Shenehon Business and Real Estate Valuation

Volume 14, No. 2, Fall 2009

< prev    2 of 5    next >

Click here to download a PDF of Valuation Viewpoint Fall 2009

Market Trends & Indicators

ECONOMIC INDICATOR

YEAR20052006200720083Q 2009
New Housing Starts - Yearly Totals357,400279,500211,700136,50072,500

P/E RATIOS IN SELECT INDUSTRIES

Reporting categories changed in spring of 2006. Data for the current categories is presented for the Years: 2006, 2007, & 2008; and Q1, Q2 & Q3 2009.

INDUSTRY (yr. end)2006200720081Q 20092Q 20093Q 2009
Basic Materials13.714.115.28.916.242
Conglomerates20.118.415.810.58.39.7
Consumer Goods25.824.416.314.58.715.8
Financials14.313.711.712.89.25.2
Healthcare38.840.026.034.963.277.1
Industrial Goods25.119.519.516.327.420.7
Services25.628.724.219.320.020.1
Technology26.338.423.812.814.215.7
Utilities24.020.015.315.211.86.0
COMPOSITE24.424.018.715.921.023.6

ECONOMIC INDICATORS (5 year average)

INDICATOR19851990199520002005200620072008Current
Inflation5.0%4.0%3.1%3.4%3.4%2.0%4.1%3.8%0.6%
Productivity1.7%0.6%1.5%2.9%1.8%1.5%1.6%2.8%9.5%
GDP4.0%1.8%2.7%3.9%2.9%2.8%2.0%1.3%3.5%
Consumer Confidence84.9104.299.2128.6107.2105.687.956.647.7

UNEMPLOYMENT

YEAR:1990199520002005200620072008Sept 2009
US5.4%5.6%4.0%5.2%4.7%4.6%4.9%10.2% (Oct)
Northeast5.0%6.0%4.0%4.9%4.7%4.4%4.7%9.0%
Midwest5.7%4.5%3.5%5.7%5.1%5.0%5.3%9.8%
South5.4%5.4%4.0%5.2%4.6%4.3%4.6%9.3%
West5.1%6.6%4.6%5.5%4.8%4.5%5.2%10.6%
Minnesota4.6%3.6%2.9%4.5%4.2%4.5%4.8%7.3%

RATES OF RETURN & RISK HIERARCHY

INVESTMENTCURRENT
30 Yr Treasury4.3%
Aaa Bond5.2%
Bbb Bond6.2%
Commercial Mortgage6.75-7.75%
Institutional Real Estate7.5-9.0%
Non-Institutional Real Estate10.5-12.5%
Speculative Real Estate14-18%
S & P Equity (Ibbotson)10.8%
Land Development20-30%
Equipment Finance Rates12%
NYSE/OTC Equity (Ibbotson)14.6%
NYSE Smallest Cap. Equity (Ibbotson)20.3%

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.