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Road to recovery
5/16/2012 9:51:38 AM
By Kelly Moore
Splash Staff Writer
As summer approaches with its annual peak in construction spending and tourist revenues, many are eyeing the local economy looking for signs of recovery from the recent recession.
"There are enough indicators out there to show the economy is warming up," said Liberty Lake Finance Director R.J. Stevenson. "Generally speaking, I'd say things are modestly getting better, at least slightly. We've seen a modest increase in revenues."
Stevenson noted a spike in 2011 sales tax revenues for the city, but said he's still not convinced it wasn't a fluke. The 2011 sales tax revenue brought in $1.9 million - almost 15 percent more than anticipated in the municipal budget. For 2012, the city has budgeted $1.89 million and Stevenson said current revenues pacing with that number is encouraging.
Stevenson added that sales tax in Liberty Lake wouldn't reveal its true colors for 2012 until the mid-summer, when construction season peaks and materials are purchased for projects. Advertisement
He said he's optimistic 2012 will continue with strong numbers, but the city is still a ways off of 2007 levels, when sales tax brought in $2.2 million.
To gauge the city's economy, Stevenson said he keeps a closer eye on building permit revenues, which he said were on track with what was budgeted for the year.
Licenses and permits revenue is budgeted to bring in $353,500 this year - up progressively since taking a steep dive from $520,283 in 2008 to $227,899 in 2009. According to a forecast Stevenson presented during the 2012 budgeting sessions, these revenues are expected to slowly recover - reaching $371,532 in 2017.
In addition, Liberty Lake Community Development Director Doug Smith said he's seen increased interest in land within city limits.
"Whenever we start talking to people who are doing their due diligence in researching prospective properties, we see that as a good thing," Smith said. "In the last four years we've had very little activity of that nature, but in the last three months that interest has been tremendous."
Smith said the Legacy Ridge area has proven to be the most significant area of interest, noting it was one of the few areas available for outside developers. Other areas, like Greenstone's neighborhood developments, are making progress on additional phases.
"Locally, over the last four months we've seen a pretty significant increase in homebuyers - both in traffic and in sales," said Greenstone CEO Jim Frank. "For the first time in a good while, the housing market has gotten strong enough for us to start looking at new land development."
Frank said both the River District and Rocky Hill neighborhood developments are sold out of lots and are expanding with additional phases this year. Construction at the River District is already underway and phase two of Rocky Hill will break ground within the next 30 days.
In addition, Frank said Greenstone was also preparing for a "major expansion" at the commercial Telido Station development. Construction to extend water and sewer lines in the 55-acre property north of Interstate 90 will start this summer.
"Every area is a little bit different, but Liberty Lake seems to be doing particularly well," Frank said. "It's not to the levels we saw in 2006 and 2007, but there is a definite increase in buyer confidence and people are starting to view home ownership more optimistically."
Frank noted that the national and regional multi-family housing market was strong and construction in the sector was nearing its peak. He said the trend was a reflection of a shift in home ownership toward renting, as well as a growing population.
John L. Scott Real Estate Broker Gary Hansen said sales in the last three months are up 33 percent in comparison to the same three months in 2011 and pending sales are up 87 percent.
"I definitely think the market is very good in Liberty Lake," Hansen said. "We'd actually love to have more homes on the market here. We've seen interested buyers that we just haven't been able to help because we don't have a lot of inventory to choose from. Whenever you have inventory moving instead of sitting, that's a good sign."
Hansen said finding homes priced under $300,000 in Liberty Lake is a long shot and foreclosure listings are "not so much" of an issue. In fact, Liberty Lake is listed sixth on RealtyTrac's Washington cities with the highest gains in home sale prices over that last two quarters. The average home sales price is up 8.41 percent to $307,696.
"I think the market has definitely turned," Hansen said. "Liberty Lake has clearly not been hit as hard as other areas. Our office sales are up over 100 percent."
In report released May 11, The Washington State Economic and Revenue Forecast Council, new housing permits filed statewide came in the highest since late 2007.
"Both multi-family and single-family housing were strong," the report states. "For the first quarter as a whole, single-family permits averaged 15,700 units, multi-family averaged 12,000 units, and the total averaged 27,700 units. These are all stronger than our forecast of 12,300 units for single family, 7,100 units for multifamily, and 19,400 for total housing units."
On the retail side, Liberty Lake-based Mercedes-Benz of Spokane General Manager Justin Robidoux said the 2012 outlook for the dealer is optimistic. He said that although the luxury car industry is trending down, the Mercedes brand is trending up.
Year-to-date, Mercedes is up 17 percent in sales. The Liberty Lake store is up 9 percent.
"The national numbers include big cities, and we're of course, not a big city, so we usually trend a little bit below the national numbers," Robidoux explained.
Greater Spokane Valley Chamber of Commerce CEO Eldonna Shaw noted that retail sales were up in Liberty Lake and Spokane Valley. She also said new business stats were slow over the last year, but the Chamber has seen more consistent enrollment in its entrepreneur-training program.
Chamber membership, which fluctuates with the economy, was in a growth period, Shaw said.
According to the Washington State Economic and Revenue Forecast Council report, employment across the state is slightly outpacing the growth expected in an economic forecast released in February, but earlier estimates were revised down, leaving the current level of employment slightly lower than anticipated.
According to the same report, total employment increased by 8,400 in February and March. Private service-providing industries accounted for the bulk of the two-month increase, adding 7,200 jobs. The aerospace sector added 500 jobs; the construction sector added netted 200 new jobs.
Washington new vehicle registrations are up 5.9 percent over the year and up more than 50 percent since the recession low in October 2009, the report said.
"Everything I'm seeing right now is encouraging," Shaw said. "I think we're all experience a recovery that's slower than we would like to, but it's still a recovery."
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Heating up?
Interpreting the varied messages economic indicators are sending in Liberty Lake:
RESIDENTIAL REAL ESTATE
HOT: Real Estate Broker Gary Hansen reported rising property values and a shrinking inventory in Liberty Lake. In addition, the city's planning department noted rising interest in Legacy Ridge land, while Greenstone breaks ground on new phases to expand the Rocky Hill and River District neighborhoods.
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COLD: Reports from professionals in the industry are entirely positive, but a resident did speak to the Liberty Lake City Council on May 1 asking to address distressed and foreclosed homes in the area. Also, while property values are rising in Liberty Lake, the Washington State Economic and Revenue Forecast Council said housing prices remain weak at the state level. The market for multi-family housing is also nearing its peak, a sign that more people are renting, Greenstone CEO Jim Frank said. |
SALES TAX REVENUE
| HOT: Last year, the city's sales tax revenues spiked notably, bringing in $1.9 million - almost 15 percent more than initial forecasts. For 2012, the city budgeted $1.89 million and Finance Director R.J. Stevenson said current revenues pacing with that number is an encouraging sign. |
COLD: City Finance Director R.J. Stevenson said he's optimistic 2012 would continue with strong numbers, but revenues are still a ways off 2007 levels, when sales tax brought in $2.2 million. |
BUSINESS AND INDUSTRY
| HOT: Liberty Lake's business sector seems to be growing, as the Meadowwood Technology Center reaches rental capacity, Camping World prepares to open a new store in the former MasterCraft location and Greenstone plans to break ground on a major expansion at the Telido Station commercial development. On the retail side, Liberty Lake-based Mercedes-Benz of Spokane General Manager Justin Robidoux said the store is up 9 percent in year-to-date sales. |
COLD: Despite a moderate influx of business, a number of prominent commercial properties like the former Liberty Mutual building at 22425 E. Appleway Ave. and the former Ashley Furniture and Sleep City building at 21605 E. Country Vista Drive still remain vacant.
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