Chris Mefford - EDC · Real Estate: Single Family Housing Zillow Home Value Index, United States and Washington Metros | Q3 2019 ... Forecast Washington State ESD 117,000 2019 130,000

Chris Mefford

8/12/2019 CAI Confidential 2

Who we are

CAI is a planning and economics firm.

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Community Attributes tells data-rich stories about

communities that are important to decision-makers.

• A little context

• Regional growth models

• Thurston County trends and economic drivers

• U.S. and Global trends and economic drivers

3

Contents

4

A little context

U.S. Economic RecoveryMonths of expansion following recession, NBER definition

5Sources: National Bureau of Economic Research, 2019; Community Attributes Inc., 2019.

*2008-2009 expansion period still ongoing.

Recession Period Recovery/ Expansion Period

2008-2009 2009 - ?

1990-1991 1991-2001

1960-1961 1961-1970

1981-1982 1982-1990

1937-1938 1938-1945

2001 2001-2008

1973-1975 1975-1980

1929-1933 1933-1937

1948-1949 1949-1953

1913-1915 1915-1918

Months of Recovery/Expansion

122

120

106

92

80

73

58

50

45

44

0 25 50 75 100 125

1

2

3

4

5

6

7

8

9

10

6

U.S. Labor Force Participation & Unemployment

50.0

52.0

54.0

56.0

58.0

60.0

62.0

64.0

66.0

68.0

70.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

UNEMPLOYMENT

Rate %

Labor Force

Participation %

Labor Force

Participation

Unemployment

Unemployment

Rate in U.S.3.7%

63.2%August 2019

Labor Force

Participation

7

Workers and Income

Workers by Wage Range (2018 dollars)Washington State, Based on Median Annual Earnings

Wages & IncomesWashington State

Sources: U.S. Bureau of Labor Statistics, Occupational Employment Statistics, 2018.

$0

$20,000

$40,000

$60,000

$80,000

$100,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2018 $

10th Percentile(0.6% CAGR)





422

1,261

861

268

435

1,386

1,011

427

0

200

400

600

800

1,000

1,200

1,400

1,600

Less than

$32,000

$32,000 to

$50,000

$50,000 to

$80,000

$80,000 to

$125,000

2007 2018

Thousands of Workers

Annual Median Earnings 2018 $

8

Where will we grow?

Sources: Washington Office of Financial Management, 2019; Community Attributes Inc., 2019.

9

A little theory

10

Circular Flows of the Economy

Robert Gordon, 2002

11

Major Industries in Washington 4,326,400 Total Jobs

Sources: Bellevue Creative Economy Study, 2017; QCEW, 2017; Washington State Employment Security Department, 2017; QCEW, Bureau of Labor Statistics,

2017; Industry/Occupation Crosswalk, Washington State Employment Security Department, 2017; Bureau of Economic Analysis, 2017

12

Major Industries in Washington Percent of Export Jobs by Industry

Sources: Bellevue Creative Economy Study, 2017; QCEW, 2017; Washington State Employment Security Department, 2017; QCEW, Bureau of Labor Statistics,

2017; Industry/Occupation Crosswalk, Washington State Employment Security Department, 2017; Bureau of Economic Analysis, 2017

13

Total Washington Exports by Commodity or Merchandise

Source: U.S. Census Bureau, 2018.

14

Washington Non-Aerospace Exports2018


15

Washington Aerospace Exports2018


16

Thurston County

17

Real Estate: Single Family HousingZillow Home Value Index, United States and Washington Metros | Q3 2019

Sources: Zillow, 2019.

$492k

$404k $404k

$374k$364k

$329k $327k$312k $303k $300k

$284k$270k $263k

$250k $249k $248k$230k

$215k$195k

$182k $177k

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

18

Real Estate: Single Family HousingZillow Home Value Index, Olympia and Comparable (Population Rank) Metros | Q3 2019


$374k

$328k $327k

$303k

$269k$256k

$241k

$215k

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Bremerton, WA Greeley, CO Olympia, WA Kennewick, WA Merced, CA Crestview-Fort

Walton Beach-

Destin, FL

Wilmington, NC Yakima, WA

19

Real Estate: Single Family HousingChange in Zillow Home Value Index, United States and Washington Metros | 2009-2019


16.5%

1.1%

9.8%

6.1%

12.9%

9.8%

6.4%

10.0%

8.4%

5.0%

15.1%

7.4%

12.0%

4.5%

11.9%

4.9%

8.3%

7.2%6.6%

3.4%

7.8%

6.9%

4.9% 4.8%4.4% 4.3% 4.2% 4.2% 4.1% 3.9% 3.8% 3.7% 3.6% 3.6% 3.5% 3.4% 3.4%

3.0% 3.0% 2.8% 2.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

One Year (2018-2019)

10 Year (2009-2019)

20

Real Estate: Multifamily HousingAverage Lease Rate and Change in Lease Rate, Thurston County | 2009-2019

Sources: CoStar, 2019.

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

20

09

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

10

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

11

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

12

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

13

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

14

Q1

20

14

Q2

20

14

Q3

20

14

Q4

20

15

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

16

Q1

20

16

Q2

20

16

Q3

20

16

Q4

20

17

Q1

20

17

Q2

20

17

Q3

20

17

Q4

20

18

Q1

20

18

Q2

20

18

Q3

20

18

Q4

20

19

Q1

20

19

Q2

QTD

Lease per SF

Lease Rate Change (Y/Y %)

Rate / SF Rate Change

21

Real Estate: Multifamily HousingVacancy Rate, Thurston County | 2009-2019


5.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

22

Real Estate: Multifamily HousingUnits Delivered (Net of Demolition), Thurston County | 2009-2019


(200)

(100)

0

100

200

300

400

5002

00

9 Q

1

20

09

Q3

20

10

Q1

20

10

Q3

20

11

Q1

20

11

Q3

20

12

Q1

20

12

Q3

20

13

Q1

20

13

Q3

20

14

Q1

20

14

Q3

20

15

Q1

20

15

Q3

20

16

Q1

20

16

Q3

20

17

Q1

20

17

Q3

20

18

Q1

20

18

Q3

20

19

Q1

QTD

23

Real Estate: Commercial OfficeVacancy Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019


0%

2%

4%

6%

8%

10%

12%

14%

THURSTON

LEWIS

PIERCE

KING

24

Real Estate: Commercial OfficeAverage Lease Rate, All Classes, Lewis, Thurston, Pierce and King Counties | 2009-2019


$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00THURSTON

LEWIS

PIERCE

KING

25

Real Estate: Commercial OfficeAbsorption (Square Feet), Thurston County| 2009-2019


(400,000)

(300,000)

(200,000)

(100,000)

0

100,000

200,000

300,000

400,000

20

09

Q1

20

09

Q4

20

10

Q3

20

11

Q2

20

12

Q1

20

12

Q4

20

13

Q3

20

14

Q2

20

15

Q1

20

15

Q4

20

16

Q3

20

17

Q2

20

18

Q1

20

18

Q4

QTD

26

Real Estate: Commercial OfficeDeliveries (Square Feet, net of demolitions), Thurston County| 2009-2019


(300,000)

(200,000)

(100,000)

0

100,000

200,000

300,000

20

09

Q1

20

09

Q3

20

10

Q1

20

10

Q3

20

11

Q1

20

11

Q3

20

12

Q1

20

12

Q3

20

13

Q1

20

13

Q3

20

14

Q1

20

14

Q3

20

15

Q1

20

15

Q3

20

16

Q1

20

16

Q3

20

17

Q1

20

17

Q3

20

18

Q1

20

18

Q3

20

19

Q1

QTD

27

Real Estate: IndustrialVacancy Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

THURSTON

LEWIS

PIERCE

KING

28

Real Estate: IndustrialLease Rate, Lewis, Thurston, Pierce and King Counties | 2009-2019


$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

THURSTON

LEWIS

PIERCE

KING

29

Real Estate: IndustrialAbsorption (Square Feet), Thurston County| 2009-2019


(400,000)

(200,000)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

30

Real Estate: IndustrialDeliveries (Square Feet, net of demolitions), Thurston County| 2009-2019


(400,000)

(200,000)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

31

A little theory

32

What is economic development?

TRADE SHOWS

BrandingMarketing, Promotion

SITE SELECTION SUPPORT

Entrepreneurial Support

Higher Education

Workforce

Supports

BUSINESS CLIMATE

Permitting, Business Support

BASIC NEEDS Housing

TRANSPORTATION

Public Safety

Schools & Early Childhood

Parks & Trails

PUBLIC HEALTH

VIBRANT NEIGHBORHOODS

CULTURAL ASSETS

Go after what you want

Work with what you’ve got

Be a good place to live

Jobs (Thurston County)1990 - 2019

Sources: Washington Employment Security Department., 2019.

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

135,000Jobs

2019

117,000 jobs

286,000 people

Actuals

Washington State ESD

Forecast

Washington State ESD

117,000

2019

130,000

2027

101,000

2008

64,000

1990

Jobs in Thurston County2003 - 2019

34

2,790

1,930

2,820 2,850 2,900

1,610

-3,200

-1,230

-330

420

3,090 3,180 3,020

4,070

2,880

3,940

2,390

-4,500

-3,750

-3,000

-2,250

-1,500

-750

0

750

1,500

2,250

3,000

3,750

4,500

2003 2005 2007 2009 2011 2013 2015 2017 2019

New Jobs


35

Job Growth in Thurston County2003 - 2019

3.2%

2.2%

3.1% 3.0% 3.0%

1.6%

-3.2%

-1.3%

-0.3%

0.4%

3.2% 3.2%2.9%

3.8%

2.6%

3.5%

2.0%

-4.5%

-3.5%

-2.5%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

2003 2005 2007 2009 2011 2013 2015 2017 2019

Growth Rate


Jobs and PeopleChange in Jobs & Net Migration, Thurston County | 1991 - 2018

36

Jobs

Sources: U.S. Bureau of Labor Statistics, 2019; Washington Office of Financial Management, 2019.

-5,500

-4,500

-3,500

-2,500

-1,500

-500

500

1,500

2,500

3,500

4,500

5,500

Jobs

People

2018 - 20192,450 Jobs

3,460 Net In-migration

Jobs and PeopleRegional Commute Patterns, 2017

37Sources: U.S. Census Bureau, LEHD,

2017; Community Attributes Inc., 2019.

Jobs and PeopleRegional Commute Patterns, 2017

38Sources: U.S. Census Bureau, LEHD,

2017; Community Attributes Inc., 2019.

Where people who work in Thurston County live Where people who live in Thurston County work

Count Share

Thurston County 63,647 54.7%

Pierce County 12,420 10.7%

King County 9,138 7.9%

Lewis County 5,449 4.7%

Mason County 3,502 3.0%

Snohomish County 3,464 3.0%

Grays Harbor County 3,047 2.6%

Clark County 2,355 2.0%

Kitsap County 1,727 1.5%

Cowlitz County 1,570 1.3%

All Other Locations 10,076 8.7%

Total Thurston Employees 116,395

Count Share

Thurston County 63,647 56.5%

Pierce County 15,343 13.6%

King County 15,245 13.5%

Lewis County 3,472 3.1%

Snohomish County 2,811 2.5%

Mason County 2,143 1.9%

Grays Harbor County 1,336 1.2%

Clark County 1,307 1.2%

Kitsap County 944 0.8%

Spokane County 867 0.8%

All Other Locations 5,535 4.9%

Total Thurston Residents 112,650

39

Migrations to Thurston CountyBy Origin of Newly Issued Driver’s Licenses, Thurston County | Past 12 Months

Origin Drivers

California 1,219

Oregon 488

Texas 412

Arizona 291

Florida 241

Colorado 235

Alaska 168

Georgia 145

Idaho 143

North Carolina 141

Total U.S. 5,770

International 184

Total Migrations 5,954

Sources: Washington Department of Licensing, 2019.

40

Population Growth & Housing Unit ChangeThurston County | 2006 – 2019

201520102005

Sources: U.S. Census Bureau, 2017; Washington Office of Financial Management, 2019.

-3,500

-2,500

-1,500

-500

500

1,500

2,500

3,500

4,500

Annual Households & Housing Unit Change in Thurston County, 2006 - 2019

Households Housing Units

41

Population and Housing UnitsThurston County Cities | 2019

Population Housing Units

Olympia 52,770 25,140

Lacey 51,270 21,710

Tumwater 24,060 10,540

Yelm 9,140 3,310

Rainier 2,110 830

Tenino 1,840 780

Bucoda 580 250

Thurston County 285,800 119,940

Sources: Washington State Office of Financial Management, 2019.

42

Population and Housing Growth in Thurston CitiesCAGR 2009 – 2017

Sources: U.S. Census Bureau, 2019; Washington Office of Financial Management, 2019.

1.2%

-1.2%

0.7%

1.2%

1.2%

1.8%

3.9%

4.1%

0.9%

0.5%

0.0%

1.3%

0.9%

1.3%

2.4%

2.9%

-1.5% -0.5% 0.5% 1.5% 2.5% 3.5% 4.5%

Thurston County

Tenino

Bucoda

Olympia

Rainier

Lacey

Tumwater

Yelm

Housing Units

Households

43

Population ForecastThurston County | 2000 - 2040

Sources: Washington Office of Financial Management, 2019.

438,800

370,700

312,100

207,400

285,800

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

Living Wage in Thurston County, 2018

Household Income

$26,100

$12.60 per hourLiving Alone

$69,400

Sources: M.I.T. Living Wage Calculator, 2019; Community Attributes Inc., 2019.

45

Assessed Land ValueThurston County | 2019

Sources: Thurston County, 2019;

Community Attributes Inc., 2019.

46

Jobs by Industry (Thurston County)Ranked by Total Covered Employment| 2018

Source: Washington State ESD,

2019.

Industry 2008 2018 Net New Jobs CAGR

Government 36,320 38,280 1,960 0.5%

Health care and social assistance 11,199 15,236 4,037 3.1%

Retail trade 11,062 12,812 1,750 1.5%

Accommodation and food services 7,737 9,369 1,632 1.9%

Construction 3,926 6,011 2,085 4.4%

Administrative and waste services 3,249 5,979 2,730 6.3%

Professional and technical services 3,273 4,738 1,465 3.8%

Other services, except public administration 4,218 3,877 (341) -0.8%

Wholesale trade 2,743 3,112 369 1.3%

Manufacturing 3,088 3,060 (28) -0.1%

Finance and insurance 2,349 2,518 169 0.7%

Transportation and warehousing 1,684 2,378 694 3.5%

Educational services 1,243 2,129 886 5.5%

Agriculture, forestry, fishing and hunting 1,337 2,006 669 4.1%

Information 1,108 1,574 466 3.6%

Arts, entertainment, and recreation 1,195 1,537 342 2.5%

Real estate and rental and leasing 1,256 1,307 51 0.4%

Management of companies and enterprises 682 887 205 2.7%

Utilities 261 188 (73) -3.2%

Mining 40 15 (25) -9.3%

Total Covered 97,970 117,013 19,043 1.8%

Jobs by Industry (Thurston County)Ranked by Net New Jobs | 2008 - 2018

47Sources: Washington Employment Security Department., 2019.

4,380

2,200

1,450 1,430 1,390 1,330 1,220

770 660 550

(1,000)

-

1,000

2,000

3,000

4,000

5,000

Health care and social

assistance

Government Accommodation and

food services

Retail trade Transportation and

warehousing

New Jobs

Professional and

technical services

Accommodation and

food servicesAdministrative and

waste services

Agriculture, forestry,

fishing, and huntingEducation

services

Jobs by Industry (Thurston County)2008 - 2018

48Sources: Washington Employment Security Department., 2019.

350 310 260 180 100 -

(40) (70)(310)

(1,000)

-

1,000

2,000

3,000

4,000

5,000

Wholesale trade Information Finance and insurance Mining Manufacturing

New Jobs

Arts, entertainment,

and recreation

InformationManagement of

companies and

enterprisesFinance and

insurance

49

Employment by Establishment SizeThurston County| 2017

13.6%

26.2%

10.9%

13.2%

9.1%

13.3%

13.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

1-9 Employees

10-49 Employees

50-99 Employees

100-249 Employees

250-499 Employees

500-999 Employees

1,000+ Employees

41% or 60KSmall Business* Employees

in Thurston County

*Note: Small Business are defined as firms employing fewer than 100 employees.

Sources: Washington Employment Security Department, 2019.

50

U.S. & Global Trends and Outlook

Global GDP Percent Change1980-2023 | Real GDP

5.6% 5.4%

3.7%3.5%

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1980 1985 1990 1995 2000 2005 2010 2015 2020

Forecast

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

-1.0%

Source: International Monetary Fund, 2019; Community Attributes Inc., 2019.

0%

20%

40%

60%

80%

100%

Percent of Global GDP by Country1980-2023 | Real GDP

EU

All Others

Japan

China

United States


7.24

-2.54

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

12.5

15.0

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

-5.0

-2.5

0.0

2.5

5.0

7.5

10.0

12.5

15.0

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022

China, U.S. and Global GDP, Percent Change1980-2023 | Real GDP

World United States China

15.0%

12.5%

10.0%

7.5%

5.0%

2.5%

0.0%

-2.5%

-5.0%


-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Real GDP, year-over-year growth (%)1990-2024

54Sources: IMF World Economic Outlook, April 2019.

ForecastHistorical

China, India, Emerging,

Developing Asia

Emerging,

Developing Europe

U.S.

Euro Area

World

Total Trade VolumeGoods and services, annual % change

55Sources: IMF World Economic Outlook, April 2019.

Assumes stability in global trade regime,

which could be undermined in 2019.

Historical Forecast

0.6%

3.8%

5.9%

11.1%

8.0%

9.4%8.0%

3.1%

-10.5%

12.5%

7.3%

3.1%3.6% 3.9%

2.8%2.2%

5.4%

3.8% 3.4% 3.9% 3.9% 3.9% 3.8% 3.8%

-15%

-10%

-5%

0%

5%

10%

15%

U.S. Real Gross Domestic ProductHistoric and Forecast, 2000-2024

56Sources: St. Louis FRED, 2018; Blue Chip Economic Indicators, 2018 (for years 2018-2019); International Monetary Fund World Economic Outlook, 2018

(for years 2020-2022).

Historical Forecast4.1%

1.0%

1.7%

2.9%

3.8%3.5%

2.9%

1.9%

-0.1%

-2.5%

2.6%

1.6%

2.2%

1.8%

2.5%

2.9%

1.6%

2.2%

2.9%

2.3% 2.4%2.2%

1.6% 1.6% 1.6%

-3.5%

-1.5%

0.5%

2.5%

4.5%

Historical Forecast

57

Interest RatesOne month Fed Funds Rate and LIBOR, 1990 - 2019

0%

3%

6%

9%

Fed Funds Effective Rate

LIBOR

Sources: St. Louis FRED, 2019.

58

Your Foreboding Recession Money Shot: Inverted Yield CurveTen Year Treasury Yields MINUS 3-Month Treasury Yields: 2005 - 2019

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

J-2005 J-2006 J-2007 J-2008 J-2009 J-2010 J-2011 J-2012 J-2013 J-2014 J-2015 J-2016 J-2017 J-2018 J-2019

Sources: St. Louis FRED, 2019.

59

Federal Deficit1972-2017

-$2,000

-$1,500

-$1,000

-$500

$0

$500

1970 1976 1982 1988 1994 2000 2006 2012 2018

Billions 2018 $

Debt-to-personal Income (%)Per Capita Debt, 2018

60

Debt Per Capita1968-2018

0%

5%

10%

15%

20%

25%

1968 1975 1982 1989 1996 2003 2010 2017

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

1968 1975 1982 1989 1996 2003 2010 2017

Revolving debt

Non-revolving debt

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

1968 1978 1988 1998 2008 2018

Revolving debt

Non-revolving debt

0%

5%

10%

15%

20%

25%

1968 1978 1988 1998 2008 2018

61

Regional Strengths, Challenges & Opportunities

Elements of a Healthy Community

Basic Needs

Vibrant Communities Arts & Culture

Economic Opportunity Environment Education

Health & Wellness

Employment

Wage levels

Upward mobility

Poverty

Access to services

Infrastructure

Air & water quality

Ecosystems & species

Natural resources

Meeting standards

Graduation rates

Workforce alignment

Safety

Engagement

Mobility

Access

Activity

Heritage

Longevity

Nutrition

Fitness

UN Sustainable Development Goals

64

Economic Growth Foundations

TRADE SHOWS

BrandingMarketing, Promotion

SITE SELECTION SUPPORT

Entrepreneurial Support

Higher Education

Workforce

Supports

BUSINESS CLIMATE

Permitting, Business Support

BASIC NEEDS Housing

TRANSPORTATION

Public Safety

Schools & Early Childhood

Parks & Trails

PUBLIC HEALTH

VIBRANT NEIGHBORHOODS

CULTURAL ASSETS

Go after what you want

Work with what you’ve got

Be a good place to live

65

Strengths

Momentum Global Presence Talent Attraction Natural Environment

66

Challenges

Housing Education Workforce SupplyBusiness Climate &

Fiscal Sustainability

737 & NMA

67

Regional Opportunities

Cloud TechnologyTriple

Bottom Line

Mega Regional

Connections

Artificial Intelligence &

Tech Entrepreneurship

68

Thank YouChris Mefford

Documents

Chris Mefford - EDC · Real Estate: Single Family Housing Zillow Home Value Index, United States and Washington Metros | Q3 2019 ... Forecast Washington State ESD 117,000 2019 130,000