2020 Economic Forecast

2020 Economic Forecast

By: Drew Doonan

Patti and I recently attended the annual Ted Jones 2020 Houston economic forecast. We have had the pleasure of hearing the wonderful Dr. Ted C. Jones speak on real estate and the economy multiple times and his talks are always insightful and engaging. For those of you who don’t know, Dr. Jones is the Chief Economist and Senior Vice President at Stewart Title Guaranty Company, a very bright man, and someone who never shies away from a joke. Ever since I first heard one of Dr. Jones talks, I’ve been compelled to keep up with him, from his Twitter, to his blog, to his talks. Last month, Dr. Jones spoke here in Houston about the 2020 outlook for real estate and the economy, both locally and nationally, and I’d like to share some of the highlights.

Ted’s theme this year was “The Beat goes on” and we picked up where we left off last year discussing the importance of millennials in our economy. Millennials still represent the largest demographic of home buyers in the marketplace. They are the future and the present of home buyers. They are a key driver in our local economy going forward as they fill their newly purchased homes up with retail purchases and babies.

Another topic that stood out was the discussion of jobs in 2019 and their implications in our economy. Now, take a look at the slides that I pulled from Ted’s presentation.

As you can see, we are experiencing exceptional job growth at a national, state and local level (even with the headwinds of oil prices). One sector that was highlighted was hospitality. The jobs that are being created in hospitality signal strong consumer confidence. The logic behind this is that you don’t take vacations or embark in “leisure” activities if you are concerned about future wages.

Another topic that has come up in the news recently and that came up during Ted’s presentation was talk of a recession. Ted assured us we are not headed into a recession and that the evidence is clear as to why. Retail sales make up 68% of our Gross Domestic Product (GDP) and a recession is defined as two or more quarters of negative GDP Growth. If you look at the numbers below you will see we were positive in all four quarters in 2019 and that retail sales were up 3.35% in November of 2019 versus November of 2018. This signals a strong economy.

Interest rates were another topic of discussion. We are currently at a three year low for thirty-year conventional mortgage rates and expectations are that they stay low. Low interest rates, more jobs and growing millennial families create a great recipe for a strong housing market.

The last theme to mention is home sales. We set several all-time records in 1019. Doonan Realty Group is all about breaking records every year, Ted is predicting 2020 to have positive growth again albeit at a lower pace.

So what can we expect in 2020? What will outperform the market?

Overall, Ted is bullish on our local economy and so are we. Where we see the opportunity to outperform the market is within the following:

• Pre-sale Updates: Millennials and their families want move-in ready homes and will pay for it.
• Good School Districts: In addition, single family homes that are located in good school districts cater to the growing millennial family.
• Townhomes: When looking at townhomes we suggest looking for areas with walkability to distinguish yourself from new construction options.

With that said, Houston’s housing market is comprised of many micro markets and deeper dives are necessary when evaluating. So if you have questions about this presentation and how it compares to your neighborhood or a neighborhood your looking to move to, please don’t hesitate to reach out.

How to Get More from Your Kitchen Renovation

In addition to being one of the most popular renovations that homeowners can complete, the kitchen often nets the highest return on your investment (ROI) relative to other areas in your home. While many homeowners give the kitchen a minor update to keep it modern, others choose a full remodel to improve the style and function of the space, enjoy it more and make it more attractive to potential buyers. Below are a few tips and tricks to help you decide what is best for you and your family.

What You Should Consider Before You Start

Why are you remodeling? This is perhaps the most important question to ask yourself before undertaking a remodel. Are you planning to sell soon or do you simply want to improve the style and function of your kitchen? The answer to this question will help you decide the scope of your project and your overall budget.

How long do you plan to live in the home?

If you plan to move within five years, consider a renovation that will give you the highest return on investment. If you plan to stay in the home for a decade or longer, consider making long-term, functional improvements that fit your style and budget.

Do you plan to have children? Choose durable, easy-to-clean materials for your renovation.

Are you planning to live in the home during the project? If you’re planning a major renovation, consider arranging accommodation off-site so that you won’t be inconvenienced.

Make Your Small Kitchen Appear More Spacious

* Choose light colors to create the illusion of openness.

* Install open shelving to keep your dishes within easy reach and display them with style.

* Incorporate patterns by choosing a bold pattern for the floor, countertops or wall to create visual interest in the room.

* Building an island will increase counter and storage space in small kitchens. Install wheels on yours so it is front and center when you need it and movable to the side when you’re entertaining guests.

 

Five Popular Trends with Great Returns

 

  1. Smart Technology: Some of the latest kitchen appliances feature technology that allows you to control the appliances from your smartphone, save energy and also work more efficiently in the kitchen. Imagine a refrigerator that tells you when you’re running out of milk, an oven that preheats on your commute home and a dishwasher that alerts you when there’s a leak. It’s all within reach and can save you time.

  1. Open-Space Concepts: Consider removing some or all of the upper cabinets and storing dishes, food and other items at eye-level. Utilize more efficient storage solutions in the base cabinets and outfit tall wall cabinets with pullout storage so you can easily view and access the items you need.

  1. Touch Technology: Activate the faucet with your elbow or the back of your hand when your hands are full or dirty. Touch technology streamlines meal preparation, makes it easier to keep your sink and faucet clean and helps ensure safer food preparation.

  1. Comfortable Gathering Space: Creating a comfortable seating area encourages family members to spend time together while dinner is being prepared. Kids can do homework and your friends can socialize during parties.

  1. Purposeful Lighting: Take your lighting to the next level by illuminating the interiors or undersides of your cabinets. Cabinet and undercabinet lighting combine function and style to add an element of sophistication to your remodeled kitchen.

For a great renovation specialist, give us a call

Patti & Drew Doonan