12/5/20151 Coachella Valley 2010 Now What? John Husing, Ph.D. Economics & Politics, Inc.

04/18/23 1

Coachella Valley 2010Now What?

John Husing, Ph.D.

Economics & Politics, Inc.

After Losing 8.36 Million Jobs …U.S. Job Creation Is Crawling Back

Consumers Confidence Decaying Again!!

100.0 = Normal

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So. CA Job Change, 1991-2010e

-488,700-886,849-10.0%

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Inland Empire Job Change, 1984-2010e

+20,600

-168,577-13.1%

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Coachella Valley, Job Changes

1,879

14,121-10.1%

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Worst National Unemployment Rates

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“”not U or V

Shape of Recovery?

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What About the Future?

… Look At The Economic Base

Gold Mine Theory

Primary Tier

Secondary Tier

Economic Base

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•Construction•Hotels & Conventions•Tourism•Tourist Shoppers•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

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Existing Homes Sales Headed For A Record in 2010 … Thanks To Short Sales/ Foreclosures

7.3%

New Homes Sales Headed For A Record in 2010 … Thanks To Short Sales/ Foreclosures

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Existing Home Price ReboundTo 2003 Level

30.5%

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New Home Price Back To 2000-2002Level … Just Above Existing Homes

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Coachella Valley Housing Permits At Modern Low … Can’t Build At These Prices

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42,60742,607 Traded 2004-7 of 97,471 Total (43.7%43.7%)

31,99531,995 Drained Equity

74,562 74,562 Problem Homes of 97,471 Total (76.5%76.5%)

46.6% 46.6% County Average Notices of DefaultCounty Average Notices of Default

34,746 34,746 Notices of Default Filed (estimate)Notices of Default Filed (estimate)

39,816 Where Are They?39,816 Where Are They?

Supply: Upside Down Homes

Somebody Has To Take A Major Hit!

Homeowners Lose Their Homes

Lenders Lose Part of Their Investments

Mortgage Backed Security Owners Lose Part of Their Investments

Taxpayers Subsidize One of the Above

Until This Happens … We Don’t Have A Recovery!

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Isn’t There Any Good News?

Yes!

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Supply & Demand

Demand From Lower Prices

Supply From Foreclosures vs.

Price Stability?

  Riverside Co. San Bernardino Co.

May $180,000   $137,000  

June $185,000 2.80% $140,000 2.20%

July $185,000 2.80% $140,000 2.20%

August $190,000 5.60% $145,000 5.80%

Sept. $183,000 1.70% $150,000 9.50%

Oct. $190,000 5.60% $150,000 9.50%

Nov. $200,000 11.10% $160,000 16.80%

Dec. $196,000 8.90% $154,000 12.40%

Jan-10 $195,000 8.30% $150,000 9.50%

Feb. $190,000 5.60% $144,000 5.10%

Mar. $198,000 10.00% $152,000 10.90%

Apr. $195,000 8.30% $150,000 9.50%

May $210,000 16.70% $160,000 16.80%

June $210,000 16.70% $160,000 16.80%

July $200,000 11.10% $155,000 13.10%

August $200,000 11.10% $158,000 15.30%

Sept. $200,000 11.10% $160,000 16.80%

Assessed Valuation

… Next Move Is UPUP!

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Soaring CV Housing AffordabilitySets A Record & Drives DemandDemand

62%

10%

53%55%

Competitive Housing Prices

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Done Const Total

Palm Springs-Cath. Cty, DHSprgs. 17 0 17

Rancho Mirage 8 7 15

Palm Desert 6 21 27

Indian Wells-La Quinta 75 33 108

Indio-Coachella 17 31 48

  123 92 215

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Limited New Home Supply, 2nd -2010

Economic Base

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•Construction D-•Hotels & Conventions•Tourism•Tourist Shoppers•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

Hotel Rates, A Weak Pulse

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Corporate Meetings & Conventions Still Missing

Airport Volume Increasing

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Wishing For More Flights Like Phoenix-Scottsdale

Car Rental Activity On & Near Airport

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Tourists … Not Business Travelers?

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Transit Occupancy Tax: Palm Springs

12.7%

-1.1% -0.4%

-11.9%

4.8%

21.6%13,024,61114,677,511 14,521,402 14,466,704

12,751,47813,367,685

FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 July/Aug.

Note: FY 2011 Based On July-August 2009-2010Source: City of Palm Springs

Transit Occupancy TaxPalm Springs, FY 2005 to FY 2011 ytd

Cold Weather In So. California Helped!

Increased Tourist Options:Possible Thermal Motor Sports Park

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Retail Sales … Finally Some Life

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Retail Sales By City

Economic Base

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•Construction D-•Hotels & Conventions D-•Tourism C+•Tourist Shoppers C-•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

High Value Crops

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Agricultural Production

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When Construction Recovers … Will Need The “AgJobs” Temporary Visa Program

Economic Base

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•Construction D-•Hotels & Conventions D-•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech•Creative Arts•Distribution•Health Care•Retirees•Manufacturing

Clean Energy Initiatives

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DemandProperty Assessed Clean Energy

Financing (PACE)Palm Desert Municipal Program

AB 811Net Metering

DevelopmentSkill Training To Work In the

IndustryElectric Vehicle Production

Economic Base

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts•Distribution•Health Care•Retirees•Manufacturing

Creative Arts

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Major Films & Important CommercialsAre Already Shot in the Coachella Valley

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Value of Filming Activity Coachella Valley

  Coachella Valley Riverside Co. Share

2006 $11,892,591 $24,225,500 49.1%

2007 $10,174,750 $15,336,750 66.3%

2008 $11,705,000 $13,551,000 86.4%

2009 $4,732,000 $9,639,200 49.1%

2006-2006 $38,504,341 $62,752,450 61.4%Assumes Coachella Valley equal to lowest share of 2007-2009Source: Inland Empire Film Commission

Opportunities Exist:

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• Coachella Valley Has Always Been A Hollywood Playground

• Films & Commercials Are Already Shot In the Valley

• Major Venues Already Require Skilled Technicians

• Major Entertainment & Film Related Events Already Take Place

• Relationships With Key Arts & Entertainment Leaders Already Exist

Its Time To Take The Next Step & Seriously Become A Center For the Creative Arts

Economic Base

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts B-•Distribution•Health Care•Retirees•Manufacturing

Logistics Links

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Key Transportation Links

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To East

To Mexico

To East & Mexico

Distribution

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Economic Base

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts B-•Distribution C+•Health Care•Retirees•Manufacturing

Facilities & Medical Staff

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Health Care Employment

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Age Distribution

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Economic Base

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts B-•Distribution C+•Health Care A-•Retirees•Manufacturing

Is the Past … the Future?

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Active Baby Boomer Retirees

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Now This

No Longer Just This

Economic Base

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts B-•Distribution C+•Health Care A-•Retirees A•Manufacturing

Manufacturing JobsBack Below 1997 Level

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Setting Conditions For The Future

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•Construction D-•Hotels & Conventions D•Tourism C+•Tourist Shoppers C-•Agriculture B•Clean Tech C+•Creative Arts B-•Distribution C+•Health Care A-•Retirees A•Manufacturing D-

Over All Grade

C-

Other Key Current Facts …

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Growth Has Slowed

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Academic Performance

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Adult Educational Level

Economic Target: Educational Performance

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What Jobs Grew?

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Largest Employers

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Payroll Released Into Valley

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Crime Per 1,000 Residents

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2010, 2011

When Will “Normal” Start To Return?

x2012

If Mortgages Fixed!

x

x2014-2015

Not

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