Elgin Area Chamber Of Commerce: Holiday Retail Sales Predicted To Rise, Top Areas For Rental Demand Potential, Inflation Growth Slow

Press release from the Elgin Area Chamber of Commerce:

September 15, 2021

Holiday Retail Sales Predicted To Rise, Top Areas for Rental Demand Potential, Inflation Growth Slows

What You Need To Know To Start Your Day

Holiday sales are projected to be better this year than last. (Getty Images)

By Richard Lawson
CoStar News
 

Holiday Retail Sales Seen Rising
 

Despite a surge in coronavirus cases, consulting firm Deloitte is projecting that retail sales rise from last year in both brick-and-mortar and e-commerce.In its annual holiday forecast, Deloitte’s retail team forecast sales increasing between 7% and 9% to potentially reach as high as $1.3 trillion. The firm tracks sales from November into January.

The e-commerce portion is expected to grow as much as $218 billion, which would be a 15% increase over last year. “As vaccination rates rise and consumers are more comfortable being outside of the home, we are likely to see increased spending on services, including restaurants and travel, while spending on goods will continue to hold steady,” Daniel Bachman, the firm’s economic forecaster, said in a statement. “A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season.”

Last year’s holiday sales increased more than expected during the 2020 holiday season as coronavirus cases surged to the highest levels during the pandemic and vaccinations had not kicked into full gear yet.
Rod Sides, DeLoitte’s vice chairman, said in the report that “while consumer concerns about health and safety have eased since the last holiday season, pandemic-influenced shopping behaviors continue to gain traction.” Retailers will do well during the holiday season if they provide convenient options for online and in-store shopping, Sides said.
 
Top Areas for Rental Demand Potential
Apartments or single-family rentals may see higher demand in each of the Dallas, Denver, Houston, Miami, Seattle and Kansas City metropolitan areas, according to an index produced by two Florida universities.

Florida Atlantic University and Florida International University’s quarterly buy versus rent index showed that those areas are near their peak in home prices, suggesting that consumers should hold off on home ownership and rent instead. Ken H. Johnson, a professor and real estate economist at FAU, said in a statement that “worries of a correction continue” with those areas.

The universities focused on 23 metropolitan areas, looking at a variety of data points that include home prices, rent, mortgage rates and home maintenance costs. Renters may be better off buying than continuing to rent in Chicago, New York, Honolulu, San Francisco, Cincinnati, Boston, Cleveland, Detroit, Milwaukee and St. Louis.

“In these metros, the cost of renting is outpacing the cost of ownership, resulting in some surprising recommended buys,” William Hardin, a professor with FIU, said in the same statement.
Inflation Growth Slows
Growth in consumer prices slowed in August, a surprise that indicates inflation may be starting to ebb.
The Labor Department reported Tuesday that its consumer price index increased 5.3% over last year and 0.3% from July. Economists had projected a 5.4% annual increase and a 0.4% month-to-month increase. The August increase was slower than the 0.5% rise between June and July.

Energy and used vehicle prices drove much of the increase. Energy prices increased 25% compared to last year. Used vehicle prices rose nearly 32% over last year as automakers struggle to bring new vehicles to market. A computer chip shortage has tens of thousands or more of vehicles parked awaiting that final piece to be shipped to dealers.

CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.