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Steve Levy Presentation from SFMS

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Steve Levy Bay Area Economy Update from Marcus & Millichap/IPA Bay Area Multifamily Forum: San Francisco & Beyond

Steve Levy Bay Area Economy Update from Marcus & Millichap/IPA Bay Area Multifamily Forum: San Francisco & Beyond

Published in: Business, Real Estate

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  • 1. Bay Area Economy Update Stephen Levy Center for Continuing Study of the California Economy M & M Multifamily Forum Nov 14, 2013
  • 2. Jobs, Income & Sustainability • Bay Area close to recovering all lost jobs. SF and SJ metros above pre-recession peaks. • Region has high share of high wage sectors • Regional wages and HH income exceed state and national averages. • Short and long-term projections have Bay Area job growth outpacing state and nation.
  • 3. Job Recovery Since January 2008 105% 100% 95% 90% SFBA Oak Metro SF Metro San Jose Metro US Aug 13 Jan 13 Jan 12 Jan 11 Jan 10 Jan 09 Jan 08 85%
  • 4. Job Growth March 12-13 Based on Complete Data-Guide to Revisions U.S. 1.6% CA 3.0% Contra Costa 3.0% Alameda 3.0% San Mateo 3.4% Santa Clara 3.8% SF 0.0% 4.3% 1.0% 2.0% 3.0% 4.0% 5.0%
  • 5. Unemployment Rate Trends 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% SFBA Oak Metro Dec 07 SF Metro High San Jose Metro May 13 U.S.
  • 6. Average Wage 2012 SJ $95,399 SF $87,562 SFBA $68,477 CA $56,792 San Diego $53,907 LA Basin $52,614 $51,298 Sac Region $49,289 U.S. $39,158 San Joaq Val $0 $25,000 $50,000 $75,000 $100,000 $125,000
  • 7. Median HH Income in 2012 U.S. CA San Diego Alameda Orange SF Contra Costa San Mateo Santa Clara $0 $20,000 $40,000 $60,000 $80,000 $100,000
  • 8. Bay Area High Share of U.S. High Wage Tech Jobs in 2012 Total Nonfarm Jobs Sci. & R&D Services Mgmnt & Tech Services Computer Services Internet Services Software Comp.& Elec. Products 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
  • 9. Average Wage including Options and Bonuses Sci. & R&D Services $146,288 Mgmnt & Tech Services $104,253 Computer Services $202,122 Internet Services $172,333 $186,797 Software $167,422 Comp.& Elec. Products $0 $100,000 $200,000 $300,000
  • 10. Other Positive Factors • BART South Bay extensions provide new support for multi-family and office developments. • Ditto for the Grand Boulevard Initiative • The IPO market is again providing an outlet for investors to realize profits • Immigration reform would be positive for Bay Area economy
  • 11. Can the Bay Area Continue to Outperform the State and Nation • UCLA has the Bay Area growing substantially faster than the state and nation in 2014 and 2015 • CCSCE’s 2011 projections for ABAG has the Bay Area with faster job growth than the state and nation to 2040. Would show faster Bay Area job growth if updated today. • Subject to overcoming regional challenges.
  • 12. Challenges • Provide enough housing to support economic growth and attract companies and workers • Improve transportation infrastructure when 90% of current funding is allocated to maintaining the existing system of roads & transit. • Having enough skilled workers—meeting the challenges of education and immigration reform. • Making the Bay Area an attractive place to live and work.
  • 13. Housing Trends • Strong price recovery especially in peninsula counties • Rising permit levels with strong trend toward multi-family units • Demographic shifts favor living in denser urban centers in the region. Every city has a downtown with potential
  • 14. Median Price Existing Homes (000s) $1,200 $1,000 $800 $600 $400 $200 $0 CA SFBA SF High Orange Low San Mateo Santa Clara Inland Emp. Sept 13
  • 15. Residential Permits by Type 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 SF MF 2011 Oakland Metro SF MF 2012 SF Metro SF MF 2013 (9M) Santa Clara
  • 16. Population in 2012—Alameda, Contra Costa, SF, San Mateo, Santa Clara 3 2.5 2.3 Millions 2 1.6 1.4 1.5 1 0.4 0.5 0 White, Non Hispanic Asian Hispanic Black
  • 17. Bay Area HH Growth (Thousands) 200,000 150,000 100,000 50,000 0 -50,000 -100,000 -150,000 Under 25 25-34 2010-2020 35-54 2020-2030 55-64 2030-2040 65-74 75+
  • 18. Initiatives to Follow • BART expansion to San Jose • Grand Boulevard Initiative • Plan Bay Area and city implementation