Mid Year Economic Notes

Single family starts are down 6.9% in the year and 16.1 % this quarter. Home prices are declining but sliding. California’s population decline by 1% helps with that home decline.But less people means less tax revenue and that is not great.

• 1.123 mm units are available. That is a tight market inventory for homes.
• 18.4% less units starts, that is bad for GCs.
• Stock market is not out of the woods yet. Still, profit vs value ratios are not great from a historical level.
• As labor bottle necks are getting better, it will get tighter. It’s not going to get better in the long run. It’s going to be a consistent issue.
• 2030 is going to be a real recession year.

Commercial real estate is currently killing the small regional banks. They are sitting on a lot of bad paper and office product is getting killed and dragging with it many lenders and borrowers.