California vs. Texas Economies 2020 Version

[Rasulis]

CA unmployment was 8.2% in November 2020 and TX was 8.1%.

Hardest hit sector for both was arts, entertainment and recreation: -49.8% for CA and -44.9% for TX.

One-year GDP change: -2.1% CA (lower than the US which was -2.8%) and -3.4% for TX.

What went wrong with TX? Oil & Gas, the pillar of TX economy, shrank by 18.7% in 2020. It's not all bad. The finance & insurance industry grew by 4.5%. Driven by the all the billion dollar chapter 11 cases. In case people are not aware, the Southern Texas Bankruptcy Court District is where companies, worldwide, come to file for bankruptcy.

It is not all sugar and spice for CA either. Oracle & HP left the states. Despite that, CA IT industry, which was pretty massive to start with, grew by 5.3%. What else?

Agriculture grew by 14.5%. How?

What happened when people had to stay home during a pandemic? They snacked a lot. Global demand for CA nuts and dried fruits went through the roof.

Once again, what happened when people had to stay home during a pandemic? People cooked more. US demand for garlic tripled.

Once again, what happened when people had to stay home during a pandemic? Apparently they try to eat healthier. Demand for salad produce also went up.

Once again, what happened when people had to stay home during a pandemic? They drank. CA wine industry had a banner year.

CA movie industry also had a banner year. It actually took back production from Texas and Georgia. Nah. Not possible.

CA movie industry received a waiver so that they can kept working during the pandemic. So do Texas and Georgia.

The state enacted very generous tax credit? So do Georgia & Texas.

Here is something that Georgia & Texas do not have. Streaming services, which are mostly CA based (Disney+, Netflix, Hulu, StarZ, Apple TV, Youtube), grew exponentially. Disney+ went from zero in 2019 to 73 million subscribers. The demand for new content is driving LA based productions to new record. Not only is the industry taking production away from Texas and Georgia, they are also taking talents away.

The return of the movie industry to CA is one of the biggest silver lining of the pandemic.

[PC2]

You're a Californiaphile!

I really like reading about state statistics but I don't like the idea of comparing states too much because it often leads people to believe that associations between favorable or unfavorable numbers and a state being more red or blue implies a causal connection between them. It leads to a lot of confusion and tribalism.

[Witchblade77]

and there I thought movie industry basically skedaddled to some combination of Vancouver and New Zealand with a smattering of eastern Europe, due to it being much cheaper to film there..

oh right, pandemic and travel restrictions.. however unless CA does something about costs post pandemic, the movie industry will skedaddle again the moment they can. can't speak of other industries.

[Calfredd]

You're a Californiaphile!

I really like reading about state statistics but I don't like the idea of comparing states too much because it often leads people to believe that associations between favorable or unfavorable numbers and a state being more red or blue implies a causal connection between them. It leads to a lot of confusion and tribalism.

Ad hominum. Attack the stats, not the poster.

[PC2]

Ad hominum. Attack the stats, not the poster.

lol I was not attacking Rasulis or even disagreeing with his points. He's mainly just posting raw information about the topic, which is good.

I just don't really like the whole X region versus Y region thing because I think there is an abundance of opportunity in most of these regions and we should not view economies through the lense of competition when all regions can grow and prosper in parallel.

[Kaleredar]

and there I thought movie industry basically skedaddled to some combination of Vancouver and New Zealand with a smattering of eastern Europe, due to it being much cheaper to film there..

oh right, pandemic and travel restrictions.. however unless CA does something about costs post pandemic, the movie industry will skedaddle again the moment they can. can't speak of other industries.

The filming might be done in these out-of-state areas, which usually lasts a few weeks.

However, the management, studio infrastructure, and a great deal of production work still goes on in California proper; things that, for a film, often take years. The infrastructure is so built up there and ingrained into the financial workings and considerations of the cities in question that studios wholesale up and leaving is unlikely.

[Omega10]

and there I thought movie industry basically skedaddled to some combination of Vancouver and New Zealand with a smattering of eastern Europe, due to it being much cheaper to film there..

oh right, pandemic and travel restrictions.. however unless CA does something about costs post pandemic, the movie industry will skedaddle again the moment they can. can't speak of other industries.

Why do I feel that the US will continue declining economically?

California is expanding and building up so much business and economy that it is financially tenable for some of the companies and some of the business to move to other states. The other states are not saying "thank you California", but instead are saying "fuck you we think you are evil and we are glad we are taking away your business".

A country that has so much internal self hatred cannot prosper. And the hatred directed towards California is generating increasing amounts of hatred reflected back.

[Witchblade77]

The filming might be done in these out-of-state areas, which usually lasts a few weeks.

However, the management, studio infrastructure, and a great deal of production work still goes on in California proper; things that, for a film, often take years. The infrastructure is so built up there and ingrained into the financial workings and considerations of the cities in question that studios wholesale up and leaving is unlikely.

for now. I see more and more productions moving not just filming but actual production - out of Hollywood as well. it is still more convenient... for now. but how long before costs will outweigh convenience and production companies will move their offices to their most used filming locations because THAT would be more convenient AND cheaper? profit >all

[wunksta]

Big tech companies need to start moving offices and branches to the midwest really.

[Rasulis]

It is not about red or blue. It is about different economic models. We could also talk about why Georgia is economically doing so much better than Mississippi, Louisiana and Kentucky. But that would be a lot less interesting. I like to talk about CA because nobody else would.

Here is an unexpected results of the pandemic economy. Despite the rising price of homes, it sucks to be a real estate broker in San Diego right now. How so? Because in San Diego, pre-pandemic, most brokers made their commissions from sales of homes below 1M. The majority in the 500 - 700k range. Unfortunately, currently there is a severe shortage of homes below 1M in San Diego.

Rather than post data, do this. Go to any real estate website, such as Redfin, and do search for 3bd/2bath homes in San Diego. Do a search with maximum price of 1M and a search with minimum price of 1M. In the City proper, the number of 1M plus homes on the market was six times of that below 1M. It gets much worse in the suburb and rural back county area. Pre-pandemic, in our neck of the wood, at any give time, we would have 30 - 50 homes on the market. Last week we had 5.

No homes, no sales. No sales, no commissions. Every day our mail box is packed with flyers and mails from brokers asking if we are interested in selling our home. We have never seen a shortage this bad before.

Another unexpected result. California expects record revenues in stunning Covid budget reversal.

California's budget has benefited from massive stock market gains and income growth among its most affluent residents, particularly those in the high-flying Bay Area. The budget picture reveals a dramatic disconnect between upper class residents who have built wealth during the pandemic and those struggling to avoid eviction and put food on the table.

California has $34 billion beyond what it needs to balance its 2021 budget (227 billion proposed), and the governor said $22 billion will be put into various reserve funds. He emphasized that fiscal forecasters believe the surplus could be fleeting and that the state will face years of deficits in the future without putting aside money.

The good.

The state's coffers are so full that California will be constitutionally obligated to put billions of dollars into rainy-day reserve accounts, all while many other states are facing deficits. In New York, Gov. Andrew Cuomo says the state is $15 billion in the red.

The bad.

Though California's pandemic fortune appears to be an outlier among states, Senate Majority Leader Mitch McConnell has already used those growing revenues to justify Republican opposition to federal stimulus aid for state and local governments. He said last month he didn't want to contribute to California's "slush fund," an argument that Republicans are likely to repeat when a Democratic-controlled Congress and President-elect Joe Biden pursue aid for states.

The good. In my humble opinion.

Newsom dismissed those concerns Friday, putting faith in California's reputation as an incubator of innovative businesses thanks in part to its world-class universities. But he also said that he has no interest in another tax on the wealthy.

"Make no mistake, there are some that are talking about wealth taxes, some that are talking about big income taxes," he said. "They're not part of the conversation."

[Spectral]

US demand for garlic tripled.

There aren't enough fun facts going around these days and this is a legitimate fun fact. God, I love garlic.

[Rasulis]

and there I thought movie industry basically skedaddled to some combination of Vancouver and New Zealand with a smattering of eastern Europe, due to it being much cheaper to film there..

oh right, pandemic and travel restrictions.. however unless CA does something about costs post pandemic, the movie industry will skedaddle again the moment they can. can't speak of other industries.

I had to look up which show productions are being moved to CA. Amazon Prime's Hunters is moving from NY to CA. Disney+'s The Right Stuff is moving from Florida to CA. The upcoming seasons of This Is Us, Westworld, Good Girls and Star Trek Picard are also moving to CA.

Hunters Season 2 is factored to have 107 shooting days in California. Even with coronavirus safety protocols in place, the production plans on hiring 3,852 extras, 267 cast members and a crew of 160. The Right Stuff Season 2 is aiming to hire 2,204 background players, 173 cast members and a crew of 214 with 88 shooting days planned for in and around San Diego.

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There aren't enough fun facts going around these days and this is a legitimate fun fact. God, I love garlic.

Who doesn't love garlic?

[Masark]

Who doesn't love garlic?

The black court?

[gondrin]

I had to look up which show productions are being moved to CA. Amazon Prime's Hunters is moving from NY to CA. Disney+'s The Right Stuff is moving from Florida to CA. The upcoming seasons of This Is Us, Westworld, Good Girls and Star Trek Picard are also moving to CA.

Hunters Season 2 is factored to have 107 shooting days in California. Even with coronavirus safety protocols in place, the production plans on hiring 3,852 extras, 267 cast members and a crew of 160. The Right Stuff Season 2 is aiming to hire 2,204 background players, 173 cast members and a crew of 214 with 88 shooting days planned for in and around San Diego.

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Who doesn't love garlic?

Dracula....always dracula.

[Biglog]

It's actually incredible that both Texas and California can have strong economies while fighting the pandemic, immigration, and in California also the massive homeless problem. California has been carrying the bulk of the weight of the homeless issue for the nation for a long time, while getting bashed for doing it. The vast majority of homeless in Cali are from other states that went there for the climate where it's exponentially easier to survive outside without shelter or heat than most of the country. At some point either federally California needs to be subsidized in some amount for carrying the nation's weight in that regard so that other states can help cover those costs, or better yet really solve the homeless problem through housing/jobs/mental health/addiction recovery/etc.

[Rasulis]

It's actually incredible that both Texas and California can have strong economies while fighting the pandemic, immigration, and in California also the massive homeless problem. California has been carrying the bulk of the weight of the homeless issue for the nation for a long time, while getting bashed for doing it. The vast majority of homeless in Cali are from other states that went there for the climate where it's exponentially easier to survive outside without shelter or heat than most of the country. At some point either federally California needs to be subsidized in some amount for carrying the nation's weight in that regard so that other states can help cover those costs, or better yet really solve the homeless problem through housing/jobs/mental health/addiction recovery/etc.

Personally, I think almost all of California’s problems (homelessness, hollowing out of the middle class, cost of living, rising inequality, etc.) are rooted in one issue - housing cost/shortage. The pandemic made it worse. During the pandemic, CA home prices, which were already some of the highest in the nation, increased at a higher rate than the rest of the US. The whole thing is just bizarre to me.

This is how much real estate in CA went up in 2020.



How about 2021? Nobody has a crystal ball. However, in December, Realtor.com ranked 100 large metropolitan areas based on forecasts for 2021 home sales and price growth and compiled the predictions into an overall score. By their math, California is forecast to have six of the nation’s 20 best-performing markets in 2021.

Sacramento was ranked No. 1, projected to rise 24.6% from a combined 17.2% rise in sales and 7.4% price growth. No. 2 was the San Jose metro with 21.6% growth combined from 10.8% sales growth and 10.8% price growth. Here are the rest.

No. 8 Ventura County: 18.0% — sales up 12.5% and 5.5% higher prices.

No. 10 Riverside-San Bernardino counties: 17.9% — sales up 12.4% and 5.5% higher prices.

No. 14 Los Angeles-Orange counties: 17.3% — sales up 10.0% and 7.3% higher prices.

No. 18 San Diego: 16.8% — sales up 11.3% and 5.5% higher prices.

No. 26 Stockton: 14.3% — sales up 8.2% and 6.1% higher prices.

No. 28 Bakersfield: 14.2% — sales up 10.5% and 3.7% higher prices.

No. 64 San Francisco metro: 9.7% — sales up 1.3% and 8.4% higher prices.

The worst projected place for housing in 2021 is New York with a -3.3% combined score — sales down 3.8% and only 0.5%higher prices.

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The black court?

You got me there.