How did Americans spend the $13 billion they saved on gas?

Phil Wahba | Fortune Magazine

Less than one-third of what consumers saved from cheaper gas went to retailers.

U.S. retailers enjoyed their best holiday season in years.

But it wasn’t so much the result of outstanding merchandising prowess as it was the benefit of gas prices falling to their lowest levels in five years, putting an extra $13 billion more in consumers’ pockets.

Those unexpected extra billions didn’t all go to retailers—in fact less a third of the windfall did. U.S. consumers actually used a big chunk to drive more, go to the movies more and eat out more. All that explains why holiday season sales, despite a big unexpected boost, still came in a whisker below initial National Retail Federation forecasts. In other words, the cheap gas helped retailers salvage a season that started off slowly with customers showing restraint.

Customer Growth Partners, a retail consulting firm that tracks stores’ sales, dug into the Department of Commerce’s numbers for November and December and estimated that the $13 billion in savings from cheap gas were used in the following manner:

  • $4.9 billion more was spent on simply using more gas.
  • $1.8 billion more went to entertainment and services, such as movies, theme parks, content downloads and smartphone subscription/service fees.
  • $1.3 billion more was spent at restaurants, fast food and bars.
  • $1 billion more went to things like tobacco, beer, and other “sin” products.
  • $4 billion more went to the kind of items included in the NRF tally.

Specifically:

  • Food and beverage stores: $1.5 billion.
  • Home improvement: $1 billion.
  • Clothing $1 billion (this is a key category for department stores like J.C. Penney and Macy’s).
  • Consumer electronics: $500 million.
(U.S. shoppers had $1 billion more in disposable income than last year from other factors, and that helped areas like toys and sports.)
Click HERE for full article and Fortune Magazine’s video on the effects of lowered oil prices

Red Zone Podcast: Falling Oil Prices and the Texas Economy

Real Estate Center Texas A&M University

COLLEGE STATION (Real Estate Center) – News outlets yesterday reported that crude oil prices dropped below $50 per barrel for the first time in more than five years.

As Real Estate Center Research Economist Dr. Jim Gaines said last month on the Real Estate Red Zone podcast, oil prices are the number one issue facing the Texas housing market in 2015.

To hear Gaines’ projections about how the Texas economy could be impacted this year by falling oil prices, check out podcast episode 239.

Houston takes silver for top real estate investment market

Nora Olabi | Houston Business Journal

Texas snatched five of the top 20 spots for the top year-end real estate markets in the country for investing, according to data compiled by national real estate forecasterLocal Market Monitor LLC andHomeVestors of America Inc.

The greater Houston area, including Sugar Land and Baytown, ranked No. 2 on the list.

The list, which evaluated single-family investment property markets, ranked the markets based on population growth, job growth rate and unemployment, conditions ideal for investing in single family homes, said Ingo Winzer, president and founder of Local Market Monitor, in a statement. Markets with small populations were excluded.

Texas markets for real estate investing that made the list:

No. 1: Austin-Round Rock

No. 2: Houston- BaytownSugar Land

No. 7: San Antonio

No. 14: Dallas-Plano-Irving

No. 16: Fort Worth-Arlington

Texas has always been a sweet spot for real estate investing. Its economy is strong, and only getting stronger,” said HomeVestors co-President David Hicks in the statement. “This is spurring population and job growth, especially among younger workers looking for work in retail, business and tourism.”

Other states that made the list include Idaho, North Carolina, Utah, Nevada, California, Florida, Washington, Tennessee and Colorado.

The average cost of a home in the top 10 markets was under $300,000. Homes in the markets listed in the top 20 range from $166,000 to $844,000.

Click HERE for full article