Dr. James P. Gaines
Research Economist
recenter.tamu.edu
CURRENT SITUATION
“The Future Just Isn’t What It Used to
Be!”
Yogi Berra
National & Global Issues
• Price of single most important commodity – oil – fell by half in span
of a few months
• Europe is in recession and reserve interest rate for ECB is negative:
EU disinflation real possibility
• Russia is experiencing full-blown currency crisis & recession with
high inflation (Central Bank of Russian Federation at 17% rate)
• Mid-east instability: geo-political unrest growing and critical
• Emerging markets in meltdown mode: China and India growth ~ half
or less of past several years, Russia & Brazil in recession
• Bull market in stocks very advanced: margin borrowing
• Fed is basically out of ammunition; rates rise mid-2015 +/- ??
• Money flowing into US for protection keeping rates down
• Volatility in credit and hedging exceedingly high and volatile
• Possible sovereign debt default now back on radar
3
Oil Prices & Energy
• Prices may not have bottomed yet:
– Saudi Arabia continues to protect its market share, and
therefore cuts prices in order to maintain sales volume.
– Global oil production increases before it decreases.
– Global oil demand does not rapidly increase even with
rapidly-falling prices.
• In the second week of December the Baker Hughes rotary
rig count for the U.S. had the biggest one-week slide since
March 2013, falling by 27 rigs to 1,893. Still a strong
number, but clearly off the September peak.
• Expect significant cut back in upstream capital spending
on E&P, i.e., fewer wells drilled
• Increased geo-political-military volatility among oil
producing nations that need (require) $95-$100+ oil price
4
US Issues
• Expected GDP growth still modest: 2015
2.8%; personal consumption 2.5%
• 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
5
Texas Issues
• Price of oil fell ~half since July
• National economy, High Tech & Healthcare
sectors still fairly strong: major influences
• Energy-dependent local economies (e.g.
Houston, Corpus) 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?
6
Dollars per Barrel
$150
$140
$130
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
1/7/2000
4/6/2000
7/5/2000
10/3/2000
1/1/2001
4/1/2001
6/30/2001
9/28/2001
12/27/2001
3/27/2002
6/25/2002
9/23/2002
12/22/2002
3/22/2003
6/20/2003
9/18/2003
12/17/2003
3/16/2004
6/14/2004
9/12/2004
12/11/2004
3/11/2005
6/9/2005
9/7/2005
12/6/2005
3/6/2006
6/4/2006
9/2/2006
12/1/2006
3/1/2007
5/30/2007
8/28/2007
11/26/2007
2/24/2008
5/24/2008
8/22/2008
11/20/2008
2/18/2009
5/19/2009
8/17/2009
11/15/2009
2/13/2010
5/14/2010
8/12/2010
11/10/2010
2/8/2011
5/9/2011
8/7/2011
11/5/2011
2/3/2012
5/3/2012
8/1/2012
10/30/2012
1/28/2013
4/28/2013
7/27/2013
10/25/2013
1/23/2014
4/23/2014
7/22/2014
10/20/2014
1/18/2015
West Texas Intermediate Spot Oil
Price FOB, Cushing, OK
US shale oil started coming on line in
2008
Source: EIA Weekly Price
7
$40
Source: EIA
12/18/2014
12/4/2014
11/20/2014
11/6/2014
10/23/2014
10/9/2014
9/25/2014
9/11/2014
8/28/2014
8/14/2014
7/31/2014
7/17/2014
7/3/2014
6/19/2014
6/5/2014
5/22/2014
$110
5/8/2014
4/24/2014
4/10/2014
3/27/2014
3/13/2014
2/27/2014
2/13/2014
1/30/2014
1/16/2014
1/2/2014
Dollars per Barrel
2014 Daily WTI Spot Oil Price
FOB, Cushing, OK
$120
6/20/14
107.95
$100
$90
$80
$70
$60
$50
8
0
Jan-50
Jan-51
Jan-52
Jan-53
Jan-54
Jan-55
Jan-56
Jan-57
Jan-58
Jan-59
Jan-60
Jan-61
Jan-62
Jan-63
Jan-64
Jan-65
Jan-66
Jan-67
Jan-68
Jan-69
Jan-70
Jan-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
Texas Active Rig Count
1,600
1,400
1,200
1,000
800
600
400
200
Source: Baker Hughes, Haver Analytics
9
National Economic
Recovery still Going …
10
2014 U.S. Economy







Sustained below average GDP growth
Continued relatively low inflation
Slow job recovery: more people are working
& jobs created, but still ~1 million < peak
Interest rates low – FED actions key with
small changes
Cautious optimism: households & businesses
Greater credit capacity again, but lenders
slow to lend
Regulatory uncertainty & political risk
continue to fuel private sector indecision
11
Percent Change in Real GDP Since 1947
10.0%
9.0%
Average 3.4% rate of growth per year 1947-2005
8.7%
8.0%
7.7%
7.2%
7.2%
7.2%
7.0%
6.5%
6.4%
6.1%
6.0%
5.0%
5.8%
5.8%
5.3%
4.4%
4.0%
5.4%
4.8%
4.6%
5.6%
4.6%
4.4%
4.1%
3.8%
3.1%
3.0%
2.5%
2.3%
3.4%
4.1%
3.6%
3.5%
3.2%
3.1%
2.5%
2.5%
3.8%
3.4%
3.3%
2.9%
2.0%
2.0%
2.0%
4.8%
4.5%
4.4%
4.1%
4.1%
3.7%
4.5%
2.8%
2.5%
1.9%
1.8%
2.8%
2.7%
2.5%
1.8%
2.3%
2.2%
1.6%
1.0%
1.0%
0.2%
0.0%
-1.0%
-2.0%
-0.5%
-0.9%
-0.6%
-0.2%
-0.6%
-0.2%
-0.3%
-0.9%
-1.9%
-3.0%
-2.8%
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
2014e
-4.0%
-0.3%
Source: BEA
Consumer Confidence Index
140
130
Texas
120
110
100
90
80
70
60
Recession
50
40
U.S.
30
Source: The Conference Board (1985=100); Haver Analytics
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
10
Jan-07
20
13
10.0%
Jan-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
Inflation Remains Relatively Low
16.0%
14.0%
12.0%
Consumer Price Index for All Urban
Consumers: All Items
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
Source: BLS
14
U.S. Jobs Finally Recovered
150,000
2013 1.7% increase
2014e ~ 2.4% increase
140,000
136,368
134,104
134,005
132,074
132,019
131,749
130,628
130,318
129,240
130,000
131,842
131,233
130,275
126,157
122,951
119,836
120,000
117,407
114,398
110,000
110,935
109,527
108,802
108,427
100,000
2014e
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
90,000
1990
Thousands of Jobs
138,823
137,936
137,170
136,398
15
Sources: BLS, Real Estate Center at Texas A&M University
Texas Outlook
 Oil prices and energy sector major issue for 2015 &
2016
 Downstream Energy, High tech, healthcare and
business services fueling job growth that is
expected to stay relatively strong
 Downside: national (global) recession ??
 Population expansion continues to fuel growth
 Local Growth Issues becoming more pressing,
causing greater strain on state and local
infrastructure and resources
16
90.0
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Texas Leading Economic Index
135.0
130.0
125.0
120.0
115.0
110.0
105.0
100.0
95.0
Source: Dallas Federal Reserve
17
Texas Annual Jobs
12,000,000
11,607,800
2012 & 2013 2.9% increase
2014 ~3.3% vs. 1.8% U.S.
11,000,000
10,000,000
11,190,200
10,875,000
10,606,300
10,567,500
10,392,700
10,304,200
10,336,900
10,063,500
9,737,500
9,510,900
9,494,200
9,428,900 9,412,700
9,366,900
9,157,300
8,940,500
9,000,000
8,610,900
8,260,300
8,027,300
8,000,000
7,755,600
7,485,500
7,272,800
7,177,300
7,098,900
7,000,000
6,000,000
Jul-14
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
5,000,000
18
Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University, SA
FW-A Annual Jobs
1,000,000
2013 & 2014 2.65% increase
944,183
919,800
896,000
876,800
870,800
864,400
849,400
840,900
845,300
815,700
798,500
796,300
795,000
789,100
782,700
769,600
900,000
800,000
742,800
710,300
700,000
600,000
681,500
656,400
634,300
613,800
597,100
596,500
595,400
500,000
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
400,000
19
Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University
190.0
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
FW-A Business-Cycle Index
370.0
350.0
330.0
310.0
290.0
270.0
250.0
230.0
210.0
Source: Dallas Federal Reserve
20
$4,000
Source: Dallas Federal Reserve
2014:Q1
2013:Q1
2012:Q1
2011:Q1
2010:Q1
2009:Q1
2008:Q1
2007:Q1
2006:Q1
2005:Q1
2004:Q1
2003:Q1
2002:Q1
2001:Q1
2000:Q1
1999:Q1
1998:Q1
1997:Q1
1996:Q1
1995:Q1
1994:Q1
1993:Q1
1992:Q1
1991:Q1
1990:Q1
1989:Q1
1988:Q1
1987:Q1
1986:Q1
1985:Q1
Millions
FW-A Retail Sales
$12,000
$11,000
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
21
FW-A Jobs Up to New Record High
1,000,000
Jobs up 2.5% in 2014
950,000
942,336
919,800
896,000
900,000
876,800
870,800
864,400
849,400
845,300
840,900
850,000
815,700
798,500
796,300
795,000
789,100
782,700
769,600
800,000
742,800
750,000
710,300
700,000
681,500
656,400
650,000
600,000
634,300
613,800
597,100
596,500
595,400
2014e
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
500,000
1990
550,000
22
Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University
700,000
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
1,000,000
FW-A Monthly Jobs Approaching
1,000,000
950,000
900,000
850,000
800,000
750,000
Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University; SA
23
Overall Growth and Change in State
Population 2010-2050
Texas
Population
D-FW
Population
Houston
% of
State Total
Population
% of
State Total
Austin
Population
San Antonio
% 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%
82% of total increase will go to the Major MSAs
24
Sources: U. S. Census; Texas State Demographer 2014 Projections (2000-2010 Scenario)
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
25
2013 Texas population by Age
8,000,000
7,159,172
7,000,000
Total 26,664,574
6,000,000
26.8%
5,000,000
3,825,377
4,000,000
3,000,000
3,614,086 3,484,545
11.0% 65+
2,730,371
14.3%
13.6%
10.2%
2,000,000
13.1%
1,743,317
1,591,662
1,304,789
879,010
1,000,000
6.0%
4.9%
6.5%
3.3%
332,245
1.2%
0
0 to 17
years
18 to 24
years
25 to 34
years
35 to 44
years
45 to 54
years
55 to 59
years
60 to 64
years
65 to 74
years
75 to 84
years
85 years
and over
26
Source: Texas State Demographer’s Office 2012 Projections 2000-2010 1.0 Scenario
Percent Change from 2010 to 2050 by
Age Groups in the Texas Population
300%
259.0%
250%
200%
150%
119.5%
89.4%
100%
101.8%
111.7%
110.5%
25-44
45-64
50%
0%
ALL
<18
18-24
Sources: Texas State Demographer’s Office 2012 Projections 1.0 Scenario
65+
27
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
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%
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
28
Why Are They Called Gen-Y?
• People born before 1946 were called The Silent
or Greatest generation.
• People born between 1946 and 1964 are called
The Baby Boomers.
• People born between 1965 and 1979 are called
Generation X.
• And people born between 1980 and 2010 are
called Generation Y.
Why do we call the last group Generation Y?
Why Are They Called Gen-Y?
Some possible reasons:
•
•
•
•
•
•
Y should I get a job?
Y should I leave home and find my own place?
Y should I get a car when I can borrow yours?
Y should I clean my room?
Y should I wash and iron my own clothes?
Y should I buy any food?
But one cartoonist explained it very eloquently...
Why Are They Called Gen-Y?
Top Housing Issues
• Affordability and sustainable price increases
• Mortgage interest rates
• Construction & labor costs
• Lot inventory for new construction
• Mortgage market changes: QRM; FNMA loan
limits; variable qualifying; closing costs;
• Higher “other” costs: taxes, insurance
• Stronger rental market
• Return to fundamentals: employment/income,
household formations, affordability
32
Mortgage and 10-Year Treasury Rates
are DOWN
6.0
10-YR Treasury
30-YR Mortgages
5.0
3.0
Source: Federal Reserve Bank of St. Louis; FHLMC; Real Estate Center at Texas A&M University
Jan-15
Oct-14
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
1.0
Apr-09
2.0
Jan-09
Interest Rate
4.0
New and Existing SF Home Sales U.S.
Existing Home Sales 000s
New Home Sales 000s
8,000
1,600
7,000
1,400
Existing SF Home Sales
6,000
1,200
(left axis)
5,000
1,000
4,000
800
3,000
600
2,000
400
New Home Sales
Sources: US Census Bureau , NAR, SAAR
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
200
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Jul-00
Jan-00
0
Jan-05
(right axis)
1,000
0
34
Why Aren’t New Home Sales
Increasing Faster?
• First-time/move up buyer employment and
financing difficulties
• Home builders maxed out in many cases
• Employment & income stability and outlook
• Rent vs. Buy: flexibility; negative stigma; no choice
• Profit margins to builders better on higher-priced
homes
• Bulk institutional investor buyers have run course
• Local regulatory controls and fees increasing cost
of new home development
35
0
Jan-90
Jul-90
Jan-91
Jul-91
Jan-92
Jul-92
Jan-93
Jul-93
Jan-94
Jul-94
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
HMI
100
Housing Market Index
90
1,800
80
1,600
70
1,400
60
1,200
50
1,000
40
800
30
600
20
400
10
200
Source: NAHB, Real Estate Center at Texas A&M University
0
36
Housing Starts, thousands
NAHB HMI & SF Starts
2,000
Single-Family Starts
Median Price of New & Existing SF Homes
$300,000
$279,473
New 2013 up 10%
2014 up 6%
Existing 2013 up 11.5%
2014 up 6%
$280,000
$260,000
$240,000
$220,000
$200,000
$247,900
$221,900
$206,782
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
Source: U.S. Census Bureau; NAHB; NAR
2014YTD
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
$20,000
1968
$40,000
Annual Texas Home Sales Near Peak
310,000
292,805
2014 up 3%
Second best year ever!
290,000
270,000
284,648
276,361
275,584
266,842
250,000
241,020
238,060
232,381
230,000
216,147
210,000
213,334
205,786
203,637
201,528
196,401
188,738
184,056
190,000
170,638
170,000
146,395
150,000
138,123
122,134
121,823
116,604
130,000
110,000
107,107
100,047
99,619
90,000
70,000
Source: Real Estate Center at Texas A&M University
38
2014p
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
50,000
Record Texas Median Home Price
Four Years in a Row
2013 up 9%; 2014p +7%
Record highs last 5 years!
184,400
172,300
158,000
148,800
147,600
147,300
146,900
145,800
143,100
136,800
130,100
127,700
124,500
119,400
112,100
Source: Real Estate Center at Texas A&M University
2014p
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
100,900
96,200
90,600
86,400
81,600
78,20080,000
75,200
71,200
68,50068,100
1989
$200,000
$190,000
$180,000
$170,000
$160,000
$150,000
$140,000
$130,000
$120,000
$110,000
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
39
Texas SF Building Permits
180,000
160,000
166,203
163,032
2014YTD up ~7.5%; marked slowdown
1995-2012 average (104,800)
151,384
137,493
140,000
122,913
120,000
111,915
108,782
99,912 101,928
103,252
100,000
82,228
83,132
70,452
69,964 70,421
78,714
67,870
66,161
60,000
102,400
93,478
84,565
80,000
120,366
67,964
81,107
81,926
68,170
68,230 67,254
59,543
59,143
46,209
36,658
35,908 38,233
43,975
40,000
0
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
2014e
20,000
Source: US Census Bureau, Real Estate Center at Texas A&M
40
Texas MF Building Permits
180,000
2014 MF permits Up ~22%
159,603
160,000
140,000
120,000
111,026
100,000
95,086
80,000
65,700
64,247
59,057
51,592
54,145
53,615
53,196
51,576
40,245 40,715
30,165
32,521
31,281
37,537
35,791
33,958
33,036
30,729
28,381
Source: US Census Bureau, Real Estate Center at Texas A&M
2014e
2013
2012
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
15,837
13,879
9,304
8,291
3,8508,273
5,251
3,745
2008
20,000
19,741
2011
33,857
46,918
2010
40,000
47,271
38,671
2009
60,000
41
Fort Worth is Generally
Following the State
Trend in Housing
Recovery
42
Greater Fort Worth Annual Home Sales
*
30,000
25,000
28,490
2013e up 20% uniformly all 3
markets
2014p up 10%
26,347
25,395
26,221 26,293
23,428
22,196
21,102
20,421
19,732
20,000
18,518
17,766
21,187
19,513
18,541
18,377
16,025
15,000
14,334
13,618
13,462
12,567
11,187
10,000
13,152
11,242
11,212
11,913
10,054
9,224
8,659
9,916 10,034
9,555
9,236
8,450 8,117
7,858
5,000
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
2014p
0
Source: Real Estate Center at Texas A&M
*Fort Worth, Arlington & NE Tarrant Co.
Greater Fort Worth Home Sales & WTI Price
Monthly January 1995 to Current
2,600
2,400
2,200
1,800
1,600
1,400
1,200
1,000
800
$150
$140
$130
$120
$110
Monthly WTI Crude Price $/bl
$100
$90
$80
$70
$60
$50
$40
$30
400
$20
600
$10
Monthly Home Sales
2,000
44
Source: EIA; Real Estate Center at Texas A&M
Median Home Prices: Fort Worth,
Arlington & NE Tarrant County
$210,000
Fort Worth
Arlington
Northeast Tarrant County
$190,000
$170,000
$150,000
$130,000
$110,000
$90,000
Source: Real Estate Center at Texas A&M University
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
$50,000
1990
$70,000
45
Greater Fort Worth Median Home Price
180,000
170,000
160,000
Average increase 1990-2007 = 3%
2012 +6.7%; 2013 +8.7% & 2014p +7.7%
150,000
130,000
125,568
124,139
121,200
117,224
120,000
100,000
90,000
80,000
155,344
142,801
136,720
136,668
135,366 136,678
133,952
133,061
133,816
140,000
110,000
167,304
109,858
102,891
99,948
95,386
90,904
87,776
83,982
83,076
80,376
80,215
76,459
76,395
70,000
Source: Real Estate Center at Texas A&M University
2014p
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
50,000
1989
60,000
Greater Fort Worth Median Home Price
12-Month Moving Average
180,000
170,000
Median price moving ahead of long-term trend
160,000
150,000
140,000
130,000
120,000
110,000
100,000
90,000
70,000
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
80,000
Source: Real Estate Center at Texas A&M University
47
0.0
Source: Real Estate Center at Texas A&M
500,000 and more
400,000 - 499,999
300,000 - 399,999
250,000 - 299,999
200,000 - 249,999
180,000 - 199,999
160,000 - 179,999
Arlington
140,000 - 159,999
120,000 - 139,999
100,000 - 119,999
Fort Worth
90,000 - 99,999
80,000 - 89,999
70,000 - 79,999
60,000 - 69,999
16.0
50,000 - 59,999
40,000 - 49,999
30,000 - 39,999
$29,999 or less
Percent of Sales
GFW 2014 Home Sales by Price
NE Tarrant Co.
14.0
12.0
10.0
Fort Worth median $143,000
Arlington median $158,000
8.0 NE Tarrant Co. median $202,200
6.0
4.0
2.0
48
8.0
Greater Fort Worth* Months’
Inventory
Long-term average 6 months inventory
7.0
6.0
5.0
4.0
2.0
1.0
Fort Worth 2.2 months
Arlington 1.4 months &
NE Tarrant Co. 1.4 months
Jan-00
Jun-00
Nov-00
Apr-01
Sep-01
Feb-02
Jul-02
Dec-02
May-03
Oct-03
Mar-04
Aug-04
Jan-05
Jun-05
Nov-05
Apr-06
Sep-06
Feb-07
Jul-07
Dec-07
May-08
Oct-08
Mar-09
Aug-09
Jan-10
Jun-10
Nov-10
Apr-11
Sep-11
Feb-12
Jul-12
Dec-12
May-13
Oct-13
Mar-14
Aug-14
Jan-15
3.0
Source: Real Estate Center at Texas A&M
*Fort Worth, Arlington & NE Tarrant Co.
49
Fort Worth* Single-Family Building Permits
20,000
2012 up 19%; 2013 up 15%; 2014p +6.7%
17,918
18,000
19 years
16,148
16,000
15,198
13,861
13,407
14,000
12,570
11,959
11,431
12,000
12,218
10,514
10,000
9,263
8,000
7,127
6,587
6,000
4,876
10,321
9,677
9,435
6,481
7,493
7,173
6,537
6,517
6,072
5,369
6,978
6,944
6,507
5,416
5,346
4,815
4,557
5,041
4,988
4,753
4,329
4,000
0
1983-1991 = - 66%
2005-2011 = - 74%
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
2014p
2,000
Source: US Census Bureau, Real Estate Center at Texas A&M University
* Johnson, Parker, Tarrant & Wise Counties
50
DFW SF Permits & WTI Price/bl
Monthly January 1995 to Current
6,000
5,000
4,000
3,000
2,000
1,000
0
$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
Fort Worth Multi-Family Building Permits
25,000
23,163
2013 -12.5%
2014 +28%
22,500
20,000
17,472
17,500
15,000
12,500
10,000
11,967
8,653
7,500
2,500
0
4,853
4,025
3,465
3,567
3,500
3,434 3,135
3,365
3,140 2,862
3,131
3,260
2,839
2,739
2,501
2,474
1,572
2,147
2,070
2,029
1,500
1,360
1,265
777
511
92 101307
0 365
3,339
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
2014p
5,000
Source: US Census Bureau, Real Estate Center at Texas A&M University
* Johnson, Parker, Tarrant & Wise Counties
52
Real Estate:
Location, Location, Location!
Dr. James P. Gaines
Research Economist
recenter.tamu.edu