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North Texas UpdateThriving DFW Economy Expands Broadly
Federal Reserve Bank of DallasJune 27, 2018
Laila Assanie
The views expressed are my own and do not necessarily reflect official positions
of the Federal Reserve System.
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DFW is the economic engine of the North Texas region Largest MSA in Texas and fourth largest in the nation Diversified industrial base, thrives regardless of the booms and busts in
the state’s energy sector Job growth cooled to 2.4 percent in 2017 from 3.0 percent in 2016, but
outperformed the state’s 1.9 percent increase DFW economy heats up again in 2018, with employment growth at a 3.7
percent annualized pace or 55,500 net new jobs added through May Growth is broad based across sectors Unemployment near historical lows
DFW Economy Expanding at a Blistering Pace in 2018
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Dallas Job Growth Outdoes Texas 2013-2016
3.73.6
-5-4-3-2-10123456
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
DFW Texas
NOTE: Last data points for Texas and DFW are 2018 YTD annualized employment growth through May.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by the Dallas Fed.
Y/Y percent change, SA
DFW Job Growth Outpaces Texas 2013-2018
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Employment Growth Continues to be Broad Based
1.7 5.5
18.3 2.0 2.1
0.7 2.2
1.6 6.5
2.4 3.9
3.7
Information (2.3%)Other services (3.4%)
Construction & mining (6.2%)Manufacturing (7.5%)
Financial activities (8.2%)Leisure & hospitality (10.3%)
Government (11.9%)Education & health services (12.2%)
Professional & business services (16.6%)Trade, transportation & utilities (21.5%)
Private (88.1%)Total (100.0%) 2018 YTD
2017
NOTES: Data sorted by percent of total DFW employment. Data show seasonally adjusted annualized percentage growth by industry supersector for 2017 and YTD 2018 (December 2017– May 2018). Numbers in parentheses are shares of total DFW nonfarm employment and may not sum to 100 due to rounding.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by the Dallas Fed.
Job Growth Accelerates in DFW and Houston
3.7
0.9
4.4
-0.1
3.0
3.7
1.4
3.3
-0.1
2.82.4 2.3
2.7
1.72.1
3.74.1
2.8
4.4
0.5
-0.50
0.51
1.52
2.53
3.54
4.55
Dallas Fort Worth Austin Houston San AntonioNOTES: Data show seasonally adjusted annualized percentage employment growth for 2015-2017. Patterned bar shows annualized data for December 2017 - May 2018.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by the Dallas Fed.
Percent change, YTD SAAR
3.83.5
2
3
4
5
6
7
8
9
10
11
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
U.S.DallasFort Worth
Percent, SA
NOTE: Last data point is May 2018.SOURCES: Bureau of Labor Statistics; seasonal adjustments by the Dallas Fed.
Unemployment Close to Historical Lows
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Expansion in Dallas Outpaces Fort Worth
80
90
100
110
120
130
140
150
160
170
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Dallas
Fort Worth
Index, Jan.'06=100
NOTE: Last data point is May 2018.SOURCE: Federal Reserve Bank of Dallas.
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0
10
20
30
40
50
60
70
80
Natural increase International Domestic
Thousands
NOTE: Series spans 2005 – 2017. Estimates are not available for Census years (2010).SOURCE: U.S. Census Bureau.
Migration to DFW Remains Strong2005 2010 2017
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DFW Leads Texas Major Metros in Gains From Net Migration
10
‐100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
DFW Houston Austin San Antonio El Paso
Net migration
NOTE: Data are for April 2010 to July 2017. SOURCE: U.S. Census Bureau, Population Division.
DFW Home Sales Rise Across Most Price Points
12
0
50
100
150
200
250
300
350
400
450
2011 2012 2013 2014 2015 2016 2017 2018
$250-499K$750-999K$500-749K$1 million+$0-249K
Index Jan 2011=100, 3MMA, SA
NOTE: Pie chart shows percentage of closed listings by price-point for May 2018. Series data through May 2018.SOURCES: MLS; Real Estate Center at Texas A&M University; adjustments by Federal Reserve Bank of Dallas.
$0‐249K48.3%$250‐499K
41.3%
$500‐749K6.9%
$750‐999K1.8% $1,000K+
1.7%
2017
Inventories Tight for Low- to Mid-Priced Homes
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10.0
7.5
5.4
3.0
1.3 0
2
4
6
8
10
12
14
16
18
20
2011 2012 2013 2014 2015 2016 2017 2018
$1,000+
$750-999
$500-749
$250-499
$0-249
Months of Inventory, SA
SOURCES: MLS; Real Estate Center at Texas A&M University; adjustments by Federal Reserve Bank of Dallas.
House Prices Ascend to New Highs
80
90
100
110
120
130
140
150
160
170
180
2010 2011 2012 2013 2014 2015 2016 2017 2018
Index, Q1 '08=100
NOTE: Index available through Q1 2018. Median home values for April 2018.SOURCES: MLS, Federal Housing Finance Agency Purchase-Only House Price Index. Series originally indexed to Q1 1991.
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Austin $303,628Dallas $281,810
Fort Worth $230,901Houston $236,101
Texas $228,137U.S. $259,081
Median Sales PriceApril 2018
Home Price Appreciation Begins to Moderate in 2018
NOTE: Data shown are year/year percent changes, except for 2018 which are ytd annualized growth.SOURCE: S&P/CoreLogic Case-Shiller Home Price Index.
Composite 20 Dallas San Francisco New York Chicago
2014 4.37 7.46 9.41 1.60 1.33
2015 5.55 9.46 10.29 2.85 2.33
2016 5.41 8.02 5.99 3.02 4.18
2017 6.28 6.91 9.25 5.61 2.52
2018 7.00 4.57 7.68 2.68 5.06
Multifamily Construction Elevated in the Metroplex
0
100
200
300
400
500
600
700
800
900
1000
1100
2010 2011 2012 2013 2014 2015 2016 2017 2018NOTE: Last data point is April 2018. Table 2018 YTD data for December – April.SOURCES: U.S. Census Bureau; seasonal adjustments by FRB of Dallas.
Index, Jan.'06=100, 5 MMA, SA
Single-family permits DFW
Multifamily permits DFW
Single-family permits Texas
Multifamily permits Texas
2017 2018 YTD 2017 2018 YTDDFW 15.8 2.3 16.1 5.0 Texas 10.5 3.3 1.0 11.2
Single-family (percent growth) Multifamily (percent growth)
DFW Apartment Market A Mixed Bag
SOURCE: Real Page Inc.
Metro AreaOccupancy
as ofQ1 2018
Annual rent growthas of
Q1 2018
Quarterly completions
as of Q1 2018 (units)
Under construction
as of Q1 2018 (units)
Dallas‐Fort Worth 93.9% 1.9% 7,000 32,400
Austin 93.2% ‐0.7% 2,600 7,600
Houston 93.2% 4.0% 3,300 7,500
San Antonio 91.7% 1.4% 1,600 5,900
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DFW Office Absorption Slows, Vacancy Rises
NOTES: Data through Q1 2018. Patterned bars and dashed lines denote partial year data.SOURCE: CBRE Research.
10
12
14
16
18
20
22
‐1
0
1
2
3
4
5
6
2010 2011 2012 2013 2014 2015 2016 2017 2018
Dallas Net Absorption Dallas VacancyMillions, sq. ft. Percent
Office Rent Growth Moderates, Houston Slumps
0
5
10
15
20
25
30
35
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Austin
Dallas
Houston
Fort Worth
San Antonio
$ per sq. foot per year
NOTE: Date through Q1 2018.SOURCE: CBRE Econometric Advisors.
Positive Outlook for DFW• DFW employment gains are broad based and continue to lead most other
major Texas metros this year• Professional and business services and construction sectors are driving job
gains• DFW continues to attract both international and domestic migrants• Multifamily construction remains elevated, the housing market continues to be
tight• Office market activity appears to be moderating • Solid job growth in DFW expected to continue
• Tailwinds: Sustained expansion in U.S. and Texas economies• Headwinds: Labor constraints and uncertainty regarding trade policies
Dallas Fed Publicationswww.DallasFed.org
Dallas Beige Book
Southwest Economy
Special Reports
DFW Economic Indicators
Texas Business Outlook Surveys
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