
100
120
140
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
80-100
50-60
More homeowners, higher wages
More renters, lower wages than
in prior expansion cycles
Source: Dr. Stephen Fuller, Delta Associates; February 2014.
-40,000 0 40,000 80,000 120,000 160,000
Federal Government
Other Services
Information
Financial Services
Other Sectors
Retail Trade
State and Local Government
Education/Health
Leisure/Hospitality
Construction
Professional/Business Services
J O B C H A N G E
P R O J E C T E D P AY R O L L J O B G R O W T H Washington Metro Area | 2013 - 2018
A L O O K A T T H E W A S H I N G T O N M E T R O A R E A E C O N O M Y A N D H O U S I N G M A R K E T
F O R - S A L E H O U S I N G M A R K E T
P R E P A R E D F O R :
M A R K E T I N D I C ATO R S Washington Metro Area | Fourth Quarter 2013
Source: MRIS, Delta Associates; February 2014. *Sales pace at December 2013. Pace is ratio of total for-sale inventory to current month’s sales.
CHANGE VS. Q3 2013
CHANGE VS. Q4 2012
Q4 AVG. SALES PRICE
$448,089 3.7% 5.8%
Q4 SALES (UNITS)
14,139 20.8% 4.0%
Q4 AVG. DAYS ON MARKET
49 9 8
SALES PACE* 2.1 Months 0.6 Months 0.0 Months
0
3
6
9
12
15
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
03 04 05 06 07 08 09 10 11 12 13
P R I C E C H A N G E A N D I N V E N T O R Y Washington Metro Area | 2003 – 2013
Source: MRIS, Delta Associates; February 2014.
12
-MO
NT
H P
RIC
E C
HA
NG
E M
ON
TH
S O
F IN
VE
NT
OR
Y*
12-Month Price Change (left axis)
Months of Inventory (right axis)
*Months of inventory at current sales pace for last month in each quarter.
M O N T H S O F F O R - S A L E I N V E N T O R Y Washington Metro Area | Dec. 2012 vs. Dec. 2013
Source: MRIS, Delta Associates; February 2014.
MO
NT
HS
OF
IN
VE
NT
OR
Y A
T S
AL
ES
PA
CE
*
*Pace is ratio of total for-sale inventory to current month’s sales.
0
1
2
3
4
5
6
7
Falls Ch Arl District Ffx Cnty Alex Ffx City Mont Lou Pr Geo Pr Will Fred (MD) Fauq
Dec. 2013: 2.1 Months
Dec. 2012: 2.1 Months
December 2012
December 2013
MO
NT
HS
OF
IN
VE
NT
OR
Y
AT
SA
LE
S P
AC
E*
A N N U A L A V E R A G E D A Y S O N M A R K E T Washington Metro Area | Existing Houses
Source: MRIS, Delta Associates; February 2014.
DA
YS
*As of December 2013. 10-year average is from 2003 to 2013
27
105
45
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
10-Year Average = 65 Days
R E S A L E VO LU M E Washington Metro Area | All Housing Types
Source: MRIS, Delta Associates; February 2014.
HO
US
ING
UN
ITS
SO
LD
0
20,000
40,000
60,000
80,000
100,000
120,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
R E S A L E P R I C E C H A N G E Washington Metro Area | Trailing 12 Months
Source: MRIS, Delta Associates; February 2014.
0%
2%
4%
6%
8%
10%
12%
14%
16%
Dec'12
Jan'13
Feb'13
Mar'13
Apr'13
May'13
Jun'13
Jul'13
Aug'13
Sep'13
Oct'13
Nov'13
Dec'13
Source: FHFA, Delta Associates; February 2014. Note: Price change at third quarter of respective year; seasonally adjusted.
P R I C E C H A N G E S Large Metro Areas | 1993 – 2013
25%
50%
75%
100%
125%
150%
175%162%
P E R C E N T C H A N G E I N H O U S E P R I C E S Washington Metro Area vs. 20-City Composite
Source: S&P/Case-Shiller, Delta Associates; February 2014.
% C
HA
NG
E
Note: Seasonally adjusted purchase-only index.
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
W a s h i n g t o n M e t r o A r e a
U . S . 2 0 M S A C o m p o s i t e
A L O O K A T T H E W A S H I N G T O N M E T R O A R E A E C O N O M Y A N D H O U S I N G M A R K E T
P R E P A R E D F O R :
C O N C L U S I O N S A N D O U T L O O K
C O N C LU S I O N S A N D O U T LO O K
In 2014, uncertainty will become less of a theme for our regional economy.
• The worst of the Federal government cutbacks is likely behind us
• Thanks to the recent two-year bipartisan Federal budget deal, confidence of businesses and consumers is likely to rebound
• Conditions will remain muted compared to past recovery cycles since regional job growth is tilting towards lower-wage positions
The local housing market will sustain modest price growth. • Prices will increase but likely at a decelerated rate due to trends in job
growth as well as the expected increases in both interest rates and inventory in the year ahead
• We expect prices to rise between 3% to 5% in 2014
A L O O K AT T H E W A S H I N G T O N M E T R O A R E A E C O N O M Y A N D
H O U S I N G M A R K E T
F E B R U A R Y 2 0 1 4
P R E P A R E D F O R :
