At Last, Inland Empire Economic Growth . . .
Will it Take Off?
John Husing, Ph.D.
Economics & Politics, Inc.
Chief Economist, IEEP
After Losing 8.74 Million Jobs …
U.S. Job Creation Is Crawling Back
Pattern of Likely Recovery
VU
Congressional Madness
Sequester
Debt Limit
U.S. Economy???
California Wage & Salary Employment
Back to Mid-1999 Level
Every Wage & Salary Job Created In California In This Decade
Has been Lost: Not A State Priority
Worst National Unemployment Rate
Unadjusted Rates: U.S. 7.4% CA 9.6%
There is Some Good News Locally
IE Up 16,106 Jobs in 2012 thru November
16,300 was Husing Forecast for 2012
-146,400
-11.4%
Sectors Creating/Losing Jobs
Lower Paying
Modest Paying
White Collar
Blue Collar
Good Paying
Admin. Support
Distribution & Transportation
Employment Agcy
Health Care
Eating & Drinking
Manufacturing
Mgmt & Professions
Accommodation
Social Assistance
Amusement
Agriculture
Utilities
Mining
Higher Education
Publish, telecomm, Other
Construction
Other Services
Financial Activities
Local Government
Retail Trade
Federal & State
K-12 Education
Exhibit 8.-Inland Empire Growing & Declining Sectors
Average January-November 2011-2012
5,164
4,691
3,782
3,055
1,545
1,127
1,100
1,000
855
609
155
64
9
(9)
(55)
(464)
(473)
(518)
(673)
(773)
(1,473)
(2,609)
Source: California Employment Development Department
The Great Challenge
Construction Share of Lost Jobs
Construction Share Of Lost Jobs
Inland Empire, 2006-2012
130,200
57.3%
74,600
Total Job Decline 2006-2012
Construction Job Decline
Construction Share of Lost Jobs
Source: CA Employment Development Department
500,000 People In
SB County
Underwater homes
Existing Home Prices Slight Upward Move
$437,200
Exhibit 5.-Price Trends, New & Existing Homes
Inland Empire, 1988-2012, Quarterly
$450,000
$420,000
$390,000
$360,000
$330,000
$300,000
$270,000
$240,000
$210,000
$180,000
$150,000
$120,000
$90,000
$60,000
$30,000
$0
$295,442
New
Existing
$107,617 36.4%
$389,924
-51.8%
$155,319
Source: Dataquick & Economics & Politics, Inc.
$187,825
Inland Empire’s Long Term
Price Competitive Advantage Still Exists
Exhibit 20.-Home Price Advantage, Inland Empire & So. California
Median Priced New & Existing Home, 3rd Quarter 2012
Median All Home Price
Inland Empire Advantage
$384,000
$352,000
$324,000
$197,000
$187,000
$155,000
Inland Empire
$521,000
Los Angeles
San Diego
Source: Dataquick
Orange
Gap To Coastal Markets Getting Larger
Exhibit 27.-Gap Between Coastal & Inland County Prices
Existing & New Homes, 1988-2012
$350,000
$325,000
$300,000
$275,000
$250,000
$225,000
$200,000
$175,000
$150,000
$125,000
$100,000
$75,000
$50,000
$25,000
$0
Los Angeles
Orange
San Diego
Source: Dataquick
$350,000
$325,000
$300,000
$275,000
$250,000
$225,000
$200,000
$175,000
$150,000
$125,000
$100,000
$75,000
$50,000
$25,000
$0
Record Inland Housing Affordability
Should Be Stimulating Demand
But Consumers Are Again Skeptical
About The Near Term Future
100.0 = Normal
Home Sales Volume Down Slightly
Investor Pre-Market Buying
Exhibit 10.-Direct Investor Purchase of Foreclosure Sales
Inland Empire, 2007-2012
50%
50%
45%
45%
40%
40%
35%
35%
30%
30%
25%
25%
20%
20%
15%
15%
10%
10%
5%
5%
0%
0%
2007
2008
2009
2010
2011
Source: Foreclosureradar.com
2012
Investor Purchases By SB Co. Area
Exhibit 11.-Home Purchases By Absentee Owners
San Bernardino County, Second Quarter 2007 v. 2012
46.4%
44.7%
2007
2012
37.8%
31.5%
30.6%
31.2%
23.4%
13.1%
14.7%
13.1%
11.9%
9.3%
San Bdno Co. Unincorp. Morongo Basin
Victor Valley
SB County
Source: Dataquick
East Valley
Westend
Single Family Rentals & Police Calls
How This Ends: A Housing Shortage
During 2008 thru 2012
California Population Grew by 993,624
106,230
9.35 per
new person
When Underwater Homes Solved
Sep-13
1.7%
Mar-14
5.1%
Mar-15
12.7%
Apr-17
35.7%
Apr-18
50.0%
Jan-19
60.0%
Jul-20
78.8%
Nov-21
89.9%
Feb-23
95.2%
Mar-24
97.9%
Mar-25
98.9%
Assessed Valuation Finally Growing
Assessed Valuation, Slow Rise
-8.1%
Construction Permits At An
Historic Low !
Construction Jobs: At the Bottom
Gold Mine Theory
Secondary Tier
Primary Tier
Construction:
Blue Collar
Health Care:
White Collar
Logistics:
Blue Collar
Manufacturing:
Blue Collar
Adult Educational Levels
31.4%
Rest of So. CA
Health Care Jobs
100
3,000
200
Inland Empire Underserved
by Health Care Workers
34.4% More People Per
Health Care Worker
Exhibit 10.-Number of People Per Health Care Worker
Inland Empire & California, 1990-2012
47.5
45.9 46.5 45.7 44.7
Inland Empire
42.7 41.8
California
41.7 41.4
40.5 40.3 40.4
40.3 40.1 39.6 40.0 39.9 39.1 39.4 40.4 41.1
39.2 38.5
36.2 35.1
34.7 34.8 34.8 34.5 34.1 33.8 33.6 33.4 33.7
33.3 32.7 32.5 32.5 32.5 32.4
31.8 31.1 31.0
Source: CA Employment Development Department
29.6 29.2 28.6
Who Will Health Care Workers Serve?
Inland Empire is Under-Officed
Office Space Per Capita & Per Local Job
Southern California Areas, 2010
51.7
Per Person
Per Job
45.4
41.7
19.0
16.0
18.2
L.A. County
San Diego Co.
23.4
5.0
Inland Empire
Sources: Grubb & Ellis, CA Employment Development Dept., CA Dept. of Finance
Office Occupations:
Strong Growth Has Stopped
Logistics Flow of Goods
Imported Container Volume Returning
+19.2%
-25.4%
Record Export Container Volume
All Time Record
Inland Empire Logistics Jobs
Manufacturing Activity: Slowing
Manufacturing Jobs In Neutral
Gold Mine Theory
Secondary Tier
Primary Tier
Inland Empire’s In-migration From Coastal
Counties Has Stopped
-15,538
Not Bringing Skills, Wealth, Income & Spending
Retail Sales, San Bernardino County
-$3.7 Billion
-6.0%
Retail Jobs Have Faltered
California Grabbing Money From
Local Government … School Funding Cut
Jerry Brown’s Hand
Government Jobs
2012 Better than 2011
Foreclosures A Continuing Issue
Complete Recovery 2016-2018??
2012 Jobs Growing As Expected
2013 Better Than 2012 IF Federal
Issues Solved
www.johnhusing.com