INTRODUCTION
The following slide are from an early July 2014 presentation in Spokane to investors and
clients of a private-lending company. The slides provide a glimpse at new developments in the
Spokane/Inland Northwest region, including the addition of Stevens and Pend Oreille counties
to the Spokane MSA.
This presentation contains population estimates through July 1, 2013, since the 2014
numbers had not be released at the time of the presentation. Those slides will be updated
with 2014 estimates when new data is released by the Census Bureau. No significant variation
in trends is expected in the new data.
Most of these slides are self-explanatory, but if you have questions or wish permission to
quote proprietary portions of the presentation, please contact us at [email protected],
or contact the cited original sources. Also, we have in-depth reports on some of the topics
raised these slides for purchase in our online store. Thanks for your interest in
spokanomics.com. We hope you’ll visit the site often.
Shaun O’L. Higgins
Managing Principal
THEOXALISGROUPLLC
905 W. Riverside Avenue, Suite 212
Spokane, WA 99201
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Ready for New Heights
The INW Regional Economy:
Midyear 2014 and Beyond
Remarks of
SHAUN O’L. HIGGINS
THEOXALISGROUPLLC
© 2014 The Oxalis Group LLC. All Rights Reserved.
Caveats and Disclaimers
• I’m an economic handicapper and amateur economist. I don’t do theory.
• We don’t want to be self-fulfilling prophets of doom, so we tend to be
positive. Please listen for “qualifying phrases.”
• Views expressed are my own and may change tomorrow.
• My views may not reflect those of COGO or Secured Financial.
• The accuracy or inaccuracy of any previous forecast doesn’t mean a thing.
• My data, though reliably sourced, is subject to varying interpretations.
• Metrics that were once relevant may no longer matter; metrics that are
relevant today may not be relevant in the future.
• Nothing in this presentation should be construed as investment advice or
as an endorsement of any investment advisory service.
• The presentation will last about 35 minutes, with brief Q&A to follow.
© 2014 The Oxalis Group LLC. All Rights Reserved.
What You Will Hear
A Context for Understanding Regional Economics
*
Demographic Status and Projections:
MSAs
Regional GDP
Population and Income
Home-value and other Real Estate Information
*
Job-Creation Performance and Employment Factors
*
Why things are looking up – and why you should be, too
Sources and Acknowledgments
Grant Forsyth, Chief Economist, Avista Corp,
Governor’s Economic Forecast Advisory Group
Dr. Patrick Jones, Eastern Washington University,
Spokane Community Indicators
Kootenai County Community Indicators
Chair, Spokane Mayor’s Advisory Council on Economic Vitality
Steve Scranton, Washington Trust Bank
Doug Tweedy, Washington State Employment Security,
Labor Market & Economic Analysis Branch
Job Growth Update , W. P. Carey School of Business,
Arizona State University
Bureau of Economic Analysis, U.S. Department of Commerce
Sources and Acknowledgments
The Spokane Journal of Business
The Spokesman-Review
The Pacific Northwest Inlander
U.S. Census Bureau
Spokane Board of Realtors
Federal Housing Finance Agency (FHFA)
Ann Glendening
The Economist
Bloomberg Business Week
The Wall Street Journal
The New York Times
The Inland Northwest
Inland Northwest Basics
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1,063,272 people (0.34% of U.S. Population)
39,240.9 Square Miles
23 Counties in Three States
$18.1 Billion in HH Income
90,419 Business Firms
$13.6 Billion in Retail Sales
$24.4 Billion in GDP (about 0.17% of U.S. GDP)
Sources: 2010 U.S. Census; Bureau of Economic Analysis-U.S. Department of Commerce, 2012 (covering
2010 GDP trends by Metro area; compilations, derivatives and comparatives by Shaun O’L. Higgins
© 2014 The Oxalis Group LLC. All Rights Reserved.
Metropolitan and Micropolitan Statistical Areas
Metro and Micro areas are geographic entities delineated by the Office of
Management and Budget for use by Federal statistical agencies in collecting,
tabulating, and publishing Federal statistics.
The term "Core-Based Statistical Area" (CBSA) is a collective term for both metro
and micro areas.
A metro area contains a core urban area of 50,000 or more population, and a micro
area contains an urban core of at least 10,000 (but less than 50,000) population.
Each metro or micro area consists of one or more counties and includes the counties
containing the core urban area, as well as any adjacent counties that have a high
degree of social and economic integration (as measured by commuting to work) with
the urban core.
Source: U.S. Office of Management and Budget
Inland Northwest Metro/Micro Areas
Combined Statistical Area
Spokane-Spokane Valley-Stevens-Pend Oreille, WA MSA,
plus Coeur d’Alene, ID MSA
MSAs
Spokane-Spokane Valley-Stevens-Pend Oreille, WA
Coeur d’Alene, ID
Lewiston-Clarkston ID-WA
Micropolitan Statistical Areas
Moses Lake WA
Moscow ID
Pullman WA
Sandpoint ID
© 2014 The Oxalis Group LLC. All Rights Reserved.
The New Spokane MSA
• Three Counties (Spokane, Stevens, Pend Oreille)
• 5,641.75 square miles in area
• 535,724 people
(To imagine what 535,724 people looks like, think of
15-16 Martin Stadiums filled to overflowing)
We now have an international border,
and. . .
© 2014 The Oxalis Group LLC. All Rights Reserved.
We’re Larger than Connecticut!
What it Means
The new designation moves us into the Top 100 U.S.
metro areas, making us more visible on the maps of
business locators and retailers, and it better positions
us to grow jobs, receive grants, and participate more
fully in some federal programs.
Another change makes us even bigger. . .
We’re also part of a CSA
(Combined Statistical Area)
Our new Combined Statistical Area includes
Kootenai County
• Total estimated population of about 680,000.
(Equal to about 58 Spokane Veteran’s Arenas
packed to capacity for a basketball games!)
• 71st largest Combined Metro Area in the U.S.
• 6,685.68 square miles in area, making us . . .
Almost as big as New Jersey
The Spo-Koo CSA Has More People
than…
. . . more people than. . .
. . .more people than. . .
POPULATION ESTIMATES
April 1, 2010-July 1, 2013
Area
2010
U.S.
308,747,716
Idaho
1,562,652
Montana
989,417
Washington
6,724,543
Lewiston-Clarkston MSA
60,888
Coeur d’Alene MSA
138,494
Spokane MSA (old definition)
471,221
Spokane MSA (new definition)
527,648
2013 est
Change
316,128,839
1,612,136
1,015,165
6,971,506
62,125
144,265
479,398
535,724
2.4 %
2.8 %
2.6 %
3.7 %
2.0 %
4.7 %
1.7 %
1.5 %
Census Bureau will release new estimates soon; no surprises expected
Source: US Census Bureau, 2014 . Latest series available. Regional derivations by SOH
Population Growth Rates 2010-2013
GSI Comparative MSAs
Raleigh-Cary NC
Boise ID
Colorado Springs CO
Seattle-Tacoma-Bellevue WA
Salt Lake City UT
Madison WI
Reno-Sparks NV
Albuquerque NM
Tucson AZ
Spokane WA
Mobile AL
7.4%
5.5%
5.1%
5.0%
4.8%
3.6%
2.9%
1.8%
1.7%
1.5%
0.3%
Source: US Census Bureau, 2014 . Latest series available. Derivations by SOH
Real GDP by Metro Area, 2010-2012
MSA
Change 09-10
Spokane-Spokane Valley
Coeur d’Alene
Lewiston
All U.S. Metros
10-11 11-12
1.0%
-0.8%
0.8%
1.5%
0.0%
-1.0%
1.7%
-2.4%
-0.3%
2.4%
1.7%
2.5%
Current /Rank
$17.4 billion (178)
$ 3.7 billion (373)
$ 1.7 billion (317)
$12,207 billion
INW Regional estimate (including non-Metro): $24.4 billion
(or, about 0.17% of U.S. total)
Sources: Bureau of Economic Analysis, U.S. Dept. of Commerce; regional estimate, The Oxalis Group LLC
Regional Job-Creation Performance Snapshot
May 2013 to May 2014
Non-Agricultural Wage and Salary Jobs
Area
Rank ‘13 Rank ’14
Spokane
C d’Alene
Lewiston
U.S.
132
5
15
NA
280
145
269
NA
Change
(Growth Rate)
0.2%
1.6%
0.4%
1.8%
Thousands of Jobs
Job Growth
2013
2014
1,400
216,300
216,800
900
57,100
58,000
100
26.900
27,000
2,399,000 136,793,000 139,192,000
From May Peaks to May 2014
United States: 138,611,000 (May 2007): Now UP 581,000 jobs, or 0.42%
Spokane: 224,400 (May 2008): Still DOWN 7,600 jobs, or -3.39%
Coeur d’Alene: 58,700 (May, 2008): Still DOWN 700 jobs, or -1.19%
Lewiston: 28,000 (May 2007): Still DOWN 1,000 jobs, or -3.57%
Data Source: Job-Growth Update, W. P. Carey School of Business, Arizona State University, June 2014 .
Regional compilation and derivation : Shaun O’L. Higgins The Oxalis Group LLC, June 2014.
GSI Comparative Cities
Jobs Snapshot: May Peak to May 2014
MARKET
Raleigh-Cary NC
Salt Lake City UT
Madison WI
Seattle-Tacoma-Bellevue WA
Boise-Nampa ID
Colorado Springs CO
Tucson AZ
Mobile AL
Albuquerque NM
Reno-Sparks NV
May 2014 2007/08 Difference
559,300
525,800
33,500
674,900
640,100
34,800
364,500
353,100
11,400
1,825,100 1,785,400
39,700
281,000
279,300
1,700
259,700
262,100 ( 2,400)
366,600
386,100 (19,500)
174,300
186,000 (11,700)
370,300
398,000 27,700)
202,900
224,600 (21,700)
10-Market Total
5,078,600
5,040,500
216,800
224,400
SPOKANE
U.S.
139,192,000 138,611,000
% Change
6.37%
5.44%
3.23%
2.22%
0.61%
- 0.92%
- 5.05%
- 6.29%
- 6.96%
- 9.66%
38,100
0.76%
( 7,600)
-3.39%
581,000
© 2014The Oxalis Group LLC. All Rights Reserved.
0.42%
MEDIAN HOUSEHOLD INCOME
Five-Year Average, 2008-2012
Selected Geographies
Geography
U.S
Idaho
Washington
INW Region
Spokane County
Spokane MSA (new)
Nez Perce ID
Asotin WA
Kootenai ID
Grant WA
Bonner ID
Latah ID
Whitman WA
MHI
$53,046
$47,015
$59,374
$46,185
$49,615
$48,729
$45,567
$42,345
$48,075
$45,531
$41,379
$39,466
$34,169
Source: U.S. Bureau of the Census. Latest data, March 2014. (www.census.gov)
Housing Price Caveat
When using the FHFA House Price Calculator, please note that it
does not project the actual value of any particular house. Rather, it
projects what a given house purchased at a point in time would be
worth today if it appreciated at the average appreciation rate of all
homes in the area. The actual value of any house will depend on the
local real estate market, house condition and age, home
improvements made and needed, and many other factors. Consult a
qualified real estate appraiser in your area to obtain a professional
estimate of the current value of your home.
Source: FHFA
The Housing Picture
Housing prices have held up better in some places than others
over the past five years.
If you bought a home for $100,000 in the 1st quarter of 2009…
…it’s likely value today looks like this:
Coeur d’Alene: $84,798
Spokane: $85,068
Lewiston: $98,796
Tri-Cities: $105,102
If you bought in the 1st quarter of 2004, it looks like this:
Lewiston: $152,050
Coeur d’Alene: $133,158
Spokane: $129,262
Tri-Cities: $123,426
Source: FHFA Home Price Calculator, June 2014. Comparatives copyright 2014, Oxalis Group LLC.
More on Real Estate
Housing Sales and Price Projections
Spokane County: Annualized single-unit sales, FLAT to UP 0.5-1.0%, compared
to 2013.
Median prices likely to be FLAT to UP 1.0-1.5%, compared to 2014. Low mortgage
rates and eased lending policies have spurred first-time home-buying a bit.
May and June 2014 improved the trend for both unit sales and prices, following a
slow start to the year.
Kootenai County: Strong market in first six months. Annualized single-unit sales, UP
6.5-7.5%, compared to 2013.
2014 median prices likely to be UP 8.0-9.2%, compared to 2013.
Apartment Vacancy Rates and Rents
Spokane County (countywide): 55th tightest market of 275 markets ranked by REIS.
Current vacancy rate about 4.9%. Market ranks 143rd (REIS) in rent-growth, about
0.4%. New construction and affordability issues have put governors on rent growth,
but demand remains strong and points to continuing, but slow, growth in rent.
Kootenai County: Vacancy rates likely to rise bit, putting pressure on rental growth,
both due, in part, to expansion of apartment projects in 2013.
Oxalis Group LLC projections. Copyright 2014, The Oxalis Group LLC
Commercial Real Estate
RETAIL SPACE
In 2013, both Spokane and Kootenai counties, vacancy rates fell (dramatically
in Kootenai County). Rents held steady.
For 2014, the picture is largely the same, with some nuances:
*
At the end of May 2014, Spokane ranked 40th in the nation in retail vacancy
rate among 190 markets measured by REIS, which reported a rate of 9.8%.
The market ranked only 172, however, on rent growth, at -0.4%.
Kootenai County is not ranked by REIS, but various reports from there by
leading commercial agents, indicate that retail-sector rents have stabilized in
the $10-$11 range, with vacancy rates expected to hold steady or fall a bit at
the 4-5% range in Hayden , the 6-7% range in Coeur d’Alene, and to hold or fall
slightly from a rate of about 17% in Post Falls.
Oxalis Group LLC analysis based on private discussions and/or published reports from reis.com, NAI Black, Kiemle & Hagood, Valbridge Property Advisors,
Spokane Board of Realtors, and others.
Office Space
SPOKANE
(county wide)
Current vacancy rate of about 12.8%, but varies greatly based on cities
and areas within cities (down from about 18% in 2010).
REIS rank 27.
Rent-growth essentially flat at 0.3%.
Forecast: Slow but steady progress on both rents and vacancy in2014,
but still a tenant market in most areas.
KOOTENAI
(county wide)
Rents flat and vacancy rate steady.
Forecast: Same as Spokane: steady progress.
Both markets anticipating growth improved rents and vacancies in
2015, with 2014 holding at 2013 levels.
Oxalis Group LLC analysis based on private discussions and/or published reports from reis.com, NAI Black, Kiemle & Hagood, Valbridge
Property Advisors, Spokane Board of Realtors, and others.
THANK YOU!
THEOXALISGROUPLLC
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communities and non-profits
***
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