The growth of the Midwest expanded at it's fastest pace in seven months according to recent reports. However housing continues to be shaky while the 30 year mortgage rates match a four year high. Consumers are also struggling with higher gas prices making it harder for consumers to continue to spend at the same rate that we have seen in previous years. In the realm of housing, experts still disagree as to whether we are experiencing a housing bubble, however at the very least it is certain that we are having a cooling off period. This is especially prevalent in the formerly hot markets that are now struggling with the bloated prices of the last couple of years.
Southwest Florida's older population potentially could double as aging baby boomers begin to retire.
"For the next 25 years, boomers will come to Lee County, already growing by 25,000 people a year. "
"Conservative estimates show that 54,000 people ages 65 to 69 will live in Lee County by 2030. That's an increase of 20,000 for that age group alone. "
"Altogether, about 4 million baby boomers are expected to pull up stakes and move to the Sunshine State when they retire. That's double the percentage of their parents' generation."
"But the flood of boomers also will create new business niches, build an armada of community volunteers, energize college classrooms and bring liveliness to areas such as the arts and culture scene, whose leaders have started tailoring programs to a generation younger than their traditional audience. "
This in from the Canadian National Post. It is hard to tell if this is happening in an isolated area or if it still exists throughout other cities in Canada. "Consumers in Alberta are now putting down deposits on housing lots without knowing what the final price for the finished home will be, in the latest example of the desperation for housing in the province."
"That's how people are securing housing now," said Mr. Klassen, adding the situation is being driven by demand for housing as opposed to greed from builders. He added it's the only way builders can agree to sell a home because their costs are rising so quickly.
"The influx of out-of-province workers into Calgary, flush with cash from jobs connected to the energy sector, has created a surge in demand for homes. The Calgary real estate board said last month existing home prices were up more than 37% from a year ago."
"New-home prices are rising quickly in the province, up about 30% in Calgary in the past year. Canada Mortgage and Housing Corp. said this month Alberta is one of the few provinces in the country where new construction activity will rise this year from 2005."
The article also reports that the unsold inventory lasts for 16 days on average. Normal inventory levels are 60 to 120 days.
Demographic changes are being ignored in housing market analysis
The last 3 years have seen very high run ups in housing prices. The trend that I think many housing market analysts are ignoring is immigration and general demographic shifts. The fact is, housing appreciation in California was lagging the rest of the country during almost all of the 90's while immigrants came pouring in. Over the last 3 years some of the non-California high appreciation areas like Las Vegas NV and Cape Coral FL had a 25-44 yr old population increases above 40%. 40%!! Even with the giant increase in speculative construction we have seen in Las Vegas, the total inventory has not increased 40% (PWC's estimate is 18%).
I am not going to say that California prices will continue to climb or even remain flat. I am going to say that immigration and demographic analysis over the last 15 years holds the answer.
Consumers' overall assessment of current conditions eased but remains favorable. Consumers claiming conditions are "good" declined to 28.0 percent from 29.7 percent. Those claiming conditions are "bad" edged up to 15.4 percent from 15.1 percent. Labor market conditions were also less favorable. Those saying jobs are "plentiful" decreased to 28.6 percent from 29.4 percent, while those claiming jobs are "hard to get" increased to 20.5 percent from 19.7 percent.
"Consumer confidence, which reached a four-year high in April, lost ground in May," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Apprehension about the short-term outlook for the economy, the labor market and consumers' earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer. In sharp contrast, consumers continue to rate current conditions favorably, although the Present Situation Index also lost ground this month." Consumer Confidence Data Released at 9am
The Western Massachusetts economy still has a lot of things going for it. But if the region doesn't do more to stop the exodus of young workers, there's trouble ahead.
That was the message hammered home by demographer Peter Francese, who was in town last week to address 200 members and guests of the Affiliated Chambers of Commerce of Greater Springfield during the group's annual meeting.
Francese, founder of American Demographics magazine and currently director of demographics for the New England Economic Partnership, said Hampden County has a "terrific mix" of industries, with 25 percent of the work force in education and health services, 16 percent in trade, 14 percent in manufacturing and 9 percent in financial services.
As expected, annualized real GDP growth was revised up in the first quarter, to 5.3% from the advance 4.8% estimate last month. However, the upward revision was smaller than expected. The upward revision came from greater private investment and stronger exports; these were somewhat offset by downward revisions to personal consumption and investment in equipment and software. Profits from current production increased $116.5 billion at an annualized pace in the first quarter from the fourth, hitting another record.
Sales of existing homes edged up in March following a strong rebound in February.
Total existing-home sales – including single-family, town homes, condominiums and co-ops – rose 0.3 percent to a seasonally adjusted annual rate of 6.92 million units in March from a pace of 6.90 million in February, but were 0.7 percent below a 6.97 million-unit level in March 2005.
David Lereah, NAR’s chief economist, said sales are leveling out. “It’s a good sign to see home sales holding close to the level of a strong rebound in the month before,” he said. “This is additional evidence that we’re experiencing a soft landing. We may see some minor slowing in home sales as interest rates rise, but the market clearly is stabilizing.” Lereah expects 2006 to be the third strongest year on record for home sales.
Federal Reserve Chairman Ben Bernanke said recent declines in world stock markets may reflect concern about inflation and reiterated that the Fed shares those concerns. But Mr. Bernanke told Congress yesterday that the Fed still has a month of data to help it decide what interest-rate action to take at its next policy meeting, on June 28 and 29.
