San Antonio Hispanic Chamber http://www.sahcc.com/ CEO and President, Ramiro Cavazosn and Economic Advisor, Dr. Steven Nivin, PH.D., made a presentation to the San Antonio REALTOR's First Voice Luncheon this past week at
Toyota of Boerne http://www.toyotaofboerne.com/. Vic Vaughan, CEO and Dealer and Shawn Vaughan, General Sales Manager, hosted the event.Other people present were San Antonio Business Journal Publisher, Kent Krauss, Toyota Central Texas Manager, Brad Clark, John Thurman, Radio Talk Show Host of Real Estate Focus http://www.klup.com/ http://www.heartoftexasrealty.com/, and Bjorn Dybdahl, http://www.bjorns.com/.
According to Dr. Nivin, corporate profits have have been declining over the past five quarters. This by itself was a signal that the economy was softening. Dr. Nivin noted that one definition of a recession is two consecutive quarters of decline in GDP. While we have not experienced that, yet, it is expected that the 4th quarter will show a pretty substantial decline, and many economists are projecting a decline in the first quarter of 2009 as well. Our chief economist has been arguing that we have been in a recession since the end of 2007 or the beginning of 2008. In the past, when the economy has experienced six consecutive months of employment decline, the economy has always gone into recession. Employment has now been declining for three quarters through October, 2008. 
US real GDB however has not declined for two quarters but the downturn in the overall economy since October is expected to put 4th quarter numbers of 2008 into a genuine decline.
US seasonally adjusted unemployment rose to 6.5% in October of 2008 and higher levesl are clearly possilble in 2009. The rate of growth in the unemployment is increasing as the end of 2008 approaches
From September 2007 to Sept 2008, inflation declined slightly to 4.94 percent.
A major benefit of the San Antonio economy is that is it very diversified. The Finance sector contributes approximatly $20.5 Million in economic contribution. Real estate contributes approximatly $19.4 Million in economic contribution, Healthcare accounts for approximately $16.3 Million, Manufacturing contributes about $14.4 Million in economic benefit. The US DOD or Department of Defence contributes about $13.3 Million in economic benefit. Hospitality and Tourism contributes about $8.7 Million in economic benefit, Informatino Technology IT contributes about 5.3 Million in economic benefit, Graphics and Creative Technologies contributes approximatly $3.4 Million in Economic Benefit, Aerospace contributes approximately 3.3 Milliion in economic benefit, and Higher Education contributes approximately about $2.2 Million. 
Employment supported by the various sectors provides a sound base for economic stability that many other communities may wish to emulate. i.e.: Department of Defense DOD accounts for approximatly 200,000 jobs annually in the San Antonio area. Approximately 131,000 people are employed in the real estate sector. Healthcare and the biosciences account for approximately 120,000 jobs in San Antonio. Tourism and hospitality accounts for approximately 100,000 jobs. Since Toyota opened a plant in San Antonio, the area's manufacturing based has increased to approximatley 53,000 jobs. San Antonio's Finance Sector accounts for approximately 51,000 jobs. Graphics and Creative Technologies account for approximatly 27,000 jobs. Higher education accounts for approximately 17,000 jobs. Information Technology IT, accounts for approximatey 11,000 jobs in San Antonio, and Aerospace accounts for approximately 10,000 jobs. Through October of 2008, San Antonio's employment has been increasing steadily at an approximate rate of about 2%
Texas' leading Economic Indes appears to indicate a slowing of the Texas economy over the next year.
The Texas economy continues to grow but the rate of growth has been declining over the past year. The index increased from 187.2 in August to 187.3 in September. From March 2008 to September 2008, the index increased at an annualized rate of 1.29%
Texas' major metro areas continue their long growth trends, but growth is starting to stagnate.
While all metro areas of Texas grew in September, Houston led the way. The Business Cycle index for major metropolitan areas in Texas noted a 1.96% increase in growth for San Antonio, a 3.96% growth for Houston, 2.34% growth for Ft. Worth, a 1.14% growth for Dallas, and a .5% growth for Austin. In fact, Austin moved from one of the fastest growning regions to one of the slowest during 2008.
US Housing starts decreased thoughtout the US in 2008 and in Texas during the last half of 2008, a clear signal of a pending recession
According to the National Association of Realtors, the number 
of months of existing homes inventory on the market decreased over the past few months from a high of over 11 months to just under 10 months. However, this statistic included the months prior to the fall of the world stock and financial markets.
The Growth in home sales continues its decline in all major areas of Texas, including San Antonio. Homes sales in San Antonio are down almost 20% from September 2007 to September 2008 according the Bob Leonard, Chairman of the Board of the San Antonio Board of REALTORS. Median home prices declined only slighty in each of the major markets though, indicating at least some stabity in home values in cities like San Antonio.
of months of existing homes inventory on the market decreased over the past few months from a high of over 11 months to just under 10 months. However, this statistic included the months prior to the fall of the world stock and financial markets.
The Growth in home sales continues its decline in all major areas of Texas, including San Antonio. Homes sales in San Antonio are down almost 20% from September 2007 to September 2008 according the Bob Leonard, Chairman of the Board of the San Antonio Board of REALTORS. Median home prices declined only slighty in each of the major markets though, indicating at least some stabity in home values in cities like San Antonio.
The PMI Mortgage Insurance Company has established PMI U.S. Market Risk Index to assess the risk that may exist in each of the major U.S. metropolitan markets. Riverside, California has a market risk of 1, meaning a 95.5% probability that if a home is foreclosed, the PMI Insurance in effect on mortgage will be result in a claim on the assets of the PMI Mortgage Insurance Company. Ft. Worth, Texas has a risk index of 5 meaning that the value of the home will likely reflect the home's market value. Other markets in Texas such as San Antonio, Dallas, Houston, and Austin have similar indexes meaning housing values should remain stable throughout the recession.San Antonio has an unemployment rate of approximatly 5% as of Novembe, 2008. During 2008, the city created approximatly 20,000 new jobs.
Summary
The national economy is clearly in for some troubled times. However, the economic stimulus that has been infused into the economy by the US Federal Government is likely to keep a depression from occuring. Even so, economic recession is imminent. But Texas's metro economies are likely to continue to grow, hopefully, but at a slower rate than the past several years.
Summarized by John Thurman , Broker, Heart of Texas Realty
Host, Real Estate Focus Talk Show, NewsTalk 930 KLUP
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