Lecture 01 CRE Mkt Overview - Jan 20 09

Lecture 01 CRE Mkt Overview - Jan 20 09 - 1 PPR Haas...

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Unformatted text preview: 1 PPR Haas Property & Portfolio Research, I nc. H aas School of Business / January 2009 Commercial Real Estate Outlook www.ppr.info PP R 2 PPR Haas The Real Economy 3 PPR Haas 50 100 150 200 250 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 0.2 0.4 0.6 0.8 1 1.2 1.4 Median Existing SF Home Price Foreclosure Rate There’s Further to Go in Housing 4 PPR Haas (4%) (3%) (2%) (1%) 0% 1% 2% 3% 4% 75-80 80-85 85-90 90-95 95-00 00-05 2006 2007 2008 YTD 2009 Forecast Sources: PPR; Census Bureau; BLS; Fed; Moody’s Economy.com Contribution to Average Annual Real Retail Sales Growth Real Disposable Income lag 1q 35-54 Year-olds lag 4q Unemployment lag 1q Credit Card Interest lag 2q Real Home Prices lag 2q Other Gale Force Wind in the Consumers Face 2009 Forecast Assumptions: Unemployment: 7.8% Home Prices Drop 16% Credit Card Rates Up 2.5 percentage pts. Prime Spenders : Flat Income Up: 0.6% 5 PPR Haas Stimulus Package #1 Led to Deleveraging… www.howispentmystimulus.com 10.1% 9.9% 9.5% 7.3% 6.1% 5.0% 4.1% 4.0% 4.0% 3.9% 3.4% 3.4% 3.1% 3.1% 3.0% 3.0% 2.8% 2.8% 2.8% 2.2% 2.1% 1.1% 1.0% 0.8% 0.6% 0.5% 0.3% 0% 2% 4% 6% 8% 10% Other Vehicle & Gas Travel & Vacation Debt/Credit Card Home & Garden Invest/Savings Rent/Mortgage Electronics Pets Recreation & Events Health & Medical Sports & Outdoors Entertainment Gifts & Donations Education Apparel Groceries Kids & Toys Utilities Food & Drink Weird Entrepreneurship Services Insurance Movies & Music Books Video Percent of Blog Posts by Category Source: PPR calculations based on www.howispentmystimulus.com, Sept. 08, Dept. of Treasury Vehicle & Gas 9.27 Travel & Vacation 8.88 Debt/Credit Card 6.82 Home & Garden 5.66 Invest/Savings 4.70 Rent/Mortgage 3.80 Electronics 3.73 Pets 3.73 Recreation & Events 3.67 Health & Medical 3.15 Implied Spending ($billions) 6 PPR Haas With Final Demand Going, Businesses Retrench Annual Growth Corporate Profits Business Investment (20%) (10%) 0% 10% 20% 30% 40% 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Sources : Bureau of Economic Analysis; Moody's Economy.com 7 PPR Haas Year-over-Year Change in Unemployment Rate Sept 08 vs. Sept 07 2.84 to 3.70 (1) 1.98 to 2.84 (8) 1.12 to 1.98 (22) 0.26 to 1.12 (15)-0.60 to 0.26 (5) …And Unemployment Rises Faster in Housing Bust Markets Source: BLS, PPR 8 PPR Haas Misery I ndex: James Caan is Having Flashbacks Source: Bureau of Labor Statistics, BEA, Moody’s Economy.com,PPR 2 4 6 8 10 12 14 16 18 20 22 Dec-76 Dec-78 Dec-80 Dec-82 Dec-84 Dec-86 Dec-88 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 Percent Unemployment YOY Change In CPI Misery Index 8% unemployment + 3% inflation = 11% misery at YE 2010 6% unemployment + 5% inflation = 11% misery today 9 PPR Haas Source: Bureau of Economic Analysis Government and Exports Driving Growth Consumption Non-residential Investment Residential Investment Change in Inventories Net Exports Government...
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This note was uploaded on 04/05/2009 for the course UGBA 137 taught by Professor Staff during the Spring '08 term at Berkeley.

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Lecture 01 CRE Mkt Overview - Jan 20 09 - 1 PPR Haas...

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