Growing Economy Lifts SIOR
Markets in First Quarter 2013
Lawrence Yun is Senior Vice President and Chief
Economist at the NATIONAL ASSOCIATION OF REALTORS®. He
writes regular columns on real estate market trends,
creates NAR’s forecasts, and participates in many
economic forecasting panels, including Blue Chip and
the Harvard University Industrial Economist Council. He
received his undergraduate degree from Purdue University
and earned his Ph.D. from the University of Maryland.
George Ratiu is Manager of Quantitative & Commercial
Research with the NATIONAL ASSOCIATION OF
REALTORS® in Washington, D.C. His research focuses
on macroeconomic indicators, commercial real estate, and
international investments. He writes regular columns for
Commercial Property Executive and Real Estate Insights,
and produces NAR’s Commercial Real Estate Outlook, which
provides quarterly forecasts for the office, industrial, retail and
multi-family sectors. He also manages the NAR Commercial
Real Estate Quarterly Market Survey. He earned his graduate
degree in Economics from Western Kentucky University.
Gross Domestic Product
- 2.0 .0 2006 - Q1 2006 - Q3 2007 - Q1 2007 - Q3 2008 - Q1 2008 - Q3 2009 - Q1 2009 - Q3 2010 - Q1 2010 - Q3 2011 - Q1 2011 - Q3 2012 - Q1 2012 - Q3 2013 - Q1
NAR Economic Overview
Economic activity has maintained a steady growth pace over the past few months.
With consumers and businesses committed to moving forward, gross domestic
product rose 2. 4 percent in the first quarter of the year. It is still shy of its historical
average growth rate of 3.0 percent.
Benefiting from a mild winter and a strong showing in the spring housing market, consumers opened up their wallets at the fastest pace since the fourth quarter
2010. Consumer spending increased 3. 4 percent in the first quarter, lifted by a 9. 1
rise in auto purchases, coupled with an equal advance in sales of recreational goods
Given the age of the average car on the road and with manufacturers rolling
out technologically flashier and more efficient new models, consumers are finding
new cars a compelling invitation. Sales of cars in April totaled 651,644 units, a 3. 1
percent increase year-over-year. Sales of light-duty trucks, which include SUVs,
advanced 14. 7 percent, benefiting from the soaring popularity of car-based cross-over vehicles, which recorded the strongest yearly gain in April, at 16. 5 percent.
Pick-up trucks also recorded solid sales growth, with the Ford F-Series leading the
sales charts, followed by the Chevrolet Silverado. Total vehicle sales will surpass
15 million this year for the first time since 2007.
Consumers also upped their expenditures of services, including health care,
transportation, food services and lodging, by 3. 1 percent, the strongest gain since
the second quarter of 2005. In a sign of a broader improvement in sentiment,
spending on financial services and insurance rose 7. 6 percent in the first quarter, a
pace not seen since the fourth quarter of 2004.
These developments stem from a growing stream of improvements in consumers’ wealth. Consumers have spent the past few
years paying off debt, cutting back on discretionary spending
and hanging in their jobs. At the same time, household wealth
tied to financial assets has been rising steadily over the past
couple of years, with the Dow recently crossing the 15,000
threshold. Household wealth tied to housing has seen a noticeable improvement in 2012 and the first quarter of 2013. Sale of
existing homes rose 9. 8 percent in the first quarter of this year,
following the 9.0 percent rise in 2012. Due to very tight inventories, multiple bids have returned to the market, and price escalation clauses are pushing home prices up. Based on NAR data, the
median sales price of existing homes jumped 11. 2 percent in the
The latest employment figures also point to a steady pace of
growth. Payroll jobs advanced by 644,000 during the first quarter spread fairly evenly across industries. On a yearly basis,
professional and business services, education and health and
Source: Bureau of Economic Analysis