UNIVERSITY OF WISCONSIN River Falls


St. Croix Valley Dashboard for February 2017 Released.

The UW-River Falls Center for Economic Research (CER) in partnership with the St. Croix Economic Development Corporation (SCEDC) has released the latest edition of the St. Croix Valley Economic Dashboard. The dashboard is a snapshot of economic conditions in labor, consumer, agricultural and housing markets for the seven county St. Croix Valley. It presents the latest available data in one convenient package and can be viewed on the CER's website at www.uwrf.edu/cer.

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The Local Housing Market

The months of housing inventory estimates how many months it would take to sell all currently listed homes if the number of homes sold remains constant at current levels.

The sale to list price ratio is the median sale price as a percent of the median listing price. The closer this ratio is to 100% the closer listing and sale prices match. A high ratio is an indicator of a seller's market and a low ratio is an indicator of a buyer's market.

Dunn's housing market has consistently favored seller's market and has taken a significant lead in November 2016. The Sale to List Price Ratio has gone noticeably up from 94.2% to 110.1%. Pierce and Polk counties continue to promote the buyers' market, The Sale to List Price Ratio has gone substantially down from 83.2% and 89.8% to 76.9% and 80.0%. Breaking the trend, St. Croix's county ratio has gone down to 12% becoming a haven for seller's market. The ratio of Dunn has increased 15.9% against the November 2016 data. In comparison to last month's data, Months of Housing Inventory has increased for Dunn county by 0.6%, reflecting 4.8 months now. Pierce and Polk counties have decreased by 0.6% and 0.4%, which means the waiting period for the houses to get sold is reduced for these 2 counties. In comparison, St. Croix has decreased drastically from 0.7 to 1%, reflecting 3.3 months now.

The US Economy

Output.  Real gross domestic product increased at an annual rate of 1.8 percent in the fourth quarter of 2016. The Real consumption factor has increased but at a decreasing rate comparing to last month. The Real investment has picked up a massive growth of 11%, whereas the Real Government spending has shown a slight increase of 1.2%. Employment Cost Index continue to show negative growth in the month of November. But at the same time Initial claims, which is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits continuous to decrease in number. Initial claims went down by 40,000 in January, 2016. This indicates that labor market is doing good and less people are claiming unemployment benefits. The Total Nonfarm employment shows an increase of 186,000 in January 2017.

Labor Market. The Employment Situation Report,(Bureau of Labor Statistics) released on January 6, 2016 reported that The unemployment rate increased to 4.7 % in December, and total nonfarm payroll employment increased by 156,000. Major employment gains occurred in health care and social assistance.

As per the Household Survey Data, In December, the unemployment rate increased by 0.1% point to 4.7%, and the number of unemployed persons rose to 7.5 million. Among the major worker groups, the unemployment rate for adult men rose to 4.4 percent in December. The rates for adult women (4.3%), teenagers increased to 14.7%. Establishment Survey Data reported that Employment in professional and business services was changed in December (+15,000), followed by an increase of 65,000 in November. Overall the industry added 522,000 jobs in 2016.

Education and health services added over 23,105 jobs in December. The sectors which reflected continuous upward trend are social assistance (+3,660), Leisure and Hospitality (+15,279) and Food services (+11,364). Health care employment rose by 43,000 in December, with most of the increase occurring in ambulatory health care services (+30,000) and hospitals (+11,000). Employment in professional and business services was little changed in December (+15,000), following an increase of 65,000 in November. The industry added 522,000 jobs in 2016. In December, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents to $26.00, after edging down by 2 cents in November. Over the year, average hourly earnings have risen by 2.9 percent. In December, average hourly earnings of private-sector production and non supervisory employees increased by 7 cents to $21.80.

National Inflation and Interest Rates. US Inflation rate hits 2 year high of 2.1% in December. Consumer prices in the United States went up 2.1 % year-on-year in December of 2016, up from a 1.7 % rise in November and in line with market expectations. It is the highest inflation rate since October of 2014, reported by trading economics.com. The Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics reported that the CPI for All Urban Consumers increased 0.1 % in December on a seasonally adjusted basis, Over the last 12 months, the all items index rose 2.7 % before seasonal adjustment following two consecutive monthly deadlines. Motor fuel prices led the rise with a 6.0-percent increase in December after leading the index downward in November with a decline of the same magnitude. The index for all items less food and energy was up 1.7 percent from December 2015 to December 2016. A 2.9-percent rise in shelter costs led the advance.

Employment. In December, total nonfarm employment in Wisconsin decreased by 3,700 and Minnesota increased by 11,900. Minnesota regained 2800 jobs in Education and Health Services that were lost in the previous month, while Wisconsin lost 1900 jobs in the same sector. In Wisconsin the most significant loss occurred in Trade, Transportation & Utilities (-4,800) and Government (-4,600) sectors but gained in construction (2700) and manufacturing (3000). Whereas in Minnesota significant gains were shown in Construction (3500), Government (3700) and Professional and Business services (2200) compared to previous month data.

As per BLS data that the unemployment rate for Minneapolis increased by .3% in December 2016 to 3.6%. The unemployment rate changed in both the states for the month of December. 4.0% in Wisconsin, and 3.9% in Minnesota.

Housing Market. The Wisconsin REALTORS® Association reported that the housing market ended a record setting year with solid growth, pushing annual sales to an all-time high and driving prices above the speed of inflation. Compared to 2015, this time around house sales rose to 4.1% and median prices rose 7.4 percent to $161,000. Home sales for the year 2016 increased 6.1 percent compared to 2015, making this the strongest year for sales since the WRA recalibrated its tracking system in 2005. Median prices for the year rose to $165,000, which is 5.9 percent higher than 2015. By comparison, the average inflation rate for 2016 was just 1.3 percent according to the U.S. Bureau of Labor Statistics. "There are several factors that have been pushing prices up, including tight inventories, but also a solid economy, favorable mortgage rates and a very low rate of foreclosure statewide," said WRA President & CEO Michael Theo.

The Wisconsin Home Affordability Index measures the fraction of the median-priced home that can be purchased by a buyer with median family income, assuming a healthy 20 percent down payment, and a 30-year mortgage on the remaining 80 percent of the purchase price, financed at current rates. Finally, annual single-family foreclosures are down 19.4 percent in just the last year, and they are down 69.8 percent from their peak 2009 levels. For 2017, there is no doubt that mortgage rates will rise as the Fed pushes the short-term rates up to control inflationary pressures in the economy.

-- 2016 December Home Sale Report

Housing Market in Twin Cities: 

According to new data released by the Minneapolis Area Association of REALTORS® numbers of homes for sale was drastically down and year over year comparisons along with days on market and months of supply. Meanwhile sales and prices were up in most markets and unemployment rates were low and wages improved. In 2017 pending sales decreased 6.5%, The number of homes for sale was down compared to this time last year. Keeping the trend alive and well, inventory levels went down

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UWRF - Center for Economic Research
College of Business and Economics

cer@uwrf.edu
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Fax: (715) 425-0707
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