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Economic News

Top real estate economist says no double dip – we haven’t even hit bottom



Dr. Dotzour, model economist

For years, we’ve been alluding to Dr. Mark Dotzour, Chief Economist of the Texas Real Estate Center as the “model economist” and called for his being Yun’s successor because of his honest and sometimes controversial economic outlooks.

We are not exaggerating when we say that most very high ranking executives in Texas commercial real estate firms and residential development groups will not make a move without hearing Dr. Dotzour’s outlook.

Because of that, we pay very close attention to his thoughts on national issues as well.

No double dip

In Dr. Dotzour’s most recent speech at the SIOR Conference, he said there was no double dip, that we haven’t even hit the bottom yet.

This conflicts with what many other economists are saying and honestly, it conflicts with what we have been saying. We’ve even shown you via chart where the double dip exists. But when Dr. Dotzour says these up and downs don’t account for the bottom yet, we are a bit afraid of what the bottom looks like.

Economy looks better, why the sour outlook?

Unemployment is bouncing up and down but is overall improved, corporate profits are way up, layoffs are way down, new home construction is more realistic and improving, existing home sales are improving, yet Dr. Dotzour’s outlook isn’t exactly sunny.

Dr. Dotzour said, “The government sector has postponed right-sizing at enormous expense to the American taxpayers” and alludes to “Unfathomable budget deficits” holding the economy back.

We highly encourage you taking time today to listen to Dr. Dotzour’s audio speech or at least thumbing through his slides. It may change your mind on some widely held beliefs about the national real estate economy.

Click here to hear Dr. Dotzour’s speech and
click here for his corresponding slides.

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  1. Ben Fisher

    May 29, 2011 at 2:23 pm

    We are seeing the same here locally. No rush to buy here yet!

  2. Eric Holmes

    May 29, 2011 at 9:01 pm

    After a long weekend of not thinking of real estate I can honestly say this article reminds me of one of my favorite quotes from the movie Caddyshack… "RAT FARTS!"

  3. Ruthmarie Hicks

    May 29, 2011 at 11:50 pm

    Its been SLLLLOOOOW in Westchester NY – However, there are too many people renting. Being close to Manhattan – rents are generally high, but they've gone up a surprising 4.5-10% in just a few months. Just this past week – two buyers that opted to rent last year got back into the market. Their leases were up and they got the bill….

    The point is that as rents rise – those capable of buying who thought they could stay in cheap rentals are being forced back into the market.

    Real estate markets are very local. In Westchester – areas near Manhattan with easy access to metro-north trains that are within 40 minutes of Grand Central – these areas appear to have bottomed. The upper part of the county and across the Hudson river in Rockland and Orange counties – as well as Putnam and Duchess counties which are due north but still on the east side of the Hudson – are probably not there yet. Living in these places means a long commute if you work in the city. 2 hours each way in some cases – and so the demand is less.

  4. Rob McCance

    May 30, 2011 at 10:45 pm

    The market is smoking in Atlanta.

  5. Dunes

    June 1, 2011 at 11:02 am

    Exciting News…

    Now Agents won't have to change their Marketing Plan and can spend another 5 years sharing their expertise by announcing we are now at the Bottom..Good time to Buy

    Bonus..Get to keep using the "Don't have a Crystal Ball" spiel

  6. Zoom out please ...

    June 2, 2011 at 8:47 pm

    "Double dip" vs. "not hit the bottom yet" is just a matter of perspective. Yes, they showed a "chart where the double dip exists," but it's so zoomed in, it's hard to make head or tails of it.

    Take a look at the chart, with more perspective:

    The housing bubble that began in the mid-nineties, and popped in the mid 2000's, has no historical president in the past 100 years. It's pretty unreal to look at, and hard to argue that it's somehow stable at a value 50% higher than it's historical average (and higher than any time in history, excluding this point in the bubble on the way up).

    So … what happened in 2009? Massive government intervention to keep houses expensive. First time buyer's credit was the big one. They quite literally gave people money to buy a house that was still radically overvalued. They basically just stalled the natural course of the bubble, nothing more.

    Of course, with the banking system as broken as it is, it's really hard to say much of anything – maybe the market will continue to be propped up by various means, maybe the markets will be flooded with ever more cheap money that will drive prices up / keep them stable.

    But I would say the smart way to think about it is to step back – that is, zoom out – and ask yourself if these prices are at all sustainable. I don't see how they can be. The price is just still correcting from its absurd high.

    Articles that keep saying "housing prices are down" completely miss the point. Housing prices are still _up_, not down. Down from yesterday, or last year? Maybe. Down from five years ago? Yes, of course, how could they not be?

    Down from ten twenty years ago (inflation adjusted)? No way, still way up!

  7. Matthew

    June 5, 2011 at 6:08 pm

    The market is weird in Chicago. Prices are near bottom on many properties because investors are buying if they can for sure make a profit as a rental. But my luck of finding such a deal is difficult with this competition. Furthermore in the one offer I made I backed out because they did not disclose that the roof needed repair, and tuck pointing done which amounts to over 30K in special assesments. As well as when I put my offer in, although I was the only offer the banks argued over who was the actual owner of the property! In the end they found that Fannie Mae owned the property and then Citibank bought the property according to my realtor "illegally" because they were suppose to take it off the market and have mine as the only offer for 30 days to stop foreclosure proceedings. Ironically Citibanks greed was shortsighted in this case because with all the trouble in the building they will loose a lot of money! This may give a clue as to just how complicated it is to buy a condo in Chicago, everything is a complete tangled mess. I feel confident with patience I will find the deal I am looking for. I estimate I have two years to do it.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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