Anthony Murphy considers himself a “glass-is-half-full economist, as opposed to a glass-is-half-empty” one.
It would take more than a predictable downward correction in the stock market or the economy’s inevitable inability to maintain a tax break-fueled 3 percent growth rate to get the senior economic policy advisor with the Federal Reserve Bank of Dallas to sound a recessionary alarm.
(ABOVE: Anthony Murphy of the Federal Reserve Bank of Dallas speaks to the Rotary Club of Park Cities. Photo by William Taylor)
“The economy is slowing down from a sugar high,” Murphy told the Rotary Club of Park Cities in January. But he added, “The near term outlook looks pretty good.”
The economy is slowing down from a sugar high. -Anthony Murphy
He expects the economy to maintain a more normal growth rate of 2.3 to 2.4 percent and reports that wages and unemployment look good.
“We’re not growing as fast as last year, but we are above (the 2 percent) trend,” he said. “Risks of recession are there, but they are not huge.”
The housing market is one area of weakness, but not an unexpected one, Murphy said. “With higher interest rates and declining affordability, that was going to be the case.”
Realtors.com forecast modest inventory gains and 2.2 percent pricing growth and warns that interest rates could reach 5.5 percent by year’s end, further chasing young adults and other first-time buyers out of the market.
Chris Kelly, the new president and CEO of the Ebby Halliday Companies, has seen the national reports, but prefers to focus on the adage “that real estate is local.”
“Obviously, when we look at the Park Cities and Preston Hollow, these are areas that will always be attractive,” he said. “Certainly, they have been very hot the last several years.”
Long-term residents looking to trade up, former residents looking to get back to where they grew up, and newcomers to Dallas are all interested in those areas, Kelly said.
While the superhot sellers’ market of 2016 and 2017 may have come to a close, what has taken its place is not so much a buyers’ market, but a balanced one with opportunities for buyers and sellers, he said.
Realtors.com projects the Dallas area will do better than other parts of the nation with 4.3 percent price growth.
Kelly sees other reasons for optimism.
“Last year, there were 800,000 jobs created in North Texas,” he said. “That certainly helps with housing and other industries.”
Murphy also has considered regional factors and sees Texas continuing to do well.
“You just need to look at the number plates on cars and see how many are from out of state,” he said. “Texas is open for business and perceived to be open for business.”
Along with the newcomers are thousands of new apartments under construction across the Dallas-Fort Worth area.
Kelly noted that new multifamily construction brings retail that can benefit single-family neighbors, and apartment dwellers will often want to stay nearby when the time comes to buy a house.
“Oftentimes, the cost of that rent is equal to or in excess of the cost of a home,” he said.
His message to renters: It’s possible to buy, save on monthly housing costs, and build wealth.