The Texas economy is booming - and that’s even more true in the Tyler area - but the boom presents some challenges to the real estate industry, one of the state’s leading experts said on Wednesday.
Gary Maler, director of the Real Estate Center at Texas A&M, updated the Greater Tyler Association of Realtor on industry trends.
“East Texas raw land prices are the fastest growing in the state,” Maler said. “Get ready for crowds. People are discovering East Texas. Smith County will have 173,000 more people by 2050. That’s a lot of folks.”
But that’s putting pressure on real estate agents, developers and home builders, he added.
“We’re not getting enough product - homes - on the ground,” he said. “Our builders can’t keep up with housing demand. And you remember your Economics class; when supply is down, prices go up.”
One issue is a scarcity of qualified construction workers.
“The oil patch took a lot of workers away,” he said. “A few years ago, if you could pass a drug test and drive a truck, you could get a job out in West Texas or South Texas and make more money than you did in construction.”
When the oil markets dipped in 2015, not many of those oil workers went back to their old construction jobs.
Even now, Maler said, as construction indexes are starting to improve, finding workers remains a challenge.
“You should know that one-in-six to one-in-seven workers cannot pass a drug test or a criminal background check,” he said. “That’s a problem for our workforce.”
Yet nearly all of the news Maler delivered on Wednesday was positive.
“Here’s what’s good: We have rising consumer confidence,” he said. “That’s even more so in Texas than the United States as a whole. And the small business optimism index is rising. The Texas economy slowed in 2016, and it was primarily mining - that means oil. But 2017 should be better. Energy will be up, health care and business and professional services will be up.”
People are moving to Texas by the thousands.
“Our population expansion continues,” he said. “We got about 433,000 more people in 2016.”
Dallas, Houston and Austin experienced the biggest population increases, but Maler used demographic information to show something else. The “Golden Triangle” formed by those cities - and the economic activity they generate - is slowly becoming a “Golden Rectangle, with Tyler forming a separate population hub.
That’s evident in the home sales numbers, he added. In Tyler, home sales are 6.9 percent higher than this time last year, he said.
“If you keep this pace, this will be the new record year,” Maler said.