Sd Bia Bull And Bear Jan 15

Prospects for a Housing
Market Bottom in 2009?

For: San Diego BIA Annual Bull & Bear
January 15, 2009

SULLIVAN GROUP REAL ESTATE ADVISORS
Peter Dennehy, Sr. Vice President
(858) 523-1443 x118
p.dennehy@sgrea.com
Phone 858.523.1443 www.sullivangroupadvisors.com

San Diego Job Losses Picking Up
2004 - 20,200
2004 - 20,200
60,000
Y-T-Y PERCENT CHANGE 2005 - 21,800
2005 - 21,800
50,000
2006 - 19,500
2006 - 19,500
40,000 2007 - 6,600
2007 - 6,600
Nov ’08- -15,300
Nov ’08- -15,300
30,000
20,000
10,000
0
-10,000
-20,000
-30,000
Sep-86
Sep-87
Sep-88
Sep-89
Sep-90
Sep-91
Sep-92
Sep-93
Sep-94
Sep-95
Sep-96
Sep-97
Sep-98
Sep-99
Sep-00
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Data is year over year change
Source: California Employment Development Department; Sullivan Group

San Diego County Job Losses Occurring
in 2008 at Accelerating Pace
25,000
2006 - 19,500
2006 - 19,500
20,000
2007 - 6,600
2007 - 6,600
15,000
Nov ’08- -15,300
Nov ’08- -15,300
10,000
Y-T-Y PERCENT CHANGE
5,000
0
-5,000
-10,000
-15,000
-20,000
May-06

May-07

May-08
Jan-06
Mar-06

Jul-06
Sep-06
Nov-06
Jan-07
Mar-07

Jul-07
Sep-07
Nov-07
Jan-08
Mar-08

Jul-08
Sep-08
Nov-08
Data is year over year change
Source: California Employment Development Department; Sullivan Group

2007 – 2008P Job Gain/Loss Comparison
September 2008 California Job Growth
California Job Growth
3.0% San Jose 0.2%
San Jose 0.2%
SF/Oakland -0.2%
SF/Oakland -0.2%
San Diego -0.4%
2.0% San Diego -0.4%
Los Angeles -0.6%
Los Angeles -0.6%
Sacramento -0.6%
Sacramento -0.6%
1.0% Orange County -1.7%
Orange County -1.7%
Inland Empire -1.9%
Inland Empire -1.9%
0.0%

-1.0%

-2.0%

-3.0%

Sacramento
Salt Lake City

Las Vegas
Seattle

San Jose

Orange County
Denver
Houston

Portland

SF/Oakland

San Diego
Dallas

Los Angeles

Phoenix

Inland Empire
Austin

Tucson
2008P is projected through September
Source: BLS; Sullivan Group Real Estate Advisors

Unemployment Level:
United States vs. San Diego
10.0
United States 7.2%
United States 7.2%
9.0
San Diego 6.9%
San Diego 6.9%
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Dec-90
Dec-91
Dec-92
Dec-93
Dec-94
Dec-95
Dec-96
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
United States San Diego
Note: US data as of Dec 2008 and San Diego as of Nov 2008
Source: Bureau of Labor Statistics; Sullivan Group

San Diego’s Residential Permits are at the
Lowest Level Since the 1940s
2004 15,587
2004 15,587
50,000 Long-term average - 17,000/yr 2005 14,306 -8%
2005 14,306 -8%
45,000 2006 9,194 -36%
2006 9,194 -36%
Building Permits

40,000 2007 7,461 -19%
2007 7,461 -19%
2008P 5,500 -26%
2008P 5,500 -26%
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0

2008P
1948

1954

1960

1966

1972

1978

1984

1990

1996

2002
Note: 2008 is a projection using data through November
Source: SOCDS; Sullivan Group

1,000
1,250
1,500
1,750
2,000
2,250
2,500

250
500
750

0
Jan-05
Feb-05
Mar-05
Apr-05
May-05

Phone 858.523.1443
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06

Source: Bureau of Labor Statistics; Sullivan Group
Jul-06
Aug-06
Sep-06
Oct-06

Attached
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Detached
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Attached
Attached
Detached
Detached

Apr-08
May-08
Jun-08
Jul-08
November 2008

Aug-08
November 2008

84
148
84
148

Sep-08
San Diego Residential Permits: 2005-2008

Oct-08
Nov-08
www.sullivangroupadvisors.com

+/-32,000 Homes Sales in ’08: Good/Bad = Bad/Good?
8 year Total Home
2004 68,262 +7%
2004 68,262 +7%
70,000 Sales Average
2005 58,953 -14%
2005 58,953 -14% 50,507
2006 42,253 -28%
2006 42,253 -28%
60,000
2007 32,658 -23%
2007 32,658 -23%
2008P 32,794 0%
2008P 32,794 0%
50,000

40,000
8 year New Home
Sales Average
30,000 9,835

20,000

10,000

0
1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008P
New Existing

Source: Dataquick; Hanley Wood; Sullivan Group

San Diego County New Home Sales
2008P = ±2,800
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0

2008P
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Detached Attached
2008P annualized using data from January through November.
Source: Hanley Wood; Sullivan Group

Case-Shiller: Prices Down 36% Since 2005
Drop from Peak - 36%
300
October 2008
250
San Diego 159.12
200 Composite of 10 169.78
150
100
50
0
Jan-87
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
San Diego Composite of 10
Composite of 10 includes Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego,
San Francisco, Washington DC
Source: S&P/Case-Shiller; Sullivan Group

Median New Home Price Also Lower
SFD: -31%; ATT: -9% Vs. Peak
$1,000,000
3rd Qtr 2008
3rd Qtr 2008
$800,000 Detached $599,450
Detached $599,450
Attached $359,995
Attached $359,995
$600,000

$400,000

$200,000

$0
3Q88
3Q89
3Q90
3Q91
3Q92
3Q93
3Q94
3Q95
3Q96
3Q97
3Q98
3Q99
3Q00
3Q01
3Q02
3Q03
3Q04
3Q05
3Q06
3Q07
3Q08
Attached Detached

Affordability Back to Late 1990s Level
3rd Qtr 2008 = 38.7
rd
50
45
40
35
30
25
20
15
10
5
0
1Q97
3Q97
1Q98
3Q98
1Q99
3Q99
1Q00
3Q00
1Q01
3Q01
1Q02
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
Note: 2Q02 through 3Q03 data not available
Source: NAHB Housing Opportunity Index; Sullivan Group

Number of Active Home Projects is Declining
San Diego: Q1 ‘05 to Q3 ‘08: - 46%
November 2008
November 2008
Active Projects –– 188
Active Projects 188
Total Sales - - 41
Total Sales 41
Active Projects
400 2,000
348 in Nov 06
350 188 in Nov 08
Active Projects

300 1,500

Total Sales
250
200 1,000
150
100 500
50
0 0
Jan-05

Apr-05

Jul-05

Oct-05

Jan-06

Apr-06

Jul-06

Oct-06

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08
Active Projects Sales
Source: Hanley Wood; Sullivan Group Real Estate Advisors

New Detached Inventory is Generally Low
November 2008
750 12.0

10.0
Speculative Inventory

600

Months of Inventory
8.0
450
6.0
300
4.0
150 2.0

0 0.0
San Diego Central Coastal East Inland South Bay
County North North

Number of Units Months of Inventory

Most New Attached Inventory in Central Submarket
November 2008
2,000
1,800 30.0
Speculative Inventory

1,600

Months of Inventory
82% of Attached Inventory 25.0
1,400
in Central Submarket
1,200 20.0
1,000
15.0
800
600 10.0
400
5.0
200
0 0.0
San Diego Central Coastal East Inland South Bay
County North North

Speculative Inventory Months of Inventory

Improvement in Existing Sales Levels in ’08
Lower Prices and REOS Stimulating Sales Activity
6,000
5,000
4,000
3,000
2,000
1,000
0
Nov-88
Nov-89
Nov-90
Nov-91
Nov-92
Nov-93
Nov-94
Nov-95
Nov-96
Nov-97
Nov-98
Nov-99
Nov-00
Nov-01
Nov-02
Nov-03
Nov-04
Nov-05
Nov-06
Nov-07
Nov-08
Total Sales 12 per. Mov. Avg. (Total Sales)
Source: Dataquick; Sullivan Group

Total Existing Sales Volume Improved in 2008
5,000 MLS ‘08 vs. ‘07
MLS ‘08 vs. ‘07
4,500 2007 25,492
2007 25,492
4,000 2008 29,284
2008 29,284
3,500 % Change +15%
% Change +15%
3,000
2,500
2,000
1,500
1,000
500
0
Jan-05

Sep-05

Jan-06

Sep-06

Jan-07

Sep-07

Jan-08

Sep-08
Mar-05

Jul-05

Nov-05

Mar-06

Jul-06

Nov-06

Mar-07

Jul-07

Nov-07

Mar-08

Jul-08

Nov-08
May-05

May-06

May-07

May-08
Source: Dataquick; Sullivan Group

Active Resale Listings Have Declined Steadily
26,000 Jan 14, 2009
Jan 14, 2009
24,000 Attached 4,535
Attached 4,535
Detached 9,512
22,000 Detached 9,512
Total 14,047
Total 14,047
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2/13/2007
3/13/2007
4/13/2007
5/13/2007
6/13/2007
7/13/2007
8/13/2007
9/13/2007
10/13/2007
11/13/2007
12/13/2007
1/13/2008
2/13/2008
3/13/2008
4/13/2008
5/13/2008
6/13/2008
7/13/2008
8/13/2008
9/13/2008
10/13/2008
11/13/2008
12/13/2008
SFD Listings Attached Listings Total Listings
Source: Zip Realty; Sullivan Group

There is a 6.2 Month Supply of Resale Units
25,000 5,000
22,500 4,500

Total Existing Sales
20,000 4,000
17,500 3,500
Listings

15,000 3,000
12,500 2,500
10,000 2,000
7,500 1,500
Dec ’08 Listings 15,110
5,000 1,000
Nov ’08 Sales 2,411
2,500 500
0 0
Mar-06
May-06

Nov-06

Mar-07
May-07

Nov-07

Mar-08
May-08

Nov-08
Jan-06

Sep-06

Jan-07

Sep-07

Jan-08

Sep-08
Jul-06

Jul-07

Jul-08
Listings Total Existing Sales
Source: Zip Realty; Dataquick; Sullivan Group


Foreclosures Still at Record Levels in
San Diego County
7,000
6,000 3Q06 = 561
3Q07 = 2,355
5,000
3Q08 = 6,463
4,000
3,000
2,000
1,000
0
Q3/89
Q3/90
Q3/91
Q3/92
Q3/93
Q3/94
Q3/95
Q3/96
Q3/97
Q3/98
Q3/99
Q3/00
Q3/01
Q3/02
Q3/03
Q3/04
Q3/05
Q3/06
Q3/07
Q3/08
Source: Real Estate Research Council; CAR; Sullivan Group Real Estate Advisors

NOD’s Jumped Again in December ‘08

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Oct-07

Oct-08
Nov-07
Dec-07
Jan-08
Feb-08

Apr-08

Jun-08
Jul-08
Aug-08
Sep-08

Nov-08
Dec-08
Mar-08

May-08

Source: InnoVest Resource Mgmt; Sullivan Group

Foreclosures at Record Level of Transactions
(Nov 2008 = 15.4%)
25,000 25%
Data reflects new state
requirement which requires
20,000 20%
lenders to contact homeowners

Trustee Deeds as % of All Deeds
30 days prior to filing.
15,000 15%
10,000 10%
5,000 5%
0 0%
Nov-91
Nov-92
Nov-93
Nov-94
Nov-95
Nov-96
Nov-97
Nov-98
Nov-99
Nov-00
Nov-01
Nov-02
Nov-03
Nov-04
Nov-05
Nov-06
Nov-07
Nov-08
All Deeds Notices of Default Trustee's Deed TD % of all Deeds
Source: InnoVest Resource Mgmt; Sullivan Group

Top 10 Homebuilders
San Diego County
Jan-Nov % of Jan-Nov % of
Builder Name 2008 Sales Total 2007 Sales Total
1 Shea Homes 248 9.6% 354 5.9%
2 Pardee Homes 169 6.5% 316 5.3%
3 Standard Pacific Homes 160 6.2% 290 4.8%
4 Lennar Homes 146 5.6% 220 3.7%
5 William Lyon Homes 139 5.4% 278 4.6%
6 Brookfield Homes 89 3.4% 79 1.3%
7 Davidson Communities 76 2.9% 61 1.0%
8 Hammer Ventures 71 2.7% 177 2.9%
9 Richmond American Homes 70 2.7% 104 1.7%
10 KB Home 63 2.4% 126 2.1%
Total Top 10 Builders 1,231 47.4% 2,005 33.4%
Total San Diego County 2,595 100.0% 6,002 6,002


Best Selling Attached Projects
January – November 2008
Jan-Nov
Project Name Community Name Open Date Sales
VILLA MONTEVINA Rancho San Diego 04/29/2006 67
VILLA LA JOLLA CONDOMINIUMS La Jolla 06/30/2005 56
GIANNI AT 4S RANCH Rancho Bernardo 05/07/2005 45
SUNSET COVE Clairemont 01/20/2007 39
APERTURE Downtown San Diego 09/15/2005 38
SUNCREST RIDGE CONDOS Oceanside 02/11/2007 38
LAS BRISAS Oceanside 04/13/2005 37
CYPRESS GREENS Poway 04/14/2007 37
TREVISO Santee 04/09/2005 32
NORTHSTAR Santee 04/21/2007 30

Note: Red Highlight indicates condo conversion project.

Best Selling Detached Projects
January - November 2008
Jan-Nov
Project Name Community Name Open Date Sales

PORTICO AT PACIFIC HIGHLANDS RANCH Future Urbanizing - Coastal 03/12/2005 39

BRIARS OF EUREKA SPRINGS (THE) Escondido 07/16/2006 36

TRIESTE AT LA COSTA GREENS La Costa 03/31/2007 33

CABRILLO AT DEL SUR San Diego 09/01/2005 31

DERBY HILL Carmel Valley 09/17/2005 31

SAN VINCENZO AT LA COSTA RIDGE Carlsbad 03/25/2006 31

LAKE RANCHO VIEJO Fallbrook 01/26/2006 28

CARRIAGE RUN Carmel Valley 06/01/2006 25

ESMERALDA Otay Mesa 05/07/2005 25

SERRAMAR La Mesa 03/19/2005 25


Sd Bia Bull And Bear Jan 15

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (12)

Similar to Sd Bia Bull And Bear Jan 15

Similar to Sd Bia Bull And Bear Jan 15 (20)

Sd Bia Bull And Bear Jan 15