Dr. Mark Dotzour Presentation to Beaumont Board of Realtors

8/8/2019 Dr. Mark Dotzour Presentation to Beaumont Board of Realtors

1/21

The EconomicOutlook for Real

Estate SalesVolume

Dr. Mark G. DotzourChief Economist

Real Estate Center

Texas A&M University

College Station, [email protected]


2/21

The Outlook for 2011

Finally !

Turning the Corner .

but we still have work to be done.


3/21

Manufacturers' New Orders:Non-defense Capital Goods Excluding Aircraft

Source: Department of Commerce


4/21

Personal Consumption Expenditures



5/21

Source: Bureau of Economic Analysis

Car and Light Truck Sales


6/21

Source: Federal Reserve Board

Debt Service Paymentsas a Percent of Disposable Personal Income


7/21

Corporate Profits(With Inventory Valuation Adjustment & Capital Consumption Adjustment)



8/21

National Federation of Independent Business

Small Business OutlookPlanning To Hire People In The Next Six Months


9/21

Corporate Hiring Plans:

Next 6 Months

Source: Business Roundtable

Q4-10 Q3-10 Q2-10 Q1-10

More Jobs 45% 31% 39% 29%

Less Jobs 18% 23% 17% 21%


10/21

Bang the Piata

If you promise the voters more candy, they will

re-elect you. Dont worry that you have no way

to pay for your promises.


11/21

Examples

$43 Trillion unfunded liability for Social Securityand Medicare

Prosecuting wars in Iraq and Afghanistan off-budget

FRANNIE losses are also off-budget

Health care plan supposed to pay for itselfpremised on the doctors haircut.

States and cities with underfunded pensions

Banks and Wall Street taught us the perils of off-balance sheet financing and now the federalgovernment is doing the same thing.


12/21

When the piata breaks

and the candy is gone


13/21

The Short-Term Pain of Living

Within Our Means: Austerity

So far,this has been

postponed by:

-Foreclosure postponements-Foreclosure moratorium,

-Federal subsidies

to states and cities,

-Extended unemploymentbenefits,

-Tax credits to buy stuff.


14/21

Home Sales Volume

Job Growth Low mortgage rates

Home price appreciation


15/21

People Who Plan to Buy a Homein the Next Six Months

Source: The Conference Board


16/21

Builders SentimentCurrent Sales Are Good

Source: National Association of Home Builders


17/21

Mortgages Rates Create Historic

Opportunity to Buy a Home


18/21

0

1

2

3

4

5

6

7

8

9

10

11

12

2001-Jan

Mar

May

JulSep

Nov

2002-Jan

Mar

May

JulSep

Nov

2003-Jan

Mar

May

JulSep

Nov

2004-Jan

Mar

May

JulSep

Nov

2005-Jan

Mar

May

JulSep

Nov

2006-Jan

Mar

May

JulSep

Nov

2007-Jan

Mar

May

JulSep

Nov

2008-Jan

Mar

May

JulSep

Nov

2009-Jan

Mar

May

JulSep

Nov

2010-Jan

Mar

May

JulSep

Nov

Months

Inventory of Unsold Homes

Beaumont

Source: Real Estate Center

Jan. 2001 to present


19/21

Four-Quarter Percentage Change

in FHFA Price Index

-4-2

0

2

46

8

10

12

1q-

04

2q-

04

3q-

04

4q-

04

1q-

05

2q-

05

3q-

05

4q-

05

1q-

06

2q-

06

3q-

06

4q-

06

1q-

07

2q-

07

3q-

07

4q-

07

1q-

08

2q-

08

3q-

08

4q-

08

1q-

09

2q-

09

3q-

09

4q-

09

1q-

10

2q-

10

3q-

10

Series 1


20/21

Employment in Beaumont

162000

163000

164000

165000

166000

167000

168000

169000

170000


21/21

ConclusionsJob growth will increase in 2011.

Mortgage rates could increase by a percent.

Home sale volume should be stronger in the secondhalf of the year after the negative impact of the

tax credit dissipates.

Documents

Dr. Mark Dotzour Presentation to Beaumont Board of Realtors