THE NATIONAL ECONOMY DISRUPTIVE EPIDEMICS AND THE U.S. ECONOMY U.S. - - PowerPoint PPT Presentation

▶
the national economy disruptive epidemics and the u s
SMART_READER_LITE
LIVE PREVIEW

THE NATIONAL ECONOMY DISRUPTIVE EPIDEMICS AND THE U.S. ECONOMY U.S. - - PowerPoint PPT Presentation

Oct 29, 2022 381 likes •956 views

THE NATIONAL ECONOMY DISRUPTIVE EPIDEMICS AND THE U.S. ECONOMY U.S. Annual GDP Growth and Epidemic Deaths 1910 - 2020 20% Polio (1916) 7,000 deaths Polio (1946-52) London Flu (1972-73) 7,710 deaths 1,072 deaths 15% Swine Flu SARS

slide-1
SLIDE 1
slide-2
SLIDE 2

THE NATIONAL ECONOMY

slide-3
SLIDE 3

DISRUPTIVE EPIDEMICS AND THE U.S. ECONOMY

U.S. Annual GDP Growth and Epidemic Deaths 1910 - 2020

*estimated Source: Bureau of Economic Analysis, CDC, University of Groningen, Delta Associates; October 2020.

  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 20%

1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020*

Asian Flu (1957-58) 116,000 deaths London Flu (1972-73) 1,072 deaths Hong Kong Flu (1968-69) 100,000 deaths Polio (1916) 7,000 deaths Spanish Flu (1918-19) 675,000 deaths Polio (1946-52) 7,710 deaths SARS (2002-03) 0 deaths Ebola (2014-15) 2 deaths COVID-19 (2020-) 220,000+ deaths Swine Flu (2009-10) 7,000 deaths

slide-4
SLIDE 4

QUARTERLY GDP PERCENT CHANGE

United States

Note: Seasonally adjusted at annual rates; change in chained 2012 dollars. Source: Bureau of Economic Analysis, Delta Associates; October 2020.

  • 35%
  • 30%
  • 25%
  • 20%
  • 15%
  • 10%
  • 5%

0% 5% 10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

20-Year Average = 2.0% Q2 2020 = -31.4%

slide-5
SLIDE 5

INITIAL UNEMPLOYMENT CLAIMS

United States | Four-Week Moving Average in Millions

Note: Data are seasonally adjusted. Source: Federal Reserve Bank of St. Louis, Delta Associates; October 2020.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Millions

Peak (Week of 3/28/09) = 659,250

Great Recession

Expansion Period

Peak (Week of 03/28/20) = 5,790,250 (Week of 10/10/20) = 866,250

COVID-19 Recession

slide-6
SLIDE 6

PAYROLL JOB GROWTH

United States | Monthly in Thousands

Note: Data is seasonally adjusted. Source: Bureau of Labor Statistics, Delta Associates; October 2020.

  • 1,400
  • 1,000
  • 600
  • 200

200 600 1,000 1,400 1,800 2,200 2,600 08 09 10 11 12 13 14 15 16 17 18 19 20

Great Recession

Monthly Avg. = -383,000

Expansion Period

September 2020

= 661,000

Monthly Avg. = 168,000

  • Mar. 2020

= -701,000

Apr 2020

= -20,537,000

COVID-19 Recession

slide-7
SLIDE 7

THE WASHINGTON ECONOMY

slide-8
SLIDE 8

PAYROLL JOB GROWTH

Selected Large Metro Areas | 12 Months Ending August 2020

Source: Bureau of Labor Statistics, Delta Associates; October 2020.

  • 201.4
  • 1,400
  • 1,200
  • 1,000
  • 800
  • 600
  • 400
  • 200

Denver Phx Atl DFW Hou Was South FL Bos Chi SF Bay LA Basin NY

NET CHANGE IN EMPLOYMENT (THOUSANDS)

slide-9
SLIDE 9

UNEMPLOYMENT RATE

Selected Large Metro Areas | August 2019 vs. August 2020

Source: Bureau of Labor Statistics, Delta Associates; October 2020.

0% 2% 4% 6% 8% 10% 12% 14% 16% Phx Atl DFW Was Den Hou S Fla SF Bay Bos Chi NY LA August 2019 August 2020 Basis Point Change +1,070 +910 +790 +820 +620 +550 +390 +440 +370 +280 +280 +170

National Rate

8. 8.5% 5% 3. 3.8% 8%

slide-10
SLIDE 10

PAYROLL JOB GROWTH

Washington Metro Area

Source: Bureau of Labor Statistics, George Mason University Center for Regional Analysis, Delta Associates; October 2020.

  • 160
  • 140
  • 120
  • 100
  • 80
  • 60
  • 40
  • 20

20 40 60 80 100 120 140 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 District

  • Sub. MD
  • No. Virginia

20-Year Annual Average = 37,600/Year 3-Year Projected Avg = 12,000/Year

THOUSANDS OF NEW PAYROLL JOBS (ANNUAL AVERAGE)

slide-11
SLIDE 11

PAYROLL JOB GROWTH

Washington Metro Area | 12 Months Ending August 2020

Source: Bureau of Labor Statistics, Delta Associates; October 2020.

  • 120,000
  • 100,000
  • 80,000
  • 60,000
  • 40,000
  • 20,000

20,000 Leisure/Hospitality Education/Health Professional/Business Services Retail Trade State and Local Government Transportation/Utilities Other Services Financial Activities Information Manufacturing Construction/Mining Wholesale Trade Federal Government

12,500

  • 213,900

JOB CHANGE

slide-12
SLIDE 12

COVID-19 RELATIVE ECONOMIC IMPACT BY SECTOR

Washington Metro Area

Note: Primary demand sources for Class A multifamily units, office, and for-sale housing highlighted in orange. Source: Delta Associates; October 2020.

Short Low

Medium

High D U R A T I O N S E V E R I T Y

Leisure/Hospitality

Medium Long

Retail Trade Construction/Mining Manufacturing Transportation/Utilities Other Services Wholesale Trade Information Education/Health Services Professional/Business Services Financial Activities State/Local Govt. Federal Govt.

slide-13
SLIDE 13

COVID-19 RELATIVE ECONOMIC IMPACT BY SECTOR

Washington Metro Area

Note: Primary demand sources for multifamily units highlighted in blue. Source: Delta Associates; October 2020.

Short Low

Medium

High D U R A T I O N S E V E R I T Y

Leisure/Hospitality

Medium Long

Retail Trade Construction/Mining Manufacturing Transportation/Utilities Other Services Wholesale Trade Information Education/Health Services Professional/Business Services Financial Activities State/Local Govt. Federal Govt.

slide-14
SLIDE 14

MARKET RESILIENCE INDEX

30 Largest Metropolitan Statistical Areas

Source: Delta Associates; October 2020.

10 20 30 40 50 60 70 80 90 100 Austin Washington San Antonio Boston Houston Pittsburgh Baltimore Dallas/Fort Worth Minneapolis San Diego

  • St. Louis

Denver Seattle Cincinatti Orlando Phoenix New York Chicago Miami/Ft. Laud. San Francisco Charlotte Atlanta Philadelphia Portland Los Angeles Tampa Sacramento Las Vegas Detroit Inland Empire

  • Avg. = 50.0

VERY HIGH HIGH MEDIUM LOW

slide-15
SLIDE 15

THE WASHINGTON METRO AREA APARTMENT MARKET

slide-16
SLIDE 16

LARGET APARTMENT MARKETS

Selected Metro Areas | 2018

Source: U.S. Census Bureau, Delta Associates; October 2020.

500 1,000 1,500 2,000 2,500 3,000

NY LA Basin Chi SF Bay DFW Hou Wash So FL Bos Atl

U N I T S ( T H O U S A N D S )

561

slide-17
SLIDE 17

ANNUAL CLASS A APARTMENT ABSORPTION AND DELIVERIES

Washington Metro Area

Note: Shaded bars represent recession periods. Source: Delta Associates; October 2020.

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Absorption Deliveries Average Absorption Average Deliveries

Expansion Period Average = 9,054 Expansion Period Average = 8,001

slide-18
SLIDE 18

CLASS A APARTMENT ABSORPTION

Top 10 Submarkets in Washington Metro Area | 12 Mo. Ending September 2020

Source: Delta Associates; October 2020.

200 400 600 800 1,000 1,200 U N I T S

slide-19
SLIDE 19

ABSORPTION PACE

Class A Projects in Initial Lease-Up | Washington Metro Area

Source: Delta Associates; October 2020.

15 25 35 45 55 65 75 85 2 4 6 8 10 12 14 16 18 20 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/20 Absorption Pace Number of Projects U N I T S P E R P R O J E C T P E R M O N T H N U M B E R O F P R O J E C T S I N A C T I V E L E A S E U P

slide-20
SLIDE 20

STABILIZED APARTMENT VACANCY RATES

Major Apartment Markets | Third Quarter 2020

Source: Axiometrics, Delta Associates; October 2020.

0% 1% 2% 3% 4% 5% 6% LA Phi NY Wash Phx Balt Atl Chi DFW Hou

National Vacancy Rate = 4.9%

4.5% VA C A N C Y R AT E ( A L L C L A S S E S )

slide-21
SLIDE 21

ANNUAL EFFECTIVE RENT GROWTH

Class A Apartments | Washington Metro Area | 2007 - 2020

Source: Delta Associates; October 2020.

  • 8%
  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

*12 months ending September 2020.

Long-Term Average Rent Growth = 3.5%

slide-22
SLIDE 22

PROJECTS CURRENTLY UNDER CONSTRUCTION

District of Columbia

Source: Delta Associates; October 2020.

Not Yet Leasing In Lease-up

slide-23
SLIDE 23

36-MONTH APARTMENT DEVELOPMENT PIPELINE*

Washington Metro Area | 2007 - 2020

Source: Delta Associates; October 2020. *Market-Rate Units Planned and Under Construction After Attrition. **As of Third Quarter.

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020**

M A R K E T - R AT E U N I T S

slide-24
SLIDE 24

PROJECTED DELIVERIES

Washington Metro Area | 2020 - 2022

Source: Delta Associates; October 2020.

1,000 2,000 3,000 4,000 5,000 6,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 District Sub MD No VA 2020 2021 2022

C L A S S A M A R K E T - R AT E U N I T S

Projected Class A Quarterly Absorption = 2,229

slide-25
SLIDE 25

36-MONTH APARTMENT DEVELOPMENT PIPELINE*

Top 10 Submarkets in Washington Metro Area | Third Quarter 2020

Source: Delta Associates; October 2020. *Market-Rate Units Planned and Under Construction After Attrition.

1,000 2,000 3,000 4,000 5,000 6,000 7,000

C L A S S A M A R K E T - R AT E U N I T S

slide-26
SLIDE 26

DEMAND AND SUPPLY PROJECTIONS

Washington Metro Area Class A Apartments | 36 Mo. Ending September 2023

Source: Delta Associates; October 2020.

2 4 6 8 10 12 14 16 18 20 No VA Sub MD The District

3.9% 4.1% 5.5% Projected Stabilized Vacancy % at September 2023 4.4% Metro-Wide

MARKET-RATE UNITS (THOUSANDS)

DEMAND

Net Absorption: 8,917/Year = 26,750

SUPPLY

Planned and may deliver by 9/23: 2,681 units

1

Under construction: 38,961 units

2

Total = 41,642 units

1 Probable supply after projected attrition. 2 Includes unleased units at projects in

lease-up.

slide-27
SLIDE 27

ANNUAL CLASS A APARTMENT EFFECTIVE RENT GROWTH

Washington Metro Area | 2007 - 2023

Source: Delta Associates; October 2020.

  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 2022 2023 Long-Term Average = 3.5%

* Annual rent growth at Third Quarter 2020 is -7.0%.

slide-28
SLIDE 28

THE BALTIMORE METRO AREA APARTMENT MARKET

slide-29
SLIDE 29

CLASS A APARTMENT ABSORPTION

Baltimore Metro Area | 2011 - 2023

Source: Delta Associates; October 2020. *12 months ending September 2020.

2,332 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021 - 2023

M A R K E T - R AT E U N I T S

10-Year Average = 2,241 Annual Average ~ 1,808

slide-30
SLIDE 30

EFFECTIVE RENT AND VACANCY RATE

Class A Apartments | Baltimore Metro Area | 2002 - 2020

Source: Delta Associates; October 2020.

$800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 0% 1% 2% 3% 4% 5% 6% Average Effective Base Rent Stabilized Vacancy S T A B I L I Z E D V A C A N C Y R A T E A V E R A G E E F F E C T I V E B A S E R E N T

3 . 6 % / Y E A R L O N G - T E R M R E N T G R O W T H

* As of Third Quarter.

slide-31
SLIDE 31

36-MONTH APARTMENT DEVELOPMENT PIPELINE*

Baltimore Metro Area | 2007 - 2020

Source: Delta Associates; October 2020.

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

*Market-Rate Units Planned and Under Construction After Attrition. **As of Third Quarter.

M A R K E T - R AT E U N I T S

slide-32
SLIDE 32

DEMAND AND SUPPLY PROJECTIONS

Baltimore Metro Area Class A Apartments | 36 Mo. Ending September 2023

Source: Delta Associates; October 2020.

Projected Stabilized Vacancy % at September 2023 4.1% Metro-Wide

MARKET-RATE UNITS 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

So Sub No Sub Balt City 3.2% 3.1% 6.0%

DEMAND

Net Absorption: 1,808/Year = 5,425

SUPPLY

Planned and may deliver by 9/23: 385 units

1

Under construction: 6,525 units

2

Total = 6,910 units

1 Probable supply after projected attrition. 2 Includes unleased units at projects in lease-up.

slide-33
SLIDE 33

ANNUAL CLASS A APARTMENT EFFECTIVE RENT GROWTH

Baltimore Metro Area | 2007 - 2023

Source: Delta Associates; October 2020.

  • 2%
  • 1%

0% 1% 2% 3% 4%

* Annual rent growth at Third Quarter 2020 is -1.0%.

Long-Term Average = 3.6%

slide-34
SLIDE 34

THE WASHINGTON/BALTIMORE AREA CAPITAL MARKETS

slide-35
SLIDE 35

APARTMENT INVESTMENT SALES

Selected Metro Areas | 2011 - 2020

Source: Real Capital Analytics, Delta Associates; October 2020. *Sales through September annualized.

$0 $2 $4 $6 $8 $10 $12 $14 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* LA DFW Chi Was Bal

B I L L I O N S

slide-36
SLIDE 36

NCREIF RETURN INDEX FOR INVESTMENT-GRADE APARTMENTS

Selected Metro Areas | 12 Months Ending June 2020

Source: NCREIF, Delta Associates; October 2020.

  • 2%

0% 2% 4% 6% 8% 10% 12% Phx Aus Den Atl Bos Was DFW Hou Chi

National Average = 4.2%

slide-37
SLIDE 37

CLASS A HIGH-RISE APARTMENT CAP RATES

Washington Metro Area | 2009 - 2019

Source: Delta Associates Market Maker Survey; October 2020.

6.61% 5.29% 4.94% 5.06% 5.11% 4.92% 4.75% 4.80% 4.88% 4.99% 4.96% 0% 1% 2% 3% 4% 5% 6% 7% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

slide-38
SLIDE 38

YEARS OF SUPPLY

Low-Rise Class A Submarkets | Washington Metro Area

Source: Delta Associates; October 2020.

2.1 – 4.0 Years 0 – 2.0 Years

slide-39
SLIDE 39

YEARS OF SUPPLY

High-Rise Class A Submarkets | Washington Metro Area

Source: Delta Associates; October 2020.

2.1 – 4.0 Years 0 – 2.0 Years

slide-40
SLIDE 40

YEARS OF SUPPLY

Class A Submarkets | Baltimore Metro Area

Source: Delta Associates; October 2020.

2.1 – 4.0 Years 0 – 2.0 Years

slide-41
SLIDE 41

THE WASHINGTON METRO AREA CONDOMINIUM MARKET

slide-42
SLIDE 42

LARGEST CONDOMINIUM MARKETS

Selected Metro Areas | 2018

Source: U.S. Census Bureau, Delta Associates; October 2020.

100 200 300 400 500 600 700 NY Chi South FL LA Basin Bos Was SF Bay Sea Tampa Bay Phila

U N I T S ( T H O U S A N D S )

129

slide-43
SLIDE 43

PRIMARY MORTGAGE INTEREST RATES

National Market Survey | 2010 – 2020*

*As of October 2020 Source: Freddie Mac, Delta Associates; October 2020.

2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 30 yr FRM 15 yr FRM 5/1 ARM

INTEREST RATE

slide-44
SLIDE 44

CONDOMINIUM SALES ACTIVITY

Washington Metro Area | 12 Mo. Ending Sept. 2020 Compared to Prior Year

Source: Delta Associates; October 2020.

Down more than 1% Up 1% - 49% Up more than 50%

slide-45
SLIDE 45

ANNUAL CONDOMINIUM RESALES

Washington Metro Area | 2004 - 2020

Source: MRIS, Delta Associates; October 2020.

U N I T S

8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Average From 2004 - 2007 = 17,612

*12 months ending September 2020.

slide-46
SLIDE 46

ANNUAL CONDOMINIUM RESALES

Washington Metro Area | 2004 - 2020

Source: MRIS, Delta Associates; October 2020.

U N I T S

8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

*12 months ending September 2020.

Average From 2008 - 2012 = 11,280

slide-47
SLIDE 47

ANNUAL CONDOMINIUM RESALES

Washington Metro Area | 2004 - 2020

Source: MRIS, Delta Associates; October 2020.

U N I T S

8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

*12 months ending September 2020.

Average Since 2013 = 15,438

slide-48
SLIDE 48

EFFECTIVE NEW CONDOMINIUM SALES PRICE CHANGE

Washington Metro Area | 2007 - 2021

Source: Delta Associates; October 2020. *12 months ending September 2020.

  • 6%
  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021

4.0%

slide-49
SLIDE 49

NEW CONDOMINIUM AVERAGE PRICE PER SF

Washington Metro Area | Third Quarter 2020

Source: Delta Associates; October 2020.

$1,319 $1,056 $1,055 $790 $760 $698 $519 $439 $248 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Upper NW DC Central DC Arl/Alex Cap East DC Ffx/FC Mideast DC Mont

  • Pr. George's

Lou/PrWm

slide-50
SLIDE 50

NEW CONDOMINIUM AVERAGE PRICE PER SF

Selected Downtown Areas in the U.S. | Third Quarter 2020

Source: Realtor.com, Douglas Elliman, Delta Associates; October 2020. *Third Quarter 2020 except for New York City Submarkets which are as of Second Quarter 2020.

$1,642 $1,319 1,194 $1,067 $1,060 $1,055 $1,036 $790 $698 $589 $430 $0 $300 $600 $900 $1,200 $1,500 $1,800

slide-51
SLIDE 51

RESALE CONDOMINIUM SALES PRICE CHANGE

Washington Metro Area | 2007 - 2020

Source: MRIS, Delta Associates; October 2020. * 12 months ending August 2020.

13.2%

  • 10%
  • 5%

0% 5% 10% 15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*

slide-52
SLIDE 52

UNSOLD CONDO UNITS ACTIVELY MARKETING

Washington Metro Area | 2007 - 2020

Source: Delta Associates; October 2020. Note: Number of units are for September of each year.

4,000 8,000 12,000 16,000 20,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

M A R K E T - R AT E U N I T S

2,734

slide-53
SLIDE 53

MONTHS OF NEW CONDOMINIUM SUPPLY

Washington Metro Area | 2007 - 2021

Source: Delta Associates; October 2020.

16 10 20 30 40 50 60 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021

*as of Third Quarter 2020.

slide-54
SLIDE 54

MONTHS OF NEW CONDOMINIUM SUPPLY BY MARKET

Washington Metro Area | Third Quarter 2020

Source: Delta Associates; October 2020.

slide-55
SLIDE 55

DEMAND AND SUPPLY PROJECTIONS

Washington Metro Area Condominiums | 36 Months Ending September 2023

Source: Delta Associates; October 2020.

400 800 1,200 1,600 2,000

The District No VA Sub MD M A R K E T - R AT E U N I T S Net Sales: 1,750/Year = 5,250 units

D E M A N D SUPPLY

Planned and May Begin Marketing by 9/23: 601 units

1

Under Construction and/or Marketing: 2,734 units

2

Total = 3,335 units

1 Probable supply after projected attrition. 2 Includes unlsold units at projects selling.

slide-56
SLIDE 56