e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The February report from the California Association of Realtors (CAR) was a mixed bag, but perhaps there is some light at the end of the tunnel. Unit sales in the state (at a seasonally adjusted annual rate) rose by 9.5% from January to February. Indeed, they have increased each month since October 2007. However, the year-to-year comparisons are still rather grim, with unit sales in February down by 28.5% over-the-year while the median price declined by 26.2% to $409,240. The CAR’s unsold inventory index (the number of months needed to deplete the supply of homes on the market at the current sales rate) was 14.3 months compared with 8.2 months a year ago.
Around Southern California during February, Los Angeles County saw unit sales plummet by 41.8% over the year, while the median price declined by 20.0% to $467,200. This was down by 24.2% from the recent high hit back in February 2007. Orange County saw unit sales in February drop by 24.8%, while the median price went down by 13.9% to $596,520. This was 20.2% below the recent high in April 2007.
The Riverside-San Bernardino area saw unit sales in February fall by a comparatively modest 17.0% over the year, while the median price declined by 27.2% to $289,660. The latter was 30.2% below the recent high attained back in January 2007. San Diego County saw unit sales decline by 17.9% over the year to February, while the median price declined by 24.1% to $450,710. This was down by 27.6% from the recent high recorded all the way back in May 2006. Resale housing activity in Ventura County saw unit sales drop by 36.9% over the year to February, while the median price slipped by 23.6% to $520,270. This was 26.8% below the recent high of August 2006.
To the north, “San Francisco Bay” saw unit sales in February decline by 32.5% over the year, while the median price declined by 5.0% to $706,880. This was only 17.2% below the recent high recorded in May 2007. The San Jose area saw unit sales decline by 37.6% over the year to February, while the median price eased down by just 1.3% to $780,000. This was down by 10.2% from the recent high attained in April 2007.
The housing news unfortunately will remain rather discouraging through most of 2008, especially as more foreclosed homes hit the California market and compete with resale housing. (Jack Kyser)
The February data from the Construction Industry Research Board contained mixed news. The number of housing permits issued in the state during the month was down over the year, while the two-month total was 40.8% below the comparable 2007 count. Interestingly, the total for multi-family units was down just a smidge (-0.2%), while the single-family count was off by 60.4%.
Los Angeles County saw its February permit count increase over the year, while its two-month housing unit total was 20.7% below the comparable 2007 period. Multi-family permits were UP by 5.8%, while single family permits were down by 52.7%. Orange County’s February housing permit total was also up over the year, and its two-month permit total was up by 19.3% over the 2007 count. Single-family permits were down by 36.9%, but this was offset by a 59.0% surge in the multi-family sector.
The Riverside-San Bernardino area’s February permit total was down over the year, and the area’s two-month total plunged by 61.8% from the comparable 2007 period. Single-family permits for the two months were down by 70.3% and multi-family permits declined by 31.1%. The number of housing unit permits issued in San Diego County during February was down from last year, and the two-month total was 46.4% below the comparable 2007. The declines were evenly spread between the single and multi-family sectors. In Ventura County (which is a smaller market), the number of permits issued in February was up over the year, and the two-month total was 42.7% ahead of last year. All the thrust was in the multi-family sector.
In the 9-county Bay Area, permit trends through two-months of 2008 were mixed. Single family permits were down by 58.3% over the comparable 2007 period, but multi-family permits rose by 33.9%. Total housing permits in the area at the two-month mark were 24.0% lower than in 2007. (Jack Kyser)
The February nonresidential permit activity from the Construction Industry Research Board was also a mixed bag of news. In Los Angeles County through two-months, industrial permit values were up by 157.3% and retail was ahead by 96.1%. There was also a surge in hotel activity (the LA Live project), with $57.3 million in permits compared with only $3.6 million in 2007. Office permits declined by 39.2%.
In Orange County through February, all three sectors were down: industrial
(-1.3%), office (-95.1%) and retail (-87.9%). In Riverside County, industrial permit values through two months were up by 22.1%, but office and retail lagged by -37.7% and -56.9%, respectively. In San Bernardino County, industrial was down by 90.3%, office was off by 69.5%, while retail was ahead – barely – up by just 0.8%.
In San Diego County through two months each of the three sectors was down: industrial (-86.7%), office (-68.1%) and retail (-1.9%). In Ventura County, office and retail were both down, by 58.4% and 60.9% respectively, while no industrial permits had been issued.
In the 9-county Bay Area through two months, industrial permits were 148.8% ahead of the 2007 period (thanks to a $75 million R & D facility in Solano County), while office was up by 86.2% (a $70 million -- partial – R & D office in San Francisco). Retail, however, was down by 1.7% from the two-month 2007 period. (Jack Kyser)
The Bureau of Economic Analysis released preliminary estimates of corporate profits in the fourth quarter 2007. Seasonally adjusted pre-tax profits from “current production” (which exclude inventory profits and include other adjustments) fell by -3.3% during 4th quarter 2007 compared to the -1.2% slippage registered during the 3rd quarter. Still, fourth-quarter 2007 profits were up by 2.5% compared to 4q2006.
U.S. financial industries’ profits dropped by -15.2% (annual rate) over the 3rd quarter and were down by -16.4% over 4q2006. Meanwhile, U.S. nonfinancial industries’ profitability fell by -4.3% over 3q2007 but was down just a smidge over the year—off by only -$200 million. Net profits from the “rest of the world” soared by 42.8% over the year. [FYI, rest of the world profits is defined as the difference between U.S. receipts of profits earned by companies located in the rest of the world (which rose by 19.1%) and U.S. profit-based payments to companies and residents in the rest of the world (-21.9%).] (Nancy D. Sidhu)
PR: http://bea.gov/newsreleases/national/gdp/2008/gdp407f.htm
The Census Bureau recently released fourth quarter 2007 information on revenues of four big groups of service sector industries. Collectively, these industries took in $979.0 billion during the last quarter, up by 5.3% over 4q2006. [The data are not seasonally adjusted.]
Fourth-quarter revenues of the professional, scientific & technical services sector were $320.1 billion, up by 6.0% versus 4q2006. The largest industry in this sector was legal services, with $68.8 billion in 4th quarter revenues, down by -0.9% over the year. Next largest was architecture, engineering & related services, with $65.0 billion in quarterly revenues, up by +11.9%. Third largest in size was computer systems design, with $56.1 billion (+8.0%), followed by management, scientific & technical consulting, with $40.9 billion (+10.2%). Revenues of accountants, tax preparers, bookkeepers and payroll services were $24.0 billion, up by 2.6% compared to 4th quarter 2006. Finally, revenues of advertising and related services firms were $19.5 billion, up by 1.0% over the year.
Estimated revenues of the information sector totaled $292.4 billion during the latest quarter, up by 4.5% versus 4q2006. This sector contains a number of industries important to the Southern California region. (1) With $126.4 billion in fourth-quarter revenues—up by 4.5% over the year—telecommunications is the largest industry in this sector. However, wired telecom revenues declined by -5.2% over the year, while wireless revenues were up by 11.2%. (2) Publishing industry revenues were $77.0 billion last quarter, up by 2.9% compared to 4q2006. Within this industry, revenues of software publishers (at $39.3 billion) were up by 8.5% over the year, while other publishers’ receipts ($37.7 billion in 4q2007) fell by -2.4%. (3) Elsewhere in this sector, fourth-quarter revenues of the motion picture & sound recording industry were $27.6 billion, up by 1.8%. (4) The broadcasting industries (including cable programming) took in $26.0 billion, up by 2.5% compared to 4q2006. (5) Data processing, hosting & related services garnered $18.3 billion, virtually unchanged (+$2 million) over the year. (6) Finally, the Internet related industries took in $17.1 billion last quarter, for a whopping increase of 28.1% over 4q2006.
The third sector covered in this report is “selected” health care services industries. Sector revenues totaled $220.9 billion during the 4th quarter, which was up by 7.9% versus 4q2006. Of this amount, hospitals took in $180.4 billion, up by 7.6% over the year, while nursing & residential care facilities brought in $40.5 billion (+9.1%).
Fourth and finally, the Census Bureau reported revenues of the administration & support and waste management & remediation services sector, which recorded $145.6 billion in 4q2007 revenues, an increase of 1.6% compared with 4q2006. The largest industry in this sector was employment services, taking in $46.7 billion during the 4th quarter (+4.6% over the year). Other administration & support industries had revenues of $71.4 billion, down by -1.6% compared with 4q2006. Waste management & remediation industry revenues were $19.5 billion last quarter, up by 6.8% over the year. (Nancy D. Sidhu)
PR: http://www.census.gov/econ/www/servmenu.html
April 7-8
Asia Pacific Business Outlook 2008
USC-Davidson Conference Center, Los Angeles. Early registration fee $775 until March 10, 2008. Regular registration fee: $925 after March 10, 2008.
The Asia/Pacific Business Outlook conference can be the catalyst for your success in Asia. Learn about the latest trade and investment opportunities and challenges from 50 concurrent sessions on 15 Asia/Pacific economies. Build your international business network through APBO's unprecendented access to 60 experts with on-the-ground knowledge and experience. Schedule one-on-one consultations with U.S. Senior Commercial Officers from each American embassy around Asia/Pacific region for private consultations and get specific answers to your questions.
Thursday, April 17
Housing Market Cycles with John Burns
11:30 a.m. at the Downtown Los Angeles Marriott.
The Los Angeles Chapter of the National Association for Business Economics (NABE) presents “Housing Market Cycles” with John Burns. Mr. Burns consults to numerous builders and others in the real-estate industry throughout the United States. He will offer his latest observations on the state of the economy and housing market. The luncheon is on Thursday, April 17th at the Downtown Los Angeles Marriott. To register and for more information, please visit www.lanabe.org. Early bird registration available until April 10th.
Thursday, May 8
2008 San Fernando Valley Economic Summit
7:30 a.m. - 1 p.m. at the Sheraton Universal Hotel.
Featuring National Economic Overview, Economic Trend & Opportunities, and Valley Economic & Real Estate Report.
Wednesday, May 14 - Save the Date
International Trade Outlook
Breakfast & Networking: 8:00 a.m. - 8:30 a.m. Program: 8:30 a.m. - 10:00 a.m. At Keesal, Young and Logan – Long Beach.
Foreign Direct Investment is a major contributor to LA County’s economy. Join us to preview this special report on FDI along with the International Trade Outlook report highlights. For more information and sponsorship opportunities, please contact Eydie Galper (213) 236-4828 : eydie.galper@laedc.org.
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