The Location Strategy Top 10

THE LOCATION STRATEGY TOP 10 CHARTBOOK

A QUICK REVIEW OF MARKET CONDITIONS FOR HOUSING.

UPCOMING EVENTS

Scott Davis will be speaking on the state of the housing market, particularly multifamily, at REDNews' 2nd Annual Apartment Summit on June 14, 2023.

Last year was a great event with a lot of really good speakers and it looks to be even better this year. Plus you can get 4 hours MCE from TREC. You don't want to miss it: register here.

LOCATION STRATEGY MEETUP

In person meetings are so important to our industry, and we are really looking forward to hosting our first industry meetup on June 15, 2023. Join us for a discussion on the market, networking, and announcements of upcoming events. You can register at the orange button below. We hope to see you there!

The Fed is struggling again with forecast inflation vs reality

Baker Hughes just reported that the total number of active drilling rigs in the US tumbled by 15 last week to 696 - down 31 rigs on a YoY basis...the entire rig count drop was driven by oil rigs (gas rigs were unch), which pushed the oil rig count into an annual decline (down for 5 straight weeks)...This is the first annual decline since May 2019. The first question we have is simple - with rigs now down almost 10% from the February highs - will Oil & Gas Extraction Industry jobs start to decline

Americans Say Families Need $85,000 To Get By, Up From $58,000 In 2013

The proportion of Americans who believe that a family needs more than $100,000 to get by has tripled to 30%, while 18% now estimate it to be between $75,000 and $99,999, and 31% think it is $50,000 to $74,999. Half as many Americans now as in 2013 believe a family of four can get by on less than $50,000 annually. This includes 3% who estimate a figure lower than $30,000 and 11% who cite a figure between $30,000 and $49,999.

50,000 stores may close by 2027

Closures will effect smaller stores disproportionately

The gap between home prices and wages widened further.

Home prices jumped in March -because there were fewer listings.

Multifamily developers are pulling fewer permits in the Texas metros than they did laster. In Houston they got fewer permits during the first quarter of this year, 5,792, than in the final quarter of 2022, 6,685. Still, the first-quarter total marks a more than 60% increase above the typical 3,535 permits pulled on average in a given first quarter between 2012 and 2022.

During the past decade, Houston added around 150,000 new units, nearly 90% of which were in higher-end four- and five-star complexes. With nearly two-thirds of what is underway within the luxury segment, the composition of construction remains skewed toward four- and five-star apartment units, although there has been an increase in three-star complexes.

It appears that residential construction spending has bottomed out; non-residential construction spending has yet to slow down.

US-Construction-Spend-Resi-v-nonresi2306020541 image

ALL NEW JOBS SINCE COVID HAVE GONE TO FOREGIN WORKERS

There are currently 131.1 million native-born US workers, which is down more than half a million from the pre-covid peak of 131.7 million reached in October 2019. Meanwhile, the number of foreign-born workers having peaked at 27.8 million in Feb 2019, the number of foreign-born workers has not only recovered its covid crash losses, but has increased by an additional 2.2 million to a record 30.0 million as of April 2023. This means that all the new job creation since the covid crash has gone to foreign workers, with native-born workers stagnating and still unable to break above pre-covid highs, even though if one merely extends the pre-covid trendline, native-born workers should have long ago surpassed their 2019 highs. The chart below shows the changes, indexed to 100 in October 2019.

BE GLAD YOU'RE NOT IN PHOENIX

We have a few areas around the metro area with water problems, but we should be thankful we aren't in Phoenix. The governor of Arizona has released a new study in support of a policy bringing development in the nation's 10th largest metro area to a screeching halt. The study claims that the desert city is out of water. Developments which have current approvals may move forward, but any pending projects will now have to show an alternate 100-year water source. The solution: Arizona is about to start construction on a desalination plant that will pump water 200 miles from the Sea of Cortez to Phoenix.

Scott Davis

LOCATION STRATEGY, LLC

1302 Waugh Drive #178

Houston, Texas 77019

832.304.DIRT (3478)