Entrepreneur Organization’s (EO) 169 Houston members representing all industry segments share their 2020 business forecast. With more than 13,000 members worldwide and median sale of $5 Million, Houston’s members are responsible for roughly 4,749 jobs across diverse industries.
Here’s what they say:
Jim McVaugh, founder and CEO of McVaugh Custom Homes says, “The 2020 Houston housing market will be a tale of two demographics. Low interest rates, high demand, and limited supply in the lower-priced end of the market vs. growing inventory, reduced real-estate tax incentives, and a limited buyer pool for higher-priced properties. Depending on which side of the coin you’re on, it could be a buyers’ or sellers’ market. Much like in 2019, the majority of sales will continue to be among single-family homes priced between $150,000 and $500,000. There is roughly a 4-month supply of homes that fall within this range. As a rule, 5 to 6 months of inventory is considered to be a normal or a balanced market. Over 6 months of inventory is a buyer’s market. When you have less than 5 months it turns to a seller’s market. The smaller the available inventory, the tighter the market. For single-family listings over $500,000 there is a roughly 9-month supply of inventory. If you are looking to score a deal on a luxury property now is the time to make a move. Keep your eye on the luxury condo/hi-rise market. There is an abundance of million-dollar condo units on the market with more set to be delivered in 2020. A typical condo has a carry cost of 4-6% of fair value before financing costs (property tax/condo fees/insurance/maintenance/special assessments/etc). These costs add up fast when a property is worth hundreds of thousands or even millions of dollars. In addition, most developers are paying over 10% for financing on these projects. Unlike 2009 where there was a glut of upper-middle-class single family homes, this time there is a glut of super-luxury condos. Most Houstonians are unable afford the monthly HOA dues in these buildings, let alone the $30,000+ property taxes. Even if you gave them away, a middle-class family could not afford to hold it. In my opinion, there are not enough wealthy foreigners to save these developers.
Moreover, the vast majority of those buyers have already purchased. I am not calling for a collapse of the hi-rise market tomorrow; however, I do see a slow burn process. As inventories begin to grow, transaction volume will decline. As a result, developers will start to feel the pain. Eventually, some will cave as they ask themselves why I am paying 10% a year to hold onto something that is dropping in value. We are already starting to see 20%-30% price declines in places like New York, San Francisco, and Miami and I think Houston’s hi-rise market could be next. 2020 should be an interesting year with lots of opportunities for both buyers and sellers.
George Joseph, CEO of Common Bond Bistro, Bakery and Brasserie and Positive Recovery Centers says, “I believe the restaurant industry in Houston will remain strong however with increased competition coming from new well-funded out of state restaurants groups weaker brands are going out of business faster. Survival of the fittest. Increase restaurants increases pressure to have enough quality staff members.
Even though the country is in the middle of an Opioid Epidemic, Addiction treatment is under payment pressure from insurance companies and increased competition from new facilities fighting for patients. Out of network treatment facilities have started gaming insurance companies by charging astronomical prices for drug testing of people in treatment. Insurance companies didn’t catch on at first but now it has shed a bad light on the whole industry because of some bad actors. This has caused increased scrutiny and overall less coverage.”
Stefan Diasti CEO at Raven says, “I do not have any hard numbers or data, other than to let you know that we are seeing a significant shift in cloud storage adoption among small-to-mid sized businesses, as well as households, in a conscious effort to go paperless. I have 5-6 calls a day with customers who buy our Raven Scanners and am witnessing this trend through these conversations, and through the sales and market share we are gaining. Whether it’s our own Raven Cloud service, or third parties like Google Drive, Dropbox, Evernote, SharePoint or OneDrive, customers are finally feeling confident and trusting of storing their data in the cloud. As a result, they’re looking for tools and techniques to implement in their daily workflows to drive more data into the cloud where it can be stored and easily retrieved in a more organized and cost-effective manner.
Jeremy Jenson President of Encore Search Partners, LLC, says, “The talent pool is getting tighter, make sure you’re not dropping the ball.
With more and more companies fighting over a smaller talent pool of qualified candidates, it has become increasingly difficult for employers to spotlight and attract A Players. Going into 2020, the unemployment rate is 3.6%, the lowest since 1969. With all the best talent already employed, hiring professionals must look beyond candidates who are actively applying for jobs and use cold outreach to solicit gainfully employed candidates to come work at their companies. In addition, younger talent pools are valuing base salary less than years past and are putting more weight on training & professional development opportunities, community involvement initiatives, and more paid time off. In addition, top tier candidates are being pulled in many directions, and as your hiring processes drag on, you run the risk of them accepting another offer, or not feeling valued enough, resulting in disinterest. Since many of the most talented candidates can afford to be selective, that means candidates are vetting companies just as much as businesses are evaluating candidates. There are company review sites out there, like Glassdoor, and even job search sites like Indeed feature company reviews on their listings. Businesses must work to make involuntary turnover as smooth of a process as possible. Retention must be a priority. Engaging employees must be an integral part of business strategy to improve a company’s reputation and attract the best talent.
The Entrepreneur’s Organization (EO) is the only global business network exclusively for entrepreneurs. With 13,000+ members in 61 countries, EO is a member-led learning organization focused on engaging and empowering its member leaders to learn from each other, leading to greater business success and an enriched personal life.