NewBase 22 April 2024 Energy News issue - 1718 by Khaled Al Awadi (AutoRe...
State Of The Economy
1. State of the Economy
The Coming Recovery
Presented to HBA Sales and Marketing Co
March 18, 2009
Fred Crowley
UCCS Southern Colorado Economic Forum
2. Objective
• How we got to this place in the econom
• National housing issues
• Local good news?
• Very good news about the military
• Great news for next week
• Summary
• Q&A
3. Data Sources
• Bureau of Economic Analysis http://www.bea.gov/
• Colorado Department of Local Affairs http://www.dola.state.co.
• County Business Patterns http://censtats.census.gov/cbpnaic/cbp
• El Paso County Public Trustees Office http://elpasopublictrustee
• Federal Reserve Bank of St. Louis http://research.stlouisfed.org
• Office of Federal Housing Enterprise Oversight http://www.ofhe
• Pikes Peak Regional Building Department http://www.pprbd.or
• PPAR, Colorado Springs REALTOR Services Corp http://www
• Yahoo/Finance http://finance.yahoo.com/
• Bureau of the Census http://www.census.gov/
• And others
5. Capital Markets
• Equilibrium (balance) when supply eq
demand
• Disequilibrium when supply and dem
are not equal
What happens if funds desired by borrowers exceeds funds lenders are wil
What happens if funds from lenders exceed borrowers’ needs?
6. Goods Markets
• Equilibrium (balance) when supply eq
demand
• Disequilibrium when supply and dem
are not equal
What happens if items desired by consumers exceeds items sellers lenders a
provide?
What happens if items from sellers exceed consumers’ needs?
8. Percent of Mortgages
Interest Only - 2000
North Dakota
Montana Minnesota
Washington
Verm
Wisconsin
South Dakota
Oregon
Wyoming
Idaho Michigan
New York
Mass
Nebraska Iowa
Pennsylvania
Illinois Ohio
Indiana
Utah
Nevada
New
Colorado West Virginia
Missouri
Kansas Del
Virginia
Kentucky
Maryland
North Carolina
California Tennessee
Oklahoma
Arkansas
New Mexico
Arizona
Mississippi South Carolina
Alabama
Georgia
Texas
Louisiana State
Florida
9. Percent of Mortgages
Interest Only - 2005
North Dakota
Montana Minnesota
Washington
Verm
Wisconsin
South Dakota
Oregon
Wyoming
Idaho Michigan
New York
Mass
Nebraska Iowa
Pennsylvania
Illinois Ohio
Indiana
Utah
Nevada
New
Colorado West Virginia
Missouri
Kansas Del
Virginia
Kentucky
Maryland
North Carolina
California Tennessee
Oklahoma
Arkansas
New Mexico
Arizona
Mississippi South Carolina
Alabama
Georgia
Texas
Louisiana State
Florida
10.
11. Case/Shiller Housing Price Index Change (Oct 2008 vs R
Peak: Mostly in 2006)
Com
-23.42%
-11.36%
-4.64%
P
-10.76%
Cle
-11.93%
-11.95% Ne
Las
-39.28%
Ch
-5.78%
Minn
-20.69%
-32.23%
B
-12.76%
C
-13.71%
-12.24%
-30.51%
-38.26%
Wa
-26.35%
-8.01%
San_
-36.15%
San
-36.44%
Los_
-34.36%
P
-40.56%
-45.00% -40.00% -35.00% -30.00% -25.00% -20.00% -15.00% -10.00%
14. Compared to a year ago, are an
you consciously
• Spending more?
• Spending about the same?
• Spending less?
15. Definition of a Recession
A recession is a significant decline in economic
activity spread across the economy, lasting more
than a few months, normally visible in
real GDP
real income
employment
industrial production
wholesale-retail sales.
National Bureau of Economic Research
20. Benefits to Colorado
• The money also will be used to create jobs, help the unemplo
continue Colorado's efforts in being an energy leader. An ea
passed version of the stimulus package put Colorado's share
but the final amount is expected to be significantly less.
• quot;The depth of the economic crisis demands bold action,quot; Go
said in a statement. quot;I'm confident Coloradans will rise to th
and seize the opportunities presented in the recovery packag
• All the details aren't available, but according to Ritter and t
House the money will be used to:
• Give tax cuts of up to $800 to 1,870,000 Colorado workers, quot;
pay out immediately into workers' paychecks.quot;
• Create or save 59,000 jobs over the next two years, from cle
health care.
• Help make college more affordable by issuing a tax credit fo
families.
• Modernize at least 99 Colorado schools.
• Offer an additional $100 per month in unemployment insur
173,000 Colorado workers who have lost their jobs and exte
unemployment benefits to an additional 36,000 laid-off work
21. American Recovery & Reinvestment Act (A
$8
Other
$43
Energy
$53
Education and Training
$59
Health Care
$81
Protecting the Vulnerable
$111
Infrastructure & science
$144
State & Local Fiscal Relief
Tax Relief
$0 $50 $100 $150 $200 $250
(Billions of Dollars)
22. Inflationary Concerns
Gross Domestic Product (GDP
Monetary Terms
The Equation of Exchange
• P = Price of goods and services
• G = Output of goods and services
• M = Money supply
• V = Velocity of money (how quickly it turns over)
• GDP = P*G, the value of all output in the economy
• V*M = how you pay for the goods and services
• P*G = V*M
Neither the output of goods nor the money supply
can change quickly. Velocity tends to increase whe
the economy is healthy. This tends to lead to price
increases (inflation)
28. Signs of Local Recovery
• Real Estate Activity
• Military
29. Compound Annual Housing Price Apprec
Last 12 Months Last 24 Months L
Q3 2007 to Q3 Q3 2006 to Q3
2008 2008
Boulder, CO 2.37% 5.47%
Colorado Springs, CO -2.80% -1.52%
Denver-Aurora, CO -0.95% -1.64%
Fort Collins-Loveland, CO -0.52% 0.46%
Grand Junction, CO 4.67% 20.10%
Greeley, CO -5.70% -7.40%
Pueblo, CO -6.37% -6.00%
Colorado -0.31% 1.76%
U.S. -4.00% -2.27%
Source: OFHEO
30. Housing Affordability Index
for El Paso County
160
140
110.4 110.1
120 108.3
101.4
100
80
60
40
20
0
2004 2005 2006 2007
Source: PPAR, NAR, Federal Reserve and UCCS Forum
31. Single Family Permit Trends
in El Paso County
600
500
Permits Issued
400
300
200
100
0
Feb-04 Feb-05 Feb-06 Feb-07 Feb-0
Seasonally Adjusted Single Family Permits 3 Mo Movin
S ource: Pikes Peak Rgl Bldg Dept, and UCCS S outhern Colorado Economic Forum
32. Seasonally Adjusted Single Family-Detache
Building Permits in El Paso County
400
355
327
321
350
302
301
297
291
284
268
300
253
250
200
154
129
111
150
110
109
108
96
85
82
78
100
50
0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov D
Monthly Average: 2/05-2/08 Last 13 Months
S ource: Pikes Peak Rgl Bldg Dept, and UCCS S outhern Colorado Economic Forum
33. Monthly Home Sales in the Pikes Peak Region vs. Yea
-22.5%
1,032 -18.6%
-14.4%
-17.7%
-19.0%
-13.8%
1,118
1,035
1,200
-26.3%
723 -10.2%
-16.9%
945
734 5.6%
896
891
886
1,000
867
840
778
772
722
695
677
800
669
649
Sales per Month
556
499
600
400
200
0
Feb Mar Apr May Jun Jul Aug Sep Oct Nov D
-200
Feb 07 - Feb 08 Feb 08 - Feb 09 Series3
Source : Pike s Peak REALTO R Service s Corp.
Pre pare d by: UC CS Southern Colorado Economic Forum
34. Ratio of Home Sales to Housing Units
(Indexed to Mar/Nov 2001 = 100)
0.8
0.7
0.6
0.5
0.4
0.3
Feb-05 Aug-05 Fe b-06 Aug-06 Feb-07 Aug-07 Feb-08 A
Home Sales
S ource: Pikes Peak REALTOR S ervices Corp. and UCCS S outhern Colorado Economic Forum
35. Monthly Single Family Home Sales
(Pikes Peak Region)
1,288 -32.7%
1,191 -25.6%
1,172 -33.6%
1,172 -28.3%
1,022 -24.5%
1,600
977 -26.1%
938 -21.7%
917 -29.2%
1,400
805 -38.0%
787 -37.1%
Single Family Homes Sold
721 -22.9%
1,200
886
867
840
1,000
778
772
734
722
649
800
556
499
495
600
400
200
0
Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec
-200
08 08 08 08 08 08 08 08 08 08 08
Historical Average : 2/05-2/08 Last 13 Months: 2/08-2/09
Source : Pike s Peak REALTO R Service s Corp. and UCC S Southe rn Colorado Economic Forum
36. Active Listings of Homes
(Pikes Peak Region)
8,000
6,595
6,544
6,396
6,323
6,175
6,030
5,849
5,829
5,856
5,841
7,000
5,710
5,642
5,571
5,520
5,547
5,360
5,185
4,957
6,000
4,722
4,663
4,366
Active Listings
5,000
4,000
3,000
2,000
1,000
0
Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec
08 08 08 08 08 08 08 08 08 08 08
Historical Average: 2/05-2/08 Last 13 Months: 2/
S ource: Pikes Peak REALTOR S ervices Corp. and UCCS S outhern Colorado Economic Forum
37. El Paso County Foreclosure Proceedings
5,000
4,500
3,476
3,240
4,000
Annual Foreclosures
2,973
3,500
2,316
3,000
2,088
1,992
2,500
1,596
1,406
2,000
1,200
1,163
1,059
1,003
1,500
959
827
664
590
1,000
499
456
431
500
0
1984 1987 1990 1993 1996 1999 2002
Source : El Paso C ounty Public Truste e and UC CS Southe rn Colorado Economic Forum
38. El Paso County, Foreclosure Proceedings per 1,0
Single Family Homes (Detached + Townhomes
Annual Foreclosures per 1,000 Homes
Previous peak was about
30
32 per 1,000 in the late 1980's.
25
20
13.78 13.26 14.46
15 12.24
10.29
10 7.75
6.94
6.86
6.11
5
0
1998 1999 2000 2001 2002 2003 2004 2005 2006
Source : El Paso C ounty Public Truste e and UC CS Southe rn Colorado Economic Forum
*Proje ction
39. Single Family Permits and Initiated Foreclosu
Proceedings in El Paso County (Seasonally Adjus
600 Foreclosures
Single Family Permits
500
400
300
200
100
Permits
0
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
Permits Foreclosures
Source : El Paso County Publ ic Truste e and UCC S Southe rn Colorado Economi c Forum
42. Expected Fort Carson Troop Arriv
Year Troops* Dependents** Tota
2009 4,893 9,137 14,03
2010 364 680 1,04
2011 3,923 7,325 11,24
2012 626 1,169 1,79
2013 25 47 7
Total 9,831 18,357 28,18
*Housing Market Analysis, Fort Carson, Colorado. Prepared by Robert D. Niehaus, Inc., 2008.
**Fort Carson Regional Growth Plan, Pikes Peak Area Council of Governments, 2008.
43. Top 25 Sectors to Benefit from Fort Carson E
Avg.
Wage Sector
Sector Jobs
Food svcs/restaurants 495 $15,128 Miscellaneous retailers
State & local education 343 $39,277 Households
Physician & dentist offices 256 $50,162 Hospitals
Nonstore retailers 199 $3,498 Commcl and ind bldgs
State/local non-education 173 $57,059 Clothing stores
General merchandise stores 156 $23,055 Auto repair/maintenance
Real estate 149 $11,079 Employment services
Nursing & care facilities 122 $30,722 Colleges
Food/beverage store 120 $28,930 Health and personal care
New residential bldg 118 $36,164 Bldg mat & garden supply
Wholesale trade 111 $57,162 Architect & engineer svcs
Social assistance 103 $28,862 Banks & credit unions
Motor vehicles & parts 102 $43,166 Summary
Private Sector Average Wage in 2007 was $39,364
44. Now for the Best News
• Spring break is next week
• My wife, Carolyn, and dog, Roxette
Are Going to Yellowstone to
Take in the Wildlife!
45.
46.
47.
48.
49.
50.
51.
52.
53. Summary
• Careless lending overheated housing
• Creative finance tools caused a liquid
• A global recession is underway – prob
deep and long
• El Paso County should do better than
because of Fort Carson
• We must attract more well paying pri
jobs