Growth in the Vero Beach economy was sluggish during the last quarter of 2015, contributing to the overall U.S. economy which ended with a 0.7% annual rate. Economists say the slowdown was due, in part, to cautious consumer spending, reduction in businesses making investments and stagnant exports to other parts of the world.
Vero Beach Economy: What's Ahead?
While the fourth quarter results weren't altogether unexpected, they have raised concerns about the future. Still, most economic experts expect a return to more positive results by the end of this quarter.
Government forecasts had predicted 2% annual growth in the gross domestic product (GDP) for the third quarter of 2015. Instead, the economy grew less than half of the anticipated rate, representing the lowest expansion since the first quarter of last year.
Government economists say the disappointing fourth quarter results are temporary and expect GDP growth to return to a rate of 2.5% to 3% by the middle of 2016. Those expectations are based on improved consumer spending and continued job growth. Consumer spending during the last quarter of 2015 dipped to an annual growth rate of 2.2%, down from a 3% rate the previous quarter. Somewhat alarming was the reduction of spending on both durable goods, like automobiles, and nondurable goods, such as clothing. Given the holiday gift-giving season the results were surprising.
Since consumer spending makes up roughly two-thirds of all economic activity, most analysts are looking to strengthening employment growth to bolster the first quarter of 2016. There are concerns that global issues such as China's shaky economy and falling oil and stock prices will continue to adversely impact the U.S.
In addition to consumer spending, a sharp drop in exported goods also contributed to the weakness of the last quarter. A stronger U.S. dollar has increased the price of goods, but made them less competitive in overseas trade markets. Business investment spending also had a negative impact. Falling from a 5.3% annual growth rate to 1.8%, spending on structures mirrored a drastic drop in oil and gas drilling and exploration.
On a brighter note, new home construction enjoyed an 8.1% annual growth rate. That will provide needed housing inventory for spring home shopping in the Vero Beach economy.
The overall growth of the economy in 2015 was 2.4%, equal to the growth of the previous year. Economists predict 2016 will see growth in the 2% range. While some say it's possible we'll see a recession this year, most agree it won't happen.
The Federal Reserve in its most recent meeting issued a cautious look at the U.S. economy. They left interest rates unchanged after having raised short-term rates in December. That could be an indication the Fed is rethinking the planned rate hikes this year. The weakness of economic growth, lower inflation and global economic impact may have gotten the Fed's attention.
Another bright spot was employment growth. The economy added roughly 284,000 jobs per month during the last quarter of 2015, bringing the year end unemployment rate at a low 5%. This, of course, is important because with more Americans working, more are considering purchasing their first home or upgrading to a larger one.
Find more articles on the Vero Beach economy by reviewing our Vero Beach Real Estate News section to your right, as well as other articles under Vero Beach Economy, both just below Vero Beach Real Estate Categories. We also post articles on a regular basis on Facebook and Twitter.
If you’re renting in the Vero Beach housing market, now hear this: it isn’t easy to buy a house. It may be easier to stay put. That’s because home price gains are picking up, while rents are leveling off — despite the fact they’ve skyrocketed in recent years. Some economists predict that by the end of this year, rents could actually rise at a slower pace than income levels in many real estate markets throughout the U.S.
Zillow Weighs in on Vero Beach Housing
According to Zillow, the annual rent appreciation rate is forecasted to rise by 1.1% by December 2016. This would represent a decrease of 4.5% in the same appreciation rate for the year ending December 2015.
With home sales prices rising at what has been termed by some economists as “unhealthy and unsustainable,” rents aren’t expected to approach that rate of growth. The rising home prices are the result of fewer listings — a shrinking supply –– and increasing demand. In December 2015, the supply of homes on the market was the lowest in ten years. In addition, annual home sales price gains — meaning the average year-over-year increase in home value –– rose to 5.3%.
Vero Beach housing experts say the hot markets will continue to enjoy brisk activity during 2016. However, rents aren’t expected to rise as fast as they have in the recent past.
Despite the slowdown in rental appreciation, renters will continue to see gradual rent increases. They will just be less dramatic than the increases in the last several years. Strong growth in multifamily apartment dwellings in recent years has helped boost the supply of rental units in major metropolitan urban markets. The trade-off, however, is that developers have been slow to do the same thing in the smaller suburban markets. Renters in those markets seem to be struggling the most with short supply and higher rents. Rental property developers have shied away from settling for lower rents. They prefer to charge top dollar in order to recoup the high cost of construction — especially in the Vero Beach housing market where available land is expensive.
Get more updates on the Vero Beach housing market and news that affects the market by checking back here from time to time, and by checking out the other articles in our Vero Beach Real Estate News section of articles under Vero Beach Real Estate Categories to your right. We also post articles on Facebook and Twitter, so find us there, too.
Vero Beach homes recently built are more expansive and expensive. And when it comes to homes, American homeowners love their space and spaciousness. However, large sized homes come with larger price tags. As home become bigger they’re becoming less affordable for a bigger group of prospective buyers.
Vero Beach Homes: Big Houses, Big Prices
In 2014 the average size of a new home was 2,660 square feet. In 2015 the average size was 2,720. Nearly half the homes under construction in 2015 had four or more bedrooms. In addition, 25% of the new homes built have three-car garages or larger. With the increased size comes a heftier price. U.S. home prices have increased by 25% since the beginning of the housing market recovery in 2011.The average sales price of a new home in 2015 was $351,000 — compared to $251,000 just six years ago, in 2009.
Vero Beach tax deductions are valuable commodities. And like most valuables, they are often well guarded. Deductions have been compared to buried treasure — because they are so valuable and they’re often buried, or at least hard to find. Deductions reduce the amount of income you’re taxed on, which reduces your tax liability. Here are a few deductions that are often overlooked.
5 Overlooked Vero Beach Tax Deductions
Charity. Most people are aware they can deduct charitable contributions. But, did you know that if you volunteer your time you can also deduct 14 cents per mile to and from the charity’s location? In addition, you can deduct the cost of supplies needed for the work you perform for the charity.
State Sales Tax. When you’re filing your tax return, you have to choose between deducting state sales taxes and state income taxes. So, this deduction is best for those taxpayers that don’t have a state income tax.
Dependent Care Credit. While most parents of young children are familiar with the dependent care credit, many may not be aware that it may also apply to summer day camp costs. You may even qualify for a deduction for adult dependent care. Some restrictions apply, of course, but it may be worth looking into when you’re looking for Vero Beach tax deductions.
Retirement Plan Contributions. Contributing to your retirement plan can earn you a deduction. If you are in the low to moderate income range, you may also be able to earn a tax credit for the contributions to your retirement account. For more information, search the web for Retirement Savings Contribution Credit.
Job Search. If you’re searching for a job, you can deduct a number of things such as employment agency fees and resume preparation costs. Every dollar you can deduct can save you from 10 cents to 40 cents on your income taxes. So it pays to find as many Vero Beach tax deductions as possible that apply to you. Be diligent in your search, or even better, consult a tax professional well versed in deductions for which you may qualify.
For more information on Vero Beach taxes, see our articles to the right under Taxes below Vero Beach Real Estate Categories.