Brazoria County Board of Realtors by CharlieThhomas

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									Dr. James P. Gaines
Dr. James P. Gaines
     Research Economist
      Real Estate Center 
      Real Estate Center
    Texas A&M University
      recenter.tamu.edu
       p
     Topics for Discussion
•   US and Texas Economy
•   Housing Activity
    H i A i i
•   Mortgage and Capital Markets
•   Demographic Trends and Outlook




                                     2
  Challenging Economy 2008
  Definite Economic Slowdown: Recession?
• D fi i E       i Sl d       R     i ?
• Soft Housing Market
• Interest Rates and Capital Markets
• Inflation and Consumer Spending
• Unemployment
     p       p     g       p
• Corporate spending and expansion
• Political uncertainty
   Wait and See attitude pervasive
• “Wait and See” attitude pervasive
                                           3
                                                                                                            1.0
                                                                                                                  2.0
                                                                                                                  20
                                                                                                                        3.0
                                                                                                                              4.0
                                                                                                                                    5.0
                                                                                                                                          6.0
                                                                                                                                                7.0
                                                                                                          -86
                                                                                                       Jan-
                                                                                                          -86
                                                                                                       Jul-
                                                                                                          -87
                                                                                                       Jan-
                                                                                                          -87
                                                                                                       Jul-
                                                                                                          -88
                                                                                                       Jan-
                                                                                                                                                         g
                                                                                                          -88
                                                                                                       Jul-
                                                                                                          -89
                                                                                                       Jan-
                                                                                                          -89
                                                                                                       Jul-
                                                                                                          -90
                                                                                                       Jan-
                                                                                                          -90
                                                                                                       Jul-
                                                                                                          -91
                                                                                                       Jan-
                                                                                                          -91
                                                                                                       Jul-
                                                                                                          -92
                                                                                                       Jan-
                                                                                                          -92
                                                                                                       Jul-
                                                                                                          -93
                                                                                                       Jan-
                                                                                                          -93
                                                                                                       Jul-
                                                                                                          -94
                                                                                                       Jan-
                                                                                                          -94
                                                                                                       Jul-
                                                                                                          -95
                                                                                                       Jan-
                                                                                                          -95
                                                                                                       Jul-
                                                                                                          -96
                                                                                                       Jan-
                                                                                                          -96
                                                                                                       Jul-
                                                                                                          -97
                                                                                                       Jan-
                                                                                                          -97
                                                                                                       Jul-
                                                                                                          -98
                                                                                                       Jan-
                                                                                                          -98
                                                                                                       Jul-
                                                                                                          -99
                                                                                                       Jan-
                                                                                                          -99
                                                                                                       Jul-
                                                                                                          -00
                                                                                                       Jan-


                                                                 Source:  Bureau of Labor Statistics
                                                                                                          -00
                                                                                                       Jul-
                                                                                                          -01
                                                                                                       Jan-
                                                                                                          -01
                                                                                                       Jul-
Yr/Yr Rate of Change in the Monthly Index, US Urban, All Items
                                                                                                          -02
                                                                                                       Jan-
                                                                                                          -02
                                                                                                       Jul-
                                                                                                          -03
                                                                                                       Jan-
                                                                                                          -03
                                                                                                       Jul-
                                                                                                          -04
                                                                                                       Jan-
                                                                                                          -04
                                                                                                       Jul-
                                                                                                          -05
                                                                                                       Jan-
                                                                                                          -05
                                                                                                       Jul-
                                                                                                          -06
                                                                                                       Jan-
                                                          4




                                                                                                          -06
                                                                                                       Jul-
                                                                                                          -07
                                                                                                       Jan-
                                                                                                                                                      Targeted Overall Inflation Rate




                                                                                                          -07
                                                                                                       Jul-
                                                                                                          -08
                                                                                                       Jan-
               Selected Food Prices Percent
                Increase May 07 – May 08
            Bananas                                                                                            21.7
               Flour                                                                                        20.9
               Eggs                                                                             18.2
        Rice & Pasta                                                                     17.0
   Dried Beans Peas
   Dried Beans, Peas                                                              15.3
                                                                                  15 3
Butter and Margarine                                                  12.4
         Whole Milk                                            10.5
             Coffee                                 8.5
       Frozen Juices                          7.7
             Apples                          7.4
                Fish                   4.3
      Whole Chicken
      Whole Chicken                    4.3
           All Items               4.2
           Potatoes              3.5
         Beef & Veal       1.5


                       0               5                  10                 15                        20             25
                           Source: Bureau of Labor5Statistics, Unadjusted CPI
                                                            ollars per Gall
                                                           Do             lon




                                                          1.00
                                                          1.20
                                                          1.40
                                                          1.60
                                                          1.80
                                                          2.00
                                                          2.20
                                                          2.40
                                                          2.60
                                                          2.80
                                                          3.00
                                                          3.20
                                                          3.40
                                                          3.60
                                                          3.80
                                                          4.00
                                                          4.20




                                                          1 40
                                                          2 20
                                                  /3/00
                                                 1/
                                                  /3/00
                                                 4/
                                                  /3/00
                                                 7/
                                                  /3/00
                                                10/
                                                  /3/01
                                                 1/
                                                  /3/01
                                                 4/
                                                  /3/01
                                                 7/
                                                  /3/01
                                                10/
                                                  /3/02
                                                 1/
                                                  /3/02
                                                 4/
                                                  /3/02
                                                 7/
                                                  /3/02
                                                10/
                                                  /3/03
                                                 1/
                                                  /3/03
                                                 4/
                                                  /3/03
                                                 7/
                                                  /3/03
                                                10/
                                                  /3/04
                                                 1/
                                                  /3/04
                                                 4/
                                                  /3/04
                                                 7/
                                                  /3/04
                                                10/
                                                  /3/05
                                                 1/
                                                                                Regular Grade




                                                  /3/05
                                                 4/

    Source: Energy Information Administration
                                                  /3/05
                                                 7/
                                                  /3/05
                                                10/
                                                  /3/06
                                                 1/
                                                  /3/06
                                                 4/
                                                  /3/06
                                                 7/
                                                  /3/06
                                                10/
                                                  /3/07
                                                 1/
                                                                                                U. S. Weekly Retail Gas Prices




                                                  /3/07
                                                 4/
                                                  /3/07
                                                 7/
                                                  /3/07
                                                10/
                                                  /3/08
                                                 1/
                                                  /3/08
                                                 4/
6
We Finally Got There !!




                          7
                p
      What to Expect
Fed to stop cutting interest rates
Gasoline prices will continue to increase
Federal bailout of the banks and
financial institutions
Mortgage interest rates likely to rise if
    y      g
they change much at all
2008-2009: high inflation, low economic
growth,      losses,
growth job losses low interest rates
                                       8
                   y
       Texas Economy
• Running Ahead of US Economy
• Employment Steady Increase
• Low Unemployment
• Personal Income Growth
    p
• Population Growth
• Housing market still relatively
   t
  strong
                                    9
                        ‐2.0%
                                ‐1.0%
                                        0.0%
                                                1.0%
                                                       2.0%
                                                              3.0%
                                                                                       4.0%
                                                                                              5.0%




                         2 0%
                   Jan‐00
                   Apr‐00
                   Jul‐00
                   Oct‐00
                   Jan‐01
                   Apr‐01
                   Jul‐01
                   Oct‐01
                   Jan‐02
                   Apr‐02
                   Jul‐02
                   Oct‐02
                   Jan‐03
                   Apr‐03
                   Jul‐03
                   Oct‐03
                   Jan‐04
                                                                                                                 Rate




                   Apr‐04




Source: BLS
                   Jul‐04
                   Oct‐04
                   Jan‐05
                   Apr‐05
                                                                     Brazoria County




                   Jul‐05
                   Oct‐05
                   Jan‐06
                   Apr‐06
                   Jul‐06
                   Oct‐06
                   Jan‐07
                                                                                Texas




                   Apr‐07
                   Jul‐07
                                           US




                   Oct‐07
                                                                                                 U. S. and Texas Employment Growth




              10




                   Jan‐08
                   Apr‐08
             Job-
      Top 10 Job-Creating States in 2007
300

250    236.9
       236 9                   Thousands of jobs created December 2006
                               Thousands of jobs created December 2006 
                               to December 2007
200

150

100             78.0
                           67.6       67.1
                                                      44.9         41.6                        31.4
 50                                                                           36.2      35.4
                                                                                                            25.0

 0
                            arolina




                                                                                                Illinois
                                                         uisiana
                                          ington




                                                                   Colorado


                                                                               eorgia




                                                                                                                  abama
                                                                                        Utah
        Texas


                  w York


                            North 
                New




                                                                              Ge
                            N




                                                                                                                Ala
                           Ca




                                                       Lou
                                      Washi




                                                                                                           11
                                                   Source: BLS
             Job-
      15 Top Job-Creating MSAs in 2007
110
100   94.2
 90
                                                                  j
                                                     Thousands of jobs created December 
 80              75.3
                                                     2006 to December 2007
 70                          66.5

 60
 50                                            46

 40                                                      35.8

 30                                                                 23.2        22.7      22
                                                                                                    21.5
                                                                                                                 21.1             21              20.6       19.5              19.2           18.8
 20
 10
  0




                                                                                                                                                              Salt Lake City
                                               Seattle




                                                                                          Raleigh




                                                                                                                       rancisco




                                                                                                                                                                                Boston
                                                                     Denver




                                                                                                     Charlotte
       Houston




                              Dallas-F Worth




                                                          Atlanta




                                                                                 Austin




                                                                                                                                                   Chicago




                                                                                                                                                                                               San Antonio
                                                                                                                                  Washington DC
                  New York


                                     Ft




                                                                                                                                                   C
       H




                                                                                                     C


                                                                                                                  San Fr
                  N




                                                                                                                                                                   L
                                                                                                                                                                                         12
                                                                              Source: BLS
  The Texas Outlook for 2008
• US job growth less than 1%
• Texas should more than double the national
  job growth rate
• Houston, Austin and San Antonio likely to
  exceed the state level, Dallas and Ft. Worth
  likely to be closer to the national growth trend
  Texas housing markets generally strong but
• T       h    i       k t         ll t        b t
  “spotty”
                                       credit,
• Fall in residential demand: tighter credit less
  investment buying, “wait and see”
• Rent and occupancy rates of Texas
  commercial real estate will continue to rise
The US Housing Market
         The “Un‐Magnificent  Seven”:
                  California
                   Florida
                   Nevada
                   Arizona
                   Indiana
                     Ohio 
                  Michigan

                                  14
       Housing Fall Off 2006 . . .
• Unlike past housing downturns, this one not
  preceded by rising interest rates, unemployment or
               y     g                         y
  recession
• Causes:
   – End of “Easy Credit – Easy Terms”
                     g
   – Excess building in fast g        g
                              growing markets
   – Slowdown in appreciation – declining home prices
           g             y       g
   – Falling affordability leading to lower user demand
   – Fall off of speculative building and “investor”
     market

                                                    15
                                                                                                                                                           (000s)




                                                                1,000
                                                                                       2,000
                                                                                               3,000
                                                                                                       4 000
                                                                                                       4,000
                                                                                                               5,000
                                                                                                                                           6,000
                                                                                                                                                   7,000




                                                            0
                                                   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
                                                                                                                       E i ti




                                                   Jan-95



Sources: US Census Bureau , NAR, NAHB, NBER
                                                   Jan-96
                                                   Jan-97
                                                   Jan-98
                                                   Jan-99
                                                   Jan-00
                                                                                                                       Existing SF S l




                                                                        New SF Sales




                                                   Jan-01
                                                                                                                                   Sales




                                                   Jan-02
                                                   Jan-03
                                                   Jan-04
                                                   Jan-05
                                                                                                                                                           New and Existing SF Home Sales U.S.




                                                   Jan-06
                                              16




                                                   Jan-07
                                                   Jan-08
           US Median Home Prices in 2008
$250,000
                                                                            8/05     7/06     6/07
                                                                          $229,600 $230,900 $229,200
$225,000


                                                                                               200,700
$200,000



$175,000



$150,000



$125,000

                                     At 2001 Trend, 2008 median prices should be
$100,000                             between $185,000 and $190,000.
                                     2007 = $217,900,
                                               $187,500 l     trend li
                                     if 2008 = $187 500 along t           down 14%
                                                                  d line, d    14%;
 $75,000
                                     if 2008 = $200,000, down 8.5%.

 $50,000
                0
           Jan-90

           Jan-91

           Jan-92
                2

                3
           Jan-93

           Jan-94
                4

                5
           Jan-95

                6
           Jan-96

           Jan-97
                7

           Jan-98
                8

           Jan-99
                9

                0
           Jan-00

           Jan-01

           Jan-02
                2

                3
           Jan-03

                4
           Jan-04

                5
           Jan-05

                6
           Jan-06

           Jan-07
                7

                8
           Jan-08

           Jan-09
                9
           Jul-90
                0

           Jul-91

           Jul-92
                2

                3
           Jul-93

                4
           Jul-94

           Jul-95
                5

           Jul-96
                6

           Jul-97
                7

           Jul-98
                8

           Jul-99
                9

                0
           Jul-00

           Jul-01

           Jul-02
                2

                3
           Jul-03

           Jul-04
                4

                5
           Jul-05

                6
           Jul-06

           Jul-07
                7

           Jul-08
                8
                                                                                               17
                Source: NAR, Real Estate Center at Texas A&M University
  U.S. Median Home Price Percent Change
 15.0%
 15 0%                                     14.4%
 14.0%                                 13.5%
                                    12.6%
 13.0%                                                                                                                      12.2%
                                             11.7%
 12.0%
                        10.7%
 11.0%                      10.3%
 10.0%
 10 0%
  9.0%   8.5%
                7.8%
                      8.2%
                               7.9%
                                                                                                                          8.3%
                   7.7%
  8.0%                                                                                                                 7.5%
                                                                                                                    7.0%
                                                   6.8%              6.6%
  7.0%                                                            6.4%
                                                                            5.9%
                                                                                                                 6.3%
  6.0%      5.5%                                                                   5.5%                 5.4%
                                                                                                     5.2%
                                                                                                  4.8%
  5 0%
  5.0%                                                         4 3%
                                                               4.3%     4 3%
                                                                        4.3%                4.0%              4.3%
                                                                                                              4 3%
                                                                                                           3.8%
                                                         3.7%
  4.0%                                                      3.0%               2.9%
                                                                                         3.4%
                                                                                               3.1%
                                                                                      2.7%
  3.0%                                                2.1%
  2.0%                                                                                                                           1.3%
  1.0%
  0.0%
  0 0%
 -1.0%
 -2.0%                                                                                                                              -1.8%
 -3.0%
 -4.0%
  5.0%
 -5 0%
 -6.0%
 -7.0%
 -8.0%
 -9.0%                                                                                                                                  -8.5%
 10.0%
-10.0%




          Apr-08
           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
                                                                                                                                        18
                                                              Source: NAR
                                                                       50
                                                                            60
                                                                                 70
                                                                                      80
                                                                                           90
                                                                                                100
                                                                                                      110
                                                                                                            120
                                                                                                                  130
                                                                                                                        140
                                                                                                                              150
                                                                                                                                    (000)
                                                                   0
                                                            Jan 1990
                                                                   0
                                                            Jul 1990
                                                                   1
                                                            Jan 1991
                                                                   1
                                                            Jul 1991
                                                                   2
                                                            Jan 1992
                                                                   2
                                                            Jul 1992
                                                                   3
                                                            Jan 1993
                                                                   3
                                                            Jul 1993
                                                                   4
                                                            Jan 1994
                                                                   4
                                                            Jul 1994
                                                                   5
                                                            Jan 1995
                                                                   5
                                                            Jul 1995
                                                                                                                                    12-




                                                                   6
                                                            Jan 1996
                                                                   6
                                                            Jul 1996
                                                                   7
                                                            Jan 1997
                                                                   7
                                                            Jul 1997
                                                                   8
                                                            Jan 1998
                                                                   8
                                                            Jul 1998
                                                                   9
                                                            Jan 1999
                                                                   9
                                                            Jul 1999
                                                                   0
                                                            Jan 2000
                                                                   0
                                                            Jul 2000
                                                                   1
                                                            Jan 2001
                                                                   1
                                                            Jul 2001
                                                                                                                                    12-Month Moving Average




                                                                   2
                                                            Jan 2002
                                                                   2
                                                            Jul 2002

Source: US Census Bureau, Real Estate Center at Texas A&M
                                                                   3
                                                            Jan 2003
                                                                   3
                                                            Jul 2003
                                                                   4
                                                            Jan 2004
                                                                   4
                                                            Jul 2004
                                                                   5
                                                            Jan 2005
                                                                   5
                                                            Jul 2005
                                                                                                                                                              US SF Housing Permits




                                                                   6
                                                            Jan 2006
                                                                   6
                                                            Jul 2006
                                                                   7
                                                            Jan 2007
                                                                   7
                                                            Jul 2007
                                                                   8
                                                            Jan 2008
                            19
           Inventory of New SF Homes For Sale
(000s Units)                                                   Months Inventory
 800                                                                         10

 750       Excess of about 475k units plus new                               9.5

 700       construction in 2008 of 700k at annual                            9

 650
           sales of around 550k – it will take several                       8.5

 600                                                                         8
           years to get back to balance
 550                                                                         7.5

 500                                                                         7

 450                                                                         6.5

 400                                                                         6

 350                                                                         5.5

 300                                                                         5

 250                                                                         4.5

 200                                                                         4

 150                                                                         3.5

 100                                                                         3
       Feb-01

       Jun-01




       Feb-02

       Jun-02




       Feb-03

       Jun-03




       Feb-04

       Jun-04




       Feb-05

       Jun-05




       Feb-06

       Jun-06




       Feb-07

       Jun-07
        Jul-00
       Jan-00
       Mar-00



       Oct-00
       Dec-00




       Oct-01
       Dec-01




       Oct-02
       Dec-02




       Oct-03
       Dec-03




       Oct-04
       Dec-04




       Oct-05
       Dec-05




       Oct-06
       Dec-06




       Oct-07
       Dec-07
       May-00




       Apr-01

       Aug-01




       Apr-02

       Aug-02




       Apr-03

       Aug-03




       Apr-04

       Aug-04




       Apr-05

       Aug-05




       Apr-06

       Aug-06




       Apr-07

       Aug-07
                                                                        20
                              Source: US Census Bureau, NAHB
   Mortgage & Capital Markets
• Problems more severe than anticipated
   – Pricing mortgage-backed assets
   – Capital requirements/solvency among institutions
   – Loss of confidence in debt ratings
   – Plethora of proposed legal/regulatory changes
   – Mergers, acquisitions and/or failures
   – Law suits
• Traditional mortgage loan underwriting
                  g                     y
• Foreclosures high into 2009 and early 2010
• Mortgage delinquency/default contagion to business &
  consumer markets
  Liquidity i     k t   b d k         h    t / illi t
• Li idit in market, nobody knows how to/willing to
  lend                                              21
                    Total HH Home Mortgage Borrowing
1,100
                                                                                                                                                                                                                                                         1,031
                         $0.5 trillion in home mortgages between 1972 and 1979;                                                                                                                                                                                  990
1,000
                         $1.5 trillion in home mortgages between 1980 and 1989;                                                                                                                                                                   941


            900          $2 12 trillion in home mortgages between 1990 and 1999;
                         $2.12 trillion in home mortgages between 1990 and 1999;                                                                                                                                                           857


            800          $6.1 trillion in home mortgages between 2000 and 2007
                                                                                                                                                                                                                                    708
            700                                                                                                                                                                                                                                                         669



            600
$Billions




                                                                                                                                                                                                                             507
            500
                                                                                                                                                                                                           380        386
            400
                                                                                                                                                                                                                                                                               321
                                                                                                                                                                                                        302
            300
                                                                                                                           222 216 225
                                                                                                                    199                         199                                       206 216
            200                                                                                              182                                       174 171
                                                                                                                                                                     157 167 154
                                                                                                      127
                                                            106 117                            105
                                                     86                   90
            100                               58                                 67
                                                                                        47
                  34 40 37 40

              0
                  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
                                                                                                                                                                                                                                                                               1Q2008
                                                                    Source: Federal Reserve, Flow of Funds, D-2, 6/5/2008                                                                                                                                                               22
Percent of Foreclosures Started
   by T      fL     4Q200
   b Type of Loan 4Q2007
                                                     Percent of                 Percent of
                                                    Outstanding                Foreclosures
            Type of Loan                               Loans                      Started




California and Florida have 39% of all prime ARM loans, but 47% of foreclosure 
           p           ;                              p
starts for prime ARMS; the two states have 29% of Subprime ARMs and 36% of 
subprime ARM foreclosures. 4Q06‐4Q07 foreclosures in FL tripled; CA doubled.
                                                                                              23
         Source: Mortgage Bankers Association, National Delinquency Survey, March 6, 2008
Total Delinquency & Foreclosure Filings
                 2007
  • US 2,203,295, up 75%
    Texas 149,703, down 4.6% (1 of only 6 down)
  • Texas 149 703 down 4 6% (1 of only 6 down)
     –   California 481,392, up 238%
     –   Florida 279,325, up 124%
     –   Ohio 153,196, up 88%                                                                            16 states 
     –   Michigan 136,205, up 68%
                                                                                                         doubled or 
     –       o a 69,9 0, up 5 %
         Arizona 69,970, up 151%
     –   Nevada 66,316, up 215%                                                                                 DC
                                                                                                         more; D.C. 
     –   Virginia 24,199, up 456%                                                                        was up 
     –   Maryland 25,109, up 455%
         Maryland 25 109 up 455%                                                                         608%
     –   Connecticut 23,470, up 100%
     –   Massachusetts 41,487, up 161%

                                                 Source:  RealtyTrac, Inc.
          Data include all default, delinquency and foreclosure filings reported. The same property often has more than one filing.   24
          y                  g
    Monthly Foreclosure Filings
100,000
            Texas foreclosures have been moderate compared to US 
 90,000
            trend.  US foreclosures were up 97% Dec 06 to Dec 07. 
 80,000
            Texas was down 13.7% Dec 06 to Dec 07 . 
 70,000                                                                                                                                                                                                                                               US
 60,000

 50,000

 40,000

 30,000

 20,000
 20 000
                                                                                                                                                                                                         Texas
 10,000

     0
          Jun‐05
                   Jul‐05
                            Aug‐05
                                     Sep‐05
                                              Oct‐05
                                                       Nov‐05


                                                                          Jan‐06


                                                                                            Mar‐06


                                                                                                              May‐06
                                                                                                                       Jun‐06
                                                                                                                                Jul‐06
                                                                                                                                         Aug‐06
                                                                                                                                                  Sep‐06
                                                                                                                                                           Oct‐06
                                                                                                                                                                    Nov‐06


                                                                                                                                                                                      Jan‐07


                                                                                                                                                                                                        Mar‐07


                                                                                                                                                                                                                          May‐07
                                                                                                                                                                                                                                   Jun‐07
                                                                                                                                                                                                                                            Jul‐07
                                                                                                                                                                                                                                                     Aug‐07
                                                                                                                                                                                                                                                              Sep‐07
                                                                                                                                                                                                                                                                       Oct‐07
                                                                                                                                                                                                                                                                                Nov‐07
                                                                 Dec‐05


                                                                                   Feb‐06


                                                                                                     Apr‐06




                                                                                                                                                                             Dec‐06


                                                                                                                                                                                               Feb‐07


                                                                                                                                                                                                                 Apr‐07




                                                                                                                                                                                                                                                                                         Dec‐07
                                                                                                     Source:  RealtyTrac, Inc.                                                                                                                                                    25
                                                                Data include Notices of Trustee Sales plus Notices of Foreclosure Sale
Texas and Brazoria
T       dB      i
 County Housing
     Markets

                     26
                                                      Texas Home Sales
                                                               12-      Mo ing A erage
                                                               12-Month Moving Average
26,000

24,000
                                                                                                       Sales “Bubble” 
                                                                                                       Sales  Bubble
22,000                                                                                                  Reverting to 
                                                                                                      long‐term trend
20,000

18,000

16,000

14,000

12,000

10,000

 8,000
             96
                      96
                               97
                                        97
                                                 98
                                                          98
                                                                   99
                                                                            99
                                                                                     00
                                                                                              00
                                                                                                       01
                                                                                                                01
                                                                                                                         02
                                                                                                                                  02
                                                                                                                                           03
                                                                                                                                                    03
                                                                                                                                                             04
                                                                                                                                                                      04
                                                                                                                                                                               05
                                                                                                                                                                                        05
                                                                                                                                                                                                 06
                                                                                                                                                                                                          06
                                                                                                                                                                                                                   07
                                                                                                                                                                                                                            07
                                                                                                                                                                                                                                     08
                                                                                                                                                                                                                                               08
                                                                                                                                                                                                                                                        09
         Jan‐9
                  Jul‐9
                           Jan‐9
                                    Jul‐9
                                             Jan‐9
                                                      Jul‐9
                                                               Jan‐9
                                                                        Jul‐9
                                                                                 Jan‐0
                                                                                          Jul‐0
                                                                                                   Jan‐0
                                                                                                            Jul‐0
                                                                                                                     Jan‐0
                                                                                                                              Jul‐0
                                                                                                                                       Jan‐0
                                                                                                                                                Jul‐0
                                                                                                                                                         Jan‐0
                                                                                                                                                                  Jul‐0
                                                                                                                                                                           Jan‐0
                                                                                                                                                                                    Jul‐0
                                                                                                                                                                                             Jan‐0
                                                                                                                                                                                                      Jul‐0
                                                                                                                                                                                                               Jan‐0
                                                                                                                                                                                                                        Jul‐0
                                                                                                                                                                                                                                 Jan‐0
                                                                                                                                                                                                                                           Jul‐0
                                                                                                                                                                                                                                                    Jan‐0
                                                                            Source:  Real Estate Center                                                                                                                                   27
       Brazoria County Existing Home
                   Sales
                   S l
160
                                                      2005
140
                                                              2007
120
                                                                            2006

100

                        2008
 80
                                                                            2004
 60

 40
                  Mar




                               May
      Jan

            Feb




                        Apr




                                               Jul

                                                        Aug




                                                                      Oct

                                                                              Nov

                                                                                    Dec
                                       Jun




                                                               Sept
                              Source:  Real Estate Center
                                                  2%
                                                 -2%
                                                       -1%
                                                                                                                10%
                                                                                                                      11%
                                                                                                                            12%
                                                                                                                                  13%
                                                                                                                                        14%




                                                             0%
                                                                  1%
                                                                       2%
                                                                            3%
                                                                                  4%
                                                                                       5%
                                                                                            6%
                                                                                                 7%
                                                                                                      8%
                                                                                                           9%
                                        1Q1997
                                        2Q1997
                                        3Q1997
                                        4Q1997
                                        1Q1998
                                        2Q1998
                                        3Q1998
                                        4Q1998
                                        1Q1999
                                        2Q1999
                                        3Q1999
                                        4Q1999
                                        1Q2000
                                                                                                                  US 1Q2008 = 0.0%




                                        2Q2000
                                                                                                                  Houston MSA = 4.4%
                                                                                                                  Texas 1Q2008 = 4.7%




                                        3Q2000
                                        4Q2000
                                        1Q2001
                                        2Q2001
                                        3Q2001
                                        4Q2001
                                        1Q2002
                                        2Q2002
                                        3Q2002
                                                                       Texas
                                        4Q2002
                                        1Q2003
                                        2Q2003
                                        3Q2003
                                        4Q2003
                                        1Q2004
                                        2Q2004



Source: OFHEO, Y/Y Change in full HPI
                                        3Q2004
                                        4Q2004
                                        1Q2005
                                        2Q2005
                                        3Q2005
                                        4Q2005
                                        1Q2006
                                        2Q2006
                                        3Q2006
                                        4Q2006
                                                                        Houston
                                                                                                                      US




                                        1Q2007
                                        2Q2007
                              29




                                        3Q2007
                                        4Q2007
                                        1Q2008
                                                                                                                                              US, Texas and Houston Appreciation
 US, Texas, California and Florida Appreciation
                                                                                                           1Q2008 HPI Percent Change Year over Year
                                                                                                           1Q2008 HPI Percent Change Year over Year
30%
28%
26%             US = -0.03%, Texas = 4.7%,
24%
22%             California = -10.6%, Florida = -8.1%
20%
18%
                                                                                                                                                                                                                                                                                                                                                               Florida
16%
14%
12%
10%
 8%
                                                                                                                                                                                                                                                                                                                                                                      Texas
 6%                                                                                                                                                                                                                                                                                            US
 4%
 2%
 0%
-2%
-4%
                                                                                                                                                                                                                                                                                 California
-6%
-8%
-10%
-12%
 14%
-14%
       1Q1997
                2Q1997
                         3Q1997
                                  4Q1997
                                           1Q1998
                                                    2Q1998
                                                             3Q1998
                                                                      4Q1998
                                                                               1Q1999
                                                                                        2Q1999
                                                                                                 3Q1999
                                                                                                          4Q1999
                                                                                                                   1Q2000
                                                                                                                            2Q2000
                                                                                                                                     3Q2000
                                                                                                                                              4Q2000
                                                                                                                                                       1Q2001
                                                                                                                                                                2Q2001
                                                                                                                                                                         3Q2001
                                                                                                                                                                                  4Q2001
                                                                                                                                                                                           1Q2002
                                                                                                                                                                                                    2Q2002
                                                                                                                                                                                                             3Q2002
                                                                                                                                                                                                                      4Q2002
                                                                                                                                                                                                                               1Q2003
                                                                                                                                                                                                                                        2Q2003
                                                                                                                                                                                                                                                 3Q2003
                                                                                                                                                                                                                                                          4Q2003
                                                                                                                                                                                                                                                                   1Q2004
                                                                                                                                                                                                                                                                            2Q2004
                                                                                                                                                                                                                                                                                     3Q2004
                                                                                                                                                                                                                                                                                              4Q2004
                                                                                                                                                                                                                                                                                                       1Q2005
                                                                                                                                                                                                                                                                                                                2Q2005
                                                                                                                                                                                                                                                                                                                         3Q2005
                                                                                                                                                                                                                                                                                                                                  4Q2005
                                                                                                                                                                                                                                                                                                                                           1Q2006
                                                                                                                                                                                                                                                                                                                                                    2Q2006
                                                                                                                                                                                                                                                                                                                                                             3Q2006
                                                                                                                                                                                                                                                                                                                                                                      4Q2006
                                                                                                                                                                                                                                                                                                                                                                               1Q2007
                                                                                                                                                                                                                                                                                                                                                                                        2Q2007
                                                                                                                                                                                                                                                                                                                                                                                                 3Q2007
                                                                                                                                                                                                                                                                                                                                                                                                          4Q2007
                                                                                                                                                                                                                                                                                                                                                                                                                   1Q2008
                                                                                                                                                                                                                                                                                                                                                                                                 30
                                                                                                                                                                Source: OFHEO
               Texas Median Home Prices
                                                                                 2003 Trend
$160,000
$160 000                                                                                                                                                                                    154,585
              Median Home Price of $154,600 by 2010 equals a                                                                                                                            150,118
$150,000                                                                                                                                                                   147,500 145,650
              4.8% increase over 2007.                                                                                                                             143,100

$140,000      Annual average increase of 4.4% 1990‐2007;                                                                                                  136,800

              Annual increases of ‐1.3% in 2008 and 3% in 2009                                                                                    130,100
$130,000                                                                                                                                127,700
              and 2010.                                                                                                          124,500

                                                                                                                       119,400
$120,000
                                                                                                             112,100

$110,000
                                                                                                   100,900
$100,000                             2003 trend line                                      96,200

                                                                                 90,600
 $90,000
 $90 000                                                                86,400

                                                               81,600
                                                      80,000
 $80,000                            75,200
                                             78,200

                           71,200
           68,500 68,100
 $70,000

 $60,000

 $50,000




                                                                                                                                                                                        p
                                                                                                                                                                                    2008p

                                                                                                                                                                                            2009p
                                                                                                                                                                                                p

                                                                                                                                                                                                    2010p
                                                                                                                                                                                                        p
             1989
                9

                    1990
                       0

                             1991

                                      1992
                                         2

                                                  3
                                               1993

                                                           4
                                                        1994

                                                                 1995
                                                                    5

                                                                          1996
                                                                             6

                                                                                      7
                                                                                   1997

                                                                                            1998
                                                                                               8

                                                                                                      1999
                                                                                                         9

                                                                                                                   0
                                                                                                                2000

                                                                                                                          2001

                                                                                                                                    2002
                                                                                                                                       2

                                                                                                                                           2003
                                                                                                                                              3

                                                                                                                                                   2004
                                                                                                                                                      4

                                                                                                                                                            2005
                                                                                                                                                               5

                                                                                                                                                                    2006
                                                                                                                                                                       6

                                                                                                                                                                             2007
                                                                                                                                                                                7
                                             Source:  Real Estate Center at Texas A&M University
   Brazoria County Median Home Prices
$150,000

$140,000
                    Annual average increase of 4.7% 1990‐2007;                                                                                                                                  139,521

                                                                                                                                                                                           133,271
                    2008, 2009 and 2010 estimates at annual 5% 
$130,000                                                                                                                                                                          127,302
                    increase.                                                                                                                                           121,600

$120,000
                                                                                                                                                              114,200

                                                                                                                                                    108 700
                                                                                                                                                    108,700
$110,000
$110 000
                                                                                                                                           99,000
$100,000
                                                                                                                           93,300

 $90,000
 $90 000                                                                                                          87,000
                                                                                                         83,400
                                                                                       80,700
                                                                                                78,800
 $80,000                                                                      77,500

                                                                     72,000

 $70 000
 $70,000                                      65,600 64,600 65,000

                                     60,800
 $60,000   55,900 56,500
                            54,400


 $50,000
 $50 000




                                                                                                                                                                                   2008e

                                                                                                                                                                                            2009e

                                                                                                                                                                                                    2010e
             1989

                     1990

                              1991

                                       1992

                                                1993

                                                       1994

                                                              1995

                                                                       1996

                                                                                1997

                                                                                         1998

                                                                                                  1999

                                                                                                           2000

                                                                                                                    2001

                                                                                                                             2002

                                                                                                                                    2003

                                                                                                                                             2004

                                                                                                                                                       2005

                                                                                                                                                                 2006

                                                                                                                                                                           2007
                                                 Source: Real Estate Center at Texas A&M University
                                                                                           ales
                                                                         Percent of Total Sa




                                                                                             10
                                                                                                  12
                                                                                                           14
                                                                                                                       16




                                                             0
                                                                 2
                                                                     4
                                                                         6
                                                                                   8
                                           $29,999 or less


                                           30,000 - 39,999


                                                                                                          Price 
                                                                                                         $77,500
                                                                                                         $77 500
                                           40,000 - 49,999
                                                                                                       1997 Median 


                                           50,000 - 59,999


                                           60,000 - 69,999


                                           70,000 - 79,999


                                           80,000 - 89,999


                                           90,000 - 99,999
                                                                                                                1997




                                                 1
                                       100,000 - 119,999


                                                 1
                                       120,000 - 139,999


                                                 1
                                       140,000 - 159,999
                                                                                                                2007




                                                 1
                                       160,000 - 179,999
                                                                                                                                                   y
                                                                                                                                     Brazoria County




Source:  Real Estate Center at Texas A&M
                                                 1
                                       180,000 - 199,999


                                                 2
                                       200,000 - 249,999


                                                 2
                                       250,000 - 299,999


                                                 3
                                       300,000 - 399,999
                                                                                                                            1997 and 2007 Home Sales by Price


                                                                                                      Price 




                                                 4
                                       400,000 - 499,999
                                                                                                    $121,600
                                                                                                  2007 Median 




                                 500,000 and more
                                                                                                                                                                              ,




                                                                     4,000
                                                                             5,000
                                                                                     6 000
                                                                                     6,000
                                                                                             7,000
                                                                                                     8,000
                                                                                                             9,000
                                                                                                                     10,000
                                                                                                                              11 000
                                                                                                                              11,000
                                                                                                                                       12,000
                                                                                                                                                     13,000
                                                                                                                                                                            14,000
                                                                                                                                                                                                  15,000
                                                            Jan-95
                                                            Apr-95
                                                            Jul-95
                                                            Oct-95
                                                            Jan-96
                                                            Apr-96
                                                            Jul-96
                                                            Oct-96
                                                            Jan-97
                                                            Apr-97
                                                            Jul-97
                                                            Oct-97
                                                            Jan-98
                                                            Apr-98
                                                                                                                                                                                                           12-




                                                            Jul-98
                                                            Oct-98
                                                                                                                                                2008 YTD down 35%



                                                            Jan-99
                                                            Apr-99
                                                            Jul-99
                                                            Oct-99
                                                            Jan-00
                                                            Apr-00
                                                            Jul-00
                                                            Oct-00
                                                            Jan-01
                                                            Apr-01
                                                            Jul-01
                                                            Oct-01
                                                            Jan-02
                                                            Apr-02
                                                            Jul-02
                                                            Oct-02
                                                            Jan-03
                                                                                                                                                2003 Trend line has very tight fit with actual.




                                                            Apr-03
                                                            Jul-03
                                                            Oct-03
                                                                                                                                                                                                           12-Month Moving Average




                                                            Jan-04
                                                                                                                                                A construction “bubble” from 2004 to mid-2006.




                                                            Apr-04
                                                            Jul-04
                                                            Oct-04
                                                            Jan-05
Source: US Census Bureau, Real Estate Center at Texas A&M

                                                            Apr-05
                                                                                                                                                                                                                                     Texas SF Permits




                                                            Jul-05
                                                            Oct-05
                                                            Jan-06
                                                            Apr-06
                                                            Jul-06
                                                            Oct-06
                                                            Jan-07
                                                            Apr-07
                                                            Jul-07
               34




                                                            Oct-07
                                                            Jan-08
                                                                     0
                                                                                   50
                                                                                                                        100
                                                                                                                              150
                                                                                                                                    200
                                                                                                                                          250
                                                                                                                                                300
                                                                                                                                                      350
                                                            Jan-95
                                                            Apr-95
                                                            Jul-95
                                                            Oct-95
                                                            Jan-96
                                                            Apr-96
                                                            Jul-96
                                                            Oct-96
                                                            Jan-97
                                                            Apr-97
                                                            Jul-97
                                                            Oct-97
                                                            Jan-98
                                                            Apr-98
                                                            Jul-98
                                                            Oct-98
                                                            Jan-99
                                                                                                                                                            12-




                                                            Apr-99
                                                            Jul-99
                                                            Oct-99
                                                            Jan-00




                                                                                t
                                                            Apr-00
                                                            Jul-00
                                                            Oct-00
                                                            Jan-01
                                                            Apr-01
                                                            Jul-01
                                                            Oct-01
                                                            Jan-02
                                                            Apr-02       2008 YTD down 35%
                                                            Jul-02
                                                            Oct-02
                                                            Jan-03
                                                            Apr-03
                                                                                                                                                            12-Month Moving Average




                                                            Jul-03
                                                                                   ti “bubble” f



                                                            Oct-03
                                                            Jan-04
                                                            Apr-04
                                                            Jul-04
                                                            Oct-04
                                                            Jan-05
                                                            Apr-05
Source: US Census Bureau, Real Estate Center at Texas A&M


                                                            Jul-05
                                                            Oct-05
                                                            Jan-06
                                                            Apr-06
                                                            Jul-06
                                                            Oct-06
                                                                         2003 Trend line has very tight fit with actual.




                                                            Jan-07
                                                                                                                                                                                      Brazoria County SF Permits




                                                            Apr-07
                                                                                                               to id 2006




                                                            Jul-07
                                                                         A construction “b bbl ” from 2004 t mid-2006.




               35




                                                            Oct-07
                                                            Jan-08
                                                            Apr-08
 Demographic
Trends for Texas
     Texas – Poised for a 21st
         Century Boom
         C t      B
• Population and Economic growth
  Population and Economic growth
• Low cost, available labor
• Pro Growth Attitude
  Pro Growth Attitude
• Migration into State from elsewhere
• Attractive Retirement Area
  Att ti R ti             tA
• Pressure on infrastructure, government 
      i         bli fi
  services, public finance
• Most affordable state for land, housing 
    d        ll    t f li i
  and overall cost of living
                                             37
    2000 – 2007 States with
Population Increases > 1 million
                  Number                                                                                    Percent
  Texas          3,052,581                                                                                  14.6%
  California
  C lif i        2 681 560
                 2,681,560                                                                                   7.9%
                                                                                                             7 9%
  Florida        2,268,419                                                                                  14.2%
  Georgia        1,357,934                                                                                  16.6%
  Arizona        1 208 140
                 1,208,140                                                                                  23 5%
                                                                                                            23.5%
  North Carolina 1,014,541                                                                                  12.6%
                                           Source: U.S. Census Bureau
 Table 2. Cumulative Estimates of the Components of Population Change for the United States, Regions, States and Puerto Rico: 
                              April 1, 2000 to July 1, 2007 (NST‐EST 2007‐02), December 27, 2007
                               2000-
            Top 18 Growth MSAs 2000-2007
1,100,000
1 100 000
1,000,000
 900,000
 800,000
 700,000
 600,000
 600 000
            996,463

                      947,907

                                900,276

                                          887,678


 500,000
                                                    803,100

 400,000
                                                    8




 300,000
                                                               484,631

                                                                         472,112

                                                                                   459,482

                                                                                             442,901

                                                                                                       405,515

                                                                                                                 385,489

                                                                                                                           375,572

                                                                                                                                     332,315

                                                                                                                                               319,492

                                                                                                                                                         311,341
 200,000




                                                                                                                                                                   282,427

                                                                                                                                                                              71,266

                                                                                                                                                                                             70,712
  00,000
 100,000




                                                                                                                                                                             27

                                                                                                                                                                                            27
                                                                                                                                               3

                                                                                                                                                         3
       0




                                                                                                                                                                                       39
                                                              Source: U.S. Census Bureau
                     2007-
US Population Growth 2007-2012




                      40
          Source: Global Insight, Inc.
                  Projected Texas Population
(000s)
45 000
45,000
                                                                                  2000 - 2030
                         At 50% 1990-2000 rate of immigration
                         At 2000-2004 rate of immigration                                                                                                                                              41,118

40,000                   At 100% 1990-2000 rate of immigration

                                                                                                                                                                            36,682
                                                                                                                                                                                              36,333
              Between 9 and 18 million more 
35,000
              residents between 2005 and 2030
              residents between 2005 and 2030                                                                                                    32,737
                                                                                                                                                                   33,158
                                                                                                                                                                   33 158
                                                                                                                                                                                     31,831

                                                                                                                                        30,253
                                                                                                                                                          29,897
30,000                                                                                                                29,214
                                                                                                                               28,006
                                                                                                             27,581

                                                                                       26,059       26,157
                                                                                  25,106
25,000                                                        23,904
                                                                             24,331

                                              22,929

         20,952

20,000



15,000
           2000

                  2001

                         2002

                                2003

                                       2004

                                                2005

                                                       2006

                                                                2007

                                                                       ...

                                                                               2010

                                                                                      2010

                                                                                             2010



                                                                                                      2015

                                                                                                               2015

                                                                                                                        2015



                                                                                                                                 2020

                                                                                                                                          2020

                                                                                                                                                   2020



                                                                                                                                                            2025

                                                                                                                                                                     2025

                                                                                                                                                                              2025



                                                                                                                                                                                       2030

                                                                                                                                                                                                2030

                                                                                                                                                                                                         2030
                                                                                                                                                                                              41
                                                               Source: U.S. Census Bureau, Texas State Demographer
    Averaging the projections results in an
   increase of 13.6 million people by 2030.
                 y    , q                  g
Over the next 25 years, equivalent of adding:

                Dallas-
        another Dallas-Ft. Worth
           t    lit          l
         metropolitan area, plus
           another Houston
         metropolitan area, plus
          another San Antonio
         metropolitan area, plus
         another Corpus Christi
                                           42
Central Texas Triangle




                         43
                         Houston MSA Population
10-
10-County: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto & Waller
11,000,000
                       At 50% 1990-2000 rate of immigration
                       At 2000-2004 rate of immigration
                                                                                                                    10,002,593
10,000,000
                       At 100% 1990-2000 rate of immigration
  9,000,000                                                                                            8,807,951

                 Between 2.1 and 4.7 million more people by 2030
  8,000,000                                                                               7,749,111



  7,000,000                                                                  6,813,412



                                                                 5,849,380
   ,   ,
  6,000,000
                                                   5,352,569

  5,000,000                           4,742,031



  4 000 0003 792 007
  4,000,0003,792,007

  3,000,000

  2,000,000
                1990
                1991
                1992
                1993
                1994
                1995
                1996
                1997
                1998
                1999
                2000
                2001
                2002
                2003
                2004
                2005
                2006
                2007

                                                                 2010
                                                                 2010
                                                                 2010

                                                                             2015
                                                                             2015
                                                                             2015

                                                                                         2020
                                                                                         2020
                                                                                         2020

                                                                                                      2025
                                                                                                      2025
                                                                                                      2025

                                                                                                                   2030
                                                                                                                   2030
                                                                                                                   2030
                                                                                                                   44
                         Source: US Census Bureau, Texas State Data Center and Demographer
          Brazoria County Population
   ,
600,000
            At 50% 1990-2000 rate of immigration
            At 2000-2004 rate of immigration                                             505,638
500,000     At 100% 1990-2000 rate of immigration                                      474,689

           Between 110,000 and 231,000 more 
400,000    residents between 2005 and 2030                                             383,598


                             294,233
300,000                 274,613
      225,381
200,000


100 000
100,000


     0
          1997
          1998
          1999
          2000
          2001
          2002
          2003
          2004
          2005
          2006
          2007

                                           2010
                                           2010
                                           2010

                                                          2015
                                                          2015
                                                          2015

                                                                         2020
                                                                         2020
                                                                         2020

                                                                                2025
                                                                                2025
                                                                                2025

                                                                                         2030
                                                                                         2030
                                                                                         2030
                                                                                           45
                       Source: U.S. Census Bureau, Texas State Demographer
                                               2005-
                        Texas Age Distribution 2005-2030
650,000                                                                                                                                               650,000

                                                                 Boomers                                                                              600,000
                            2005                                                                                                                                                   2010
600,000

550,000                                                                                                                                               550,000                                                           Boomers
500,000                                                                                                                                               500,000

450,000                                                                                                                                               450,000

400,000                                                                                                                                               400,000

350,000                                                                                                                                               350,000

300,000                                                                                                                                               300,000

250,000                                                                                                                                               250,000

200,000                                                                                                                                               200,000

150,000                                                                                                                                               150,000

100,000                                                                                                                                               100,000

 50,000                                                                                                                                                50,000

      0                                                                                                                                                     0
          0

              5

                  10

                       15

                            20

                                 25

                                       30

                                             35

                                                       40

                                                                  45

                                                                            50

                                                                                      55

                                                                                                60

                                                                                                          65

                                                                                                                    70

                                                                                                                              75

                                                                                                                                    80

                                                                                                                                          85+




                                                                                                                                                                         10

                                                                                                                                                                              15

                                                                                                                                                                                    20

                                                                                                                                                                                         25

                                                                                                                                                                                              30

                                                                                                                                                                                                   35

                                                                                                                                                                                                        40

                                                                                                                                                                                                                   45

                                                                                                                                                                                                                        50

                                                                                                                                                                                                                             55

                                                                                                                                                                                                                                  60

                                                                                                                                                                                                                                       65

                                                                                                                                                                                                                                            70

                                                                                                                                                                                                                                                 75

                                                                                                                                                                                                                                                       80

                                                                                                                                                                                                                                                            85+
                                                                                                                                                                0

                                                                                                                                                                    5
                                                                                                                                          8




                                                                                                                                                                                                                                                            8
                                                            Age                                                                                                                                              Age

650,000                                                                                                                                               650,000

                                                                                                                                                      600,000
                                            2020
600,000

550,000                                                                                                                                               550,000
                                                                                                                                                                                                   2030
                                                                                                     Boomers                                          500,000
                                                                                                                                                                                                                                            Boomers
500,000

450,000
 50,000                                                                                                                                               450,000

400,000                                                                                                                                               400,000

350,000                                                                                                                                               350,000

300,000                                                                                                                                               300,000

250,000                                                                                                                                               250,000

200,000                                                                                                                                               200,000

150,000                                                                                                                                               150,000

100,000                                                                                                                                               100,000

 50,000                                                                                                                                                50,000

     0                                                                                                                                                     0                                                                                      46
                                                                                                                                                                        10


                                                                                                                                                                              15


                                                                                                                                                                                    20


                                                                                                                                                                                         25


                                                                                                                                                                                              30


                                                                                                                                                                                                   35


                                                                                                                                                                                                        40


                                                                                                                                                                                                                   45


                                                                                                                                                                                                                        50


                                                                                                                                                                                                                             55


                                                                                                                                                                                                                                  60


                                                                                                                                                                                                                                       65


                                                                                                                                                                                                                                            70


                                                                                                                                                                                                                                                 75


                                                                                                                                                                                                                                                       80
                                                                                                                                                                0


                                                                                                                                                                    5




                                                                                                                                                                                                                                                            85+
          0


              5


                  10


                       15


                            20


                                  25


                                        30


                                                  35


                                                            40


                                                                       45


                                                                                 50


                                                                                           55


                                                                                                     60


                                                                                                               65


                                                                                                                         70


                                                                                                                                   75


                                                                                                                                         80


                                                                                                                                                85+




                                                                 Age                                                                                                                                         Age
                   p
         What to Expect
• Energy industry continued strong for next year
     so
  or so, but slower job growth and watch out …
• Overall home values flat to small increase;
              sub-markets
  “spotty” by sub markets
• 2008-2009: good economic growth, job gains
  not as great as past several years, strong
  housing market demand
• Increased rental demand as mortgage market
  tightens – softer rental demand as/if new
  government programs started
                                              47
Dr. James P. Gaines
Dr. James P. Gaines
     Research Economist
      Real Estate Center 
      Real Estate Center
    Texas A&M University
      recenter.tamu.edu

								
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