Posted by: BayAreaComRE | June 22, 2010

Mid-Year Economic Update by Union Bank’s Chief Economist Kei Matsuda

Kei Matsuda, Director of Economic Research at Union Bank, presented to Cushman & Wakefield his annual mid-year analysis of the global and California economy.  Union Bank recently acquired San Rafael-based Tamalpais Bank through a FDIC-assisted transaction.

The CRE Recession, beginning in the second quarter of 2008, will stymie growth in commercial real estate until sometime in 2012, but there are green shoots in the economy. Health Services and Government sectors have been adding jobs nationally. Housing is beginning to stabilize. A notable trend, which may be the first time in history, is men have diverged to higher unemployed than woman to 10.5%  and 8.8% repsectively.

In the San Francisco Metropolitan Area, professional services, government and construction sectors shed the most jobs from April 2009 to April 2010.  The housing market is nearing a bottom, which will stabilize the Bay Area economy.

The commercial real estate industry is creating headwind in the economy while it tries to correct itself. $300 Billion of assets could mature in 2010, 2011 and 2012. Interest rates remain low so these loans are being serviced, but the elephant in the room in commercial real estate is an uptick in interest rates. However, as inflation remains low, the government is not under pressure to raise the interest rates.

Please see Kei’s full presentation Scribd below, which he approved for us to post on our blog.

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