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.

Dr. Mark Dotzour Presentation to Beaumont Board of Realtors

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