Tucson Retail Up and Down, Housing Inventory Declines, and Consumers ‘Only A Little Bit’ Grumpier
Picor Commercial Real Estate an affiliate of Cushman & Wakefield released its ‘Marketbeat Retail Snapshot’ for Q1 2013 last week. The report indicates little change in retail vacancies, with little more than a percentage point in movement since Q3 2009, “for years, Tucson’s retail vacancy has inched up and down”.
To see Picor’s full Retail report go to: https://picor.com/downloads/tucson_ret_1q13.htm
From a national viewpoint, consumers pulled back spending slightly in March, according to the Census Bureau, with total US retail and food services down by 0.4% month-over-month and spending up by 2.8% compared with March 2012. The bureau adjusts spending estimates for seasonal variations, holidays and the like, but not for price changes.
Not many retailers saw sale advances in March, according to both Picor and the Bureau reports. Furniture and home furnishing sales were up 0.9% month-over-month, and 2.8% over March 2012. Picor reported increased mattress stores activity, and restaurants and bars nationally experienced a 0.4% growth. However, according to Greg Furrier of Picor, locally “restaurants’ appetites (were) largely restricted to the Campbell corridor and downtown submarkets”.
Nationally, non-store retailers, such as catalog and internet sales were up 0.3% for month-over-month and 13.5% over March 2012. The losers for the month were electronics stores that saw sales chipped away by 1.6%, down 3.2% compared to March 2012, and gas stations down by 2.2% month-over-month, with gas prices down in March from February highs, and down a mere 0.4% from March 2012. It should be noted that most categories of retailers did see a year-over-year increase in sales.
Realtor.com, operated by the National Association of Realtors, reports that in 134 of the 146 markets tracked, housing inventory decreased since last year. Here at home, the Tucson Association of Realtors reports inventory shrunk by 544 listings, or 4%, compared to March 2012. The decline is due to a combination of sales to homeowners, investors, and the slower pace of new development and foreclosures.
Consumer sentiment is down slightly for the month of April, according to the Reuters /University of Michigan Consumer Sentiment Index. It came in at 76.4 in April, down from 78.6 in March, but the end-April sentiment level could have been much worse considering that the mid-month reading was 72.3. Consumer sentiment has been bouncing around, but mostly on the low side of historic averages. Maybe some consumers are feeling a little bit better with lower gas prices.
As one seasoned Tucson CRE investor, who prefers to be unidentified, commented, “As long as the trend is not declining, it’s all good news.” This may be the best approach to take when reading Q1 2013 market reports.
