Economic and Market Watch Report - Yes MLS! · MLS_logo Local Report Ashtabula County, OH zip Code Average Price Data by Zip Codes Price Change (1 Year) Total # Homes Sold (Quarter)

Economic and Market Watch Report

4th Quarter, 2002

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© 2003 Northern Ohio Regional Multiple Listing Service and NATIONAL ASSOCIATION OF REALTORS®

Reproduction, reprinting, or retransmission in any form is prohibited without writtenpermission.

Northern Ohio Regional Multiple Listing Service Economic and Market Watch Report

Local Report…………………………...............….....……………………….…….........…..1Ashtabula County…………….………………..…………..…….........……1Cuyahoga County……………………...............................…....……...........3Geauga County………………………...............................…....……...........6Lake County………....………………...............................…....……...........8Lorain County………………….……...............................…....……...........8Medina County………………………...............................…....…….........11

Trends……………………………………………………….....…………............................13Chief Economist’s Commentary*……....................…………..............……......................15Local Forecast………………………………………………….....……..........................….16Economic Monitor*………………………………………….....…….......................….......18

Index

*Reprinted from Real Estate Outlook: Market Trends and Insights, ©2003 NATIONAL ASSOCIATION OF REALTORS®. Usedwith permission. Reproduction, reprinting, or retransmission of this article in any form (electronic media included) is prohibitedwithout written permission. For subscription information please call 1-800-874-6500

The Northern Ohio Regional Multiple Listing Service (NORMLS) facilitates over 500 member realestate companies, and their 7000+ agents, in cooperatively marketing properties for sale. NORMLSInternet-based MLS system, WEBSTER, houses the largest database of homes in Ohio. Broker websitehosting, a Preferred Providers Program and online class registration are a few of the many servicesNORMLS offers to its members.

Local Report MLS_logo

Ashtabula County, OH

1 2 3 4 5

Employment declined by 91 jobs in October, November, and December. The job losses brought about an increase in the average monthly unemployment rate from 7.2% in the third quarter to 7.4% during the fourth quarter. Despite the job losses, the job situation still remains strong in Ashtabula County. Combined with favorable low mortgage rates, home sales should continue at a strong pace.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $99,100 $96,700

# Homes on the Market * NA NA

# homes Sold ** 206 196

# New Homes Built 115 103

Avg # of Days on Market 88 91 * Available as of Dec. 31, 2002. * * May not add to total of zip codes

zip Code Average Price

Data by Zip Codes

Price Change(1 Year)

Total #Homes Sold

(Quarter)

% Change in #Homes Sold

(1 Year)

Average Dayson Market

% of asking price(Sold/List

Price)

44003 $82,233 24.8% 12 140% 93.8%8344004 $89,907 -6.1% 64 6.7% 96.6%9044010 $169,000 181.7% 3 200% 94.3%3644030 $71,554 -14% 32 23.1% 91.8%11944032 $79,900 - 1 - 100.0%44041 $101,560 -7.9% 32 18.5% 94.4%8444047 $91,305 -16.3% 13 85.7% 95.3%10044048 $96,000 52% 2 -33.3% 94.4%3744057 $125,967 - 3 - 98.2%27

1


Ashtabula County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44068 $152,279 114.2% 7 75% 96.7%7144076 $107,083 2% 3 50% 98.9%9744082 $135,000 -43.5% 1 0% 93.1%7244084 $111,699 -22.9% 6 20% 101.5%5344085 $174,757 47.7% 7 0% 96.8%10744093 $71,938 - 8 - 92.0%11744099 $265,000 43.2% 1 0% 88.6%115

2


Cuyahoga County, OH

1 2 3 4 5

Cuyahoga County saw 1,309 layoffs occur during October, November and December. Despite the decline in employment, the average monthly unemployment rate fell from 6.4% during the third quarter to 5.9% during the fourth quarter. Despite the job losses, the labor market remains relatively strong leaving record low mortgage rates to drive home sales.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $158,700 $151,400


# homes Sold ** 3,511 3,050




Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44017 $126,116 -0.2% 65 12.1% 95.4%5844022 $397,528 14% 36 12.5% 89.4%10444040 $732,057 71.2% 7 -41.7% 85.6%9744067 $107,000 -8.9% 1 0% 93.1%5044070 $140,360 2.8% 92 -3.2% 96.7%6444102 $80,934 13.6% 66 -5.7% 97.1%5544103 $29,067 -69.1% 3 -70% 103.8%7644104 $46,000 27.5% 7 16.7% 92.9%7444105 $63,358 24.1% 73 28.1% 101.8%54

3


Cuyahoga County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44106 $241,297 6.8% 30 0% 94.2%6244107 $137,602 0.5% 141 7.6% 95.4%5644108 $173,932 66.1% 28 7.7% 96.2%9744109 $82,634 -1.6% 92 13.6% 95.3%5744110 $52,405 -10.6% 22 -18.5% 93.0%6844111 $95,002 4.8% 97 -22.4% 97.5%5244112 $71,994 -16.2% 31 55% 98.7%8544113 $126,285 21.2% 24 71.4% 94.9%8044114 $99,000 1550% 1 0% 92.5%10044116 $187,055 18.4% 79 -6% 94.9%5244117 $100,790 7.4% 21 5% 97.6%7644118 $141,002 0.2% 95 5.6% 95.9%4444119 $94,442 -4.7% 50 19% 98.2%6044120 $164,007 3.7% 37 -30.2% 95.2%6144121 $118,584 10% 105 -9.5% 96.7%7044122 $241,528 5.9% 75 -7.4% 95.2%6144123 $90,439 -0.9% 58 -4.9% 97.1%7044124 $192,726 -0.8% 106 12.8% 94.0%5844125 $97,809 0.5% 98 46.3% 97.1%6644126 $143,156 -0.3% 56 21.7% 96.6%4744127 $32,000 36.2% 4 0% 90.3%9244128 $80,980 13.6% 40 42.9% 97.0%5844129 $120,817 5.3% 83 -4.6% 97.1%4344130 $138,744 6.3% 113 -16.9% 96.9%9444131 $189,461 6.9% 37 -14% 95.3%6044132 $84,126 -9.4% 32 -11.1% 96.5%6444133 $180,411 11.1% 82 10.8% 95.4%6344134 $120,985 0.3% 93 -2.1% 96.3%5444135 $91,289 7.7% 85 -1.2% 96.9%5344136 $192,328 -1.3% 76 -17.4% 97.0%6544137 $91,793 4.2% 96 33.3% 98.4%7144138 $170,086 3.6% 65 6.6% 97.7%8044139 $299,184 1.8% 61 -18.7% 96.6%9244140 $211,213 2.8% 63 -3.1% 95.9%5944141 $240,840 2.3% 54 20% 95.9%7044142 $122,791 6.5% 32 -22% 96.2%4944143 $213,950 16.6% 53 -27.4% 96.6%85

4


Cuyahoga County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44144 $101,272 -3.6% 52 62.5% 96.6%5244145 $241,639 13.3% 122 22% 96.5%6544146 $125,510 20.4% 72 33.3% 98.3%7344147 $236,410 15% 67 42.6% 96.8%69

5


Geauga County, OH

1 2 3 4 5

Employment declined by 94 jobs in October, November, and December. The job losses brought about an increase in the average monthly unemployment rate from 3.8% in the third quarter to 3.9% during the fourth quarter. Despite the job losses, the job situation still remains strong in Geauga County. Combined with favorable low mortgage rates, home sales should continue at a strong pace.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $250,000 $256,900


# homes Sold ** 270 210




Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44021 $174,560 -9.2% 10 -33.3% 96.3%6644022 $332,713 -14.8% 16 14.3% 94.9%19944023 $319,400 2.1% 52 -13.3% 95.6%8144024 $227,625 14.9% 62 19.2% 95.4%8644026 $229,933 36.3% 15 -25% 94.3%7044040 $375,000 - 1 - 94.0%17744046 $154,900 -13.4% 1 -66.7% 100.0%3544057 $267,000 112.8% 1 -50% 106.8%16244060 $800,000 - 1 - 86.5%83

6


Geauga County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44062 $143,553 -4.3% 11 -45% 97.9%12144064 $242,180 51.7% 5 -28.6% 94.4%9544065 $176,607 -4.5% 14 16.7% 95.5%6344072 $347,901 16.6% 12 -25% 93.5%8644086 $274,250 102.3% 2 -60% 97.7%7144234 $134,250 -30.9% 4 33.3% 87.8%176

7


Lake County, OH

1 2 3 4 5

Lake County saw 247 layoffs occur during October, November and December. Despite the decline in employment, the average monthly unemployment rate fell from 5.5% during the third quarter to 5.3% during the fourth quarter. Despite the job losses, the labor market remains relatively strong leaving record low mortgage rates to drive home sales.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $156,100 $158,400


# homes Sold ** 690 632




Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44024 $86,000 - 1 - 95.7%9644045 $105,500 - 2 - 98.3%9044057 $125,153 3% 44 -8.3% 97.6%11544060 $169,443 9.8% 207 11.3% 96.8%6444077 $161,572 7.7% 169 23.4% 96.7%7344081 $172,998 18% 20 5.3% 98.6%4144092 $134,756 17.4% 31 -8.8% 97.1%4444094 $176,999 -0.8% 69 -5.5% 98.3%5544095 $136,182 12.1% 84 -4.5% 106.3%51

8


Lorain County, OH

1 2 3 4 5

Lorain County saw 272 layoffs occur during October, November and December. Despite the decline in employment, the average monthly unemployment rate fell from 6.9% during the third quarter to 6.5% during the fourth quarter. Despite the job losses, the labor market remains relatively strong leaving record low mortgage rates to drive home sales.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $147,600 $141,500


# homes Sold ** 830 718




Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44001 $165,044 15.7% 47 6.8% 96.5%9844011 $230,765 10.7% 62 24% 98.4%6744012 $194,016 -9.7% 75 21% 96.5%8244028 $197,292 12.6% 16 33.3% 95.6%6944035 $111,945 5.9% 155 -4.9% 96.6%6544039 $136,989 -5% 76 -3.8% 97.5%6344044 $175,091 -2.2% 23 21.1% 97.7%7144050 $168,760 -11.5% 10 -9.1% 96.9%5644052 $83,774 7.3% 74 -5.1% 96.5%81

9


Lorain County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44053 $116,151 -10.5% 37 -22.9% 96.3%9344054 $124,447 11.3% 47 23.7% 95.1%7144055 $80,619 5.4% 35 -22.2% 95.9%5444074 $136,592 -23.6% 13 -40.9% 97.8%10544089 $125,626 -4.1% 19 5.6% 91.7%10444090 $164,677 15.9% 26 13% 96.0%10944253 $253,750 21.4% 2 100% 94.9%6244889 $229,000 42.2% 1 0% 93.9%110

10


Medina County, OH

1 2 3 4 5

Medina County saw 156 layoffs occur during October, November and December. Despite the decline in employment, the average monthly unemployment rate fell from 4.9% during the third quarter to 4.9% during the fourth quarter. Despite the job losses, the labor market remains relatively strong leaving record low mortgage rates to drive home sales.

Seller's Market

Buyer's Market

Labor Market :

Q3' 02 Q4' 02 Q1' 03

Housing Market :

(Forecast)

Average Price $179,000 $184,100


# homes Sold ** 571 487




Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44028 $275,000 - 1 - 98.6%1644212 $161,396 5.6% 115 -11.5% 98.3%6444215 $164,107 48.8% 15 200% 98.3%6944233 $279,509 36.4% 17 70% 95.7%9044235 $141,950 -23.1% 2 0% 95.0%7744253 $180,840 1.8% 10 42.9% 97.6%9844254 $144,367 -3.6% 12 33.3% 96.0%11044256 $201,014 3.3% 210 1.4% 98.3%8844273 $132,367 19.5% 15 50% 96.6%49

11


Medina County, OH


Data by Zip Codes


Total #Homes Sold

(Quarter)


(1 Year)



Price)

44275 $138,166 35.1% 7 133.3% 96.8%10844280 $237,790 7.7% 10 66.7% 95.1%5444281 $168,031 6.4% 71 -13.4% 97.0%82

12

13

Trends

Does Home Size Really Matter? - What’s Selling TodayBy Ken Fears, Economist

The year 2002 saw the housing market flourish and even set several sales records. Mortgage rates atand below the 6.0 percent mark spurred this trend. The vast majority of homebuyers in 2002 were ator near the margin of affordability. Consequently, the steep decline in rates allowed those looking tobuy for the first time and those looking to purchases larger homes to move into affordable situations.In effect, the 40-year low in mortgage rates expanded the pool of people who could afford to pur-chase homes for the first time by lowering the interest rate portion of their monthly mortgage pay-ments.

For example, at 8.1 percent, the annual average interest rate on the 30-year FRM in 2000, a typicalhousehold would need $53,238 in annual income to purchase a home priced at $150,000. By 2002,the average interest rate on a 30-year FRM had reached 6.5 percent. To purchase the same $150,000home in 2002, a household would require an annual income of $45,504. The advantage, which thelow mortgage rates brought, was substantial.

However, some have speculated that home sales at the high-end were hurt by the decline in the stockmarket that brought about the low mortgage rates. Purportedly, the decline in the stock marketeroded stored wealth, reducing the funding that would-be homebuyers had to put towards theirpurchase. Anecdotal evidence from the Federal Reserve’s Beige Book, a frequent publication thathighlights trends in local consumption and which is used by economists and analysts to gauge thestate of the economy, suggests that large home purchases suffered in 2002 and infers that the tum-bling stock market and loss of portfolio wealth were to blame.

Thus, we would like to know if the lower-end of the housing market is outperforming the higher endin the area covered by the Northern Ohio Regional MLS. To this end, we examine the type of homesthat sold during the fourth quarter of 2002 compared to a year earlier.

Home Sales in the 4th Quarter of 2001

Home Sales in the 4th Quarter of 2002 Percentage Change

Homes with at least 3,000 square feet 211 180 -15%

Between 2,000 and 3,000 square feet 732 563 -23%

Under 2,000 square feet 3646 2198 -40%

As the chart above depicts, larger homes experienced the strongest growth in sales during the fourthquarter of 2002. These findings would appear to discredit the notion discussed above that the lowerend market outperformed the higher end housing market in 2002.

Another interesting analysis of the relationship between sales during 2002 and housing size is tolook at the difference that housing size made in the final price of a sold home. Using a form ofeconometric analysis, a technique used to determine the relationship between two variables while

Trends

1 That is, we included the age and style in our analysis since these two variables might play a part in a consumer’s choiceto purchase a home. These variables were chosen because they are related to neighborhood and home specific factors (likeamenities and condition) that would also factor into a purchase. Thus, these variables help to take into account otherfactors that affect the decision to purchase a home.

14

controlling for any other variables that may have an effect1 on the subject of analysis (housing pricesin this case), we find that home prices were higher by roughly $60.75 for every square foot offinished living space over the average for the area covered by the Northern Ohio Regional MLS.

All of the anecdotal stories of hotter sales among smaller sized homes appear to be false for the areacovered by the Northern Ohio Regional MLS. To take advantage of the current sales climate,Realtors should know their target audience. Clearly, home sales in the fourth quarter of 2002 havemoved towards larger homes.

Chief Economist’s Commentary

THE BALANCING ACT – RISK AND REWARDby David Lereah, Chief Economist

It is no surprise that as we begin the New Year, investors and households still look toward the U.S. equities marketwith some trepidation and the real estate markets with some comfort.

The creator had a purpose in equipping us with a neck: he surely meant for us to stick it out—at times. Well a lotof people stuck their necks out in the stock market during the past several years and lost a lot of money doing it.Since the bear market began in March 2000, households have, collectively, lost almost $6 trillion.

There has always been a trade off between reward and risk. Even in the Book of Genesis we see an example —justask Adam and the decision he had to make about a rib. The greater the return, the greater the assumed risk.

It appears that investors will have a revised view of risk/reward tradeoffs in 2003. Real estate will most probably bein favor, while stocks and bonds will be viewed with a cautious eye. During this past year, I have sung the praises ofthe housing markets from an industry perspective— telling anyone in earshot that the robust housing market haskept a struggling U.S. economy afloat.

But the other side of the housing coin is its investment attributes. A home is not just a place to live anymore. It hasincreasingly become a solid investment alternative to stocks and bonds. Anyone who has lived and owned a homeduring the past two years has not only enjoyed the pride of homeownership but has also experienced (on average)a six to eight percent annual gain in the home’s value. The same household has also built up equity in its home bymaking mortgage payments that are not only paying off the loan’s interest but paying off principal as well. TheNATIONAL ASSOCIATION OF REALTORS® estimates that households collectively experienced $200 billion inrealized capital gains on home sales last year, but over $1 trillion in unrealized capital gains, helping to offset theirmultitrillion dollar losses in the stock markets.

Clearly, housing has become a wealth builder for anyone participating in the American dream of owning a home. Italso has not discriminated among household income groups or by race or by geographic region. The foreign-bornand minorities have begun to close the homeownership “gap.” And by becoming homeowners, they also haveincreased their household wealth.

Perhaps more importantly, while household wealth has been building, the primary expense of homeownership—themortgage payment—has fallen to cyclical lows. The mortgage debt service/income ratio is now at a cyclical lowdue to 30-year mortgage rates hovering near 40-year lows. Building wealth at a low cost has not only been a goodrecipe for housing, but has helped many families partially offset sudden and (in most cases) unexpected losses intheir retirement accounts as they watched their 401ks turn into 201qs.

The increasing gravity towards housing has taken many forms. Households are purchasing both new and existinghomes in record numbers. There are also record numbers of first-time homebuyers, trade-up buyers andhouseholds buying second homes either for vacation or investment that have participated in the housing market.The bottom line is that households have shifted a meaningful portion of their funds into housing and probably awayfrom stock, bonds, or other investment-type purchases.

How long can real estate stay in favor vis a vis stocks and bonds? The simple answer is that this trend will notcontinue forever. Real estate markets experience cycles just like the equity and bond markets. It was not that longago that real estate was out of favor (remember the 1986 Tax Reform Act?), particularly commercial/investment realestate, but also residential real estate. According to NAR’s Existing Home Sales Survey, home prices increased bya meager 0.5 percent in 1990—not exactly a stellar investment.

So, cycles come and cycles go and the current real estate cycle will inevitably follow this historical pattern.Hopefully, we can prolong this current bull-run for real estate a bit longer. But when the bull finally returns to itsstable, it is probably a safe bet that households and investors will continue to view real estate as a safe haven anda viable investment option for their funds. Of course, the ultimate reason for purchasing a house will never change—having a place to call home.

15

The ForecastBy Lawrence Yun, Senior Research Forecaster

Forecast

16

Job losses returned in the fourth quarter of 2002. The economyneeds to expand at better than 3% consistently in order to createjobs. The preliminary estimate of U.S. fourth-quarter economicactivity was very weak. GDP posted a mere 0.7% growth rate.This anemic performance was expected. It is, therefore, notsurprising that we saw job losses return in the fourth quarter.

The weak growth was expected due to the fluctuation in autosales. Auto sales surged in the third quarter, and were theprincipal reason why the economy grew at 4.0% during thatperiod. In the fourth quarter, car sales retreated offunsustainably very high levels.

Looking AheadBut the outlook for 2003 looks more positive than did theclosing months of 2002 despite the impending war with Iraq,a poorly performing stock market, and the fits and starts inauto sales. All sectors of the economy are lining up nicely tobring about at least one million new jobs and hammer downthe unemployment rate from the current 6.0% to 5.6% by theyear’s end. The momentum is likely to further build in 2004.

Business SpendingThe biggest drag on the economy in the past two years hasbeen the collapse in business spending for machines andequipment. While bulls roamed the stock market and cashflowed like water, companies over-invested. Businessspending also had spiked from Y2K related machine upgrades.Fortunately there were no computer crashes at the turn of thecentury – even in the developing countries where no upgradeswere made. And all those new machines in which businesseshad invested had a number of useful years in them. Thedownside is that there was no need to pour money into anynew equipment. Business spending turned negative for eightstraight quarters.

But now the useful life of all those machines and equipment –especially information technology items – is coming to an end.New machines are needed to keep up with the fast changingbusiness world. After recording successively smaller declines,business spending (i.e., nonresidential fixed investment) inthe fourth quarter actually managed to squeak out a positivegrowth of 1.5%. Business spending will no longer be a dragthe economy in 2003. In addition, business inventory levelshave been squeezed dry. Even a modest level of inventoryrestocking by itself could add about 1% to the overall GDPgrowth.

It’s Still About ConsumersMeanwhile, consumer and government spending will moveahead. Consumers will continue to spend. A tax cut couldhelp. The federal government is ramping up military spending.There is really no impediment to solid economic growth in2003. But there are some things that could bring growth to a

halt. A prolonged war with Iraq could cause oil prices toshoot much higher. A major terrorist attack may result in asharp decline in consumer and business confidence. On theupside, assuming a quick victorious war, oil prices willdecline from the current $30 per barrel to low $20, whichwill further boost the economy.

National Housing MarketAmazingly, the recession proof housing sector continues toexceed all expectations. Existing home sales, new homesales, and single-family housing starts all recorded healthygains of better than 5% in 2002. Strong sales also translatedinto large home price gains, with the national median salesprice of an existing home rising 7.1% to $165,800.Homeowners are smiling as a result. No wonder, the wealthholdings of homeowners improved significantly. TheFederal Reserve’s recently published 2001 Survey ofConsumer Finances showed that the net worth forhomeowners was $171,700 while that of renters was $4,800.(In the previous survey done in 1998, the comparable figureswere $143,800 for homeowners and $4,600 for renters.) Theinclusion of 2002 data would have made the gap even larger.

In 2003, housing activity will slow just a bit compared to2002, but will remain at very high levels. Existing homesales of 5.40 million and new home sales of 959,000 will bethe second best ever for both of the series. Home priceswill increase but at a more reasonable rate of 4.8%. With somany new single-family housing starts begun in the latterpart of 2002, many new homes will be coming on to themarket in 2003. Therefore, the demand and supply situationwill be much more balanced.

Local MarketThe Cleveland metro market lost 7,200 payroll jobs fromDecember 2001 to December 2002. But there have beenjob gains in the recent months implying that the worst daysof the labor market are likely to be over. The metrounemployment rate was 5.3% a year ago; it then shot up to6.6% by June of 2002; it is now 5.6%. Job gains will becritical to keeping the home sales at high levels in 2003.This is because mortgage rates will be inching higher fromthe current sub 6% level to about 6.6% by the year’s end.Falling interest rates had heavily influenced home sales in2002. From a historical point of view, mortgage rates in2003 will be very attractive, but given that many peoplealready took advantage of that last year, the magicalinfluence of low mortgage rates will be less important forthis year. Hence, a bigger importance is placed on jobcreations going forward. Based on our national economicoutlook and its influence on the local economy, there willbe about 12,000 more jobs this time next year compared tothe current figures.

Forecast

17

Annual ForecastNational Outlook II III IV I II III IV I II III 2002 2003 2004U.S. EconomyAnnual Growth RateReal GDP 1.3 4.0 0.7 3.0 3.7 3.7 4.1 3.4 3.2 3.7 2.4 2.9 3.6Nonfarm Payroll Employment -0.2 0.4 -0.1 0.3 1.9 1.8 2.3 2.2 2.0 2.4 -0.9 0.8 2.2Consumer Prices 3.4 1.9 2.4 3.6 2.6 1.4 1.4 2.6 2.8 2.5 1.6 2.5 2.2Real Disposable Income 3.9 3.1 2.6 3.4 4.1 4.3 4.0 3.2 2.5 3.4 4.5 3.5 3.4Consumer Confidence 108 95 82 86 95 100 113 114 115 118 97 99 117

PercentUnemployment 5.9 5.7 5.9 5.9 5.8 5.7 5.6 5.4 5.4 5.3 5.8 5.8 5.4

Interest Rates, PercentFed Funds Rate 1.8 1.7 1.4 1.3 1.3 1.7 2.2 2.5 2.8 3.0 1.7 1.6 2.83-Month T-Bill Rate 1.7 1.6 1.3 1.2 1.2 1.4 1.9 2.2 2.5 2.7 1.6 1.4 2.6Prime Rate 4.8 4.8 4.4 4.3 4.3 4.7 5.2 5.5 5.8 6.0 4.7 4.6 5.8Discount Rate 1.3 1.3 0.9 0.8 0.8 1.2 1.7 2.0 2.3 2.5 1.2 1.1 2.3Corporate Aaa Bond Yield 6.7 6.3 6.3 6.2 6.2 6.3 6.4 6.4 6.4 6.3 6.5 6.3 6.330-Year Government Bond 5.8 5.2 5.1 5.0 5.0 5.0 5.1 5.2 5.2 5.3 5.4 5.0 5.2

Mortgage Rates, percent30-Year Fixed Rate 6.8 6.3 6.1 6.2 6.2 6.4 6.6 6.8 6.8 6.8 6.5 6.4 6.81-Year Adjustable 4.8 4.4 4.2 3.9 3.9 4.2 4.7 4.9 5.2 5.4 4.6 4.3 5.3

Housing IndicatorsThousandsExisting Single-Family Sales 5,537 5,370 5,730 5,511 5,354 5,332 5,409 5,451 5,447 5,519 5,563 5,402 5,494New Single-Family Sales 951 1,020 1,044 968 960 954 955 960 962 967 976 959 963Housing Starts 1,667 1,697 1,747 1,704 1,693 1,685 1,686 1,699 1,671 1,677 1,705 1,692 1,674Single-Family Units 1,328 1,340 1,417 1,381 1,362 1,349 1,354 1,360 1,325 1,323 1,360 1,361 1,326Multifamily Units 338 357 330 323 331 336 333 339 346 354 345 331 348

Percent Change -- Year AgoExisting Single-Family Sales 3.9 2.0 9.4 -4.7 -3.3 -0.7 -5.6 -1.1 1.7 3.5 5.0 -2.9 1.7New Single-Family Sales 6.9 17.6 12.6 6.7 1.0 -6.4 -8.6 -0.8 0.2 1.3 7.5 -1.7 0.4Housing Starts 2.6 5.9 11.1 -1.2 1.6 -0.7 -3.5 -0.3 -1.3 -0.4 6.4 -0.8 -1.1Single-Family Units 2.8 4.9 12.7 0.7 2.5 0.6 -4.5 -1.6 -2.8 -1.9 6.8 0.1 -2.6Multifamily Units 1.8 9.6 4.8 -8.8 -2.0 -5.8 0.8 5.1 4.4 5.4 4.5 -4.0 5.1Residential Construction 3.2 3.4 6.1 3.1 2.1 1.5 -0.1 -0.1 0.3 0.4 3.9 1.7 0.3

Median Home PricesThousands of DollarsExisting Home Prices 157.8 161.4 161.6 160.9 165.5 168.8 166.5 167.2 173.3 176.8 158.3 165.8 173.2New Home Prices 186.2 177.3 181.5 190.4 192.3 192.9 195.2 198.1 200.5 202.8 185.2 192.9 201.4

Percent Change -- Year AgoExisting Home Prices 7.5 7.0 8.8 6.6 4.9 4.6 3.0 3.9 4.7 4.7 7.1 4.8 4.4New Home Prices 5.4 3.3 4.8 1.7 3.3 8.8 7.5 4.1 4.2 5.1 5.7 4.2 4.4

C leveland R egion

Payroll Jobs (in thousands) 1161 1151 1151 1147 1153 1158 1163 1159 1170 1171 1150 1155 1167Home Sales 6110 6078 5293 4360 6080 6060 5230 4340 6120 6130 21824 21730 21839Home Prices (in thousand$) 153.3 160.9 156.1 154.1 159.4 167.2 161.7 159.9 165.6 174.0 155.2 160.6 166.9

Percent Change -- Year AgoPayroll Jobs -0.6% -0.4% -0.6% 0.7% -0.6% 0.6% 1.0% 1.0% 1.5% 1.1% -0.5% 0.4% 1.0%Home Sales 2.5% 0.4% 2.7% 0.4% -0.5% -0.3% -1.2% -0.5% 0.7% 1.2% 4.3% -0.4% 0.5%Home Prices 0.2% 3.4% 5.3% 4.1% 4.0% 3.9% 3.6% 3.8% 3.9% 4.1% 2.6% 3.5% 3.9%

Quarterly figures are seasonally adjusted annual rates for national forecast.

Source: Forecast produced using Macroeconomic Advisers quarterly model of the U.S. economy and NAR Housing Model of the housing sector.Assumptions and simulations by Dr. David Lereah and Dr. Lawrence Yun.

U.S. Economic Outlook: March 2003

2002 2003 2004

Real Estate Outlook

Monthly Indicator Recent

Statistics

Likely Direction Over the Next

Six Months Forecast

Notes: All rates are seasonally adjusted. Existing home sales, new home sales and housing starts are shown in thousands. Employment growth is shown as month-to-month change in thousands. Inflation is shown as month-to-month percent change in the Consumer Price Index. Sources: NAR, Bureau of the Census, Bureau of Labor Statistics, Mortgage Bankers Association, and Freddie Mac.

Economic Monitor

��

OctNovDec

6.116.076.05

SepOctNov

5.105.375.28

��

1,0531,0111,069

1,8081,6571,697

��

-84+86-40

348.6356.9357.6

��

140.8141.9141.2

+0.2%+0.3%+0.1%

This table reflects data available throughJanuary 7, 2003.

Mortgage Rates fell further in December. The 30-year fixed ratedecreased by two basis points to 6.05%. One-year adjustable ratesdecreased by four basis points to 4.12%.

Elimination ofdividend tax helpsstocks over bonds.

Existing Home Sales decreased 3.5% in November to 5.56million seasonally adjusted annualized units, but were still 5.9% above thelevel in November 2001. Resales are expected to set a record in 2002.

2003 wil be thesecond best year ever for resales.

New Home Sales passed the one-million unit mark for a fourthconsecutive month. In November, new home sales posted 1.069 millionseasonally adjusted annualized units - a 5.7% increase from the previousmonth.

Million-unit salescannot be sustained.

Housing Starts increased 2.4% in November to 1.697 million units.Single-family starts rose by 1% while multi-family starts gained 15%. Tightinventory of both new and existing homes translated in newly built units.

The South will seegain, but otherregions won’t.

Employment Growth The economy shrank by 40,000 inNovember. Revised October figures showed a gain of 86,000 jobs.

New stimuluspackage will helpboost job creation..

Purchase Applications Purchase activity increased slightlyas the purchase application index rose to 357.6 in December. Thepurchase index has remained in this range for quite some time.

OctNovDec

Home salesretreating off theirrecord pace.

Housing Affordability remained very healthy in November, inspite of a decline to 141.2 in November from October’s revised figureof 141.9. The decline was due primarily to an increase in the medianprice of an exisitng home.

Rising mortgagerates increasemonthly payments.

Inflation Consumer prices advanced 0.1% in November. The coreindex (excluding Food and Energy) increased 0.2% for the month and 2.0%from a year ago. The housing index increased 0.2%.

Weakening dollar makesforeign products moreexpensive.

SepOctNov

SepOctNov

SepOctNov

SepOctNov

SepOctNov

The unemployment rate is the number of unemployed peopledivided by the number of people in the labor force. Bothchanges in job creation and in labor force figures affect thejobless rate, which in turn is a very important indicator forthe health of the overall economy. The unemployment ratein November reached 6% as the economy lost jobs for themonth. The November unemployment rate was close to threepercentage points higher than the average for the previousten months of 2002. On a positive note, over the past sixmonths 173,000 jobs have been added to the economy. Thesolid economic growth expected this spring will allow firmsto hire and thus increase employment and improve theunemployment rate.

By Hristina Toshkova18

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Economic and Market Watch Report - Yes MLS! · MLS_logo Local Report Ashtabula County, OH zip Code Average Price Data by Zip Codes Price Change (1 Year) Total # Homes Sold (Quarter)