The Monday Morning Quarterback | A quick analysis of important economic data released over the last week
Elliott D. Pollack & Co.
Not a lot of new data this week on the national front, but the data that was released all point to a continued expansion. Locally, most of the data was housing related and told a familiar story: housing is not doing well. Yet, despite that disappointment, the overall Arizona economy continues to recover. Were it not for the problems in single-family housing, the local economy would probably be recovering at a substantially faster rate. A combination of slow population growth, the large number of millennials continuing to delay marriage and live with their parents, and the difficulty in getting financing (this isn’t improving quickly and isn’t being discussed enough) will prevent a quick turnaround in single family construction. Yet, the state will continue to expand, albeit at a rate that by historic standards looks to be painfully slow. Remember, this too shall pass.
U.S. Snapshot
Consensus forecasts of annual U.S. real inflation adjusted GDP growth in 2014 and 2015 inched up this month. The increases appear partially attributable to lowered inflationary expectations. The consensus forecast of year-over-year real GDP in 2014 increased 1/10th of 1% to 2.2%. The 2015 forecast increased the same amount to 3.1%. This is close to the 20-year average rate of growth during an expansion.
Revolving credit outstanding was flat in August after a strong increase in July (see chart below). The July numbers indicated consumers’ willingness to spend more by using credit. The August result was not terribly surprising after 5 months of gains. Non-revolving credit outstanding, boosted by strong vehicle sales and the government’s acquisition of student loans from private lenders, rose for the 36th straight month. The gain, though, was below expectations.
The inventories/sales ratio remained in the normal zone in August, but was up slightly from a year ago. The ratio was 1.19 in August compared to 1.16 a year earlier.
Thirty-year mortgage rates were 4.12% for the week of October 9. This is down slightly for the week and is down 2.6% from a year ago.
Arizona Snapshot
In Greater Phoenix, single-family listings were up 15.2% in September compared to a year ago. At the same time, single-family sales in MLS were down 0.5%. Medial prices have been flat to down over the past few months but are still 8.0% higher than a year ago.
Days-on-market for resale homes in Greater Phoenix have gone from 62 days a year ago to 85 days as of September. This is down slightly from 88 days in August.
The number of residential foreclosures in Greater Phoenix in September was 405. This was down from 684 a year ago. The current level of foreclosures in now almost back to levels reached in 2002-2004 (see chart below).
In Greater Tucson, total unit sales dropped from 1,158 in August to 1,038 in September resulting in a 10.4% decrease for the month. On a year over year basis, the decline was 1.2%. The median sales price for September was $165,000, a 1.2% increase since last month and a 6.2% gain over a year ago.
