Today I attended a luncheon at the beautiful Federal Reserve Bank on Allen Parkway, courtesy of HAR's NextGen Realtor Group.  The guest speaker was Dr. Ted Jones, Chief Economist of Stewart Title. 

Here are some of the main points of his presentation: 

1.  Between 2000-2010, the U.S. lost 1.81M jobs.  In the same time frame, Houston GAINED 243,000 jobs.
2.  Inflation is currently at 2.2%
3.  Oil demad is expected to go up, bringing gasoline prices UP.  If this happens, LOCATION will become real estate's biggest selling point because people will want to live close to work to avoid wasting gas driving from far away.
4.  Mortgage interest rates have never been and will never be this low again.  They will most definitely go UP this year.  NOW is the time for people to be buying real estate.
5.  Houston home sales are doing great.  Number of homes sold have not fallen like the rest of the U.S.  Average price of home is also holding strong, unlike the rest of the U.S.
6.  Retail sales are very strong, showing stronger consumer confidence.
7.  Real estate still remains the strongest investment, even compared to gold, when adjusted for inflation.
8.  Stock prices are a little inflated right now.
9.  Debt to income ratio for U.S. households is high (over 100%) because people's incomes are lower and people have high credit card debt/mortgages.
10.  Home mortgage delinqueny rates are HIGH, with many foreclosures expected in 2011 (in the U.S. but less on average for Houston).
11.  Commercial real estate crashed in 2009.  Expected to increase in 2010 (numbers still out).
12.  Federal budget deficit forelooks terrible: triple that of 2008 when President Bush left office.  Interest expense alone on the federal debt for 2010 was almost $414 billion.
13.  In 2011, Dr. Jones thinks Houston should have 1.2% job growth

Other interesting points made were:
 
1.  The point Buyers like most about a realtor (they rank this as the most valuable attribute of a good realtor) is their negotiating skills.
2.  Agents, remember to check HAR's statistics button to check inventory months.  Recommend to sellers the higher the number, the more they need to lower the price to sell it.  The lower the number, the more they can ask for more on the sales price.
3.  Houston's population is forecasted to grow tremendously in the coming years.  By 2020, our population is projected to go from 5.9 million (2010) to 7.6 million.
4.  As interest rates go up slowly this year, explain to buyers that for the same monthly payment, they will be able to buy less house.  Example:  a monthly loan payment of $506 at 4.5%, the buyer could get a $100,000 loan.  If the interest rate went to 5%, for the same $506 monthly payment, they can now only get a $95,000 loan.  If the interest rate goes up to 5.5%, and they still can only afford a $506 monthly payment, now they can only get a $90,000 loan.  The problem is, home prices are NOT falling in Houston.  Therefore, the longer they wait, the less home they can buy.  *Unless they put down a bigger down payment to make up the difference.