2 Nov 2017 - Source: Bureau of Labor Statistics. Note: Data not seasonally adjusted. Quarter-end monthly data. San Diego
SAN DIEGO’S QUARTERLY ECONOMIC SNAPSHOT November 2017
IN THIS ISSUE
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Every quarter San Diego Regional EDC analyzes key economic indicators that are important to understanding the regional economy and the region’s standing relative to the 25 most populous metropolitan areas in the U.S.
SAN DIEGO HIGHLIGHTS
This issue covers data from Q3 2017.
UNEMPLOYMENT
1.1%
year-over-year growth in employment
7.8%
year-over-year growth in median home price
25.1%
quarterly growth in VC dollars
39.1K
Unemployment Rate - 25 Most Populous US Metros
•
With an unemployment rate of 4.1 percent, the San Diego region had the 17th lowest unemployment rate among the 25 most populous metros, two spots lower than Q2.
•
San Diego’s unemployment rate remained below California’s rate of 4.7 percent, and was on par with the national rate of 4.1 percent.
•
When compared to its regional neighbors, San Diego’s unemployment rate continued to fare better than both Riverside (5.4 percent) and Los Angeles (4.5 percent).
•
Year-over-year, the region’s unemployment rate decreased by 0.5 percentage points.
jobs in San Marcos
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Rank
1 2 3 3 5 5 5 8 9 10 11 12 13 14 14 14 17
18 19 20 21 22 22 24 25
Metro
Denver Minneapolis Orlando San Antonio Boston San Francisco Tampa Dallas Saint Louis Washington DC Baltimore Charlotte Miami Atlanta Phoenix Portland San Diego US Seattle Detroit Los Angeles Philadelphia Chicago New York Houston Riverside
Q3 2017 Q2 2017
2.2 2.9 3.2 3.2 3.3 3.3 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.0 4.0 4.1 4.1 4.2 4.4 4.5 4.6 4.7 4.7 4.8 5.4
2.5 3.5 4.0 3.9 4.0 3.6 4.1 4.0 4.0 3.9 4.4 4.0 4.5 4.8 4.5 3.9 4.3 4.5 4.0 3.7 4.4 4.8 4.9 4.3 5.3 5.5
PP Change
-0.3 -0.6 -0.8 -0.7 -0.7 -0.3 -0.8 -0.6 -0.5 -0.3 -0.7 -0.2 -0.6 -0.8 -0.5 0.1 -0.2 -0.4 0.2 0.7 0.1 -0.2 -0.2 0.4 -0.5 -0.1
Source: Bureau of Labor Statistics Note: Data not seasonally adjusted. Quarter-end monthly data.
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CALIFORNIA’S UNEMPLOYMENT12 BY COUNTY
UNEMPLOYMENT TRENDS Quarter-End Unemployment Rate San Diego & Select California Metros
10%
10
San Diego
Unemployment Rate (%)
Los Angeles
> 9.9 7.0 - 9.9 8 6.0 - 6.9 5.0 - 5.9 4.0 - 4.9 6 3.0 - 3.9 < 3.0
SF
9%
San Francisco Riverside
8%
California US
7%
4 6%
5.4%
2 Q2 2011
Los Angeles Riverside San Diego Source: Bureau of Labor Statistics Note: Data not seasonally adjusted.
5%
Q2 2012
Q2 2013
Q2 2014
Q2 2015
Q2 2016
4%
3% Q3 2013
Q2 2017
4.7% 4.5% 4.1% 4.1% 3.3%
Q3 2014
Source: Bureau of Labor Statistics Note: Data not seasonally adjusted. Quarter-end monthly data.
Q3 2015
Q3 2016
Q3 2017
November 2017 EMPLOYMENT
Quarter-Over-Quarter Change in Employment
•
Following an increase in employment during Q2, total nonfarm employment fell 5,800, or 0.4 percent, in Q3. Job gains in the private sector helped offset some of the losses seen in local and state government. Compared to a year ago, total nonfarm employment was up 16,100, or 1.1 percent.
•
With the holiday season approaching, retail trade recorded the largest gain, adding 1,400 jobs during the quarter. Healthcare and social assistance continued to grow, adding 1,200 jobs.
•
Other strong contributors to the quarterly employment growth were other services, real estate and rental and leasing, and construction, totaling 2,900 additional jobs. These three sectors also saw the three largest year-over year gains, increasing by 9.0 percent, 7.9 percent, and 5.2 percent, respectively.
•
Professional, scientific, and technical services, as well as transportation utilities, saw the largest declines in the private sector, losing 1,900 and 1,700 jobs, respectively.
•
There were 1,364,906 total job postings during the quarter, of which 192,814 were unique. This means that on average, employers are posting the same job opening more than seven times.
•
With nearly 8,000 unique job postings during the quarter, registered nurses continued to top the charts, indicating continued demand in one of the region’s fastest growing sectors - healthcare.
25 Most Populous US Metros
Phoenix San Antonio 0.40% Seattle 0.17% Portland 0.14% Orlando 0.04% Dallas 0.00% Charlotte 0.00% Los Angeles 0.00% Riverside -0.01% San Francisco -0.11% Baltimore -0.20% Atlanta -0.24% United States -0.31% San Diego -0.40% Philadelphia -0.49% Boston -0.54% Saint Louis -0.58% Tampa -0.59% Denver -0.69% Miami -0.79% Washington DC -0.80% Minneapolis -0.81% Chicago -0.99% Detroit -1.02% New York -1.49% Houston -1.55%
2.01%
Source: Bureau of Labor Statistics Note: Changes in quarter-end monthly data.
TOP IN-DEMAND OCCUPATIONS BY JOB UNIQUE JOB POSTINGS
7,547
Registered Nurses
6,820
5,830
Heavy & TractorTrailer Truck Drivers
Retail Salespeople
5,266
4,912
Supervisors of Retail Sales Workers
Applications Software Developers
Source: EMSI, Job Posting Analytics, Q3 2017
EMPLOYMENT CHANGES BY SECTOR
Employment by Sector (in thousands) Total (Private and Government) Total Private Professional and Business Services Prof., Scientific and Tech. Services* Mgmt. of Companies and Enterprises Administrative
Trade, Transportation and Utilities Wholesale Trade Retail Trade Transportation and Utilities Education and Health Services Education Services Healthcare and Social Assistance Leisure and Hospitality* Manufacturing* Financial Activities Finance and Insurance Real Estate and Rental and Leasing Construction Other Services Information* Mining and Logging Total Government Federal Government State Government Local Government
Q3 2017
Q2 2017
Q3 2016 1427.3 1188.0 235.1 129.3 21.3 84.5
Change Prev. QTR -5.8 2.9 -2.4 -1.9 -0.3 -0.2
Change Prev. YR 16.1 12.6 -2.5 -1.3 0.3 -1.5
% Change Prev. QTR -0.4% 0.2% -1.0% -1.5% -1.4% -0.2%
% Change Prev. YR 1.1% 1.1% -1.1% -1.0% 1.4% -1.8%
1443.4 1200.6 232.6 128.0 21.6 83.0
1449.2 1197.7 235.0 129.9 21.9 83.2
219.3 44.9 146.6 27.8 202.7 29.0 173.7 196.6 107.7 76.0 45.9 30.1 81.4 60.4 23.6 0.3 242.8 46.0 45.7 151.1
219.1 44.4 145.2 29.5 202.0 29.5 172.5 195.7 107.5 75.0 45.6 29.4 80.6 59.0 23.5 0.3 251.5 46.1 49.8 155.6
220.1 44.9 145.5 29.7 198.8 29.3 169.5 196.3 108.1 72.9 45.0 27.9 77.4 55.4 23.6 0.3 239.3 46.7 45.3 147.3
0.2 0.5 1.4 -1.7 0.7 -0.5 1.2 0.9 0.2 1.0 0.3 0.7 0.8 1.4 0.1 0.0 -8.7 -0.1 -4.1 -4.5
-0.8 0.0 1.1 -1.9 3.9 -0.3 4.2 0.3 -0.4 3.1 0.9 2.2 4.0 5.0 0.0 0.0 3.5 -0.7 0.4 3.8
0.1% 1.1% 1.0% -5.8% 0.3% -1.7% 0.7% 0.5% 0.2% 1.3% 0.7% 2.4% 1.0% 2.4% 0.4% 0.0% -3.5% -0.2% -8.2% -2.9%
-0.4% 0.0% 0.8% -6.4% 2.0% -1.0% 2.5% 0.2% -0.4% 4.3% 2.0% 7.9% 5.2% 9.0% 0.0% 0.0% 1.5% -1.5% 0.9% 2.6%
Source: Bureau of Labor Statistics Notes: Italics denote supersectors. Asterisk (*) denotes sectors strongly associated with San Diego’s traded economies. Quarter-end monthly data.
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November 2017 RESIDENTIAL REAL ESTATE
HOME PRICES
SALES & PRICE TRENDS
•
San Diego’s housing market stands as the second most expensive in the nation, although Los Angeles is not far behind after rapid price appreciation in Q3 2017.
•
Median home price appreciation has been strong and consistent since 2015, with a compound annual growth rate of 7.6 percent.
•
The region’s median home price rose slightly from the previous quarter, and is now up 7.8 percent compared to a year ago.
•
Despite a reprieve during Q3, price growth accelerated in 2017 to 8.8 percent, as supply remains constrained.
•
Home sales swung up and down in Q3, ending down 4.3 percent compared to a year ago.
Median Home Price for 25 Most Populous US Metros
Single SingleFamily FamilyHomes Homes
% Change From Prev. Year 10.2% 7.8% 10.1% 13.4% 6.6% 5.4% 8.1% 3.8% 8.6% 7.9% 7.9% 2.2% 7.3% 4.7% 5.3% 8.0% 5.8% 7.8% 1.7% 7.6% 8.0% 9.8% 4.0% 6.7% 3.8%
Change Year-Ago ChangeYear-Ago in Median Home Price & Sales Year-Ago Change 50% 50%
40% 40%
40% 40%
30% 30%
30% 30% 20% 20%
20% 20% 10% 10%
10% 10%
0% 0% 0% 0%
-10% -10% -20% -20%
-10% -10%
-30% -30% -20% -20%
MedianPrice Price(L) (L) Median
Sep-17 Sep-17
Sep-16 Sep-16
Mar-17 Mar-17
Mar-16 Mar-16
Sep-15 Sep-15
Mar-15 Mar-15
Sep-14 Sep-14
Mar-14 Mar-14
Sep-13 Sep-13
Mar-13 Mar-13
Sep-12 Sep-12
-50% -50%
Mar-12 Mar-12
-40% -40%
Sep-11 Sep-11
Metro San Francisco San Diego Los Angeles Seattle Boston New York Denver Washington DC Portland Miami Riverside Baltimore Minneapolis Chicago US Dallas Phoenix Orlando Philadelphia Houston Charlotte Tampa San Antonio Atlanta Saint Louis
% Change From Prev. Quarter -5.3% 0.3% 15.7% 0.7% -0.2% 1.2% -1.5% -4.7% 0.1% 1.5% -0.2% -2.5% -0.5% -3.3% -0.5% -2.4% 0.6% 1.2% -0.1% -0.7% -0.5% 2.2% -0.9% -0.3% 1.4%
Sep-10 Sep-10
Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Price Q3 2017 $900,000 $607,000 $595,100 $478,500 $464,100 $419,100 $418,100 $408,500 $389,400 $340,000 $339,900 $270,000 $257,800 $255,600 $254,000 $249,000 $248,900 $247,900 $238,900 $233,900 $233,200 $225,000 $220,700 $204,300 $176,500
Mar-11 Mar-11
(Q3 2017)
-30% -30%
Sales(R) (R) Sales
Source: California Association of Realtors
Source: National Association of Realtors Notes: Detroit not available. Single-family detached homes. Data not seasonally adjusted.
BUILDING PERMITS While building permits have been growing steadily since 2014, the total number of housing permits issued in Q3 2017 was down 2.3 percent compared to the same period in 2016.
Permit Activity
Building Permits by Housing Type
16,000
Single Family Multi-Family
1,117
12,000
1,090
61
248
8,000
2006
2007
4,000
2008
2009
2010
2011
2012
2013
2014
2015
2005
2006
2007
2008
Source: US Census Bureau, Building Permits Survey, 2004-2016 Notes: The survey universe increased in 2014.
2009
2010
2011
2012
2013
2015
2016
Single-Family Single Family
Multi-Family 147
Multi-Family (5+)
876
2014
132
Multi-Family Multi-Family (2-4) (2-4)
2,161
2004
557
Single Family
2016
0
682
Q3 2017 Q3 2017
Multi-Family (5+)
1,473
2,303
Q3 2016 2016 Q3
Source: US Census Bureau, Building Permits Survey Note: Quarter-end monthly data.
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November 2017 COMMERCIAL REAL ESTATE 11.0%
OFFICE MARKET
97.7K sq. ft.
Vacancy Rate
230.5K sq. ft.
Net Absorption
$2.92 FSG
Construction
Lease Rate
•
Positive market fundamentals continued to define the San Diego office market in Q3 2017. Average asking rates increased quarter-overquarter which led to a historically high asking rate and relatively flat vacancy.
•
Net absorption for Q3 2017 was positive at 97,729 sq. ft., marking five straight quarters of positive net absorption.
12.0%
$3.30 $3.30
12% 10.0%
1,600
$2.70 $2.70
8% 6.0% 6% 4.0% 4%
1,000
4.3%
Vacancy Rate
400
4.8% 12.0%
800 600
200
200
4.6% 11.5% 4.4%
-
11.0% 4.2%
-
2%
INDUSTRIAL MARKET
5.2% 12.5% 5.0%
400
2.0%
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Class A Class B Class C Rent Growth
5.4% 13.0%
600
1,200
Sq. ft., Thousands
$2.90 $2.90
0.0% 0%
13.5%
Vacancy Rate
10% 8.0%
1,400
Thousands
$3.10 $3.10
$2.50 $2.50 $2.30 $2.30 $2.10 $2.10 $1.90 $1.90 $1.70 $1.70
Market Absorption & Vacancy Rates
800
Rent, year-ago change
Lease Rate (FSG) per sq. ft.
Asking Lease Rate & Rent Growth $3.50
10.5% (200) (200) 4.0% Q4 2015 Q1 2016 Q2 2016Q4Q3 2016 Q1 Q42016 2016 Q2 Q12016 2017 Q2 Q1 2015 Q2 2015 Q3 2015 2015 Q3 2017 2016 Q3 Q42017 2016
Net Absorption
1.1M sq. ft.
2.6M sq. ft.
Net Absorption
Construction
Contruction
$1.37 NNN
High-finish Lease Rate
Vacancy Rate
$0.87 NNN
Low-finish Lease Rate
•
After a relatively slow start to the year, the industrial market surged in Q3. Net absorption for the quarter was strong, which surpassed one million sq. ft. for the first time in two years.
•
The overall vacancy rate experienced a sharp decline quarter-over-quarter, dropping 50 basis points (bps) to 4.3 percent. The overall vacancy rate is now approaching the post-recession low of 4.2 percent set in Q4 2015.
• •
With 10 new projects breaking ground in Q3 2017, overall construction activity now totals over 2.6 million sq. ft., a post-recession high. Average asking rates for both high- and low-finish product remain at all-time high levels. Average asking rates for high-finish product decreased quarter-over-quarter by $0.02 to $1.37 NNN, likely due to large blocks of highly priced product leasing up. Low-finish asking rates climbed $0.01 to a post-recession high of $0.87 NNN. Asking Lease Rate & Rent Growth
$1.60
1,600
18%
$1.30
15.0%
$1.20
14%
10.0%
$0.90
12%
$0.80
$0.70
10%
5.0%
$0.60
8%
$0.50
6%
$0.40 $0.30
0.0% 4%
$0.20 $0.10
2%
Q32015 2015 Q1 Q42016 2015 Q2 Q12016 2016 Q3 Q22016 2016 Q4 Q32016 2016 Q1 Q42017 2016 Q2 Q12017 2017 Q3 Q22017 2017 Q4 High Finish
Low Finish
High-Finish Rent Growth
0% -5.0%
Low-Finish Rent Growth
1,000 800 600 400
4.8% 5.2%
2,000
5.0% 4.6%
1,500
4.8%
1,000
4.6% 4.4%
500
4.4%
-
4.2% 4.2%
200 (200)
(500) Q1 2015 Q4 Q22015 2015 Q1Q3 2015Q2 Q4 2015 Q1 2016 Q2 2016 Q3Q2 2016 2016 2016 Q3 2016 Q4 2016 Q1 2017 2017 Q4 Q32016 2017
Net Absorption
Contruction
Vacancy Rate
$1.00
1,200 Thousands
$1.10
5.0%
5.4%
2,500
1,400
16%
Rent, year-ago change
Lease Rate (NNN) per sq. ft.
3,000
20%
$1.40
-$0.10 $0.00
Market Absorption & Vacancy Rates
20.0%
Sq. ft., Thousands
$1.50
4.0% 4.0%
Vacancy Rate
Note: CBRE no longer reports an overall industrial asking rate. It now separately reports high-finish rates and low-finish rates. High-finish generally has more office build-out, multiple stories and consists of business park R&D and R&D subtypes. Low-finish has higher clearance, more dock doors and consists of business park industrial, light industrial, manufacturing and warehouse subtypes.
COMMERCIAL REAL ESTATE INSIGHT PROVIDED BY
4
Venture Capital Dollars Received in San Diego by Funding Stage
November 2017 VENTURE CAPITAL
•
•
•
$600 $500 Startup/Seed
$400 Millions
•
Venture Capital Dollars Received by Funding Stage
In Q3 2017, the San Diego region saw 24 venture capital deals worth nearly $362 million. This places San Diego ninth out the 19 U.S. regions tracked by the PwC MoneyTree Report in terms of VC dollars and fourteenth in number of deals. VC investment into the region increased 25.1 percent compared to the previous quarter, despite having one less deal. Compared to the same period a year ago, VC investment is up 19.0 percent.
Early Stage Expansion
$300
Later Stage $200
Other
Venture Capital Dollars Received in San Diego by Industry
$100 $0
More than half, or $195.3 million, of the venture capital received in Q3 went to technology companies, for the first time since Q3 2016. VC investment into the technology cluster doubled compared to the previous quarter, with more than 70 percent going to software companies.
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Venture Capital Dollars Received by Sector $600 $500
Expansion stage funding jumped 64 percent to $253.4 million, commanding more than 70 percent of all VC dollars for the quarter. Later stage funding made up 20 percent of the quarter’s total.
Millions
•
$400
Healthcare Technology
$300
Other
$200
The top five deals went to companies in either expansion or later stage funding rounds; three of these are in healthcare. The largest investment was in Brain Corp, a software company developing artificial nervous systems, for $114 million.
$100 $0 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
Source: PwC/CB Insights MoneyTree™ Report
TOP VENTURE CAPITAL DEALS
$114M
$67M
Brain Corp
Amplyx Pharmaceuticals
Technology
Healthcare
$39M
eFFECTOR Therapeutics Healthcare
$32M
$25M
Sotera Wireless
Venture Capital Investment Trends in San Diego
PatientSafe Solutions
Healthcare
Technology
Source: PwC/CB Insights MoneyTree™ Report, Q3 2017
VENTURE CAPITAL TRENDS Venture Capital Investment Trends $600
45 40
Millions
$500
35
$400
30 25
$300
20
$200
15 10
$100 $0 Q1 2010
5 Q2 2011 Q3 2012 Q4 2013 2015 Venture Venture Capital Capital Investment Investment Activity Activity in San inQ1San Diego Diego Dollars Dollars Invested Invested Dollars Invested (L)
Q2 2016
0 Q3 2017
Number Number of Deals of Number ofDeals Deals (R)
Source: PwC/CB Insights MoneyTree™ Report Note: Data is subject to revision, as VC activity is not always disclosed during the quarter of investment. PwC’s methodolgy can be found here.
$1,400 $1,400 $1,200 $1,200
120 120
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November 2017 CIT Y SPOTLIGHT:
SAN MARCOS
EDC produced a regional profile for the City of San Marcos, detailing the city’s recent demographic, socioeconomic, and economic trends. The profile is a powerful tool for economic development as it provides clarity and insight into San Marcos’ regional strengths, in addition to identifying the fundamental drivers of the local economy. It is clear that the city is an economic powerhouse with a diverse economic base, a highly-educated workforce, and significant growth opportunity.
DEMOGRAPHICS San Marcos has the smallest population along the 78 Corridor, with 93,300 people. Yet, the city’s population has grown by more than 11 percent since 2010, outpacing the other four cities along the Corridor.
93.3K
POPULATION 2016
SOCIOECONOMICS
33.5
MEDIAN AGE 2016
The proportion of people with a bachelor’s degree or higher in the city exceeded 33 percent in 2015, four percentage points shy of the San Diego region and second among the five 78 Corridor cities. Although the city’s median household income is slightly lower than the region’s median, it has grown significantly faster than the region’s.
$66.3K
MEDIAN HOUSEHOLD INCOME 2016
THE ECONOMY
33.2%
BACHELOR’S OR HIGHER 2016
7K+
ACADEMIC PROGRAM COMPLETIONS 2016
San Marcos boasts a robust and diverse economic base. With nearly 40,000 jobs and more than 4,000 businesses, San Marcos is a major player along the 78 Corridor’s economic landscape.
39,100 JOBS 2016
LIVING IN SAN MARCOS
4,075
BUSINESSES 2016
3.7%
UNEMPLOYMENT RATE 2016
San Marcos is the birthplace of San Diego’s most iconic craft beer company, Stone Brewing Co., as well as home to the 78 Corridor’s only university, CSU San Marcos. The city also has ample public space, including 16 community parks and 18 mini parks.
$529K
MEDIAN HOME PRICE 2016
FOR A COPY OF THE PROFILE AND INTERACTIVE DASHBOARD VISIT For more information, please contact our research team: Kirby Brady, Director Eduardo Velasquez, Manager Marcela Alvarez, Coordinator
[email protected] | 619-234-8 484 sandiegobusiness.org
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MILES OF MULTI-USE TRAILS
8
BREWERIES
2016
2016
San-Marcos.net/demographics San Diego Regional EDC’s mission is to maximize the region’s economic prosperity and global competitiveness.
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