San Angelo Leaders Optimistic for an Economic Revival Soon
The San Angelo economy stabilized while local businesses remained conservative in the time period prior to the U.S. presidential election. That is how President of the San Angelo Chamber of Commerce Dan Koenig summed up the October 2016 economic report released Friday by his organization.
In October 2016, sales tax collections, the bellwether indicator of economic health, dipped lower by $222,091, or 9.12 percent in September. That is in line with the rest of 2016 through Sept. 30, where City of San Angelo sales tax collections are down 11.52 percent.
|City of San Angelo||$2,212,308||$2,434,399||-9.12%|
|For Comparison purposes:|
|City of Abilene||$3,703,629||$3,900,376||-5.04%|
|City of Midland||$4,615,014||$5,542,681||-16.73%|
|City of Odessa||$3,607,840||$3,953,861||-8.75%|
|City of Wichita Falls||$2,756,888||$2,778,868||-0.79%|
Dropping sales tax numbers from two months ago are not leading numbers to forecast during the election year, Koenig stated.
“I heard that excuse a lot,” Koenig said. “When we have this conversation about the local economy in January, it will be interesting to see what the impact the election may have had on businesses being conservative.”
There are bright spots in the local economy. Koenig points out that the unemployment rate (4.6 percent for Oct. 2016 versus 4.2 percent for Oct. 2015) is relatively stable.
“Not mentioned in the report are the wages and salaries. They are relatively unchanged, too,” Koenig said.
He continued, “What this indicates to me is the extra lift we received from the oil boom has erased itself. What lies underneath is a diverse, relatively stable economy of San Angelo.”
On top of this stability are two bright spots. First, the airline passenger count at Mathis Field is up in October 2016 versus a year prior, and the overall passenger count for 2016 is up, too.
The sales of real estate are up an unimpressive $1 million for the first 10 months of 2016 compared to the same period in 2015. But less units were sold from January through October 2016 compared to the prior year’s same time period.
|Total Sold YTD||1,240||1,298|
|Dollar Volume YTD||$231,483,945||$230,485,595|
Source: San Angelo Association of Realtors
October’s real estate sales numbers may show a reversal of the trend of number of units sold, just to maintain the same dollar volume as last year.
Is this a turning point?
Binnie Dierschke, a San Angelo broker who heads Dierschke & Dierschke Real Estate, said she recognized the October 2016 increase in volume at her office, and it carried somewhat into November.
There were 129 versus 113 homes closed in October 2016 versus October 2015, but the dollar volume was lower, $18.8 million versus $20.3 million.
Dierschke expects the November numbers to show the same trends, but added that October and November were still slow months. December is shaping up to have more contracts than October, she said.
“Lower priced houses are selling pretty fast right now,” Dierschke said. By lower in price, she said anything under $200,000 doesn’t stay on the market long.
Buyers, most of whom Dierschke estimates are first-time home buyers, not older residents downsizing, are entering the local real estate market with very conservative mindsets. She noted that the first-time homebuyers she is seeing are qualified to buy much more expensive homes, but are opting for houses priced well below the mortgages they qualify for.
She said that means these new homeowners are going to have more disposable income, which is a good trend for the rest of San Angelo’s economy. Dierschke credits the boom-bust cycle of the oil field for this year’s conservative approach to home buying.
“I think we’ll remember the bust for a while,” she said.
County Judge Steve Floyd was more direct about why he is feeling a positive change in attitude in San Angelo.
“It’s Trump. Look at what the stock markets are doing,” he said. “The election brought back hope.”
From talking to his contacts in the agriculture sector, Floyd said he has been told more than once that there is a great deal of money sitting on the sidelines.
But not for long, he predicted.
Floyd looked long at the still-falling sales tax revenue for the county. He said he’s been monitoring the new vehicle registrations in the county for a while, too.
“The car dealers have had a tough year,” he surmised. But he said people’s attitudes are already starting to change.
“San Angelo has food, fiber, and now energy. If Trump really wants a renaissance of the American economy, he’s going to need inexpensive energy. We have that. We’re sitting in the catbird’s seat,” the judge said.
Koenig is optimistic, but careful in his predictions.
“We’re certainly stable. We have a very diversified economy. Our low unemployment numbers and stable wages are still there,” he said. “We’re going to have to see if people and businesses open their wallets and spend.”