Monday Report
Home and Condo Sales and Prices March 2nd 2009


SCORECARD

Public Policy Initiatives

Commercial Real Estate Outlook - National
 

ECONOMIC NOTES:
  • Global Business Confidence
  • There is no respite from the dark pessimism overhanging global businesses. Sentiment regarding sales, hiring and investment all remain extraordinarily poor. Most worrisome is the recent collapse in pricing power; a record over one-third of respondents now say they are cutting prices for their goods and services. Confidence is weakest among those who work in government, but it is bad across all industries. If there is a distinction, it is that Asian businesses are a bit less negative than businesses everywhere else.
  • The Conference Board Consumer Confidence -12.4
  • The Conference Board index of consumer confidence tumbled to another record low in February. The index fell to 25 from January's 37.4 (downwardly revised from 37.7). The expectations component led the decline, falling to 27.5 from 42.5 (previously 43). The present situation component fell to 21.2 from 29.7 (previously 29.9). Assessments of current labor market conditions deteriorated significantly, providing more evidence of large, ongoing job losses.
  • Durable Goods (Advance) -5.2%
  • New orders for manufactured durable goods fell 5.2% in January following a 4.6% decline in December. January marks the sixth consecutive month of decline. Core capital goods orders fell 5.4% following a larger drop in December. Orders excluding transportation fell 2.5%, as expected. Shipments fell 3.7%, and core goods shipments were down 6.6%.
  • Business Employment Dynamics
  • Gross labor market flows through mid-2008 confirm the weakness in the labor market that began in early 2008. Gross job losses escalated in the second quarter of 2008, but gross job gains also ticked higher. Nonetheless, job gains remained very low in historic perspective. Expanding establishments were the source of the modest improvement in hiring, while job creation at new companies was flat. Gross labor market flows through mid-2008 confirm the weakness in the labor market that began in early 2008. Gross job losses escalated in the second quarter of 2008, but gross job gains also ticked higher. Nonetheless, job gains remained very low in historic perspective. Expanding establishments were the source of the modest improvement in hiring, while job creation at new companies was flat.
  • Mass Layoffs - 48
  • The number of layoffs involving at least 50 workers from a single establishment in January was 2,227 compared with 2,275 in December. The layoffs involved 237,902 workers compared with 226,117 in December. All numbers are seasonally adjusted. The global recession is causing a large number of layoffs in manufacturing as producers cut output to control inventories.
  • Jobless Claims +36K
  • Initial claims for jobless benefits increased 36,000 to 667,000 for the week ending February 21, far exceeding expectations for a small decline. Continuing claims increased 114,000 to 5.112 million for the week ending February 14, yet another new high. This is grim news for the labor market, showing that layoffs are rising and an increasing number of people remain unemployed.
  • New-Home Sales (C25) -10.2%
  • New-home sales continued to fall in January, coming in at 309,000, down by 10.2% from the revised December figure of 344,000. New-home sales are down by 48.2% from their January 2008 level. The median sales price also fell to $201,100, a decrease of 9.9% from December. The months' supply of new homes also reached a new high. All told, the market for new homes continued to deteriorate in January.
  • Existing-Home Sales -5.3%
  • Existing-home sales slid by an unexpected 5.3% in January, more than reversing December's gain. At 4.49 million units, the pace of sales has fallen well below the 4.9 million to 5 million range that it had been treading in for much of the last 16 months. The months of inventory picked up slightly from 9.4 months to 9.6 months, but this increase was likely due to seasonal factors. Months of inventory in January were below the year-ago reading of 10.2. Compared with a year ago, listings were down by 13.5%, the largest decline during this housing cycle, indicating that supply conditions are improving. The median existing- house price declined by 14.8% y/y, a tiny improvement over the 15.2% decline that occurred in December.
  • FHFA Purchase-Only House Price Index
  • The FHFA purchase-only index showed a slight monthly increase of 0.1% for the U.S. in December, although this slight increase was somewhat uneven. Much of the improvement was due to a 2.7% monthly increase in house prices in the West North Central region. The West South Central region also improved somewhat. Nevertheless, the purchase-only index is still down by 8.7% from December 2007.
  • Case-Shiller Monthly Home Price Indices
  • Existing-house prices remained in free fall during the three months ending in December, ending 2008 on a gloomy note. The S&P/Case-Shiller 20-city house price index fell 18.5% from a year ago in December, a slightly greater decline than the consensus expectation. The 10-city index posted a larger year-ago decline of 19.2%. Both indices recorded greater year- ago percentage decreases in December than during November, establishing new record annual rates of decline.
  • MBA Mortgage Applications Survey -15.1%
  • In the week ending February 20, the MBA market index fell 15.1% to 743.5. Both parts of the composite also declined. The purchase index fell 2.6% to 250.5, while the refinance index fell 19.1% to 3,618. Contract rates on both 30-year fixed and one-year adjustable mortgages held somewhat steady.
  • Chain Store Sales -0.8%
  • Chain store sales rose 0.6% in the week ending February 21, lifted by favorable weather, discounting, and a dip in gasoline prices. The year-ago decline shrank to 0.8%, the smallest decline in seven weeks as a result of the gain. Despite the improvement, however, sales are still falling, a sign of very restrained spending.
  • Oil and Gas Inventories +700kb
  • Crude oil inventories rose by 700,000 barrels during the week ending February 20, according to the Energy Information Administration, below expectations of a 1.25 million barrel buildup. Gasoline inventories unexpectedly fell by 3.4 million barrels, compared with expectations that they would remain unchanged. Distillate inventories rose by 800,000 barrels, exceeding expectations of a 1.2 million barrel decline. Refinery operating capacity fell to 81.4% from 82.3%. Total domestic petroleum demand fell. This mixed report points to moderately higher oil prices.
  • Weekly Natural Gas Storage Report - 101bvf
  • Working gas in underground storage decreased by 101 billion cubic feet during the week ending February 20. The consensus estimate was for a decline of 108 billion cubic feet.

  • Rocky Mountain Chocolate Factory
  • Rocky Mountain Chocolate Factory, Inc. trades as Rocky Mountain Chocolate Factory at 320 locations nationwide and in Canada and Internationally.
  • The stores, offering chocolates, candy, truffles and caramels, occupy spaces of 600 sq.ft. to 1,000 sq.ft. in malls and entertainment, mixed-use, outlet, specialty and tourist centers.
  • Growth opportunities are sought nationwide during the coming 18 months.
  • Typical leases run five years. A vanilla shell and specific improvements are required.
  • Major competitors include Godiva.
  • The company is franchising.
  • For more information, contact
    • Kraig Carlson or Dave Ritchie,
    • Rocky Mountain Chocolate Factory, Inc.,
    • 265 Turner Drive, Durango, CO 81303
  • Daily Grill and The Grill on The Alley
  • Grill Concepts, Inc. trades as Daily Grill and The Grill on The Alley at 32 locations throughout CA, IL, MA, MD, OR, TX, VA, WA and Washington, DC.
  • The restaurants occupy spaces of 5,000 sq.ft. to 8,000 sq.ft. in freestanding locations, hotels, malls, office buildings and mixed-use and specialty centers.
  • Growth opportunities are sought throughout major metropolitan markets in AZ, CA, FL, IL, Boston, MA; MD, NV, TX, VA and Washington, DC during the coming 18 months.
  • Typical leases run 15 years with options.
  • Specific improvements are required.
  • For more information, contact
    • Robert Chais,
    • Grill Concepts, Inc.,
    • PO Box 2546,
    • El Segundo, CA 90245;
    • Web site: www.dailygrill.com.
  • Lenny's Sub Shop
  • Lenny's Sub Shop operates 175 locations nationwide.
  • The restaurants, serving subs and other sandwiches along with salads, occupy spaces of 1,500 sq.ft. to 2,400 sq.ft. in endcaps of entertainment, specialty and strip centers, in addition to downtown/urban locations.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • Typical leases run five years.
  • The company prefers to locate in areas with strong daytime demographics.
  • The company is franchising.
  • For more information, contact
    • Andrew Bryant,
    • Lenny's Sub Shop,
    • 8295 Tournament Drive, Suite 200,
    • Memphis, TN 38125;
    • Web site: www.lennys.com
  • Popeye's Chicken & Biscuits
  • Popeye's Chicken & Biscuits operates 1,870 locations nationwide and internationally.
  • The fast food restaurants, serving Cajun-inspired fried chicken, occupy spaces of 2,000 sq.ft. to 3,000 sq.ft. in inline spaces and freestanding locations.
  • Growth opportunities are sought nationwide during the coming 18 months.
  • For more information, contact
    • Bob Faller,
    • Popeye's Chicken & Biscuits,
    • 5555 Glen Ridge Connector Northeast, Suite 300,
    • Atlanta, GA 30342.

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  • Home and Condo Sales and Prices
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  • Public Policy Initiatives
  • Economic Notes
  • Grants
  • This Weeks Leads
  • SCORECARD
    		•

    Existing Home Sales - State/Region 2006 - 2008

    Ranked by % Change

    State2006 20072008Yr. % Change
    United States6,4785,652 4,91-5.9%
    West1,346 1,0841,07026.5%
    Midwest1,483 1,3271,129-12.4%
    South2,563 2,2351,864-13.4%
    Northeast1,086 1,006849-13.9%
    NEVADA70.2 45.365.5133.7%
    ARIZONA142.9 105.5116.342.6%
    COLORADO123.7 118.2106.8-9.7%
    WYOMING13.6 12.910.0-14.3%
    NEW MEXICO58.244.5 33.3-20.9%
    MONTANA26.8 24.119.9-21.4%
    IDAHON/A 36.326.5-21.8%
    UTAH51.7 41.930.8-24.4%
  • Source: National Association of Realtors, February 2009

    Metropolitan Area Apartment, Condo-Coops Sales - State/Region 2006 - 2008

    Ranked by % Change

    State2006 20072008Yr. % Change
    U.S.221.9 226.3210.0-15.8%
    NE249.7 256.1252.7-6.3%
    MW190.9 195.2188.2-10.1%
    SO184.0 185.1167.2-17.0%
    WE264.7 263.3218.7-30.1%
    Albuquerque, NM138.6149.2 151.48.6%
    Colorado Springs, CO148.1151.5 143.5-3.2%
    Boulder, CO213.1214.0 214.2-3.7%
    Salt Lake City, UT137.6163.1 164.4-4.3%
    Tucson, AZ162.5151.5135.6 -9.8%
    Austin-Round Rock, TX150.4172.3 170.2-10.5%
    Phoenix-Mesa-Scottsdale, AZ182.0186.3 162.4-24.1%
    Reno-Sparks, NV191.4197.2 152.0-39.0%
    Las Vegas-Paradise, NV201.9193.1 128.9-48.9%
  • Source: National Association of Realtors, February 2009

    Metropolitan Area Home Prices - State/Region 2006 - 2008

    Ranked by % Change

    State2006 20072008Yr. % Change
    U.S.221.9 217.9197.1-12.4%
    WE350.5 342.5275.4-25.1%
    MW164.8 161.4150.5-10.6%
    SO183.7 178.8170.0-7.5%
    NE280.3 288.1271.5-4.7%
    Phoenix-Mesa-Scottsdale, AZ268.2257.4 191.3-35.5%
    Las Vegas-Paradise, NV317.4297.7 220.5-33.6%
    Reno-Sparks, NV347.2321.4 259.1-23.3%
    Tucson, AZ244.9244.8 204.3-21.2%
    Boise City-Nampa, IDN/A206.0 188.7-14.7%
    Denver-Aurora, CO249.5245.4 219.3-12.7%
    Boulder, CO366.4376.2 359.0-12.6%
    Colorado Springs, C218.2217.5 205.5-11.2%
    Albuquerque, NM184.2198.5 192.6-6.2%
    Salt Lake City, UT203.0232.0 229.6-1.6%
  • Source: National Association of Realtors, February 2009
  • Public Policy Initiatives
    		•

  • CO - Ritter Creates Board to Oversee Stimulus Spending.Gov. Bill Ritter has created a new board to oversee how Colorado spends its federal stimulus money. Ritter said he has appointed his economic development director, Don Elliman, to lead the group. The board will be composed of another dozen people from state government and Colorado's business community. Ritter said the group will answer questions about how the money will be spent but said that information probably won't be known until federal agencies establish their rules. http://www.koaa.com/aaaa_top-spending
  • DE - Markell Announces Boost for Electric Car Company.Gov. Jack Markell announced that the Delaware Economic Development Office will give a $94,140 grant to AutoPort, Inc., for a project designed to retrofit existing gasoline-powered Toyota Scions so they can run on electric battery power. Markell's office described it as one step in his "economic prosperity" plan that puts a clean environment at the heart of economic development efforts. http://www.delawareonline.com/902180332/1003
  • WV - Manchin Positioning State as Leader in Energy.West Virginia is well positioned as the nation moves toward alternative energy, clean-coal technology and a lesser dependence on foreign oil, national energy and mining officials say. West Virginia moved forward with its own energy plan Thursday as state lawmakers introduced Gov. Joe Manchin's Alternative and Renewable Energy Portfolio Act. It calls for 10 percent of the state's energy to come from alternative or renewable sources by 2015 and 25 percent by 2025. "Right now we're 99 percent dependent on coal in the form that we burn it in right now," Manchin said. "We know that we have to change, and we can make it much better." http://www.dailymail.902190654
  • WY - Freudenthal Works to Increase Power Lines.Gov. Dave Freudenthal plans to meet with federal officials in Washington to urge the construction of more power lines and to push for the state's involvement in any federal coal research projects. Freudenthal said he wants to learn about the Obama administration's support for developing clean coal technology. Wyoming is the nation's largest coal- producing state. "If they're going to open that up, we want to be part of that discussion through the School of Energy Resources and our partnership with General Electric," Freudenthal said. http://www.forbes.com/feeds/ap/2009/02/20/ap607716 3.html
  • NJ - Corzine Participates in Health Care Discussion.Gov. Jon S. Corzine addressed AARP members in a unique news conference where they were featured in front of a live audience at AARP's state office. "As the economic meltdown continues, and unemployment rises, our nation's broken health care system will worsen as tens of thousands, if not millions, more will lose insurance around the nation," said Governor Corzine. "Today, we have a new partnership with Washington that recognizes there is a huge cost for doing nothing to repair that system -- for individuals, for businesses, for the economy, for the state, and for the future of the nation. We must work together to develop substantial, meaningful, comprehensive health care reform." http://www.app.com/article/-1/HOMETOWNS
  • NC - Perdue Announces Leader of Office of Economic Recovery and Investment.Gov. Beverly Perdue announced that Dempsey Benton, the former secretary of the state Health and Human Services Department, will lead the state new Office of Economic Recovery & Investment and provide accountability for use of NC's stimulus money. "This money and these programs must be put to use quickly and effectively to create jobs, provide important services and get our economy moving again," Perdue said in the news release. "Dempsey Benton brings the skill and experience to oversee this important effort. He will bring the transparency and accountability to this office that our citizens expect." http://abclocal.go.com/wtvd=6662839
  • AR - Beebe Promises College Tuition Aid to High School Students.Gov. Mike Beebe told Little Rock Hall High students that they don't have to be wealthy to attain a college education, but if they prepare in high school and apply for college, the state will help eliminate logistical and financial barriers. "You don't have to be rich to go to college, and you don't have to have all your money set aside already to go to college," Beebe said at an event kicking off the "Say Go College Week" campaign in the state's high schools. "We have a variety of aid opportunities," the governor said, citing about 20 different funding programs. "Part of the problem is sometimes they are hard to understand and hard to access. We are going to fix that. We are going to simplify that process where it will not be your problem, and you won't have to worry about that." http://www.nwanews.com/adg/News/252636/
  • DE - Markell Makes Green Jobs a Priority. Gov. Jack Markell announced that Delaware will be the only state participating in a national project that puts green jobs at the top increase incomes, productivity and competitiveness. The state will implement strategies that reduce energy costs for businesses, making them more competitive, and for homeowners, returning dollars to the local economy. It will also implement strategies to help Delaware's existing businesses become participants in the green economy, and it will create a workforce trained to power green industries in Delaware, such as electric- vehicle manufacturing and the constructing of parts for wind turbines.http://www.ledgerdelaware.com/articles/.txt
  • NJ - Corzine Praises Recent SCHIP Expansion.Gov. Jon S. Corzine said the recent reauthorization of the State Children's Health Insurance Program mirrors one of his top priorities for the state: ensuring health care for all children. Corzine said "ensuring that children have access to health insurance so they have a healthy start in life" has been one of his top priorities as governor and through SCHIP and NJ FamilyCare, "we are making great strides to reach these children and we will continue our outreach efforts to enroll every eligible child." http://www.ifawebnews.com/f48b369619632.txt
  • NM - Richardson to Introduce Stronger Ethics Reform Bills.Gov. Bill Richardson announced that he would introduce legislation this week to ban campaign contributions from corporations, contractors and lobbyists. A second piece of legislation his office will introduce will require contractors to register with the state and disclose information such as campaign contributions. "I'm proud of the reforms we've enacted since I've taken office, including gift limits, public financing for appellate judges, and a ban on contractor campaign contributions during the procurement process," Richardson said. "I'm urging lawmakers to expand on those reforms and to break the logjam that has blocked our past efforts to create strong and meaningful ethics laws." http://newmexicoindependent.-government-record

  • Commercial Real Estate Outlook - National
    		•

    The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.

    • Office Market
    • Losses in the job market continue to reduce demand for office space. Vacancy rates are projected to increase to 16.7 percent in the third quarter of 2009 from 13.4 percent in the third quarter of 2008.
    • Annual rent in the office sector is expected to decline 4.2 percent this year following a 0.4 percent dip in 2008. In 57 markets tracked, net absorption of office space, which includes the leasing of new space coming on the market as well as space in existing properties, is seen as a negative 77.4 million square feet in 2009.
    • Industrial Market
    • The industrial sector is now beginning to feel the impact of the global economic slowdown, which is reducing the demand for exports. Vacancy rates in the industrial sector are forecast to rise to 12.2 percent in the third quarter of 2009 from 10.7 percent in the third quarter of last year.
    • Annual rent is estimated to fall 4.1 percent this year, after declining 0.8 percent in 2008. Net absorption of industrial space in 58 markets tracked should be a negative 148.1 million square feet this year. Because much of recent construction has been built to suit specific needs, many obsolete structures are on the market.
    • Retail Market
    • The slowdown in consumer spending has hit retailers hard. The retail vacancy rate will probably rise to 13.4 percent in the third quarter of this year from 9.8 percent in the third quarter of 2008. Average retail rent is expected to fall 9.0 percent this year; it declined 2.0 percent in 2008. Net absorption of retail space in 53 tracked markets will likely to be a negative 49.8 million square feet this year.
    • Multifamily Market
    • The apartment rental market - multifamily housing - has held its own as a result of depressed home sales as potential buyers seek rental housing. Multifamily vacancy rates are forecast to edge up to 6.0 percent in third quarter of this year from 5.8 percent in the third quarter of 2008.
    • Average rent is projected to grow 1.7 percent this year, following a 2.9 percent gain in 2008. Multifamily net absorption should be 127,500 units in 59 tracked metro areas in 2009.

    Source: National Association of Realtors, 2/19/09

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