Houston and Tomball Economic and. Housing Outlook. recenter.tamu.edu. Dr. James P. Gaines Research Economist

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1 Houston and Tomball Economic and Dr. James P. Gaines Research Economist Housing Outlook recenter.tamu.edu

2 THE CURRENT SITUATION The Future Just Ain t What It Used to Be! Yogi Berra

3 National Economic Recovery still Going six years later! 3

4 1Q1980 1Q1981 1Q1982 1Q1983 1Q1984 1Q1985 1Q1986 1Q1987 1Q1988 1Q1989 1Q1990 1Q1991 1Q1992 1Q1993 1Q1994 1Q1995 1Q1996 1Q1997 1Q1998 1Q1999 1Q2000 1Q2001 1Q2002 1Q2003 1Q2004 1Q2005 1Q2006 1Q2007 1Q2008 1Q2009 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 Billions Household Net Worth Has Rebounded Well $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 Source: Federal Reserve St. Louis

5 1Q1980 1Q1981 1Q1982 1Q1983 1Q1984 1Q1985 1Q1986 1Q1987 1Q1988 1Q1989 1Q1990 1Q1991 1Q1992 1Q1993 1Q1994 1Q1995 1Q1996 1Q1997 1Q1998 1Q1999 1Q2000 1Q2001 1Q2002 1Q2003 1Q2004 1Q2005 1Q2006 1Q2007 1Q2008 1Q2009 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 1Q2015 Percent of Disposable Income Debt Service Payments as a Percent of Disposable Personal Income Low Source: Federal Reserve Board 5

6 U.S. Outlook Expected GDP growth still modest: %; personal consumption 2.5% FED and interest rates? When, not if Inflation not worrisome: % - 2.0%, especially with lower gas prices Industrial production data generally positive Housing improving, adding to overall national economy Jobs expanding; unemployment rate under 5.5% Energy sector & oil prices major issue for the year 6

7 Thousands of Jobs U.S. Jobs Finally Recovered 150, , , % % %!! 126, , , , , , , , , , , , , , , , , , , , , , , , , , , ,000 90,000 Sources: BLS, Real Estate Center at Texas A&M University 7

8 Jan-71 Jan-72 Jan-73 Jan-74 Jan-75 Jan-76 Jan-77 Jan-78 Jan-79 Jan-80 Jan-81 Jan-82 Jan-83 Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Inflation Remains Relatively Low 16.0% 14.0% 12.0% Consumer Price Index for All Urban Consumers: All Items 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% Source: BLS, Y/Y % change in index 8

9 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Consumer Confidence Index Expansion Recession U.S. Texas Source: The Conference Board (1985=100); Haver Analytics 9

10 Oil Prices & Energy Prices may not have bottomed yet: Saudi Arabia continues to protect its market share Global oil production will increase before it decreases Global oil demand not rapidly increasing even with rapidly-falling prices. Expect significant cut back in upstream capital spending on E&P, i.e., fewer wells drilled The Texas rig count down >55%: 900 to 412 (10/14-4/15) Increased geo-political-military volatility among oil producing nations that need (require) $95-$100+ oil price 10

11 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Active Rotary Rig Count & Price of WTI 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, Rigs down 53% from Sept. 14 (1930 to 905) Rigs (left) WTI $/bl (right) $160 $150 $140 $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Source: Baker Hughes; EIA; Haver Analytics 11

12 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul Annual Employment Growth Rates for US, Texas and Houston 6.0 Houston Texas US Source: BLS, Real Estate Center at Texas A&M University 12

13 Jan-81 Jul-81 Jan-82 Jul-82 Jan-83 Jul-83 Jan-84 Jul-84 Jan-85 Jul-85 Jan-86 Jul-86 Jan-87 Jul-87 Jan-88 Jul-88 Jan-89 Jul-89 Jan-90 Jul-90 Jan-91 Jul-91 Jan-92 Jul-92 Jan-93 Jul-93 Jan-94 Jul-94 Jan-95 Jul-95 Jan-96 Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Texas Leading Economic Index Source: The Conference Board (1985=100); Haver Analytics 13

14 Houston Annual Jobs 3,200,000 3,000,000 2,800,000 2,600, %, 104,200 jobs %, 101,900 jobs %, 97,500 jobs Jan-May ,300 jobs since December 2,471,900 2,629,600 2,621,400 2,573,900 2,559,100 2,554,500 2,725,600 2,827,500 2,925,000 2,400,000 2,200,000 2,000,000 1,800,000 1,994,400 1,945,000 1,885,000 1,840,800 1,805,400 1,807,000 1,773,800 2,077,900 2,372,800 2,309,700 2,303,800 2,271,200 2,289,600 2,306,700 2,217,900 2,182,400 1,600,000 1,400,000 Sources: Texas Workforce Commission, Real Estate Center at Texas A&M University 14

15 Jan-95 Jul-95 Jan-96 Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Houston Employment & WTI Price/bl Monthly January 1995 to Current 3,100,000 3,000,000 2,900,000 Number of Jobs NSA WTI $/bl Correlation coefficient of 0.26 $140 $130 $120 2,800,000 2,700,000 2,600,000 2,500,000 2,400,000 2,300,000 2,200,000 2,100,000 2,000,000 1,900,000 1,800,000 Jun $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 1,700,000 $0 Source: Avg. Monthly WTI Spot Price FOB Cushing, OK; TWC; Real Estate Center at Texas A&M University

16 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 Millions, SAAR Total Public and Private Construction Put in Place $1,200,000 $1,000,000 Public Private $800,000 $600,000 $400,000 $200,000 $0 Source: Census Bureau, Haver Analytics

17 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 Millions, SAAR Total Residential and Nonresidential Construction Put in Place $800,000 $700,000 Nonresdiential Residential $600,000 $500,000 $400,000 $300,000 $200,000 Source: Census Bureau, Haver Analytics

18 Major Demographic Trends & Changing Housing Preferences Aging population Generational changes Lifestyle & life cycle: Gen Y vs. Boomers Increasing racial/ethnic diversity & cultural shifts Economic Shift: income & wealth gap Educated and less well educated Age Race & Ethnicity Urban Concentration - urban areas 18

19 Average Age of Major Life Events First Marriage, Males: 28.6 Years First Marriage, Females: 26.6 Years First Child: 26.0 Years Source: U.S. Department of Labor, U.S. Department of Commerce and Wells Fargo Securities, LLC 19

20 Overall Growth and Change in State Population Texas D-FW Houston Austin San Antonio Population Population % of State Total Population % of State Total Population % of State Total Population % of State Total ,145,561 6,426, % 5,920, % 1,716, % 2,142, % ,541,978 7,920, % 7,413, % 2,306, % 2,635, % ,155,084 9,970, % 9,278, % 3,035, % 3,182, % ,955,896 12,728, % 11,519, % 3,960, % 3,735, % ,369,297 16,367, % 14,221, % 5,176, % 4,294, % Increase 29,223,736 9,941, % 8,300, % 3,460, % 2,151, % Total Percent Increase 116.2% 154.7% 140.2% 201.6% 100.4% 82% of total increase will go to the Major MSAs Sources: U. S. Census; Texas State Demographer 2014 Projections ( Scenario) 20

21 Legend tl_2010_48_county10 F6 Projected Population Change, Texas Counties, , ,000 2,001-10,000 10, , ,001-1,000,000 1,000,001-3,480,000 Source: Texas State Data Center 2012 Population Projections Migration Scenario 21

22 Houston MSA Population Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery & Waller Counties ,500,000 13,500,000 11,500,000 9,500,000 7,500,000 5,500, ,147,640 3,500, ,201, % increase since % increase since ,767, ,715, ,946, ,700, ,750, ,519, ,221,267 1,500,000 Source: U.S. Census Bureau, Texas Demographer s Office 2014 Projections, scenario 22

23 Biggest Obstacles to Homeownership All adults year-olds only Saving enough for a down payment 55% 58% Not having a stable job 36% 43% Having a poor credit history 35% 33% Qualifying for a mortgage 32% 29% Unable to pay off existing debt 26% 30% Rising home prices 22% 23% Rising mortgage rates 15% 18% Limited inventory 5% 5% Among renters who wish to buy a home right now. Respondents could choose multiple options. Survey conducted November Trulia Trends, December 2013.

24 In the next three years, do you expect to continue renting or purchase home? Source: FHLMC, Perceptions of Renting and Homeownership, Multifamily Research Perspectives, December 8, 2014

25 Gen Y Housing Outlook Gen Y Emerging Adults Plugged in Social Educated Outspoken More liberal Multicultural High performance High expectations Marry later buy later Fewer children, later Gen Y Housing Seen the housing collapse Currently 51% rent 80+% eventually want to buy First-time buyers mostly with financial constraints to buying Jobs and student debt = less savings for down payment First-time buyers <30% vs. historic 40% Gen Rent Sources: M. Leanne Lachman and Deborah L. Brett, Generation Y: America's New Housing Wave, Urban Land, February 2011, FNMA National Housing Survey; Pew Research Group; Real Estate Center at Texas A&M University 25

26 Thousands Number of HHs by Age Group 11,500 11, ,500 10,000 9,500 9,000 8,500 8,000 Source: US Census HVS/Haver Analytics; Real Estate Center at Texas A&M University

27 Thousands Number of HHs: Head of HH ,500 24,000 23,500 23,000 22,500 22,000 21,500 21,000 20,500 20,000 Source: US Census HVS/Haver Analytics; Real Estate Center at Texas A&M University

28 Why Are They Called Gen-Y? People born before 1946 were called The Silent or Greatest generation. People born between 1946 and 1964 are called The Baby Boomers. People born between 1965 and 1979 are called Generation X. And people born between 1980 and 2010 are called Generation Y. Why do we call the last group Generation Y?

29 Why Are They Called Gen-Y? Some possible reasons: Y should I get a job? Y should I leave home and find my own place? Y should I get a car when I can borrow yours? Y should I clean my room? Y should I wash and iron my own clothes? Y should I buy any food? But one cartoonist explained it very eloquently...

30 Why Are They Called Gen-Y?

31 Housing 31

32 Macro Housing Issues Demographics: growing, shifting Affordability: workforce priced out of ownership Capital: more equity Infrastructure: transportation, education, utilities Development: Design, Density, Resources and Processes Regulatory: lending; environmental; land use Federal State Local Growth Controls/Initiatives

33 Design Issues

34 Urban Density Issues

35 Rural Density Issues

36 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Interest Rate % Mortgage and 10-Year Treasury Rates YR Treasury 30-YR FMR Mortgages Source: Federal Reserve Bank of St. Louis; FHLMC; Real Estate Center at Texas A&M University

37 Jan-00 Jul-00 New and Existing SF Home Sales U.S. Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Existing Home Sales 000s 8,000 New Home Sales 000s 1,600 7,000 1,400 6,000 5,000 Existing SF Home Sales (left axis) 1,200 1,000 4, , ,000 1,000 New Home Sales (right axis) Sources: US Census Bureau, NAR, SAAR 37

38 New SF Home Starts (000s SAAR) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, average per year (1.06 million) 1, ,309 1,151 1, ,162 1,451 1,433 1, ,067 1,084 1,072 1,179 1,146 1,081 1, ,303 1,271 1,273 1,231 1,198 1,161 1,126 1,134 1,076 1, ,359 1,499 1,610 1,716 1,465 1, *2015 & 2016 NAHB projections Apr 2015 Source: US Census Bureau; NAHB; Real Estate Center at Texas A&M University

39 Household Formations and SF Starts 2,000 1,800 1,600 1,400 1,200 1, HH Formations^ SF Starts* ^ March-to-March Change CPS *NAHB projected 2015 Source: US Census Bureau; NAHB; Real Estate Center at Texas A&M University

40 Net Household Formations and SF Starts 2,200 2,000 1,800 1,600 1,400 1,200 1, HH Formations^ SF Starts* ^ US Census HVS/Haver Analytics *NAHB projected starts 2015 Source: US Census Bureau; NAHB; Real Estate Center at Texas A&M University

41 Number of Texas Households Added Annually 250,000 Average number of households added annually = 126, , , , , , , , , , , , , , ,000 98, , , , , ,468 93,985 79, ,086 68, , , , , , , , , , ,438 50,000 32,833 52,105 44,952 0 Source: U.S. Census Bureau, Real Estate Center at Texas A&M 41

42 Annual Texas Home Sales 310, , , , , , , , , , ,000 90,000 70,000 50, ,755 90,798 81,105 69, up 5% Second best year ever! 107,107 89, ,047 99,619 86,287 82,867 92,370 91,340 87,218 89, , , , , , , , , , , , , , , , , , , , , , ,361 Source: Real Estate Center at Texas A&M University 42

43 Texas Median Home Prices $200,000 $190,000 $180,000 $170,000 $160,000 $150,000 $140,000 $130,000 $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 78,200 80,00081,600 75,200 68,50068,100 71, ,900 96,200 90,600 86, , , , , , , , , , , , , , , ,700 Source: Real Estate Center at Texas A&M University 43

44 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Texas Months Inventory Inventory at extremely low level relative to market activity Source: Real Estate Center at Texas A&M 44

45 Texas SF Building Permits 180, , , average 86,000/year 151, , , , % 120, , , , , ,782 99, , , ,045 93,478 80,000 60,000 40,000 67,870 66,161 84,565 78,714 67,964 59,143 59,543 43,975 46,209 35,908 36,658 38,233 69,964 70,452 70,421 83,132 82,228 81,107 81,926 68,170 68,230 67,254 20,000 0 Source: US Census Bureau, Real Estate Center at Texas A&M

46 Houston Annual Home Sales 90,000 80, average 64,500 80,994 77,668 83,399 80,848 72,800 70,000 66,979 65,169 68,643 60,000 50,000 56,563 51,433 52,459 53,856 48,767 60,732 60,106 58,854 56,807 40,000 30,000 33,443 33,617 32,491 29,183 29,726 30,080 30,783 32,371 33,386 36,894 40,673 20,000 10,000 21,451 14,849 15,187 13,091 13,275 15,065 16,495 20,139 Source: Real Estate Center at Texas A&M

47 Monthly Home Sales Houston Home Sales & WTI Oil Price Monthly January 1995 to Current 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Correlation coefficient of 0.58 Monthly WTI Crude Price $/bl Source: Haver Analytics; Real Estate Center at Texas A&M 47

48 Houston Median Home Prices 210, , , , , , , , , , , ,000 90,000 80,000 70,000 60,000 50,000 66,00065,800 72,400 94,700 88,900 78,400 79,900 83,000 78,20078, up 6% 2013 up 10% 2014 up 9.5% 101, , , , , , , , , , , , , , , ,600 Source: Real Estate Center at Texas A&M University

49 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 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Houston Months Inventory Inventory at extremely low level relative to market activity Source: Real Estate Center at Texas A&M 49

50 Houston SF Building Permits 60,000 50,000 Average since 1995 = 31,677 45,092 51,202 55,159 40,000 34,685 42,040 42,217 34,543 38,319 30,000 20,000 10,000 21,160 25,763 30,563 30,303 17,820 8,886 7,803 7,514 8,093 9,894 10,963 15,159 15,661 15,762 15,873 13,535 19,463 20,854 25,414 25,617 28,169 30,490 28,188 22,328 22,369 22,887 28,624 0 Source: U. S. Census Bureau, Real Estate Center

51 Houston SF Permits & WTI Price/bl Monthly January 1995 to Current 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 $140 $150 Source: Avg. Monthly WTI Spot Price FOB Cushing, OK; Real Estate Center at Texas A&M University

52 Houston MF Building Permits 45,000 40,000 35,000 30,000 42,355 32, % % % % average 12,700 25,000 20,000 15,000 10,000 5, ,310 21,543 12,687 4,067 3,667 3,887 3,341 2,2432, , ,690 4,783 4,499 11,265 20,189 10,150 7,631 6,643 11,382 16,586 10,602 10,468 15,733 20,312 14,165 4,709 4,858 8,281 14,525 16,649 25,044 Source: U. S. Census Bureau, Real Estate Center

53 Tomball-249 Corridor Major Employers: Hewlett Packard Tomball Regional Medical Center Tomball ISD Lone Star College-Tomball Baker Hughes Exxon-Mobil 53

54 May Sales in Houston Local Market Areas (Y/Y Percent Change) Tomball Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University

May Sales in Houston Local Market Areas (Y/Y Percent Change) 1 Tomball 2 4 3

55 May Sales in Houston Local Market Areas (Y/Y Percent Change) 1 Tomball Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University

56 Tomball Local Market Areas Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University

57 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Home Sales Tomball Area Spring/Klein/Tomball Tomball South/Lakewood Tomball Tomball Southwest Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University

58 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 1-Tomball Average Price/s.f. $120 $110 $100 $90 $80 $70 $60 $50 Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University 59

59 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 2-Tomball Southwest Average Price/s.f. $300 $250 $200 $150 $100 $50 $0 Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University 60

60 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 3-Spring/Klein/Tomball Average Price/s.f. $100 $95 $90 $85 $80 $75 $70 $65 $60 Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University 61

61 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 $110 $105 $100 $95 $90 $85 $80 $75 $70 $65 4-Tomball South/Lakewood Average Price/s.f. $60 Source: Texas Realtor Data Relevance Project Real Estate Center at Texas A&M University 62

62 Location, Location, Location!

63 Houston and Tomball Economic and Housing Outlook Dr. James P. Gaines Research Economist recenter.tamu.edu

Dr. James P. Gaines Research Economist recenter.tamu.edu

Texas Uncertain Economy in a World of Uncertain Oil Prices Dr. James P. Gaines Research Economist recenter.tamu.edu National Economic Recovery still Going 2 U.S. Outlook Expected GDP growth still modest: