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The Market Absorption Study starts with the identification of the expected product mix, and then proceeds to arrive at an estimate of the products' absorption, based upon a systematic analysis of the expected macroeconomic and microeconomic conditions; additionally, the sensitivity of the residential absorption to changes in mortgage rates is also discussed. );> Identification of the Proposed Prodnct Mix The expected number of future housing units as well as the commercial-office/retail products in CFD No. 2005- 01 will be identified based upon the planning approvals for the properties as well as the development/marketing strategies of the property owner; the expected composition of the product types in CFD No. 2005-0 I is as follows: );> MacArthur Place: );> 791 condominiums: 276 integral, IS cinema loft, ISO cinema tower and 350 lake towers. );> Commercial: 14,703 sq.ft. );> Office: 10,000 sq.ft. );> Geneva Commons: );> 278 condominiums/lofts: 84 condominium lofts and 194 high-rise units );> Commercial: 13,000 sq. ft. The product mixes represented above are subject to confirmation by the Planning Department and the Property OwnerslBuilders. );> Macroeconomics Components · To arrive at long-term employment forecasts, Empire Economics compiles information from economic forecasts that are available for the Southern California Market Region and its counties, including Data Resources Institute (DR!) and the University of California Los Angeles (UCLA) as well as regional forecasters such as the Los Angeles Economic Development Department as well as California State University Long Beach. The use of a Consensus Employment Forecast for the Market Region is substantiated by a comprehensive study of forecasts that was conducted by the Federal Reserve Bank of New York which concluded that Consensus Forecasts, defined as combining the forecasts of several firms or agencies, were found to have a consistently higher degree of accuracy and reliability than any particular forecaster. Empire Economics then uses these employment forecasts to derive estimates of the Southern California's future demand for housing and commercial-industrial products during the foreseeable future. · Next the proportion of Southern Califomia's future employment, residential, and commercial-industrial growth that is expected to be captured by the Market Area for CFD No. 2005-01 is estimated. Southern California (Se), as a whole, essentially represents a self- contained equilibrium with respect to employment and housing because the vast majority of households employed in SC also have their primary residences in SC. For specific market areas, such as the City of Santa Ana however, there are employment/housing dis-equilibriums because the members of many households live in one area but work in another area. With regards to the City of Santa Ana, it is regarded as being a very strong employment center, and so most of the demand for the residential products is expected to generated by local employment growth. 4