GOVERNMENT OF THE DISTRICT OF COLUMBIA OFFICE OF THE CHIEF FINANCIAL OFFICER OFFICE OF REVENUE ANALYSIS

District of Columbia Economic and Revenue Trends: October 2013
Vincent C. Gray, Mayor Natwar M. Gandhi, Chief Financial Officer Fitzroy Lee, Deputy CFO & Chief Economist Stephen C. Swaim, Senior Economist

October highlights:   
Slow job growth…….........2 Slower resident employment..…...……………………..4 September revenue es mate...…………………….....16

The percentage increase in DC’s Personal Income from 2001 to 2012 was 55% greater than the US average
In the 2010 to 2012 post-recession recovery period, however, DC’s percentage gain moved closer to the national average
According to recently revised Personal Income estimates by the US Bureau of Economic Analysis, DC’s 2012 Personal Income—$47.28 billion—was 81.8% higher than in 2001. This percentage increase was 55% higher than the US gain over this period, which was 52.8%. (In compound interest terms, DC’s rate of growth over the 11-year period was 5.6% per year v. 3.9% for the US.) Personal Income, a broad measure of residents’ current income from all sources, can be divided into 3 parts: (1) earnings from work (wages, benefits, and proprietors’ income), (2) property income (interest, dividends, and rent, but not including capital gains), and (3) transfer payments (Social Security, Medicare, Medicaid, Unemployment Insurance, and pensions). DC’s higher income gain is largely attributable to earnings from work. DC earnings are a greater proportion of Personal Income than in the US, and they have grown more rapidly. Earnings from work. In 2001 DC’s earnings from work accounted for 70.2% of all Personal Income compared to 68.4 % for the US. Over the next 11 years the percentage growth in DC was almost twice that in the US (86% v. 44%), and by 2012 the share of earnings in DC’s Personal Income had risen to 71.9% while the US share fell to 64.6%. The US recession slowed earnings growth considerably. In the 2010 to 2012 recovery period, DC earnings growth, which was considerably less than in the two years prior to the recession, moved much closer to the national average (11.3% in DC v. 10.8% in the US). (See table on p. 17). Of note, the percent growth in DC resident earnings from 2001 to 2012 also outpaced the 68% gain in amounts earned in DC by residents and non-residents alike. This reflects a combination of less income loss to suburban commuters and more reverse commuting by DC residents. In the 2010 to 2012 recovery period, amounts earned by all in DC actually grew less rapidly than the US average (7.1% earned by all in DC v. 10.8% in the US). (Continued on p. 17.)
Earnings from Work as percent of 2012 Personal Income in DC and US
DC

Indicator updates:
Wage and salary employment..…2 Sectors of the DC economy .…...3 Resident employment and unemployment …..………………….…. 4 Wages and income………...…....5 Residen al real estate…….…….….6 Commercial office space…….…...8 Real estate construc on outlook and value of transac ons…..…..9 Hospitality .……………..…...…......10 US economy …………….……...…..11 DC tax collec ons……….…....…..12 US and DC forecasts…….….......14 DC revenue es mate..…….....…..16 ORA reports & documents.…....18 About this report….........…...…….18 ORA contact informa on.……..18

Earnings from work for DC residents, all in DC, and the US: 2001 to 2012: Index numbers (2001 = 100)
200 180 DC residents In DC US 186.1 167.8 144.3

71.9%

160 140 120

US

64.6%

100 80

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

DC Economic and Revenue Trends: October 2013

1

DC Office of Revenue Analysis

2012

Wage and salary employment
DC job growth remains weak
●August wage and salary employment in DC was up by 833 (0.1%) from a year earlier as measured by the 3-month moving average. ●Federal government employment for August was down by 6,100 (-2.9%); the private sector gained 7,533 (1.5%). ●Total year-over-year DC metropolitan area employment increased by 42,767 (1.4%) in August as measured by the 3month moving average. ●There was an increase of 1.8% in suburban Washington employment in August from a year earlier. ●Seasonally adjusted wage and salary employment in DC fell by 2,000 (0.3%) in August from the prior month. Seasonally adjusted employment was 3,700 less than it was six months earlier in February.

Change in wage and salary employment located in DC, the DC suburbs, and the US: August 2011 to August 2013
(% change from prior year in 3-month moving average) 3.0 2.0 1.0 0.0

Aug-11

Nov-11

Feb-12

May-12

Aug-12

Nov-12

Feb-13

May-13

Aug-13

-1.0

DC (aug @ 0.1) DC suburbs (aug @ 1.8) US (aug @ 1.6)

Table 1 . Wage and salary employment in DC, Washington Metro area, and the US: August 2013
Jurisdiction District of Columbia 1 year change % change W ashington metro area 1 year change % change W ashington suburbs (% ch) US (% ch)
Source: BLS. August data is prel iminary. FY 2010 FY 2011 FY 2012 12-mo avg 3-mo average Thi s month

709,075 7,442 1.1 2,956,233 -8,083 ‐0.3 ‐0.7 ‐1.9

723,233 14,158 2.0 2,998,442 42,208 1.4 1.2 1.2

730,033 6,800 0.9 3,030,808 32,367 1.1 1.1 1.7

733,192 3,417 0.5 3,068,125 39,333 1.3 1.6 1.6

734,200 833 0.1 3,090,700 42,767 1.4 1.8 1.6

728,700 1,600 0.2 3,068,500 33,400 1.1 1.4 1.7

Not seasonally adjusted. Suburban empl oyment is the di fference between the metro area total and the DC portion.

Table 2. Federal government and private sector wage and salary employment in DC: August 2013
Sector Federal government 1 year change % change
FY 2010 FY 2011 FY 2012 12-mo avg 3-month average This month

208,233 10,183 5.1

213,258 5,025 2.4

208,600 -4,658 ‐2.2 486,708 11,875 2.5

204,883 -4,150 ‐2.0 494,150 8,117 1.7

203,433 -6,100 ‐2.9 494,033 7,533 1.5

203,400 -5,300 ‐2.5 492,100 7,200 1.5

Private sector 464,100 474,833 1 year change 1,158 10,733 % change 0.3 2.3 Source: BLS. Not seasonally adjusted. August is preliminary.

Table 3 . Seasonally adjusted DC Employment: February 2013 to August 2013
Indicator Feb Mar Apr May Jun Jul Aug

D.C. Wage and Salary employment change from prior month % change from prior month
Source: BLS seasonally adjusted. August is preliminary

733,600 -1,100 ‐0.1

734,300 700 0.1

733,100 -1,200 ‐0.2

733,800 700 0.1

732,700 -1,100 ‐0.1

731,900 -800 ‐0.1

729,900 -2,000 ‐0.3

DC Economic and Revenue Trends: October 2013

2

DC Office of Revenue Analysis

Sectors of the economy
Professional services (other than legal), education, and food services lead private sector job growth
●In August professional services (other than legal) gained 3,267 jobs over last year and education gained 2,800 jobs, together acccouting for about 80% of all private sector net job growth. (3-month moving averages.) ●Food service (2.600), finance (900), and other business services (600) also showed significant one year gains. ●Private sector industries losing jobs included information, legal, employment services, retail, recreation, construction, personal services, and accomodations. ●Local government fell by 600. ●Over the past year, DC’s share of federal employment fell slightly in both the DC metro area and the US.

Federal government and private sector wage and salary employment in DC: Aug. 2011 to Aug. 2013
(% change from prior year in 3-month moving average) 5.0 4.0 3.0 2.0 1.0 0.0

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

Feb-13

Apr-13

Jun-13

Aug-13

-1.0 -2.0 -3.0 -4.0

federal gov't (aug @ -2.9)

private sector (aug @ 1.5)

Table 4. Wage and salary employment located in DC: August 2013
3-month moving average 1 year change Industry sector 12-mo. moving avg: % change Change from Aug 2012 to Aug 2013 in DC share of sector jobs in: metro area US

Federal government Local government Legal services Other Professional and technical Employment services Other Business services Information Finance Organizations Education Health Food service Accomodations Amusement and recreation Retail trade Wholesale trade Construction Personal and miscellaneous ser. Other private Total Public sector Private sector Professional and all business

Aug 2012 Aug 2013 Amount 209,533 203,433 -6,100 37,333 36,733 -600 30,133 76,800 13,367 33,633 17,400 28,133 60,900 44,767 64,100 43,700 15,667 7,333 18,733 4,933 14,000 7,667 5,233 733,367 246,867 486,500 199,467 29,900 80,067 12,733 34,233 16,667 29,033 61,433 47,567 64,300 46,300 15,633 6,967 18,000 4,967 13,633 7,500 4,900 734,200 240,167 494,033 202,633 -233 3,267 -633 600 -733 900 533 2,800 200 2,600 -33 -367 -733 33 -367 -167 -333 833 ‐6,700 7,533 3,167

%

Sector % of all DC jobs, Aug 2013

DC share (%) in Aug 2013 of all sector jobs in: metro area US

-2.9 -1.6 -0.8 4.3 -4.7 1.8 -4.2 3.2 0.9 6.3 0.3 5.9 -0.2 -5.0 -3.9 0.7 -2.6 -2.2 -6.4 0.1 ‐2.7 1.5 1.6

-2.0 -1.6 -0.9 3.8 -4.0 2.6 -5.1 1.5 1.5 6.2 1.0 3.7 -0.2 -0.2 -3.0 3.3 3.6 -4.1 -4.0 0.5 ‐1.9 1.7 1.2

27.9 5.0 4.1 11.0 1.7 4.7 2.3 4.0 8.4 6.5 8.8 6.4 2.1 1.0 2.5 0.7 1.9 1.0 0.7 100.8 33.0 67.8 27.8

54.6 11.9 22.8 33.9 17.5 21.7 18.6 36.6 48.2 22.9 21.6 36.5 14.1 6.8 7.8 9.3 4.6 23.8 35.2 20.5 21.4

7.38 0.20 2.64 1.15 0.37 0.48 0.62 0.36 2.05 1.53 0.37 0.44 0.80 0.30 0.12 0.09 0.23 0.29 0.03 0.54 1.14 0.43 0.84

-0.6 -0.6 0.7 -0.1 -0.5 -0.7 -0.3 0.1 -0.8 -0.1 0.2 0.1 -2.0 -0.4 0.0 -0.2 -0.1 -0.3 -1.2 0.0 0.0

-0.03 0.00 -0.03 0.01 -0.05 0.00 -0.03 0.01 0.01 0.08 -0.01 0.01 -0.01 -0.03 -0.01 0.00 -0.01 -0.01 0.00 -0.01 -0.03 0.00 -0.01 0.00 0.00 0.00

Education, health, and orgs. 169,767 173,500 3,733 2.2 2.7 23.8 30.5 0.55 0.1 14.4 0.26 -0.2 Hospitality and trade 90,367 91,867 1,500 1.7 1.2 12.6 10.2 0.10 -0.2 Other private sector 26,900 26,033 ‐867 ‐3.2 ‐0.2 3.6 Source: BLS. not seasonally adjusted. na=not available. For the metro area, legal is included in other professional and technical, and personal and miscellaneous services is included in organizations (a category BLS calls "other services")
DC Economic and Revenue Trends: October 2013

3

DC Office of Revenue Analysis

Resident employment
DC’s resident employment growth continued to slow
●In August DC resident employment rose 5,841 (1.8%) from a year earlier (3-mo. moving average). ●Seasonally adjusted DC resident employment has fallen for five months in a row and in Aug. was 7,935 below the Feb. level. ●In August the unemployment rate (seasonally adjusted) increased to 8.7%. The rate has changed little in the past 6 months. ●August initial unemployment insurance claims were up 8.6% (3month moving average).
Jobs located in DC and DC resident employment: August 2011 to August 2013
(% change from prior year in 3-mo. moving average) 8.0 6.0 4.0 2.0 0.0

Resident employment in DC , the DC suburbs, and the US: August 2011 to August 2013
(% change from prior year in 3-month moving average) 8.0 6.0 4.0 2.0 0.0

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

Feb-13

Apr-13

Jun-13

Aug-13

-2.0

DC (aug @ 1.8) DC suburbs (aug @ 0.4) US (aug @ 1.3)

Table 5. Unemployment rates for DC, metro area, and US: August 2013
(percent of labor force) Not seasonally adj. Jurisdiction Aug. 2012 Aug. 2013 Seasonally adj. Aug. 2012 Aug. 2013

-2.0

jobs in DC (aug @ 0.1)

DC res. jobs (aug @ 1.8)

US DC DC metro area DC suburbs

8.2 9.0 5.7 5.3

7.3 8.5 5.4 5.0

8.1 8.9 na na

7.3 8.7 na na

Table 7. Seasonally adjusted DC Resid ent employment and unemployment: Feb ruary 2013 to August 2013
Indicator Feb Mar Apr May Jun Jul Aug

DC Resident employment change from prior month % change from prior month DC Unemployment rate (%)
Source: BLS seasonally adjusted. August i s preliminary
DC Economic and Revenue Trends: October 2013

Aug-11

Tab le 6 . R es id ent e m ploym e nt a nd une m p loym e n t: Au gu st 2 01 3
In dicato r F Y 2 01 0 F Y 2 01 1 FY 2 0 12 1 2-m o a vg 3 -m o n th ave rag e T his m o n th

D C Labo r for ce sum m ary R esident em p loy m ent 1 y ea r cha ng e % c han ge La b or Fo rc e 1 y ea r cha ng e % c han ge U nem pl oy ed 1 y ea r cha ng e % c han ge U nem pl oy m ent ra t e 308 ,513 4 ,332 1.4 343 ,475 9 ,339 2.8 34 ,962 5 ,007 16.7 10.2 312 ,14 8 3 ,63 5 1.2 347 ,47 0 3 ,99 5 1.2 35 ,32 2 36 0 1.0 10.2 32 3,41 2 1 1,26 4 3. 6 35 6,43 9 8,96 9 2. 6 3 3,02 7 - 2,29 5 ‐ 6. 5 9. 3 337, 839 16,264 5. 1 369, 558 14,605 4. 1 31,719 -1, 659 ‐ 5. 0 8. 6 338 ,371 5 ,841 1. 8 371 ,045 4 ,838 1. 3 32 ,674 -1 ,003 ‐ 3. 0 8.8 331, 037 -1, 267 ‐ 0 .4 361, 835 -3, 459 ‐ 0 .9 30, 798 -2, 192 ‐ 6 .6 8. 5

D C Un em pl oy m e nt in sur ance (st ate pr og r am ) Init ia l c la im s (m on thly a v g .) 1 y ea r cha ng e % c han ge W eek s co m pensa t ed (m o. a vg .) 1 y ea r cha ng e % c han ge 1 ,799 -404 ‐ 18.3 53 ,592 -881 ‐ 1.6 2 ,10 1 30 2 16.8 46 ,42 3 -7 ,16 9 ‐ 13.4 1,78 4 -31 7 ‐ 15. 1 4 5,17 0 - 1,25 3 ‐ 2. 7 1,888 70 3. 8 42,807 -2, 645 ‐ 5. 8 2 ,195 174 8. 6 43 ,048 15 0. 0 1, 881 -21 ‐ 1 .1 42, 690 -278 ‐ 0 .6

So u rce : La bo r forc e : B LS. U n em p loym en t Ins u ran c e: US D ep t o f La bo r. N o t se as on a lly ad j.

Nov-11

Feb-12

May-12

Aug-12

Nov-12

Feb-13

340,941 714 0.2 8.6

May-13

Aug-13

Source: U.S. BLS. na= data not available

341,229 288 0.1 8.6

340,933 ‐296 ‐0.1 8.5

340,562 ‐371 ‐0.1 8.5

340,057 ‐505 ‐0.1 8.5

337,536 ‐2,521 ‐0.7 8.6

333,006 ‐4,530 ‐1.3 8.7

4

DC Office of Revenue Analysis

Wages and income
DC resident wage gains below the US average ●Wages earned in the District of Columbia were 1.8% higher in the June quarter compared to the same quarter of 2012. ●Wages earned in DC have now grown at a slower rate than the US average for 10 quarters. ●In the June quarter, estimated wages of DC residents grew 2.5%. DC Personal Income grew 2.3%. ●In the June quarter, the private sector accounted for 143% of the $1.11 billion increase in wages earned in DC; federal wages declined by $350 million.
Wages earned in DC, wages earned by DC residents, and wages earned in the US: 2010.2 to 2013.2
8.0 6.0 4.0 2.0 0.0
2010.2 2010.3 2010.4 2011.1 2011.2 2011.3 2011.4 2012.1 2012.2 2012.3 2012.4 2013.1 2013.2

(% change from the same quarter of the prior year)

DC (2013.2 @ 1.8) DC resident (2013.2 @ 2.5) US (2013.2 @ 3.2)

Table 8. DC Wages and Personal Income: Jun e 2013 ($ billion at seasonally adjusted annual rates unless otherwise noted)
4-qua rter m ov ing a vera ge La test qua rter (Jun.)

Indicator

FY 2009

F Y 2010

FY 2011

FY 2012

Wages and salaries earn ed in DC 1 year change % chan ge Sup plemen ts to w ages & salaries % chan ge P ro prieto rs' inco me earned b y DC residents* % chan ge Wages and salaries of DC resid ents*** c hange from o ne year ago % chan ge Inc ome earned by DC resid ents % chan ge P ro perty inc ome o f DC residents % chan ge P ensio ns and other tran sfer of D C residen ts % chan ge D C P erson al Inco me** 1 year change % chan ge US Perso nal inco me (% c hang e fro m prior yea r) US Wages and salaries(% chan ge from prior year)

54.9 2 1.2 4 2.3 14.0 8 4.5 5.8 3 ‐4.1 20.7 6 0.9 3 4.7 29.0 2.9 6.7 6 ‐11.1 4.6 1 12.1 40.4 0 0.4 9 1.2 ‐2.0 ‐3.3

57.24 2.33 4 .2 14.93 6 .0 5.35 ‐8 .2 22.03 1.27 6 .1 30.1 3 .8 6.16 ‐8 .8 5.19 12 .7 41.50 1.10 2 .7 1 .3 0 .2 0.49 1.77 38 .5

59.5 6 2.3 1 4.0 16.1 1 7.9 5.5 6 4.0 23.4 8 1.4 5 6.6 32.5 7.9 7.0 8 14.9 5.6 8 9.3 45.2 7 3.7 7 9.1 5.9 4.2 1.7 6 0.6 8 39.4

60.62 1.07 1 .8 16.23 0 .7 5.80 4 .3 24.33 0.85 3 .6 33.7 3 .7 7.51 6 .1 5.65 ‐0 .4 46.87 1.60 3 .5 4 .0 3 .4 1.35 ‐0.35 40 .1

61.65 1.10 1 .8 16.06 ‐1 .8 6.05 4 .4 24.88 0.68 2 .8 34.2 1 .8 7.75 3 .6 5.75 1 .7 47.72 0.97 2 .1 3 .5 3 .9 1.58 ‐0.43 40 .4

62.05 1.11 1.8 16.08 ‐0.8 6.21 7.0 25.09 0.60 2.5 34.4 1.6 7.89 4.3 5.81 3.6 48.11 1.09 2.3 2.7 3.2 1.59 ‐0.35 40.4

Ad dendum: C han ge from prior year in w ages ea rned in DC b y sec tor Private sector (1 yr ch , $B) ‐0.08 Federal government (1 yr ch, $B) 1.12 D C res. w ages as % of wag es earn ed in DC 37.8

* Proprietors' income is de rived fr om federal tax data and therefore all proprietors' income is earne d by DC re sidents. **Reflects de duction of social insurance paid by i ndividuals. W age and salary am ounts shown are be fore this de duction. ***Est. by ORA ; assum es w age and salary suppl. ar e the same % for DC reside nt w ages as for w ages earned i n DC. Source : BEA; data for June we re re leased September 30, 2013

DC Economic and Revenue Trends: October 2013

5

DC Office of Revenue Analysis

Single family and condominium home sales
Value of home sales continues to increase sharply
●The September 3-month moving total of single family home sales was up 15.2% from a year earlier, and the average selling price was 14.9% higher. ●September condominium sales were 25.8% above a year earlier as measured by the 3-month moving total; the average selling price was 6.1% higher. ●The total value of all home sales in September was 32.7% more than a year earlier as measured by the 3-month moving total. ●September year-to-date median prices were up 15.4% for single family units, and up 6.8% for condominiums. ●The September ratios of inventory to sales were 1.8 for both single family units and condominiums (3-mo. moving average).
40 30 20 10 0

Total value of sales of single family and condo units: September 2011 to September 2013 (% change from prior year in 3-mo. and 12-mo. moving totals)

Sep-11

Dec-11

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

-10 -20

12-month moving total (sep @ 27.8) 3-month moving total (sep @ 32.7)

Table 9. D.C. Residential Real Estate Indicators: September 2013
12-mo moving total or 3-m o moving average total or average

Indicator

FY 2009

FY 2010

FY 2011

FY 2012

This month

Number of sales (settled contracts) Single family 1 year change % change Condo 1 year change % change Total 1 year change % change Average prices of units that sold Single family ($) 1 year change % change Condo ($) 1 year change % change Total value of all sales ($ million) 1 year change % change Ratio: active inventory to sales Single family Condo

3,259 237 7.8 2,590 -206 ‐7.4 5,849 31 0.5 597,269 -70,098 ‐10.5 359,952 -52,283 ‐12.7 2,878.8 -290.6 ‐9.2 5.2 5.7

4,084 825 25.3 2,884 294 11.4 6,968 1,119 19.1 538,395 -58,874 ‐9.9 414,030 54,078 15.0 3,392.9 514.1 17.9 3.4 4.6

3,800 -284 ‐7.0 2,469 -415 ‐14.4 6,269 -699 ‐10.0 601,026 62,631 11.6 423,365 9,336 2.3 3,329.2 -63.7 ‐1.9 3.3 4.9

3,563 -237 ‐6.2 2,784 315 12.8 6,347 78 1.2 630,109 29,083 4.8 429,611 6,245 1.5 3,441.1 111.9 3.4 2.3 2.9

3,979 416 11.7 3,487 703 25.3 7,466 1,119 17.6 712,799 82,690 13.1 447,827 18,216 4.2 4,397.8 956.7 27.8 1.6 1.7

1,094 144 15.2 1,001 205 25.8 2,095 349 20.0 764,104 98,864 14.9 450,688 25,801 6.1 1,287.1 316.9 32.7 1.8 1.8

297 33 12.5 267 25 10.3 564 58 11.5 809,843 149,527 22.6 423,486 19,291 4.8 353.6 81.5 29.9 2.0 2.1

Median contract prices, CY to date in September 2013: single family $600,000 (15.4% 1 yr ch); condo $406,000 (6.8% 1 y r ch) Note: Data are closed contracts settled during each month or other period shown. Because average price depends on the mix of units sold, this measure can be volatile on a month‐ to‐ month basis, and it is not intended to measure changes in the value of all residential property. Monthly average price for all single family units is calculated by ORA based on reported average prices and number of sales for different types of units. Source: Metropolitan Regional Information Sy stems (MRIS); median contract price and inventory ratio data accessed through the Greater Capital Area Assn. of Realtors (GCAAR).

DC Economic and Revenue Trends: October 2013

6

DC Office of Revenue Analysis

Apartments and single family home transactions
DC housing prices rising faster than in US or the metro area
●In June the quarterly Federal Housing Finance Agency house price index for DC was 12.8% higher than a year ago. The metro area increase was 9.9%, and the US was 7.6%. ●Sales of single family units at prices above $1 million were up 68.5% in Sep. from a year ago as measured by the 3-month moving total; they accounted for 19.1% of sales. ●In the June quarter, occupied apartment units rose 2,161 (2.5%) and rents rose 1.9% from a year earlier.
25 15 5

FHFA expanded-data housing price index for DC and the US: 2004.2 to 2013.2
(% change from prior yr. in the 12-mo. moving avg.)

2004.2

2005.1

2005.4

2006.3

2007.2

2008.1

2008.4

2009.3

2010.2

2011.1

2011.4

2012.3

2013.2

-5 -15 -25

DC (2013.2 @ 12.8) US (2013.2 @ 7.6)

DC metro (2013.2 @ 9.9)

T a ble 1 0 . D .C. S in gl e f a m il y an d c on d om in iu m h o m e s a le s a t p ric e s o f $ 1 m i lli on o r m o re : S e p te m b e r 2 0 1 3
C ate go ry FY 20 0 9 F Y 2 01 0 FY 2 01 1 FY 2 0 12 1 2 -m o m o vin g tota l 3 -m o m ov in g t o ta l Th is m o n th

S ing le fa m ily ho m es 1 y ea r ch a ng e % ch an ge pe rc ent o f a ll sin g le fa m ily sa le s C o nd m iniu m s 1 y ea r ch a ng e % ch an ge p erc en t of a ll co n do m in ium sa les

33 3 -10 2 ‐ 2 3.4 10. 2 62 -1 5 ‐ 1 9.5 2. 4

41 8 85 2 5.5 10 .2 89 27 4 3.5 3 .1

4 89 71 17. 0 12 .9 87 -2 ‐ 2. 2 3 .5

4 58 -31 ‐ 6 .3 1 2.9 72 -15 ‐ 17 .2 2.6

68 9 23 1 5 0. 4 17 .3 11 2 40 5 5. 6 3 .2

2 09 85 68. 5 19 .1 30 10 50. 0 3 .0

57 25 78 .1 1 9.2 6 1 20 .0 2.2

So urc e: M etrop o litan R eg io n a l Inf o rm a tio n Sy stem s (M R IS). Sa le s a re o n es c lo se d (s et tle d) d u rin g p eriod sh o w n.

Table 11. Federal Housing Finance Agency Price Index for single fam ily property in DC, DC metro area, and US: June 2013 Fiscal year average Quarter
Indicator FY 2009 FY 2010 FY 2011 FY 2012 2012.2 2012.3 2012.4 2013.1 2013.2

% change from prior year in value of inde x DC -7.5 1.5 1.6 8.2 7.1 10.2 DC metro area -14.9 1.9 -0.4 3.7 5.3 7.0 US -10.2 -2.9 -4.8 0.9 2.9 3.5 Addendum: % change from prior year in the average price of settled sales contracts for single family homes Average DC sales price ‐10.5 ‐9.9 11.6 4.8 5.4 7.1

15.0 8.9 5.5 18.5

12.8 9.4 6.6 5.8

12.8 9.9 7.6 12.7

Source: (1) Federal Housing Financy Agency "Expanded ‐ data HPI Index" (sales plus refinancings) (nsa).This index is a broad measure of the movement of single‐fam ily house prices. It m easures aver age price changes in repeat sales or r efinancings on the same properties. This information is obtained from tr ansactions whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. It is augm ented by data on mortgages endorsed by FHA and countr y recorder data li censed fr om DataQuick Information Systems. (2) Average DC sales pr ice is the average pr ice of houses that sold duri ng the period (settled contracts): see Table 9. Not seas. adj.

Table 12. M ark et ‐ rate un its in larger DC apartment buildings: June 30, 2013
Late st Q (June 30, 2013) Indica tor Sep. 30 2009 Sep. 30 2010 Sep. 30 2011 Sep. 30 2012 a mount 1 Q ch

Inventory 1 year c hange % ch ange Oc cupied u nits 1 year c hange % ch ange Vacan t u nits 1 year c hange % ch ange % o f in ventory Average effec tive mo nthly rent % ch ange from 1 yea r

87,090 1,663 1.9 81,964 443 0.5 5,126 1,220 31.2 5.9 $1,342 0.1

87,970 880 1.0 82,965 1,001 1.2 5,005 -121 ‐2.4 5.7 $1,380 2.8

88,710 740 0.8 84,125 1,160 1.4 4,585 -420 ‐8.4 5.2 $1,422 3.0

89 ,464 754 0.8 85 ,620 1 ,495 1.8 3 ,844 -741 ‐16.2 4.3 $1 ,481 4.1

91,121 2,304 2.6 87,228 2,161 2.5 3,893 143 3.8 4.3 $1,499 1.9

316

% ch 0.3

237

0.3

79

2.1

$9

0.6

Source : Reis. I nclude s units in competitive, private sector buildings w ith 40 or m ore units. Excludes condo conver sions.

DC Economic and Revenue Trends: October 2013

7

DC Office of Revenue Analysis

Commercial office space
Office market improved slightly in September
●For the quarter ending September, the vacancy rate for DC commercial office space fell to 9.2%. ●DC’s vacancy rate in September was below the 13.4% rate for the metropolitan area. ●Occupied space in the September quarter rose by 1.99 million square feet (1.6%) from the prior year, reaching a new high. ●Space under construction in September (2.42 million square feet) was up slightly from the last quarter. ●In the June quarter, average effective rents for class A office space leases were down 1.3% from 6-months earlier.
124 123 122 121 120 119 118

Occupied office space: 2010.3 to 2013.3
(million square feet) 123.52

Table 13. Comm ercial office space in DC: Septem ber 30, 2013
(In millions of square feet, unless noted otherwise) Sep. 30 Indicator 2009 Inventory 1 year change % change Occupied space 1 year change % change Leased space Under construction 1 year change % change % of inventory Vacant (no sublet) % of inventory Vacant (w sublet) 127.45 3.86 3.1 114.45 -0.99 ‐0.9 116.25 5.75 -4.85 ‐ 45.8 4.5 11.20 8.8 13.00 4.84 59.4 S ep. 30 2010 131.95 4.49 3.5 119.94 5.49 4.8 121.35 2.14 -3.60 ‐ 62.7 1.6 10.60 8.0 12.01 -0.99 ‐ 7.6 Sep. 30 2011 133.50 1.56 1.2 121.89 1.95 1.6 123.06 2.42 0.27 12.7 1.8 10.44 7.8 11.61 -0.39 ‐ 3.3 Sep. 30 2012 133.99 0.48 0.4 121.52 -0.36 ‐ 0.3 122.82 2.74 0.33 13.5 2.0 11.17 8.3 12.46 0.85 7.3 last quarter (S eptem ber 2013) Level 1 Q ch % ch 136.03 2.05 1.5 123.52 1.99 1.6 124.43 2.42 -0.33 ‐11.9 1.78 11.60 8.5 12.51 0.05 0.4 -0.01 -0.14 ‐ 0.1 ‐ 1.1 0.01 0.03 0.0 1.2 0.14 0.1 0.00 0.0

1 year change % ch from one year
DC area vacancy rates (with sublet) District of Columbia Northern Virginia Suburban Maryland DC Metropolitan area

10.2 13.5 14.6 12.6

9.1 13.4 14.5 12.2

8.7 13.5 14.2 12.1

9.3 15.2 14.5 13.1

9.2 15.8 14.7 13.4

‐ 0.1 0.0 0.0 0.0

Source: Delta Associates. Includes single tenant and privately owned space as well as multi ‐ tenant buildings.

T a b le 1 4 . A v e ra ge e ff e c tive of fi ce re n t fo r Cl a ss A c om m e rc i a l o ff ic e l e a se s in D o w n tow n D C by y e a r: 2 0 0 9 t o 2 0 1 3 .2
In d ic a to r $ p e r s q ua re fo o t o f g ro s s floo r sp a ce e n d in g o n da t e sh o w n : 20 0 9 2 01 0 2 01 1 2 0 12 2 01 3 .2

A v er a g e effec tive r en t % ch fr om pr ior y e a r A v er a g e v a lue o f im p ro v em en ts for ten a nt s

5 0.8 0

48. 65 ‐ 4. 2

48. 54 ‐ 0 .2

47 .80 ‐ 1 .5 80 .00

47 .20 ‐ 1 .3* 85 .00

So u r c e: D e lta A sso c ia tes . R en t is f or fu ll ser vic e (in c lu d in g op e ra tin g e xp en se s a n d ta xes ), l ess c o n c ess ion s ( fre e ren t, etc .). C la ss A is d ef in ed as b u ild in g s g r ea ter th a n 5 0 ,0 0 0 sq u a r e fee t a n d b u ilt a fter 1 9 9 7 . * Per c en t ch an ge f ro m D ec em b er 31 , 2 0 1 2 .

DC Economic and Revenue Trends: October 2013

8

DC Office of Revenue Analysis

Housing permits, office and apartment outlook, and value of property transfers
Value of property transfers continues to increase ●For the 12-month period ending August, 3,768 housing unit building permits were issued, a 3.7% decline over the prior 12-month period. ●Delta Associates expects DC’s office vacancy rate (including sublet) to fall to 9.0% over the next two years.
Value of real property transfers (including transfers of economic interest): September 2011 to September 2013
60 40 20 0 (% change in 3-month and 12-month moving totals)

Sep-11

Nov-11

Jan-12

Mar-12

May-12

Jul-12

Sep-12

Nov-12

Jan-13

Mar-13

May-13

Jul-13

Sep-13

-20 -40 -60

Housing permits issued in DC: August 2010 to August 2013
5,000 4,000 3,000 2,000 1,000 0 (12-month moving total) 3,768

12-month moving total (sep @ 16.3) 3-month moving total (sep @ 25.4)

●Reis expects 6,546 new apartment units to be added to inventory in CY 2013 and CY 2014, and occupancy to grow by 6,232. ●The value of September property transfers was up by 25.4% from last year as measured by the 3-month moving total. The 12-month moving total ($11.05 billion) was 16.3% higher than last year .

Table 15. Housing unit building permits issued in DC: August 2013
12-month 3-month moving total moving total

Total units change from 1 year ago % change from 1 year

Source: Census Bureau (permits issued during period).

Table 16. Delta Associates outlook for commercial office space in DC and the surrounding metro area: Sep. 2013 to Sep. 2015
Indicator DC No VA Sub MD Total DC % of total

Inventory September 2013 Inventory (msf) 136.0 vacancy rate (%) 9.2

Estimated net activity to September 2015 new supply (msf) 2.8 4.3 new demand (msf) 2.9 4.0 Estimated Inventory September 2015 vacancy rate (%) 9.0 15.6
Source: Delta Associates msf = million square feet

Table 18. Market Value of Real Property transfers subject to the Deed Transfer or Economic Interest tax: September 2013
12-month 3-month moving total moving total

All property transfers ($ million) change from one year ago ($M)
% change from 1 year ago

Note: represents value of property or economic interest transferred as of date deed noted by the Recorder of Deeds.
DC Economic and Revenue Trends: October 2013

Aug-10

Nov-10

Feb-11

May-11

Aug-11

Nov-11

189.7 15.8

Feb-12

May-12

Aug-12

FY 2009

94.0 14.7 1.2 1.3 14.5

Nov-12

499 -191 ‐27.7

5,591.2 -5,936.1 ‐ 51.5

Feb-13

419.8 13.4 8.3 8.2 13.2

FY 2009

May-13

FY 2010

Aug-13

FY 2011

FY 2012

This month

986 487 97.6

2,459 1,473 149.4

4,091 1,632 66.4

3,768 -146 ‐3.7

747 -513 ‐40.7

49 ‐463 ‐90.4

32.4

33.7 35.4

Table 17 DC market rate apartment units: 2008 to 2017 CY Inventory 1 yr ch % vacant Occupied 2008 86,583 1,965 4.8 82,465 2009 87,788 1,205 6.1 82,415 2010 88,360 572 5.5 83,477 2011 88,817 457 4.7 84,632 2012 90,433 1,616 4.3 86,500 2013 est 92,855 2,422 3.9 89,237 2014 est 96,979 4,124 4.4 92,732 2015 est 99,072 2,093 4.7 94,380 2016 est 100,434 1,362 4.9 95,491 2017 est 101,867 1,433 5.0 96,723
Source: Reis, June 2013. (see note in table 12)

1 yr ch 1,181 -50 1,062 1,155 1,868 2,737 3,495 1,648 1,111 1,232

FY 2010

FY 2011

FY 2012

This month

7,789.1 2,197.9 39.3

10,059.5 2,270.4 29.1

9,494.3 -565.3 ‐5.6

11,045.3 1,551.1 16.3

3,469.6 703.5 25.4

982.8 380.1 63.1

9

DC Office of Revenue Analysis

Hospitality
Hotel stays continue to increase
●In August the 3-month moving total for hotel room-days sold was 0.9% more than a year earlier. The average room rate fell 2.0%, leading to 1.2% loss in room revenue. ●Employment in food services was 5.9% more in August than a year earlier as measured by the 3-month moving average. Hotel employment fell 0.2%, and retail lost 3.9%. ●July airline traffic into the DC area was flat from a year earlier as measured by the 3-month moving total. Reagan National Airport gained 4.9%.
Hotel room sales revenue: Aug. 2011 to Aug. 2013
(percent change in 3-month and 12-month moving average from same period of prior year) 20 15 10 5 0

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

Feb-13

Apr-13

Jun-13

Aug-13

-5 -10

3-mo. moving average (aug @-1.2) 12-mo. moving average (aug @ 1.6)

Table 19. Hospitality Indu stry: August 2013
3-month 12-m o total moving total or averag e* or averag e* This m onth

Indicator

Units

date

FY 2010

FY 2011

FY 2012

Hotel stays H otel room -days sold

('M) 1 yr ch 1 yr % ch $ 1 yr ch 1 yr % ch % 1 yr ch 1 yr % ch ($M) 1 yr ch 1 yr % ch 1 yr % 1 yr % 1 yr % 1 yr % ch ch ch ch

aug

7.370 0.248 3 .5 199.12 -4.05 ‐2 .0 73 .8 0 .7 0 .9 1 ,467 .5 20 .5 1 .4 0 .5 1 .2 4 .6 2 .1 15 .3 0 .3 2 .0 37 .0 1 .2 3 .3 7 .0 -0 .1 ‐1 .5 18 .3 0 .5 3 .0

7.465 0.095 1 .3 206.60 7.49 3 .8 74 .2 0 .5 0 .6 1 ,542 .3 74 .8 5 .1 6 .2 0 .6 4 .2 3 .4 15 .3 0 .0 0 .1 39 .3 2 .3 6 .2 6 .8 -0 .2 ‐2 .5 18 .6 0 .2 1 .3

7.617 0.152 2 .0 203.59 -3.02 ‐1 .5 75 .4 1 .2 1 .6 1 ,550 .7 8 .4 0 .5 2 .8 -2 .9 1 .0 0 .1 15 .5 0 .2 1 .1 42 .7 3 .3 8 .5 6 .9 0 .1 1 .5 18 .8 0 .3 1 .4

7.676 0.049 0.6 206 .90 1 .91 0.9 7 5.9 0.4 0.6 158 8.1 2 4.6 1.6 7.3 - 4.8 - 0.7 0.2 1 5.5 0.0 ‐0.2 4 4.0 1.6 3.7 6.9 0.0 ‐0.2 1 8.2 - 0.6 ‐3.0

2.1 06 0.0 19 0.9 183.44 -3.81 ‐2.0 81.9 -0.1 ‐0.2 386.3 -4.5 ‐1.2 4.9 -2.6 -1.6 0.0 15.6 0.0 ‐0.2 46.3 2.6 5.9 7.0 -0.4 ‐5.0 18.0 -0.7 ‐3.9

0 .679 0 .041 6.4 15 3.44 - 1.07 ‐0.7 78.4 3.7 5.0 1 04.1 5.6 5.7 2.4 -0.1 -2.6 -0.3 15.5 0.1 0.6 46.2 2.9 6.7 6.9 -0.4 ‐5.5 18.0 -0.6 ‐3.2

Average room rate

aug

Occupancy rate (averag e) Room revenue

aug

aug

A irline passengers DCA IAD BWI Total Em ployment Accommodations

jul jul jul jul aug

level ('000) 1 yr ch 1 yr % ch level ('000) 1 yr ch 1 yr % ch level ('000) 1 yr ch 1 yr % ch level ('000) 1 yr ch 1 yr % ch

Food and bev

aug

Arts and entertain.

aug

Retail

aug

* Total for hotel r ooms sold and room revenue Source: Smith Travel Research (hotel data); BLS (employment); A irport authorities (airline passengers);

DC Economic and Revenue Trends: October 2013

10

DC Office of Revenue Analysis

US economy
Economic growth picked up in the June quarter
●June was the 9th consecutive quarter of real GDP growth (newly revised series). The 2.5% annual rate of growth for the quarter was above average for the post-recession recovery. ●US employment (seas. adj.) increased by 148,000 in September ●The US unemployment rate (seasonally adj.) fell to 7.2% in Sep.. ●In September the S & P 500 index rose 1.0% from August, and was 16.9% above last year. ●Compared to a year earlier, inflation fell in August to 1.5% (sa).
Real (2013.2 @ 2.5) Nominal (2013.2 @ 3.1)

Quarterly change in US Real and Nominal GDP: 2010.2 to 2013.2
(% change from the previous quarter at annual rates) 7 6 5 4 3 2 1 0 -1 -2

2010.2

2010.3

2010.4

2011.1

2011.2

2011.3

2011.4

2012.1

2012.2

2012.3

2012.4

2013.1

2013.2

Table 20. US GDP, income, corporate profits, and inflation: 2013.2 and September 2013
(percent change from same period of prior year unless noted)
Indicator Date of latest indicator FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 12-mo avg 2013.2 Sep. 2013

US GDP real US GDP nominal US Personal income US wages Corporate profits S and P stock index US CPI Balt//Wash. area CPI

2013.2 2013.2 2013.2 2013.2 2013.2 sep aug jul

1 yr % ch 1 yr % ch 1 yr % ch 1 yr % ch 1 yr % ch 1 yr % ch 1 yr % ch 1 yr % ch

1.1 3.4 5.6 3.4 -11.2 -5.7 4.4 5.0

-3.9 -2.6 -3.4 -3.5 -12.2 -34.3 -0.3 0.3

1.8 2.8 1.5 0.4 35.9 23.7 1.7 1.7

1.9 4.0 5.4 4.0 9.1 13.8 2.7 3.0

2.3 4.2 3.3 3.1 8.4 5.4 2.4 2.4

2.0 3.7 3.7 3.9 3.8 16.7 1.7 1.8

1.6 3.1 3.0 3.2 4.5 19.2 1.4 na 16.9 1.5 1.9

Source: BEA (data revised as of September 26, 2013), BLS, and Yahoo finance. na = not available Personal income and wage data may differ from amounts shown in table 8 due to differences in BEA source tables.

Table 2 1. Q uarte r to qua rte r c ha nge in US GD P and inc om e : 2 0 11 .4 to 20 1 3 .2
( perc ent chang e fro m pr evi ous quar ter at seaso na lly adj ust ed ann ual r ates)
In d ica to r u n its ca len d ar ye ar q u arte r 20 1 1. 4 2 01 2. 1 2 01 2. 2 2 01 2 .3 2 01 2 .4 2 01 3 .1 2 0 13 .2

U S GDP r eal U S GDP no m inal W ag es an d salar ies P erso nal i nco m e

% c h f rom pr ior Q at saar % c h f rom pr ior Q at saar % c h f rom pr ior Q at saar % c h f rom pr ior Q at saar

4.9 5.4 -2.4 0.6

3.7 5.8 11.1 7.4

1.2 3.0 1.8 3.0

2.8 4.9 1.8 1.5

0.1 1.6 10.5 10.8

1.1 2.8 -2.6 -4.2

2 .5 3 .1 3 .1 4 .0

N o te: GD P =G ros s D o m es tic Pro d uct s aa r=s ea so n ally a d jus ted at a n nu al rate Sou rce: BEA, up da ted o n Se pte m be r 2 6, 2 0 13

Table 22. M on th ly s elected US Indicators : M a rch 2013 to S eptember 2013
I ndicator Ma r Apr M ay June July August Septe mber

S an d P stoc k ind ex (l evel ) % chan ge from prior mon th % ch ang e fro m 1 y ear ago 1 0 y r. Treasu ry Interest rate (lev el) C PI % ch f ro m prior mo nt h (season ally a djusted) C PI % ch fro m prio r year (seasona lly ad just ed) J obs (seaso nally ad just ed level, in m illions) ch an ge fro m p rio r mont h ( tho usands) % chan ge from prior mon th R esid ent emplo ymen t ( seaso n. adj. level, i n mi l.) ch an ge fro m p rio r mont h ( tho usands) % chan ge from prior mon th U nemp loyment rate (season ally adj.)
So urce: BLS and Y ahoo! F inance .

1551 2.5 11.6 1.95 -0.18 1.48 135.31 142 0.11 143.29 -206 0.06 7.6

1571 1.3 13.3 1.73 -0.37 1.11 135.51 199 0.15 143.58 293 0.20 7.5

1640 4.4 22.3 1.92 0.15 1.39 135.69 176 0.13 143.90 319 0.22 7.6

1619 -1.3 22.3 2.29 0.48 1.76 135.86 172 0.13 144.06 160 0.11 7.6

1668 3.0 22.6 2.57 0.16 1.96 135.95 89 0.07 144.29 227 0.16 7.4

1670 0.1 19.0 2.73 0.09 1.52 136.14 193 0.14 144.17 -115 ‐ 0.08 7.3

1687 1.0 16.9 2.80

136.29 148 0.11 144.30 133 0.09 7.2

DC Economic and Revenue Trends: October 2013

11

DC Office of Revenue Analysis

DC tax collections
6,500

Total DC tax collec ons (before earmarking): September 2008 to September 2013
(12-month moving total in $ million) September 2013 @ 6,118.1M

6,100 5,700 5,300 4,900 4,500

Table 23. Tax Collections (before earmarking): September 2013 (Preliminary) ($ million) Revenue (from CAFR)
12-month movi ng total

Sep-08

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Tax collections
FY 2013 3-month to date moving total

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Tax

FY 2010

FY 2011

FY 2012

This month

Total taxes 1 year change % change Real property 1 year change % change General sales 1 year change % change Individual income 1 year change % change withholding 1 year change % change non-withholding 1 year change % change Corporate income 1 year change % change Unincorporated Bus. 1 year change % change Deed taxes* 1 year change % change Other taxes 1 year change % change

5,005.2 -47.0 ‐0.9 1,821.5 -1.2 ‐0.1 976.7 1.8 0.3 1,110.4 -25.5 ‐2.2 1,073.8 52.6 5.2 36.6 -78.1 ‐ 68.1 207.3 -14.6 ‐6.6 116.4 -3.9 ‐3.2 225.6 38.2 20.4 547.3 -43.3 ‐7.3

5,325.3 320.1 6.4 1,715.1 -106.4 ‐5.8 1,014.9 51.7 3.9 1,296.6 186.2 16.8 1,192.2 118.3 11.0 104.4 67.8 185.2 216.3 9.0 4.3 143.4 27.0 23.2 311.2 85.6 37.9 627.8 80.6 14.7

5,861.8 536.5 10.1 1,822.0 106.9 6.2 1,111.0 67.6 9.5 1,490.7 194.1 15.0 1,321.6 129.5 10.9 169.1 64.6 61.9 302.9 86.6 40.1 163.0 19.6 13.6 306.6 -4.5 ‐1.5 665.5 37.7 6.0

6,118.1 262.8 4.5 1,901.7 80.9 4.4 1,133.0 33.4 3.0 1,665.1 192.5 13.1 1,402.7 97.1 7.4 262.4 95.4 57.1 302.3 -2.9 ‐ 0.9 160.4 1.9 1.2 366.2 68.1 22.8 589.4 -111.1 ‐15.9

6,118.1 262.8 4.5 1,901.7 80.9 4.4 1,133.0 33.4 3.0 1,665.1 192.5 13.1 1,402.7 97.1 7.4 262.4 95.4 57.1 302.3 -2.9 ‐0.9 160.4 1.9 1.2 366.2 68.1 22.8 589.4 -111.1 ‐15.9

2,021.2 28.3 1.4 920.8 33.1 3.7 285.5 5.7 2.0 396.8 17.3 4.6 342.9 21.0 6.5 53.8 -3.7 ‐6.4 68.4 -15.0 ‐18.0 31.5 7.1 29.3 120.8 30.2 33.4 197.5 -50.2 ‐20.3

1,250.4 -7.4 ‐0.6 814.7 32.1 4.1 91.9 11.8 14.8 174.0 -1.9 ‐1.1 115.5 1.9 1.6 58.6 -3.8 ‐6.1 54.6 -11.2 ‐ 17.0 25.1 -0.1 ‐0.2 31.4 13.6 75.9 58.6 -51.7 ‐ 46.8

*Deed taxes include deed recordation, deed transfer, and economic interest taxes on real pr operty transactions. Note: (1) Revenue for the fiscal years shown is consistent with the CAFR for those respective years. (2) Tax collections data subject to accounting adjustments. (3) This table and the graphs on the next page may include adjustments to the timing and consistency of collection reporting intended to make comparisons with prior year periods more meaningful. The data may therefore vary from other OCFO reports. Source: OCFO/ORA

DC Economic and Revenue Trends: October 2013

12

DC Office of Revenue Analysis

DC tax collections
Preliminary tax collections for FY 2013 are 4.5% above FY 2012
●For FY 2013 through September preliminary tax collections
(before earmarking) were $263 million (4.5%) more than in FY 2012. Collections for the last 3 months were 1.4% above last year.
30.0 20.0 10.0 0.0

Total tax collections (before earmarks): September 2012 to September 2013 (% change from prior year: 3 months, 12 months, and FY 2013-to-date)

●For FY 2013, preliminary individual income tax collections are
13.1% above last year and account for about 73% of the gain in all collections over last year. Withholding in the past three months was 6.5% above a year earlier.

●Preliminary general sales collections for FY 2013 were 3.0%
above last year. For the past 3 months they were 2.0% above last year.

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

-10.0 -20.0

●For FY 2013 preliminary deed tax collections were up 22.8%
from the prior year; and for the past 3 months they were 33.4% above the prior year.

3-month moving total (sep @ 1.4) 12-month moving total (sep @ 4.5) FY 2013-to-date (sep @ 4.5)

General Sales tax collections (before earmarks): September 2012 to September 2013 (% change from prior year: 3 months, 12 months, and FY 2013-to-date )
15.0 10.0 5.0 0.0

Withholding for the Individual Income tax: September 2012 to September 2013 (% change from prior year: 3 months, 12 months, and FY 2013-to-date)
20.0 15.0 10.0 5.0 0.0
Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

-5.0 -10.0

3-mo moving total (sep @ 2.0) 12-mo moving total (sep @ 3.0) FY 2013 to date (sep @ 3.0)

3-month moving total (sep @ 6.5) 12-month moving total (sep @ 7.4) FY 2013-to-date (sep @ 7.4)

Deed tax collections (before earmarks): September 2012 to September 2013 (% change from prior year: 3 months, 12 months, and FY 2013-to-date)
120.0 100.0 80.0 60.0 40.0 20.0 0.0

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

-20.0 -40.0

3-month moving total (sep @ 33.4) 12-month moving total (sep @ 22.8) FY 2013-to-date (sep @ 22.8)

DC Economic and Revenue Trends: October 2013

13

DC Office of Revenue Analysis

US economic forecasts
The October Blue Chip Indicators decreased slightly its outlook for FY 2014
●The October Blue Chip Indicators decreased its forecast for real GDP growth in FY 2014 to 2.4%. ●The October Blue Chip Indicators forecast for inflation (CPI) remained the same for FY 2013 (1.6%) and decreased slightly for FY 2014 (to 1.7%). ●S and P 500: The range of September forecasts for the change in the last quarter of 2013 compared to the last quarter of 2012: 8.3% to 18.6%.

Table 24. Forecasts for US nominal and real GDP: FY 2012 through FY 2014 (% change from prior fiscal year)
real Forecast and date 2012 2013 2014 2012 nominal 2013 2014
6 4

Blue Chip Indicators estimate of US Nominal and Real GDP: FY 2007 to FY 2014
(% change from the prior year; Oct. 2013 estimate)

Congressional Budget Office August 2.0 February 2013 2.3 Sep. 2013 2.3 Blue Chip July August September October 2.3 2.8 2.8 2.8

0.4 1.5 1.5

2.1 2.1

3.9 4.2 4.2 4.2 4.6 4.6 4.6

2.0 3.1 3.1 3.2 3.1 3.2 3.2

3.8 3.8 4.2 4.1 4.1 4.0

2 0

1.6 1.5 1.6 1.6

2.5 2.4 2.5 2.4

2007 -2 -4

2008

2009

2010

2011

2012

2013 est

2014 est

Sources: Blue Chip Indicators and the Congressional Budget Office.

Real (2014 @ 2.4) Nominal (2014 @ 4.0)

S and P 500 stock index actual and alternative forecasts: 2006.4 to 2014.4 (September forecasts; value of index)
1700 1500 1300 1100 900 700 1610

Table 25. Forecasts for S and P 500: 2012.4 to 2014.4
(% change from prior fiscal year) Forecast % change from prior year date 2012.4 2013.4 2014.4 Global Insight: baseline % change from prior year 2012.4 2013.4 2014.4 Global Insight: pessimistic

1738 1562

June July August September
2006.4 2007.3
Actual Global Insight pessimisstic

15.7 15.7 15.7 15.7 15.7 15.7 15.7 15.7

14.4 15.5 19.3 18.6 12.9 13.7 13.7 16.8

3.6 4.7 3.3 3.4 2.4 -0.2 -0.2 -0.6

15.7 15.7 15.7 15.7 15.7 15.7 15.7 15.7

-1.0 0.0 7.2 8.3 9.5 10.5 13.7 16.8

7.6 8.7 3.4 1.7 1.2 0.9 -4.4 -4.7

Economy.com baseline

Economy.com pessimistic

DC Economic and Revenue Trends: October 2013

2008.2

2009.1

2009.4

2010.3

2011.2

Global Insight baseline

Table 26. Blue Chip forecasts for CPI and 10 year Treasury interest rate: FY 2012 to FY 2014
(% change from prior fiscal year) Forecast date CPI 2012 2013 2014 10 yr Treasury rate 2012 2013 2014

Jul Aug Sep Oct

Source: Blue Chip Indicators

2012.1

2012.4

2013.3

2014.2

June July August September

Source: IHS Global Insight and Moody's Economy.com.

2.5 2.5 2.5 2.5

1.6 1.6 1.6 1.6

1.7 1.7 1.8 1.7

1.9 1.9 1.9 1.9

2.0 2.1 2.1 2.1

2.7 2.9 3.0 3.0

14

DC Office of Revenue Analysis

DC economic forecasts
September forecasts for DC by IHS Global Insight and Moody’s Economy.com did not change much The biggest changes in September are (1) modest cuts in FY 2014 income earned in DC and for DC residents in all forecasts, and (2) reduction in employment estimates in the Economy.com forecasts.
●Employment: The range of change in wage and salary employment for FY 2013 is 3,242 to 4,243; and for FY

2014: -1371 to 6,920.

●Unemployment: . The unemployment rate forecast range for FY 2013 is 8.5%. For FY 2014 the range is 8.3% to 8.9%. ●Wages earned in DC: The range in growth from the prior year: 1.0% to 1.9% in FY 2013, picking up to 1.7% to

4.6% in FY 2014.

●Wages earned by DC residents: The range in growth from the prior year: -0.8% to 1.8% in FY 2013, and –4.1% to

3.5% in FY 2014. Both forecasts still anticipate that the growth in resident wages in FY 2013 and FY 2014 will be lower than those for growth in wages earned in DC, a reversal of recent trends.
Table 27. Jobs in DC: forecasts for FY 2012 to FY 2014
(amount of change from prior year)
Date of estimate Global Insight: baseline 2012 2013 2014 Global Insight: pessimistic 2012 2013 2014 Economy.com: baseline 2012 2013 2014 Economy.com: pessimistic 2012 2013 2014

Jun Jul Aug Sep

6,659 6,659 6,659 6,659

5,929 4,307 4,331 4,243

8,681 6,964 7,015 6,920

6,658 6,658 6,658 6,658

5,671 4,155 4,139 4,189

5,974 4,466 4,475 4,294

6,658 6,658 6,658 6,658

4,887 4,963 4,341 3,290

4,663 5,548 5,380 2,063

6,658 6,658 6,658 6,658

4,625 4,719 4,291 3,242

-668 484 2,167 -1,371

Source: IHS Global Insight and Moody's Economy.com.

Table 28. Unemployment rate in DC FY 2012 to FY 2014
Date of estimate Global Insight: baseline 2012 2013 2014 Global Insight: pesssimistic 2012 2013 2014 Economy.com: baseline 2012 2013 2014 Economy.com: pessimistic 2012 2013 2014

Jun Jul Aug Sep

9.3 9.3 9.3 9.3

8.5 8.5 8.5 8.5

8.4 8.4 8.5 8.4

9.3 9.3 9.3 9.3

8.6 8.5 8.5 8.5

8.8 8.8 8.8 8.7

9.3 9.3 9.3 9.3

8.5 8.4 8.5 8.5

8.3 8.2 8.3 8.3

9.3 9.3 9.3 9.3

8.6 8.5 8.5 8.5

9.9 9.8 8.9 8.9

Source: IHS Global Insight and Moody's Economy.com.

Table 29. Wages earned in DC FY 2012 to FY 2014
(percent change from prior year)
Date of estimate Global Insight: baseline 2012 2013 2014 Global Insight: pessimistic 2012 2013 2014 Economy.com: baseline 2012 2013 2014 Economy.com: pessimistic 2012 2013 2014

Jun Jul Aug Sep

2.1 2.1 2.1 2.1

-0.8 0.6 0.9 1.0

3.5 3.7 3.6 2.9

2.1 2.1 2.1 2.1

-0.9 0.5 0.7 1.0

2.2 2.5 2.4 1.7

2.1 2.1 2.1 2.1

1.7 1.7 2.1 1.9

4.7 4.8 4.8 4.6

2.1 2.1 2.1 2.1

1.6 1.6 2.1 1.9

3.2 3.4 4.1 3.5

Source: IHS Global Insight and Moody's Economy.com.

Table 30. DC resident wages FY 2012 to FY 2014
(percent change from prior year)
Date of estimate Global Insight: baseline 2012 2013 2014 Global Insight: pessimistic 2012 2013 2014 Economy.com: baseline 2012 2013 2014 Economy.com: pessimistic 2012 2013 2014

Jun Jul Aug Sep

3.2 3.3 3.3 3.3

-5.5 -1.8 -1.2 -0.7

0.5 1.7 1.5 -1.4

3.2 3.3 3.3 3.3

-5.8 -2.1 -1.4 -0.8

-2.4 -1.1 -1.2 -4.1

3.2 3.2 3.3 3.3

1.2 1.2 2.0 1.8

3.7 3.9 4.0 3.5

3.2 3.2 3.3 3.3

1.2 1.1 2.0 1.7

2.6 2.9 3.4 2.7

Note: Estimated by ORA; assumes wage and salary supplements are the same % for DC resident wages as for wages earned in DC. Source: IHS Global Insight and Moody's Economy.com.

DC Economic and Revenue Trends: October 2013

15

DC Office of Revenue Analysis

DC revenue estimate
The September revenue estimate adds to revenue growth in FY 2013 and FY 2014
●Anticipated tax revenue growth of $253.9 million in FY 2013 and $157.2 million in FY 2014 (gains of 4.3% and 2.6%, respectively) are significantly lower than that which occurred in FY 2012 ($528.0 million and 9.9%). This reflects one-time increases in FY 2012, slowing employment growth in DC, and allowances for the impact of a sequester or other cutbacks in federal spending. ●The individual income tax accounts for about 64% of growth in FY 2013, and real property accounts for 73% of the growth in FY 2014. ●As a share of DC Personal Income, tax collections in FY 2013 and FY 2014 are slightly higher than in FY 2012.

Table 31. DC Tax Revenue (before earmarks) for FY 2012 through FY 2014: September 2013 revenue estimate Tax FY level ($ million) Change from prior year ($ M) % change from prior year
2012 Real property Deed taxes General sales Individual income Withholding non‐withholding Business income Other Total 1,822.0 306.6 1,111.0 1,490.7 1,321.6 169.1 465.9 657.0 5,853.3 2013 1,889.8 346.6 1,138.2 1,653.6 1,415.6 238.0 475.8 603.3 6,107.2 2014 2,004.8 315.4 1,145.2 1,687.0 1,450.8 236.3 490.5 621.4 6,264.4 2012 106.9 -4.5 96.1 194.1 129.5 64.6 106.2 29.2 528.0 2013 67.7 40.0 27.1 162.9 94.0 68.9 9.9 -53.7 253.9 2014 115.1 -31.2 7.0 33.5 35.2 ‐1.7 14.7 18.1 157.2 2012 6.2 -1.5 9.5 15.0 10.9 61.9 29.5 4.6 9.9 2013 3.7 13.0 2.4 10.9 7.1 40.8 2.1 -8.2 4.3 2014 6.1 -9.0 0.6 2.0 2.5 ‐0.7 3.1 3.0 2.6

Source: ORA. Sep. 30, 2013 revenue estimate under existing legislation. The table includes tax revenue only, before all earmarks, and excludes all non‐tax revenues, lottery, and "O‐tyoe" earmarked revenues. FY 2012 is from the FY 2012 CAFR

Table 32. DC labor market assumptions: FY 2012 to FY 2014

item Wage and salary employment 1 year change % change DC resident employment 1 year change % change Unemployment rate

2012 730,025 6,658 0.9 323,512 11,396 3.7 9.3

2013 733,690 3,665 0.5 338,569 15,057 4.7 8.5

2014 737,181 3,491 0.5 341,163 2,594 0.8 8.8

Table 33. DC Income and stock market assumptions: FY 2012 to FY 2014 (% change from prior year)

item Wages and salaries earned in DC Wages and salaries earned by DC residents DC Personal income S and P 500 stock index

2012 2.1 3.3 3.9 15.7

2013 0.7 3.1 3.5 7.2

2014 1.8 2.1 2.8 3.4

Source: ORA September 2013 revenue estimate

Source: ORA September 2013 revenue estim ate. Stock index, on a calendar year basis, represents the % change from the December quarter of the prior year.

Table 34. DC tax revenue (before earmarks) and DC Personal Income: FY 2006 to FY 2015
item 2006 20 07 2008 2009 2010 201 1 2 012 2013 est 2014 est 2 015 est

Tax revenue ($ million) Level Change from prior year Percent change from prio r year Tax revenue Personal Income Tax revenue as percent of Personal Inco me
4,51 6 26 7 5,155 638 5,325 170 5,052 -273 5,005 -47 5,3 25 3 20 5,853 528 6,107 254 6,264 157 6,4 35 1 71

6.3 8.2

14.1 8.1

3.3 9.6

-5.1 0.4

- 0.9 4.1

6.4 6.8

9.9 3.9

4.3 3.5

2.6 2.8

2.7 3.5

1 3.3

14.0

13.2

12.5

1 1.9

11.8

12.5

12.6

12.6

12.5

Source: ORA. September 2013 revenue estimate under existing legislation. The table includes tax revenue only, before all earmarks, and excludes all non ‐ tax revenues, lottery, and "O ‐ type" earmar ked revenues.

DC Economic and Revenue Trends: October 2013

16

DC Office of Revenue Analysis

DC Personal Income, continued from p.1

Continued from p.1

Property income. Property income accounted for 16.1% of DC Personal Income in 2012. From 2001 to 2012 property income was also the slowest growing DC Income component, modestly outpacing the US average (57.6% v. 51.6%). Property income grew in DC at about the same pace as earnings until 2008. With the US recession, property income declined 17.5% by 2010, but it grew rapidly from 2010 to 2012 (when it was the fastest growing component of Personal Income) to again reach the level of 2008. Transfer payments. This is the smallest of the three components of DC Personal Income, accounting for 12.0% in 2012, It was, however, the fastest growing component in both DC and the US from 2001 to 2012—94.7% v. 98.5%. The growth of transfer payments accelerated during the recession, and about 55% of the increase in transfers
from 2008 to 2010 were accounted for by Unemployment Insurance and Medicaid. The November Trend report will look at other aspects of the earnings and transfer payments components of DC Personal Income. —Stephen Swaim, Office of Revenue Analysis

DC Personal Income components in 2012 ($B)
DC resident earnings (71.9%) Property income (16.1%) $34.00 Pensions and other transfers (12.0%)

Components of DC Personal Income: 2001 to 2012 (Index numbers: 2001 = 100)
220 200 180 160 140 120 100 80 60 DC resident earnings Property income Transfers 194.7 186.1 157.6

$5.66 $7.63

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

DC and US Property Income: 2001 to 2012 (2001 = 100)
170 160 150

DC and US Transfers: 2001 to 2012 (2001 = 100)
210 190 170

140 130 120 110 100 90

150

DC (2012 @ 157.6) US (2012 @ 151.6)

130 110 90

DC (2012 @ 194.7) US (2012 @ 198.5)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2012
2011

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

DC and US Personal Income in 2012: level and change from 2001 to 2012 Personal Income in 2012
Income component Amount ($ million) Percent of total Amount ($M)

2012

Change from 2001 to 2012
Percent change Percent of total ch.

Earnings Property Transfers Total

DC US 33,996 8,875,621 7,630 2,495,206 5,655 2,358,236 47,281 13,729,063

DC 71.9 16.1 12.0 100.0

US 64.6 18.2 17.2 100.0

DC US 15,731 2,726,504 2,789 849,008 2,751 1,170,163 21,270 4,745,675

DC 86.1 57.6 94.7 81.8

US 44.3 51.6 98.5 52.8

DC 74.0 13.1 12.9 100.0

2012

US 57.5 17.9 24.7 100.0

Source: US Bureau of Economic Analysis

Cha ng e i n Pe rso na l Inc om e in DC a nd the US : tw o ‐ ye a r pe riod s f ro m 2 0 06 to 2 012
Dis tr ic t of C olu m bia
Am o u n t of c h a ng e ($ M ) f ro m : 2 00 6 t o 2 00 8 t o 2 0 10 t o 2 0 08 2 0 10 20 1 2 Pe rc en t c h an g e fro m : 20 0 6 t o 2 00 8 t o 2 01 0 t o 2 00 8 2 01 0 2 0 12

US
P erc e n t c h an ge f ro m: 2 00 6 t o 2 00 8 t o 2 0 10 to 2 0 08 2 0 10 20 1 2

In c o m e c o m p o n en t

E a rn in g s Pr op e rty T ra n sfe r s to ta l
A dd en du m :E a rnin gs b y a ll in DC

4, 5 04 1, 0 01 5 66 6, 0 72
7 ,13 2

1 ,6 82 - 1 ,3 31 1 ,1 58 1 ,5 10
3 ,64 6

3 ,4 4 6 1 ,3 3 7 288 5 ,0 7 1
5 ,0 27

1 8 .5 1 5 .1 1 5 .5 1 7 .5
11 .9

5 .8 -1 7 .5 2 7 .5 3 .7
5 .4

1 1 .3 2 1 .3 5 .4 1 2 .0
7 .1

6 .5 1 3 .2 1 7 .0 9 .3

- 1.4 -1 1.8 2 0.9 0.0

1 0 .8 1 6 .7 3 .6 1 0 .5

DC Economic and Revenue Trends: October 2013

17

DC Office of Revenue Analysis

ORA Reports and Documents
From time to time the Office of Revenue Analysis prepares revenue estimates, fiscal impact statements on pending legislation, reports, and other documents on subjects related to DC ‘s economy and taxes. These documents are posted on the OCFO web site (www.cfo.dc.gov) under subcategories of “Reports and Publications” and “Budget and Revenue.”

Recent ORA reports: Revised Revenue estimates for FY 2013 to FY 2017, September 30, 2013. Quarterly revenue estimate shows differences from the prior estimate, describes economic assumptions and changes in each tax, and contains details of each tax and of key economic variables. Briefing documents. A series with information related to DC’s economy and taxes. DC Tax Facts, 2013. Details on all DC taxes. Tax Rates and Tax Burdens 2011 Nationwide. This annual publication compares DC tax rates and estimated DC tax burdens for households of different income levels with the rates and burdens of state and local taxes in the principal cities in all 50 states. Tax Rates and Tax Burdens 2011 Washington Metropolitan Area. This annual publication compares DC tax rates and estimated DC tax burdens for households of different income levels with the rates and burdens of the surrounding jurisdictions in the DC metropolitan area. About this report. District of Columbia Economic and Revenue Trends is generally issued about the third week every month. Employment and most other DC information reported on a monthly basis is from one to two months prior to the Trends date (the October report has mostly July and August data). Lags can be greater with quarterly data such as Personal Income and commercial real estate. Data in the tables are believed to be reliable, but original sources are definitive. All data are subject to revision by the information source. The Trends report is available at the DC Chief Financial Officer web-site: www.cfo.dc.gov (click on Budget and Revenue/Economy/ Economic and Revenue Trends).

Table 35. Information sources
Indicator D.C. Jobs and Labor Force information D.C. Personal Income D.C. Tax Collections D.C. Housing Sales D.C. Commercial Office Building data DC Apartment data D.C. Hotel stay information Consumer Price Index U.S. Jobs and Labor Force U.S. GDP and Personal Income S and P 500 Stock Index Interest rate on 10-Year Treasury Securities IHS Global Insight D.C. forecast Moody's Economy.com D.C. forecast Blue Chip Economic Indicators for the U.S. Source BLS BEA OTR/ORA MRIS* Delta Associates Reis, inc Smith Travel Research BLS BLS BEA Financial press Financial press Global Insight Economy.com Aspen Publishers Period covered in this report August 2013.2 September September 2013.3 2013.2 July August August and September 2013.2 September September September September October Next release November 22 December 19 November15 c October 10 c January 1 c November c. September 30 October 30 November 8 November 7 November 1 November 1 c. October 25 c. October 25 November 10

*Metropolitan Regional Information Systems; listings and contract data accessed through the Greater Capital Area Association of Realtors.

For further information or to comment on this report, contact: Stephen Swaim (202-727-7775) or stephen.swaim@dc.gov See also the Economic Indicators issued monthly by the D.C. Office of the Chief Financial Officer (www.cfo.dc.gov). District of Columbia Economic and Revenue Trends is prepared by the Office of Revenue Analysis, which is part of the Office of the Chief Financial Officer of the District of Columbia government. Fitzroy Lee, Deputy Chief Financial Officer and Chief Economist Office of Revenue Analysis 1101 4th St., SW, Suite W770 Washington D.C. 20024 202-727-7775
DC Economic and Revenue Trends: October 2013

18

DC Office of Revenue Analysis

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