e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]According to the Construction Industry Research Board, new homebuilding activity in California continued to tumble in September. Permits were issued for 4,364 units during the month, down by -32.4% from last year. The 9-month total was 51,378 units, which was -44.1% below last year. The CIRB estimated the annual rate at 66,000 units for 2008, a decline of -41.6% from the 2007 level. This would be the lowest total on record.
Around Southern California, the news wasn’t any better. In Los Angeles County, permits were issued for 935 units during the month, while the 9-month total stood at 10,218 units, down by -37.2% from last year. In Orange County 284 housing unit permits were issued in September, and its 9-month total of 2,705 units was -51.7% below 2007. In the Riverside-San Bernardino area, 489 housing unit permits were issued in September, while the 9-month total was 7,394 units, -58.0% below last year.
San Diego County saw 203 permits issued in September, and its 9-month total of 4,454 units was -24.0% below the comparable 2007 total. Ventura County saw just 22 permits issued during September. The 9-month total of 699 units was -51.9% behind 2007. (Jack Kyser)
The September numbers from the California Association of Realtors made for an interesting read. Unit sales in the state (at a seasonally adjusted annual rate) were up over the year by +96.7%, and moved over the 500,000 unit mark for the first time in over two years. CAR’s unsold inventory index was 6.5 months compared with 16 months a year ago.
In Los Angeles County, the median price in September was $376,790, down over the year by -35.3%. Orange County recorded a decline of -27.9% to a median of $498,640. The Riverside-San Bernardino area’s median home price declined sharply, falling by -39.3% in September to $217,730. San Diego County’s price was down by -33.4% to $373,620. Ventura County recorded a decline of -36.7% to $431,770. (Jack Kyser)
PR: http://www.car.org/newsstand/newsreleases/septembersalesandpricereport/?view=Standard
The nonresidential permit values in Southern California through September were down over the year, with a couple of exceptions. In Los Angeles County, the 9-month total for office was down over the year by -16.7%. However, industrial was up by +16.2%, while retail was ahead by +13.2%. Hotel permit values in the County were up a whopping +160.1%, thanks to LA Live and the W Hotel project in Hollywood. In Orange County, the news wasn’t so cheery. All four major sectors were down over the comparable 2007 period; industrial (-65.6); office (-50.8%); retail (-54.9%); and hotels (-76.5%).
In Riverside County through September, it was almost all down: industrial (-61.8%); office (-32.6%); and retail (-7.0%). Permits for $31.0 million for hotels were issued compared with none last year. In San Bernardino County, all sectors were down: industrial (-59.1%); office (-72.2%); retail (-22.9%); and hotels (-68.0%).
San Diego County’s totals were down with one exception. Hotel permits values through September were up by +108.4% (the Hilton at the Convention Center). Industrial permits were down by -39.2%, office was off by -38.2% and retail was behind by just -1.6%. Ventura County was a mixed picture. Industrial was down by -80.7%, while office was off by -41.5%. However, retail was ahead by +45.1%. No permits have been issued so far for hotels in the County. (Jack Kyser)
Grubb & Ellis Research Services recently released the industrial market vacancy rates for third quarter 2008. The numbers were up across Southern California as the economy continued to deteriorate, demand for imports declined, and transportation costs soared. Companies have consolidated and were putting large blocks of sublease space back on the market as they delayed hiring and expansion plans until the economic situation gets better. Markets close to the ports, rail yards, and airports have the best outlook.
The industrial vacancy rate in Los Angeles County during the third quarter of 2008 was still quite low at 2.3%, up slightly from second quarter 2008 vacancy rate of 1.8% and the comparable period a year ago of 1.6%. L.A. County’s industrial vacancy rate, though considered very tight, has been on the rise for the past three quarters. Within L.A. County, the Central/Downtown area had the lowest vacancy rate at 1.8%, up from third quarter 2007 of 0.7%. The South Bay area had the second lowest industrial vacancy rate at 2.4%, up from third quarter 2007 of 1.8%. Faced with higher transportation costs, firms are opting to be closer to ports and airports.
Orange County’s third quarter industrial vacancy rate increased a bit to 4.6% from 4.5% the previous quarter and from 4.0% the same period a year ago. The Riverside-San Bernardino area’s third quarter industrial vacancy rate shot up to 8.6% from 7.9% the previous quarter and from 4.9% the same period in 2007. San Diego County’s industrial vacancy rate increased a tad to 7.1%, up from 7.0% the previous quarter. However, it actually declined from 7.5% in third quarter 2007. It’s proximity to Mexico’s border and limited future development makes San Diego a good long-term prospect for industrial users looking to expand. (Candice Flor Hynek)
PR: http://grubb-ellis.com/Research/Reports.aspx
California was the nation’s third highest state in foreclosure activity during the third quarter of 2008, according to a report released by RealtyTrac. A total of 210,845 properties—more than 27% of the nation’s foreclosure activity—were at some stage of the foreclosure process in California. The third quarter total was up by +4.0% from second quarter 2008, and was significantly higher (+122.5%) than third quarter 2007. Of these, 97,894 were notices of default (NOD) and 85,066 were Real Estate Owned (REO). The number of NODs in California fell by more than -50% in September 2008 from the previous month due to a new law which went into effect early in September. The new law requires lenders to make contact with the borrowers in default at least 30 days before filing a notice of default.
Southern California’s metro areas remained among the top 20 metro areas in the nation with high foreclosure activity during the third quarter of 2008. Within Southern California, the Riverside-San Bernardino area posted the highest foreclosure activity and took the number three spot in the nation, behind Stockton, CA and Las Vegas/Paradise, NV. It had a total of 43,294 properties in some stage of foreclosure, representing 3.1% of total housing units. This was down by -0.7% from second quarter 2008 but up sharply by +109.5% from same period in 2007. San Diego County (#12) had a total of 17,273 properties in some stage of foreclosure (1.5% of total housing units). This was down by -0.4% from the previous quarter, but up by +139.0% from third quarter 2007. Ventura County (#15) posted a total of 3,785 properties in some stage of foreclosure (1.4% of total housing units). This was up by +19.1% from second quarter 2008, and by +176.1% from third quarter 2007. Orange County (#17) had a total of 12,331 properties in some stage of foreclosure (1.2% of total housing units). This was down by -0.9% from the previous quarter, but up sharply by +187.1% from the comparable period of 2007; and Los Angeles County (#18) had a total of 40,096 properties in some stage of foreclosure (1.2% of total housing units). This was up by 8.5% from the previous quarter, and by +122.2% from third quarter of 2007.
With the dim economic outlook and increasing unemployment rates, foreclosure activity in the remainder of the year will more than likely be the same story or even worse. The excess supply of unsold homes and rising foreclosure rates will continue to drag home values further south, unfortunately. (Candice Flor Hynek)
PR: http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=5299&accnt=64847
Tuesday, October 28: Milken Institute State of the State Conference
The Milken Institute’s 10th Annual State of the State Conference brings together California’s leading lawmakers, senior business executives, investors, academic experts, journalists and other decision-makers for an extraordinary day of discussion, debate and analysis about the state’s future. The conference will be held at Beverly Hilton Hotel, Beverly Hills, CA.
Friday, November 14: San Gabriel Valley Economic Partnership: Economic Outlook Breakfast
Join us for breakfast and a forecast update on the state, regional and local economies. Followed by a real estate forecast: Where are we? What lies ahead? Speakers: Jack Kyser, Senior Vice President & Chief Economist and Nancy D. Sidhu, Vice President and Senior Economist, Los Angeles County Economic Development Corporation, and Steve Johnson, Director, Metrostudy's Southern California Region.
Tickets Now Available! Monday, November 17: The LAEDC 13th Annual Eddy Awards®
The Eddy Awards® is a cocktail, dinner, and awards gala to support fulfillment of the LAEDC mission to attract, retain, and grow businesses and jobs for the regions of Los Angeles County. The Awards were introduced by the LAEDC in 1996 to celebrate individuals, organizations, and now cities that demonstrate exceptional contributions to positive economic development in the region. Honorees: The Walt Disney Company, and Rick Caruso, developer of The Grove and the Americana.
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