Elliott D. Pollack & Company Making Lemonade Lemons out of Lemons By: Jim Rounds Senior V.P.,...

Elliott D. Pollack & Company

Making LemonadeLemons out of Lemons

By:Jim Rounds

Senior V.P., Elliott D. Pollack & Company


Your job?

Your home?

Your future?

The economy’s impact on:


U.S. Summary


U.S. Y/Y Job Losses - Recent RecessionsDuration in Months – BLS - May

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

0 3 6 9 12 15 18 21 24 27 30 33

1974 Recession 1980/81 Recessions 1991 Recession

2001 Recession Current Recession

1980/81

1974

20011991


US New Job Data Change from Prior Month (S/A)

June 2010 - June 2011Source: Bureau Labor of Statistics

(250)

(200)

(150)

(100)

(50)

0

50

100

150

200

250

(000’s)

?


Recession Indicators Summary:Still Moving Upward

(Just Slowly)

Real GDP Real Income Employment Industrial Production Wholesale – Retail Sales


Household Net Worth ($$$)1970 – 2010*

Source: Federal Reserve

0

10

20

30

40

50

60

70

•Data through fourth quarter 2010.

Recession Periods($ in trillions)

But still feel poor…


Consumer Confidence1978 – 2011*

Source: The Dismal Scientist

20

30

40

50

60

70

80

90

100

110

120

130

140

150

*Data through March 2011

Recession Periods

1985 Benchmark = 100


Jobs are being created but not quickly enough.

Those that have jobs are spending a little more but will remain cautious.

Most of those that don’t have jobs probably won’t anytime soon.

Wealth levels are improving but people still feel poor.

Congress and the President have done little to positively influence confidence.

Consumer Summary:


BusinessDepends on the sector…


Doin’ God’s Work


Corporate Profit (Billions of Dollars, SA)

1975-2010*Source: Freelunch.com

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

*Data through fourth quarter 2010

Recession Periods


Corporate Profit By Industry ($Billions)2010 q4

Source: BEA

435.8

241.5

121.2

44.7

104.7

38.222.5

0

50

100

150

200

250

300

350

400

450

500

Financial Manufacturing Retail Trade Wholesale Trade Information Transp. &Warehousing

Utilities


U.S. Real Exports as a Percent of Real GDP

1971 – 2010* Source: Bureau of Economic Analysis

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1971 Q

1

1973 Q

1

1975 Q

1

1977 Q

1

1979 Q

1

1981 Q

1

1983 Q

1

1985 Q

1

1987 Q

1

1989 Q

1

1991 Q

1

1993 Q

1

1995 Q

1

1997 Q

1

1999 Q

1

2001 Q

1

2003 Q

1

2005 Q

1

2007 Q

1

2009 Q

1

Recession Periods

*Data through fourth quarter 2010


Hours WorkedPercent Change from Year Ago

1976 – 2010** Source: Bureau of Labor Statistics

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Recession Periods

**Data through fourth quarter 2010


Capacity Utilization Rate1970 – 2011*

Source: The Conference Board

65

70

75

80

85

90

Jan-

70

Jan-

71

Jan-

72

Jan-

73

Jan-

74

Jan-

75

Jan-

76

Jan-

77

Jan-

78

Jan-

79

Jan-

80

Jan-

81

Jan-

82

Jan-

83

Jan-

84

Jan-

85

Jan-

86

Jan-

87

Jan-

88

Jan-

89

Jan-

90

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

*Data through February 2011

Recession Periods

This is where investment occurs.


Profits are high, but…

Business spending on plant will be slow, but getting closer to seeing some limited investment.

Hiring will still be relatively slow, but more pressure to hire by the end of the year.

Lots of money sitting on the sidelines.

Business Summary:


U.S. Summary:

Recovering but not recovered.

Lots of small shocks thus far but none have been game changers (oil spikes,

Middle East, Japan, etc.)

Debt Ceiling???


ARIZONA


The “Lemons”


9

4

15

2

10

3

7

Job Growth 2006

11

15

6

22

8

Source: US BLSSource: US BLS

13

Jobs growing

Jobs declining

Top 10

Hawaii

Alaska


4

22

25

3

1

8

Job Growth 2007Source: US BLSSource: US BLS

11

1028

36

15

7

206

9

45

Jobs growing

Jobs declining

Top 10

Hawaii

Alaska


11

47

1

1745

6

10

3

8

14

34

46

42

2

4

7

9

15


50

Jobs growing

Jobs declining

Top 10

Hawaii

Alaska


5

49

23

3545

4

32

8

24

47

50

44

1

16

3

Alaska 2

13

1830


46

Jobs growing

Jobs declining

Top 10

Hawaii


19

49

43

2544 38

3

42

28

50

Hawaii

40

1

35

12

Alaska 2

47

1748

4

8

5

37

Jobs growing

Jobs declining

Top 10

6

7

9

10

Job Growth 2010


3

May 2011 v May 2010

36

4

23 39

2

50

7

Job Growth Update: Arizona Ranked 36th

46

33

1

5

38

Alaska 11

45

3422

37Jobs growing

Jobs declining

Top 10

Hawaii

13

9

18

6

810


How did we go

from 2ndto 49th in

the rankings?


How did AZ go from 2nd to 49th? Financial meltdown. Credit crunch/freeze. Overextended consumer. Excess single family inventory. Housing prices decline.

Loss of wealth incl. home equity. Can’t sell homes or retire. Homebuilding crash. Population inflows weaken in AZ. Household formations decline. Household size increases.

Excess commercial construction

Construction job losses. All sector job loses.


How does AZ go from 49th to 2nd? Slow recovery. Credit frees up slowly. Consumers more confident.

Overall US economy improves. Stock market improves. Limited AZ job and population growth.

Excess housing absorbed. Smaller household size. Housing prices rise. Construction kicks in.

All sector job gains; more robust %s. Even more people move to AZ.


In 2008, 2009, and 2010 no one showed up!


2.1%

3.7%

4.2%

4.7%

3.9%

3.3%

3.0%

3.1%

4.3%

5.1%

4.2%4.4%

2.9%

2.5%

1.3%

2.4%

2.8%

3.5%

4.3%

4.6%

4.2%4.2%

3.8%

4.3% 4.3%

3.1%

3.2%3.3%

3.4% 3.4%

2.7%2.5%

1.6%

1.0%0.9%

0.9%

1.5%

0%

2%

4%

6%

1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Greater Phoenix Population Annual Percent Change 1976–2012*

Source: Arizona State University & Department of Commerce, Research Administration

2008 and 2009 are estimates put out by ADES and may be subject to substantial revision.

* 2011 & 2012 forecast is from Elliott D. Pollack & Co. Recession Periods

*2000-2010 estimates based on 2010 Census release

?


Greater Phoenix Y/Y Job Losses - Recent RecessionsDuration in Months – BLS - April

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

0 3 6 9 12 15 18 21 24 27 30 33 36

1974 Recession 1980/81 Recession 1991 Recession

2001 Recession Current Recession

1980/81

1974

2001 1991

= J

ob

Gro

wth


AZ New Job Data Change from Prior Month (S/A)

May 2010 - May 2011Source: Bureau Labor of Statistics

(20)

(15)

(10)

(5)

0

5

10

15

20

(000’s)

About 2k not S/A


Greater Phoenix Employment* Annual Percent Change 1975–2012**

Source: Department of Commerce, Research Administration

-3.7%

4.9%

8.7%

13.3%

10.4%

3.7%

3.0%

-0.1%

5.8%

11.2%9.3%

4.8%3.5%

5.9%

2.5%

2.2%

-0.3%

1.1%

4.9%

6.6%7.2%7.3%

5.4%5.4%

4.6%3.5%

1.2%

-0.1%

1.5%

3.9%

6.2%5.4%

1.6%

-2.5%

-7.9%

-2.1%

1.0%

2.0%

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

10%12%14%

*Non-agricultural wage & salary employment. Changed from SIC to NAICS reporting in 1990.

** 2011& 2012 forecast is from Elliott D. Pollack & Co.

Recession Periods


This is NOT a multi decade recovery…

Think 2015 – 2016 for full recovery, but growth before

then.


Employment Levels: Greater Phoenix back to Peak in 2015?

Source: ADOC

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

2,000.0

2,200.0

2,400.0

Recession Periods

Peak


Single Family Housing


Across the US, underproduction has been

occurring.

This helps with the oversupply.


U.S. Single-Family Starts1978–20111/

Source: Census Bureau

1.4

1.2

0.9

0.7 0.7

1.1 1.1 1.1

1.2 1.11.1

1.00.9

0.8

1.01.1

1.2

1.1

1.21.1

1.3 1.31.2 1.3

1.4

1.5

1.6

1.7

1.5

1.0

0.6

0.4 0.5 0.5

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

(Millions)

1/ Through Febuary 2011

Recession Periods

Over-supply

Under-supply

LTA: 1.2


In AZ, because of the weak population inflows, this underproduction only

recently started.


Single-Family Permits vs. Population DemandGreater Phoenix 1975–2015

Source: PMHS / RL Brown

8,705

11,081

22,281

28,851

18,843

11,485

10,64911,625

19,44718,125

22,598

23,222

17,94415,085

12,00010,61413,698

18,379

22,652

27,426

28,54329,609

31,715

36,001

35,30834,701

36,151

38,914

47,720

60,892

63,570

42,423

31,172

12,582

8,0276,822

5,000

7,0008,000

15,000

25,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

# Permits Recession Periods

* 2011 - 2015 forecast is from Elliott D. Pollack & Co.


Single-Family Vacant UnitsMaricopa County 1993–2010

Source: PMHS

13,60015,25014,800

13,550 13,92514,725

17,55020,000

18,725

23,85024,725

16,75519,400

30,200

51,725

60,175

106,125101,625

0

20,000

40,000

60,000

80,000

100,000

120,000


How Investors Impact the Market:

Investors temporarily create demand.

How many of those homes will come back on the market

and add to the supply?

But, how many will be kept as permanent rental units or purchased by current renters?


Home Prices Indices 2000 – 2011 (January) Source: Macro Markets, LLC; AMLS

70

90

110

130

150

170

190

210

230

250

MLS Index Case-Shiller Index Trendline (4.0%)

Recession Periods

Weak Pop/Emp

Investors

?


Negative Equity in Homes Affects Ability to Sell or Buy

Source: First American Core Logic

50% of homes in Arizona have negative

equity.


Persons per Household


Household Formations

Fewer during recessions (doubling up, living at home with mom & dad, etc).


Persons per HHSource: U.S. Census Bureau & American Community Survey

2000 2009

Single Family Owner Occupied 2.83 3.02

Single Family Renter Occupied 3.20 3.72

Apartments 2.10 2.21


Commercial


Commercial Markets

(Not making things worse anymore)


APARTMENTS


Multi-Family Year-End Vacancy RatesMaricopa County 1986–2012*

Source: ASU Realty Studies

6.2%

4.1%3.3%

2.8%

3.9%

6.1%

4.4%

6.1%

6.9%7.7%

10.1%10.6%

13.0%14.1%

13.4%

10.0%9.5%

8.0%

4.0%3.8%4.5%4.5%4.8%

5.1%5.9%

6.8%

8.2%

9.4%9.6%

7.9%

5.0%5.3%

8.5%

10.8%

14.2%

10.3%9.9%

8.5%

0%

3%

6%

9%

12%

15%

18%

*2011 -2012 are forecasts from the Greater Phoenix Blue Chip

Recession Periods


OFFICE


Office Space Year-End Vacancy RatesMaricopa County 1986–2012*

Source: CB Richard Ellis

26.7%

22.8%

24.0%

26.7%26.4%

25.4%

22.7%

18.8%

14.8%

11.7%

9.5% 9.2%9.5%

10.0%9.9%

16.0%

18.8%18.3%

16.4%

12.6%

11.1%

13.9%

19.1%

24.5%

26.2%

24.6%22.8%

0%

5%

10%

15%

20%

25%

30%

35%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

*2011 -2012 are forecasts from the GPBC

Recession Periods


INDUSTRIAL


Industrial Space Vacancy RatesMaricopa County 1980 – 2012*

Source: CB Richard Ellis

8.4%

9.4%

11.1%

9.7%

12.8%

13.2%

16.4%15.2%

14.6%

12.8%14.0%

14.8%

13.6%

10.8%

7.4%

6.6%5.7%

7.0%7.1%8.1%

7.4%

9.8%10.3%

9.7%

8.5%

5.6%

6.7%

8.4%

12.5%

16.1%

14.7%13.9%

12.3%

0%

5%

10%

15%

20%

* 2011 - 2012 are forecasts from the GPBC

Recession Periods


RETAIL


Retail Space Vacancy RatesMaricopa County 1985–2012*

Source: CB Richard Ellis**

6.6%

8.9%

10.0%

11.8%13.1%

14.2%13.5%

12.7%

11.1%

9.8% 8.7%

7.9%7.5%

6.3%5.5%

5.3%6.6%7.3%

7.4%

6.1%5.3%

5.1%6.2%

7.5%

11.4%12.2%12.3%

11.4%

0%

5%

10%

15%

20%

* 2011-2012 are forecasts from the GPBC** Data prior to 1992 is from Grubb & Ellis

Recession Periods


Financial Problems…


U.S. Problem Commercial Real Estate Loans RiseDelinquency Rates at Commercial Banks

1991 – 2010* Source: Federal Reserve

0

2

4

6

8

10

12

14

1991 Q

1

1991 Q

4

1992 Q

3

1993 Q

2

1994 Q

1

1994 Q

4

1995 Q

3

1996 Q

2

1997 Q

1

1997 Q

4

1998 Q

3

1999 Q

2

2000 Q

1

2000 Q

4

2001 Q

3

2002 Q

2

2003 Q

1

2003 Q

4

2004 Q

3

2005 Q

2

2006 Q

1

2006 Q

4

2007 Q

3

2008 Q

2

2009 Q

1

2009 Q

4

2010 Q

3

* Data through fourth quarter 2010

Recession Periods

Temporary before flat

again?


U.S. Commercial1 Mortgage Maturities1980–2020*

Source: Foresight Analytics

$17.6$18.9$21.2$23.9

$26.6$30.0$34.2

$39.2$48.3$58.3

$65.3$73.1

$79.4$79.6

$78.5

$67.1$60.0

$48.4$43.7$44.6$46.7

$53.6 $62.7

$76.7$88.1

$101.9

$118.3

$134.0

$166.4

$177.9$197.2

$218.9$225.9 $226.5

$199.4$198.0

$177.3$183.7

$87.1

$44.8$34.2

$0

$50

$100

$150

$200

$250

1/ Includes mainly office, retail, industrial and hotelsNote: Forecast is from Foresight Analytics

Recession Periods

Post 2004 - Upside Down?

Borrowed Loan Due


Commercial Property Values?


So which influence will be bigger?

• Pop/Emp related gains may be offset by new leases adjusting for lower rents/less space, at least in 2011/2012.

• This means the possibility of relatively flat rental and vacancy rates in 2011/2012.

• 2012-2013 should see more improvement.


How does this impact commercial property values?

Flat activity often means flat prices. But, values through 2010 were propped up by:

- Owners depleting reserve funds (done);- Extend and Pretend (still pretending?);- Interest rates low (continues but small

increase);- Multi-year leases carrying higher rents

(fewer).


Commercial Summary:

Flat or only slightly improving indicators but declining prices?

Maybe. Will vary by location though.


When do we get back to normal vacancy rates in

commercial?


Back to Normal Vacancy?

• Office = 2014 - 2015

• Industrial = 2013 - 2014

• Retail = 2014 - 2015


Tax Revenues


Gains Needed to Reach Previous Peak

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 6 11 16 21 26 31 36 41 46

Realized Percent Loss

Re

qu

ire

d P

erc

ent

Ga

in

Sales Tax: -23% / 30%

Corporate Income Tax: -58% / 139%

Individual Income Tax: -36% / 55%

?

Now

State forecast revisions in our future?


But, local revenues related to single family and

commercial taxation will remain weak.


AZ Summary:

Lagging the US in terms of full recovery; just now starting to expand the employment base.


Full Recovery: 2015-ish

Fully recovered in terms of: 1) Housing oversupply; 2) Commercial vacancy rates; 3) Retail sales activity; 4) Employment levels. 5) Tax revenues?


The “Lemonade”


• A leader in population growth,

• A leader in employment growth,

• A leader in income growth.

Pre 2007


• Below average performance in many economic categories, but this is a temporary condition and is already improving…

Post 2007


How Arizona Ranks Among the States in Percentage Growth

Source: U.S. Bureau of Census; Bureau of Labor Statistics; Bureau of Economic Analysis PERSONAL DECADE POPULATION EMPLOYMENT INCOME

1950 - 1960 4TH 3RD 4TH

1960 - 1970 3RD 3RD 4TH 1970 - 1980 2ND 3RD 3RD

1980 - 1990 3RD 3RD 5TH

1990 - 2000 2ND 2ND 3RD

2000 – 2006 3rd 2nd 3RD

2007—2010 44th 49th 46th


Phoenix-Mesa Employment Growth(Ranking among all metro areas greater than 1,000,000; 2011 May/May)

Source: Arizona State University, U.S. Bureau of Labor Statistics

YEAR RANK # of MSAs

1991 4 20 1992 5 20 1993 2 20 1994 1 20 1995 1 21 1996 1 23 1997 2 23 1998 1 24 1999 3 26 2000 8 26 2001 6 28 2002 5 28 2003 3 29 2004 4 29 2005 1 30 2006 1 31 2007 10 32 2008 29 32 2009 31 32 2010 31

32 2011 15 32


Greater Phoenix PopulationSource: U.S. Bureau of Census; Arizona Department of Economic Security

Year Population1950 331,7701960 726,1831970 1,039,8071980 1,600,0931990 2,238,4982000 3,251,8762010 4,192,887

U.S. 2010 308,745,538


Why are households not forming?

1. Lack of jobs,2. Inability to sell home elsewhere and

move to Greater Phoenix,3. Lack of jobs,4. Lack of jobs,5. Lack of jobs…


These will improve over time.


Surprising Econ Fact: If marginal household size was still at 2000 levels, there wouldn’t be any excess single family

housing!


Properties in the Foreclosure Process Maricopa County 2002 – 2011

Source: The Information Market

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

*Data through April 2011.

Recession Periods


Also now more competitive in terms of housing prices (and

commercial prices).


Housing Affordability Index2000 q2

Source: NAHB

65.5 64.463.5 60.7

57.1

51.3

45.4

34.5

27.5

0

20

40

60

80

Las Vegas Phoenix Albuquerque Tucson Salt Lake City Denver Seattle Los Angeles San Diego



Source: NAHB

58.5

44.541.6

31.229.9

27.4

16.1

4.61.9

0

20

40

60

80

Denver Salt Lake City Albuquerque Tucson Flagstaff Phoenix Las Vegas San Diego Los Angeles



Source: NAHB

81.7 80.880.0

74.1 73.2 72.2

57.454.9

44.0

33.0

0

20

40

60

80

100

Las Vegas Phoenix Albuquerque Tucson Salt LakeCity

Denver Seattle Flagstaff San Diego Los Angeles


Housing Opportunity Index* Greater Phoenix vs. US

1992-2011** Source: NAHB

0

10

20

30

40

50

60

70

80

90

100

Phoenix MSA U.S.*Data through Q1 2011.** Years 2002 & 2003 only have one data figure


Negative Equity in Homes Affects Ability to Sell or Buy

Source: First American Core Logic

50% of homes in Arizona have negative

equity.

(National average about 25%)


5

910

Benefits of the “SUNBELT”

Alaska

Hawaii

Industrial Northwest


What about the bad national press?

Yes, SB1070


• Governor impeached• Real estate depression• Defense cutbacks• AZ Scam• Martin Luther King Holiday Crisis• Keating• Keating 5• Every S&L taken over by RTC

Between 1987 and 1992


No long-term effects in the past.

Going forward?


Benefiting from basic demographic changes…


Retirement Home Buying CycleNet Change in Maricopa County Population Ages 55 to 69

1991-2030Source: U.S. Bureau of the Census, Arizona Department of Economic Security

0

5,000

10,000

15,000

20,000

25,000

30,000


Trade-Up Home Buying CycleNet Change in Maricopa County Population Ages 34 to 44


-5,000

0

5,000

10,000

15,000

20,000

25,000


Starter Home Buying CycleNet Change in Maricopa County Population Ages 25 to 34


0

5,000

10,000

15,000

20,000

25,000


One survey shows that over 80% of current single family RENTERS would like to soon

own.

Some of these homes are thus permanently absorbed.


Thus, we will also likely see a permanent increase in the

percentage of all single family homes that are maintained as

rentals.

Up from 11% to as high as 14%-15% possibly(?).


Economic Competitiveness


Arizona’s government officials are even

getting involved…


Government isn’t going to turn everything around by

itself. But, govt. can impact the economy at the margin

(with the right policies).


Old Competitiveness Map – AZ will be Moving Up!


Rules if NOT Competitive:

If it’s perception, fix the perception (example: effective tax rates). Doing that!

If it’s reality, implement some strategic reforms. Doing that!

Regarding the previous map, we now have the tools, we just need to implement them properly and our ranking will improve.


Being addressed now…


1 Workforce skills

2 State and local tax scheme

3 Transportation infrastructure

4 Flexibility of incentives programs

5 Availability of incentives

6 Utility infrastructure

7 Land/building costs and supply

8 State economic development strategy

9 Permitting and regulatory structure

10 Higher education resources

Source: Site Selection Magazine

2010 Corporate Real Estate Executive Survey

In 2012


What We’ve Done:Arizona Competitiveness Package

Arizona Competes Fund• Deal Closing Grants/Loans - $25 Million Annually

Arizona Job Training Fund• Grants for Customized Training - $12 - $15 Million Annually

Quality Jobs Tax Credit• Job Creation/Capital Investment - $9,000 Tax Credit per Job

Income Tax Reform (FY 2014 – FY 2017)• Sales Factor – 100%• Corporate Income Tax – 4.9%

Property Tax Reform • Accelerated Depreciation (2012)• Personal Property Exemption (2012)• Class 1 Property Assessment Ratio – 18% (2013 – 2016)


What about the rest?


1 Workforce skills

2 State and local tax scheme

3 Transportation infrastructure

4 Flexibility of incentives programs

5 Availability of incentives

6 Utility infrastructure

7 Land/building costs and supply

8 State economic development strategy

9 Permitting and regulatory structure

10 Higher education resources

Source: Site Selection Magazine

2010 Corporate Real Estate Executive Survey

In 2012


Policymakers finally started to understand how our economy functions and how to improve our position.

We have the economic development “tools” but need to see if the state can use them properly.

More is to be done in terms of government policy, but so far so good.

Economic Development Summary:


In terms of other business development factors:

Competitive in terms of single family prices,

Competitive in terms of commercial rental rates and prices,

Competitive in terms of labor and land costs.



We will continue to grow faster than the rest of the country over the long run.

If we do things right we might even grow in terms of quality…hmmm…maybe.

Coordination among all of the E.D entities will be critical.



Arizona Summary


AZ Summary:

Lagging the US in terms of full recovery; just now starting to expand the employment base.


Full Recovery: 2015-ish

Fully recovered in terms of: 1) Housing oversupply; 2) Commercial vacancy rates; 3) Retail sales activity; 4) Employment levels. 5) Tax revenues?


The long term economic fundamentals have not really

changed.

The long term economic outlook remains favorable (2015+).

AZ will be a national growth leader by mid decade.


There is a BOOM for Arizona out there somewhere.


But, can we also grow in terms of quality?

Elliott D. Pollack & Company 118

ELLIOTT D. POLLACK & Company

7505 East Sixth Avenue, Suite 100 Scottsdale, Arizona 85251

480-423-9200 P / 480-423-5942 F / www.arizonaeconomy.com / [email protected]

• Economic and Fiscal Impact Analysis/Modeling

• Real Estate Market and Feasibility Studies

• Litigation Support

• Revenue Forecasting

• Keynote Speaking

• Public Finance and Policy Development

• Land Use Economics

• Economic Development

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