Arizona Economic Housing Outlook

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RIck Merritt was the speaker at SJREI this past week . We are sharing his content rich presentation on Arizona and the Greater Phoenix market

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  • Arizona Economic Housing Outlook

    1. 1. Everything You Wanted to Know About Arizona and Greater Phoenix San Jose Real Estate Investors November 19, 2013 Presented By: Rick Merritt President, Elliott D. Pollack & Company Elliott D. Pollack & Company
    2. 2. U.S. Economic Overview Elliott D. Pollack & Company
    3. 3. You Choose… Elliott D. Pollack & Company
    4. 4. It is only because conditions have been so poor for so long that we feel this (insert word here) recovery is OK. Elliott D. Pollack & Company
    5. 5. When will the recovery firm up? Elliott D. Pollack & Company
    6. 6. Good News – The recovery should continue because there are no significant imbalances. Elliott D. Pollack & Company
    7. 7. Overall • No irrational exuberance Consumers • Debt burden low • Net worth improved • Real income growth • Liquidity improving • Inflation low Elliott D. Pollack & Company
    8. 8. Businesses • No excess inventory • No capacity issues • Dollar not overly strong Government • No longer a drag on economy • Fed policy still expansive Housing • Prices up but only as a rebound Elliott D. Pollack & Company
    9. 9. Economic Crisis Du Jour • • • • • • • • • U.S. Debt Ceiling ObamaCare Middle East European Debt Rating Downgrade Middle East Fiscal Cliff Sequestration Middle East… Elliott D. Pollack & Company No growth for you!?!?
    10. 10. United States Real Gross Domestic Product* Annual Growth 1970 - 2014** Source: U.S. Bureau of Economic Analysis & Blue Chip Economic Indicators 8% 7.3% 5.4% 5.6% 5.6% 6% 5.2% 4.6% 4.6% 4% 4.8% 4.5% 4.5% 4.1% 3.6% 4.0%3.8% 4.2% 4.2% 3.5% 3.5% 3.7% 3.2% 2.6% 3.3% 2.8% 2.7% 2.7% 1.9% 2% 3.8% 3.4% 2.8% 2.5% 2.6% 1.8% 1.6% 2.7% 1.8% 1.8% 0.9% 0.2% 0% -0.5% -0.2% -0.1% -0.2% -2% -0.3% -1.9% -2.8% 0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 197 197 197 197 197 198 198 198 198 198 199 199 199 199 199 200 200 200 200 200 201 201 201 -4% * Based on chained 2009 dollars. ** 2013 and 2014 are a forecast from the Blue Chip Economic Indicators, September 2013 3.8% = 40-year avg during expansion 3.2% = 20-year avg during expansion Recession Periods Elliott D. Pollack & Company
    11. 11. US Non-Farm Employment Change from Prior Month (S/A) June 2010 – August 2013 Source: Bureau Labor of Statistics 400 350 300 271 228 250 205 196 200 0 69 (250) 78 165 160 153 138 125 112 87 199 176 172 169 148 142 104 -37 -43 -86 (150) -130 (200) 132 205 247 219 1 (50) (100) 230 174 166 115 95 100 225 209 144 150 50 332 311 304 Feel Better When >200k Elliott D. Pollack & Company
    12. 12. US Non-Farm Employment Percent of Persons Working Full Time (S/A) 1970 – 2013* Source: Bureau Labor of Statistics Elliott D. Pollack & Company Recession Periods *Data through August 2013.
    13. 13. U.S. Unemployment Rate 1970 – 2013* Recession Periods Source: Bureau of Labor Statistics Underemployment = 14.3% *Seasonally adjusted data through July 2013 Elliott D. Pollack & Company
    14. 14. Consumers Hey, check this out… Elliott D. Pollack & Company
    15. 15. Wealth Effect • Housing Prices • Stock Market Elliott D. Pollack & Company
    16. 16. Leads to… • Retirement freedom • Ability to relocate • Comfort with additional spending Elliott D. Pollack & Company
    17. 17. U.S. Household Net Worth (Billions of Dollars, NSA) 1970 - 2013* Recession Periods Source: Board of Governors of the Federal Reserve System Elliott D. Pollack & Company *Data through first quarter 2013.
    18. 18. Financial Obligation Ratio** 1980 – 2013* Source: Federal Reserve Recession Periods 20.0% 19.0% 18.0% 17.0% 16.0% 19 80 Q 19 1 81 Q 19 2 82 Q 19 3 83 Q 19 4 85 Q 19 1 86 Q 19 2 87 Q 19 3 88 Q 19 4 90 Q 19 1 91 Q 19 2 92 Q 19 3 93 Q 19 4 95 Q 19 1 96 Q 19 2 97 Q 19 3 98 Q 20 4 00 Q 20 1 01 Q 20 2 02 Q 20 3 03 Q 20 4 05 Q 20 1 06 Q 20 2 07 Q 20 3 08 Q 20 4 10 Q 20 1 11 Q 20 2 12 Q 3 15.0% *Data through first quarter 2013 **Ratio of mortgage and consumer debt (including auto, rent and tax payments) to disposable income. Elliott D. Pollack & Company
    19. 19. Household Debt Composition Percent Change Year Ago 2004 – 2012 Source: The Federal Reserve Bank of New York Elliott D. Pollack & Company Recession Periods
    20. 20. Rate Sensitivity $25,000 Car Loan Payments 5-Year Term Interest Rate Monthly Payment 3.0% $449.22 4.0% $460.00 5.0% $471.78 6.0% $483.32 7.0% $495.03 8.0% $506.91 9.0% $518.96 10.0% $531.18 Elliott D. Pollack & Company
    21. 21. For Comparison: Mortgage Payments 30-Year Term Interest Interest Rate Rate 3.0% 3.0% $150,000 $150,000 Loan Loan $632.41 $632.41 $200,000 $200,000 Loan Loan $843.21 $843.21 $250,000 $250,000 Loan Loan $1,054.01 $1,054.01 4.0% $716.12 $954.83 $1,193.54 5.0% 6.0% 6.0% $805.23 $899.33 $899.33 $1,073.64 $1,199.10 $1,199.10 $1,342.05 $1,498.88 $1,498.88 7.0% 7.0% 8.0% 8.0% $997.95 $997.95 $1,100.65 $1,100.65 $1,330.60 $1,330.60 $1,467.53 $1,467.53 $1,663.26 $1,663.26 $1,834.41 $1,834.41 Elliott D. Pollack & Company
    22. 22. How Do We Get Off the Cheap Money Train? Elliott D. Pollack & Company
    23. 23. Net Percentage of Large U.S. Banks Reporting Tougher Standards versus Eased Standards on Residential Mortgage Prime Loans 2007Q1 – 2013Q2 Source: Federal Reserve, Board of Governors 80% 70% 60% 50% 40% 30% 20% 10% Elliott D. Pollack & Company 1 13 Q 3 12 Q 1 12 Q 3 11 Q 1 11 Q 3 10 Q 1 10 Q 3 09 Q 1 09 Q 3 08 Q 1 08 Q 3 Q 07 07 Q 1 0% -10%
    24. 24. Consumer Summary:  Jobs are being created at a slow rate.  Those that have jobs are being cautious in spending.  Unemployment will trend lower but underemployment will remain high.  Wealth levels are improving.  People feeling better, but uncertainty across the globe and U.S. Congressional roadblocks are affecting confidence. Elliott D. Pollack & Company
    25. 25. Business Elliott D. Pollack & Company
    26. 26. Net Percentage of Large U.S. Banks Reporting Tougher Standards versus Eased Standards on Business Loans 1997 – 2013* Source: Federal Reserve, Board of Governors Recession Periods 90% 80% 70% 60% 50% Small Firms 40% Large & Medium Firms 30% 20% 10% 0% -10% -20% 19 97 19 Q4 98 19 Q2 98 19 Q4 9 19 9 Q 99 2 20 Q4 00 20 Q2 00 20 Q4 0 20 1 Q 01 2 20 Q4 02 20 Q2 02 20 Q4 0 20 3 Q 03 2 20 Q4 04 20 Q2 04 20 Q4 0 20 5 Q 05 2 20 Q4 06 20 Q2 06 20 Q4 0 20 7 Q 07 2 20 Q4 08 20 Q2 08 20 Q4 0 20 9 Q 09 2 20 Q4 10 20 Q2 10 20 Q4 1 20 1 Q 11 2 20 Q4 12 20 Q2 12 20 Q4 13 Q 2 -30% * Data as of July 2013 survey. Elliott D. Pollack & Company
    27. 27. Ja n Ja -70 n Ja -71 n Ja -72 n Ja -73 n Ja -74 n Ja -75 n Ja -76 n Ja -77 n Ja -78 n Ja -79 n Ja -80 n Ja -81 n Ja -82 n Ja -83 n Ja -84 n Ja -85 n Ja -86 n Ja -87 n Ja -88 n Ja -89 n Ja -90 n Ja -91 n Ja -92 n Ja -93 n Ja -94 n Ja -95 n Ja -96 n Ja -97 n Ja -98 n Ja -99 n Ja -00 n Ja -01 n Ja -02 n Ja -03 n Ja -04 n Ja -05 n Ja -06 n Ja -07 n Ja -08 n Ja -09 n Ja -10 n Ja -11 n Ja -12 n13 Capacity Utilization Rate 1970 – 2013* Source: The Federal Reserve Bank of St. Louis Recession Periods 90 85 80 75 70 65 *Data through July 2013 Elliott D. Pollack & Company
    28. 28. Business Spending on Equipment Percent Change from Prior Quarter 2005 – 2013* Source: Bureau of Economic Analysis Recession Periods 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0% *Data through first quarter 2013 Elliott D. Pollack & Company
    29. 29. Business Spending on Plant Percent Change from Prior Quarter 2005 – 2013* Source: Bureau of Economic Analysis Recession Periods 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0% -14.0% Elliott D. Pollack & Company *Data through first quarter 2013 Note: Data smoothed in Q1 & Q2 of 2011
    30. 30. U.S. Inventories to Sales Ratio: Total Business 1992 – 2013* Source: U.S. Dept. of Commerce: Census Bureau Recession Periods 1.60 1.55 1.50 1.45 1.40 1.35 1.30 1.25 1.20 1.15 1.10 * Data through June 2013. Elliott D. Pollack & Company
    31. 31. 19 76 19 Q1 77 19 Q1 78 19 Q1 79 19 Q1 80 19 Q1 81 19 Q1 82 19 Q1 83 19 Q1 84 19 Q1 85 19 Q1 86 19 Q1 87 19 Q1 88 19 Q1 89 19 Q1 90 19 Q1 91 19 Q1 92 19 Q1 93 19 Q1 94 19 Q1 95 19 Q1 96 19 Q1 97 19 Q1 98 19 Q1 99 20 Q1 00 20 Q1 01 20 Q1 02 20 Q1 03 20 Q1 04 20 Q1 05 20 Q1 06 20 Q1 07 20 Q1 08 20 Q1 09 20 Q1 10 20 Q1 11 20 Q1 12 20 Q1 13 Q 1 Hours Worked Percent Change from Year Ago 1976 – 2013* Source: Bureau of Labor Statistics Elliott D. Pollack & Company Recession Periods 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% *Data through second quarter 2013
    32. 32. Business Summary:  Businesses are in better shape.  Spending on equipment to continue to grow modestly.  Spending on plant will soon accelerate.  Employment to continue to grow.  Uncertainty over Congress, Obamacare Elliott D. Pollack & Company
    33. 33. Government Elliott D. Pollack & Company
    34. 34. States At Risk For Spending Cuts Federal Spending as Percent of State GDP Elliott D. Pollack & Company Pew Center for the States
    35. 35. Arizona Elliott D. Pollack & Company
    36. 36. Phoenix, Arizona Economic Hub of the Southwest 9 10 5 Phoenix, Arizona Elliott D. Pollack & Company
    37. 37. Arizona’s Five C’s • • Cattle • Climate • Copper • Elliott D. Pollack & Company Cotton Citrus
    38. 38. How Arizona Ranks Among the States in Percentage Growth Source: U.S. Bureau of Census; Bureau of Labor Statistics; Bureau of Economic Analysis DECADE POPULATION EMPLOYMENT PERSONAL INCOME 1950 - 1960 4TH 3RD 4TH 1960 - 1970 3RD 3RD 4TH 1970 - 1980 2ND 3RD 3RD 1980 - 1990 3RD 3RD 5TH 1990 - 2000 2ND 2ND 3RD 2000 – 2010 2ND 10th 7TH Elliott D. Pollack & Company
    39. 39. “SUNBELT” 9 10 Upper Midwest Industrial Northeast 5 Hawaii Alaska Elliott D. Pollack & Company
    40. 40. Where Do In-Migrants Come From 1. 2. 3. 4. 5. California Rust Belt (Illinois, Michigan, Pennsylvania) Northeast (Washington D.C. to Boston) Florida Everywhere else Elliott D. Pollack & Company
    41. 41. Arizona Population Distribution 2012 Source: Arizona Department of Security Department Elliott D. Pollack & Company
    42. 42. 2000 - 2012 Arizona Population Growth Distribution Source: Arizona Department of Security Department Elliott D. Pollack & Company
    43. 43. Greater Phoenix Population Source: U.S. Bureau of Census; Arizona Department of Economic Security Year 1950 1960 1970 1980 1990 2000 2010 Population 374,961 726,183 1,039,807 1,600,083 2,238,498 3,251,876 4,192,887 U.S. 2010 = 309,769,609 Elliott D. Pollack & Company
    44. 44. Arizona population growth was slow but still Top 10 in 2012 1 9 3 5 4 6 7 10 Percent Change 2012 U. S. Census Bureau Elliott D. Pollack & Company 2 8
    45. 45. Arizona Rank Population Growth 1991-2012 Source: Census Bureau Elliott D. Pollack & Company
    46. 46. Greater Phoenix Population Annual Percent Change 1976–2014* Source: Arizona State University & Department of Commerce, Research Administration 6% 5.1% 4.6% 4.7% 4.3% 4.2% 4.4% 4.2% 4.3% 4.2% 4.3% 4.3% 4.2% 3.9% 4% 3.7% 3.8% 3.3% 3.1% 3.0% 3.8% 3.7% 3.5% 2.9% 3.1% 2.7% 2.8% 2.5% 2.1% 3.6% 3.0% 2.6% 2.4% 1.9% 2% 1.8% 1.5% 1.3% 0.5% 1.1% 0.6% 0.3% 0% . Elliott D. Pollack & Company Recession Periods * 2013 & 2014 forecast is from Elliott D. Pollack & Co.
    47. 47. Job Growth 2006 Alaska 24 Source: US BLS 10 7 9 5 4 14 23 Hawaii 1 3 15 8 2 Jobs growing Top 10 Jobs declining Elliott D. Pollack & Company 11 6 50
    48. 48. Job Growth 2010 Source: US BLS Alaska 2 8 48 18 27 39 50 32 41 Hawaii 23 49 Jobs growing Top 10 Jobs declining Elliott D. Pollack & Company 1 7 46 9 4 40 10 43 3 6 5
    49. 49. Job Growth 2013 YTD July 2013 vs YTD July 2012 Source: US BLS Alaska 50 6 10 21 4 1 49 9 2 11 23 Hawaii 7 Jobs growing Top 10 Jobs declining Elliott D. Pollack & Company 5 38 8 3
    50. 50. Job Growth 2013 July 2013 vs July 2012 Source: US BLS Alaska 50 9 16 19 6 2 8 29 42 1 24 35 Hawaii 4 Jobs growing Top 10 Jobs declining Elliott D. Pollack & Company 7 40 5 10 3
    51. 51. Arizona Rank Employment Growth 1990-2013* Source: Bureau of Labor Statistics Elliott D. Pollack & Company *Year-to-date through July
    52. 52. State Job Growth 2013 YTD July 2013 vs YTD July 2012 Source: US BLS 20 North Dakota Utah Texas Idaho Colorado Washington Arizona Georgia Nevada Montana California North Carolina Minnesota Delaware Florida Tennessee Mississippi New Jersey Indiana South Carolina Oregon Massachusetts Hawaii Maryland Vermont Elliott D. Pollack & Company 3.97% 3.27% 2.94% 2.81% 2.59% 2.08% 2.07% 2.06% 1.95% 1.91% 1.89% 1.88% 1.87% 1.78% 1.77% 1.76% 1.72% 1.63% 1.60% 1.58% 1.49% 1.49% 1.45% 1.45% 1.43% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Iowa Louisiana South Dakota Michigan New Hampshire Virginia Missouri Kentucky New York Kansas Oklahoma Illinois New Mexico Wisconsin Nebraska Connecticut Alabama Arkansas West Virginia Ohio Pennsylvania Rhode Island Maine Wyoming Alaska 1.39% 1.25% 1.23% 1.23% 1.21% 1.13% 1.12% 1.09% 1.09% 1.06% 1.03% 0.99% 0.77% 0.76% 0.71% 0.70% 0.62% 0.60% 0.58% 0.47% 0.39% 0.38% 0.20% 0.13% 0.00% 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
    53. 53. Top Sources of New Jobs Arizona Source: Bureau of Labor Statistics Job Growth Wage Total 67,600 $45,237 1 Food Services 10,100 $16,452 2 Health Care 8,900 $47,847 3 Construction 8,200 $47,020 4 Financial Activities 7,400 $59,564 5 Wholesale Trade 6,200 $69,918 6 Administrative Services 5,700 $32,741 7 Retail Trade 4,400 $29,843 Elliott D. Pollack & Company *Job growth July 2013/ July 2012
    54. 54. Top Sources of New Jobs U.S. Source: Bureau of Labor Statistics Job Growth Total Wage 2,296,000 $49,200 1 Food Services 387,800 $16,242 2 Administrative services 354,700 $34,870 3 Retail Trade 353,200 $27,729 4 Health Care 322,200 $45,407 5 Professional services 237,900 $83,357 6 Construction 166,000 $52,294 7 Financial activities 124,000 $80,097 Elliott D. Pollack & Company *Job growth July 2013/ July 2012
    55. 55. Arizona Job Losses Exceeded U.S. Source: Bureau of Labor Statistics, Seasonally Adjusted Data Elliott D. Pollack & Company
    56. 56. Arizona Jobs Regained Since Bottom of Cycle Most Industries Yet To Regain Lost Jobs Elliott D. Pollack & Company
    57. 57. Greater Phoenix Economy Elliott D. Pollack & Company
    58. 58. Phoenix Moving Up: Rank of the Largest CMSA’s/MSA’s Source: U.S. Department of Commerce, Bureau of the Census Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1980 1990 2010 2012 New York Los Angeles Chicago Philadelphia Detroit San Francisco Washington, DC Dallas Houston Boston Nassau-Suffolk St. Louis Pittsburgh Baltimore Minneapolis Atlanta Newark Orange County, CA Cleveland San Diego Miami Denver Seattle Tampa Riverside New York Los Angeles Chicago Washington, DC San Francisco Philadelphia Boston Detroit Dallas Houston Miami Seattle Atlanta Cleveland Minneapolis San Diego St. Louis Pittsburgh New York Los Angeles Chicago Dallas Philadelphia Houston Washington DC Miami Atlanta Boston San Francisco Detroit Riverside New York Los Angeles Chicago Dallas Houston Philadelphia Washington DC Miami Atlanta Boston San Francisco Riverside Greater Phoenix Detroit Seattle Minneapolis San Diego Tampa St. Louis Baltimore Denver Pittsburgh Charlotte Portland San Antonio Orlando Greater Phoenix Elliott D. Pollack & Company Greater Phoenix Tampa Denver Cincinnati Portland Milwaukee Kansas City Sacramento Seattle Minneapolis San Diego St. Louis Tampa Baltimore Denver Pittsburgh Portland Sacramento San Antonio Orlando Greater Phoenix
    59. 59. Top 20 Largest CMSA’s/MSA’s Source: U.S. Department of Commerce, Bureau of the Census CMSA/MSA Population New York 19,831,858 Los Angeles 13,052,921 Chicago Dallas 6,700,991 Houston 6,177,035 Philadelphia 6,018,800 Washington DC 5,860,342 Miami 5,762,717 Atlanta 5,457,831 Boston 4,640,802 San Francisco 4,455,560 Riverside 4,350,096 Greater Phoenix 4,329,534 Detroit 4,292,060 Seattle 3,552,157 Minneapolis 3,422,264 San Diego 3,177,063 Tampa 2,842,878 St. Louis 2,795,794 Baltimore Elliott D. Pollack & Company 9,522,434 2,753,149
    60. 60. WHY GREATER PHOENIX GROWS Elliott D. Pollack & Company
    61. 61. Ten Factors Contributing to Greater Phoenix’s Growth 1. 2. 3. 4. 5. 6. 7. 8. 9. Climate Lifestyle Geographic Location Pro-Growth Attitude Competitive Tax Structure Focused Incentives Leadership with Common Sense Low Cost of Living Congressional delegation working for State’s Long-Term Needs 10. Business & Government Headed in Same Direction Elliott D. Pollack & Company
    62. 62. No Natural Disasters • • • • • • Elliott D. Pollack & Company No hurricanes No tornadoes No earthquakes No tsunamis No fires No mudslides
    63. 63. People and companies vote with their feet… Elliott D. Pollack & Company
    64. 64. …People have been voting for Greater Phoenix for decades. Elliott D. Pollack & Company
    65. 65. Greater Phoenix’s economic fundamentals have not changed with the recession (even housing has returned to more affordable levels). The long term economic outlook remains favorable. Elliott D. Pollack & Company
    66. 66. MYTHS Elliott D. Pollack & Company
    67. 67. Age: Phoenix is all old retired Midwesterners living in Sun City Elliott D. Pollack & Company
    68. 68. MEDIAN AGE Source: U.S. Bureau of the Census Male Female Total Greater Phoenix 32.9 34.6 33.7 United States 35.4 38.2 36.8 Elliott D. Pollack & Company
    69. 69. Arizona will run out of water Elliott D. Pollack & Company
    70. 70. STATEWIDE WATER DEMAND Current Source: AZ DWR Elliott D. Pollack & Company
    71. 71. GREATER PHOENIX WATER DEMAND Source: Arizona Department of Water Resources Municipal 41.4% Agricultural & Other 58.6% Elliott D. Pollack & Company
    72. 72. COMPARISON OF WATER USAGE AGRICULTURE vs. RESIDENTIAL Source: Arizona Water Resources Assessment, AZ DWR ACRE FEET OF WATER PER ACRE 8 5.74 6 4 1.81 2 0 AGRICULTURE Elliott D. Pollack & Company SINGLE FAMILY RESIDENTIAL
    73. 73. Wages... Elliott D. Pollack & Company
    74. 74. Median Household Income - Phoenix Peer Metro Areas Adjusted for Cost of Living 2010 City Nominal Nominal Rank Adjusted Adjusted Rank Dallas $54,539 8 $57,959 3 Atlanta $55,464 7 $58,077 2 Austin $56,218 6 $58,867 1 Salt Lake City $57,138 4 $56,797 5 Denver $59,007 3 $57,233 4 Phoenix $52,796 10 $52,481 8 Las Vegas $53,505 9 $52,599 7 Seattle $64,028 1 $52,828 6 Portland $55,521 6 $49,929 9 San Diego $60,231 2 $45,595 10 Elliott D. Pollack & Company
    75. 75. What Makes Greater Phoenix Tick? Current Economic Base 1. 2. 3. 4. High-tech (Semi-conductors) Aerospace & Defense Advanced Business Services Transportation, Distribution, & Wholesale Trade 5. Tourism 6. Retirement & Second Home Elliott D. Pollack & Company
    76. 76. Greater Phoenix Top Employers Semiconductors Intel Corp. IBM Freescale Semiconductor Avnet Inc. General Dynamics Motorola Satellite Comm. Inc. Microchip Technology Inc. Jabil Circuits Inc. Medtronic Inc. ON Semiconductor Microsemi Corp. Financial Services Wells Fargo & Co. Bank of America JPMorgan Chase & Co. American Express Charles Schwab & Co. Inc. USAA Vanguard Group Discover Financial Services LLC #FTE Aerospace #FTE 11,000 Raytheon Co. 11,500 3,000 Honeywell Aerospace 10,000 3,000 Luke Air Force Base - 56th Fighter Wing 5,600 2,600 Boeing Co. 5,000 5,400 Orbital Sciences 1,500 1,700 Other #FTE 1,600 Apollo Group Inc. 10,000 1,400 US Airways 9,200 900 Freeport-McMoRan Copper & Gold Inc. 8,100 800 Southwest Airline 4,400 700 FedEx Express 3,900 #FTE United Postal Service 3,100 13,700 Ebay 2,000 12,500 GoDaddy.com Inc. 2,600 11,400 W.L. Gore & Associates Inc. 2,000 7,800 Insight Enterprises Inc. 1,500 3,500 ConocoPhillips Co. 1,000 3,000 Empire Southwest LLC 900 2,100 PING Inc. 800 1,900 Henkel 750 Notes : Al l rounded numbers a re es tima tes of ful l time equi va l ents provi ded by ea ch empl oyer. Source: Phoeni x Bus i nes s Journa l Book of Li s ts ; Ari zona Republ i c Elliott D. Pollack & Company
    77. 77. Expansions and Relocations Source: Arizona Commerce Authority Apple: U.S. manufacturing facility (GT Advanced Technologies) – 700 jobs in the first year. State Farm: State Farm, selected Arizona as one of its four regional headquarters - 1.9 million SF of office space in Tempe, 7,000 new jobs with a capital investment of $600 million. Composite Mirror Applications: Composite Mirror Applications is a defense contractor that develops and produces carbon fiber reinforced composite mirrors and structures. Garmin: 140 jobs and $11 million capital investment. Asurion: Mobile tech support center - 450 new jobs and $12 million in capital investment. GoDaddy: Global Technology Center, 150,000-square-foot facility, 1,300 employees. General Motors: Fourth IT Innovation Center in Chandler, 1,000 jobs, $21 million in capital investment. STEALTH Software: Site of its U.S. headquarters, 200 jobs. Elliott D. Pollack & Company
    78. 78. Employment Composition Greater Phoenix vs. U.S. Source: Arizona Department of Economic Security, U.S. Department of Labor Sector Natural Resources & Mining Construction Manufacturing Goods Producing Trade Transportation, Warehousing Information Financial Activities Services Government Service Producing Non-FarmWage & Salary Elliott D. Pollack & Company PHX-MSA US 0.2% 5.1% 6.4% 11.7% 0.5% 4.3% 8.9% 13.7% 17.5% 3.6% 1.6% 7.9% 44.0% 13.7% 88.3% 15.3% 3.6% 2.1% 5.9% 42.1% 17.3% 86.3% 100.0% 100.0%
    79. 79. Greater Phoenix Employment* Annual Percent Change 1975–2014** Source: Department of Commerce, Research Administration 13.3% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% 8.7% 5.8% 4.9% 7.3% 7.2% 6.6% 5.4% 5.4% 4.6% 4.9% 3.5% 4.8% 5.9% 3.5% 2.5% 3.7% 3.0% 2.2% 1.1% -0.1% 6.2% 5.4% 3.9% 3.0% 2.6% 2.4% 1.6% 1.5% 1.5% 1.2% -0.1% -0.3% -2.5% -3.7% -1.9% 13 20 11 20 09 20 07 20 05 20 03 20 01 20 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 19 81 19 79 19 19 77 -7.9% 75 19 11.2% 9.3% 10.4% *Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990. ** 2013 & 2014 forecast is from Elliott D. Pollack & Co. Elliott D. Pollack & Company Recession Periods
    80. 80. Ja n Ju -95 Ja l-95 n Ju -96 Ja l-96 nJu 97 Ja l-97 n Ju -98 Ja l-98 nJu 99 Ja l-99 n Ju -00 Ja l-00 n Ju -01 Ja l-01 n Ju -02 Ja l-02 n Ju -03 Ja l-03 nJu 04 Ja l-04 n Ju -05 Ja l-05 nJu 06 Ja l-06 n Ju -07 Ja l-07 n Ju -08 Ja l-08 n Ju -09 Ja l-09 n Ju -10 Ja l-10 nJu 11 Ja l-11 n Ju -12 Ja l-12 nJu 13 Ja l-13 n Ju -14 Ja l-14 n Ju -15 Ja l-15 n16 Employment Levels: Greater Phoenix back to Peak in late-2015 or early 2016? Source: ADOA Recession Periods 2,400.0 2,200.0 2,000.0 Elliott D. Pollack & Company Peak 1,800.0 1,600.0 1,400.0 1,200.0 1,000.0 *Based on seasonally unadjusted monthly data
    81. 81. Phoenix-Mesa Employment Growth (Ranking among all metro areas greater than 1,000,000) Source: Arizona State University, U.S. Bureau of Labor Statistics Year Rank # MSA’s Year Rank 1991 4 19 2003 3 25 1992 4 19 2004 3 25 1993 2 19 2005 1 26 1994 1 19 2006 1 27 1995 1 20 2007 9 28 1996 1 21 2008 24 28 1997 1 22 2009 24 25 1998 1 23 2010 24 24 1999 3 24 2011 14 25 2000 9 25 2012 6 27 2001 7 26 2013* 5 28 2002 5 25 # MSA’s *Year-to-date, July 2013 Elliott D. Pollack & Company
    82. 82. Greater Phoenix Employment* Source: Bureau of Labor Statistics Sectors in Decline Net Change % Change -800 -1.3% Sectors Improving Net % Change Change 10,400 2.9% Education & Health Services 9,100 3.7% Leisure & Hospitality 8,800 5.0% Construction 8,400 9.4% Government 5,900 3.0% Professional & Bus Services 5,700 2.0% Financial Activities 5,000 3.4% Information 400 1.3% Manufacturing Other Services 200 0.2% 0 0.0% Trade, Transp, Utilities Natural Resources & Mining Elliott D. Pollack & Company *July 2013/ July 2012
    83. 83. U.S. Has Gained 77% of Lost Jobs 2 Million Jobs (23%) Still to Recover Peak 138 million Jan. 2008 6.7 Mil. Jobs Regained (77%) 8.7 Million U.S. Jobs Lost (6.4%) Feb. 2010 Elliott D. Pollack & Company Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted Slide stolen from Lee McPheters…
    84. 84. Arizona Has Gained 47% of Lost Jobs 167,000 Jobs (53%) Still to Recover Peak 2,687,000 Oct. 2007 147,000 Jobs Regained (47%) 314,000 Arizona Jobs Lost (12%) Sept. 2010 Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted Elliott D. Pollack & Company
    85. 85. Greater Phoenix Has Gained 47% of Lost Jobs 133,000 Jobs (53%) Still to Recover Peak 1,932,000 July 2007 118,000 Jobs Regained (47%) 251,000 Phoenix Jobs Lost (13%) Sept. 2010 Source: U.S. Bureau of Labor Statistics, Thousands of Jobs, Seasonally Adjusted Elliott D. Pollack & Company
    86. 86. WHY? (1) Significant declines in population flows. (2) Steeper housing decline. *** But, expect higher rates of growth in AZ going forward. Full recovery in AZ will be about the same as the U.S. – Late 2015 Elliott D. Pollack & Company
    87. 87. Population Flows Elliott D. Pollack & Company
    88. 88. Ja n A -03 pr Ju -03 O l-03 ct Ja -03 n A -04 pr Ju -04 O l-04 ct Ja -04 n A -05 pr Ju -05 O l-05 ct Ja -05 n A -06 pr Ju 06 O l-06 ct Ja -06 n A -07 pr Ju 07 O l-07 ct Ja -07 n A -08 pr Ju 08 O l-08 ct Ja -08 n A -09 pr Ju 09 l-0 O 9 ct Ja -09 n A -10 pr Ju -10 O l-10 ct Ja -10 n A -11 pr Ju -11 O l-11 ct Ja -11 n1- 12 A 12 pr 12 -J u - l 13 Oct A -J an pr -1 3 SRP Residential Utility Hookup Percentage Growth Greater Phoenix 2003 – 2013* Source: SRP 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Elliott D. Pollack & Company *Data through April 2013.
    89. 89. 19 54 19 56 19 58 19 60 19 62 19 64 19 66 19 68 19 70 19 72 19 74 19 76 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 20 12 Residential Customers Over Prior Year APS: Slowest Growth in over 50 years 1954 – 2013* 8% 7% 6% 5% 4% 3% 2% 1% 0% Elliott D. Pollack & Company *Data through second quarter 2013 Source: APS
    90. 90. Greater Phoenix Population Annual Percent Change 1976–2014* Source: Arizona State University & Department of Commerce, Research Administration 6% 5.1% 4.6% 4.7% 4.3% 4.2% 4.4% 4.2% 4.3% 4.2% 4.3% 4.3% 4.2% 3.9% 4% 3.7% 3.8% 3.3% 3.1% 3.0% 3.8% 3.7% 3.5% 2.9% 3.1% 2.7% 2.8% 2.5% 2.1% 3.6% 3.0% 2.6% 2.4% 1.9% 2% 1.8% 1.5% 1.3% 0.5% 1.1% 0.6% 0.3% 0% . Elliott D. Pollack & Company Recession Periods * 2013 & 2014 forecast is from Elliott D. Pollack & Co.
    91. 91. How quickly are population flows going to recover? No one knows but not as rapidly as we would like. Elliott D. Pollack & Company
    92. 92. Housing Elliott D. Pollack & Company
    93. 93. Fewer people mean fewer houses. Elliott D. Pollack & Company
    94. 94. Housing Not a light switch… Good Bad A dimmer switch… Mediocre Not great Bad Terrible Elliott D. Pollack & Company OK Good Great
    95. 95. Elliott D. Pollack & Company
    96. 96. Ja n O -89 ct8 Ju 9 l A -90 pr Ja 91 nO 92 ct9 Ju 2 l A -93 pr Ja -94 n O -95 ct9 Ju 5 l-9 A 6 pr Ja -97 n O -98 ct9 Ju 8 l-9 A 9 pr Ja -00 n O -01 ct0 Ju 1 l-0 A 2 pr Ja -03 n O -04 ct0 Ju 4 l A -05 pr Ja -06 n O -07 ct0 Ju 7 l A -08 pr Ja -09 n O -10 ct1 Ju 0 l A -11 pr Ja -12 n O -13 ct1 Ju 3 l-1 A 4 pr -1 5 Home Prices Indices Greater Phoenix 1989 – 2013* Source: Macro Markets, LLC; AMLS MLS Index Elliott D. Pollack & Company Case-Shiller Index Recession Periods 240 220 200 180 160 140 120 100 80 60 Trendline (4.0%) *Data through July 2013.
    97. 97. Elliott D. Pollack & Company
    98. 98. Greater Phoenix Single Family Permits Source: RL Brown Year Permits % chg 2004 60,872 27.6% 2005 63,570 4.4% 2006 42,423 -33.3% 2007 31,172 -26.5% 2008 12,582 -59.6% 2009 8,027 -36.2% 2010 6,822 -15.0% 2011 6,794 -0.4% 2012 11,615 71.0% 2013* 10,083 8.7% Elliott D. Pollack & Company *Data YTD Sept 2013 v. Sept 2012
    99. 99. Single Family Permits Greater Phoenix 1975–2016* Source: RL Brown & Elliott D. Pollack & company # Permits (000) 70 63.6 60.9 60 47.7 50 42.4 40 28.9 30 23.2 22.3 20 10 11.1 8.7 18.8 22.6 19.4 18.1 11.5 11.6 10.6 27.4 22.7 17.9 18.4 15.1 12.0 13.7 10.6 38.9 34.7 36.0 36.2 31.7 35.3 29.6 28.5 31.2 25.0 20.0 16.0 13.5 11.6 8.0 6.8 6.8 12.6 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 0 *2013 – 2016 forecast is from Elliott D. Pollack & Company Elliott D. Pollack & Company
    100. 100. Elliott D. Pollack & Company
    101. 101. Single-Family Vacant Units Greater Phoenix 1993–2011 Source: PMHS 120,000 102,275 101,625 100,000 83,475 80,000 58,050 60,000 51,650 40,000 20,000 23,825 19,800 14,725 14,975 17,525 17,525 15,425 13,725 13,750 13,681 29,775 19,325 24,450 17,125 Elliott D. Pollack & Company 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 19 98 19 97 19 96 19 95 19 94 19 19 93 0
    102. 102. New Residential Foreclosure Notices Greater Phoenix Source: Information Market 10,000 8,675 7,800 8,000 6,062 6,000 4,014 4,000 3,221 2,367 2,000 1,087 1,095 983 0 Elliott D. Pollack & Company 1,274 682 772
    103. 103. Total Pending Foreclosures Greater Phoenix Source: Information Market 47,144 50,000 42,152 40,000 30,000 24,469 24,393 16,829 20,000 7,312 6,894 10,000 4,936 7,066 5,002 0 Elliott D. Pollack & Company 3,141 2,483
    104. 104. Greater Phoenix Single Family Lender Owned Sales* June 2003 – June 2013 Source: TheWilcoxReport.com 4,247 4,500 4,000 3,500 3,008 3,000 2,384 2,500 1,381 2,000 1,500 720 1,000 500 348 84 121 0 Elliott D. Pollack & Company 9 2 104
    105. 105. Total Single Family Units Occupied by Renters 2000 - 2011 Greater Phoenix Source: American Community Survey 25% 21.8% 20.3% 18.1% 20% 16.4% 15.3% 14.1% 15% 11.7% 12.4% 11.6% 10% 5% 0% Elliott D. Pollack & Company 11.3% 11.7% 11.7%
    106. 106. Greater Phoenix Housing Affordability Index 2004 – 2013* Source: National Association of Realtors 100 83.6 80 80.8 83.6 77.7 76.4 76.2 73.5 70.9 60.3 68.8 69.0 69.5 69.7 68.6 67.0 67.0 66.5 63.0 65.3 64.4 60 49.3 40 32.4 27.4 20 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Elliott D. Pollack & Company
    107. 107. 19 98 19 Q1 98 Q 19 3 99 Q 19 1 99 Q 20 3 00 20 Q1 00 Q 20 3 01 Q 20 1 01 Q 20 3 02 20 Q1 02 20 Q3 03 Q 20 1 03 Q 20 3 04 20 Q1 04 Q 20 3 05 Q 20 1 05 Q 20 3 06 Q 20 1 06 20 Q3 07 Q 20 1 07 20 Q3 08 Q 20 1 08 20 Q3 09 Q 20 1 09 Q 20 3 10 Q 20 1 10 20 Q3 11 Q 20 1 11 Q 20 3 12 Q 20 1 12 20 Q3 13 Q 1 Investor Activity: Percent of Non-Owner Occupied Sales of Total Sales Greater Phoenix Source: DataQuick 50% 40% 30% 20% 10% 0% Elliott D. Pollack & Company
    108. 108. Number of Active Subdivisions Greater Phoenix Source: CRA 800 663 700 600 568 574 665 672 687 693 710 597 607 536 512 500 400 322 300 275 255 208 200 100 0 Elliott D. Pollack & Company 181
    109. 109. In a weak economy, population growth fails to translate into household growth, but when the economy begins to strengthen, there is pent-up demand for housing. Source: Linneman Letter Elliott D. Pollack & Company
    110. 110. Many renting will now buy. Many doubled-up will now buy. Some population growth is back. Employment growth is occurring. Retirees less tied to current homes. Elliott D. Pollack & Company
    111. 111. Pent-Up Demand Household Formations: lower during recessions (doubling up, living at home with mom & dad, etc.) Elliott D. Pollack & Company
    112. 112. Percent of 18-34 Year Olds Living With Parents U.S.: 1983 – 2012 Source: US Census Bureau Elliott D. Pollack & Company Recession Periods
    113. 113. Housing is a market of markets Elliott D. Pollack & Company
    114. 114. The outlook for housing is still reasonably good Elliott D. Pollack & Company
    115. 115. Greater Phoenix Population Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project YEAR Population 1950 374,000 1960 1970 726,183 6.9% 1,039,807 3.7% 1980 1990 2000 1,600,093 4.4% 2,238,498 3.4% 3,251,876 3.8% 2010 4,192,887 2.6% 2020 (forecast) 5,011,767 1.8% Elliott D. Pollack & Company
    116. 116. Greater Phoenix Employment Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project YEAR 1950 74,400 1960 1970 181,700 327,200 1980 1990 636,200 1,013,300 2000 2010 1,578,400 1,686,800 2020 (forecast) Elliott D. Pollack & Company EMPLOYMENT 2,312,700
    117. 117. Headwinds for Single Family Market • • • • Shortage of construction workers Shortage of finished lots Rising material prices Rising interest rates Elliott D. Pollack & Company
    118. 118. Multi-Family Elliott D. Pollack & Company
    119. 119. Multi-Family Year-End Vacancy Rates Maricopa County 1975–2014* Source: ASU Realty Studies / Hendricks & Partners** Recession Periods 18% 15% 14.1% 13.0% 13.4% 13.4% 12.5% 12% 10.6% 10.1% 9% 7.7% 6.9% 6.2% 6% 6.1% 3.9% 4.1% 3.3% 2.8% 6.1% 4.4% 10.2% 10.0% 9.5% 10.8% 9.6% 9.4% 8.0% 8.2% 6.8% 5.1% 5.9% 4.8% 4.5% 4.5% 3.8% 4.0% 7.9% 7.8% 6.8% 7.5% 7.1% 6.3% 6.6% 3% 19 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2099 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 14 0% *2013 -2014 are forecasts from the Greater Phoenix Blue Chip **Data prior to 2005 is from ASU Elliott D. Pollack & Company
    120. 120. Elliott D. Pollack & Company *Data through second quarter 2013.
    121. 121. Multi-Family Market • High prices paid for existing properties • Construction activity strong • Over-building of market on the horizon Elliott D. Pollack & Company
    122. 122. OFFICE Elliott D. Pollack & Company
    123. 123. Office Space Year-End Vacancy Rates Maricopa County 1986–2014* Source: CBRE Recession Periods 35% 30% 25% 26.7% 26.4% 26.7% 25.4% 24.0% 22.8% 26.2% 25.5% 24.5% 23.9% 22.7% 22.0% 18.8% 18.3% 18.8% 20% 16.0% 14.8% 15% 11.7% 9.5% 9.9% 9.5% 9.2% 10.0% 19.1% 19.0% 16.4% 13.9% 12.6% 11.1% 10% 5% 19 8 19 6 8 19 7 8 19 8 8 19 9 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 14 0% Elliott D. Pollack & Company *2013 -2014 are forecasts from the Greater Phoenix Blue Chip
    124. 124. Under any reasonable employment growth scenario, it will be at least 2016 before any significant office construction occurs (although some sub-markets will be sooner). Elliott D. Pollack & Company
    125. 125. INDUSTRIAL Elliott D. Pollack & Company
    126. 126. Industrial Space Vacancy Rates Maricopa County 1980 – 2014* Source: CBRE Recession Periods 20% 15% 10% 16.4% 15.2% 14.8% 14.6% 14.0% 13.2% 13.6% 12.8% 12.8% 11.1% 10.8% 9.4% 9.7% 8.4% 16.1% 14.7% 12.5% 10.3% 9.8% 9.7% 8.5% 8.4% 8.1% 7.4% 7.4% 7.1% 6.6% 7.0% 6.7% 5.7% 5.6% 12.4% 11.0% 10.9% 10.0% 5% 19 8 19 0 1981 8 19 2 8 19 3 1984 8 19 5 8 19 6 1987 8 19 8 8 19 9 1990 9 19 1 1992 9 19 3 9 19 4 1995 9 19 6 9 19 7 1998 9 20 9 0 20 0 2001 0 20 2 0 20 3 2004 0 20 5 0 20 6 2007 0 20 8 0 20 9 2010 1 20 1 1 20 2 2013 14 0% Elliott D. Pollack & Company * 2013 - 2014 are forecasts from the Greater Phoenix Blue Chip
    127. 127. As of second quarter 2013, there are 6.4 million square feet of industrial space under construction. Elliott D. Pollack & Company Source: CBRE
    128. 128. RETAIL Elliott D. Pollack & Company
    129. 129. Retail Space Vacancy Rates Maricopa County 1985–2014* Source: CBRE** Recession Periods 20% 14.2% 13.1% 13.5% 12.7% 11.8% 15% 10.0% 10% 8.9% 6.6% 12.2% 12.2% 11.0% 11.4% 10.9% 10.2% 11.1% 9.8% 8.7% 7.9%7.5% 7.4% 7.5% 6.6% 7.3% 6.3% 5.3% 6.1% 6.2% 5.3% 5.5% 5.1% 5% 19 8 19 5 8 19 6 8 19 7 8 19 8 8 19 9 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 1 20 0 1 20 1 1 20 2 1 20 3 14 0% * 2013-2014 are forecasts from GPBC ** Data prior to 1992 is from Grubb & Ellis Elliott D. Pollack & Company
    130. 130. Maricopa County Retail Sales Percent Change Year Ago* 1999 – 2013** Source: Arizona Department of Revenue Recession Periods 25% 20% 15% 10% 5% 0% -5% -10% -15% Ja n9 Ju 9 l-9 Ja 9 n0 Ju 0 l-0 Ja 0 n0 Ju 1 l-0 Ja 1 n0 Ju 2 l-0 Ja 2 n0 Ju 3 l-0 Ja 3 n0 Ju 4 l-0 Ja 4 n0 Ju 5 l-0 Ja 5 n0 Ju 6 l-0 Ja 6 n0 Ju 7 l-0 Ja 7 n0 Ju 8 l-0 Ja 8 n0 Ju 9 l-0 Ja 9 n1 Ju 0 l-1 Ja 0 n1 Ju 1 l-1 Ja 2 n1 Ju 2 l-1 Ja 2 n13 -20% Elliott D. Pollack & Company *Data through May 2013 **3-month moving average Note: January 2010 and March 2010 retail sales are estimates.
    131. 131. Maricopa County Motor Vehicle Retail Sales Percent Change Year Ago 2006 – 2013* Source: Arizona Department of Revenue Elliott D. Pollack & Company *Data through March 2013 **3-month moving average Note: January 2010 and March 2010 retail sales are estimates.
    132. 132. Available Big Box Space Greater Phoenix Year End 2012: 272 Spaces 7.1 Million SF Elliott D. Pollack & Company Source: CBRE
    133. 133. What’s Happening? • Consumers tightening their belts and reducing debt • Domination of retail by large national chains • Internet sales Elliott D. Pollack & Company
    134. 134. Elliott D. Pollack & Company
    135. 135. Elliott D. Pollack & Company
    136. 136. Retail Market • Population growth needed to assist • market Long term viability of local retailers questionable Elliott D. Pollack & Company
    137. 137. CONCLUSIONS: How will it all turn out? Elliott D. Pollack & Company
    138. 138. The economy is improving in both absolute and relative terms. Elliott D. Pollack & Company
    139. 139. Arizona & Greater Phoenix– Slow but mildly accelerating recovery. • No recession on the horizon • 2013 will be slightly better than 2012 • 2014 will be better than 2013 • 2015 should be a good year Elliott D. Pollack & Company
    140. 140. Greater Phoenix Population Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project YEAR Population 1950 374,000 1960 1970 726,183 6.9% 1,039,807 3.7% 1980 1990 2000 1,600,093 4.4% 2,238,498 3.4% 3,251,876 3.8% 2010 4,192,887 2.6% 2020 (forecast) 5,011,767 1.8% Elliott D. Pollack & Company
    141. 141. Greater Phoenix Employment Source: U.S. Bureau of Census; Arizona Department of Administration; University of Arizona Forecasting Project YEAR 1950 74,400 1960 1970 181,700 327,200 1980 1990 636,200 1,013,300 2000 2010 1,578,400 1,686,800 2020 (forecast) Elliott D. Pollack & Company EMPLOYMENT 2,312,700
    142. 142. New Greater Phoenix 2014 Forecast Source: IHS Global Insight • 3.3% Growth – Gross Metro Product • 2.8% Employment Growth • Greater Phoenix economy larger than Oregon’s and 25 other states’ Elliott D. Pollack & Company
    143. 143. For a quick analysis of important economic data released each week, subscribe to the Monday Morning Quarterback www.arizonaeconomy.com/mmq_subscribe.htm Elliott D. Pollack & Company
    144. 144. ELLIOTT D. POLLACK & Company • Economic and Fiscal Impact Analysis/Modeling • Real Estate Market and Feasibility Studies • Litigation Support • Revenue Forecasting • Keynote Speaking • Public Finance and Policy Development • Land Use Economics • Economic Development 7505 East Sixth Avenue, Suite 100 Scottsdale, Arizona 85251 480-423-9200 P / 480-423-5942 F / www.arizonaeconomy.com / info@edpco.com Elliott D. Pollack & Company

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