recenter.tamu · Texas Economic Outlook: 2019 Positive but Slower Growth Than 2018 9 U.S. Economy...

Dr. James P. GainesChief Economist

recenter.tamu.edu

2018 A Very Good Year -2019 Definite Slowdown

2

• Real GDP growth 2018 2.9%+ 2019 ~2.5%

• Jobs expanded ~1.5% Unemployment rate ~4.0%+

• Interest rates up/down during the year;

• Inflation approached 2.5%

• Tax Cuts added positive impacts

• Industrial Production high but less labor

• Income and spending growing

• Real Disposable Personal Income +2.9% thru 3Q18

• Real PCE +2.6% thru 3Q18

• Housing improving, not fully recovered; recent stalling

• U.S. became #1 oil producer and net exporter

Source: The Conference Board (1985=100; NSA); Haver Analytics

Consumer Confidence Index

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

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

Jan

-16

Ju

l-16

Jan

-17

Ju

l-17

Jan

-18

Ju

l-18

Jan

-19

Ju

l-19

3

U.S.

Texas

NFIB Small Business Optimism Index(Overall Index SA 1986 = 100)

84

86

88

90

92

94

96

98

100

102

104

106

108

110

112

114

Ja

n-1

1

Ma

r-11

Ma

y-1

1

Ju

l-1

1

Sep

-11

No

v-1

1

Ja

n-1

2

Ma

r-12

Ma

y-1

2

Ju

l-1

2

Sep

-12

No

v-1

2

Ja

n-1

3

Ma

r-13

Ma

y-1

3

Ju

l-1

3

Sep

-13

No

v-1

3

Ja

n-1

4

Ma

r-14

Ma

y-1

4

Ju

l-1

4

Sep

-14

No

v-1

4

Ja

n-1

5

Ma

r-15

Ma

y-1

5

Ju

l-1

5

Sep

-15

No

v-1

5

Ja

n-1

6

Ma

r-16

Ma

y-1

6

Ju

l-1

6

Sep

-16

No

v-1

6

Ja

n-1

7

Ma

r-17

Ma

y-1

7

Ju

l-1

7

Sep

-17

No

v-1

7

Ja

n-1

8

Ma

r-18

Ma

y-1

8

Ju

l-1

8

Sep

-18

No

v-1

8

Ja

n-1

9

Ma

r-19

Ma

y-1

9

Ju

l-1

9

Source: National Federation of Independent Businesses; based on ten survey indicators

Fed Funds Rate, 10-Year Treasury, 30-Year FMR

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Jan

-07

Ap

r-07

Ju

l-07

Oct-

07

Jan

-08

Ap

r-08

Ju

l-08

Oct-

08

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

Ap

r-15

Ju

l-15

Oct-

15

Jan

-16

Ap

r-16

Ju

l-16

Oct-

16

Jan

-17

Ap

r-17

Ju

l-17

Oct-

17

Jan

-18

Ap

r-18

Ju

l-18

Oct-

18

Jan

-19

Ap

r-19

Ju

l-19

30-Year FMR

Fed Funds Rate

10-Year Treasury

Source: Haver Analytics; FHLMC; St. Louis FED;

Real Estate Center at Texas A&M University

Fed Funds Rate, 10-Year Treasury, 30-Year FMR & Inflation

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Jan

-07

Ap

r-07

Ju

l-07

Oct-

07

Jan

-08

Ap

r-08

Ju

l-08

Oct-

08

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

Ap

r-15

Ju

l-15

Oct-

15

Jan

-16

Ap

r-16

Ju

l-16

Oct-

16

Jan

-17

Ap

r-17

Ju

l-17

Oct-

17

Jan

-18

Ap

r-18

Ju

l-18

Oct-

18

Jan

-19

Ap

r-19

Ju

l-19

30-Year FMR

Fed Funds

10-Year Treasury

Inflation

Source: Haver Analytics; FHLMC; St. Louis FED;


2015-2016 Oil Decline; Down Years

2017 Recovery – A Good Year

2018: Better than 2017

2019 Some Headwinds, but Not Bad

7

Texas Economy

2018 a Very Good Year Economically For Texas

• Rebound from Harvey going strong but not over

• State GDP +3.7% (3Q18) [estimate ~4.5% 2018]

• Personal Income +5.3% vs. 4.5% nationally

• Oil Prices >$70 until 4Q – dropped then rebounded

• Jobs increased 276,100 +2.3%

• Population increased 379,128 to 28,701,845• 190,951 natural increase (50.3%)

• 104,976 foreign immigration (27.7%)

• 82,569 domestic immigration (22%)

8

Texas Economic Outlook: 2019 Positive but Slower Growth Than 2018

9

U.S. Economy stays relatively strong

Employment: ~1.5% - 2.0% from 2.3% in 2018 (revised)

GDP: 3.5% 2019 from ~4.5% 2018

Energy sector neutral; oil prices $40-$60/bl.

Population expansion continues but at slower pace

Exports doing well and contributing to economy – trade

agreements and value of dollar add uncertainty

Retail Sales steady but not significantly higher

Texas’ Leading Economic Index

95.0

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

140.0

Source: Federal Reserve Bank of Dallas, 1987=100

T

e

c

h

W

r

e

c

k

GreatRecession

Oil Bust

A composite of 8 leading indicators: 1) value of

the dollar, 2) U.S. leading economic index, 3)

real oil price, 4) well permits, 5) initial claims

for unemployment insurance, 6) Texas stock

index, 7) help-wanted index, and 8) average

weekly hours worked in manufacturing.

Weekly Active Texas Rig Count & Price of WTI

11

11/21/2014, 906

5/20/2016, 173

6/27/2014, $106.69

2/12/2016, $28.14

$0$10$20$30$40$50$60$70$80$90$100$110$120$130$140$150$160$170$180

100150200250300350400450500550600650700750800850900950

1,000

1/7

/20

00

4/2

8/2

00

08

/18

/200

01

2/8

/200

03

/30

/200

17

/20

/200

11

1/9

/200

13

/1/2

002

6/2

1/2

00

21

0/1

1/2

00

21

/31

/200

35

/23

/200

39

/12

/200

31

2/3

1/2

00

34

/23

/200

48

/13

/200

41

2/3

/200

43

/24

/200

57

/15

/200

51

1/4

/200

52

/24

/200

66

/16

/200

61

0/6

/200

61

/26

/200

75

/18

/200

79

/7/2

007

12/2

8/2

00

74

/18

/200

88

/8/2

008

11/2

6/2

00

83

/20

/200

97

/10

/200

91

0/3

0/2

00

92

/19

/201

06

/11

/201

01

0/1

/201

01

/21

/201

15

/13

/201

19

/2/2

011

12/2

2/2

01

14

/13

/201

28

/3/2

012

11/2

1/2

01

23

/15

/201

37

/3/2

013

10/2

5/2

01

32

/14

/201

46

/6/2

014

9/2

6/2

01

41

/16

/201

55

/8/2

015

8/2

8/2

01

51

2/1

8/2

01

54

/8/2

016

7/2

9/2

01

61

1/1

8/2

01

63

/10

/201

76

/30

/201

71

0/2

0/2

01

72

/9/2

018

6/1

/20

18

9/2

1/2

01

81

/11

/201

95

/3/2

019

Rig Count

(left)

WTI $/bl.

(right)

Rig Count up 318, +184% since May 2016

Source: Baker Hughes; EIA; RE Center at Texas A&M University

Current and Futures Monthly Average Price of WTI

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

Ja

n-1

3

Ma

r-13

Ma

y-1

3

Ju

l-1

3

Sep

-13

No

v-1

3

Ja

n-1

4

Ma

r-14

Ma

y-1

4

Ju

l-1

4

Sep

-14

No

v-1

4

Ja

n-1

5

Ma

r-15

Ma

y-1

5

Ju

l-1

5

Sep

-15

No

v-1

5

Ja

n-1

6

Ma

r-16

Ma

y-1

6

Ju

l-1

6

Sep

-16

No

v-1

6

Ja

n-1

7

Ma

r-17

Ma

y-1

7

Ju

l-1

7

Sep

-17

No

v-1

7

Ja

n-1

8

Ma

r-1

8

Ma

y-1

8

Ju

l-1

8

Sep

-18

No

v-1

8

Ja

n-1

9

Ma

r-19

Ma

y-1

9

Ju

l-1

9

Sep

-19

No

v-1

9

Ja

n-2

0

Ave

rag

e M

on

thly

Pri

ce

Cushing Spot Price

6-Month Futures

12-Month Futures

2-Year Futures

12Sources: EIA; Haver Analytics; Real Estate Center at Texas A&M University

Oil Spot Prices: Cushing & Midland

13Sources: Bloomberg; Dallas Federal Reserve Bank;


Futures contracts for Midland and Cushing crudes show the market expects

their prices to stay in the mid-$50 range through the end of 2019.*

*Permian Basin Economic Indicators, Dallas Federal Reserve Bank, March 22, 2019

Monthly Texas Oil Production & Price of WTI

14

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

$110.00

$120.00

$130.00

$140.00

$150.00

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

Ja

n-9

0

Ja

n-9

1

Ja

n-9

2

Ja

n-9

3

Ja

n-9

4

Ja

n-9

5

Ja

n-9

6

Ja

n-9

7

Ja

n-9

8

Ja

n-9

9

Ja

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

Ja

n-1

6

Ja

n-1

7

Ja

n-1

8

Ja

n-1

9

Ja

n-2

0

Th

ou

san

ds o

f B

arr

els

pe

r D

ay

Tx Oil Production (left)

WTI Price (right)

Source: EIA; RE Center at Texas A&M University

Texas Annual Jobs

15

7,125,7007,204,7007,300,1007,514,500

7,786,6008,059,000

8,292,200

8,643,700

8,973,1009,189,500

9,462,0009,545,0009,447,4009,401,8009,527,700

9,772,900

10,098,900

10,429,60010,643,100

10,341,30010,375,300

10,605,400

10,914,600

11,240,900

11,592,60011,864,800

12,013,60012,227,90012,504,100

12,754,182

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

11,000,000

12,000,000

13,000,000

14,000,0001990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019p

Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University

2014-2018 +1,262,200 jobs;

average 252,440/year

2015 +2.4%

2016 +1.2%

2017 +1.8%

2018 +2.3%

2019p ~2.0%

Monthly Change in Total Nonfarm Employment Texas

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

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

Jan

-16

Ju

l-16

Jan

-17

Ju

l-17

Jan

-18

Ju

l-18

Jan

-19

Ju

l-19

Jan

-20

Nu

mb

er

of

Jo

bs

, S

A

Change in Monthly Employment Six-Month Moving Average

Sources: TWC; Haver Analytics; Real Estate Center at Texas A&M University

Average of ~21,900 jobs per month since January 2011

Texas Growth

Year

Jobs, NSA

(Dec-Dec)

Population

(July-July)

2010 216,200 439,887

2011 236,200 402,776

2012 373,300 433,903

2013 300,800 400,952

2014 420,900 475,157

2015 151,800 500,444

2016 150,000 449,982

2017 253,900 399,734

2018 276,100 379,128

17Sources: US Census Bureau; Texas Workforce Commission;


2010-2018

+3,881,963

people

+2,379,200

jobs

Killeen-Temple MSABell County Economic

Outlook

Killeen-Temple MSA

19

Bell

Lampasas

Coryell

Bell County

20

Belton

TempleKilleen

Texas Major MSAs Employment Growth 2017, 2018 & 2019

3.2

2.8

2.3

1.0

2.3

1.8

3.3

2.3

2.6

2.2

1.6

2.3

2.5

1.8

2.2

2.0

1.4

2.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Austin Dallas Fort Worth Houston San Antonio Texas

Pe

rce

nt

Gro

wth

in

An

nu

al

Em

plo

ym

en

t

2017 2018 2019

21Sources: TWC; Real Estate Center at Texas A&M University

Austin & Texas Business-Cycle IndexesMonthly, Seasonally Adjusted, 10/1980=100

50100150200250300350400450500550600650700750800850900950

1000

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

Jan

-16

Jan

-17

Jan

-18

Jan

-19

Jan

-20

22Source: Federal Reserve Bank of Dallas

Austin

Texas

Austin Annual Jobs

396,000408,800

430,800

461,000

492,000

524,900549,700

575,600

610,500

645,900

684,000685,300669,300663,900

679,000704,700

736,400

772,100791,100

774,300785,500

811,900

844,400

884,100

923,000

963,300

1,000,900

1,034,700

1,069,1001,095,828

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,0001990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019p

23Sources: Haver Analytics; Real Estate Center at Texas A&M University

2015 +4.4%

2016 +3.9%

2017 +3.4%

2018 +3.3%

2019p +2.5%

Bell County Annual Employment

24

89,41891,011

97,22797,989

100,809102,007

105,164

108,380109,785

113,309

116,433118,431

121,669122,763

124,194125,981127,044

129,832

132,983135,305

137,877139,945

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,0001

99

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

201

5

201

6

201

7

201

8

201

9p

2016 +2.4%

2017 +1.8%

2018 +1.9%

2019p +1.5%

Sources: Haver Analytics; Real Estate Center at Texas A&M University

Bell County Unemployment Rate

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

20

09

- J

an

20

09

- J

ul

20

10

- J

an

20

10

- J

ul

20

11

- J

an

20

11

- J

ul

20

12

- J

an

20

12

- J

ul

20

13

- J

an

20

13

- J

ul

20

14

- J

an

20

14

- J

ul

20

15

- J

an

20

15

- J

ul

20

16

- J

an

20

16

- J

ul

20

17

- J

an

20

17

- J

ul

20

18

- J

an

20

18

- J

ul

20

19

- J

an

Perc

en

t U

nem

plo

yed

25

Killeen-Temple Employment by Industry

Mining, Logging and Construction, 5%

Manufacturing, 5%

Trade, Transportation, and

Utilities, 19%

Information, 1%

Financial Activities, 5%

Professional and Business Services,

8%Education and Health

Services, 17%

Leisure and Hospitality, 11%

Other Services, 4%

Government, 27%

Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University

Killeen-Temple Jobs and Annual Job Growth Rate

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

122,500

125,000

127,500

130,000

132,500

135,000

137,500

140,000

142,500

145,000

147,500

Feb

-09

Ju

n-0

9

Oct-

09

Feb

-10

Ju

n-1

0

Oct-

10

Feb

-11

Ju

n-1

1

Oct-

11

Feb

-12

Ju

n-1

2

Oct-

12

Feb

-13

Ju

n-1

3

Oct-

13

Feb

-14

Ju

n-1

4

Oct-

14

Feb

-15

Ju

n-1

5

Oct-

15

Feb

-16

Ju

n-1

6

Oct-

16

Feb

-17

Ju

n-1

7

Oct-

17

Feb

-18

Ju

n-1

8

Oct-

18

Feb

-19

Employment Count Annual Growth Rate

27Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University

Texas Demographics

28

Pecos

Brewster

Webb

Hudspeth

PresidioTerrell

Culberson

Reeves

Val Verde

Crockett

Hill

Duval

Harris

Frio

Bell

Kerr

Kenedy

Starr

Polk

Clay

Edwards

Irion

Hall

Ellis

Jeff Davis

Sutton

Uvalde

Bee

Hale

Dallam

Leon

Bexar

Gaines

Hidalgo

Upton

Hartley

King

Erath

Jack

Kinney

Kent

Zavala

Brazoria

Tyler

GrayOldham

Dimmit

CassLynn HuntWise

Kimble

Lamb

Medina

Floyd

Terry

Coke

Llano

Ector

Andrews

Milam

Travis

Knox

Falls

Ward

Collin

Jones

Nolan

Potter

Nueces

Taylor

Real

Bowie

Young

Lamar

Martin

Garza

DallasFisher

Moore

Kleberg

Cameron

Cooke

Hardin

Schleicher

Gillespie

Foard

Wood

Menard

La Salle

Rusk

LibertyLee

Mills

Smith

Burnet

Cottle

Zapata

Coryell

Matagorda

Brown

Motley

Reagan Houston

Maverick

Jasper

Coleman

BaylorArcher

Scurry

Tom Green

Mason

Parker

Castro

Navarro

Brooks

Bailey

Deaf Smith

DeWitt

Lavaca

Donley

Hays

Goliad

Atascosa

Denton

BosqueEl Paso

Fannin

Tarrant

Wharton

CraneConcho

Carson

Runnels

Fayette

Crosby

Borden

Haskell

Calhoun

Newton

Live Oak

Randall

ShelbySterling

Jefferson

Briscoe

McMullen

Parmer

Jim Hogg

Mitchell

Wilson

Victoria

Trinity

Roberts

PanolaHoward

Walker

Bastrop

Grayson

San Saba

Midland

Hockley

Dickens

Swisher

Gonzales

Winkler Anderson

Dawson

Willacy

Grimes

Wheeler

Cherokee

Harrison

Colorado

Eastland

Lubbock

Karnes

Red River

Refugio

Austin

Hemphill

Williamson

Jackson

Blanco

Ochiltree

McCulloch

Loving

Sherman

Wilbarger

Hansford

Callahan

McLennan

Yoakum

Angelina

Hopkins

Lipscomb

StephensPalo Pinto

Stonewall

Hamilton

Montague

Bandera

Cochran

Jim Wells

Limestone

Kaufman

Fort Bend

Titus

Comal

Armstrong

Kendall

Freestone

Comanche

Glasscock

Johnson

Galveston

Henderson

Montgomery

Wichita

Brazos

Van Zandt

Chambers

Robertson

Waller

Sabine

Upshur

Hood

Hutchinson

Shackelford

Childress

Burleson

Nacogdoches

Lampasas

Collingsworth

Hardeman

Throckmorton

Guadalupe

Caldwell

Aransas

Marion

San Patricio

Madison

San Jacinto

Delta

WashingtonOrange

Rains

Gregg

Morris

San Augustine

Franklin

Somervell

Rockwall

Estimated Population Change, Texas Counties, 2010 to 2017

29Source: U.S. Census Bureau, 2017 Vintage Population Estimates;

Texas State Demographer’s Office

87% E

of I-35

67% in

Urban

Triangle

91 counties lost population over the 7 year period.

tl_2017_us_county

NumCh10-17

-2,139 - 0

1 - 1,000

1,001 - 20,000

20,001 - 100,000

100,001 - 560,521

Texas Population 1910-20502018 Population Projection & 2017 Texas Water Plan

11,196,730

54,369,297

25,145,561

47,342,417

41,928,264

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

2015

2020

2025

2030

2035

2040

2045

2050

30

From 1970 to 2010 (40 years),

Texas added 13.9 million people

From 2010 to 2050 (40 years),

Texas will probably add ~17- 30

million people

Sources: U.S. Census Bureau; Texas State Demographer’s Office 2018

Projection & 2000-2010 Scenario; Real Estate Center at Texas A&M University

2017 Texas

State Water

Plan

Revised 2018

Projection

(2010-2015

Rate)

2000-2010

Projection

Projected Population Change, Texas Counties, 2010-2050

31

Source: Texas State Data Center 2012

Population Projections . 2000-

2010 Migration Scenario

Legend

tl_2010_48_county10

F6

-6,200 - 0

1 - 2,000

2,001 - 10,000

10,001 - 100,000

100,001 - 1,000,000

1,000,001 -3,480,000

90%+ in the

Urban Triangle

http://en.wikipedia.org/w/index.php?title=File:I-35.svg&page=1

Austin MSA PopulationBastrop, Caldwell, Hays, Travis & Williamson Counties

301,261585,051

1,249,763

1,716,289 2,246,558

2,867,566

3,624,734

4,542,827

5,176,940

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1960 1970 1980 1990 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050

32Source: U.S. Census Bureau; Texas State Demographer’s Office 2018 Projection &

2000-2010 Projection; Real Estate Center at Texas A&M University

2010-2050 2,826,538; 165% increase

70,663/year average

Williamson County Population

37,305

422,679

633,783

940,542

1,380,749

1,976,958

1,638,796

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1970 1980 1990 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050

33Source: U.S. Census Bureau; Texas State Demographer’s Office 2014

Projection; 2000-2010 Scenario

2010-2050 1,216,117; 288% increase

30,400/year average

Killeen-Temple MSA PopulationBell, Coryell & Lampasas Counties

169,117

268,820

405,300 477,112

524,884570,097

591,103

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1970 1980 1990 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050

34Source: U.S. Census Bureau; Texas State Demographer’s Office 2018 Projection;


2010-2050 185,803; 46% increase

4,650/year average

Bell County Population

124483

310,235

353,615

396,685

440,487

482,318

0

250000

500000

750000

1970 1980 1990 2000 2010 2015 2020 2025 2030 2035 2040 2045 2050

35Sources: U.S. Census Bureau; Texas State Demographer’s Office 2018

Projection; Real Estate Center at Texas A&M University

2010-2050 172,083; 55% increase

4,300/year average

36

Texas Housing

Market

2018 A Solid Year For Housing Around the State

• Total Housing Activity: 2018 vs. 2017

• Sales +1.7% 343,833 vs. 336,502 $97.7B vs. $92.4B

• Listings +1.4% 101,603 vs. 100,664

• DoM 58 vs. 57

• MOI 3.4 vs. 3.1

• Average Price +3.7% $284,173 vs. $274,580

• Median Price +4.5% $233,000 vs. $223,990

• Md. Price/sq. ft. +5% $116.37 vs. $110.55

• Avg. Price/sq. ft. +4.3% $128 vs. $122

37Source: TAR Data Relevance Program; Real Estate Center at Texas A&M University

2018 A Solid Year For New Housing Around the State

• New Home Construction lead the nation• State 168,500 total starts, ~122k SF ~47k MF

• DFW 57.9K (35.1k SF, 22.8k MF); Houston 50.8k (41.3k SF, 9.5k MF)

• New Home Sales stayed strong• New home sales +8.1%

• DoM 93

• MOI 5.1

• Average price -0.4%

• Median price +0.2%

• Price/sq. ft. +2.9%

38

2018 Percent Changes in Key Housing Measures

39

Sales

Average

Price

Median

Price

Months

Inventory

Median

Price/sf

Texas 1.7% 3.7% 4.5% 9.8% 5.0%

Austin 1.4% 4.2% 3.9% 9.7% 3.9%

DFW -2.4% 4.1% 3.9% 19.7% 5.7%

Houston 3.4% 2.7% 3.1% 13.5% 4.2%

San

Antonio 2.9% 4.2% 5.2% 8.0% 5.5%

Source: TAR Data Relevance Program; Real Estate Center at Texas A&M University

2019 Home Market SlowdownFactors that may create a drag on home-buying demand

• Limited inventory availability

• Higher prices - affordability

• Increasing interest rates

• Concerns about general economy –fear of recession or jobs

• Stock market volatility

• Negative press coming off record year(s)

40

March 2019 Residential Sales Slowed Down; Price/Sq. Ft. Still Up

41

Sales 0.7% YTD

Price +3.4% YTD

Source: TR Data Relevance Program; Real Estate Center at Texas A&M University


103,344102,789110,830

120,749126,525

126,279

142,940

151,861

177,179

191,189195,568

204,084209,438

224,215

250,380

277,649

304,762

286,778

241,666

221,768211,640213,968

247,680

287,833297,623

309,274

323,661

338,178343,833

347,271

$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

$330,000

$350,000

$370,000

$390,000

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

310,000

330,000

350,000

370,000

390,000

19

90

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

20

15

20

16

20

17

20

18

20

19

p

Sales Avg Price Md Price

2018

Sales 1.7% Prices ~4%

2019p

Sales ~1%, Prices ~3.5%

Annual Texas Home Sales & Prices

42

2010-2018

Sales +64%,

Average Price +49%,

Median Price +59%

Texas Home Sales per 1,000 Households

17.016.617.5

18.819.4

18.9

20.921.8

24.9

26.326.527.327.7

29.4

32.1

34.8

37.6

34.8

28.7

26.0

24.224.1

27.5

31.532.0

32.833.9

35.1

10

12

14

16

18

20

22

24

26

28

30

32

34

36

38

40

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

201

5

201

6

201

7

Source: TAR Data Relevance Program; US Census Bureau;


1990-2000 Average 20.8

2001-2017 Average 30.6

Texas Median Home Prices Continue to Climb

$68,470$71,656

$75,525$78,396$80,294$81,851

$86,462$90,879

$96,063$100,952

$111,642$118,808

$123,725$127,017$128,883

$135,788$141,905

$146,105$145,613$144,633$146,417$147,000

$156,800

$170,000

$182,500

$195,372

$210,000

$223,000

$233,000

$241,155

$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$210,000$220,000$230,000$240,000$250,000

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

201

5

201

6

201

7

201

8

201

9p

44

2017 +6.2%;

2018 +4.5%

2019p +3.5%

2012-2018p +49%


Texas Median HH Income & Median Home Price Indexed to 1989

60

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

60

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

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

2015

2016

2017

Sources: U.S. Census Bureau; Haver Analytics; Real Estate Center at Texas A&M University

2017 Adjusted HH Income +20%

Nominal HH Income +129%

Median Home Price +226%

1989 Median Price = 2.65 x Median HH Income

2017 Median Price = 3.76 x Median HH Income

11,879

14,270

38,706

64,530

60,366

44,992

53,004

24,626

19,602

5,197

5,087

80,000 60,000 40,000 20,000 0

2018 Sales

Texas 2018 Sales and Months Inventory by Price

46

3.6

3.2

2.4

2.2

2.7

3.4

3.9

4.5

5.3

7.5

10.3

0.0 2.0 4.0 6.0 8.0 10.0 12.0

$0 - $69,999

$70,000 - $99,999

$100,000 - $149,999

$150,000 - $199,999

$200,000 - $249,999

$250,000 - $299,999

$300,000 - $399,999

$400,000 - $499,999

$500,000 - $749,999

$750,000 - $999,999

$1,000,000 +

Current Mos. Inventory


3.5%

4.2%

11.3%

18.9%

17.6%

13.1%

15.5%

7.2%

5.7%

1.5%

1.5%

About 61% of

sales in $100k

to $300k range

Very Tight

Inventory

to $300k

Texas SF Building Permits

38,233

46,209

59,543

69,96470,45270,421

83,13282,228

99,912101,928108,782

111,915

122,913

137,493

151,384

166,203163,032

120,366

81,107

68,230

68,170

67,254

81,926

93,478

103,045105,448

106,511

116,766123,772

127,485

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

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

201

5

201

6

201

7

201

8p

201

9p

Source: US Census Bureau; NAHB; Real Estate Center at Texas A&M

2015 +2.3%

2016 +1.0%

2017 +9.6%

2018e +6%

2019p +3%

1995-2017 average

104,854/year

Texas MF Building Permits

8,96210,2989,514

15,545

32,23734,68435,720

43,794

56,918

44,716

32,620

38,427

42,40943,081

39,796

44,431

53,894

58,542

49,897

17,375

21,504

32,260

56,40656,644

67,319

69,995

59,34258,34656,596

54,898

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

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

201

5

201

6

201

7

201

8e

201

9p

Source: US Census Bureau, Real Estate Center at Texas A&M

1995-2016 average 45,444/year

2017 -1.7%; 2018p -3%

Texas Residential Construction Leading and Coincident Indexes

Jan 2000=100

40

60

80

100

120

140

160

180

40

60

80

100

120

140

160

180

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

Jan

-16

Ju

l-16

Jan

-17

Ju

l-17

Jan

-18

Ju

l-18

Jan

-19

Ju

l-19

Jan

-20

Source: Real Estate Center at Texas A&M University

Leading Index

Coincident Index

Total Housing

Permits (12-MMA)

49

Texas Single-Family Housing Markets Expected to Slow Down in 2019

50Source: Real Estate Center at Texas A&M University

Texas (2018 (%) 2019 (%) 1991-2018 (%)Housing Permits 5.7 2.1 5.4

Sales 1.8 0.9 4.6

Price per square foot 4.4 4.0 4.8

Austin

Housing Permits 9.6 0.2 11.4

Sales 2.3 2.8 6.1


DFW


Sales -2.2 0.3 5.0


Houston


Sales 3.5 1.1 3.9


San Antonio


Sales 2.3 -1.0 6.8


51

Killeen-Temple/

Bell County

Housing Markets

3,327

3,544

2,600

3,710

4,173

5,8525,555 5,339

4,6314,505

4,411

3,764

4,197

4,633

5,035

5,526

6,082

6,335

6,612

6,810

$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

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

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

20

15

20

16

20

17

20

18

20

19

p

Sales Avg Price Md Price2018 sales +4.4%,

prices +4.6%

2019p sales ~3.0%,

Prices ~4%

Annual Killeen-Temple Home Sales & Prices

52Source: Temple-Belton BoR; Real Estate Center at Texas A&M University

Source: Temple-Belton BoR; Real Estate Center at Texas A&M University

3,095

3,496

3,758

4,119

4,567

4,983

5,2065,322

5,455

$120,000

$130,000

$140,000

$150,000

$160,000

$170,000

$180,000

$190,000

$200,000

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,0002

01

1

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

p

Sales Avg Price Md Price2018 sales +2.2%,

prices +5.0%

2019p sales ~2.5%,

Prices ~3.5%

Annual Bell County Home Sales & Prices

53

283

510

1,383

1,498

675

414

331

112

70

13

5

2,000 1,500 1,000 500 0

2018 Sales

Bell County 2018 Sales and Months Inventory by Price

54

2.3

1.6

1.4

2.2

4.6

4.5

5.8

4.8

7.5

13.8

0.0 2.0 4.0 6.0 8.0 10.012.014.016.0

$0 - $69,999

$70,000 - $99,999

$100,000 - $149,999

$150,000 - $199,999

$200,000 - $249,999

$250,000 - $299,999

$300,000 - $399,999

$400,000 - $499,999

$500,000 - $749,999

$750,000 - $999,999

$1,000,000 +

Current Mos. Inventory

5.3%

9.6%

26.1%

28.3%

12.8%

7.8%

6.3%

2.1%

1.3%

0.2%

0.1%

About 67% of

sales in $100k

to $250k range

Very Tight

Inventory

to $200k

21.6 months


March 2019 Killeen-Temple Residential Sales & Price/Sq. Ft.

55

Sales +12.1% YTD Price +3.5%YTD

BeltonTempleKilleen

Lampasas

Coryell

Salado

BeltonTempleKilleen

Lampasas

Coryell

Salado


March 2019 Bell Co. Residential Sales & Price/Sq. Ft.

56

Sales +13.4% YTD

Existing +20%

New -11.2%

Price/sf +0.7%YTD

Median +2.6%YTD

Sales & Prices by Zip Code

BeltonTemple

Killeen

Salado

BeltonTemple

Killeen

Salado

2.6 Months Inventory


Bell County SF Permits

433437

945

1,269

928

1,3371,327

844

683

470

196

343

1,047

1,461

1,2961,3251,315

1,0821,1551,179

1,321

1,515

1,7691,857

2,351

3,047

2,514

2,270

1,599

1,8411,750

1,646

1,8461,8611,848

1,6801,5811,600

1,827

1,845

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250

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

4

201

5

201

6

201

7

201

8e

201

9p

59Source: US Census Bureau; Real Estate Center at Texas A&M University

2017 +1%; 2018e +14%; 2019p

+1%

Bell County MF Permits

200244304

1,822

482

878

29105

0 20 0 0 0 0 28

364337302

1280 30 0

182

24

272228

729

72

256224

72

239200125

0 0

290405

110

3346

170

208

259

219

13452

24 7 2 9 4 2644

164272287

234

246

444

688

902

446

786

394

868

478

303

82

92

140284

121

143

362

236

242

240

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

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

4

201

5

201

6

201

7

201

8e

5+ Units 2-4 Units

60Source: US Census Bureau; Real Estate Center at Texas A&M University

Longer-Term Outlook• Population Growth Continues to Outpace U.S.;

Concentrated in Urban Triangle

• Infrastructure Trying to Keep Up with Growth: roads, water/sewer, utilities, schools• Water West of I-35 Major Limiting Factor for Growth

• Infrastructure Financing higher rates; bond market competition for capital; private vs. public financing; taxes

• Land and land resources & government regulatory actions

• Money Capital & Money Markets: debt, inflation and interest rates

61

Dr. James P. GainesChief Economist

recenter.tamu.edu

recenter.tamu · Texas Economic Outlook: 2019 Positive but Slower Growth Than 2018 9 U.S. Economy...

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