Mixed bag reflected in economic indicators

U.S. home prices rose more slowly in September than in August suggesting weaker sales are taking pressure off lower inventories. In Tampa, home prices rose in September by +.02% from August but this was still +14.5% over the year. Consumer confidence fell in November to the lowest level in 7 months. Consumer confidence dropped to 70.4 in November, down from 72.4 in October. There was a positive signal for the economy as Florida unemployment few to 6.7% ( below the national average of 7.3% ) and apartment building permits achieved their fastest pace in 5 years. This suggests that housing will make a stronger contribution to economic growth in the 4th quarter than was originally anticipated. Plans for construction in the South drove these figures.

New home sales slide for 5th straight month

For the fifth month in a row, fewer Americans signed contracts for new homes. The seasonally adjusted new home sales index dropped to  -0.6 to 102.1, the lowest level since December. A contributing factor was the 16 day federal shutdown when the IRS was not able to verify incomes. Rising interest rates, the increasing cost and uncertainty about health care, and the and rising home prices may also have been factors. There is evidence to suggest the housing recovery is stalling at this time.

Florida leads nation in job creation

Florida added +44,600 jobs in the September thru October period. Tampa added +7100 jobs and has added +39,900 this year. The formerly stagnant construction industry lead the growth. Florida's unemployment rate is now down to 6.7% 

16,000 DOW, lower mortgage interest, fewer unemployed offer hope

On Thursday, the DOW closed over 16,000 for the first time in history. Since the start of the year, the DOW has increased +22%, and has topped three 1,000 point milestones on the way. The DOW has more than tripled since its low point in 2009. It was also reported the number of people seeking unemployment benefits fell by 21,000 last week to a seasonally adjusted 323,000. US wholesale prices dropped for the second month in a row. Thirty year fixed rate interest rates retreated to 4.22% down from 4.35% the week before. These are signs the recovery is continuing.

Tampa area home sales soften

Momentum was reversed in October as home sales went flat falling 2% behind last year. This comes on the heels of a year long trend of increasing sales. For instance, in September, sales were up +18% over 2012. The controversy over flood insurance and the 16 day federal shutdown may have contributed to this slow down. It was also apparent the large investors who were acquiring properties in large numbers have left the market.

Retail sales encouraging

October retail sales grew +.4%  after being flat in September. Analysts looked for sales to be flat due to the 16 day federal shut down. Falling gasoline prices were offset by stronger performances in furniture, electronics, appliance, and clothing sales. This news was encouraging, suggesting that upcoming  holiday sales may be stronger than first predicted.

No plump in the Butterball turkeys

Butterball announced that it will have a limited supply of heavy turkeys ( over 16# ) this holiday season.  Butterball CEO Rod Brenneman told the Associated Press that there is a mystery why some of its turkeys will not plump up in time for Thanksgiving. Apparently, they haven't ingested grain as well this year as in previous years. Larger turkeys are preferred for carving as they have a better meat to bone ratio which increases yield. 

Billions pledged to upgrade Tampa International Airport

A business plan presented to the public on Monday shows $4.2 billion of improvements for TIA through 2033. The business plan includes $2.5 billion in improvements, and $1.6 billion for maintenance items. This plan anticipates traffic increasing from the current level of 17 million to 34 million by 2041. Under this plan, the main terminal will now be able to handle this traffic negating the need to build a new $1 billion North Terminal to handle this volume.

Studio apartments triple in Tampa

Since 2007, the number of studio apartments ( no bedroom ) has tripled to 13,000 in Hillsborough County. Tampa now has 6000 studios averaging 550-600 square feet with rents in the $1200 range.
People are selecting location, as opposed to size, in  a lifestyle decision to rent a studio. They want to be closer to downtown activities.

Student loans now $1.027 trillion and growing

Since 2004, student loans have tripled to the current balance of $1.027 trillion. In the last quarter, the debt rose by $33 billion. Loans over 90 days past due rose to 11.8% in the third quarter, up from 10.9% in the second quarter. Student loans are now 9% of all consumer debt, up from 3% a decade ago.

Wholesale orders increase again

For the third straight month, wholesalers have increased inventories in anticipation of increased business. Seasonally adjusted, stockpiles rose +.4% in September. In August the increase was +.8%.
Wholesale sales increased +.6% in September, up from +.4% in August.

Florida #1 in foreclosures

RealtyTrac reports that Florida pulled ahead of Nevada in October as the leader in foreclosures. In Florida, 1 in every 332 homes received some kind of foreclosure filing.  In Nevada, it was 1 in every 407 homes.  Florida lenders filed 11,606 notices of a foreclosure sale in October. Lenders are beginning to work out the back log of foreclosed homes using more auction sales.

Medicaid showing strength as alternative

Medicaid has signed up 444,000 people in 20 states over the past 6 weeks. This appears to dwarf the sign ups for the nation ACA sign ups plagued by poor management. Starting January 1, 2014, Medicaid is expanded to those with incomes up to 138% of the federal poverty level...$15,856 for an individual, $32,499 for a family of four. The biggest reason for this increase is attributed to the 36 states offering the ACA through the federal website which is not working. People want some type of insurance in place on January 1st.

Florida promotes driverless AV vehicles

Florida is one of 3 states that allow new technology on highways.  Autonomous Vehicles ( driverless ) are coming to the roads. Enter the address you are headed to, computers and software map out the route and take over the drive to the destination. Florida is trying to stay ahead of the planned introduction of these vehicles expected to be introduced around 2020. Florida is trying to create the infrastructure ahead of the introduction and thereby be a leader in this new form of transportation. California and Nevada are the other 2 states permitting AV's to be tested on their roads.

Apartments spur development in Pinellas

The strong rental market is fueling apartment developments in Pinellas County. Largo reports 1200 apartment units are planned or being built. Dunedin, Clearwater, and St. Petersburg are seeing more apartment developments. Communities have been working with developers on development fees to make projects more affordable. There has been little rental development in the past 5 years, and current developments will help ease the current shortage, but may not provide enough affordably priced units. Many of the units under development will rent in the $700-$1400 monthly range.

"Liar" home loans will be hard to get in 2014

In January, new lending rules go into effect which are expected to curtail many of the bad lending practices which contributed to the sub-prime housing crash. The major new requirement is the Ability-to-Repay  condition that makes lenders confirm that someone on the loan has the ability to repay it. The second major change will see the Consumer Financial Protection Agency label certain loans as "qualified mortgages" (QM's). These loans can't be interest only, balloon mortgages, or contain negative amortization provisions, or be longer than 30 years. More than 95% of all existing mortgages already meet the new standards coming  January 10, 2014. Borrowers will be required to prove income with documentation, be within the 43% debt to income ratio, and meet other more conservative conditions of the new law.

Credit card borrowing down for 4th straight month

Consumers continued to tighten their use of credit card debt for the 4th straight month. Consumers increased their borrowing by +13.7 billion in September reaching a seasonally adjusted rate of $3.05 trillion. This was still a  record amount of debt on credit cards. The increase was driven entirely by auto and student loan debt.

Economy grew faster than expected

From July-September, the economy grew  at a +2.8% annual rate, faster than the expected. The growth in the April-June quarter was +2.5%. This growth is about +1% higher than predicted.
Americans purchased more autos and long-lasting good to fuel this growth.

Dow sets new record on 11/6

The Dow closed up + 129 points on Wednesday reaching a new high of 15,747. Standard and Poor's index came within 1 point of their old record. The Nasdaq dropped 8 points to close at 3932. 

Tampa International Airport served 16.9 million passengers last year

In fiscal 2013, Tampa International Airport served 16.9 million passengers. Domestic passengers represented 16.4 million (+.7% growth ) and international passengers 525,060 ( + 6.9% growth).
In the past 2 years, charter flights to Cuba, and new nonstop flights to Switzerland, have fueled growth in the number of international up +28%. The airport reported revenues of $184.3 million,
an increase of +3.8% over 2012.

University of Tampa continues growth trends

This fall, 7343 students are attending the University of Tampa, an increase of +5.5% from 2012. This is  triple the enrollment from two decades ago. There was a  dedication of two facilities held earlier this year for the Peter J.Schoomaker ROTC  and Athletics building, and a new lacrosse stadium.
Recently, UT  finished  the 11 story West Kennedy residence hall, which is the seventh new building in the past 15 years. It has just been announced UT will build a seven story multipurpose structure which will include four stories of parking, classrooms, faculty offices, student meeting and study areas, along with a Campus Safety Center, and an entrepreneurship center designed to launch new concepts and ventures.

63 gigabytees...13.6 hrs daily...for Americans

The University of Southern California released a report this week showing Americans tuned into the radio, television, phones, and computers an average of 13.6 hours a day during 2012. In total,  U. S. media consumption reached 1.46 trillion hours. In 2008, averaged 33 gigabytes a day. In 2015, it is expected this consumption will increase to 15.5 hours reaching 1.7 trillion hours for the year. Texting and video watching on the internet are growing rapidly. For example, video watching was 3 hours a month in 2008, grew to 6 hours in 2012, and is projected to reach 11 hours by 2015. Mobil messaging is having the same kind of growth.

Stock markets setting new records

Last Tuesday, the Dow Jones Industrial average reached a new high. This year, the DOW is up +19%,  the S&P 500 up +24%, and the Nasdaq up + 30%.  Technology shares are leading the way. Many believe the stock market is reasonably priced. It was also noted that 100 stocks of the S&P 500 are making new highs along with the technology stocks. This is considered a healthy sign overall.

The sale of small businesses increasing rapidly

The web site BizBuySell.com, which monitors the sale activity of small business, reports sales of small businesses rose 40% in the third quarter. At the low point in 2009, 1040 small businesses were sold. This year, there were 1685 closings, Retail businesses and restaurants are leading the sales increase. Lenders have become more willing to lend for these small business acquisitions, and owner financing plays a role as well. Some are predicting even faster growth next year in small business sales.

Tampa area encouraging development

The Florida Fairgrounds, at the intersection of I 75 and Interstate 4, is a rare piece of real estate with development potential. The Fair Board has invited developers to propose projects for this valuable piece of real estate. The fair authority's plans lean towards developing the entire 330 acres with shops, hotels, and entertainment businesses. The Hard Rock Café & Casino is right across from the Fair grounds and built on 35 acres. In another area of Tampa, a 380 unit hotel project was being proposed on the Encore site just north of downtown. The developer, Pinnacle Group has offered the Tampa Housing Authority $7.8 million for the site, and would begin development this coming summer. These events, coupled with all the interest in re-developing  Channelside , speak well for Mayor Buckhorn's efforts to bring quality development to Tampa.

Stock market skips October jinx

October has seen the stock market have a number of crashes in previous October's. This year it avoided a crash, did not scare off investors, and set record highs. All this happened in the face of the 16 day shutdown of the government. The S&P 500 is up +23.2% this year and is tracking towards the best year since 2009. Helping support this performance was the announcement by the Feds they will continue buying $85 billion in bonds each month as a means to keeping short term interest rates low so as to promote economic growth.