Guidance for The Movement in the Real Estate Market

2013 California Real Estate Market Outlook.

California Association of Realtors

Written by: Sara Sutachan

Macro-Economic Indicators

Below are the statistics and details that were presented in this section that I thought were interesting:

Gross Domestic Product: Growth is stalling.  In 2012, the economy saw growth at a rate of 2.2%, but in 2013, growth was 2.5%.  That was a .3% increase year after year.  The slide also outlines that in 2009, US economy suffered the largest percentage loss to the GDP at 3.4%.  Sara stated that economists describe a stable economy when it has an annual growth of 2.5% – 4%. Therefore, the economy is growing at a stable pace.

Unemployment is heading down, and it is at its lowest levels since 2008. As of the date of this publication CA was at 8.9% and the US rate was 7.2%.

Slide 7 graph shows that in Jan of 2009 the economy lost 1.3 million jobs.  Of that amount, the economy has recaptured 805,700 jobs, leaving an unemployment deficit of approximately 500,000 jobs to be at the levels we saw in December of 2008, which was the year that is described as the start of the recent recession.

Slide 8 states that the Bay Area is the strongest region in California seeing the highest job growth (1.7%) in nonfarm employment.   The region with the slowest growth was North Central area of CA which saw only a job growth rate of 0.5%.  On average, CA as a whole saw a job growth increase of 1.5%.

Slide 10 segregates the CA job growth by industry.  Construction jobs are the fastest growing segment which saw a growth rate of 4.2%.  The growth in this segment should provide a positive correlation with the real estate industry because construction includes construction of new homes and other types of properties.  What I also found interesting was that the health care industry did not see one of the higher rates of growth.   You would assume with universal health care being offered, the industry would need more employees to handle the increased demand.  Perhaps this segment will be one of the higher growing segments for the 2014 calendar year.

Slide 11 depicts Consumer Confidence slightly lower now than it was at the beginning of the year. Perhaps consumer confidence has been affected by the recent government shut down since many other positive factors have been reflected in the economy this past year.

Slide 12 is their US Economic Forecast for the remainder of the year.  Based on their forecast, 2014 will have positive gains in GDP, job growth, and disposal income as well as a decrease to the national unemployment rate.

Slide 13 is their CA Economic Forecast for the 2013 and 2014 calendar year.   CA residence can expect to see an increase in job growth and disposal income, but decreases to the unemployment rate.  Although we cannot expect to see growth at the same rate as 2013 per the article, what is important to note is that growth is still expected in 2014 and the US and CA economy have been improving since about the First Quarter of 2011. Please remember to view the slides that I am writing about please see the original article that we posted on our web site on Friday, November 15. Thank you for taking the time to read and I hope you found the information useful.