This year was tough for the commercial real estate market. But a panel of Houston real estate professionals is looking ahead to 2009. The third annual Boyar & Miller Breakfast Forum was a chance for industry experts to offer real estate predictions, given current economic conditions. Retail developer Ed Wulfe says a lot is considered when you make forecasts.
"In order to really get your arms around the market, you've got to look at everything from housing, to retail sales, to businesses—the whole, the whole spectrum of the economic life of the city all play into what's going to happen in 2009, and then we're still guessing!"
Welcome Wilson, Jr., of GSL Welcome Group says the future of industrial real estate rests somewhat on the new administration.
"Well, there's always the speculation, and really in our market it's the unknown is what causes confusion. So whatever the new rules are that will or will not be in effect, really we just need to figure out what those are, and in the real estate business we can figure out how to adjust accordingly."
Joel Marshall of Trendmaker Development looked at Houston's housing and master planned community picture.
"Well, we think that business will be down in 2009, but if mortgage rates do come down as they've been predicted to do, IO think people will see that as a tremendous opportunity and it will be a tremendous opportunity for them to get into a home, and I think that that'll stabilize us."
Craig Hausman of Yancey/Hausman expects a downturn in office real estate.
"If you tend to want to compare back to the 80's, we don't have the overbuilding that we had going on at that point of time, so while I think we're going to have a downturn, I think we're entering it with much more strength in the market than we had in the mid-80's."
All panelists expect Houston's homebuilding and commercial real estate market will continue to decline in sales volume throughout 2009.
The government says employers axed 533,000 jobs in November, the most in 34 years, and the unemployment rate rose to 6.7 per cent. It was dramatic proof the country is careening ever deeper into recession. The Labor Department's report shows the crucial employment market deteriorating at an alarmingly rapid clip, and handed Americans some more grim news right before the holidays. The jobless rate rose from 6.5 per cent in October to 6.7 per cent, a 15-year high.
The White House says it's "very concerned" about big job losses. After news that the nation's unemployment rate jumped up, President Bush scheduled a statement about the alarming state of the economy. He was to speak to reporters on the south lawn of the White House. His spokeswoman acknowledged significant job losses in the economy, blaming them on housing and credit problems. White House Press Secretary Dana Perino pledged aggressive efforts to help. She said that policymakers need to focus on the causes of the economic downturn to reverse the trend in job creation.
President-elect Barack Obama says today's dismal November jobs report is more proof that forceful action is needed. At the same time, he warned that "there are no quick or easy fixes" and said "it's likely to get worse before it gets better." Obama says the tough times provide an opportunity "to transform our economy to improve the lives of ordinary people." This could be done, he said, by such things as rebuilding roads, modernizing schools and investing in clean energy. The Labor Department reported this morning that employers eliminated 533,000 jobs last month, pushing the unemployment rate to a 15-year high 6.7 per cent.
President Bush and Congressional leaders are seizing on grim new unemployment data to try to rally support for a rescue plan for U.S. automakers, although they differ on where the money would come from. Bush told reporters in the Rose Garden that Congress should take $25 billion from a program that already exists and should do it by no later than next week. He said taxpayer money must be repaid. Congressional leaders are considering other routes, including a $34 billion bailout in new money being pushed by big three automakers.
A key House committee chairman agrees that today's unemployment news makes helping U.S. automakers even more urgent. Opening a hearing on a proposed auto bailout this morning, Congressman Barney Frank said "the country is held hostage" by the debate over how to help Detroit's big three. And he's warning colleagues that doing nothing "would be a disaster." Executives from GM, Ford and Chrysler were on Capitol Hill for a second day, seeking as much as $34 billion dollars in aid. Lawmakers have expressed skepticism, questioning the amount after the automakers asked for $9 billion less just two weeks ago. Congressman Gary Ackerman of New York joked he doesn't want to send them home empty-handed again, "because it's going to get more expensive."' Lawmakers and the auto executives are mulling a government-run restructuring that would include massive downsizing and labor givebacks, while several lawmakers are urging the automakers to consider a pre-negotiated bankruptcy.
General Motors will eliminate another 2,000 factory jobs early next year as the U.S. auto sales slump continues to put a strain on domestic automakers.
President Bush says that any auto bailout measure passed by Congress must require car companies to pay back the taxpayers. He said that he is concerned that some automakers may not survive over the long-term, and urged Congress to act next week on his approach to helping the troubled industry. Bush spoke to reporters on the south lawn not long after the release of a government report showing a big jump in the unemployment rate. Bush says that if any federal dollars are given to the car companies, the money must all be paid back. He says he is concerned about providing taxpayer money to companies "that may not survive."
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are again asking President George W. Bush to use the $700 billion Wall Street bailout fund to help rescue the big three automakers. In a letter to Bush, they argue that such a course is justified because of the potential for grave harm to the financial sector in the event of a carmaker collapse. Auto state lawmakers are even going further. They're threatening to block the Bush administration's access to the second half of the financial bailout fund unless it makes a firm commitment to assist working Americans and save American jobs. The administration has consistently refused to use the fund to help the automakers.
U.S. consumers unexpectedly cut back on their borrowing in October as the economy sunk deeper into recession. The Federal Reserve says STRONG>consumer credit fell at an annual rate of 1.6 per cent in October. That compares with a 3.1 per cent growth rate logged in September, and marks the deepest cutback since August. Economists expected consumers to boost their borrowing by around $2 billion in October from the previous month. Instead, consumer debt dropped by $3.5 billion to $2.58 trillion. The Fed's measure of consumer borrowing does not include any debt secured by real estate, such as mortgage or home equity loans.
An industry group says a record one in ten American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy. The Mortgage Bankers Association said the percentage of loans at least a month overdue or in foreclosure was up from 9.2 per cent in the April-June quarter, and up from 7.3 per cent a year earlier. There were, however, some modest signs of stabilization. The percentage of loans on which new foreclosures were started was 1.07 per cent in the third quarter, flat from the second quarter./P>
Govrenor Rick Perry has requested $300 million in federal money to get temporarily housing for victims of Hurricane Ike. Perry requested the money in a November 26th letter to the Federal Emergency Management Agency. When it made landfall in September, Ike destroyed or flooded about 100,000 homes and left half a million homeless in southeast Texas, Perry said. "Texans need and deserve a safe place to live while recovering from this devastating storm," he said. "With alternative housing funds from FEMA, we will be able to work with local officials to ensure that all Texans are in safe and adequate housing as soon as possible." The money would speed up the creation of a program for people to acquire temporary housing."
Merrill Lynch shareholders have approved the investment bank's sale to Bank of America, in a move that will create the nation's largest financial services firm. During a special shareholders meeting at company headquarters in New York, Merrill shareholders approved the sale of the company to the Charlotte, N.C.-based bank. Merrill originally agreed to sell itself to Bank of America in September amid the deepening credit crisis. The sale helps Merrill avoid the fate of competitor Lehman Brothers, which filed for bankruptcy.
It appears giving to charitable foundations did not falter last year even as the economy began to fade. A group that monitors philanthropy says U.S. charitable foundations donated a record $5.4 billion to international causes in 2007. And the foundation center says this year is expected to be even stronger. The group says between 2002 and 2006, more than half the money distributed came from the Bill & Melinda Gates Foundation. But apart from the Gates contributions, international charity still grew faster than all foundation giving during the period of the study. The foundation center says the biggest concentration of international giving by U.S. foundations went to health-related causes, thanks largely to the Gates Foundation. The second-ranking cause was global development, followed by the environment.
The number of rigs actively exploring for oil and natural gas in the United States dropped by 14 this week—to settle at 1,852. Baker Hughes in Houston says one year ago the rig count stood at 1,828. Texas lost 38 rigs this week. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.