In case you haven’t noticed … JC Penney has a new direction. Ron Johnson the new CEO has taken charge and is breathing air to a tired brand.  What is Ron Johnson’s background?  Prior to his appointment at JCP, he has deep roots in retail at both Target and the Apple Store.

Most shoppers view JC Penney as a “also ran.” When you compare their offering to their peers, Macy’s and Kohl’s, the product is similar, but seems inferior because the retail space, in my opinion, outdated.

JC Penney is rolling out two significant programs:

1. Fair and Square Every Day Pricing
2. Stores within a Store.  (Think Martha Stewart boutique)

Fair and Square Every Day Pricing.  Johnson has determined that the large majority of its sales are sold at deep discounts.  (Over 50% off.)  The new pricing structure is:

1. Every Day – Fair Prices
2. Month Long Value – Themed Items and Products
3. Best Prices – Clearance

We’ll have to wait and see if the pricing structure works.  This probably works, in time, with their second initiative

The second program is the concept stores.  They are going to roll out stores within a store.  The first one they’ve announced in Martha Stewart.  Others will be named, but will be similar, I would assume to what they already do with Sephora.  Their concept stores are supposed to roll out about 2 per month, until their are 80 to 100 branded concepts in each JC Penney.

There have been a slew of articles about JC Penney’s approach. I am sure there was a very healthy debate in the executive offices and Board Room, as well.

I think the approach has generated significant publicity for a brand that is tired and worn out. In a competitive retail environment, would there be a reason to talk about JC Penney? Probably not.

Two that I like and recommend, should you have an interest:

Rafi Mohammed – Harvard Business Review – Understanding JC Penney’s Risky New Pricing Strategy

AP Interview with CEO Ron Johnson

Men list more homes:

Women list expensive homes:

The Center for Housing Policy collected data points from the National Homebuilders Association, US Department of Housing and Urban Development, and Salary.com

Below summarizes Boise, Idaho specific data:

• Homeownership 3Q 2011 Median Price:  $148,000 (Metro Ranking of 104).  This places Boise in the middle of the data points of most to least expensive homeownership markets.  This includes new and existing sales.
• Homeownership Affordability Index:  24 (Metro Ranking of 93).  This means 24 out of 74 occupations(or just 32%) earn enough to afford a median priced home as of 3Q 2011.
• Rents of a 2 Bedroom Apartment 3Q 2011 Median Rent:  $702 (Metro Ranking of 164).
• Rental Affordability Index:  52 (Metro Ranking of 154).  This means 52 out of 74 occupations (or 70%) earn enough to afford a 2 Bedroom apartment in Boise.
• Qualifying Income needed to purchase a Median Priced Home:  $42,698 (Metro Ranking of 172).  In 4Q 2009 a similar study was done.  At that time the median priced home was $163,000, and the qualifying income was $48,657.  There has been a -12.25% decrease in qualifying income.

Here are a couple of additional graphics that I was able to extract from the website.

This Chart compares the income of seasonal retail jobs to the annual income needed to purchase a median priced home:

This Chart compares the income of five pre-selected occupations (out of a list of 74) to the annual income needed to purchase a median priced home:

One other tool that I haven’t shown allows you to select an occupation, and compare the median salary across three markets.  The report provides median home price, income needed to purchase a home, and the median salary for the occupation across all three markets.  The site can be found here.

• How workers fare in the housing market (for sale and rental)
• Housing affordability for working families in various occupations

They also provide some templates on how certain occupations match up with the needed income to achieve the median home price in each MSA. The data points were collected from the National Homebuilders Association, US Department of Housing and Urban Development, and Salary.com

The Most to Least Expensive Homeownership Markets can be found here.

The Top 10 Most Expensive Homeownership Markets with Q3 2011 Prices are:

1.  San Francisco, CA: $585,000
2.  New York, NY: $450,000
3.  San Jose, CA: $443,000
4.  Honolulu, HI: $425,000
5.  Santa Ana, CA: $405,000
6.  Santa Cruz, CA: $395,000
7.  Bridgeport, CT: $390,000
8.  Suffolk-Nassau, NY: $378,000
9.  Cambridge, MA: $370,000
10. Ocean City, NJ: $353,000

The Least 10 Expensive Homeownership Markets with Q3 2011 Prices are:

200.  Battle Creek, MI: $85,000
200.  Flint, MI: $85,000
202.  Wheeling, WV: $84,000
203.  Lima, OH: $83,000
203.  Saginaw, MI: $83,000
203.  Springfield, OH: $83,000
206.  Bay City, MI: $82,000
207.  Ocala, FL: $80,000
207.  Toledo, OH: $80,000
209.  Youngstown, OH: $77,000

The Center for Housing Policy also reviewed data for rental affordability. They compared 2 Bedroom rentals across all markets. The Most to Least Expensive Rental Markets can be found here.

Obviously, their are some market overlaps when you compare affordability of rentals to affordability of homeownership.

Here are the Top 10 Most Expensive Rental markets (Cities in BOLD are also in the Top 10 Most Expensive Homeownership Markets):

1.  San Francisco, CA: $1,833
2.  Santa Cruz, CA: $1,730
3.  Honolulu, HI: $1,702
3.  San Jose, CA: $1,702
5.  Suffolk-Nassau, NY: $1,661
6.  Santa Ana, CA: $1,584
7.  Oxnard, CA: $1,527
8.  Los Angeles, CA: $1,465
9.  Bethesda, MD: $1,461
9.  Washington, DC: $1,461

The data is summarized below:

1.  Ocala, FL.  Value per sq. ft.:  $50.  Average home size:  1,615 sq. ft.  Zillow Home Value Index:  $85,200

2.  Lakeland, FL.  Value per sq. ft.:  $52.  Average home size:  1,666 sq. ft. Zillow Home Value Index:  $89,100

3.  Spartanburg, SC.  Value per sq. ft.:  $56.  Average home size:  1,678 sq. ft.  Zillow Home Value Index:  $98,800

4.  Mobile, AL.  Value per sq. ft.:  $57.  Average home size:  1,803 sq. ft.  Zillow Home Value Index:  $78,200

5.  Detroit, MI.  Value per sq. ft.:  $59.  Average home size:  1,604 sq. ft.  Zillow Home Value Index:  $72,900

6.  (Tied) Atlanta, GA.  Value per sq. ft.:  $60.  Average home size:  2,128 sq. ft.  Zillow Home Value Index:  $109,700

6.  (Tied) Memphis, TN.  Value per sq. ft.:  $60.  Average home size:  1,882 sq. ft.  Zillow Home Value Index:  $95,400

8.  (Tied) Canton, OH.  Value per sq. ft.:  $61.  Average home size:  1,634 sq. ft.  Zillow Home Value Index:  $88,900

8.  (Tied) Augusta, GA.  Value per sq. ft.:  $61.  Average home size:  1756 sq. ft.  Zillow Home Value Index:  $84,600

10.  Toledo, OH.  Value per sq. ft.:  $62.  Average home size:  1,652 sq. ft.  Zillow Home Value Index:  $86,700

The Top 10 Cities were:

1. Washington DC
2. Boston, MA
3. Des Moines, IA
4. Minneapolis, MN
5. Omaha, NE
6. Oklahoma City, OK
7. Salt Lake City, UT
8. Austin, TX
9. New York, NY
10. San Antonio, TX

The Bottom 10 Cities were:

93.          Lakeland, FL
94.          Cape Coral, FL
95.          North Port, FL
96.          Dayton, OH
97.          Modesto, CA
98.          Youngstown, OH
99.          Sacramento, CA
100.        Fresno, CA
101.        Riverside, CA
102.        Stockton, CA

The full list can be found here.

Market Watch’s criteria included two major Headings of Company Concentration and Economic Stability:

COMPANY CONCENTRATION

1. Per-capital sales volume, based on revenue of S&P 500 companies in a metro area, divided by the population.
2. Per-capita sales for Fortune 500 companies in the area.
3. Per-capita sales for Forbes Private Companies in the area.
4. Number of Russell 2000 companies per capita in a metro area. (For those cities with no S&P, Fortune 500, Forbes or Russell companies, the largest metro area with a zero total in those categories finishes last.)
5. Census Bureau data from 2009 — the most recent available — measuring the number of companies, annual payroll and number of employees, all per capita, in a metro area.

ECONOMIC STABILITY

1. Population growth, from Census Bureau data, 2000 to 2010.
2. Per capita metro economic output, from Bureau of Economic Analysis data, 2010.
3. Growth in economic output, from Bureau of Economic Analysis data, 2007 to 2010.
4. Personal income growth, from Bureau of Economic Analysis data, 2000 to 2010.
5. Personal income growth, from Bureau of Economic Analysis data, 2009 to 2010.
6. Unemployment rates, from Bureau of Labor Statistics data, for August 2011
7. Cumulative metro unemployment rates, from Bureau of Labor Statistics data, for August 2003, August 2007 and August 2011.
8. Job growth measured against population growth from Census Bureau and the Bureau of Labor Statistics data, 2005 to 2010.

The methodology can be found here.

ABC did a story about a homebuilder in Bozeman, Montana. He only used US made materials as a demonstration to create more jobs. According to ABC’s article, if every builder only used 5% more US made materials, there would be an increase of 220,000 jobs.

The article

The list

The video

Great idea to grow jobs.

Article No. 1:  In an article by Wendell Cox, NewGeography.com, Domestic Migration: Returning to Normalcy?, he reviewed the American Community Survey data, and Census Data.  In summary, in 2010:

Stock up:  Texas, Florida, North Carolina and Arizona

Stock Down:  California, New York and Illinois

The best quote of the article:  “It is premature to suggest any long-term judgments on these early data. However, it would not be surprising to see the states with the highest costs of living (driven by high housing costs) and the least friendly business climates to lose domestic migrants to states with lower costs of living and more friendly business environments.”

Article No. 2:  In an article in 247WallStreet.com, they author’s highlight 10 markets with new, significant foreclosures.  Skyrocketing Foreclosures (Rank, City, Q3 11 increase in Foreclosures).

1. No. 1:  Albuquerque, New Mexico, +151% Q3 2011
2. No. 2:  Boston, Massachusetts, +67% Q3 2011
3. No. 3: Sarasota / Bradenton, Florida, +57% Q3 2011
4. No. 4: Cincinnati, Ohio / Kentucky / Indiana, +55% Q3 2011
5. No. 5: Jacksonville, Florida, +49% Q3 2011
6. No. 6: Palm Bay / Melbourne / Titusville, Florida, +44% Q3 2011
7. No. 7:  Fresno, California, +41% Q3 2011
8. No. 8:  Vallejo / Fairfield, California, +35% Q3 2011
9. No. 9:  Cape Coral / Ft. Myers, Florida, +35% Q3 2011
10. No. 10:  Columbus, Ohio,  +32% Q3 2011

Article No. 3:  Home prices Weigh down 75% of housing markets.  In an Alan Zibel article in WSJ.com, he extrapolated 3Q 2011 data showing that housing prices had fallen in 111 of 150 Metro Areas; a less flattering way to put it:  Values down in 75% of the markets.  Not a very good data point.

Stock Up:  Grand Rapids, Mich. (23.7%), South Bend, Ind. (19.8%), Palm Bay-Melbourne, Fla. (17.7%) and Youngstown, Ohio. (13.1%).

Stock Down:  Mobile, Ala. (-17.7%), Phoenix, Ariz. (-17.6%), Allentown, Pa. (-17.5%) and Salt Lake City (-15.3%)

One final commentary … In Q3 2011 Melbourne, Florida, saw a 44% increase in Foreclosures, and a 17.7% increase in housing values.  This seems like a very unlikely scenario.  At the very least, I would opine that if future foreclosures continue to rise or remain similar to Q3 2011, Melbourne will see a dip in future home values.