Is the housing picture really improving in Texas?
A few weeks ago the Brookings Institute, a non-profit public policy organization based in Washington, D.C., published a report that described the economic Recession and Recovery in America's 100 Largest Metropolitan Areas. You can see the full report here. I am always skeptical of the specific numbers in reports of this sort, whether it is the government or a private concern reporting. However, I do believe general trends can be found in reports of this kind.
Here is one of the key paragraphs in the report: "Several metro areas showed signs of beginning to recover from the recession, and the rate of economic decline slowed in many more. The most positive signs occurred in GMP, where 20 metro areas (Albuquerque, Austin, Baltimore, Bridgeport, Cape Coral, Charlotte, Colorado Springs, Dallas, Harrisburg, Houston, McAllen, Raleigh, Richmond, Riverside, San Antonio, San Jose, Seattle, Tulsa, Virginia Beach, and Washington) posted at least small increases in GMP during the second quarter of 2009 and the remaining 80 saw output decline more slowly than in the first quarter. In addition, five metro areas (Akron, Buffalo, Columbia, Madison, and McAllen) stabilized or managed to add jobs in the second quarter of this year, up from two in the first quarter. An additional 60 metro areas shed jobs at a slower rate from March to June than in the previous three months. Left further behind were 35 metro areas, located in every region of the country, in which the rate of employment loss quickened in the second quarter. McAllen was the only metro area that gained jobs in both the first and second quarters of the year. "
That confirms what we thought about the Texas economy. We did not have a housing bubble that drove up house prices during the go-go years. And because house prices have been pretty reasonable we did not have a huge drop in home values. Therefore our market has not suffered as severely as many other areas of the country. That does not mean we escaped the economic downturn entirely. We do have home owners unable to stay current with mortgage payments, higher unemployment, and foreclosures.
The Brookings Report showed housing prices stabilizing in many areas during the past year. The report showed San Antonio experiencing a 3.1% change in home prices from 2nd Quarter 2008 to 2nd Quarter 2009. Of course, measured on a neighborhood by neighborhood basis, some areas had price increases and others had price decreases.
Here is their Change in House Price Index, 2nd Quarter 2008 to 2nd Quarter 2009.
It seems to me the two main components needed to keep our residential real estate on a solid foundation are- keep unemployment down, and keep interest rates in check. That's easy enough to say, but it will be a real challenge to keep these objectives in balance. Since we have a pretty diversified employment base, and a favorable tax situation for business development, we have a lot of things going for a continued growth situation. Finger crossed for good economic times in the future.
Call me if I can help you with your residential real estate needs. We have an outstanding commercial real estate division too. I can link you up with one of our great commercial realtors too. Call me.
Comments(3)