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In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses retail sales.
- Sales at Furniture, Home Furnishing, and Appliance stores have been soft in recent months as home sales have pulled back. February sales were 5 percent below the peak from October.
- People are still showing up at Building Material and Supply shops because maintenance and home rehab activity still go on even with fewer home sales.
- Snowed-in people shopped online. Sales through non-store retailers continued to grow. Such growth raises demand for warehouses and distribution hub cities like Memphis and Louisville. But the demand for commercial retail store spaces is bypassed, which is one reason why the vacancy rates of retail spaces have barely budged lower even with job creations. Web shopping also raises the legitimate fairness question of whether a tax benefit should be provided for online retailers at the expense of brick-and-mortar retail shops.
- Home sales are expected to slowly turn the corner around second and third quarter and then mostly rise over the next several years from the release of huge pent-up housing demand. With rising home sales, retail sales at housing related stores will also get boosted.
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