economic indicators | nashvillepost.com

Don't look for hotel recovery soon

Industry players surveyed at a recent Smith Travel Research conference don't expect their pricing power to return for at least another year.

Thirty-three percent of the respondents believe RevPAR will not start to recover until 2011 or beyond, 23.9 percent believe it will start to recover during third-quarter 2010, and 21.6 percent believe it will start to recover during fourth-quarter 2010.

Aug 7, 2009 1:08 PM

Nashville income growth cut in half

The Bureau of Economic Analysis says Nashvillians' incomes grew 3.3 percent in 2008, barely half the 5.8 percent of 2007. That number was right in line with the U.S. average and puts our MSA 76th in the country.

Aug 6, 2009 3:07 PM

CRE still in sorry shape

The Real Estate Roundtable's quarterly barometer of industry sentiment is showing signs of stabilizing, but no one's close to calling the start of the next up market. There can be only one solution: Call in the feds.

"Continued comprehensive policy action is called for to bring liquidity back to the market and avoid a cascade of negative repercussions for the economy," said Roundtable President and CEO Jeffrey DeBoer. "A sick commercial real estate sector means less revenue for local governments; layoffs and cutbacks for construction, hotel and retail workers; and an even smaller retirement nest egg for millions of investors."

Check out the full report, which also contains quotes like “The property market stinks and it continues to get worse. We were in the same place in 1990.”

Aug 6, 2009 7:21 AM

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One in five Tennessee homes upside down

Moody's Economy.com delivers an update on homeowners whose properties are worth less than their mortgages and it ain't pretty. Nationally, one in four homes are now 'underwater,' an increase from 16 percent a year ago. Tennessee is in the bottom third of states, but still has 20 percent of its homeowners in negative equity. With numbers that high, loan-modification plans don't have much of an effect, says Economy.com's Mark Zandi.

To date, most foreclosure-rescue efforts have focused on lowering monthly payments by reducing interest rates, in part because the housing crisis began with mortgages that were resetting to higher payments. But the looming negative-equity problem could put more pressure on policymakers to come up with a modification plan that includes reducing loan balances, and not just lowering interest rates.

SEE ALSO: Underwater numbers going back a few years and some info on which banks are actively modifying mortgages these days.

Aug 5, 2009 1:04 PM

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Retail's weakest really wobbling now

The second-quarter numbers from mall operator CBL & Associates give us a glimpse of where the retail sector is feeling the most pain: Malls that already were struggling and smaller strip centers. The company's higher-end destinations — such as the Cool Springs Galleria — are holding their own when it comes to occupancy, although CBL says sales for non-anchor tenants slipped 6 percent from a year ago

Aug 5, 2009 8:25 AM

Browsing LP's Q2 call transcript

Some color from Louisiana-Pacific's conference call with analysts Tuesday, which discussed the company's smaller-than-expected second-quarter loss: - Already with a decent presence on the ground in Chile, the company is laying the groundwork for a post-recession push into Brazil, Britain, Japan and Australia. CEO Rick Frost expects the moves to be cash-positive as early as next year. – Despite having cut back quite a bit in Canada, Frost said he expects to have to make "some downtime decisions" in the fourth quarter about LP's operations up north. - The industry as a whole appears prepared to emerge from the housing crunch with roughly the same players as during the boom. Frost doesn't see much consolidation ahead, saying that "there [are] no sissies left in the wood-products business." - The average house built today is about 70 square feet smaller than during the building boom of a few years ago. Over the course of five years, Frost said, that equates to taking about 500 million feet of oriented strand board off the market.

Aug 5, 2009 6:57 AM

Why we need to be skeptical about Case-Shiller

Economist David Rosenberg says the noted home-price index's methodology — which earlier this week showed its first rise in many months — is now out of whack. A big reason is that the crunch being felt by more affluent homeowners.

An increasing number of high-end homes are now entering the foreclosure sales process, which are skewing these price indices higher after a prolonged period when the data were being pulled down by the preponderance of ever-cheaper subprime units hitting the auction market. As an aside, at the beginning of the year when prices were sliding more than 2% per month, half the sales were coming from foreclosure auctions and many of these were low-end units; now the foreclosure share is down to 30% and more of these are higher-end homes seeing as prime-based mortgage default rates are now rising faster than subprime.

Rosenberg also pointed out that high apartment vacancy rates will "continue to provide competitive pressure to the homeownership market" and that the national backlog of more than 800,000 vacant homes will further push down prices — up to 25 percent if "the insanity" of 2001-2006 is fully unwound.

This is what happens after bubbles burst — every bubble. Prices go to stupid cheap levels.

HT: Alphaville

Jul 29, 2009 2:06 PM

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Nashville hotels among nation's most resilient

Smith Travel Research says Nashville's average daily hotel room rates fell just 4.9 percent in the first half of this year, trailing only Washington, D.C. on that front. SEE ALSO: Bit by bit, hotels claw their way back

Jul 29, 2009 8:58 AM

Downtown office market among region's worst

Almost one in five square feet of downtown Nashville's office inventory stood empty at the end of June, one of the worst numbers in this part of the country. Only St. Louis' downtown is in worse shape — and has been for several quarters — while the CBDs of Louisville and Charlotte are looking OK for now. On the suburban front, Nashville is among the strongest performers (as is St. Louis, go figure) in the region with a vacancy rate of 13 percent.

Jul 28, 2009 3:01 PM

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Case-Shiller rises for first time in three years

But several people, including one of the founders of the famous home-price index, say the housing market is nowhere near out of the woods.

While acknowledging that the report was good news, Mark Zandi, chief economist for Moody's Economy.com, downplayed the importance of a single month's statistics. "I think it's a temporary respite," he said. "It reflects the recent decline in foreclosure sales, and prices will continue to fall over the next several months."

Jul 28, 2009 2:24 PM