Econ 101: Housing Demand Outpaces Supply

SCEDC BLOG

Econ 101: Housing Demand Outpaces Supply

BY BILL RUBIN, EXECUTIVE DIRECTOR

There are fewer things hotter in the St. Croix Valley than home sales. Sellers may receive multiple offers, and in some cases, exceeding the list price. Home builders are part of this hot market, too. As fast as they can be built, new homes are sold and crews move on to the next one, just like in the good old days.

A big part of home buying revolves around personal confidence and a strong economy. If buyers are confident about their financial course in life, they’ll jump into the market and incur debt for fifteen or twenty years. Low borrowing rates add to the confidence of buyers. The state and national economies are strong. The top elected guy in Madison tweeted Wisconsin’s unemployment rate for April was the fifth-lowest in the U.S. The top guy also reported a record number of Wisconsinites working, estimated at 3,086,100 people, as well as a ‘Top 5’ labor force participation rate of nearly seventy percent.

The supply of homes listed for sale is impacting the hot market. A couple of associations track monthly and year-to-date home sales. They are the Wisconsin REALTORS® Association and St. Paul Area Association of REALTORS®. Agents in the St. Croix Valley have their choice of associations, but the summaries depict similar findings – the inventory of homes for sale has fallen and prices continue to rise.

Sounds like a case of simple economics akin to Econ 101. When the supply dips, the price rises, and vice versa. The St. Paul association says its inventory of available homes is currently below two months, reflecting a decline of twenty-five percent over the previous year. In January, the inventory had fallen to only forty-five days. The Wisconsin association reported a four month inventory of homes on the market across the state in April. This estimate is lower in urban areas and higher in rural areas.

Meanwhile, prices continue to rise. The Wisconsin association estimated St. Croix County’s home sales in April had a median price of $236,500. The year-to-date median price in St. Croix is $230,000. For perspective, the year-to-date median price in nearby Eau Claire County is estimated at $167,000 and the state’s median price is $174,000. The median price estimates from the St. Paul’s association is nearly identical to the Wisconsin group. Things do not improve westward into Minnesota. The year-to-date median home sale price for the 16-county metro area is $257,000.

As long as the inventory is low in the St. Croix Valley, buyers can expect to pay a premium. Buyers can expect a gain on their investments, however. With annual appreciation running between five and ten percent, maybe higher, home buying is a good investment. The longer prospective buyers wait, the more it will cost them. When in doubt refer to Econ 101.

April 2018 Unemployment Rate

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St. Croix County’s April Unemployment Rate at 2.8%

On May 23rd, the Wisconsin Department of Workforce Development (DWD) announced the preliminary April 2018 unemployment rates for Wisconsin’s 72 counties and the 32 cities with populations greater than 25,000 residents. St. Croix County’s rate was estimated at 2.8%. For comparison, St. Croix’s final rate for March was 3.3% and February’s final rate was 3.7%. One year ago, the county’s unemployment rate was estimated at 2.9%.

DWD said preliminary unemployment rates for April declined or stayed the same in 63 of the 72 counties when compared to April 2017. Forty-five (45) of the state’s 72 counties experienced or tied their lowest April unemployment rate on record in 2018. The rates ranged from 1.8% in Dane and Lafayette counties to 7.9% in Iron.

The April 2018 preliminary unemployment rates decreased in all of Wisconsin’s 32 municipalities with population bases of least 25,000 residents when compared to April 2017. Nineteen (19) of the 32 largest municipalities experienced their lowest April unemployment rate on record in 2018. Rates ranged from 1.7% in Fitchburg to 4.1% in Racine.

Dane and Lafayette counties had the lowest rate in April at 1.8% followed by Ozaukee (2.1%), Washington (also at 2.1%), and Calumet (2.2%). Iron County had the highest rate in April at 7.9%, followed by Menominee (6.8%), Bayfield (5.9%), Forest (5.7%), and Sawyer (5.4%).

St. Croix, Pierce, Polk, and Dunn counties comprise Wisconsin’s Greater St. Croix Valley. In addition to St. Croix referenced above, April’s preliminary rate in Dunn was estimated at 2.9%, Pierce, also at 2.9%, and 4.1% for Polk. Except for Polk, the current rates are lower than the rates for April 2017.

St. Croix and Pierce counties are included in the 16-county Minneapolis-St. Paul-Bloomington MN-WI metro area. The April 2018 unemployment rate for the Twin Cities was estimated at 2.7%, which is lower than the final rate of 3.3% for March and February’s final rate of 3.4%. The unemployment rate in the Twin Cities was 3.3% in April 2017.

The preliminary (seasonally adjusted) unemployment rate for Wisconsin in April was estimated at 2.8%, which is lower than the final rate of 2.9% for both March and February. One year ago, the state’s seasonally adjusted rate was 3.3%.

The preliminary (seasonally adjusted) unemployment rate in Minnesota in April was estimated at 3.2%, which is the same as final rates for both March and February. Minnesota’s seasonally adjusted rate one year ago was 3.5%.

The preliminary (seasonally adjusted) unemployment rate in the U.S. for April was estimated at 3.9%, which is lower than final rate of 4.1% for both March and February. One year ago the U.S. rate (seasonally adjusted) was estimated at 4.4%.

Wisconsin’s preliminary (seasonally adjusted) labor force participation rate for April 2018 was estimated at 68.9%, which is higher than the final rate of 68.7% for March and February’s final rate of  68.6%. One year ago, Wisconsin’s labor force participation rate was 68.6%. The preliminary (seasonally adjusted) labor force participation rate for the U.S. in April was estimated at 62.8%, which is lower than the final rate of 62.9% for March and February’s final rate of 63.0%. One year ago, the labor force participation rate in the U.S. was 62.9%.

April’s estimates are preliminary and are subject to revision within the next few weeks.

April 2018 Unemployment Table
April 2018 Unemployment Comparison
April 2018 Participation Rate

Planet Coffee

SCEDC BLOG

Planet Coffee

BY BILL RUBIN, EXECUTIVE DIRECTOR

Coffee has ushered in a new era of consumer spending, whether it’s in pursuit of fresh-roasted beans, flavored grounds, bigger and bigger mugs, brick and mortar stores, or main street diners serving the finest selections from Ecuador or Costa Rica.

Toney and fashionable Edina, Minnesota was in the news a while back when its city council gave preliminary approval to a new Caribou Coffee shop. The news? When the shop opens, it will be the tenth Caribou store in Edina, which already boasts eight Starbucks and a single Dunn Bros Coffee. More news. . . the proposed Caribou will replace an existing 5,000 square foot Jiffy Lube, making it a teardown in the name of progress. And caffeine.

Locally, two brothers and a high school friend have a small but growing empire of coffee shops in the St. Croix Valley. Their franchised stores include two in Hudson, one in Stillwater, and the newest in New Richmond. Add in a sandwich and soup shop and they’ve got their hands full managing associates, customers, beans, grounds, and their bottom line.

Society has come a long way in its embrace of coffee. A tough-as-nails WWII vet from southern Minnesota only knew coffee one way – percolated from a pot laced with Folgers® brand grounds. Top it with condensed milk as a creamer (gulp) and the world was safe until at least mid-morning when another round was consumed from a thermos.

Convenience stores may have been late to the caffeine party. There is money to be made in coffee products when numerous blends are available, as found in c-stores. Coolers in the c-stores also feature the latest coffee-based products, allowing for more choices on the same spin. Even grocery stores are aligned with franchised coffee conglomerates. A jittery shopper pushing a cart in aisle three may have the same hair trigger tendencies as a motorist navigating rush hour traffic on the highway.

The younger generation from a North Hudson, Wisconsin neighborhood is occasionally rewarded with a coffee/caffeine stop from a drive-through lane. The menu board is cryptic. English may be spoken when orders are placed, but neither the driver nor the payer (i.e. the same adult) comprehends. Hot, iced, cold pressed, double shot, caramel, vanilla, espresso, or latte . . . it all amounts to the same – I scream, you scream, we all scream for caffeine.

Here’s to coffee. Here’s to the coffee shop owners and franchisees. Here’s to the local roasters and wholesalers. Here’s to the consumers who push the envelope for creative new spins from an age-old product. Welcome to Planet Coffee.

Directors and Officers Elected at 2018 Annual Meeting

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Directors and Officers Elected at 2018 Annual Meeting

2018 Annual Meeting Officers

St. Croix Economic Development Corporation (EDC) held its annual meeting on Tuesday, May 8, 2018. Jill Gorres (left), Benefits Consultant, JA Counter (New Richmond, WI), was elected to a one-year term as Board President. She has served on the board since 2013 and replaces Rob O’Keefe who completed his term as President. O’Keefe remains on the Board and will continue to serve on the executive committee in his new role as Past President.

Brian Elwood (2nd from left), Manager, Community Relations, Xcel Energy (Hudson, WI), was elected First Vice President.

Scott Jones (3rd from left), Vice President, Business Loan Officer, RCU (St. Croix Valley region), was elected Second Vice President.

David Tyvoll  (right) was elected Corporate Secretary/Treasurer. He is a Vice President, Commercial Banker at First State Bank and Trust (Hudson).

Eric Biltonen, Ph.D., UW-Extension (Community, Natural Resources, and Economic Development Educator, St. Croix County, WI), Brian Elwood, Rob Kreibich, Executive Director, New Richmond Area Chamber of Commerce, and Rob O’Keefe, IT Director, OEM Fabricators (Woodville, WI) were re-elected to 3-year terms on the board.

2018 Annual MeetingApril Nelson (l) and Tom Borowski (r) were elected to initial 3-year terms on the board. Nelson is a Vice President and Loan Officer with WBD and Borowski is the President of Hudson Hospital & Clinic (Hudson). Both companies are longtime members-supporters of St. Croix EDC.

The board of directors accepted the 2017 financial review from Guinn, Vinopal & Zahradka, LLP.

At the conclusion of the meeting, a plaque was presented to Rob O’Keefe for his service as President. Chuck Jerrick and Steve Peterson also received mementoes for completing their terms on the board.

2017 Traveler Spending Up in the Greater St. Croix Valley

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2017 Traveler Spending Up in the Greater St. Croix Valley
State’s Tourism Spending up 3.17% to $12.7 Billion

 

2017 traveler spending in St. Croix County increased $110.6 million (+4.11% from 2016) according to an annual analysis released May 4th by the Wisconsin Department of Tourism. St. Croix’s $110.6 million from travelers resulted in total business sales of $182.6 million, reflecting a 3.72% increase from 2016. This spending supported an estimated 1,954 jobs (+2.37% from 2016) in St. Croix and generated $13.9 million in state and local tax revenues (+3.73% from 2016).

Statewide, travelers spent an estimated $12.7 billion in 2017, a 3.17% increase from 2016. Total business sales from tourists were estimated at $20.607 billion (+3.2% increase from 2016). Tourism and traveler-supported employment in Wisconsin in 2017 was estimated at 195,255 jobs (+0.93% from 2016). Tourism also provided the state with tax revenues of $1.536 billion in 2017 (+2.20% increase from 2016).

St. Croix, Polk, Pierce, and Dunn counties comprise the Greater St. Croix Valley. Visitor spending in 2017 for the 4-county region was estimated at $272.4 million compared to $261.2 million in 2016 (+4.28% from 2016). In addition to St. Croix’s estimated $110.6 million, 2017 visitor and traveler spending in Polk increased to $87.3 million (+4.47% from 2016). Spending in Dunn County for 2017 was estimated at $45.8 million, compared to 45.5 million in 2016 (+0.73% from 2016). Pierce County’s spending from travelers increased to 28.7 million from $25.9 million in 2016 (+10.84%). Because of the Greater St. Croix Valley’s proximity to the 16-county Twin Cities metro area, many visitors enjoy day trips to the Valley and return to their homes without incurring expenses on lodging. Overnight stays would greatly increase traveler spending in the Greater St. Croix Valley.

Total business sales from travelers and visitors to the Greater St. Croix Valley in 2017 were estimated at $450.2 million compared to $433.7 million in 2016 (a +3.80% increase). Business sales in St. Croix County were estimated at $182.6 million (+3.69% increase from 2016), followed by $131.8 million in Polk (+4.02% increase from 2016), $82.4 million in Dunn (+1.73% from 2016), and $53.4 million $49.9 million in Pierce (7.01% from 2016).

Tourism-related employment in the Greater St. Croix Valley for 2017 was estimated at 4,325 jobs (+1.79% from 2016). In addition to the estimated 1,954 tourism-related jobs in St. Croix, there were 1,098 in Polk (+2.57% from 2016), 837 in Dunn (-1.44% from 2016), and 436 in Pierce (+3.66% from 2016).

State and local tax revenues attributable to visitors and travelers in the Greater St. Croix Valley for 2017 were estimated at $32.1 million (+2.88% from 2016). Tax revenues in St. Croix were estimated at $13.9 million, followed by Polk with $9.1 million, Dunn with $5.8 million, and Pierce with $3.3 million.

Milwaukee is the state’s top county for visitor spending estimated at $1.990 billion. The other counties in the Top 10 include Dane ($1.246 billion in visitor spending); Sauk ($1.086 billion); Waukesha ($776.4 million); Brown ($671.0 million); Walworth ($544.2 million); Door ($358.7 million); Outagamie ($348.0 million); La Crosse ($263.8 million); and Winnebago (240.7 million).

Tourism is one of Wisconsin’s top three industries along with manufacturing and agriculture.

For additional information, or to read the 2017 Economic Impact of Tourism in Wisconsin go to
http://industry.travelwisconsin.com/research/economic-impact and select the topic: “County Total Impact”.

2017 traveler spending up

March 2018 Unemployment Rate

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St. Croix County’s March Unemployment Rate at 3.3%

On April 25th, the Wisconsin Department of Workforce Development (DWD) announced the preliminary March 2018 unemployment rates for Wisconsin’s 72 counties and the 32 cities with populations greater than 25,000 residents. St. Croix County’s rate was estimated at 3.3%. For comparison, St. Croix’s final rate for February was 3.7% and January’s final rate was 3.3%. One year ago, the county’s unemployment rate was estimated at 3.7%.

DWD said preliminary unemployment rates for March declined in all 72 counties when compared to March 2017. Sixty-three (63) of the 72 counties tied or reached their lowest March unemployment rates on current record. The rates ranged from 2.2% in Dane County to 6.8% in Iron.

The March 2018 preliminary unemployment rates decreased in all of Wisconsin’s 32 municipalities with population bases of least 25,000 residents when compared to March 2017. Twenty-one (21) of the 32 largest municipalities reached their lowest March unemployment rates on current record. Rates ranged from 2.0% in Fitchburg to 4.6% in Racine.

Dane County had the lowest rate in March at 2.2% followed by Ozaukee (2.4%), Sheboygan (also at 2.4%), Washington (2.6%), and Waukesha (also at 2.6%). Iron County had the highest rate in March at 6.8%, followed by Bayfield (6.5%), Adams (5.6%), Burnett (also at 5.6%), and Sawyer (5.5%).

St. Croix, Pierce, Polk, and Dunn counties comprise Wisconsin’s Greater St. Croix Valley. In addition to St. Croix referenced above, March’s preliminary rate in Dunn was estimated at 3.5% followed by Pierce at 3.6% and 4.7% in Polk. The current rates in all four counties are lower than the rates for March 2017.

St. Croix and Pierce counties are included in the 16-county Minneapolis-St. Paul-Bloomington MN-WI metro area. The March 2018 unemployment rate for the Twin Cities was estimated at 3.3%, which is lower than the final rates of 3.4% for both February and January. The unemployment rate in the Twin Cities was 3.8% in March 2017.

The preliminary (seasonally adjusted) unemployment rate for Wisconsin in March was estimated at 2.9%, which is the same as February’s final rate but lower than January’s final rate of 3.2%. One year ago, the state’s seasonally adjusted rate was 3.3%.

The preliminary (seasonally adjusted) unemployment rate in Minnesota in March 2018 was estimated at 3.2%, which is the same as February’s final rate but lower than January’s final rate of 3.3%. Minnesota’s seasonally adjusted rate one year ago was 3.6%.

The preliminary (seasonally adjusted) unemployment rate in the U.S. for March was estimated at 4.1%, which is the same as the final rates for both February and January. One year ago the U.S. rate (seasonally adjusted) was estimated at 4.5%.

Wisconsin’s preliminary (seasonally adjusted) labor force participation rate for March 2018 was estimated at 68.6% which is the same as the final rate for February and higher than the final rate of 68.5% for January. One year ago, Wisconsin’s labor force participation rate was 68.3%. The preliminary (seasonally adjusted) labor force participation rate for the U.S. in March was estimated at 62.9% which is lower than February’s final rate of 63.0% but higher than January’s final rate of 62.7%. One year ago, the labor force participation rate in the U.S. was 63.0%.

March’s estimates are preliminary and are subject to revision within the next few weeks.

March 2018 Unemployment Table
March 2018 Unemployment Comparison
March 2018 Participation Rate