BUSINESS BRIEFS: Remodeling Comeback, Unemployment, Water$, Etc.

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Home Remodeling may Snap Back

Spending for residential improvements and repairs is expected to shrink this year for the first time since 2010, but signs point to some easing of declines by year’s end, according to Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that declines in annual homeowner renovation and maintenance expenditure will worsen through the third quarter of this year before moderating slightly to -6.5 percent by the end of 2024. “Home remodeling will continue to suffer this year from a perfect storm of high prices, elevated interest rates, and weak home sales,” says Carlos Martín, Project Director of the Remodeling Futures Program at the Center. “These headwinds create considerable uncertainty in the economy, and remodeling spending is projected to fall from $481 billion last year to $450 billion in 2024.”

Unemployment up Slightly in Dec.

The state’s December total unemployment rate was 3.2 percent, up 0.3 percentage point from the revised November estimate of 2.9 percent, the Executive Office of Labor and Workforce Development announced Friday. The Massachusetts unemployment rate was 0.5 percentage points lower than the national rate of 3.7 percent reported by the Bureau of Labor Statistics (BLS). Over-the-year, the state’s seasonally adjusted unemployment rate was down by 0.5 percentage points. The labor force grew by an estimated 13,900 from the revised estimate of 3,729,000 in November, the largest single month increase since January 2022. The increase is a result of 1,300 more residents employed and 12,600 more residents unemployed over-the-month. The state’s labor force participation rate – the total number of residents 16 or older who worked or were unemployed and actively sought work in the last four weeks – increased by 0.3 percentage point at 64.9 percent over-the-month. Compared to December 2022, the labor force participation rate was up 0.2 percentage points. The BLS preliminary job estimates indicate Massachusetts gained 4,300 jobs in December. This follows November’s revised gain of 6,400 jobs. The largest over-the-month private sector job gains were in Education and Health Services, Information, and Manufacturing. Employment now stands at 3,793,700. Massachusetts gained 732,100 jobs since the employment low in April 2020.

Waters Earnings Call

Waters Corporation (NYSE:WAT), Milford, will hold its Q4 2023 financial results conference call live on Tuesday, February 6th, 2024 at 8:00 a.m. Eastern Time. A live webcast of the presentation will be available on Waters Investor Relations website at https://ir.waters.com. A replay of the webcast will also be available until at least March 5th, 2024, at midnight Eastern Time.

Real Estate Group Supports Housing Bill

“I am Tamara Small, and I am the CEO of NAIOP Massachusetts, The Commercial Real Estate Development Association. NAIOP represents the interests of over 1800 members who develop, own, manage, and finance office, lab, industrial, mixed use, retail and multifamily properties throughout Massachusetts. As a member of the Governor’s Economic Development Advisory Council and the Administration’s Affordable Homes Act Steering Committee, NAIOP Massachusetts believes that the Affordable Homes Act is a critical step in securing housing stabilization and expanding access to housing in the Commonwealth. From capitalizing the HousingWorks Infrastructure program to creating a new Momentum Fund seeded by the state, the bill’s bonding provisions are a bold step forward for the Commonwealth. However, NAIOP is strongly opposed to two policy provisions within the bill, both of which have been shown to negatively impact housing production and affordability. The first is the proposed municipal opt-in transfer tax. Levying transfer taxes will not achieve housing affordability in the Commonwealth – and will not translate to more housing starts. While buyers are not obligated to pay a portion of the tax under the proposed language, ultimately the enactment of a transfer tax will drive up the price of housing, something the Commonwealth cannot afford. For multifamily properties, the tax would simply be passed down to tenants – driving up rents. Additionally, declining occupancy and continued uncertainty over the future of the office sector has dramatically reduced office valuations. A transfer tax on these properties will further damage investment, with the potential for serious negative ripple effects on the property tax collections of communities across the Commonwealth. While revenues might be levied from this new tax, they would not be enough to sustain the loss in property tax revenue caused by the devaluation of commercial properties.”

County Reports on Real Estate Trends

Norfolk County Register of Deeds William P. O’Donnell reports that Norfolk County recordings for 2023 show indicators of less real estate activity as compared to 2022 with decreases in both the total number deeds and mortgages recorded. However, seasonal trends remained consistent, with a decrease in activity during the winter months and an uptick in the spring and summer months. In 2023, there were 102,188 documents recorded at the Norfolk County Registry of Deeds, a 21% decrease from 2022. “Looking at the 2023 real estate market, I think most would agree that it was a slow year especially compared to 2021 and 2022's busy home sales. Consumers have been facing a limited inventory of available properties along with rising mortgage interest rates. As an example of these indicators property sales in Massachusetts have dropped 22.5% in 2023,” remarked Register of Deeds William P. O’Donnell. “However, Norfolk County’s decline was less than the statewide average for the year.” Overall, the County’s lending activity showed a continued downward trend. A total of 14,598 mortgages were recorded at the Registry in 2023, 37% less than a year earlier.