St. Louis’ housing market is recovering from the so-called "Great Recession,' but its pace is slower than in other areas of the country.
That was the message members of the St. Louis Association of Realtors heard at the group’s annual economic forecast breakfast Wednesday.
Bills Emmons, an economist with the Federal Reserve Bank of St. Louis’ Division of Banking Supervision and Regulation, told the group that St. Louis is following national trends in the housing market.
But, he said, St. Louis’ slow population growth means the market is not rebounding as quickly here.
"It’s recovering, like most other places in the country. But, like our job market, it’s just not going to be as fast as a recovery in terms of house prices or building activity," Emmons said.
He said 2015 will be a strong year for the economy due to low energy prices, a strong job market and good financial conditions, such as a strong stock market.
"These are the forces that have come together in 2015 leading us to believe this is going to be an outstanding year, relative to what we’ve experienced recently, but there are reasons to think this isn’t going to last forever," Emmons said.
The economist said he believes 2015 could be the best year for the economy the country will experience for some time. Emmons said with 10,000 baby boomers retiring every day, there are insufficient numbers of workers to replace them. He said the growth rate of those 18 to 64-year olds in the U.S. is now close to zero percent.
"As this massive generation moves through its working years and moves into its retirement years, it’s going to have fundamental, important impacts on the economy," he said.
Emmons said job growth is expected to drop because there won’t be enough people to hire. The Congressional Budget Office estimates there will be nearly 200,000 new jobs per month created this year. But that number is expected to drop to just under 150,000 per month in 2016 and under 100,000 per month in 2017.
"We’re looking at a fairly substantial decline in job growth and the potential for the economy to grow in coming years," he said.
With a slower-growing, aging population, Emmons said that likely will mean a slower-growing housing market than the country experienced before the recession.
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