HOUSING AND LABOR MARKET TRENDS: CALIFORNIA

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1 HOUSING AND LABOR MARKET TRENDS: CALIFORNIA July 2014 Community Development Research Federal Reserve Bank of San Francisco

2 National Trends

3 Composition of distressed sales by geography Percent of Buy-Side Transactions 35% 30% 25% 20% 15% 10% 5% 0% 6% 13% 13% Proportion of Distressed Property Transactions May Month Moving Average 6% 12% 11% 5% 6% 12% 9% 13% 7% 3% 8% 11% 4% 8% 8% 9% 7% Short Sale Move-In Ready REO Damaged REO 3% 4% 12% 10% 6% 5% 4% 5% 5% 5% Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions May 2014

4 Neighborhood stabilization: concerns over investor purchases of distressed properties Who Is Buying Properties? May Month Moving Average 100% 90% 15% 14% Percent of Property Type 80% 70% 60% 50% 40% 30% 20% 10% 55% 25% 20% 45% 39% 36% 33% 30% 36% 50% Investor First-Time Homebuyer Current Homeowner 0% Damaged REO Move-In Ready REO Short Sale Non-Distressed Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions May 2014

5 Financing for home purchases Financing for Homebuyers May Month Moving Average 100% Percent of Buyer-Side Transactions 90% 80% 70% 60% 50% 40% 30% 30% 8% 23% 14% 24% 8% 19% 38% 19% 7% 2% 72% All Other Financing VA Fannie/Freddie FHA Cash 20% 10% 0% 25% 11% Current Homeowners First-Time Homebuyers Investors Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions May 2014

6 California Trends

7 California s unemployment rate trending down but still above national average (7.6% May 2014) 14 Unemployment Rate (%) California United States Source: Bureau of Labor Statistics Recession

8 California house prices back on the rise 250 FHFA (formerly OFHEO) House Price Index (2000=100, quarterly) California FHFA House Price Index 2000= United States Source: Federal Housing Finance Agency (formerly OFHEO)

9 Northern California house prices still rising 250 FHFA House Price Index: Northern California (2000 = 100) Sacramento FHFA House Price Index 2000= Oakland San Francisco Source: Federal Housing Finance Agency (formerly OFHEO)

10 Central Valley house prices trending up 270 FHFA (formerly OFHEO) House Price Index: Central California (2000 = 100, quarterly) 240 FHFA House Price Index 2000= Fresno 120 Stockton Merced Source: Federal Housing Finance Agency (formerly OFHEO) Visalia

11 Southern California house prices trending up 290 FHFA House Price Index: Southern California (2000 = 100, quarterly) 250 FHFA House Price Index 2000= Los Angeles San Diego Ventura 130 Inland Empire Source: Federal Housing Finance Agency (formerly OFHEO)

12 Number of delinquent mortgages and properties entering foreclosure process continues to fall 800,000 Delinquent Mortgages and Foreclosure Starts - California 600,000 Number of Mortgages 400, , Foreclosure Starts All Mortgages Past Due Source: Mortgage Bankers Association, National Delinquency Survey

13 New housing starts slowly trending up 600 New Housing Starts - California (Quarterly) 500 New Housing Units (in thousands) Source: Bank of Tokyo-Mitsubishi UFJ

14 LA rents up: $1,499 for Q1 2014, vacancy rate down to 3% $1,560 Asking Rent and Vacancy Rate in Los Angeles Quarterly Asking Rent Vacancy Rate 6% $1,500 Asking Rent $1,440 $1,380 3% Vacancy Rate $1, Source: Reis, Inc. Asking rent is calculated by first determining the average rent for each unit size, and then calculating a weighted average based on the number of units in each size category. 0%

15 Inland Empire rents up: $1,104 for Q1 2014, vacancy rate down to 2.6% $1,120 Asking Rent and Vacancy Rate in San Bernardino/Riverside Quarterly Asking Rent Vacancy Rate 9% $1,080 6% Asking Rent $1,040 $1,000 3% Vacancy Rate $ Source: Reis, Inc. Asking rent is calculated by first determining the average rent for each unit size, and then calculating a weighted average based on the number of units in each size category. 0%

16 SF rents up: $2,171 for Q1 2014, vacancy rate down to 2.9% $2,200 $2,100 Asking Rent and Vacancy Rate in San Francisco Quarterly Asking Rent Vacancy Rate 6% $2,000 Asking Rent $1,900 $1,800 3% Vacancy Rate $1,700 $1, % Source: Reis, Inc. Asking rent is calculated by first determining the average rent for each unit size, and then calculating a weighted average based on the number of units in each size category.

17 Fresno rents up: $842 for Q1 2014, vacancy rate at 2.8% $860 Asking Rent and Vacancy Rate in Fresno Quarterly Asking Rent Vacancy Rate 8% $830 Asking Rent $800 4% Vacancy Rate $ Source: Reis, Inc. Asking rent is calculated by first determining the average rent for each unit size, and then calculating a weighted average based on the number of units in each size category. 0%

18 Sacramento rents up: $983 for Q1 2014, vacancy rate down to 2.8% Asking Rent and Vacancy Rate in Sacramento Quarterly $1,000 Asking Rent Vacancy Rate 9% $975 6% Asking Rent $950 $925 3% Vacancy Rate $900 $ % Source: Reis, Inc. Asking rent is calculated by first determining the average rent for each unit size, and then calculating a weighted average based on the number of units in each size category.

19 State & Local Data Maps

20 California Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

21 California Data Maps Areas at Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

22 Bay Area Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

23 Bay Area Data Maps Areas At Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

24 Sacramento Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

25 Sacramento Data Maps Areas At Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

26 Central California Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

27 Central California Data Maps Areas At Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

28 Central Coast Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

29 Central Coast Data Maps Areas at Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

30 LA Metro Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

31 LA Metro Data Maps Areas at Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

32 Inland Empire Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

33 Inland Empire Data Maps Areas at Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

34 San Diego Data Maps Areas Affected by Concentrated Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

35 San Diego Data Maps Areas at Risk of Additional Foreclosures May 2014 Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

36 Conclusions

37 For More Information: FRBSF Community Development Website All publications and presentations available on our website Conference materials also posted shortly after events