Los Angeles-Long Beach-Santa Ana Area Metro Market Report, First Quarter 2009
Today's Market…
Median Price (Red Line) and One-year Price Growth
40% 30% 20% 10% 0% -10% -20% -30% -40%
2002 Q1 Q3 2003 Q1 Q3 2004 Q1 Q3 2005 Q1 Q3 2006 - Q1 Q3 2007 - Q1 Q3 2008 Q1 Q3 2009 Q1
1,000s $700 $600 $500 $400 $300 $200 $100 $0
Los Angeles
Price Activity
Current Median Home Price (2009 - Q1) 1-year Appreciation (2009 - Q1) 3-year Appreciation (2009 - Q1) 3-year (12-quarter) Housing Equity Gain 7-year (28 q) Housing Equity Gain 9-year (36 q) Housing Equity Gain
U.S.
$167,633 $167 633 -8.8% -22.7% -$49,267 -$31,367 $633
Local Trend
The decline has wiped out most of the equity gained during the housing boom The decline has wiped out most of the equity gained during the housing boom
$303,500 $303 500 -34.1% -46.2% -$260,400 -$148,900 $12,100
100% 80% 60% 40% 20% 0% -20% -40%
2002 Q1
State Home Sales (Red Line) and Sales Growth
1,000s 700 600 500 400 300 200 100 0
Q3
2003 Q1
Q3
2004 Q1
Q3
2005 Q1
Q3
2006 - Q1
Q3
2007 Q1
Q3
2008 Q1
Q3
2009 Q1
Home Sales and Construction Growth *State Existing Home Sales (2009 - Q1)
California 80.6%
U.S.
-8.2% Stablizing
*versus same quarter, year-ago
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Local Supply and Demand…
Local Economic Outlook 1-year Job Additions (2009 - ) 3-year Job Additions (2009 - ) State Economic Activity Index 12-month change (2009 - ) 36-month change (2009 - )
Los Angeles -219,800 -213,500 California -4.4% -0.8%
U.S.
Not Comparable Not Comparable Weak for this market and could impact demand
U.S.
-2.8% 1.6% Contracting faster than the rest of the nation
Local Fundamentals 1-year (12 month) Job Growth Rate 3-year (36 month) Job Growth Rate 1-year Job Gain to New Single-Family Homes
3-year Job Gain to New Single-Family Homes
Los Angeles -3.9% -3.8% -16.7 -3.2 -49.3%
U.S.
-1.3% 1.2% 0.0 7.5 -41.6% Weak compared to other markets Weaker than most metro areas Weak compared to the national average Weak compared to the nation Important to reduce supply
** Single-Family Housing Permits (2009 - )
**Rolling 12-month sum vs. a year ago
Affordability - Local Mortgage Servicing Cost-to-Income
(Historical Average Shown in Red Dashed Line)
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
Monthly Mortgage Payment to Income
Ratio for all of 2008 Ratio for 2009 - Q1 Historical Local Average
Los Angeles 29.7% 19.4% 29.3%
U.S.
20.7% 17.7% 23.2% Weak affordability Improving and historically strong Weak relative to the nation
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Recent Trend ‐ Local Mortgage Servicing Cost to Income
40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2007 - Q4 2008 - Q1 2008 - Q2 2008 - Q3 2008 - Q4 2009 - Q1
(Historical Average Shown in Red Dashed Line)
Median Home Price to Income
Ratio for 2008 Historical Local Average
Los Angeles 9.3 9.1
U.S.
7.2 7.2 Weak Relative to Local History Weak Compared to Nation Average
Ratio of Local Median Home Price to Local Average Income
(Historical Average shown in Red Dashed Line)
16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
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Looking Deeper….
State Total Foreclosure Rate vs. U.S Average
(U.S. Average in Red Dashed Line)
4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
Source: Mortgage Bankers' Association
Monthly Market Data - February 2009 PRIME Market Share SUBPRIME and Alt-A Market Share TOTAL Foreclosure + REO Rate TOTAL Foreclosure + REO Rate (same period, 1year earlier ) SUBPRIME Foreclosure + REO Rate SUBPRIME Foreclosure + REO Rate (same period, 1- year earlier) ALT-A Foreclosure + REO Rate ALT-A Foreclosure + REO Rate (same period, 1year earlier)
Los Angeles 84.6% 15.4% 1.4% 0.5% 11.3% 7.5% 7.8% 3.1%
U.S.
84.5% 15.5% 1.7% 0.8% 14.6% 11.6% 12.1% 5.5% Lower subprime exposure than average Strong Compared to the Nation There has been a large local increase versus a year ago Compared to the nationional average, today's local rate is low There has been a large local increase versus a year ago Locally, today's foreclosure rate is low relative to the nationional average A large local increase occurred compared to a year ago Today's local rate is low compared to the national average
Monthly Foreclosure data provided by First American CoreLogic, LoanPerformance data
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The Mortgage Market
30-year Fixed Mortgage Rate and Treasury Bond
8.0 7.0 6.0 5.0 4.0 3.0 2.0
Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
3.00 2.50 2.00 1.50 1.00 0.50 0.00
Spread (right axis)
30-Year FRM
10-Year Treasury Bond
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