Published: Monday, 23 Nov 2009 | 10:46 AM ET
By: Reuters
Sales of previously owned U.S. homes rose in October at a faster-than-expected pace to the highest in more than 2-1/2 years as buyers rushed to take advantage of a popular tax credit, a survey showed Monday.
The National Association of Realtors said sales surged a record 10.1 percent month-over-month to an annual rate of 6.10 million units, the highest since February 2007, from a downwardly revised 5.54 million-unit pace in September.
Analysts polled by Reuters had expected October sales to jump to a 5.70 million-unit pace from the previously reported 5.57 million units in September. Compared to October last year, home sales were up by a record 23.5 percent. U.S. stock indexes extended gains on the data, while Treasury debt prices were little changed.
"Many buyers have been rushing to beat the deadline for first-time buyer credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," said Lawrence Yun, NAR's chief economist.
Distressed transactions accounted for 30 percent of sales last month and continued to weigh on house prices. First-time buyers made up a third of sales in October.
The national median home price fell 7.1 percent from October last year, the smallest decline in over a year, to $173,100. Homes in foreclosure typically sell for 15 to 20percent less than traditional homes.
"Existing home sales have already bottomed. Home prices are almost there. We are seeing a less of a decline in house values," said Yun.
The housing market is slowly mending after a three-year decline, which contributed to tipping the U.S. economy into its worst recession in seven decades. Housing construction contributed to economic growth in the third quarter for the first time since 2005.
Recovery is being supported by the $8,000 tax credit for first-time buyers, low mortgage rates and falling house prices. The government this month extended the incentive into next year and added a $6,500 credit for home owners buying a new residence. It had been due to expire on Nov. 30.
"The tax benefits going into the housing market are working, and that's a relief," said William Larkin, portfolio manager at Cabot Money Management in Boston. "Everything is about housing and jobs right now."
The improvement in October sales was broad-based, with sales of single-family homes, the biggest segment of the market, rising 9.7 percent to an annual rate of 5.33 million units, while condominium and co-ops increased 13.2 percent to a 770,000-unit rate.
Sales were up in all four regions of the country. Prices rose 1.1 percent in the Midwest, which didn't see the same boom as the rest of the country, while declining in the other three. The rise in the Midwest was the first price increase in any region since November 2008.
Analysts are cautiously hoping a sustained housing market recovery will help to improve the psychology of households, which has been shaken by rising unemployment.
While the economy resumed growing in the July-September period after four quarters of decline, sluggish consumer spending is seen slowing the momentum.
The inventory of existing homes for sale in October fell 3.7 percent to 3.57 million units from the previous month, NAR said. At October's sales pace, that represented a supply of 7.0 months, the lowest in 2-1/2 years, from September's revised 8.0 months.
Copyright 2009 Reuters.
Monday, November 23, 2009
Thursday, November 19, 2009
Low Interest Rates Spur Refinancing, Buying Interest
by Broderick Perkins
If you purchased a home a year ago and have the equity and creditworthiness to swing it, a refinance today could save you hundreds of dollars a month.
Or, if you are in the market to buy a home, interest rates will make for a more affordable deal.
Freddie Mac's Primary Mortgage Market Survey for Nov. 12 put the average fixed interest rate for 30-year conforming mortgages at 4.91 percent.
Last year at the same time, the 30-year fixed rate mortgage (FRM) averaged 6.14 percent.
"Keeping rates at historically low levels for a sustained period of time has to remain a cornerstone of Fed policy until the economy gets back on track," said Nancy Osborne, chief operating officer of Erate.com.
On a $300,000 mortgage the principle and interest payment at today's average rate would be about $1,594, compared to $1,825 a year ago, according to Erate's calculators.
That's a monthly savings of $231. Put another way, a year's worth of the savings -- $2,772 -- amounts to almost two mortgage payments on a $300,000 mortgage at today's average rate.
Both home buyers and owners who want to refinance may have some time yet to shop around and dicker for the best interest rate deal.
"I don't suspect rates will begin to rise until we see at least three consecutive months of solid employment growth," Osborne said.
Freddie Mac also said the 15-year FRM averaged 4.36 percent, down from 5.81 percent a year ago.
Adjustable rate mortgages (ARMs)
The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.29 percent this week, down from 5.98 percent a year ago. The one-year Treasury-indexed ARM averaged 4.46 percent, down from 5.33 percent in 2009 at this time.
Published: November 19, 2009
If you purchased a home a year ago and have the equity and creditworthiness to swing it, a refinance today could save you hundreds of dollars a month.
Or, if you are in the market to buy a home, interest rates will make for a more affordable deal.
Freddie Mac's Primary Mortgage Market Survey for Nov. 12 put the average fixed interest rate for 30-year conforming mortgages at 4.91 percent.
Last year at the same time, the 30-year fixed rate mortgage (FRM) averaged 6.14 percent.
"Keeping rates at historically low levels for a sustained period of time has to remain a cornerstone of Fed policy until the economy gets back on track," said Nancy Osborne, chief operating officer of Erate.com.
On a $300,000 mortgage the principle and interest payment at today's average rate would be about $1,594, compared to $1,825 a year ago, according to Erate's calculators.
That's a monthly savings of $231. Put another way, a year's worth of the savings -- $2,772 -- amounts to almost two mortgage payments on a $300,000 mortgage at today's average rate.
Both home buyers and owners who want to refinance may have some time yet to shop around and dicker for the best interest rate deal.
"I don't suspect rates will begin to rise until we see at least three consecutive months of solid employment growth," Osborne said.
Freddie Mac also said the 15-year FRM averaged 4.36 percent, down from 5.81 percent a year ago.
Adjustable rate mortgages (ARMs)
The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.29 percent this week, down from 5.98 percent a year ago. The one-year Treasury-indexed ARM averaged 4.46 percent, down from 5.33 percent in 2009 at this time.
Published: November 19, 2009
Wednesday, November 4, 2009
Congress Poised to Keep Homebuyers’ Tax Credit
By JACKIE CALMES
Published: November 3, 2009
WASHINGTON — The Senate and House are poised to agree on a compromise measure to extend unemployment benefits that also would expand a popular $8,000 tax credit for homebuyers, despite a recent government report on extensive mistakes and suspected fraud in the program.
The Senate might pass its version as early as Wednesday, and aides to Congressional leaders say the House could accept it this week, sending the bill to President Obama to sign into law. After weeks of partisan delay in the Senate, Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment.
The homebuyers’ credit — enacted last year, expanded this year and scheduled to expire Nov. 30 — would be extended to cover homes under contract by April 30. Also, it no longer would be limited to first-time buyers; people who have owned a home for at least five years could get a $6,500 credit on a new residence. Income limits for eligibility would be raised, making many more people qualify.
Extending and expanding the credit would cost an estimated $11 billion, on top of the $10 billion spent so far. It would be a big victory for the housing and real estate lobby and for the Senate majority leader, Harry Reid, Democrat of Nevada, who faces a tough re-election race next year in the state with the most claims for the credit per capita.
Critics complain that most of the credits go to taxpayers who would have bought their homes anyway, which even the industry acknowledges. Also, a Congressional subcommittee released a Treasury Department report last month about suspected criminal and civil abuses of the program.
Government officials testified, however, that many of the problems may be due to confusion among taxpayers and the Internal Revenue Service about the overlapping 2008 and 2009 versions of the tax credit. With Congress likely to change the eligibility provision again, the new measure could present further administrative problems for the I.R.S., although the measure does include several new safeguards.
“It’s not unreasonable to think that this is going to provide some further challenges for them, both in terms of implementing a third version of it and in terms of ensuring taxpayers’ compliance,” said James R. White, director of tax issues for the Government Accountability Office.
The Treasury Department report said that as of Sept. 30, the I.R.S. had identified 167 suspected criminal schemes and was examining nearly 107,000 cases of potential civil violations.
The first person to be convicted of defrauding the tax credit program was a tax preparer in Jacksonville, Fla., who was sentenced last month to 30 months in prison. According to the Justice Department, he claimed the credit for ineligible clients, many of whom were unsuspecting, and electronically paid himself $1,000 of the credit’s value each time.
Investigators found that more than 500 claimants of the tax credit nationwide were minors as young as 4, so the new measure will require applicants to be at least 18. Homes cannot be acquired from relatives, and taxpayers must submit a settlement statement as proof of purchase, though officials acknowledge that could be a problem for those who file tax returns electronically.
While real estate groups and some economists say the credit has helped stabilize the housing market, critics say it is too costly a subsidy when low interest rates and home prices are incentives enough for most.
Of the 1.4 million claimants of the credit, fewer than a third — about 350,000 to 400,000 — are believed to have bought their homes because of the credit, according to independent and industry-affiliated economists.
Under the new legislation, individuals with income up to $125,000 a year and couples earning up to $225,000 would be eligible. The current income limits are $75,000 for individuals and $150,000 for couples. Under both the House and Senate versions, smaller amounts are available to people of slightly higher incomes until the credit phases out.
The expanded homebuyers’ tax credit was attached to a bill intended to extend unemployment compensation for up to 20 weeks for people who have been out of work for long periods. Another amendment would sweeten a tax break for businesses with net operating losses in 2008 and 2009.
Published: November 3, 2009
WASHINGTON — The Senate and House are poised to agree on a compromise measure to extend unemployment benefits that also would expand a popular $8,000 tax credit for homebuyers, despite a recent government report on extensive mistakes and suspected fraud in the program.
The Senate might pass its version as early as Wednesday, and aides to Congressional leaders say the House could accept it this week, sending the bill to President Obama to sign into law. After weeks of partisan delay in the Senate, Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment.
The homebuyers’ credit — enacted last year, expanded this year and scheduled to expire Nov. 30 — would be extended to cover homes under contract by April 30. Also, it no longer would be limited to first-time buyers; people who have owned a home for at least five years could get a $6,500 credit on a new residence. Income limits for eligibility would be raised, making many more people qualify.
Extending and expanding the credit would cost an estimated $11 billion, on top of the $10 billion spent so far. It would be a big victory for the housing and real estate lobby and for the Senate majority leader, Harry Reid, Democrat of Nevada, who faces a tough re-election race next year in the state with the most claims for the credit per capita.
Critics complain that most of the credits go to taxpayers who would have bought their homes anyway, which even the industry acknowledges. Also, a Congressional subcommittee released a Treasury Department report last month about suspected criminal and civil abuses of the program.
Government officials testified, however, that many of the problems may be due to confusion among taxpayers and the Internal Revenue Service about the overlapping 2008 and 2009 versions of the tax credit. With Congress likely to change the eligibility provision again, the new measure could present further administrative problems for the I.R.S., although the measure does include several new safeguards.
“It’s not unreasonable to think that this is going to provide some further challenges for them, both in terms of implementing a third version of it and in terms of ensuring taxpayers’ compliance,” said James R. White, director of tax issues for the Government Accountability Office.
The Treasury Department report said that as of Sept. 30, the I.R.S. had identified 167 suspected criminal schemes and was examining nearly 107,000 cases of potential civil violations.
The first person to be convicted of defrauding the tax credit program was a tax preparer in Jacksonville, Fla., who was sentenced last month to 30 months in prison. According to the Justice Department, he claimed the credit for ineligible clients, many of whom were unsuspecting, and electronically paid himself $1,000 of the credit’s value each time.
Investigators found that more than 500 claimants of the tax credit nationwide were minors as young as 4, so the new measure will require applicants to be at least 18. Homes cannot be acquired from relatives, and taxpayers must submit a settlement statement as proof of purchase, though officials acknowledge that could be a problem for those who file tax returns electronically.
While real estate groups and some economists say the credit has helped stabilize the housing market, critics say it is too costly a subsidy when low interest rates and home prices are incentives enough for most.
Of the 1.4 million claimants of the credit, fewer than a third — about 350,000 to 400,000 — are believed to have bought their homes because of the credit, according to independent and industry-affiliated economists.
Under the new legislation, individuals with income up to $125,000 a year and couples earning up to $225,000 would be eligible. The current income limits are $75,000 for individuals and $150,000 for couples. Under both the House and Senate versions, smaller amounts are available to people of slightly higher incomes until the credit phases out.
The expanded homebuyers’ tax credit was attached to a bill intended to extend unemployment compensation for up to 20 weeks for people who have been out of work for long periods. Another amendment would sweeten a tax break for businesses with net operating losses in 2008 and 2009.
Tuesday, October 13, 2009
Survey: Most economists see recovery beginning
By Mae Anderson
The Associated Press
New York » More than 80 percent of economists believe the recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist.
That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.
"The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines," said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University.
The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through the next year. Forecasters now expect the economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010.
Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious.
The unemployment rate rose to 9.8 percent in September from 9.7 percent, the Labor Department said earlier this month, the highest point in 26 years.
Forecasters expect the unemployment rate to continue to rise, to 10 percent in the first quarter of next year, before edging down to 9.5 percent by the end of 2010.
The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs. More job cuts were announced last week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs.
Worries about unemployment are likely to continue to constrain household spending. Personal consumption spending likely began rising in the second half of this year, but is expected to remain low in 2010. Still, Americans aren't expected to save as much as they have in past decades. The savings rate is expected to be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s.
The housing recovery is one bright spot. Forecasters expect 2010 to be the first year since 2005 that the housing sector will contribute to overall growth. Home prices are expected to rise 2 percent in 2010, but panelists do not believe that will stifle the housing recovery.
Inflation is expected to remain low due to the weak labor market and other factors. Thus, the NABE panel -- which consists of 44 economists surveyed Sept. 2 through Sept. 24 -- expects the federal funds rate to remain at its current record low near zero until late next spring, before a gradual rise begins.
"The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," said Reaser.
The Associated Press
New York » More than 80 percent of economists believe the recession is over and an expansion has begun, but they expect the recovery will be slow as worries over unemployment and high federal debt persist.
That consensus comes from leading forecasters in a survey by the National Association for Business Economics released Monday.
"The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines," said NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University.
The forecasters upgraded the economic outlook for the next several quarters, but cautioned that unemployment rates and the federal deficit are expected to remain high through the next year. Forecasters now expect the economy, as measured by gross domestic product, to advance at a 2.9 percent pace in the second half of the year, after falling for four straight quarters for the first time on records dating to 1947. They expect a 3 percent gain in 2010.
Still, the federal deficit has ballooned and the jobless rate is expected to lag behind, as employers remain cautious.
The unemployment rate rose to 9.8 percent in September from 9.7 percent, the Labor Department said earlier this month, the highest point in 26 years.
Forecasters expect the unemployment rate to continue to rise, to 10 percent in the first quarter of next year, before edging down to 9.5 percent by the end of 2010.
The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs. More job cuts were announced last week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs.
Worries about unemployment are likely to continue to constrain household spending. Personal consumption spending likely began rising in the second half of this year, but is expected to remain low in 2010. Still, Americans aren't expected to save as much as they have in past decades. The savings rate is expected to be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s.
The housing recovery is one bright spot. Forecasters expect 2010 to be the first year since 2005 that the housing sector will contribute to overall growth. Home prices are expected to rise 2 percent in 2010, but panelists do not believe that will stifle the housing recovery.
Inflation is expected to remain low due to the weak labor market and other factors. Thus, the NABE panel -- which consists of 44 economists surveyed Sept. 2 through Sept. 24 -- expects the federal funds rate to remain at its current record low near zero until late next spring, before a gradual rise begins.
"The good news is that this deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation," said Reaser.
Home-buying incentives available, but time is short
Economy » The two programs are intended to help spur the sale of houses.
By Lesley Mitchell
The Salt Lake Tribune
Homebuyers along the Wasatch Front are racing to meet a deadline for purchasing incentives that expire on Nov. 30.
The larger of the two incentives is an $8,000 federal income tax credit geared toward first-time buyers of new or existing homes, although anyone who hasn't owned a home in the past three years is eligible. Utah also is offering a $4,000 grant for buyers of newly built homes. Both state and federal officials stress that there is no leeway on the deadlines for the incentives, which are aimed at boosting the sagging economy and real estate sector.
"You could be a day late and $8,000 short," said IRS spokesman Bill Brunson.
Salt Lake City Realtor DeAnna Dipo is telling prospective buyers who are interested in either incentive they probably are going to need to be under contract to buy a home no later than the end of October to allow for sufficient time for loan underwriting and to beat the Nov. 30 deadline to close.
"It's definitely getting people off the fence," said Ryan Kirkham, president of the Salt Lake Board of Realtors. "There's no question that it's having a positive effect on home sales right now." Further motivating buyers are super-low mortgage rates of about 5 percent or even below 5 percent.
"A lot of people realize that rates aren't always going to be this low," Kirkham said.
First-time buyer Saxony Sharkey qualified this summer for a mortgage at 5.25 percent to purchase an existing home in West Jordan. Like other buyers, she first heard about the federal home-buying incentive last year. But last year, the incentive was a $7,500 no-interest loan that had to be repaid.
Only this year, when the government started offering an $8,000 tax credit -- it does not have to be repaid if the home remains a primary residence for at least 36 months -- did she make her move.
"I thought, this is something I didn't want to pass it up," she said.
The state incentive, dubbed "Home Run 2," provides $4,000 grants to buyers who meet certain criteria and buy new construction. It follows the original Home Run program, which provided $6,000 grants to new home buyers. That program ended in June after all the funds were exhausted and 1,652 grants had been issued.
Today, there's about 1,400 grants available out of 1,950 when the program debuted on Sept. 4.
"The interest level has been very high," said Grant Whitaker, president and CEO of the Utah Housing Corp., which is administering the program.
Clark Ivory, who lobbied the state to create the grant program, said his home-building company had 60 sales in September, up from 47 in September 2008.
Cristy and Luis Duran, who are renting, didn't think they could afford to buy. But after a local real estate agent told them about the incentives, they went to a mortgage lender to see if they could qualify to buy a townhome.
They did qualify, and are using the $4,000 state incentive toward their down payment. Once they close in a few weeks, they will file an amended return to get the $8,000 federal incentive, which they plan to use to finish their basement.
"Without this money, we would not have been able to buy this home," Cristy Duran said.
Sharkey said she elected to amend her 2008 tax return after she bought her home this summer, and expects to get the tax credit money sometime over the holidays. Others are waiting to file for the credit in early 2010 when they file their 2009 return. Half of Sharkey's $8,000 was earmarked for some upgrades; the other half is destined for her saving account.
"I wanted to use some of its on upgrades," she said. "But based on the way things are going right now [with the economy], I thought it would be good [to put] half of it in savings."
lesley@sltrib.com
By Lesley Mitchell
The Salt Lake Tribune
Homebuyers along the Wasatch Front are racing to meet a deadline for purchasing incentives that expire on Nov. 30.
The larger of the two incentives is an $8,000 federal income tax credit geared toward first-time buyers of new or existing homes, although anyone who hasn't owned a home in the past three years is eligible. Utah also is offering a $4,000 grant for buyers of newly built homes. Both state and federal officials stress that there is no leeway on the deadlines for the incentives, which are aimed at boosting the sagging economy and real estate sector.
"You could be a day late and $8,000 short," said IRS spokesman Bill Brunson.
Salt Lake City Realtor DeAnna Dipo is telling prospective buyers who are interested in either incentive they probably are going to need to be under contract to buy a home no later than the end of October to allow for sufficient time for loan underwriting and to beat the Nov. 30 deadline to close.
"It's definitely getting people off the fence," said Ryan Kirkham, president of the Salt Lake Board of Realtors. "There's no question that it's having a positive effect on home sales right now." Further motivating buyers are super-low mortgage rates of about 5 percent or even below 5 percent.
"A lot of people realize that rates aren't always going to be this low," Kirkham said.
First-time buyer Saxony Sharkey qualified this summer for a mortgage at 5.25 percent to purchase an existing home in West Jordan. Like other buyers, she first heard about the federal home-buying incentive last year. But last year, the incentive was a $7,500 no-interest loan that had to be repaid.
Only this year, when the government started offering an $8,000 tax credit -- it does not have to be repaid if the home remains a primary residence for at least 36 months -- did she make her move.
"I thought, this is something I didn't want to pass it up," she said.
The state incentive, dubbed "Home Run 2," provides $4,000 grants to buyers who meet certain criteria and buy new construction. It follows the original Home Run program, which provided $6,000 grants to new home buyers. That program ended in June after all the funds were exhausted and 1,652 grants had been issued.
Today, there's about 1,400 grants available out of 1,950 when the program debuted on Sept. 4.
"The interest level has been very high," said Grant Whitaker, president and CEO of the Utah Housing Corp., which is administering the program.
Clark Ivory, who lobbied the state to create the grant program, said his home-building company had 60 sales in September, up from 47 in September 2008.
Cristy and Luis Duran, who are renting, didn't think they could afford to buy. But after a local real estate agent told them about the incentives, they went to a mortgage lender to see if they could qualify to buy a townhome.
They did qualify, and are using the $4,000 state incentive toward their down payment. Once they close in a few weeks, they will file an amended return to get the $8,000 federal incentive, which they plan to use to finish their basement.
"Without this money, we would not have been able to buy this home," Cristy Duran said.
Sharkey said she elected to amend her 2008 tax return after she bought her home this summer, and expects to get the tax credit money sometime over the holidays. Others are waiting to file for the credit in early 2010 when they file their 2009 return. Half of Sharkey's $8,000 was earmarked for some upgrades; the other half is destined for her saving account.
"I wanted to use some of its on upgrades," she said. "But based on the way things are going right now [with the economy], I thought it would be good [to put] half of it in savings."
lesley@sltrib.com
Thursday, May 28, 2009
Utah execs more upbeat about state's economy
After two years of growing pessimism about the economy, some Utah business leaders are saying that the worst of the recession may be over.
Optimism among executives about the futures of their companies increased in the opening three months of 2009 for the first time since the fourth quarter 2006, according to the bank's latest quarterly forecast of the economy, released Tuesday.
"It's the first time I've seen attitudes look more upbeat, to see hope for the future, rather than a steady decline," said Julie Olsen, an analyst for Dan Jones and Associates, the Salt Lake City market research firm that constructed the forecast for Zions.
Olsen said it's too soon to call the upswing the start of a recovery from the worst recession gripping Utah since the 1930s. But "at least during this quarter we are willing to say that the executives in this survey see [the economy] improving."
The level of optimism hardly compares to when Zions established its quarterly report in the second quarter 2006, when Utah's economy was booming. Back then 90 percent of the executives who took part were bullish on their businesses, compared with 65 percent today.
In hindsight, second quarter 2006 turned out to be the survey's high point. Except for small increases in the fourth quarters of 2006 and 2007, optimism fell steadily until the first quarter 2009, and business leaders hope the turnaround sticks.
"We have seen an uptick in demand, which is very good," said Dan England, chairman of Salt Lake City-based trucking giant C.R. England Inc. "We are not going to be too aggressive on our predictions, but we are hoping and thinking that things may be improving a little bit."
The Zions forecast is based on a survey of 337 executives from April 2 through April 30. Olsen said a "notable" number of executives believe their companies' "health" will improve in the second quarter ending June 30. Forty-four percent sense better times ahead, compared with just 22 percent in the last three months of 2008.
Similarly, more executives expect their companies to maintain or boost spending on capital projects and add employees during the quarter, she said. Fifty-seven percent of executives in the statewide survey anticipate spending as much or more on capital expenditures, compared with 41 percent in the fourth quarter.
The executives showed more inclination to hire additional workers in the second quarter. Twenty-six percent said their work forces would increase somewhat or greatly, up from 17 percent who in the first quarter said their payrolls probably would increase.
"What you have is some optimism that there are parameters to the recession," said Mark Knold senior economist at the state Department of Workforce Services.
"Before, it just felt like it was in a free fall, like nobody knew where it was going to go [or] what it would take to get their hands around it.
"What's changed now is there is a feeling that a bottom is somewhere close, and some of the indicators may have seen their deepest day," he said.
Knold doesn't think Utah is out of the woods, though. Initial claims for unemployment benefits are still hovering around 3,000 per week, three times greater than normal levels.
"I'd like to see them trending below 2,000" before calling a bottom to the labor market, he said.
By Paul Beebe
The Salt Lake Tribune
Updated: 05/26/2009 08:54:56 PM MDT
Optimism among executives about the futures of their companies increased in the opening three months of 2009 for the first time since the fourth quarter 2006, according to the bank's latest quarterly forecast of the economy, released Tuesday.
"It's the first time I've seen attitudes look more upbeat, to see hope for the future, rather than a steady decline," said Julie Olsen, an analyst for Dan Jones and Associates, the Salt Lake City market research firm that constructed the forecast for Zions.
Olsen said it's too soon to call the upswing the start of a recovery from the worst recession gripping Utah since the 1930s. But "at least during this quarter we are willing to say that the executives in this survey see [the economy] improving."
The level of optimism hardly compares to when Zions established its quarterly report in the second quarter 2006, when Utah's economy was booming. Back then 90 percent of the executives who took part were bullish on their businesses, compared with 65 percent today.
In hindsight, second quarter 2006 turned out to be the survey's high point. Except for small increases in the fourth quarters of 2006 and 2007, optimism fell steadily until the first quarter 2009, and business leaders hope the turnaround sticks.
"We have seen an uptick in demand, which is very good," said Dan England, chairman of Salt Lake City-based trucking giant C.R. England Inc. "We are not going to be too aggressive on our predictions, but we are hoping and thinking that things may be improving a little bit."
The Zions forecast is based on a survey of 337 executives from April 2 through April 30. Olsen said a "notable" number of executives believe their companies' "health" will improve in the second quarter ending June 30. Forty-four percent sense better times ahead, compared with just 22 percent in the last three months of 2008.
Similarly, more executives expect their companies to maintain or boost spending on capital projects and add employees during the quarter, she said. Fifty-seven percent of executives in the statewide survey anticipate spending as much or more on capital expenditures, compared with 41 percent in the fourth quarter.
The executives showed more inclination to hire additional workers in the second quarter. Twenty-six percent said their work forces would increase somewhat or greatly, up from 17 percent who in the first quarter said their payrolls probably would increase.
"What you have is some optimism that there are parameters to the recession," said Mark Knold senior economist at the state Department of Workforce Services.
"Before, it just felt like it was in a free fall, like nobody knew where it was going to go [or] what it would take to get their hands around it.
"What's changed now is there is a feeling that a bottom is somewhere close, and some of the indicators may have seen their deepest day," he said.
Knold doesn't think Utah is out of the woods, though. Initial claims for unemployment benefits are still hovering around 3,000 per week, three times greater than normal levels.
"I'd like to see them trending below 2,000" before calling a bottom to the labor market, he said.
By Paul Beebe
The Salt Lake Tribune
Updated: 05/26/2009 08:54:56 PM MDT
Tuesday, May 19, 2009
National papers put spotlight on Salt Lake City
May 18th, 2009 @ 4:16pm
By Amanda Butterfield
SALT LAKE CITY -- Two of the most-read newspapers in the country have recently published lengthy articles about Utah, and they're very positive. That has community leaders very excited.
"National coverage is great. It gives a lot of creditability for what we're doing here across Salt Lake," said Jason Mathis, executive director of the Downtown Alliance.
Mathis couldn't be happier with the recent articles in USA Today and the New York Times. The USA Today article notes what a great place Salt Lake is to have a second home and how there's so much so do that's all close by for visitors.
"Utah has a unique connection of urban city center and mountain resorts. Nobody else has that," Mathis said.
The New York Times article goes into detail about Salt Lake's construction of the City Creek project. At a time when other building projects across the country are at a standstill, The Church of Jesus Christ of Latter-day Saints is on schedule reviving downtown.
"We've got great construction going with more the 1,000 construction workers in the downtown area every day. We have dozens of small businesses that have opened up in the past month," Mathis said.
He says it's important to note, because the construction workers are from all over the valley, the money being made doesn't just stay downtown. "The money generated downtown goes throughout the entire region," he said.
Whether you were born and raised in Utah or recently moved to the state, Mathis says these articles prove Utahns have a lot to be proud of. "We take living here for granted, but people who come from outside, they see the mountains, the awesome city, and they're floored. This is really a remarkable place to live," he said.
Even the magazine Men's Fitness magazine is taking notice of Salt Lake City. In February, Salt Lake was named the nation's fittest city.
By Amanda Butterfield
SALT LAKE CITY -- Two of the most-read newspapers in the country have recently published lengthy articles about Utah, and they're very positive. That has community leaders very excited.
"National coverage is great. It gives a lot of creditability for what we're doing here across Salt Lake," said Jason Mathis, executive director of the Downtown Alliance.
Mathis couldn't be happier with the recent articles in USA Today and the New York Times. The USA Today article notes what a great place Salt Lake is to have a second home and how there's so much so do that's all close by for visitors.
"Utah has a unique connection of urban city center and mountain resorts. Nobody else has that," Mathis said.
The New York Times article goes into detail about Salt Lake's construction of the City Creek project. At a time when other building projects across the country are at a standstill, The Church of Jesus Christ of Latter-day Saints is on schedule reviving downtown.
"We've got great construction going with more the 1,000 construction workers in the downtown area every day. We have dozens of small businesses that have opened up in the past month," Mathis said.
He says it's important to note, because the construction workers are from all over the valley, the money being made doesn't just stay downtown. "The money generated downtown goes throughout the entire region," he said.
Whether you were born and raised in Utah or recently moved to the state, Mathis says these articles prove Utahns have a lot to be proud of. "We take living here for granted, but people who come from outside, they see the mountains, the awesome city, and they're floored. This is really a remarkable place to live," he said.
Even the magazine Men's Fitness magazine is taking notice of Salt Lake City. In February, Salt Lake was named the nation's fittest city.
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