HOUSING AND LABOR MARKET TRENDS: SOUTHERN CALIFORNIA Community Development Research Federal Reserve Bank of San Francisco May 2011
HOUSING AND LABOR MARKET TRENDS: SOUTHERN CALIFORNIA
Community Development ResearchFederal Reserve Bank of San Francisco
May 2011
National Trends
Unemployment dips below 9%
Source: Bureau of Labor Statistics, November 2010
0
2
4
6
8
10
12
Recession
U.S. Unemployment Rate
Une
mpl
oym
entR
ate
Recovery, particularly in labor market, remains elusive
Source: Bureau of Labor Statistics, December 2010
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48
Perc
ent D
eclin
e in
Em
ploy
men
t fro
m P
eak
Months Since Start of Recession to Employment Recovery
1980 1974 1981 1990
2007
Case-Shiller Index shows continued softness in housing market
Source: Case - Shiller Home Price Index
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Case-Shiller National House Price Index(2000 = 100, Quarterly)
FHFA House Price Index Dips Again at End of 2010
FHFA
Hou
se P
rice
Inde
x20
00=
100
Source: Federal Housing Finance Agency (formerly OFHEO), includes refinancing and is not seasonally adjusted
90
100
110
120
130
140
150
160
170
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA (formerly OFHEO) House Price Index (2000=100, quarterly)
Nationally, delinquencies drop in 2010, but still more than 4.5 million homes in distress
Source: Mortgage Bankers Association, National Delinquency Survey
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Num
ber o
f M
ortg
ages
All Mortgages Past Due Loans in Foreclosure
Despite improvement, high rates of delinquency remain concentrated in western and southern states
Source: Lender Processing Service Inc. Applied Analytics, November 2010
HAMP modifications down; borrowers still face challenges in obtaining permanent modifications
Source: HAMP Service Performance Report Through January 2011
0
20,000
40,000
60,000
80,000
100,000
120,000
February March April May June July August September October November December January
Mod
ifica
tions
New HAMP Trials Started New Permanent Modifications Started2011
Composition of distressed sales
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Arizona and
Nevada
California Florida Industrial Midwest
Pacific NW South Northeast Rocky Mountain
Damaged REO Move-In Ready REO Short Sale
Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions, Feb 2011
Neighborhood stabilization: concerns over investor purchases of distressed properties
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Damaged REO
Move-In Ready REO
Short Sale Non-Distressed
Investor
First-Time Homebuyer
Current Homeowner
Perc
ent
of P
rope
rty
Type
Who Is Buying Properties?─February 2011
Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions, Feb 2011
30%
11%
75%20% 55%
2%
19%
14%
5%
4%
5%28%
16% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Current Homeowners
First-Time Homebuyers
Investors
All Other Financing
VA
Fannie/Freddie
FHA
CashPerc
ent
of B
uyer
-Sid
e Tr
ansa
ctio
nsFinancing for home purchases
Source: Campbell/Inside Mortgage Finance HousingPulse Monthly Survey of Real Estate Market Conditions, Feb 2011
Many states within 12th District face severe budget shortfalls
Total End-of-Year Shortfall as Percentage of 2010 Budget
Source: Data from Center for Budget and Policy Priorities
California Trends
California’s unemployment still well above national average
Source: Bureau of Labor Statistics
0
2
4
6
8
10
12
14
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Recession
Une
mpl
oym
ent R
ate
United States
California
Unemployment rates particularly high in Central Valley and northern counties
Source: Bureau of Labor Statistics, February 2011
California house prices appear to be stabilizing
Source: Federal Housing Finance Agency (formerly OFHEO)
FHFA
Hou
se P
rice
Inde
x20
00=
100
90
110
130
150
170
190
210
230
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA (formerly OFHEO) House Price Index(2000=100, quarterly)
California
United States
Source: Federal Housing Finance Agency (formerly OFHEO)
FHFA
Hou
se P
rice
Inde
x20
00=
100
Southern California MSA house prices seem to be stabilizing
90
110
130
150
170
190
210
230
250
270
290
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA House Price Index: Southern California(2000 = 100, quarterly)
San Diego
Inland Empire
Los Angeles
Number of delinquent mortgages and properties in foreclosure dropped throughout 2010
Source: Mortgage Bankers Association, National Delinquency Survey
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2005 2006 2007 2008 2009 2010
Num
ber o
f M
ortg
ages
Loans in Foreclosure All Mortgages Past Due
Data Maps
Southern California Data Maps
Source: Lender Processing Services Inc. Applied Analytics
Areas Affected by Concentrated ForeclosuresFebruary 2011
Northern California Data Maps
Source: Lender Processing Services Inc. Applied Analytics
Areas At Risk of Additional ForeclosuresFebruary 2011
Southern California Data Maps
Source: CoreLogic Home Price Index and FRBSF CD Calculations
Changes in House Prices Since 2007 PeakFebruary 2011
Conclusions
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