National and Local Economic Outlook

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National and LocalEconomic Outlook

• Alan Gin
• Associate Professor of Economics
• School of Business Administration

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National Economy in a Severe Recession
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Tight credit markets
Problems with financial institutions
Foreclosures
Falling housing prices
Plunge in stock prices
Loss of real estate related jobs
Glut in housing market
Job losses, economy in recession
Weak housing demand
Slow auto, retail sales
Fiscal problems for governments
High gas prices
Imports
Exports
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Economic Policy

• Stimulus package
• Tax cuts and credits
• Aid to the poor
• Spending on infrastructure and targeted areas
• Relief for state governments

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Economic Policy

• Aid to the housing market
• Relief for homeowners in difficulty
• Tax credit for first-time homebuyers
• More aid to financial institutions to free up
  credit TARP, TALF
• Huge deficits, big expansion in national debt

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Fed aggressive with interest rates
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National Economic Outlook

• Continued negative GDP growth through the first
  two quarters of 2009
• Pickup in housing market and various Federal
  actions with stabilize economy in second half of
  2009
• Growth still negative for the year as a whole
• Slow growth of 1.0 - 1.5 expected in 2010

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San Diego Economic Outlook
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Down 35 of the last 36 Months
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Total Job Loss 44,500
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Outlook for San Diego

• Local economy to remain weak
• Job growth negative in 2009, slightly positive in
  2010
• Unemployment to top 10
• Slow economic activity (retail sales, income
  growth)
• Much depends on various federal actions

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Real Estate Market Outlook
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Real Estate Market Outlook

• Housing market not likely to bottom out until
  late 2009 at the earliest
• Sales picking up with lower prices and low
  interest rates

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Real Estate Market Outlook

• Housing market not likely to bottom out until
  late 2009 at the earliest
• Sales picking up with lower prices and low
  interest rates
• Foreclosures to remain at high levels

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Real Estate Market Outlook

• Housing market not likely to bottom out until
  late 2009 at the earliest
• Sales picking up with lower prices and low
  interest rates
• Foreclosures to remain at high levels
• Continued downward pressure on prices

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Real Estate Market Outlook

• Housing market not likely to bottom out until
  late 2009 at the earliest
• Sales picking up with lower prices and low
  interest rates
• Foreclosures to remain at high levels
• Continued downward pressure on prices
• Supply getting tighter

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Real Estate Market Outlook

• Housing market not likely to bottom out until
  late 2009 at the earliest
• Sales picking up with lower prices and low
  interest rates
• Foreclosures to remain at high levels
• Continued downward pressure on prices
• Supply getting tighter
• Problems in commercial real estate could be the
  next trouble area

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May you live in interesting times. - Chinese
Curse