IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
1 canyon lake
1. It’s The Economy,
Stupid
January 25, 2012
With your host…
Gene Wunderlich
2. 2011: A Year of Economic Wild Cards
Political
Change
on
Oil Price Spikes Capitol
Hill
Arab Spring
Sovereign
Debt
Crisis in
EuroZone
Debt Limit
Stock
Ceiling & Market
Downgrade Volatility
of US Debt
5. Economy
Government's view of the economy could be
summed up in a few short phrases: If it moves,
tax it. If it keeps moving, regulate it. And if it
stops moving, subsidize it.
Ronald Reagan
American President
7. Consumer Confidence?
Highest Since April
November 2011: 64.5
Overall, 62 percent of those
160 surveyed say they’re optimistic
INDEX,
about what 2012 will bring for the
100=1985 country, according to the
140
Associated Press-GfK survey. And
for themselves and their families,
120 Americans are even more positive,
with 78 percent telling pollsters
100 they are personally hopeful about
the year ahead.
80
60
40
20
Jul-00
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Jul-11
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
9. Unemployment Stubbornly High
November 2011
California (11.3%) vs. United States (8.6%)
14%
CA US
12%
10%
8%
6%
4%
2%
0%
Jan-00
Jan-11
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
SOURCE: CA Employment Development Division
10. Total Payroll Jobs in the U.S.
(same as in 2000, but with 30 million more people)
11. How Many Years to Get Job
Market Back to Normal?
Jobs added per month Assumed new jobs How many years?
needed for growing
population per month
100,000 100,000 Treading water and
never back to normal
200,000 100,000 6.3 years
300,000 100,000 3.2 years
400,000 100,000 2.1 years
12. Housing
The housing market will get
worse before it gets better.
James Wilson
American Politician
(1742 – 1798)
15. Sales of Existing Detached Homes: California
October 2011 Sales: 493,240 Units, Up 1.1% YTD, Up 8.5% YTY
UNITS Sales Consumer Confidence INDEX
700,000 160
600,000 140
120
500,000
100
400,000
80
300,000
60
200,000
40
100,000 20
0 0
Jul-11
Jul-00
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Jan-11
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
*Sales are seasonally adjusted and annualized
SOURCE: The Conference Board
16. Median Price of Existing Detached Homes
California, October 2011: $278,060, Down 8.9% YTY
$700,000 P: May-07
$594,530
$600,000
$500,000
T: Feb-09
$245,230
$400,000 -59% from
peak
$300,000
$200,000
$100,000
$0
Jul-00
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jul-10
Jul-11
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
SOURCE: California
Association of REALTORS®
17. California Sales of Existing Homes
and Median Price
Housing Cycle Comparisons 1970- 2011
Sales of Existing Detached Homes Median Price
UNITS/MEDIAN PRICE $
700,000
-44%
600,000
500,000
-61% -25%
400,000
300,000
200,000
100,000
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
California Association of REALTORS®
18. Canyon Lake Median Price
$800,000
$696,385
$700,000
$600,000
$500,000
Peak to trough
-77% in 24 months
$400,000
$300,000
$200,000
$158,489
$100,000
$0
3/04
9/04
3/05
9/05
3/06
9/06
3/07
9/07
3/08
9/08
3/09
9/09
3/10
9/10
3/11
19. California vs. U.S. Median Price
US Median Price CA Median Price
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
California Association of REALTORS®
23. Compelling Affordability
Monthly Mortgage to buy a Median Priced Home
2005 Q2 2011 Q2
San Diego $ 2,833 $ 1,564
Miami $ 1,726 $ 853
Milwaukee $ 1,014 $ 797
Kansas City $ 735 $ 600
24. CA New Housing Permits:
Opportunity
300,000
Single Family Multi-Family
250,000
Average 1988-09: 138,000
200,000
150,000
100,000
50,000
0
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2009: 36,200 2010: 39,000 2011: ??
SOURCE: CBIA. Forecast: C.A. R.
25. CA Underwater Mortgages:
Reverse Wealth Effect
Negative Equity Share in CA Near Negative Equity Share in CA
40%
35%
30.2%
30%
25%
20%
15%
10%
4.6%
5%
0%
Q4-2009
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
26. Proportion of Sellers
Planning to Repurchase
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. Is the seller planning on purchasing another home?
California Association of REALTORS®
27. Sellers with a Net Cash Loss
35%
30%
25%
21.8%
20%
Long Run Average = 11.2%
15%
10%
5%
0%
2008
2011
2000
2001
2002
2003
2004
2005
2006
2007
2009
2010
What was the net cash gain or net loss to the seller as a result of this sale?
California Association of REALTORS®
28. Net Cash to Sellers
Median
$250,000
$200,000
$150,000
$100,000 $75,000
$50,000
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Q. What was the net cash gain or net loss to the seller as a result of this sale?
California Association of REALTORS®
29. 8 in 10 Americans (STILL) Agree:
Buying a Home is the Best Investment One Can Make
SOURCE: Pew Research Center’s “Home Sweet Home. Still. Five Years After the Bubble Burst”
30. Direction of Home Prices:
Sellers Skeptical/Buyers Hopeful
Down Flat Unsure Up
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Sellers Buyers
California Association of REALTORS®
34. 60
Canyon Lake
Sales by Price Break
50
Least expensive: $30,000 on Lake Drive
Most expensive: $2,999,000 on San Joaquin
40
30
20
Price point in 2006
10
0
<100 100-200 200-300 300-400 400-500 500-600 600-700 700-800 800-900 900-1,000 1,000+
Active Pending Sold
Data courtesy of CRMLS
36. 2012 Preview : State
Accelerated 3% withholding
4% flat tax – including services
Point of sale mandates
Mortgage interest deduction
40+ ballot propositions
Taxes, taxes, Texas
37. Federal Issues – Critical Concerns
• High-cost Loan Limits - expired 10/1/11 (except
FHA)
• Future of Fannie and Freddie? FHA?
• Tax Reform on the horizon
Mortgage Interest Deduction?
Capital Gains?
• QRM (Qualified Residential Mortgage) 20% Down
Is the future of the 30 year mortgage in doubt?
38. 2012 – What’s Ahead
• Stable to increasing home sales
• Stable median price
• Declining inventory of resale homes
• Rising rents
• Lack of new home inventory
• Compelling affordability
• Record low interest rates
Pent up demand
39. It’s Time To Buy Again
“Forget stocks. Don't bet on
gold. After four years of
plunging home prices, the
most attractive asset class
in America is housing.”
SOURCE: “Real estate: It’s time to buy again”
Fortune Magazine’s 3/28/11 article written by Shawn Tully