A housing and demographic update for the Murrieta/Temecula Group

1. The Voice for Real Estate

2. • Murrieta/Temecula
Demographics
• Regional Housing Market
• What Lies Ahead
• CA / National Trends
• Forecast
Lots to cover – Not enough time

3. Regional Demographics

4. 68% MTG v 31% Rivco

6. Regional Demographics

7. Population

8. Economics

9. Jobs & Education

10. Commute
50% - 30 minutes +
38% - 45 minutes +
26% - 60 minutes +
83% drive alone

11. Too Many v Not Enough

12. Let’s talk Housing!

13. National recession
Ended 6/09
SoCal recession
Ended 9/10
That’s the good news –
We should stop here.
Latest Economic News
From my presentation to MTG in 2011

14. Let’s talk housing - 2009

15. Let’s talk housing - 2019

16. Where are we today

17. Regional Sales - UP
7500
8000
8500
9000
9500
10000
2014 2015 2016 2017 2018 2019
8
5
2
4
9
3
0
7
9
6
2
9
9
9
5
4
9
0
9
0
9
3
5
0
Southwest California SFR Unit Sales
Year-to-Date – Thru October
15% 3%
9%

18. Regional Median $$- UP
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2014 2015 2016 2017 2018 2019
$
2
8
5
,
6
5
5
$
3
0
2
,
2
1
2
$
3
2
6
,
1
7
4
$
3
4
8
,
8
9
5
$
3
7
4
,
5
5
5
$
3
8
5
,
1
5
0
Southwest California SFR Median Price
Year-to-Date – Thru October
26%

19. Median Prices - OK

20. Still short on inventory – 2.2 months

21. What Lies Ahead?

22. GDP 2.1%
2019-Q2
Consumption 4.3%
2019-Q2
Core CPI 2.1%
June 2019
Job Growth 1.5%
June 2019
Economic Fundamentals Solid
(For Now)

23. • US Unemployment at a 50 year low – Youth unemployment at 52 year low –
Record 63% Labor Participation rate
• Homeownership has risen from a historic low of 62.9% (2014/2015) to 64.8%
and rising
• Average home price up 22.7% since Jan. 2017
• Stock Market is trading at a historic record level over 27,000 +
• Gallup reports Public Optimism at 16 year high
• Bureau of Labor Statistics reports 6 million jobs created since 1/17. A record
500,000 are in manufacturing
• AP reports job openings outnumber the employed by one million
• The Bureau of Economic Analysis announced GDP growth hit over 3%. First
time in over 13 years
• The Council of Economic Advisers revealed prescription drug prices reduced
for the first time in fifty years (Council of Economic Advisers Report)
• USDA reports Food Stamp usage continues to drop – Down 15.1% since Jan.
2017
• US Census Bureau data shows median income continues to rise
• America is now the world’s largest oil producer
• Black and Hispanic unemployment lowest level…’ever’
• US Consumer confidence at 17 year high
• Bloomberg reports S&P 500 companies show record investments of 39% -
Fastest growth since 2007
Good news on all fronts

24. Unemployment Rates at 50 Year Low

25. MONTHLY
Mortgage Rates at 3 Year Low

26. However, statewide sales are flat, at best
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
California sales: -2.6% YTD, 1.6% YTY

27. Price appreciation slowing
but still near record territory
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000 Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
May-12
Jan-13
Sep-13
May-14
Jan-15
Sep-15
May-16
Jan-17
Sep-17
May-18
Jan-19
California: October 2019 $605,280. -0.1% MTYM, 6.0% YTY

28. More of Everything, EXCEPT…

29. 0
50000
100000
150000
200000
250000
300000
350000
Single Family Multi-Family
CA HCD Projected
Housing Needs:
180,000/yr.
2017: 112,886 2018: 114,370
“Missing” 60,000 New Units Annually

30. Too many simply can’t afford to buy

31. Putting CA in questionable company

32. Some cities already ahead of the curve

33. Why don’t we build enough housing?

34. 3.5
Million
Units
The Governor's Call-to-Action
Left unanswered:
Where? When? How? How much?
Over
Next
7 Years

35. John Husing, Ph.D.
Economics & Politics, Inc.
State of the Inland Empire
. . . The “Adventure” Continues

36. California Housing Market Outlook - Positive
2015 2016 2017 2018 2019p 2020f
SFH Resales (000s) 409.4 417.7 424.9 402.8 390.2 393.5
% Change 7.0% 2.0% 1.7% -5.2% -3.1% 0.8%
Median Price
($000s)
$476.3 $502.3 $537.9 $570.0 $593.2 $607.9
% Change 6.6% 5.4% 7.1% 6.0% 4.1% 2.5%
Housing
Affordability Index
31% 31% 29% 28% 32% 32%
30-Yr FRM 3.9% 3.6% 4.0% 4.5% 3.9% 3.7%

37. CoreLogic Agrees

39. As the largest trade association in the U.S., the National Association of
Realtors® advocates every day on behalf of the nation’s 1.4 million
Realtors® and 75 million property owners. NAR is widely considered
one of the most effective and bipartisan advocacy organizations in the
country.