July 2014 Newsletter

Jeff Fleming headshot 2012

Does your community recognize the investment potential of retiree recruitment as a non-traditional economic development strategy?

The Census Bureau recently reported there are 43.1 million people over 65 in the United States.  That’s roughly equivalent to the entire population of the traditional South (NC, SC, GA, AL, MS, TN, AR, LA).  This population group will grow to 92 million by 2060.  Many of these retirees are going to be looking for a home to purchase and a place to spend their lifetime of accrued earnings.  Will it be your community?

So what are you waiting for?  Learn how to become an AARC Seal of Approval community and market yourself to this crucial piece of the economic pie.


Jeff Fleming, Chair

Join us October 15th – 17th for The AARC’s Annual Conference in Memphis, Tennessee


Mark your calendar for the annual AARC Conference to be held at the home of blues, barbeque, and the King of Rock ‘n’ Roll—Memphis, Tennessee.

As the economy continues to improve, baby boomers will again search for their future homes. Don’t miss the opportunity to share with your peers the valuable techniques and best practices to attract retirees to your destination or development. This conference offers two tracks – one each for communities and developers – to enable your business with the latest trends in retiree recruitment.

The Tennessee Vacation Guide boasts Memphis as front and center in West Tennessee. The city’s story and history are best told through its music, from Beale Street and its blues clubs to the soulful sounds of Stax (the neighborhood recording studio where Otis, Isaac, and Booker T. recorded), to the legendary 60 year old tale of Elvis Presley’s meteoric rise as the king of rock ‘n’ roll at Graceland. Graceland and the newly renovated National Civil Rights Museum, both in Memphis, recently placed 1st and 3rd inUSA Today’s Best Iconic American Attractions list.

Sheraton ExteriorThough Memphis may be ground zero for the blues, it’s also grounded in green—as in eco-friendly, with plenty of green spaces and an impressive farm-to-table scene. Young chefs like Ryan Trimm of Sweet Grass and Southward Fare & Libations, Kelly English of Iris, and Michael Hudman and Andrew Ticer of Andrew Michael Italian Kitchen and Hog & Hominy are gaining national notice for their culinary creativity as well as their dedication to using locally-sourced ingredients. If you’re looking for more fun green spaces to explore, don’t forget Justin Timberlake’s public golf course Mirimichi, located in nearby Millington.

 Attendance at the 2014 Conference starts at just $325.00 and hotel accommodations are 

Sheraton Memphisonly $142/night and include breakfast each morning.

See you in Memphis!

To Signup for this year’s conference visit – Conference Signup

To book your hotel accommodations visit – Hotel Signup (click the Reserve link)

August Webinar – The Graying of America

August 20th 2:30pm (Eastern)

The Graying of America

280776By 2035, one in five Americans will be 65 or older, up from the current ratio of one in seven. This long-term trend will have significant economic implications, with impacts ranging from a changing labor force to a shift in consumer spending. We will examine the economic challenges and opportunities of an aging population. We will explore the outlook for the labor force and social safety net spending. At the same time, we will consider how the demographic changes could stimulate increased spending on goods and services, and alter the patterns of consumption. Also, we will discuss the economic effects of retirees migrating between different regions in the United States – addressing both the impacts on the regions that will gain retirees, and those that will lose them.

Adam Fulton, Senior Economic Associate, at Regional Economic Models, Inc (REMI).  Adam holds a M.S. and B.S. in Agricultural Economics from the University of Tennessee, Knoxville.  Mr. Fulton has worked with REMI since early 2011 on numerous economic and demographic forecast projects with REMI users. He has been involved with economic impact analyses of tax policies, healthcare projects, and transportation projects in several states across the nation. Prior to his work with REMI, Mr. Fulton worked as a business/marketing consultant in Washington and Tennessee. He has also developed his skills as a research assistant at the University of Tennessee focusing on economic impacts of commercial scale cellulosic ethanol plants in Tennessee.

AARC Members & VIP Guest – Click To Signup

Non-Members of AARC can join us for this special presentation for only $50 (can be applied to Membership fee) 

To visit our Webinar Page and Learn More and Sign Up – Click Here

S&P/Case Shiller: May Home Prices Rise At Slowest Rate Since Feb. 2013

By Erin Carlyle, Forbes

In yet another sign that the housing recovery is slowing down, the 14-month streak of double-digit, year-over-year jumps in home prices finally ended in May, data from S&P/Case-Shiller released Tuesday shows.

The 10-City Composite Index rose 9.4% year-over-year while the 20-City measure climbed 9.3%. That pace is significantly lower than the rates the indices increased in April: 10.9% and 10.8%, respectively. It is also the slowest rate since Feb. 2013.

To be clear, home prices are still rising–just not as fast as they have been. Economists like year-over-year prices because they give a better sense of the market’s overall direction than do the swings in prices from month to month (compared to April, both city indices gained 1.1%).

Tuesday’s S&P/Case-Shiller numbers coincide with other housing data that, in recent weeks and months, have been wildly mixed. “Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.”

As of May 2014, home prices are back to their summer 2004 levels, but still about 17-18% off their summer 2006 peaks. All the cities the indices track, with the exception of Charlotte and Tampa, saw year-over-year home prices rise at slower rates than during the prior month.

Regionally, the Sun Belt continued to lead, with seven of the top eight cities based on year-over-year price gains. Las Vegas remained the city where prices are climbing fastest, with a 16.9% annual price increase; San Francisco was close behind at 15.4% annual price increase. Compared to the March 2012 lows, the 10-City Composite is up 26.5% and the 20-City Composite up 27.3%.

“Nationally, today’s Case-Shiller data is consistent with the slow glide-path down towards a more normal housing market we’ve been experiencing for the past few months,” said Stan Humphries, Zillow’s chief economist. “But the national numbers are masking a lot of variation from city-to-city: Cleveland, for example, is performing a lot differently than the Bay Area.”

Even within local markets, Humphries noted, the various price tiers are performing quite differently: lower-priced homes are appreciating more rapidly than the most expensive homes. “This is driven by higher affordability at the bottom tier, which boosts demand; and much higher negative equity rates at the lower end of the market, which keeps supply tight. These conditions are typical of a housing market recovery in which every layer of the onion we peel off reveals something different.”

When Will Rising Mortgage Rates Hurt The Housing Market?

By Jed Kolko, Trulia

Jed Kolko, Chief Economist at Trulia, digs into recent history to reveal how today’s rising rates may be more bark than bite. Typically, spiking mortgage rates take a big chomp out of refinancing immediately and smaller nibbles out of sales three months later. Longer term, the impact of rising rates is typically offset by stronger economic growth. 

home-prices-riseEver since mortgage rates started their steep climb in early May, we’ve all been on high alert, watching how higher rates will affect the housing market. For a would-be buyer calculating the mortgage payment on their dream home, the effects are obvious: the increase in the 30-year fixed rate from 3.59% in early May to 4.73% at the end of August (according to the Mortgage Bankers’ Association, or MBA) means a 15% increase in the monthly payment on a $200,000 mortgage. That should deter homebuyers and reduce mortgage applications, sales, and prices, right? In theory, yes, but of course the real world is much more complicated. Mortgage rates aren’t rising all on their own: other housing and economic shifts are happening at the same time.

Fortunately, the recent past is a useful guide. The 30-year fixed rate jumped .47 points in May 2013 and .51 points in June 2013, comparing the levels at months’ end (MBA). (Side point: the 30-year fixed reached 4.80 this morning, September 11, .22 points higher than at the end of June, which means July, August, and early September have seen much milder increases compared with the May & June spike.) But this year isn’t the only time when mortgage rates have jumped up: they also climbed at least .4 points in seven other months since 1999. With some simple time-series regressions, we traced out the typical paths of mortgage applications, sales, and prices in the months immediately after a mortgage rate spike. 

The Month-by-Month Impact of a Rate Spike
Our analysis of mortgage rates and other housing data from January 1999 through April 2013 – just before the current spike – shows that mortgage rates hit refinancing applications (MBA) earlier and harder than any other measure of housing market activity. (Not all of the data series are available back to 1999.) Here’s the timeline of what typically happens when rates spike by half a point in a month:

  • The month when rates spikeRefinancing applications typically fall by 45% in the month of a spike, with further falls one and two months after mortgage rates jump, compounding the effect. The drop in refinancing applications this year was roughly 50% cumulatively over two months, which actually looks small compared with similar rate jumps in the recent past.
  • 1-2 months after the spike: Pending home sales and home-purchase mortgage applications typically decline slightly, though the effect isn’t statistically significant. New home sales also decline modestly.
  • 3 months after a spike: New home sales and existing home sales drop. That means that the May mortgage rate spike should show up most strongly in August new home sales and existing home sales, both of which will be reported later this month (on September 25 and September 19, respectively).

Compared with the impact on refinancing, the impact of a rate spike on home-purchase mortgage applications and sales volumes is very small and not always statistically significant.