e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The June numbers from the California Association of Realtors (CAR) continued to exhibit divergent trends – unit sales up but median prices down. In the state, unit sales in June rose by 17.5% over the year, the third such increase in a row. However, the median price continued to fall, down by -37.7% to $368,250. This reflects the large volume of distressed sales in many areas of the state.
The CAR’s Unsold Inventory Index (the number of months needed to deplete the supply of homes on the market at current sales rates) was 7.7 months in June, compared with 10.2 months a year-ago.
In Los Angeles County, unit sales in June rose by 1.7% over the year, but the median price declined by -32.3% to $396,560. June’s median price was -35.6% below the peak price recorded in February 2007. In Orange County, unit sales increased by 18.1% over the year to June. The median price fell by -22.5% to $560,900. The June median was -24.9% below the peak price of $747,260 recorded in April 2007. In the Riverside-San Bernardino area, unit sales in June boomed by 75.4%. The median price declined by -32.5% to $261,980. June’s median price was -36.9% below the peak price recorded in January 2007.
Unit sales in San Diego County went against the grain in June, with a decline of -20.1% over the year. No median price data was available for the month. In Ventura County, unit sales also declined in June, falling by -15.7% over the year. The median price dropped by -30.6% to $480,430, which was -32.4% below the peak price recorded in august 2006.
To the north, unit sales in “San Francisco Bay” declined by -4.7% in June, while the median price dropped by -19.8% to $676,740. June’s median price was -20.7% below the peak price recorded in May 2007. In the San Jose area, unit sales declined by -6.8% over the year to June, while the median price declined by -14.5% to $740,000. June’s median price was -14.8% below the peak set in April 2007. (Jack Kyser)
PR: http://www.car.org/index.php?id=Mzg1NTU=
California was the nation’s second highest state in foreclosure activity during the second quarter of 2008, according to a report released by RealtyTrac. A total of 202,599 properties—one in every 65 households—were at some stage of the foreclosure process in California. The second quarter total was up by 19.3% from first quarter 2008, and was significantly higher (+197.8%) than second quarter 2007. The three stages of foreclosure includes notices of defaults (NOD) and Lis Pendens (LIS); Auction – Notice of Trustee Sale (NTS) and Notice of Foreclosure Sale (NFS); and Real Estate Owned (REO). Of the total, 119,836 were NOD’s; 19,968 were NTS’; and 62,795 were REO’s.
Southern California’s metro areas were among the top 20 metro areas in the nation with high foreclosure activity during the second quarter of 2008. Within Southern California, the Riverside-San Bernardino area posted the highest foreclosure activity and took the number two spot in the nation.
| Rate Rank | Metro Area | Total | 1/every X Household (rate) | % Change from | |
| 1Q 2008 | 2Q 2007 | ||||
| 2 | Riverside-San Bernardino Area | 43,600 | 32 | 17.1 | 193.4 |
| 11 | San Diego County | 17,343 | 65 | 13.2 | 206.5 |
| 15 | Orange County | 12,439 | 82 | 29.7 | 276.7 |
| 16 | Ventura County | 3,177 | 85 | 34.6 | 228.9 |
| 19 | Los Angeles County | 36,955 | 91 | 14.9 | 168.2 |
With the dim economic outlook, foreclosure activity in the second half of the year will more than likely follow the same storyline. The excess supply of unsold homes and rising foreclosure rates will continue to drag home values further south, unfortunately. (Candice Flor Hynek)
PR: http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=4891&accnt=64847
The June report from the Construction Industry Research Board contained more bad news. The number of housing unit permits issued in the state during the month was down by -34.1% over the year, while the SIX-month total of 36,282 units was -43.9% below the comparable 2007 total.
The June permit total for Los Angeles County was down by -48.3% over the year. The six-month total of 7,082 units was -38.2% below the comparable 2007 period. Orange County’s June housing unit permit count was just -3.7%, while the six-month permit total was -39.7% below the like 2007 period. In the Riverside-San Bernardino area, the June permit total was down by -26.5% over the year. The area’s six-month tally was -56.7% below the comparable 2007 period, to 5,560 units.
San Diego County provided a little surprise in June, with the number of units permitted up by 50.8% to a “huge” 974 units. The county’s six-month housing unit total was -30.6% below the comparable 2007 period. Ventura County also saw a big jump over the year in June, rising by 86.0% to 93 units. The County’s six-month total was -43.9% below the same 2007 period.
In the 9-county Bay Area through June, the number of housing units permitted was -35.2% below the count for the comparable period of 2007. San Francisco County, however, has seen a lot of multi-family construction activity, with its six-month permit count up by 61.4% over the year. (Jack Kyser)
Grubb & Ellis Research Services released office and industrial market vacancy rates for second quarter 2008. The numbers were up across the board and reflected the gloomy economic environment in the region.
Mounting job losses in office-space-using activities – particularly finance and mortgage-related companies – have boosted office vacancy rates around Southern California. The office vacancy rate in Los Angeles County during the second quarter of 2008 was 10.7%, up slightly from first quarter 2008 vacancy rate of 10.1% and from the comparable period a year ago of 9.5%. This was the third quarter in a row that L.A. County’s office vacancy rate edged higher. Orange County’s second quarter office vacancy rate increased to 15.2% from 14.9% the previous quarter and from 9.0% the same period a year ago. The Riverside-San Bernardino area second quarter office vacancy rate shot up to 17.5% from 14.6% the previous quarter and from 9.3% the same period in 2007. San Diego County’s office vacancy rate increased to 14.1%, up from 12.8% the previous quarter and from 10.9% in second quarter 2007.
The picture was a bit better in the industrial market, though vacancy rates rose. Many businesses have been consolidating facilities in the region as demand for goods has tapered off. The industrial vacancy rate in Los Angeles County remained low at 1.8% during the second quarter of 2008. This was just a tad higher from the 1.6% rate in the previous quarter and unchanged from second quarter 2007. Orange County’s second quarter industrial vacancy rate increased to 4.5%, up slightly from last quarter’s 4.3% vacancy rate and the comparable period a year ago of 3.7%. The Riverside-San Bernardino area industrial vacancy rate increased significantly to 7.9% in the second quarter 2008, up from 6.5% in the previous quarter and from a 4.8% industrial vacancy rate in second quarter 2007. On the other hand, San Diego County’s industrial vacancy rates declined to 7.0%, down a bit from 7.3% the previous quarter and from 7.2% the same period a year ago. (Candice Flor Hynek)
PR: http://grubb-ellis.com/Research/Reports.aspx
The June report from the Construction Industry Research Board on nonresidential activity was also generally downbeat. The numbers for Los Angeles County, however, were somewhat upbeat. Through June, permit values for industrial were up by 18.7% over the comparable 2007 period, while retail was ahead by 16.7%. Also, permits valued at $250 million had been issued for hotels in the County, compared with $35 million last year. However, office permit values in the County were down by -46.8% over the year.
In Orange County through June, everything was down: industrial (-58.9%); office (-65.0%); retail (-72.9%); and hotels (-76.5%). Riverside County’s results were also downbeat: industrial (-58.3%); office (-23.9%); and retail (23.6%). However, there was some hotel development during the period (compared with none last year). San Bernardino County’s numbers weren’t much to write about either: industrial (-57.4%); office (-66.4%); and hotel (-48.8%). However, retail permit values through 6 months were up by 12.9% over last year.
The results for San Diego County through June were mixed. Permit values for industrial were down by -21.1% while office was off by -20.1%. However, retail was up by 28.8% over the comparable 2007 period and hotels were up by 489.8%. Ventura County’s numbers were also mixed. No industrial or hotel permits have been issued yet, while office valuations were down by -39.2%. However, retail was doing well, with permit values up by 104.7% over the 2007 period.
In the 9-county Bay Area through June, permit values for industrial were ahead by 79.3% (strength in Contra Costa and Solano counties), but all the other categories were down: office (-15.3%); retail (-4.9%); and hotel (-73.8%). (Jack Kyser)
The May international trade numbers released by the Bureau of the Census weren’t too bad. At the Los Angeles Customs District, export values rose by 19.5% over the year, while import values were up by 8.3%. Total two-way trade value for the month rose by 11.6% to $31.2 billion. The five-month total for the Los Angeles District was up by 6.1% over the comparable 2007 period to $144.7 billion.
At the San Francisco Customs District in May, export values increased by a modest 2.2%, while import values rose by 3.2% over the year. The two-way trade value for May moved up by 2.8% to $9.9 billion. The five-month total for the San Francisco District was up by 6.8% over the year to $48.0 billion.
At the San Diego Customs District, May export values moved ahead by 3.2%, while imports increased by 3.0%. Total two-way trade value for the month rose by 3.1% to $4.6 billion. The five-month value was up over the year by 5.4% to $22.2 billion. (Jack Kyser)
The Census Bureau recently released first quarter 2008 information on revenues of four big groups of service sector industries. Collectively, the four industries took in $961.3 billion during that quarter, up by 5.0% over first quarter 2007 (the data are not seasonally adjusted).
First-quarter revenues of the professional, scientific & technical services sector were $310.9 billion, up by 4.4% versus 1q2007. Six industries in this sector saw higher revenues in 1q2008, and one (legal services) declined. In order of size,
Estimated revenues of the information sector totaled $277.9 billion during the first quarter, up by 3.5% versus 1q2007. This sector contains a number of industries important to the Southern California region. All six industries reported higher revenues in 1q2008, but several are undergoing considerable structural change.
The third sector covered in this report is “selected” health care services industries. Sector revenues totaled $228.5 billion during the 1st quarter, which were up by 7.8% versus 1q2007.
Fourth and finally, the Census Bureau reported revenues of the administration & support and waste management & remediation services sector, which recorded $144.0 billion in 1q2008 revenues, up by +5.0% compared with 1q2007.
These are important industries, and this report is the only good source of information about them (beyond employment). Change is clearly under way in the information sector but most of the other industries appear to be in pretty good shape. (Nancy D. Sidhu)
PR: http://www.census.gov/indicator/qss/qssq1-08pr.pdf
According to May data from PKF Consulting, the hotel industry was still holding up in Southern California. In Los Angeles County, the May occupancy rate was 76.6% compared with 77.3% last year. However, the average daily room rate (ADR) rose by 5.9% to $162.19. Around the County, three areas had 80% or better occupancy rates: Airport (82.1%); I-5 corridor/Whittier (80.9%, down from 85.0% last year); and Santa Monica (80.7%). Beverly Hills had the highest ADR in May, $430.15, up by 5.8% over the year.
The May hotel news from Orange County wasn’t as cheery. The occupancy rate came in at 71.5% compared with 74.2% last year. The ADR inched up by 0.3% to $151.17. By area, the highest occupancy rate was 74.7%, found at Orange County Airport. The highest ADR during May was South Orange County’s $230.03, up by 2.9% over the year.
San Diego County’s hotel industry had a good May, with the occupancy rate at 75.8% compared with 74.3% last year. The ADR rose by 4.4% to $182.10. By area, the highest occupancy rate during the month was Downtown’s 79.8%. The highest ADR by area in the County was $261.63 recorded by San Diego Bay areas, up by 10.3% over the year. (Jack Kyser)
Tuesday, August 12: Japan America Society - U.S. Subprime Crisis - Lessons From Japan's Real Estate Bubble Collapse
Panelists include David B. Green, CMB, Senior Vice President - Mortgage Division, Comerica Bank; Bradley A. Luster, President, Major Properties; and Mark Spiegel, Ph.D., Vice President, International Research & Director, Center for Pacific Basin Studies, Federal Reserve Bank of San Francisco.
Save the Date! Monday, November 17: The LAEDC 13th Annual Eddy Awards®
The Eddy Awards® is a cocktail, dinner, and awards gala to support fulfillment of the LAEDC mission to attract, retain, and grow businesses and jobs for the regions of Los Angeles County. The Awards were introduced by the LAEDC in 1996 to celebrate individuals, organizations, and now cities that demonstrate exceptional contributions to positive economic development in the region. Confirmed honoree: Rick Caruso, developer of The Grove and the Americana.
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