Pardon our atmospheric gloom, and national economic free fall, but some comparatively good local economic news emerged last week. So with everyone from President-elect Barack Obama on down speaking poorly of the nation’s financial condition, a few words to the upside may be in order.
Who knows, this may be the last chance for a while.
Let’s start with the nugget hidden behind this ominous headline on a Tuesday release from the Washington Department of Revenue: “Taxable Retail Sales Decline 4.2 percent in Third Quarter 2008.” There is little expectation, just given the shopping season weather, that the fourth quarter will be anything but worse.
For Spokane, however, an errant ray of sunshine: Taxable retail sales in the quarter improved over 2007. By less than 1 percent, granted, but up. The narrower measure, retail sales, which excludes construction and service, showed a 1.1 percent gain.
None of the other major cities – Seattle, Tacoma, Bellevue or Everett – had anything positive to show for the quarter, with Bellevue coming in with a 12.2 percent plunge in retail sales. Smaller cities in the Puget Sound area such as Fife, Auburn, Issaquah and Kent saw their taxable retail sales fall more than 20 percent.
Spokane County did less well than the city, with taxable sales off 4.2 percent and retail off 5.3 percent. But even those numbers were better than those for King, Pierce, Snohomish and Clark counties. Of the smaller counties contiguous to Spokane, Stevens sales fell 1 percent, but Whitman, Ferry, Lincoln and Pend Oreille were up.
The other semipositive narrative was in real estate, of all places. The few years of double-digit price inflation earlier in the decade are just a fond memory, but there’s comfort to be found in what we still have, namely our homes.
RealtyTrac released its national 2008 foreclosure statistics last week. They were awful.
More than 2.3 million properties were the object of some kind of foreclosure activity, a jump of 81 percent over 2007. Rates in some states were multiples of 2007, a staggering 15 times for thinly populated South Dakota, and even already hard-hit California managed to double the pace of 2007.
Unfortunately, Idaho also experienced twice the foreclosure activity rate of 2007, with 8,512 homes affected, or 1.38 percent. In Kootenai County, 828 homes were subjected to a notice of some sort. That’s 1.45 percent of all homes, or more than double the number of 2007.
Rates for Washington and Spokane County also increased, to 1 percent and 0.6 percent of all homes, respectively. Discouraging as the number for Spokane may be – 1,146 homeowners were affected – the rate of increase remained steady; 14 percent more than 2007, which was 14 percent more than 2006.
The trend was far worse in the urban counties of Western Washington, with more than 2 percent of homes in Pierce County receiving notices.
The explanation for Spokane’s relatively low foreclosure rate is tied to the other bit of local real estate news, the very modest decline in housing prices for 2008, less than 3 percent from 2007. The median price slipped less than 1 percent to $184,000.
“You don’t have many people upside down in their homes,” noted Glenn Crellin, director of the Washington State Real Estate Research Center.
He said Washington, based on third-quarter figures from the Mortgage Bankers Association, may be doing better than RealtyTrac numbers indicate. Washington ranked fifth-lowest in the MBA rankings, compared with 25th in RealtyTrac, he said.
All this said, let’s be clear: Most homes are worth less today than they were a year ago. But as Crellin said, “Given the nation’s economy, we couldn’t help but be moving backward.”
How fast and how far back depends more than anything on whether people are working. Spokane has largely avoided the big layoff announcements casting a pall over Boise and Seattle, and that surely has a lot to do with the comparative stability of our retail sales and housing numbers.
The December report is due this week from the Washington Department of Labor. In these times, small layoffs are small blessings.