Is Inflation on Its Way?
With average wage rates increasing slowly (less than 2% annually), inflation in the near future seems unlikely. (Aside from Justin Bieber's ego.) It’s one of the reasons Texas A&M Real Estate Center chief economist and research director Mark Dotzour remains bullish on Texas.
Mark (here speaking at a North Texas CCIM and CREW Dallas joint luncheon yesterday) says interest rates go up because inflation expectations go up, but he doesn't think that'll happen. Treasury rates look stable, and the housing market is not going away, he says. He’s watching for growth in conventional mortgage loan volume and applications for purchase. The big prediction: record-high prices for commercial real estate sales. (It should be a great year for bank accounts and for books people keep records in.) Investors will look outside gateway markets to places like Houston and Dallas to find value and yields, he says.
Mark says the inventory of unsold homes is four months (equilibrium is six months) and some parts of Texas only have a three-month supply. That’s the No. 1 economic development issue facing Texas, he says. The state needs more spec homes and lots on the ground because demand is causing prices to spike. Also snapped at the event: ValleyCrest Landscape Maintenance's Kathy Tune; Guida, Slavich & Flores's (and 2015 CREW Dallas prez) Sally Longroy, Office Resource Group's Cara Leigh, RER Solutions' Eugenia Robbins, and the Herrin Commercial Real Estate's Sharon Herrin.
When you sit at the table with the Bisnow reporter, you may just find your 15 minutes of fame. Here are Allegiance Title Services' Peg Jordan, Nova Consulting's Vanessa Chambers, ShannonGracey's Barbara Kennedy, and Centerpoint Builders' Brittany Allcorn. (Beyond the sheer good luck of sitting with us, Vanessa also won an iPad Air in a drawing.)
We also snapped DTZ's David Abell; Bradford's Anne Turney, Lynn Davis, Sharon Friedberg, and Kevin Santaularia; Component Capital Group's Dan Newell; and Allen EDC's Dan Bowman. Sharon tells us she just inked a 10k SF lease in Las Colinas for a tech company's expansion. She's also meeting with a firm from the UK looking to set up a US office. She thinks 2014 will be better than last year because the positive economic news is giving business owners the confidence to expand. And Kevin says Bradford is marking its 25th anniversary this year. (Silver is the traditional gift, though not an ideal building material.)
