Local economy improved in fourth quarter

By PAT KINNEY

Courier Business Editor

WATERLOO -- The Black Hawk County economy was climbing back on track during the fourth quarter of 2007.

Five of eight economic indicators tracked by the Courier showed improvement over the previous year and three were in decline. Three months ago, four improved and four declined.

Real estate rebounded in a big way after a flat couple of years. The quarter's 548 home sales topped the 501 recorded in the fourth quarter of 2006. It was the first time in three years fourth-quarter home sales showed improvement from the previous year. Home sales have been down slightly each of the last two years, after six consecutive years of increases, when annual sales had been running at levels not seen since the late 1970s. It is the first quarterly sales increase in six quarters, dating back to the second quarter of 2006.

The fourth quarter showing is a positive signal of things to come, according to Waterloo-Cedar Falls Board of Realtors executive Bob Reisinger.

"It's looking good," Reisinger said. So far in 2008, "We're pretty much on line with our better years. I think people are starting to get out and look again. "With the (mortgage) interest rates, the economy's still good, the employment is still good, there's just a lot of positive things. I think there is pent-up demand." He's hoping sales for the year will be as good as 2004 or 2007, "maybe a little better." About 2,400 sales were recorded each of those years.

Despite those sales dips each of the past two years, median and average sales prices for homes in Waterloo Cedar falls have continued to increase, a trend which has continued for the past 20 years, since the middle of the 1980s recession and farm crisis.

Fourth quarter construction activity was running roughly 60 percent ahead of last year in terms of the dollar valuation of new construction. The metro area's performance was bolster in large part by the construction of Target Corp.'s new $32-million cold-storage grocery warehouse adjacent to its massive Target Distribution Center west of north and west of U.S. Highway 20 and Hudson Road in the Cedar Falls Industrial Park. Waterloo's performance, was bolstered by public sector projects such as the construction of new Logan Middle School and a number of commercial new construction and expansion projects.

Also, Cedar Falls issued permits for 63 new homes at a total valuation of about $13 million, compared with 38 new homes at nearly $8 million for the fourth quarter of 2006, or about $320,000 a house. Waterloo issued permits for five new homes with a total valuation of about $700,000, compared with just one new home valued at $268,000 for the same period a year ago.

The other positive indicators were residential utility connections, continuing an upward trend of many years. Motor vehicle registrations were up 4 percent for the quarter. And bank and credit union deposits were up about 2.4 percent from the previous quarter, possible as people headed for more conventional forms of investment given an up-and-down stock market.

On the other side of the ledger, airline passenger boardings were down once again, by about 14 percent, reflecting the loss of a flight at the Waterloo Regional Airport.

Bankruptcies we up for the quarter, but still less than one third of the total recorded just two years ago. The 394 fourth-quarter 2005 bankruptcies in the Waterloo division of U.S. Bankruptcy Court were the most since the Courier began tracking those figures 17 years ago. That huge spike in bankruptcies occurred just before a new bankruptcy law took effect Oct. 17, 2005.

Employment took a slight dip during the fourth quarter, but the 3.6 percent average unemployment rate for the quarter was the second-lowest average quarterly jobless rate in the past five years.

Contact Pat Kinney at (319) 291-1484 or Pat.Kinney@wcfcourier.com