Cape Business Trends newsletter January 4, 2007
Sandwich: The Cape Begins Here
There are more than 385 companies of all sizes doing business within Sandwich’s 02563 ZIP code. They employ more than 3,300 people with an annual payroll approaching $100 million.
This is a small sampling of the economic data that will appear in Sandwich: The Cape Begins Here, which will be inserted in the March/April edition of Cape Business and also mailed directly to 5,000 residences in this rapidly growing town. Sandwich’s profile is taking on that of a Boston suburb rather than a traditional Cape community dependent on seasonal tourism. Unemployment in the middle of the winter is lower than the statewide average.
What are the leading industries in Sandwich, as we head into 2007? Cape Business will profile two of them – financial services and health care. What are residents demanding in terms of products and services? What is the new tourism in town?
If you want to learn more about this special publication, which will reach more than 40,000 readers, please contact Bob Viamari at 508-385-3811 or e-mail bob@capebusiness.net.
Reverse mortgages: Are they right for you?
Once upon a time, in a land of high property values, there lived an aging population. One day, the people were going about their business on their fixed incomes when they met fiercely rising fuel, electricity and prescription medicine costs. Who will help them? Where will new income come from at their time of life?
In our tale, the white knight is an unlikely hero – the mortgage loan officer.
“Cape Cod has a larger retirement population than most areas of Massachusetts, therefore the reverse mortgage is more popular in this segment of the state,” said Kirsten Wood of Hyannis Mortgage.
Reverse mortgages are an increasingly popular tool for homeowners over age 62 to be able to spend down some of the equity in their homes while they continue to live there. It is a loan against the value of your home that you don’t have to repay as long as you live there. Payment does not come due until both homeowners sell, move out or die.
Is it the right strategy for thousands of Cape Codders?
Cape Business will explore this issue and many others in its upcoming personal finance edition: Building and Protecting Your Real Estate Investment. If you are a business that wants to reach the 20,000 highest-assessed homes on Cape Cod, please call Cape Business at 508-385-3811.
Beacon Hill: Minimum wage, child labor laws and taxes
The new child labor law reform permits longer hours for teenage workers. Expect severe civil penalties for businesses that violate the law, however. The state minimum wage has gone up to $7.50/hour as of this week. It will increase to $8.00/hour January 1, 2008. Tipped employee wages remain unchanged
Will the new Democratic administration mean higher taxes? Democratic House Speaker Salvatore DiMasi says: “I don't see it on the table right now.” His counterpart, Sen. Robert Travaligni is equally adamant.
DiMasi also served notice that any attempt to weaken the nine-month-old law aimed at delivering health insurance to all Massachusetts residents will fail.
Cape Cod’s state Sen. Robert O’Leary says public higher education would be the “highest priority” in 2007, comparable to the health care reform that took up much of both branches’ time last year.
DiMasi plans to file comprehensive energy legislation he says will reduce pollution, streamline the state bureaucracy, increase conservation and create new sources of renewable energy.
Travaglini’s pet initiatives include increased stem cell investment, the so-called family leave bill, and a plan to promote hybrid vehicle purchases.
Tourism: A mixed bag
The numbers for 2006 are coming in, and there are some bright spots along with causes for concern.
Bridge traffic is down, but that could be due partly to construction; occupancy rates are slightly lower and so are room tax revenues that help out town budgets. Even visitor leads recorded by the Cape Cod Chamber of Commerce are lower than either 2005 or 2004.
Accommodation numbers through October 30, according to the chamber’s survey of lodging establishments, actually showed some promise in the spring; an early summer fall-off and then increased activity heading into the fall.
On the clearly positive side, National Seashore visits were up substantially, as was traffic at the Cape chamber’s two visitor centers and at Barnstable County Airport. Last year also saw sharp increases in visits to the chamber Web site, as tourists appeared to be waiting longer to make their vacation plans and spending considerable time investigating the best deals.
To see all the tourism statistics, please go to www.ecapechamber.com/cape-cod-chamber-tourism-statistics.asp.
Retailers’ resolutions for 2007
Our Retail Details guru, Doug Fleener, has this advice for Cape retailers wanting to increase sales in 2007:
• Spend a minimum of one hour a week without interruption or multitasking in order to work on strategies to grow your sales.
• Go offsite sometime this month for an all-day (or at least half-day) meeting with key members of your team and any adviser/mentor you have.
• Create a list of what you think your company/store did well in 2006 that helped you achieve the success you did. Using both lists, create your 2007 objectives along with the tactics, measurements and milestones that will enable you to double your sales growth for 2007. Even if you don’t do the offsite meeting, do the exercise anyway.
• Find at least two things you do on a regular basis that you can delegate to an employee, outsource or quit doing altogether.
In coming weeks, we will announce Fleener’s scheduled appearance in Yarmouth as part of our spring initiative with the Yarmouth Chamber of Commerce that will include the Villages of Yarmouth publication in the May/June edition of Cape Business. If you want to learn more, please call us at 508-385-3811. Like all of our town supplements, this one will be mailed directly to 5,000 homes in town.
Who can afford to rent on Cape Cod?
While home sales get the most publicity every month, a profound economic story on the Cape focuses on rental housing. In most places, a young family can find and afford an apartment, and then save for a first home. On the Cape, there are few rentals – and even if someone can find an apartment, it’s likely to be too expensive.
A new study confirms this. The National Low Income Housing Coalition reports that a two-bedroom apartment on the Cape now costs an average $1,003 per month. To afford it, with utilities, a family or individual would have to earn $3,343 a month or $40,120 a year. Assuming a 40-hour workweek, that translates to an hourly wage of $19.29.
The estimated average wage, however, is about $10.25. That would require someone to work an impossible 75 hours a week to afford that apartment – based on the assumption they will pay 30 percent of their income on housing.
“With over 40 percent of the Cape’s work force in the retail, food service, arts and entertainment, and other service sectors, this study provides further confirmation that the region’s primary workforce housing need is for the creation of affordable rental housing,” said Paul Ruchinskas of the Cape Cod Commission.
To read the entire report, titled Out of Reach, please go to www.capecodcommission.org/housing/resources.htm.
A population increase, albeit a small one
The Census Bureau reports the state gained population for the first time in three years, albeit a miniscule 3,826 people. That’s not enough to avoid a likely loss of some federal aid based on population. The reality remains: We are losing a disproportionate number of young people; only rising immigration is keeping us in balance.
There’s an interesting angle to counting population on the Cape. Thousands of Cape homeowners are not registered here, but elsewhere in the state where they have their primary homes. Yet many of these 27,000 second-home owners are spending increased time here, and that makes them prime consumers if we can effectively reach them.
If you are a business trying to target second-home owners, please give us a call at Cape Business or e-mail bob@capebusiness.net.
Housing: Light at end of tunnel?
Last year ended with some evidence the worst may be over in the housing market. Home sales continued to fall, but at a far slower pace than during previous months. And when the dust settled, median home prices were virtually the same as a year before.
For December, the county Registry of Deeds reports sales volume down 3.9 percent compared with a year earlier. The median price of a single-family home, meanwhile, dropped 1.8 percent from the previous year.
By comparison, home sales were down about 30 percent in September and median prices about 2.4 percent.
While December shows some positive trends, experts in our upcoming January/February edition counsel patience. Recovery probably won’t occur until at least the second half of 2007. But inventories of unsold homes continue to decline; and as long as interest rates remain stable, pent-up demand eventually translates to increased sales.
Here are some of the final 2006 numbers:
• 2006 sales volume: 6,368; 2005 sales volume: 8,219
• 2006 total sales value: $3,558,436,159; 2005 total sales value: $4,012,116,164
• 2006 median sales price: $365,000; 2005 median sales price: $365,000
• 2006 mortgage volume: 22,239; 2005 mortgage volume: 27,045
• 2006 median mortgage amount: $220,000; 2005 median mortgage amount: $216,000.
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