That was the central takeaway in his keynote address during the 2019 CCIM Commercial Real Estate Forecast Competition. Dotzour began by describing the incredible growth in jobs and population in Texas. He went on to discuss Opportunity Zones and other tax incentives that will benefit the real estate community, but he did note the curious timing of it. He explained tax cuts are usually put in place to stimulate the economy during a recession. However, the current set of tax cuts were implemented during an expansion, putting the current economic expansion on course to become the longest in U.S. history.
Dotzour notes that some economic analysts point to the speed with which the markets have accelerated, which might indicate that a recession is on the horizon. These models typically point to a market correction—making markets neither too hot nor too cold—as the only possible outcome.
While Dotzour acknowledges tighter financial conditions and a fading fiscal stimulus to be key drivers of deceleration, he does not expect a recession this year. He also jokingly cautioned people not to worry about reports of slowing corporate profits. "You’ll see headlines like this: 'Corporate profits slowing.' But what does that mean? They’re still growing, they’re just growing at a slower rate," Dotzour insisted. "Instead of going up 15 or 16 percent, it’ll only be 8 or 9 percent."
He did describe one of the biggest threats to prolonged prosperity in the United States: we’re experiencing a labor shortage as more and more jobs are created. “Until we resolve the immigration thing and figure out a way to get people to legally work here, it’s going to be a tight labor market,” Dotzour said.
Dr. Mark G. Dotzour is a real estate economist who served for 18 years as Chief Economist of the Real Estate Center at Texas A&M University in College Station. He has given more than 1,450 presentations to more than 250,000 people and has written over 90 articles for magazines and journals. His research findings have appeared in the Wall Street Journal, USA Today, Money Magazine and Business Week. His clients include banks, private equity firms, real estate investments trusts, construction firms, engineering companies, wealth managers, private foundations, and commercial and residential brokerage firms.