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<br />· Empire Economics will also discuss the desirability that prospective homeowners have to reside <br />in the City of Santa Ana due to the high caliber of its development and its strong economic base <br />which provides a attractive employment opportunities. <br /> <br />~ Microeconomics Components <br /> <br />· The microeconomic analysis focuses upon the competitiveness of the forthcoming residential, <br />retail and office projects/properties in CFD No. 2005-01 as compared to the competing <br />residential, retail, and office projects in the Market Area. The analysis deals with various <br />regional factors as well as the specific features/attributes of the forthcoming projects in CFD <br />No. 2005-01. <br /> <br />· The competitiveness of CFD No. 2005-01's residential, retail and office products is evaluated <br />by performing a systematic analysis of the expected characteristics of the forthcoming projects <br />in the District with the comparable/competing projects in the Competitive Market Area. <br />Specifically, this involves a consideration of their respective locations, prices, lot sizes, living <br />areas, Special Taxes/Assessments, amenities, and other factors. The result of this analysis is the <br />competitiveness, and hence the capture rate, for CFD No. 2005-01's products in the <br />marketplace. <br /> <br />~ Estimated Absorption Schedules <br /> <br />· The market absorption schedules for the forthcoming residential projects/products in CFD No. <br />2005-01 are presented in the following manner: <br /> <br />· Aggregate Absorption Schedules for CFD No. 2005-01: This analyzes the <br />market demand and supply conditions for all of the product types located in CFD <br />No. 2005-01. <br /> <br />. Absorption Schedules for CFD No. 2005-01 by Product Types and Project: <br />This analyzes the market demand and supply conditions for each of product <br />types: condominiums, townhomes and live-work as well as retail and office, and <br />provides a separate absorption schedule for each of these. These absorption <br />schedules by product type provide the relevant absorption information to the <br />Appraiser and Special Tax Analyst. <br /> <br />Therefore, the Market Absorption Study systematically proceeds from the macroeconomic analysis of the <br />Southern California Market Region's future employment, population, and housing growth to the microeconomic <br />analysis of the competitiveness of its projects, and then arrives at the absorption schedules for each of the <br />product types/projects in CFD No. 2005-01. <br /> <br />~ Residential Absorption Schedules - Sensitivity Analvsis <br /> <br />· The most probable market absorption schedules for the forthcoming residential units in CFD <br />No. 2005-01, as set-forth above, are then analyzed according to the following sensitivity <br />scenario: <br /> <br />· Potential Increase in Mortgage Rates for Homebuyers in CFD No. 2005- <br />01: This analyzes how a 100 basis point (I %) increase in interest rates would <br />influence the expected absorption for the forthcoming projects in CFD No. <br />2005-0 I. <br /> <br />5 <br />