Financial Standpoint for Focal Texas Land

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The staff of the Real Estate Center wish you and yours an upbeat and prosperous new year! This year points the 35th commemoration of the Real Estate Center. ...

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Financial Outlook for Central Texas Real Estate Dr. James P. Gaines Research Economist Real Estate Center Texas A&M University jpgaines@tamu.edu

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News Publications RECON Newsletter Data Market Reports Tierra Grande is our quarterly magazine with opportune research and investigation of the patterns and occasions molding Texas land today. Specialists on evaluation, lodging , back, law, demography, financial matters, speculation and different ranges share bits of knowledge inaccessible anyplace else. Building grants Employment Home Sales Housing Affordability Population Rural Land You'll be an insider – on the off chance that you subscribe to our electronic bulletin RECON. RECON is an acronym for Real Estate Center Online News. It's a twice-week by week instructions on Texas land news. As of now more than 20,000 supporters worldwide are marked on. Best of all, RECON is free. Wanting to put resources into Texas land? It is safe to say that you are searching for nearby land advertise data for Texas urban communities? Click here for broad information for each metro range in the Lone Star state. Our reports incorporate business patterns, populace, private, multi-family, office, mechanical and retail data. RECON News Releases Events Calendar Videos TRECI Index Events Calendar Happy New Year! The staff of the Real Estate Center wish you and yours a cheerful and prosperous new year! This year points the 35th commemoration of the Real Estate Center. In 1971, Gov. Preston Smith marked enactment making the Texas Real Estate Research Center and set it at Texas A&M University. Educator Training Courses , May 18-19, College Station, Texas. The Legal Update and Ethics teacher instructional classes incorporate credit for the required 3-hour Legal Update course and the required 3-hour Ethics course. Likewise, every educator instructional class will incorporate a brief introduction to the instructor's manuals for every course and additionally a dialog of preparing issues. Land CENTER at TEXAS A&M UNIVERSITY Mays School of Business http://recenter.tamu.edu

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We've Spent a Lot of Time Around the Ole Water Cooler

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Summary of the "Incomparable Recession" A 0% reserves rate, $1.4 trillion yearly shortfall and a $2.2 trillion Fed monetary record Approximately $3.5 Trillion in all out government jolt Nearly 33% of mortgage holders have negative value 1 in 6 are either unemployed or underemployed. 1 in 7 mortgage holders either reprobate or in the dispossession procedure Small business disappointments are up 44% y/y 20% - 30% slide in home costs half dive in business land values

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Percent Growth in Real GDP Since 2000 Seasonally Adjusted Annual Rate A deadened 2.7% expansion amid first 50% of 2010 Source: Bureau of Economic Analysis

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Personal utilization speaks to around 70% of US economy and is hinting at recuperation Personal Consumption Expenditures Source: Department of Commerce, SAAR

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Consumer Confidence Index 7 cycles since 1967: Avg. amid subsidence = 72 Avg. at end of subsidence = 71.5; Avg. amid a development = 102 Source: The Conference Board (1985=100)

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Annual Employment Growth Rates for US and Texas US Source: BLS

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Annual Employment Growth Rates for US, Texas and Austin MSA Austin Texas US Source: BLS, TWC, Real Estate Center at Texas A&M University

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Measures of Un-and Underemployment Percent SA U-6, the broadest measure Headline Rate Source: BLS

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Measures of Un-and Underemployment Percent SA U-6, the broadest measure Headline Rate Austin Source: BLS

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Unemployment Rate by Level of Education June 2010 Source: BLS , 25-years of age +; Seasonally balanced rates

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Small Business Outlook "Wanting To Hire People In The Next Six Months" Source: National Federation of Independent Business

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Are There Secular Changes Going On Given Economy, Credit Collapse and Household Net Worth Implosion? Obligation & Savings Discretionary spending designs Homeownership Financial System & Banks

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A Thought from Maxine "BAIL EM OUT! ????" Wow, in 1990, the Government grabbed the Mustang Ranch whorehouse in Nevada for duty avoidance and, as required by law, attempted to run it. They fizzled, and it shut. Presently we are believing the car business, the managing an account framework and human services to a similar boneheads who couldn't profit running a prostitute house and offering bourbon!

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Looking Ahead to 2010 & 2011

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Our Last Economic and Housing Forecasting Staff Meeting

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Major Hurdles for 2010 & 2011 State, neighborhood and school areas' falling incomes Credit compression proceeds – business, customer credit, contracts Jobs, wage and spending Pending changes in laws, directions and duties – capital increases assess; top and exchange; money related organizations & keeping money regs – UNCERTAINTY! "Broaden & Pretend" in keeping money framework "Abandonment entryway" Psychological discomfort

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Texas Scenarios for 2010-2011 Texas slacked into retreat might lead out Expect work misfortunes to stop and new employments to begin being made, 1.5% possibly 2% work development in 2010 Natural gas costs and action generally as critical as oil costs Flat lodging deals and costs until economy genuinely recuperates Small and provincial bank issues to work out State, neighborhood and school regions monetary issues just truly beginning In-movement ought to reinvigorate financial development and lodging markets

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Texas Index of Leading Indicators (1987=100) Source: Federal Reserve Bank of Dallas

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Texas Retail Sales Monthly SEASONALLY ADJUSTED , BILLIONS OF DOLLARS Source: Federal Reserve Bank of Dallas

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The Housing Market

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Current Housing Trends Tax credit & coordinate sponsorships over Household creation moderate; generational lodging inclinations changing Purchase contracts substantially more hard to acquire – tight endorsing Renting a more suitable alternative Appraisals are real issue in buys Jumbo home advances and ADC advances troublesome Housing deflationary desires

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Lost Wealth: Households' Equity in Real Estate $6.2 trillion or 47% in lost land value RE Equity about where it was in 1999-2000 Source: Federal Reserve, Flow of Funds, B-100

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Total HH Home Mortgage Borrowing $0.5 trillion somewhere around 1972 and 1979; $1.5 trillion somewhere around 1980 and 1989; $2.1 trillion somewhere around 1990 and 1999; $6.1 trillion somewhere around 2000 and 2007 Source: Federal Reserve, Flow of Funds, D-2

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First-Time Home Buyers (Percent of Total Home Buyers) Top Four Reasons for First-Time Buyers: Desire to Own (62%) Current Affordability (10%) Change in Family Situation (8%) Tax Credit (6%) Source: NAR, 2009 Profile of Home Buyers and Sellers

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US Mortgage Delinquency Rates US contract wrongdoing rate set record-breaking high in 4Q2009 Subprime Mortgages All Mortgages Prime Mortgages Source: Mortgage Bankers Association, National Delinquency Survey

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Monthly Foreclosure Filings Texas dispossessions have been much more steady than US Source: RealtyTrac, Inc. Information incorporate Notices of Trustee Sales in addition to Notices of Foreclosure Sale

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New and Existing SF Home Sales U.S. (000s) Existing SF deals are down 21% from 2005 pinnacle 1980-1989 3.55 million every year 1990-1999 4.7 million every year 2000-2006 7.15 million every year 2007-1H2010 4.3 million every year New SF deals are down 78% from 2005 pinnacle Sources: US Census Bureau , NAR, NAHB, NBER

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Distressed Home Sales Total Distressed Sales Foreclosures Short Sales Source: NAR

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Number of Housing Units Vacant and Held Off Market Total stock of empty units might be more like 9 million, including apartment suites, dispossessions and different properties viably empty Source: US Census Bureau

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Annual U.S. Middle Existing Home Price Percent Change Since 2005, middle cost of a SF home is down 23.5% Source: NAR

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US Median Home Prices Since 1990 National House Price Bubble 12-Month Moving Average Since 2001 1990-2000 Trend Source: NAR, Real Estate Center at Texas A&M University

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National Housing Affordability Index Average 1994-2003 = 132.4 Drop of 31.5% from April 2003 to July 2006 Source: NAR Composite Index

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US Total Housing Starts Total Units & 12-Month Moving Average Monthly Units 12-Month Moving Avg. Source: US Census Bureau, Real Estate Center at Texas A&M

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Has the Housing Market Bottomed? Reply: possibly, ideally, most likely. In any case, despite everything we may not by any means know without a doubt for an additional a while. Can the market maintain itself without huge Federal government help  Foreclosures will remain high. Countless ARM and prime ARM contracts reset beginning this quarter and experiencing all one year from now and into 2011. The strength of the lodging market, broadly and locally, relies on upon a general financial recuperation - particularly ceasing the loss of occupations and ideally including new employments. The lodging business sector may have bottomed out, however will most likely have a long, moderate recuperation – think 5 to 10 years, not only maybe a couple.

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Number of Years to Clear Available Inventory When and How Does the Housing Market Go Back to "Ordinary"? * 2009 yearly deals level Somewhere between mid-2012 and 2014

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Texas & Austin Housing Markets

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Texas Single-Family Market Source: Real Estate Center at Texas A&M University; NTREIS * 12-month moving normal to date; # 3Q2009 versus 3Q2010

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Texas Single-Family Market 3Q2010 Source: Real Estate Center at Texas A&M University

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Annual Texas Home Sales 2009 = deals down 8% from 2008 levels 2010 ought to be generally level about equivalent to 2001-2003 levels Source: Real Estate Center at Texas A&M University

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Texas Home Sales 12-Month Moving Average

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