Presentation is loading. Please wait.

Presentation is loading. Please wait.

Planning for the Future Economic/Demographic Trends in California and Beyond.

Similar presentations


Presentation on theme: "Planning for the Future Economic/Demographic Trends in California and Beyond."— Presentation transcript:

1 Planning for the Future Economic/Demographic Trends in California and Beyond

2 The Last Few Years… Warning signs started in 2005 with a widening gap between home values and HH incomes. Affordable housing was becoming an issue as supply was taken by purchasing of second homes and investment properties. Initial favorable interest rates which encouraged refinancing and home equity loans. This brought more money into the economy. Pressure on interest rates came later in year.

3 The Last Few Years… In 2006, rising interest rates and higher inventories began to slow demand and home value appreciation. Higher home inventories depressed the sales of new and existing homes. Home value decline removed equity as a source of HH wealth. Decline of housing market slowed growth in GDP and affected income and job growth. Lower job and income growth, combined with rising interest rates impacted ability to service mortgages.

4 The Last Few Years… By mid 2008, the housing market was in decline. An increase in home loan defaults was evident which caused lenders to tighten credit. HH formation began to slow and population changes slowed. Slowing of migration (both in and out). The hottest housing markets were hit first and the hardest. Source: ESRI Demographic Update 2009/14 May 2009

5 So Where Do We Go From Here?

6 Latest Research and Thoughts From: Demographic Research Unit, California Department of Finance USC School of Policy, Planning and Development USC Population Dynamics Research Group Southern California Association of Governments Los Angeles County Economic Development Department Hanley Wood Market Intelligence California Association of Realtors National Center for Education Statistics, U.S. Dept. of Education ESRI Business Data, ESRI, Inc.

7 The Consensus is: Uncertainty in the Short Term Long Term Demographic Trends are More Clear

8 National Enrollment Trends Source: US Dept of Education, NCES Dec 2007

9 Regional-Population Change (2000-2008) Source: ESRI Business Data May 2009

10 Regional- Enrollment Change Source: US Dept of Education, NCES Dec 2007

11 Regional Source: US Dept of Education, NCES Dec 2007

12 Planning for the Future Economists and demographers say that California will continue to grow. How fast this will occur is dependent upon the recession. Industries in CA are targets for growth. Venture capital still seeks out CA firms. The recession will end, but when?...

13 When Will the Recession End? Many economists say between 2010-2011. A few economists say longer to around 2012. But if we’re planning long-term for California school growth to 2020 and beyond, the difference between 2010 and 2012 doesn’t matter…

14 Where are we compared with our last recession?

15 CA Job Loss in 1990s Recession

16 CA Share of U.S. Jobs (1990s recession)

17 CA Share of U.S. Jobs (1990-2008)

18 CA Job Loss Then and Now Months After Recession Started

19 Job Trends Source: Bureau of Labor Statistics, CA EDD

20 Unemployment- April 2009 Source: ESRI Business Data April 2009

21 Foreclosures More about this later…

22 The Current Recession: Implications for California Growth Larger job losses than in the 90s but, Only a slight loss in share of U.S. jobs primarily due to housing/construction. This is a NATIONAL recession – Oregon, Nevada and Arizona have larger % job losses and nine states have higher unemployment rates

23 Future California Growth California’s job, population and household growth depends on: The amount of population and job growth nationwide The attractiveness of California for entrepreneurs, workers and their families The choices made by the two fastest growing demographic groups- over 55 and children/grandchildren of immigrants

24 What will the Future Bring? Internal growth primarily from residents already in the state (in/out migration down). Increased births from those who have settled since the 1980s (including the children and grandchildren of immigrants).

25 What will the Future Bring? As in previous up cycles, population growth will occur where: Relatively young populations already exist Housing costs are moderate (low end housing will rebound first) Areas where family formation are likely to occur Location will vary widely within California.

26 California Enrollment Source: CA Dept of Finance 2008 Series We are here

27 California Enrollment Source: CA Dept of Finance 2008 Series We are here

28 What the Components of Pop Change? Natural increase in population Births – deaths Net Migration

29 Components of Population Change Source: CA Dept of Finance 2007 County Race/Ethnic Pop Estimates PopulationNumeric NaturalNet (July 1)ChangeBirthsDeathsIncreaseMigration Total 200034,095,209 200134,766,730671,521529,395231,737297,658373,863 200235,361,187594,457526,280232,941293,339301,118 200335,944,213583,026537,419233,295304,124278,902 200436,454,471510,258539,858239,325300,533209,725 200536,899,392444,921547,137231,054316,083128,838 200637,298,417399,025553,028239,036313,99285,033 200737,712,588414,171564,556234,660329,89684,275 Average 516,768542,525234,578307,946208,822

30 CA Components of Population Change Source: CA Dept of Finance 2007 County Race/Ethnic Pop Estimates

31 White Components of Population Change Source: CA Dept of Finance 2007 County Race/Ethnic Pop Estimates

32 Hispanic Components of Population Change Source: CA Dept of Finance 2007 County Race/Ethnic Pop Estimates

33 CA Age-Nativity Pyramid Arrival Decade and Generation Source: CA Demographic Futures USC School of Policy, Planning and Development

34 % Immigrant Share of Total Population California 1970 to 2030 Source: CA Demographic Futures USC School of Policy, Planning and Development

35 CA Projected Births Source: CA Dept of Finance 2008 Series  Projected 

36 CA Projected Births by Ethnic Group Source: CA Dept of Finance 2008 Series

37 CA Regional Projected Births Source: CA Dept of Finance 2008 Series Fresno, San Joaquin, Riverside, San Bernardino

38 CA Regional Projected Births Source: CA Dept of Finance 2008 Series Los Angeles, Orange County, San Francisco, San Diego

39 The Housing Market Housing is the key to long-term continued growth in various areas Opportunities are appearing: Lower housing costs Low interest rates (for now) Demand still there

40 CA Median Price Existing Detached Source: CA Assoc. of Realtors CA Outlook Sept 2008

41 Housing Market First-time Buyer Housing Affordability Index California vs. U.S. 2003-2008 Source: CA Assoc. of Realtors CA Outlook Sept 2008

42 Housing Market Sales Hit Bottom in 2007, up in 2008 and 2009 Source: CA Assoc. of Realtors CA Outlook Sept 2008

43 CA Ratio Median Home Price to Median HH Income Source: CA Dept of Finance

44 Housing Market Unsold Inventory Index- July 2008 6.7 months and dropping Source: CA Assoc. of Realtors CA Outlook Sept 2008

45 Housing Market Peak vs. July 2008 prices Bay Area: Sales down Moderate median price declines Central Valley: Sales up dramatically Large median price declines Southern California: Moderate to large sales increases Large median price declines Varies by county Source: CA Assoc. of Realtors CA Outlook Sept 2008

46 2009 CA Housing Market Outlook According to California Assoc. of Realtors Sales should increase 5-10% over 2008 (primarily low-end and foreclosures) California median home price: Prices stabilize in 2Q 2009 at earliest Should correspond with foreclosures at/near peak Affordability is good; availability of funds uncertain Source: CA Assoc. of Realtors CA Outlook Sept 2008

47 2009 CA Housing Market Outlook CA Housing Market will stay stagnant for several more years… Potential homebuyers waiting on the sideline…skittish about prices Buyers unable to get loans even with stellar credit background Financing not available for builders in current market Source: CA Assoc. of Realtors CA Outlook Sept 2008

48 Summary of K-12 Growth in CA Potential growth in the future will occur: In areas with larger immigrant populations Where the population driven by settlement of young families coupled with births Areas with affordable housing

49 California Enrollment Source: CA Dept of Finance 2008 Series

50 Thank You For Your Attendance


Download ppt "Planning for the Future Economic/Demographic Trends in California and Beyond."

Similar presentations


Ads by Google