Shenehon Business and Real Estate Valuation

Volume 14, No. 1, Spring 2009

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Market Trends & Indicators

Economic Indicator

YEAR:2002200320042005200620072008
New Housing Starts - Yearly Total349,600374,100355,700357,400279,500211,700136,500

P/E Ratios in Select Industries

INDUSTRY (yr. end)200620072008Jan 2009Feb 2009Mar 20091Q 2009
Basic Materials13.714.115.28.98.79.28.9
Conglomerates20.118.415.812.59.69.510.5
Consumer Goods25.824.416.316.013.214.414.5
Financials14.313.711.718.011.09.412.8
Healthcare38.840.026.021.641.941.134.9
Industrial Goods25.119.519.519.312.916.716.3
Services25.628.724.221.621.015.419.3
Technology26.338.423.812.413.312.712.8
Utilities24.020.015.322.213.110.315.2
COMPOSITE24.424.018.716.316.115.415.9

Economic Indicators

INDICATOR (5 yr. avg.)19851990199520002005200620072008
Inflation5.0%4.0%3.1%3.4%3.4%2.0%4.1%3.8%
Productivity1.7%0.6%1.5%2.9%1.8%1.5%1.6%2.8%
GDP4.0%1.8%2.7%3.9%2.9%2.8%2.0%1.3%
Consumer Confidence84.9104.299.2128.6107.2105.687.956.6

Unemployment

YEAR:1990199520002005200620072008Feb 2009
US5.4%5.6%4.0%5.2%4.7%4.6%4.9%8.1%
Northeast5.0%6.0%4.0%4.9%4.7%4.4%4.7%7.7%
Midwest5.7%4.5%3.5%5.7%5.1%5.0%5.3%8.6%
South5.4%5.4%4.0%5.2%4.6%4.3%4.6%8.1%
West5.1%6.6%4.6%5.5%4.8%4.5%5.2%9.2%
Minnesota4.6%3.6%2.9%4.5%4.2%4.5%4.8%8.1%

Rates of Return & Risk Hierarchy

INVESTMENTCURRENT
30 Yr Treasury3.6%
Aaa Bond5.95%
Bbb Bond7.1%
Commercial Mortgage6.75-7.75%
Institutional Real Estate7.5-9.0%
Non-Institutional Real Estate10-12.2%
Speculative Real Estate14-18%
S & P Equity (Ibbotson)10.7%
Land Development20-25%
Equipment Finance Rates12.5%
NYSE/OTC Equity (Ibbotson)14.3%
NYSE Smallest Cap. Equity (Ibbotson)20.4%

Sources: National Real Estate Index (2009), Appraisal Institute; F.W. Dodge Division, Business Week, Value Line, U.S. Chamber of Commerce, Standard & Poors, Investment Dealers Digest, U.S. Government Census, Yahoo Finance, Bureau of Labor Statistics.

Shenehon Company makes every effort to ensure the accuracy of the information published in Valuation Viewpoint. Shenehon Company uses only those sources it determines are accurate and reliable, but no guarantee or warranty with regard to the information is made or implied.