“Remember, South Texas is younger than the rest of Texas and Texas is one of the youngest states in the country. I’m just trying to tell you; your future looks bright,” — Dr. Ted C. Jones, the Chief Economist
By Roberto Hugo Gonzalez
As originally published by Texas Border Business newsprint edition March 2017.
A record crowd showed up to listen and learn from Dr. Ted C. Jones, the Chief Economist – Senior Vice President for Stewart Title Guaranty Company, during the Edwards Abstract and Title Co. 13th Annual State of Real Estate Forum. Edinburg Mayor Richard Garcia and McAllen Mayor Jim Darling were present and part of the keynote speaker team.
Real estate industry professionals, business and civic leaders attended the State of Real Estate Forum to take in Dr. Ted C. Jones’ presentation titled Things Change – The Outlook for Real Estate and the Economy.
Byron J. Lewis, the Chairman of the Board and Chief Executive Officer Certified Title Insurance Associate with the Edwards Abstract and Title Co. in the Rio Grande Valley was in charge of introducing Dr. Jones who shared an optimistic view of the Valley’s economy and real estate sales.
“What an honor to be here,” Dr. Jones said. “I really don’t care who you voted for, let’s talk about the results. I mean Hilary is a brilliant woman, don’t get me wrong, but she didn’t win under the rules.”
Dr. Jones asked the audience, “Is Trump doing everything he said he was going to do? Yes, and no. Trump is not going to export 11 million people from our country.” He said, “But if you are a convicted felon, I would think I would look over my shoulder.”
He also said that if we literally shut down production in Mexico and Trump does talk these people into building in the USA. Where are they going to build it in the US?
Dr. Jones said that San Diego was not an option. “If you look at industrial properties there, they have a 2% vacancy rate, it’s too expensive and is not the manufacturing region.”
He also said that the plants will be built on the US border side, and believes that Trump is going to build a border wall which will cause some hiccups and hurt some retail sales because it’s going to be more restricted crossing the border. “I do believe that my avocado addiction is going to cost me more in the future because the best avocados in the world come from Mexico,” Dr. Jones stated.
On the other hand, he thinks that the Valley is going to be one of the biggest winners out of it in the long run because the region is going to manufacture here. “Why?” he asked, “Because, thank God, we have an Interstate out here at 69, and that just didn’t happen by itself that was a function of leadership. That said we need an interstate out here for the primary manufacturing region not just in Mexico but in South Texas.”
He said that he is looking forward to this opportunity, but admits that in the short run, retail sales near the border will be an issue. “On the long run, it means a whole lot more manufacturing jobs here so I think you need to look at the big picture on this one,” he stated.
During his lectures, Dr. Jones always shares interesting news about technology. This time around he said that the electric self-driving cars technology does work. In the United States, there are 80 self-driving cars. “How many of you all think in the next 5 years, they are going to be common place on the roads?” The audience was quiet and he said, “I completely disagree with you. The technology works, we have 80 cars, and we had three fatalities last year. No insurance company in this world will insure that.”
His comments about the millennials were astonishing for many in the audience, but before getting in to that subject he said that there are 76 million boomers if you’re born between 1946 and 1964. “But let’s talk about millennials. I’m excited about you all. Why?” he said, because you were the largest home buying segment in the United States last year.”
He pointed out that there are 83 million millennials between the ages of 19 and 35. And that the most common age of millennials is 24 then 23 then 25. “The most common age for the first-time home buyer is 31 and yet you are already the largest home buying segment there is. He said, “Just wait another 14 years. If you go down to the age of 16, there’s 91 million millennials, we are going to see millennials creating households for the next 14 years.”
He also mentioned that we are going to have a recession between now and then, but essentially, we are going to have a literally demographically driven economic growth for the next 14 years. “Remember, South Texas is younger than the rest of Texas and Texas is one of the youngest states in the country. I’m just trying to tell you; your future looks bright.”
Dr. Jones spoke about Private Mortgage Insurance Tax Deductibles which was killed on December 31, 2016; also, about short sales and 1099Cs. Energy credits was a short topic, because as he said, this is an item about insulations, windows, doors. What congress has learned is that they have more complaints on this area than anything else.
Another interesting topic was the renewables, like wind and solar. “We are talking big wind turbine farms, we are talking really big solar farms, not just a solar panel at our house.” “We literally have a wind turbine farm in the US that is making a 10% return on investment for investors that has no power line connected to them. They make so much money off the tax credit and other issues, just run it through the meter, it’s cheaper than building a power line,” he stated.
On the healthcare issue, he said that there is no one size fits all. He like the fact that President Trump’s health care program will continue to insure pre-existing conditions. This one topic, vibrated in the audience’s ears.
Dr. Jones said, “President Trump and congress are going to cut the corporate tax rate from 35% to 15%. Why? Because we have the highest corporate tax rate of all top 20 economically developed countries in the world.”
After his presentation, Mayor Richard Garcia of Edinburg shared highlights of the projects that have chosen Edinburg as the place to locate their business. These include Bob’s Steak & Chop House; TownPlace Suites by Marriott, Bert Ogden Arena, HEB Park and others.
Mayor Jim Darling of McAllen discussed recent visits by the members of the Texas Senate delegation, John Cornyn and Ted Cruz and members of the U. S. Congressional Delegation. Mayor Darling commented on the importance of focusing on a good relationship with Mexico as a trade partner.
Mr. Lewis, on behalf of Edwards Abstract and Title Co. Executive Committee, Management Team and the employees, sent a special thank you to all the presenters and especially the over 250 guests that made time to attend the 13th Annual State of Real Estate Forum. For more information on the Edwards office locations, products and services visit the website at www.edwards-titleco.com or follow on Facebook, Twitter and LinkedIn.
If you want to download Dr. Ted C. Jones’ presentation titled Things Change – The Outlook for Real Estate and the Economy, follow this link.