Economic outlook ‘optimistic’ [UPDATED]Published 11:49am Thursday, January 24, 2013 Updated 11:50am Thursday, January 24, 2013
Joe Mahon of the Federal Reserve Bank made a humorous qualifier before stating that the economic outlook is fairly optimistic for Minnesota and Fergus Falls.
“Economists got into forecasting to make weather people look good,” he joked.
The outlook is based on indicators such as solid gains in employment, a continued decrease in unemployment and a continued increase in residential construction starts.
Mahon, an economist and analyst with the Federal Reserve Bank in Minneapolis, wrapped up what was an interesting Economic Outlook 2013 session Wednesday at the West Central Initiative in Fergus Falls.
Other presenters spoke about work force trends and labor availability, tools for starting and growing a business, and residential, industrial and commercial real estate.
RE/MAX broker Bruce Fuhrman initiated the real estate session, saying that the past year has been the best of the past three years for area real estate, but consumers are still cautious. Fuhrman provided current industry statistics and demographics to lay the groundwork for himself and two other seasoned realtors to speak — Alan Olson from Century 21 Vista and Jon Drews from Keller Williams.
Olson said that sales of lakeshore properties have grown 65 percent over last year, and more focus should be Otter Tail Country Tourism Association, to
highlight the outstanding features of the area.
“We have more lakes in our county than any other county in the state, and second most in the country,” said Olson. “People are coming here for the quality of the lakes and prices that are lower than Brainerd, Detroit Lakes and Alexandria.”
Lakeshore sales are not only benefiting from the good farm economy, Fuhrman said, but also from the people making a high income in North Dakota’s oil patch.
“We are seeing a lack of quality residential inventory at certain price points,” said Fuhrman, adding that a lack of inventory would make sale prices go up. “If I were a builder, I would be throwing up spec houses, and I haven’t said that in five years.”
With apartment vacancies also very low, it is a good time to invest in rental property because it will be occupied, Olson added.
Fuhrman also represents significant commercial developments in town, such as the recently-purchased mill and the old dairy on the Otter Tail River in the heart of Fergus Falls.
“The city’s future is on the river,” said Fuhrman, adding that development of the mill will be the catalyst to initiate more projects. “There are less risk takers in commercial real estate, but as our economy keeps improving that will come along as well.”
Drews theorized that people who held off buying for a year or two because of the economy or 401K losses are back in the lakeshore market, but expressed concern about the residential market. He wants to see an environment where young people and families purchasing their first home will stay in the area as their career grows.
“We need to act as ambassadors to encourage good paying jobs in our area to keep people here,” said Drews.
As the discussion shifted from real estate and business opportunities to the available labor force, there was a discussion of whether a person earning a median income in our area of $14.80 per hour can afford to purchase a home here.
“If we project that a student cannot make a living wage when they finish school, we won’t continue to offer that program,” said Peggy Kennedy, president of Minnesota State Community and Technical College, an attendee of the conference.
Dale Umlauf from the West Central Initiative, David Gaffaney from FedStar and Todd Leonard from the Minnesota Angel Network all spoke about funding opportunities for business development, ranging from government programs to private loans.
The Minnesota Angel Network has advantages for entrepreneurs that are willing to locate a business in Fergus Falls. Entrepreneurs who apply and are accepted pay for review and coaching from a team of experts including investors, entrepreneurs, attorneys and accountants.
If an entrepreneur is accepted into the program, they work with the team to get their business plan ready to meet with potential investors that the Angel Network lines up.
“Through the Minnesota Angel Network, we brought 16 companies here last year and put them in front of investors,” said Harold Stanislawski, Executive Director of the Fergus Falls Economic Improvement Commission. “We anticipate bringing 60 more companies here, and more are coming, for potential investment without spending tax dollars.”
In addition to financing opportunities, the city sent a clear message.
“We want to put out to the rest of the world that we are shovel ready,” said Stanislawski. “We have property available with water, sewer and streets already there.”
Stanislawski reviewed several properties, including along the tower road corridor, which are ripe for business development.
With an optimistic economic outlook for the region, positive growth may be on the horizon.
“Opportunities exist, and if there is an economic fit, we have the right assets and resources to make that happen,” said Stanislawski.
Information on the resources discussed can be found in the Fergus Falls Development Opportunity Guide 2013, available through the Fergus Falls Economic Improvement Commission office.