Local economy is all about the numbers

SANDUSKY Words are a writer's stock in trade. But for an economist, it's all about the numbers.
Tom Jackson
May 24, 2010

SANDUSKY

Words are a writer's stock in trade. But for an economist, it's all about the numbers.

The numbers for Erie County haven't been good for the past few months. Home sales and car sales are down. Sales tax figures show that merchants are hurting. And unemployment has been up.

Home sales

The numbers for home sales show the situation, while not great, is beginning to improve. And a local car dealer has noticed signs the auto business is beginning to turn around.

On Thursday, the Ohio Association of Realtors released home sales figures for March for the Firelands Association of Realtors, which represents the housing industry in Erie, Huron, Ottawa, Seneca and Sandusky counties.

The 161 homes sold in the Firelands area last month is a 5.8 percent decrease from the 171 homes sold in March 2008.

The area did well by comparison with the rest of the state. Statewide, home sales dropped 16.8 percent.

In January through March 2008, 409 homes were sold in the Firelands area, compared to 350 for the first three months of this year. That's a decline of 14.4 percent, but the figures for March alone suggest sales are picking up.

"I wouldn't say we're out of the woods yet, but we can see the clearing," said Jeff Berquist, president of the Firelands Association of Realtors. "I think the second half of 2009 is going to be, not a great year, but substantially better than the second half of 2008 was."

"We did see a large increase in the amount of traffic at our open houses last Sunday," Berquist said.

The good weather helped, but word also seems to be getting out that it's a good time to buy.

"If you are waiting to catch the very bottom you may miss it and get caught with increasing interest rates, increasing home prices or both," he said.

Scott Biechele, past president of the Firelands Association of Realtors, said activity has picked up in the past few weeks.

Two things are helping housing sales, Biechele said. Interest rates are at about 4.75 percent, very low for recent history.

"With the interest rates being lower, you can buy more house," he said.

The economic stimulus bill provides an $8,000 tax credit for the first-time home buyer, he noted.

"It's a tax credit, not a tax deduction," he said. "If you owe $2,000 in taxes, they send you a check for $6,000."

Improved housing sales would help other areas of the economy, Biechele observed.

"When they buy a house, then they buy a carpet. Then they buy a window treatment," he said. "That pushes the economy. That's why the housing market is so critical."

Car sales

Car sales have fallen sharply in Erie County.

Figures released by the Great Cleveland Auto Dealers Association show there were 248 new car registrations in February 2008, compared to only 150 in February 2009.

Chevrolet registrations fell from 45 to 23, Ford registrations went from 68 to 35 and Honda registrations fell from 38 to 15. Toyota registrations rose slightly, from 25 to 29.

Bob Mathews, owner of Mathews Ford Lincoln Mercury, said sales appear to be picking up.

"We had a very good March," he said. "April so far has been a little bit slower, but of course the month is not over."

Mathews expects sales to "slowly increase" and expects a good reception when the new Ford Taurus becomes available in late summer or early fall.

"It's going to be a beautiful car," he said. "It will be one of the crown jewels of Ford."

A boost in car sales would be welcome news to the Erie County Commissioners. Sales taxes on car sales are a significant portion of the county's sales tax revenue.

Figures released last week show sales taxes sent back to Erie County from the state for January through April this year are down 6.45 percent from like months last year.

Erie County budgeted for a 5 percent drop, but so far the actual figures are worse.

Commissioners at Monday's meeting said they hope the opening of the new Menards store and the planned opening of the new Aldi store will help.

Merchants throughout Ohio reported slow sales because of the recession.

Through March of the 2009 fiscal year, state sales tax collections are down 5.8 percent, said Michael McKinney, a spokesman for the Ohio Department of Taxation. The state's 5.5 percent sales tax is the second most important source of government revenues, accounting for about 36 percent of general revenues.

Last week's new joblessness report showed Erie County's unemployment rate in March was 12.3 percent. That's the worst March since 1983, when the county's unemployment rate was 16.1 percent.

The unemployment numbers for Erie County are expected to improve because of the seasonal nature of many local jobs. Cedar Point opens May 16, hotels that close during the winter open up again and restaurants add staff to feed tourists coming to the area.

Ohio's unemployment rate in March was 9.7 percent. The U.S. unemployment rate in March was 8.5 percent.