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THE NORTHWEST ECONOMIC MAINLINE 05·18·2009
What to Watch This Week
- Due to the small number of economic and earnings announcements scheduled for the week, and in taking a break from more rousing employment and unemployment figures that the media has certainly taken a liking to recently; this week, I plan to first focus on building permit and housing start statistics. These figures are scheduled to be released Tuesday by the Census Bureau.
- Given that sentiment appears to have risen recently (very slightly) in the national home building sector, it will certainly be interesting to gauge any trends or changes in starts and permitting levels that have occurred as well. I plan to first focus on national numbers, then moving to local figures, finally, isolating local multifamily from single-family. This approach is often the most telling in terms of recent changes and/or trends.
- Earnings from Lowe's on Monday, Home Depot on Tuesday, and Toll Brothers on Wednesday are also of interest. Often, buried within the details of announcements from Lowe's and Home Depot are specific trends that the company is seeing relative to remodeling and the purchasing of building materials on a regional basis. While not always the case, many times, this has been very useful information.
- Toll Brothers announcement come on Wednesday is intriguing because often, their announcement statement contains much more opinion than is expected by analysts. They often touch on macroeconomic issues, as well as what they are specifically seeing in their respective markets. Although they have yet to make an entrance into the Puget Sound market, their information opinions is are certainly applicable useful when in gauging more-macrolarger trends.
- On that same note, I came across this offering last week. Although I have yet to order it myself, given the price of $175 and the topics that are touched on, this maybe be beneficial to MBAKS builder-members that are trying to gain a sense of what the nationals are doing and seeing in the market.
What I Saw Last Week
- U.S. Housing and Urban Development (HUD) secretary Shaun Donovan announced Tuesday that home buyers will soon be able to use their $8,000 tax credit for down payment purposes. This should definitely boost program participation.
- Dismal news came from RealtyTrac on Wednesday when they announced that, nationally, April foreclosures had risen 32 percent year-over-year, the second straight month of more than 300,000 households. As much as this jump was influenced by moratoria on foreclosures that came to an end recently, it still demonstrates that we are not yet out of the woods. Still, everything is relative and we in Seattle can take a little comfort in the fact that thing could be far worse. A recent report showed that in the Las Vegas-Paradise metro area, 67.2 percent of homes have negative equity!
- News on the retail front was also less than favorable with the Commerce Department reporting that retail sales had fallen 0.4 percent over the past month. With expectation of sales being flat or increasing slightly month-over-month, investors on Wall Street certainly didn't welcome the news with open arms.
- Locally, we are happy to hear that the state economist, Arun Raha suggests that initial unemployment claims may have peaked and that the pace of job losses is set to slow in the months ahead. This is not to say that our unemployment rate is set do decline yet, but as the adage goes, "you have to stop firing before you start hiring!"
Quote/Link of the Week
Two individual headlines from Pacific Northwest Local News definitely caught my attention last week. The first touches on the issue of the Metropolitan King Council extending the lifetime of permits for stalled projects by two years and the second, high-rise development in Kent:
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