texas’ uncertain economy in a world of uncertain …...yogi berra texas issues 2015-2016 •price...
TRANSCRIPT
Texas’ Uncertain Economy in a World of Uncertain Oil Prices
Dr. James P. GainesResearch Economist
recenter.tamu.edu
2015 Realtors® Region 8 Leadership ProgramApril 27, 2015
Bryan - College Station
National Economic Recovery still Going …
2
U.S. Outlook• Expected GDP growth still modest: 2015 2.8%; personal
consumption 2.5%
• FED and interest rates? When, not if
• Inflation not worrisome: 2015 1.5% - 2.0%, especially
with lower gas prices
• Industrial production data generally positive
• Housing improving, adding to overall national economy;
residential construction stable at 1–1.2 million units
• Jobs expanding; unemployment rate probably down
under 5.5% level or better
• Energy sector & oil prices major issue for the year 3
Percent Change in Real GDP Since 1947
-0.9%
4.4%
-0.5%
8.7%
7.7%
3.8%
4.6%
-0.6%
7.2%
2.0%2.0%
-0.9%
7.2%
2.5%2.3%
6.1%
4.4%
5.8%
6.4%6.5%
2.5%
4.8%
3.1%
0.2%
3.4%
5.3%
5.8%
-0.6%-0.2%
5.4%
4.6%
5.6%
3.1%
-0.3%
2.5%
-1.9%
4.5%
7.2%
4.1%
3.5%3.2%
4.1%
3.6%
1.9%
-0.2%
3.4%
2.9%
4.1%
2.5%
3.7%
4.5%4.4%
4.8%
4.1%
1.0%
1.8%
2.8%
3.8%
3.3%
2.7%
1.8%
-0.3%
-2.8%
2.5%
1.6%
2.3%2.2%2.4%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: BEA
Average 3.4% rate of growth per year 1947-2005
U.S. Jobs Finally Recovered
109,527108,427108,802
110,935
114,398
117,407
119,836
122,951
126,157
129,240
132,019132,074
130,628130,318131,749
134,005
136,398137,936
137,170
131,233
130,275
131,842
134,104
136,393
139,042
90,000
100,000
110,000
120,000
130,000
140,000
150,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Th
ou
sa
nd
s o
f J
ob
s
5Sources: BLS, Real Estate Center at Texas A&M University
2013 + 1.7%
2014 +2.0%
1999-2014 +7.6%!!
Inflation Remains Relatively Low
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%J
an
-71
Jan
-72
Jan
-73
Jan
-74
Jan
-75
Jan
-76
Jan
-77
Jan
-78
Jan
-79
Jan
-80
Jan
-81
Jan
-82
Jan
-83
Jan
-84
Jan
-85
Jan
-86
Jan
-87
Jan
-88
Jan
-89
Jan
-90
Jan
-91
Jan
-92
Jan
-93
Jan
-94
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
6Source: BLS, Y/Y % change in index
Consumer Price Index for All Urban Consumers: All Items
Source: The Conference Board (1985=100); Haver Analytics
Consumer Confidence Index
10
20
30
40
50
60
70
80
90
100
110
120
130
140
Jan
-07
Ju
l-07
Jan
-08
Ju
l-08
Jan
-09
Ju
l-09
Jan
-10
Ju
l-10
Jan
-11
Ju
l-11
Jan
-12
Ju
l-12
Jan
-13
Ju
l-13
Jan
-14
Ju
l-14
Jan
-15
Ju
l-15
Recession
7
U.S.
Texas
Consumers Spending Money AgainReal Retail and Food Services Sales
$110,000
$120,000
$130,000
$140,000
$150,000
$160,000
$170,000
$180,000
$190,000
$200,000Ja
n-9
2Ju
l-9
2Ja
n-9
3Ju
l-9
3Ja
n-9
4Ju
l-9
4Ja
n-9
5Ju
l-9
5Ja
n-9
6Ju
l-9
6Ja
n-9
7Ju
l-9
7Ja
n-9
8Ju
l-9
8Ja
n-9
9Ju
l-9
9Ja
n-0
0Ju
l-0
0Ja
n-0
1Ju
l-0
1Ja
n-0
2Ju
l-0
2Ja
n-0
3Ju
l-0
3Ja
n-0
4Ju
l-0
4Ja
n-0
5Ju
l-0
5Ja
n-0
6Ju
l-0
6Ja
n-0
7Ju
l-0
7Ja
n-0
8Ju
l-0
8Ja
n-0
9Ju
l-0
9Ja
n-1
0Ju
l-1
0Ja
n-1
1Ju
l-1
1Ja
n-1
2Ju
l-1
2Ja
n-1
3Ju
l-1
3Ja
n-1
4Ju
l-1
4Ja
n-1
5
Millio
ns
Source: Federal Reserve Bank of St. Louis
Total Public and Private Construction Put in Place
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000Ja
n-0
0
Ja
n-0
1
Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Ja
n-1
5
Millio
ns, S
AA
R
Public Private
Source: Census Bureau, Haver Analytics
Total Residential and Nonresidential Construction Put in Place
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000Ja
n-0
2
Ja
n-0
3
Ja
n-0
4
Ja
n-0
5
Ja
n-0
6
Ja
n-0
7
Ja
n-0
8
Ja
n-0
9
Ja
n-1
0
Ja
n-1
1
Ja
n-1
2
Ja
n-1
3
Ja
n-1
4
Ja
n-1
5
Millio
ns, S
AA
R
Nonresdiential Residential
Source: Census Bureau, Haver Analytics
Value of Nonresidential Construction in Texas
$0
$1
$2
$3
$4
$5
$6
$7
$8
Se
p-1
0
Oc
t-1
0
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Ju
n-1
1
Ju
l-1
1
Au
g-1
1
Se
p-1
1
Oc
t-1
1
No
v-1
1
De
c-1
1
Jan
-12
Feb
-12
Ma
r-1
2
Ap
r-1
2
Ma
y-1
2
Ju
n-1
2
Ju
l-1
2
Au
g-1
2
Se
p-1
2
Oc
t-1
2
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Ma
r-1
3
Ap
r-1
3
Ma
y-1
3
Ju
n-1
3
Ju
l-1
3
Au
g-1
3
Se
p-1
3
Oc
t-1
3
No
v-1
3
De
c-1
3
Jan
-14
Feb
-14
Ma
r-1
4
Ap
r-1
4
Ma
y-1
4
Ju
n-1
4
Ju
l-1
4
Au
g-1
4
Se
p-1
4
Billio
ns
Source: McGraw Hill, Texas Comptroller of Public Accounts
Value of Residential and Nonresidential Construction in Texas
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Se
p-1
0
Oc
t-1
0
No
v-1
0
De
c-1
0
Jan
-11
Feb
-11
Ma
r-1
1
Ap
r-1
1
Ma
y-1
1
Ju
n-1
1
Ju
l-1
1
Au
g-1
1
Se
p-1
1
Oc
t-1
1
No
v-1
1
De
c-1
1
Jan
-12
Feb
-12
Ma
r-1
2
Ap
r-1
2
Ma
y-1
2
Ju
n-1
2
Ju
l-1
2
Au
g-1
2
Se
p-1
2
Oc
t-1
2
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Ma
r-1
3
Ap
r-1
3
Ma
y-1
3
Ju
n-1
3
Ju
l-1
3
Au
g-1
3
Se
p-1
3
Oc
t-1
3
No
v-1
3
De
c-1
3
Jan
-14
Feb
-14
Ma
r-1
4
Ap
r-1
4
Ma
y-1
4
Ju
n-1
4
Ju
l-1
4
Au
g-1
4
Se
p-1
4
Billio
ns
Nonresidential Residential Total
Source: McGraw Hill, Texas Comptroller of Public Accounts; Real Estate Center at Texas A&M University
TEXAS’ CURRENT SITUATION
“The Future Just Ain’t What It Used to Be!”
Yogi Berra
Texas Issues 2015-2016• Price of oil fell more than 50% since July
• National economy, High Tech & Healthcare sectors still fairly strong: major influences
• Energy-dependent local economies (e.g. Houston, Midland) more vulnerable to significant downturns
• Statewide or local Slowdown vs. Decline?
• State budget expectations from Severance Tax affected by oil price decline
• Downstream offsets to Upstream cutbacks?
14
Oil Prices & Energy• Prices may not have bottomed yet:
• Saudi Arabia continues to protect its market share
• Global oil production will increase before it decreases
• Global oil demand not rapidly increasing even with rapidly-falling prices.
• Expect significant cut back in upstream capital spending on E&P, i.e., fewer wells drilled
• The Texas rig count down >55%: 900 to 412 (10/14 - 4/15)
• Increased geo-political-military volatility among oil producing nations that need (require) $95-$100+ oil price
15
Texas Active Rig Count & Price of WTI
$0
$20
$40
$60
$80
$100
$120
$140
$160
200
300
400
500
600
700
800
900
1,000
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
Ju
l-08
Jan
-09
Ju
l-09
Jan
-10
Ju
l-10
Jan
-11
Ju
l-11
Jan
-12
Ju
l-12
Jan
-13
Ju
l-13
Jan
-14
Ju
l-14
Jan
-15
Ju
l-15
16Source: Baker Hughes, Haver Analytics
Rigs (left)
WTI $/bl (right)
Texas rigs down 49%
from Nov. ’14 (904 to 465)
Texas Leading Economic Index
90.0
95.0
100.0
105.0
110.0
115.0
120.0
125.0
130.0
135.0
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
Ju
l-08
Jan
-09
Ju
l-09
Jan
-10
Ju
l-10
Jan
-11
Ju
l-11
Jan
-12
Ju
l-12
Jan
-13
Ju
l-13
Jan
-14
Ju
l-14
Jan
-15
Ju
l-15
17Source: Federal Reserve Bank of Dallas, 1987=100
Falling six months in a row
Texas Annual Jobs
7,098,9007,177,400
7,272,900
7,485,500
7,755,600
8,027,300
8,260,200
8,610,900
8,940,500
9,157,300
9,428,9009,510,900
9,412,7009,366,9009,494,100
9,737,500
10,063,600
10,393,300
10,607,300
10,305,60010,338,700
10,569,700
10,880,300
11,206,900
11,550,200
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
18Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University
2012 2.9% increase
2013 3.0% increase
2014 3.1% increase
Texas Industries and Government Sector Ranked by Employment Growth Rate From February 2014
to February 2015
Sources: Texas Workforce Commission, SA; Real Estate Center at Texas A&M University
Industry Mar-15 Mar-14 Change
Percent
Change
Texas Total 11,753,200 11,336,000 417,200 3.7
Construction 673,100 633,800 39,300 6.2
Leisure and Hopsitality 1,223,500 1,173,000 50,500 4.3
Transportation, Warehouse, Utilities 492,000 469,400 22,600 4.8
Mining and Logging 308,600 298,700 9,900 3.3
Professional and Business Serivices 1,571,100 1,520,900 50,200 3.3
Education and Health Services 1,562,600 1,510,400 52,200 3.5
Trade 1,871,000 1,817,900 53,100 2.9
Financial Activities 715,800 693,400 22,400 3.2
Other Services 413,200 406,500 6,700 1.6
Information 204,400 202,300 2,100 1.0
Government 1,836,300 1,820,200 16,100 0.9
Manufacturing 881,600 879,200 2,400 0.3
Texas 2015 Outlook
• Nonresidential/infrastructure construction heavy for the year
• Home sales flat to down 10% depending on impact of oil prices
and potential offsets from downstream, healthcare, technology,
first-time buyers and National economy; maybe even lower
interest rates 1H15
• Houston, Midland, Corpus vulnerable to downturns from oil
prices
• Austin, San Antonio and DFW not as vulnerable to oil
prices but still may slip some from very high 2014 levels
• Home prices up 4% to 8% - continued tight S&D
• Employment growth rate more like U.S. (from 3.1% to ~2.0% or
less)
Texas Long-Term Outlook
• Energy sector long-term growth stimulant: world
energy demand will grow; U.S. (Texas) will be
major supplier
• Local Growth Issues becoming more pressing,
causing greater strain on state and local
infrastructure and resources
• Favorable business tax and regulatory
environment will fuel more business start ups
and relocations to Texas
• Rapid population expansion will fuel growth
Major Demographic Trends & Changing Housing Preferences
Aging population• Generational changes
• Lifestyle & life cycle: Gen Y vs. Boomers
Increasing racial/ethnic diversity & cultural shifts
Economic Shift: income & wealth gap • Educated and less well educated
• Age
• Race & Ethnicity
Urban Concentration - urban areas
22
Overall Growth and Change in State Population 2010-2050
Texas D-FW Houston Austin San Antonio
Population Population% of
State Total Population% of
State Total Population% of
State Total Population% of
State Total
2010 25,145,561 6,426,214 25.3% 5,920,416 23.5% 1,716,289 6.8% 2,142,508 8.5%
2020 30,541,978 7,920,671 25.8% 7,413,214 24.3% 2,306,857 7.6% 2,635,183 8.6%
2030 37,155,084 9,970,678 26.8% 9,278,789 25.0% 3,035,547 8.2% 3,182,644 8.6%
2040 44,955,896 12,728,992 28.4% 11,519,566 25.6% 3,960,317 8.9% 3,735,981 8.3%
2050 54,369,297 16,367,293 30.4% 14,221,267 26.1% 5,176,940 9.7% 4,013,515 7.7%
Number Increase 29,223,736 9,941,079 34.6% 8,300,851 28.2% 3,460,651 12.0% 2,151,724 7.0%
Percent Increase
116.2% 154.7% 140.2% 201.6% 100.4%
23Sources: U. S. Census; Texas State Demographer 2014 Projections (2000-2010 Scenario)
82% of total increase will go to the Major MSAs
Percent Change from 2010 to 2050 by Age Groups in the Texas Population
119.5%
89.4%101.8%
111.7% 110.5%
259.0%
0%
50%
100%
150%
200%
250%
300%
ALL <18 18-24 25-44 45-64 65+
24Sources: Texas State Demographer’s Office 2012 Projections 1.0 Scenario; Real Estate Center at Texas A&M University
Housing Markets
25
26
0
200
400
600
800
1,000
1,200
1,400
1,600
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000J
an
-00
Ju
l-0
0
Jan
-01
Ju
l-0
1
Jan
-02
Ju
l-0
2
Jan
-03
Ju
l-0
3
Jan
-04
Ju
l-0
4
Jan
-05
Ju
l-0
5
Jan
-06
Ju
l-0
6
Jan
-07
Ju
l-0
7
Jan
-08
Ju
l-0
8
Jan
-09
Ju
l-0
9
Jan
-10
Ju
l-1
0
Jan
-11
Ju
l-1
1
Jan
-12
Ju
l-1
2
Jan
-13
Ju
l-1
3
Jan
-14
Ju
l-1
4
Jan
-15
Ju
l-1
5
Sources: US Census Bureau , NAR, SAAR
New and Existing SF Home Sales U.S.
Existing SF Home Sales(left axis)
New Home Sales(right axis)
New Home Sales 000sExisting Home Sales 000s
First-Time Home Buyer Percent of All Buyers
42%40% 40% 40%
36%39%
41%
47%50%
37%39% 38%
33%
29%
0%
10%
20%
30%
40%
50%
60%
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
20
14
Te
xa
s
Source: NAR Home Buyers and Sellers Survey; 2014 Texas Home Buyers and Sellers Survey
Long-term average 40%
First-Time Home Buyers by Age Group (Percent of All Buyers)
0%
10%
20%
30%
40%
50%
60%
70%
80%
To
tal
<3
4 Y
ears
34-4
8 Y
ea
rs
49-5
8 Y
ea
rs
59-6
7 Y
ea
rs
68 >
Ye
ars
38%
76%
35%
16%
9%2%
Source: 2014 NAR Home Buyers and Sellers Survey
2014 Texas first-time buyer was 32
Age of All Home Buyers (Percent Distribution and Median Age in Group)
0%
5%
10%
15%
20%
25%
30%
35%
<3
4 Y
ears
34-4
8 Y
ea
rs
49-5
8 Y
ea
rs
59-6
7 Y
ea
rs
68 >
Ye
ars
31%30%
16%14%
9%
Source: 2014 NAR Home Buyers and Sellers Survey
2940
53
63
72
2014 Texas buyer was 45
Biggest Obstacles to Homeownership
All adults 18-34 year-olds only
Saving enough for a down payment 55% 58%
Not having a stable job 36% 43%
Having a poor credit history 35% 33%
Qualifying for a mortgage 32% 29%
Unable to pay off existing debt 26% 30%
Rising home prices 22% 23%
Rising mortgage rates 15% 18%
Limited inventory 5% 5%
Among renters who wish to buy a home right now. Respondents could choose multiple options. Survey conducted November 2013. Trulia Trends, December 2013.
Many renters say they tend to live payday to payday
Source: FHLMC, “Perceptions of Renting and Homeownership,” Multifamily Research Perspectives, December 8, 2014
In the next three years, do you expect to continue renting or
purchase home?
Source: FHLMC, “Perceptions of Renting and Homeownership,” Multifamily Research Perspectives, December 8, 2014
Gen Y Housing Outlook
Gen Y• Emerging Adults
• Plugged in
• Social
• Educated
• Outspoken
• More liberal
• Multicultural
• High performance
• High expectations
• Marry later – buy later
• Fewer children, later
33
Gen Y Housing• Seen the housing collapse
• Currently 51% rent
• 80+% eventually want to buy
• First-time buyers mostly with financial constraints to buying
• Jobs and student debt = less savings for down payment
• First-time buyers <30% vs. historic 40%
• “Gen Rent”
Sources: M. Leanne Lachman and Deborah L. Brett, “Generation Y: America's New Housing Wave,” Urban Land, February 2011,
FNMA National Housing Survey; Pew Research Group; Real Estate Center at Texas A&M University
Mortgage and 10-Year Treasury Rates are DOWN
1.0
2.0
3.0
4.0
5.0
6.0
Jan
-09
Ap
r-09
Ju
l-09
Oct-
09
Jan
-10
Ap
r-10
Ju
l-10
Oct-
10
Jan
-11
Ap
r-11
Ju
l-11
Oct-
11
Jan
-12
Ap
r-12
Ju
l-12
Oct-
12
Jan
-13
Ap
r-13
Ju
l-13
Oct-
13
Jan
-14
Ap
r-14
Ju
l-14
Oct-
14
Jan
-15
Inte
rest
Rat
e
10-YR Treasury 30-YR Mortgages
Source: Federal Reserve Bank of St. Louis; FHLMC; Real Estate Center at Texas A&M University
1,012
970964
779
844
899
811813
1,151
1,309
1,132
888892
1,162
1,4511,433
1,194
852
705
663
1,0671,0841,072
1,1791,146
1,081
1,003
895
840
1,030
1,126
1,198
1,076
1,1611,134
1,2711,303
1,231
1,273
1,359
1,499
1,610
1,716
1,465
1,046
622
445471
434
537
621
647
803*
1,100*
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,8001 2 3 4 5 6 7 8 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
New SF Home Starts
*NAHB projections Feb 2015
Source: US Census Bureau; NAHB; Real Estate Center at Texas A&M University
(000s SAAR)
1963-2002 average per year (1.06 million)
NAHB HMI & SF Starts
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
10
20
30
40
50
60
70
80
90
100
Jan
-90
Ju
l-90
Jan
-91
Ju
l-91
Jan
-92
Ju
l-92
Jan
-93
Ju
l-93
Jan
-94
Ju
l-94
Jan
-95
Ju
l-95
Jan
-96
Ju
l-96
Jan
-97
Ju
l-97
Jan
-98
Ju
l-98
Jan
-99
Ju
l-99
Jan
-00
Ju
l-00
Jan
-01
Ju
l-01
Jan
-02
Ju
l-02
Jan
-03
Ju
l-03
Jan
-04
Ju
l-04
Jan
-05
Ju
l-05
Jan
-06
Ju
l-06
Jan
-07
Ju
l-07
Jan
-08
Ju
l-08
Jan
-09
Ju
l-09
Jan
-10
Ju
l-10
Jan
-11
Ju
l-11
Jan
-12
Ju
l-12
Jan
-13
Ju
l-13
Jan
-14
Ju
l-14
Jan
-15
Ho
usi
ng
Star
ts, t
ho
usa
nd
s
HM
I
Housing Market Index Single-Family Starts
36Source: NAHB, Real Estate Center at Texas A&M University
Source: Real Estate Center at Texas A&M University
Annual Texas Home Sales
100,04799,619
107,107
116,604
122,134
121,823
138,123
146,395
170,638
184,056188,738
196,401201,528
216,147
241,020
266,842
292,805
275,584
232,381
213,334
203,637205,786
238,060
276,459
284,790
$50,000
$70,000
$90,000
$110,000
$130,000
$150,000
$170,000
$190,000
$210,000
$230,000
$250,000
$270,000
$290,000
$310,000
50,000
70,000
90,000
110,000
130,000
150,000
170,000
190,000
210,000
230,000
250,000
270,000
290,000
310,0001
99
0
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Sales Avg Price Md Price
Sales
2013 up 16%
2014 up 3%
37
March Closed Sales Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.
March Average Sales Price/sq.ft.Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.
Texas Monthly Home Sales & WTI Price/blJanuary 1986 to Present
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
32,000
34,000
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150
1986-1989
1990-1995
1996-1999
2000-2005
2006-2009
2010-2014
Source: EIA; Real Estate Center at Texas A&M University
WTI Spot Price FOB Cushing, OK
Texas SF Building Permits
67,87066,161
78,714
103,252
84,565
67,964
59,143
43,975
35,90836,65838,233
46,209
59,543
69,96470,452
70,421
83,13282,228
99,912 101,928
108,782111,915
122,913
137,493
151,384
166,203
163,032
120,366
81,107
68,23068,170
67,254
81,926
93,478
103,050
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,0001
98
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4p
2014 up 10%; slightly below
1995-2012 average (104,800)
Source: US Census Bureau, Real Estate Center at Texas A&M 41
Texas SF Permits & WTI Price/bblMonthly January 1991 to Current
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150
1991-1995
1996-1999
2000-2004
2005-2009
2010-2014
Source: U.S. Census; EIA; Real Estate Center at Texas A&M University
Avg. Monthly WTI Spot Price FOB Cushing, Ok
Texas Median Home Price
68,50068,10071,200
75,20078,20080,00081,600
86,40090,600
96,200
100,900
112,100
119,400
124,500127,700
130,100
136,800
143,100147,300146,900
145,800147,600148,800
158,000
172,300
184,400
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
$150,000
$160,000
$170,000
$180,000
$190,000
$200,000
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
Source: Real Estate Center at Texas A&M University 43
2013 +9.1%
2014 +7.0%
Texas Median Price & WTI Price/bblMonthly January 1990 to Current
$50,000
$70,000
$90,000
$110,000
$130,000
$150,000
$170,000
$190,000
$210,000
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150
Source: Avg. Monthly WTI Spot Price FOB Cushing, OK; Real Estate Center at Texas A&M University
Correlation coefficient of 0.86
Home Sales by Price Range
0
2
4
6
8
10
12
14
2004 2014
Source: Real Estate Center at Texas A&M
2004 66% <$160,000
2014 40% < $160,000
Texas MF Building Permits
51,592
59,057
111,026
159,603
95,086
64,247
33,857
5,2513,7453,8508,2739,3048,291
13,879
30,16531,28132,521
40,245
51,576
40,715
28,381
33,95835,79137,53733,036
38,671
47,271
53,196
46,918
15,837
19,741
30,729
54,14553,615
63,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,0001
98
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
46Source: US Census Bureau, Real Estate Center at Texas A&M
2014 +17.4%
March Closed Sales Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.
March Closed Sales Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.Marble Falls
March Average Sales Price/sq.ft.Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.
March Average Sales Price/sq.ft.Y/Y Percent Change
Source: Real Estate Center at Texas A&M University
Waco
Killeen-Temple
BCS
Austin
Williamson Co.Marble Falls
AFFORDABILITY
“Workforce” Housing S & D
How much down?
How much per month?
US and Texas Median Home Price
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
$250,000
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
19
98
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
Source: NAR; Real Estate Center at Texas A&M University
Texas remains a housing bargain, but
not by as much.
The gap between the US and Texas
median price widened to 38%, but has
narrowed to 11%
U.S. Median HH Income & Median Home Price Indexed to 1989
8090100110120130140150160170180190200210220230240250260270280
8090
100110120130140150160170180190200210220230240250260270280
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014e
Source: U.S. Census Bureau; Real Estate Center at Texas A&M University
Real HH Income
Nominal HH Income
Median Home Price
Median Home Price as a Multiple of Median Household Income
3.033.07
3.263.383.43
3.563.49
3.363.353.223.203.253.283.273.29
3.15
3.423.453.553.523.473.49
3.553.513.483.53
3.85
4.07
4.284.40
4.73
4.60
4.34
3.91
3.463.51
3.32
3.47
3.80
3.92
3.33
3.483.60
3.703.82
3.653.61
3.44
3.613.563.573.70
4.014.134.154.10
3.983.974.054.03
3.933.943.953.923.964.02
4.15
4.424.50
4.98
5.205.11
4.94
4.61
4.35
4.504.54
4.81
5.18
5.30
2.65
2.41
2.572.692.72
2.602.552.612.58
2.692.61
2.902.92
3.10
3.253.14
3.303.303.203.16
3.073.123.033.04
3.25
3.37
2.10
2.50
2.90
3.30
3.70
4.10
4.50
4.90
5.30
5.70
197
5
197
6
197
7
197
8
197
9
198
0
198
1
198
2
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4e
US New Homes (‘75-’00 avg. = 3.82)
US Existing Homes (‘75-’00 avg. = 3.36)
Source: US Census Bureau, NAR, Real Estate Center at Texas A&M University
Texas MLS Homes (‘89-’10 avg. = 2.88)
Texas’ Uncertain Economy in a World of Uncertain Oil Prices
Dr. James P. GainesResearch Economist
recenter.tamu.edu
2015 Realtors® Leadership ProgramApril 27, 2015
Bryan - College Station