Quarterly Analysis on Memphis Area Real Estate

Memphis Retail:  Evolution Not Extinction — A Look at Disruption, Trends, and Innovation in Retail

By Shawn Massey, CCIM, CRX, CLS, ALC*

Much has been written about the “Retail Apocalypse” and the demise of bricks and mortar that is simply not justified by the actual numbers.  How this negative view of retail has evolved can be traced back to a few sources that have twisted the news and have focused on the retail of the past and not on the future of retail development and the evolution taking place within the industry.

Continue

Prospects for Improving Real Estate Cycle Conditions for Memphis Area Commercial Real Estate

By Richard D. Evans, PhD.

Emeritus Professor of Economics and Real Estate, University of Memphis Sparks Bureau of Business and Economic Research, Director of Real Estate Research and Director of Revenue Forecasting

Glenn Mueller’s Real Estate Cycle Monitor rates real estate cycle conditions for five Memphis commercial property types. Quarterly cycle reports, covering more than fifty major markets for five property types, are free‒with the latest issue emailed November 27, 2017. [Real Estate Cycle Monitor. Black Creek Group, https://blackcreekgroup.com/insights/market-cycle-reports/]

Continue

Say No to Tax Cuts

By Elena Delavega, Ph.D., Associate Professor of Social Work, The University of Memphis

“Taxes are what we pay for civilized society.”  Supreme Court Justice Oliver Wendell Holmes, Jr. (1841–1935).

I happen to like civilization, and as a reasonable person and responsible adult, I understand that it is important to pay for the things we like. The thing about civilization is that it is not possible to limit it to a few. Either we live in a society in which the benefits of civilization accrue to all, or we don’t really live in a civilized society. Ultimately, if the social infrastructure is not there for all, it is not there at all. We cannot stay in our gated enclaves forever.

We Are Not Lost – Amazon Gave Us a Map

By John Gnuschke, Ph.D., Director,  Sparks Bureau of Business & Economic Research
The University of Memphis

Memphis is a long shot in the race for the location of the second headquarters of Amazon, but sometimes long shots win. However, win or lose, Amazon has given Memphis a great gift--a map that will define the future of the city.  Follow the map and the city either wins this race or the next one.  Don't follow the map and the city will be lost and disappointed. 

Memphis Has Brains

By David Taylor

This week Bloomberg released its 2017 Brain Drain and Brain Concentration Index for U.S. Metro Areas. For the Brain Drain Index metro areas were assessed on their “drain”, or loss of advanced degree holders, white-collar jobs, STEM pay, and net business closure. The Brain Concentration Index used concentrations of full-time STEM workforce, advanced degree or Science & Engineering undergraduate degree holders, and net business formation.

Hurricane Harvey and Gas Prices

By Dr. Jeff Wallace

Over 45.0 percent of total U.S. petroleum refining capacity is located along the coast of the Gulf of Mexico (see: https://www.eia.gov/special/gulf_of_mexico/).   Accordingly, it is not surprising that hurricane season brings with it great risks to fuel supplies and, therefore, prices.  When hurricanes strike the Gulf region, specifically with regard to gasoline prices, the relevant questions to be answered are how much will prices rise and for how long? As seen in the linked-PowerPoint, we explored this issue in the immediate aftermath of Hurricane Harvey, just as prices were beginning to rise.  We show that price impacts of hurricanes are likely to be short lived (less than one month) before prices return to their prior trend levels.  As is becoming evident with newer data, gasoline prices have already begun to drift lower towards prior levels (see https://www.gasbudy.com and https://www.eia.gov/petroleum/data.php#prices).

Hurricane Harvey and Gas Prices

Memphis is a great city for jobs, and that’s no Bluff?

By David Taylor

Looking for a Job you love? Consider moving to the Bluff City. According to a new report from Glassdoor, Memphis is one of the best cities for jobs in 2017. Glassdoor City Score, based on a 5-point scale (5.0=best city for a job, 1.0=worst city for a job), is determined by weighing three factors equally: hiring opportunity, cost of living and job satisfaction. Hiring opportunity is the ratio of active job openings to population. Cost of living is the ratio of median base salary to median home value.  This ranking values the lower cost of living in Memphis greater than the number of jobs in Nashville. A similar study by Indeed also placed Memphis in it’s top 10 cities for job seekers where cost of living seems to be a major factor. 

In the Glassdoor report, Memphis landed in the 6th spot, with an overall score of 4.4. Here are the numbers for Memphis as reported in the Glassdoor report.

Job Openings: 42,347

Median Base Salary: $41,200

Job Satisfaction Rating: 3.3

Median Home Value: $119,700

Hot Jobs: Physical Therapist, Software Engineer, Maintenance Technician

Leading the way with 95,339 jobs Pittsburgh, PA took the number 1 spot. Our neighbor to the east, Nashville, is 14 spots below Memphis at number 20. Below are the factors for Nashville.

Job Openings: 80,192

Median Base Salary: $42,000

Job Satisfaction Rating: 3.4

Median Home Value: $220,100

Hot Jobs: Professor, Licensed Practical Nurse, Restaurant Server

It is always nice to have a positive story written about Memphis.  But as a precaution, it should be noted that this ranking is not definitive.  It is one of many rankings that come out throughout the year.  In each case, the relative score depends on the factors included in the analysis and the methods used by the analysts.  Memphis ranked high in this report and on the ranking produced by Indeed but the city will rank low on other rankings produced by other companies. The rankings are frequently designed for a purpose—generating publicity is a frequent case.  City rankings are always a mixed bag and should be evaluated carefully before use.  

Check out the full report on Glassdoor's website.

https://www.glassdoor.com/List/Best-Cities-for-Jobs-LST_KQ0,20.htm

Check out the full report on Indeed's website.

http://blog.indeed.com/2017/05/01/what-is-the-best-city-for-job-seekers/

The University of Memphis 2016 Economic Impact Study

The University of Memphis is a major economic engine for Memphis and the Mid-south.  In 2016, the University spent $477.7 million directly in the Memphis Metro Area while positively impacting the lives of its students and the community. This video is intended to present the findings of an economic impact study of University spending and show some of the long-term impacts of a college educated workforce.

Increasing Productivity: The Key to Jobs in Memphis

Productivity is a key determinant of wages and ultimately income and corporate profits. Multifactor productivity is a measure of economic performance that compares the amount of goods and services produced (output) to the amount of combined inputs used to produce those goods and services. Inputs can include labor, capital, energy, materials, and purchased services.  Growing and recruiting businesses with high productivity creates higher wage opportunities for local workers. In order to improve the Memphis labor market, economic development efforts should focus on upgrading the workforce and increasing the number of high wage job opportunities.

The following presentation was put together by Sparks Bureau of Business and Economic Research Intern Christopher Bailey. It reports multifactor productivity data for Shelby County manufacturing industries between 2014 – 2015.

Shelby County Multifactor Productivity

How Do Tennessee Traffic Counts Reflect Recent Economic Progress Across the State?

By Ryan Hanson

Traffic can be one of the least appealing aspects of urban living. No one wants to be caught in gridlock traveling to or from work. Despite an individual’s perspective, previous research shows that the traffic impeding employees’ commute may be a sign that the economy is driving forward.[1] However, this relationship is complicated. While slight increases in congestion may be good for the economy, traffic that goes unchecked can slow delivery times, reduce workers’ quality of life, and limit employers’ access to labor, making a city undesirable and stalling its economy.[2]

THE IMPACT OF PROPOSED FEDERAL BUDGET CUTS IN SHELBY COUNTY

With federal budget plans being debated in Congress, this article takes a look at the economic impact of potential federal budget cuts in Shelby County, Tennessee in 2018.  The estimates are based upon President Trump’s budget document America First: A Budget Blueprint to Make America Great Again and the companion Trump administration document Budget of the U.S. Government: A new Foundation For American Greatness, Fiscal Year 2018.  However, while presidents propose budgets it is up to the Congress to actually pass budget legislation for the President to vote on and those discussions are on-going.