Local Economic Indicators Show Continued Improvement

Local Economic Indicators Show Continued Improvement

Data collected by the Village of Northbrook shows that the Village has seen significant progress toward recovery from the economic challenges of the pandemic. Indicators from the first quarter of the Village’s FY 2021/22 (ending July 31) reveal that most sectors have matched or exceeded figures from the same period in FY 2019.

In a recent report to the Board of Trustees at a Committee of the Whole meeting, Village Staff reviewed data regarding local construction, real estate market trends, unemployment, and sales tax revenue. A few notable trends:

  • Sales tax collections for sales made in April, May and June 2021 were nearly double compared to taxes generated for the same period in 2020, and the highest sales tax since 2016 for the same period. Part of the increase reflects 2021 changes that allow municipalities to collect sales tax on online purchases delivered to addresses within their boundaries. Overall, the Village collected about $4.5M in sales taxes in the first quarter of FY 2021/22. In comments to the Chamber in mid-November, Village CFO Iwona Petryszak shared that sales tax collections through the first two months of the second quarter put the Village 26.7% ahead of budget.
  • The cumulative value of construction permits has returned to 2019 levels, an increase of over $14M compared to 2020. As of September 2021, the Village had roughly $66M in construction projects under permit.
  • Residential real estate remains highly competitive, with single family home prices reaching an average of $621K. A likely-related trend: permits for home additions have soared to a new record, with 175 issued as of September.  Multifamily rental properties are also near capacity: large apartment complexes at 770 Skokie (TGM) and 1000 Skokie (The Elaine) have a combined vacancy rate of just 1.9%, compared to an average of 7.5% for rental properties in a ten-mile radius.
  • Retail and industrial real estate markets have seen minor increases in vacancies this year, although both sectors remain extensively leased. Retail vacancies are reported at 4.8%, not including unoccupied spaces that continue to be under lease such as the former Dominick’s grocery at Sanders Court.  The industrial market continues to be very tight with only 3.5% vacant. Challenges for the vacant industrial spaces include the need to repurpose office-style layouts for large properties, like the former Walgreens 205K square foot facility at 4000 Commercial Avenue.  Office space vacancies are increasing, reflecting the trend toward remote work.  The Village has an overall office vacancy rate of 17.2%, with the largest impact felt in the Class A properties in the Skokie Boulevard corridor.
  • Unemployment in Northbrook has improved from its precipitous spike in April 2020, although it remains above 2019 levels. The Village’s unemployment rate as of this August was 4.9%, compared to 6.8% for Illinois as a whole and 5.3% for the U.S. At the peak of the pandemic, the local rate had shot up to 15.1%.

Click here to view the complete report.