v.20 n.13 – Released March 29, 2016
This Week’s Headlines:
- SoCal Home Sales and Median Prices in February
- U.S. Personal Income and Spending in February
- Events of Interest
- May 10, 2016: San Gabriel Valley Economic Outlook
- June 16-17, 2016: Select L.A. International Investment Summit
Home sales in Southern California accelerated over the year in February, rising by 9.1% to $15,373 units (new and resale houses and condominiums). Sales last month were the highest for a February since 2013, but were still below the February average of 17,307 units observed since 1988. Over the month, sales rose by 5.1% – substantially higher than the average January to February increase of 0.9%. So far this year, home sales are off to a stronger start than last year, but remain below the norm. Low mortgage interest rates along with employment and population growth are driving housing demand, but would be buyers continue to struggle with rising prices, low inventory and credit challenges.
The median price across Southern California rose more slowly last month, increasing by 3.7% over the year (to $430,000) after posting a gain 6.7% in January. Over the month, prices dipped by 0.5%. The median price has now risen on a year-over-year basis for 47 consecutive months but remains 15.9% below the peak median of $505,000 reached in mid-2007.
High demand and a lack of inventory are fueling price gains, but the composition of sales also has an effect. The share of homes priced above $500,000 was 39.1% in February, up from 36.6% a year ago and the number of homes sold for $500,000 or more was up by 16.8%. Meanwhile, home sales in the more affordable price ranges (below $500,000) rose only moderately, increasing by 5.1%. (Kimberly Ritter-Martinez)
Total personal income in the U.S. increased in February by 0.2% or $23.7 billion on a nominal basis. Wages and salaries, however, which make up a little over half of personal income, declined by 0.1%. Meanwhile, government transfers (Social Security, unemployment, Medicare, Medicaid and veterans’ benefits) rose by 0.3%.
Real disposable income (adjusted for taxes and inflation) increased by 0.3% matching the increases (revised) in January and December.
Real personal consumption expenditures rose by 0.2% after remaining unchanged in January. Real spending on goods fell by 0.1% to $3.9 billion, the third consecutive monthly decline. Spending on services, which comprises about 65% of consumer spending, increased by 0.3% to $7.5 billion.
On a year-to-year basis, incomes and spending accelerated slightly in February:
- Real disposable income rose by 2.7% after posting a 2.6% increase in January
- Real personal consumption expenditures accelerated from 2.6% in January to 2.8% last month.
- There is a clear divide between the service side of the economy and the goods-producing side. Growth in real spending on goods (3.3%) outpaced spending on services (2.5%), but in dollar terms, Americans spend more than two times as much on services as they do goods.
Consumer prices edged lower over the month in February (-0.1%) but were up over the year by 1.0%. Excluding food and energy, prices advanced by 1.7%.
Income gains are holding firm, although there were some significant downward revisions to the January numbers. February was one more month in a two-year stream of monthly personal income gains. The decline in wages and salaries was offset by higher transfer payments, interest income and rental income, and is likely transitory. Solid job creation and tighter labor markets all point to stronger wage gains this year. (Kimberly Ritter-Martinez)
Source: U.S. Bureau of Economic Analysis
May 10, 2016: San Gabriel Valley Economic Outlook
Pacific Palms Resort & Conference Center: 1 Industry Hills Parkway, City of Industry, CA
Success in the 21st century requires having up-to-date data. The San Gabriel Valley Economic Partnership presents the only study specifically about the economy of the San Gabriel Valley, compiled by the Kyser Center for Economic Research, one of the most renowned economic research facilities in the nation. This special report provides the information business and community leaders need to understand opportunities for investment, business expansion, job creation and how to avoid pitfalls.
This is your opportunity to get the data first hand and ask questions of Economist Kimbery Ritter-Martinez and State Treasurer John Chiang.
June 16-17, 2016: Select L.A. International Investment Summit
JW Marriott at LA Live: 900 West Olympic Blvd., Los Angeles, CA 90015
The 2016 SELECT LA Investment Summit is Southern California’s premier international trade event that brings together global investors with business and governmental leaders from Southern California to facilitate and secure foreign direct investment (FDI), and gain exclusive insights on market trends and opportunities in the Los Angeles region.
SELECT LA offers the perfect environment to create and foster new relationships with individuals who are responsible for turning a conversation into an investment opportunity. Just as important is understanding the local processes and protocol for a diverse array of industries and verticals. World Trade Center Los Angeles will facilitate the conference and present many ways to get in the mix, such as table exhibits, one-on-one interactions, seminars and panels led by local and international innovators and executives.