UNIVERSITY OF WISCONSIN River Falls

St. Croix Valley Dashboard for November 2016 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.

The sale to List Price Ratio seems to be picking up for Polk and Pierce counties drastically. Polk count's Sale to Price Ratio which was deteriorating in previous month shows positive changes and has gone up by 4.8%, comparing to last month. Ratio's for St. Croix and Dunn counties shows negative figures of -1.6 and -4.1, which means the sale to list price has fallen slightly for these two counties in September. The housing inventory seems to be increasing for the month of September against the negative growth in August for all four counties.

The US Economy

Output. Overall the economic outlook for 2016 continuous to look better. Real GDP grew at an annual rate of 2.90 percent in the third quarter of 2016, which is much better than previous quarters. The Real consumption factor has increased but at a decreasing arte comparing to last month. The real investment and real government spending have started to pick up the growth. Both reflects positive figures against the negative growth in the previous month. Real investment has gone up from -7.87 percent in August to 3.14 percent in September. Employment Cost Index signals negative growth in the month of September. 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 22,000 in September, 2016. This indicates that labor market is doing good and less people are claiming unemployment benefits.

Labor Market. The national job report, (Bureau of Labor Statistics Employment Situation Report) released on November 4, 2016 reported that total nonfarm payroll employment rose by 161,000 in October, and the unemployment rate was little changed at 4.9 percent. Employment continued to trend up in health care, professional and business services, and financial activities.

According to the Household Survey Data, The unemployment rate, at 4.9 percent, and the number of unemployed persons, at 7.8 million,

changed little in October. Both measures have shown little movement on net, since August 2015. According to the Bureau of Labor Statistics, nonfarm job growth has averaged 181,000 per month, compared with an average gain of 229,000 per month in 2015 and monthly job gains have averaged 176,000 over the past 3 months. Health care employment rose by 31,000 in the month of October. Over the year this sector has added 415,000 jobs. It is important to that that Employment in professional and business services continued to trend up over the month (+43,000) and has expanded by 542,000 over the year. In October, computer systems design and related services added 8,000 jobs, management and technical consulting services added 5,000 jobs by continuing upward trend. Over the year, financial activities employment has grown by 172,000. Average hourly earnings of all employees on private nonfarm payrolls grew by 10 cents in October to $25.92, following an 8-cent increase in September. Over the past 12 months, average hourly earnings have risen by 2.8 percent. The number working part time people in the month of October for economic reasons was 5.9 million. The estimation reflects little net change over the past year.

National Inflation and Interest Rates. The monthly inflation data released by U.S. Bureau of Labor Statistics on October 18th reported 38% increase in Annual Inflation in September. The annual inflation rate was 1.06% in August and increased 37.7% to 1.46% in September as a result of the Consumer Price Index (CPI-U) increasing from 240.854 to 241.428. As per Current Population Survey (CPS), From September 2015 to September 2016, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 1.5 percent (on a seasonally adjusted basis). The Federal Reserve left the target range for its federal funds rate unchanged at 0.25 percent to 0.5 percent for the seventh time during its November 2016 meeting CNBC.com on November 2nd stated that The Federal Reserve remains on track to hike rates in December .

Employment. In September, total nonfarm employment in Wisconsin decreased by 10,500 and Minnesota increased by 1,900. When Minnesota lost 3800 jobs in Education and Health Services, Wisconsin gained 400 jobs in same sector. Employment in this sector of Wisconsin seems to be increasing at a decreasing rate. Wisconsin recorded job loss nearly in all sectors. In Minnesota when most significant job increment is recorded in Professional and Business services (10,500), Trade, Transportation and Utilities, Leisure and hospitality and Education & Health Services sector of Minnesota lost jobs. Manufacturing sector and Government sector gained 700 and 1100 jobs in Minnesota. At the same time Wisconsin lost 100 jobs in manufacturing, 1,100 jobs in finance, 2000 in government, 400 in information and 4000 in leisure and hospitality. The BLS reported that the unemployment rate for Minneapolis decreased by .3 percent in September 2016 to 3.3%. The unemployment rate changed a little in both the states, 4.1% in Wisconsin, and 4% in Minnesota.

Housing Market. The Wisconsin REALTORS® Association reported that Wisconsin housing market could set a record high this year. As per WRA analysis September sales were up 6.9 percent over September 2015, and median prices increased 7.9 percent over that same period to $167,450. Through the first nine months of 2016, home sales were up 5 percent and median prices rose 4.8 percent to $165,000 over the first nine months of 2015.

According to Zillow's Q3 Real Estate Market Report, the 20th straight month of annual inventory declines for overall housing market. For-sale inventory has fallen on an annual basis in 49 of the past 58 months, rising only during a brief stretch from mid-2014 through early 2015. This lack of inventory is exacerbated by strong demand from home buyers. Even as inventory has continued to fall, the level of home sales itself is up. National Association of Realtors states that, in September, the number of existing homes sold rose a modest 0.6 percent year-over-year. In August, sales of newly constructed homes are up 20.1 percent year-over-year, according to the Census Bureau.

The Wisconsin Housing Affordability Index shows the percent of the median-priced home that a household with median family income can qualify to purchase, assuming a 20 percent down payment with the remaining principle financed with a 30-year fixed-rate mortgage. The index has been stable over the last 12 months and stood at 231 in September 2016, which is nearly identical to the value from 2015.

-- 2016 September Home Sale Report

  • Housing Market in Twin Cities: According to the Minnesota Property Group analysis, Job and wage growth coupled with rising rents and attractive interest rates are doing more to inspire buyers than rising property values and shorter time on the market seem to be doing to inspire sellers as the market continues to struggle with inadequate inventory. The new listings in twin cities is up by 5.6% in September. Inventory of homes for sale in Twin cities is down by -16.1%. Months' supply of inventory down 20 %. The percent of original list price received up 0.9%. Pending sales down -0.3%. The median sale price has gone up by 3.6% to 230,000.

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UWRF - Center for Economic Research
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