October 19, 2007
Forecast 2008: The Texas Economy and Housing Market
Dr. James P. Gaines
Research Economist Real Estate Center Texas A&M University
1
The Texas Housing Market
• Current Conditions and “Scorecard” • Future Trends
2
The “100,000 foot” View
• 2006 peak of current housing cycle in Texas, not sure about the
trough
• Sales-transaction volumes down about 3%, probably 5 to 10%
by year end – a return to long-term “norm”
• Home prices across the state continue to rise • Significant and needed decline in new home construction –
permits down about 30% from ’06
• Period of “easy credit, easy terms” over • Biggest current threat to market is recession • Long-term outlook for Texas is substantially positive over next 25
years
3
Housing Scorecard
National
Measure Ex. SF Sales (YTD) Amount
3,555k 9.8 3,920k 596k 8.2 529k Y/Ym % YTD % -12.2% 37.0% 16.3% -21.2% 20.6% -6.9% 2.6% $223,900 $225,700 $269,800 0.0% -7.5% -0.6% -8.0% -19.9% 55.6% -27.9% 69.2% $201,900 $178,700* 84,485 69,471 7.7% 12.5% -33.1% -13.1% -27.2% -4.8%
4
Texas
Amount
194,172 5.9 139,426 -22.7% Y/Ym % -6.6% 13.5% 14.1%
YTD %
-2.9%
-9.5%
Mo. Inventory SF Listings New Sales (YTD) Mos. Inventory
New Homes For Sale
OFHEO Apprec. (2Q)
6.9% $153,100 4.8%
Md. Exist. Pr. (m) Md. New Price (m) Avg. Exist. Pr. (m)
SF Permits (YTD)
Delinq./Foreclosure Filings (1H07)
Avg. New Price (m) $292,000
649.3k 925,986
Texas MSAs Housing Scorecard
Texas
Measure
SF Sales (m) YTD SF Sales Pending Sales (m) Total Listings (m) Months Inventory New Listings (m) SF Md. Price (m) SF Avg. Price (m) SF Price per S.F. SF Permits (m) YTD SF Permits
9,580 84,485 -33.1% -27.2 6.9% 69,471 -13.1% 5,155 $153,100 $201,900 4.8% 7.7% 139,426 5.9 14.1% 13.5%
Austin
Amount
2,501 20,424 2,196 11,172 4.5 3,806 $192,200 $258,954 $120 936 9,137 Y/Y % -10.4% -2.7% -24.0% 25.1% 25.1% -15.9% 6.5% 7.3% 5.3% -45.6% -30.2% 10.9% -23.9%
Dallas
Amount
5,631 41,206 6,442 32,915 6.6 11,602 $169,000 $230,600 $90 1,617 13,429 Y/Y % -8.0% -4.8% -16.8% 7.0% 10.0% -12.2% 1.3% 4.4% 3.4% -35.3% -37.1% 3.7% 23,284 -11.8%
Houston
Amount
7,823 54,792 4,702 43,107 6.4
San Antonio
Amount
2,167 13,763 2,012 12,470 6.1 4,017
Amount
26,977 194,172
Y/Y %
-6.6% -2.9%
Y/Y %
0.2% -0.8% -4.6% 14.7% 12.3%
Y/Y %
-12.0% -7.2% -6.5% 49.9% 52.5% 19.2% 4.3% 3.4% 9.8% -49.3% -33.9% 10.5%
$157,000 $211,100
3.7% 7.4%
$154,800 $188,357 $90
3,199 27,781
-30.3 -23.3% 5.6%
711 4,807
OFHEO Apprec. (Q)
Delinq./Foreclosure Filings (1H07)
16,057
-22.9%
6,409
-13.6%
5
Texas Existing Home Sales
35,000
YTD 2007 sales down 3% from 2006
30,000
2007 will not “stack” on top of 2006, but not be far behind
2007
25,000
2006
20,000
2003
15,000
2005 2004 2002
10,000
Jan Feb Mar Apr
Source: Real Estate Center
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
6
Texas SF Home Permits
18,000 16,000 14,000 12,000 10,000 8,000 6,000
2006
2004 2007
YTD SF Permits are down 27.2%
Jan Feb Mar Apr May Jun Jul Aug Sept
2005 2003
Oct
Nov
Dec
7
Source: Real Estate Center
Multi-Family Building Permits
162,000 152,000 142,000 132,000 122,000 112,000 102,000 92,000 82,000 72,000 62,000 52,000 42,000 32,000 22,000 12,000 2,000
34,238 Through August, 2007 YTD Permits up 14% Average of 38,718 per year 19972006
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981
8
Source: Real Estate Center - Permits for Buildings with 5+ Units
US and Texas Appreciation
Purchase Only Index Change Year over Year
12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
1Q1992 3Q1992 1Q1993 3Q1993 1Q1994 3Q1994 1Q1995 3Q1995 1Q1996 3Q1996 1Q1997 3Q1997 1Q1998 3Q1998 1Q1999 3Q1999 1Q2000 3Q2000 1Q2001 3Q2001 1Q2002 3Q2002 1Q2003 3Q2003 1Q2004 3Q2004 1Q2005 3Q2005 1Q2006 3Q2006 1Q2007
US average increase = 5.5% Texas average increase = 4.1% US 2Q2007 = 2.6% Texas 2Q2007 = 6.4%
10.8%
US
7.7%
Texas
Source: OFHEO
9
FHLMC Reported 14 States with Annualized Home Price Decline in 2Q07
1. 2. 3. 4. 5. 6. 7. Arizona -1.6% California -4.3% Connecticut -3.9% Florida -3.5% Massachusetts -4.1% Maine -0.9% Michigan -6.1% 8. Minnesota -2.8% 9. New Jersey -1.5% 10. Nevada -5.9% 11. New York -2.8% 12. Ohio -0.5% 13. Rhode Island -5.8% 14. Vermont -2.8%
10
Source: FHLMC, Conventional Mortgage Home Price Index, State Annualized Quarterly Growth Rates
1Q 97 2Q 97 3Q 97 4Q 97 1Q 98 2Q 98 3Q 98 4Q 98 1Q 99 2Q 99 3Q 99 4Q 99 1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02 3Q 02 4Q 02 1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06
14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 -1 -2
Y/Y Index Change
Home Price Appreciation
Source: OFHEO
San Antonio
Dallas
Austin
Ft. Worth
Houston
11
3Q 06 4Q 06 1Q 07 2Q 07
Percent of Sales
$29,999 or less 30,000 - 39,999
14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1996
40,000 - 49,999 50,000 - 59,999 60,000 - 69,999 70,000 - 79,999 80,000 - 89,999
2006
90,000 - 99,999 100,000 - 119,999 120,000 - 139,999 140,000 - 159,999 160,000 - 179,999 180,000 - 199,999 200,000 - 249,999 250,000 - 299,999 300,000 - 399,999 400,000 - 499,999 500,000 and more
Distribution of Texas Home Prices
Source: Real Estate Center at Texas A&M University
What will 2016 look like?
12
"If we don't change the direction we are headed, we will end up where we are going."
Chinese Proverb
13
14
US Median HH Income and Median Home Prices Indexed to 1990
250 225 200 175 150 125 100 75
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
15
M
n Ho edia
Price me
edian M
e Incom HH
Source: US Census Bureau, NAR
2006
Texas Median HH Income and Median Home Price Indexed to 1990
250 225 200 175 150 125 100 75
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
16
M
n Ho edia
Price me e com In
H an H i Me d
Source: US Census Bureau, Real Estate Center at Texas A&M University
2006
U.S. and Texas Median Home Price
$250,000 $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000
Texas is a housing bargain. The gap between the US and Texas median price has widened from around 25% to 33%.
ian d Me S. e om H rice P
rice P
U.
T
1989 1990 1991 1992 1993 1994 1995 1996 1997
xas e
1999
M
n dia e
me Ho
1998
2000
2001
2002
2003
2004
2005
2006
17
Source: NAR; Real Estate Center at Texas A&M University
2007
5.50 5.25 5.00 4.75 4.50 4.25 4.00 3.75 3.50 3.25 3.00 2.75 2.50 2.25 2.00
1989
Median Home Price as a Multiple of Median Household Income
US New Homes US Existing Homes
Texas Existing Homes
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
18
Source: US Census Bureau, NAR; Real Estate Center at Texas A&M University
2006
1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0
US and Texas Housing Affordability Indexes
Texas U.S.
Ratio of Median Family Income to Required Income to Qualify for a Loan to Purchase the Median-Priced Home
2001
2002
2003
2004
2005
2006
19
Source: Real Estate Center at Texas A&M University
Number of Texas Households by Maximum Affordable Home
>$500,000 268,045, 3.3% $400,000-$500,000 206,366, 2.5% $300,000-$400,000 451,658, 5.6%
Maximum Home Price
$250,000-$300,000 439,510, 5.4% $200,000-$250,000 707,063, 8.7%
Number of households by the maximum affordable home price assuming: 30-Year, 85% loan at 6% fixed rate Qualifying ratio = 30% Effective property taxes = 3% Property Insurance = 0.80% Annual Utilities = 2%
$175,000-$200,000 447,210, 5.5% $150,000-$175,000 528,731, 6.5% $125,000-$150,000 $75,000-$125,000 <$75,000 662,303, 8.2% 1,694,019, 21% 2,704,483, 33.4%
54% of Texas households cannot afford a house priced greater than $125,000
Number of Households
20
Source: US Census Bureau 2006 American Community Survey; Real Estate Center at Texas A&M University
POPULATION GROWTH
21
Demographic Overview
• Texas is fastest growing state in absolute number of
people
• Texas is a “younger” state than the US as a whole • Immigration – foreign and domestic - is the major
contributor to Texas population growth and probably is significantly undercounted
• Racial/Ethnic mix will reverse in the next 25 years • Aging Boomers represent a primary force
22
October 15, 2007
First Boomer Applies for Social Security
"America's silver tsunami"
“The baby boomers' stampede for Social Security benefits has begun. The nation's "first" baby boomer, a retired teacher from New Jersey, applied for Social Security benefits Monday …was born one second after midnight on Jan. 1, 1946, gaining her recognition as the first baby boomer — a generation of nearly 80 million born from 1946 to 1964 An estimated 10,000 people a day will become eligible for Social Security benefits over the next two decades … The Social Security trust fund, if left alone, is projected to go broke in 2041 …”
23
US Population Growth 2007-2012
24 Source: Global Insight, Inc.
(000s)
Projected Texas Population 2000 - 2030
At 50% 1990-2000 rate of immigration At 2000-2004 rate of immigration At 100% 1990-2000 rate of immigration
36,682 41,118
45,000
40,000
36,333
35,000
32,737 33,158 31,831 30,253 29,897
30,000
26,157
29,214 27,581 26,059 25,106 24,331 23,508 22,518 21,762 20,952 28,006
25,000
20,000
15,000
2000 2001 2002 2003 2004 2005 2006 2010 2010 2010 2015 2015 2015 2020 2020 2020 2025 2025 2025 2030 2030
25
Source: U.S. Census Bureau, Texas State Demographer
2030
...
Averaging the projections results in an increase of 13.6 million people by 2030.
Over the next 25 years, equivalent of adding: another Dallas-Ft. Worth metropolitan area, plus another Houston metropolitan area, plus another San Antonio metropolitan area, plus another Corpus Christi
26
Texas Age Distribution 2005-2030
2005
650,000 600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
85+ 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Age
2010
650,000 600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
Age
Boomers
Boomers
2020
650,000 600,000 550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
85+ 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Age
2030
650,000 600,000
Boomers
550,000 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
0 5 10 15 20 25 30 35 40 45 50 55 60 65
Age
Boomers
27
85+ 70 75 80
85+
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
Changing Face of Housing: Future Homebuyers and Sellers
Racial and Ethnic Composition of the US 1999 and 2025
1999 2025
, 7. 0%
Asian
Asi an
Black, 12.1%
Black, 12.9%
Hi sp
H
n pa is
2 8. ,1 ic
%
White, 71.9%
White, 62.0%
During the next two decades, minorities will account for approximately two-thirds of household growth … and half of all first-time homebuyers
, 4.5%
an i
c, 11 .5
%
Source: Social Science Data Analysis Network; NAR Forecast
28
Percent of Total Texas Population by Race
Anglo and Hispanic Proportions Reverse by 2030
60%
53.1%
Anglo
49.5% 45.9%
Black
Hispanic
45.1%
Other
51.3% 48.2%
50% 40%
42.4%
38.6% 35.3% 32.0%
41.9%
39.0% 35.7% 32.5%
30% 20% 10% 0%
11.6%
11.4%
11.2%
10.8%
10.5%
10.0%
9.5%
3.3%
3.8%
4.3%
4.9%
2000
2005
2010
2015
2020
5.4%
2025
6.1%
2030
29
Source: Texas State Data Center and Demographer, Average of Projections
6.7%
11,500,000 10,500,000 9,500,000 8,500,000 7,500,000 6,500,000 5,500,000 4,500,000 3,500,000 2,500,000 1,500,000 500,000
Major Texas MSAs Population 1980 to 2030
s Dalla o Houst n
o n Antoni Sa
Austin
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 ... 2010 2015 2020 2025 2030
30
Source: US Census Bureau, Texas State Data Center and Demographer
12-Counties: Collin, Dallas, Delta, Denton, Ellis, Hunt, Kaufman, Rockwall & Johnson, Parker, Tarrant, Wise
D-FW MSA Population
13,000,000 12,000,000 11,000,000 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000
5,161,544 5,823,043 6,570,840 7,482,956 8,566,960 9,862,210
Between 2.8 and 6.7 million more people by 2030
12,522,171
11,397,571
8,648,782
5,000,000 4,000,000 3,000,000 2,000,000
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 2010 2010 2010 2015 2015 2015 2020 2020 2020 2025 2025 2025
3,017,230 3,989,294
31
Source: US Census Bureau, Texas State Data Center and Demographer
2030 2030 2030
Home Sales Outlook
32
Texas Monthly Home Sales
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Average monthly sales since January 2000 = 19,225 Average monthly sales since January 2004 = 22,153
Source: Real Estate Center
33
Texas Home Sales per 1,000 Households
40.0 35.0 30.0
25.36 25.53 26.24 26.7
1980-1999 averaged 17.5 sales/1,000 HH 2000-2006 averaged 30 sales/1,000 HH
33.4
35.6
“Normal” around 25 to 26 sales/1,000HH
28.14
30.92
25.0 20.0 15.0 10.0 5.0 0.0
20.21 18.42 15.78 12.99 15.76 16.29 15.62 14.2 15.6 16.48 16.1 14.91 16.94 18.13 18.7 18.2 21
23.99
14.86
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
34 Source: US Census Bureau , Real Estate Center at Texas A&M
2006
310,000 290,000 270,000 250,000 230,000 210,000
Texas Home Sales
Projected 2007 annual sales = 274,000, a decline of 5.4% from 2006 level. A 10% decline in sales = 261,000 in 2007. At 25 sales per 1,000HH = 202,800, a 30% decline. At 30 sales per 1,000HH = 243,000, a 16% decline.
216,099 196,401 201,528 289,644 274,005 266,519 240,870
190,000 170,000 150,000 130,000 110,000 90,000 70,000 50,000
1990
184,056
194,172 200,046
188,738
YTD Sales
146,402 138,123
170,638
200,046
116,604 107,107 100,047 99,640
122,134 121,823
194,172
1991
1992
1993
Source: Real Estate Center at Texas A&M University
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
35
2006
F2007
70,000 65,000 60,000 55,000 50,000 45,000
Dallas Annual Home Sales
Simple trend extension indicates 2007 sales = 61,200, down 1.3% from 2006 and about 5,100 sales per month and 2008 sales = 64,000 However, YTD sales through August = 41,206, down 4.8% At 5% decline, total sales = 58,900, about 4,900 sales per month; if 10% decline, sales = 55,800, 4,650 sales per month.
49,278 54,514 61,977 59,980 58,900 56,000
If 2008 = 5.0% lower than 2007 = 56,000 sales, 4,667 per month.
45,446 43,199 40,051
46,992
47,199
40,000 35,000
30,128 33,884
30,000 25,000
21,406 24,968 22,999 19,742 17,528 16,858
20,000 15,000 10,000 5,000 0
F2007
Source: Real Estate Center at Texas A&M University
36
F2008
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Home Price Outlook
37
$250,000
US Median Home Price Since 1990
National House Price Bubble
$225,000
$200,000
$175,000
$150,000
Starting in 2001 prices stayed above trend despite a national recession. The national housing boom started around January 2002 creating a house price bubble that peaked in August 2005.
$125,000
$100,000
200
$75,000
ne endli 1 Tr
$50,000 Jul-90 Jul-91 Jul-92 Jan-93 Jul-93 Jul-94 Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jan-90 Jan-91 Jan-92 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jul-06 Jan-07
Source: NAR, Real Estate Center at Texas A&M University
38
$250,000
US Median Home Prices Since 1990
Including the higher sales prices through June 2007, re-establishes a long-term trend line that pivots upward and is steeper than the 1990-2001 trend.
$225,000
$200,000
$175,000
$150,000
1990-2007 Trend Line
$125,000
1990-2001 Trend Line
$100,000
$75,000
$50,000 Jul-90 Jul-91 Jul-92 Jan-93 Jul-93 Jul-94 Jul-95 Jul-96 Jul-97 Jul-98 Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jan-90 Jan-91 Jan-92 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jul-06 Jan-07
Source: NAR, Real Estate Center at Texas A&M University
39
$400,000 $375,000 $350,000 $325,000 $300,000 $275,000 $250,000
US Median Home Prices 1990 - 2030
Which is the “real” trend line for the future?
$230,100 $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27 Jan-28 Jan-29 Jan-30
Source: NAR, Real Estate Center at Texas A&M University
Are we headed for a national median price of nearly $400,000 or to around $300,000 or to something in between?
40
Texas Median and Average Home Prices
$275,000 $250,000 $225,000 $200,000 $175,000
$153,000
Average Price could approach $270,000 and the Median Price could approach $210,000 by 2020.
$201,700
$150,000 $125,000 $100,000 $75,000 $50,000
Average Price
Median Price
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
41
Source: Real Estate Center at Texas A&M University
Jan-20
Texas Annual Median Home Prices
180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000
F2007 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008 2009
42
$75,200 $71,200 $68,500$68,100 $90,600 $86,400 $80,000 $78,200 $81,600
Trend extrapolation indicates a 2007 median price = $144,000 and $158,100
$170,650
$158,100
by 2010. At long-term average 4.5% increase, 2007 = $149,540 and $170,650 by 2010.
$112,100 $100,900 $96,200
$149,540
$143,100 $136,800 $130,100 $127,700 $124,500 $119,400
$144,000
Source: Real Estate Center at Texas A&M
2010
Dallas Average and Median Home Prices
$325,000 $300,000 $275,000 $250,000 $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
43
Average Price could approach $300,000 and the Median Price could approach $230,000 by 2020.
$230,600
Average Price
$169,000
Median Price
Source: Real Estate Center
Home Construction Outlook
44
Texas SF Building Permits
21,000 19,000 17,000 15,000 13,000 11,000 9,000 7,000 5,000
Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21
21,627
18,488
16,637
2007 trend line
18,771 16,185
15,272
2003 trend line
13,602
8,713
3,000
45 Source: U.S. Census Bureau, Real Estate Center at Texas A&M (data thru May 2007)
Texas SFD Building Permits
180,000 160,000 140,000
122,913
2006 permits down 2.1% from 2005; 2007* permits down 25% from 2006; YTD down 26.4%
137,493
166,203
163,032
151,384
-25%
122,275
120,000
108,613
111,915
100,000
83,103 82,180
99,831
101,848
80,000
70,355 62,672 70,418
60,000
41,654
54,798
40,000 20,000 0
38,141
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
46
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
Dallas SFD Building Permits
3,500 3,000 2,500 2,000 1,500 1,000 500
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
47
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
Jan-07
Dallas SFD Building Permits
35,000 30,000 25,000
22,645 22,974
2006 permits down 10% from 2005; YTD07 permits 13,429, down 37.1% 2007* permits if down 35% from 2006;
25,726 25,689 24,978
32,101
31,696
28,513 27,418
-35%
20,000
18,072 15,827 15,881 15,651
19,434 18,500
15,000
11,224 9,993
14,769
10,000 5,000
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
48
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
Austin SFD Building Permits
20,000 18,000 16,000 14,000 12,000
10,805 11,704 11,072
2006 permits up 1.6% from 2005; ‘07 YTD Permits down 30.2% 2007* permits down 30% from 2006;
14,309 13,045 12,116
17,615 17,346
-30%
12,330
10,000 8,000
6,369 6,250 7,435
10,095 9,115 8,456
6,000
4,641
4,000 2,000 0
1,916
2,994
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
49
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
Houston SF Building Permits
60,000 50,000
2006 permits up 11.5% from 2005; YTD Permits down 23.3% 2007* permits down 25% from 2006;
44,019
49,101
-25%
40,000
36,237
38,781 36,825
30,000
25,610 23,917 21,743 22,248
29,215
20,000
16,482 12,499 13,051 13,309 13,486 11,587
17,936
10,000
9,086
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
50
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
16,000 14,000 12,000
San Antonio SF Building Permits
2006 permits down 6.4% from 2005; YTD Permits down 29.8% 2007* permits down 30% from 2006;
11,920 14,047 13,142
10,407
-30%
10,000
9,138 8,518 8,678 8,407
10,063 9,200
8,000
6,901 6,235 6,364 6,747
6,000
4,825
4,000 2,000 0
1,684 1,981
3,358
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007*
51
Source: U.S. Census Bureau, Real Estate Center at Texas A&M University
October 19, 2007
The Texas Housing Market
Dr. James P. Gaines
Research Economist Real Estate Center Texas A&M University jpgaines@tamu.edu
52