The economic growth for Austin started in 1990 when the technology boom hit town. Dell and IBM made Austin home and the construction began. Fast forward to 2008 and the growth is still here.

"Austin's market was definitely heating up; everyone was calling it the second Silicon Valley," said Mike Hansen, who recently moved to Austin from California.

The 2008-2009 economic predictions were released Thursday morning. Angelos Angelou, a national economist who's often regarded as a chief architect in developing Austin as a high-tech center in the early 90's, addressed a crowd of hundreds at the convention center. He outlined what makes Austin go against the national declining trend.

"The local population is younger, better educated and earns higher incomes. If we add to this combination the high quality of life in Austin, then it is pretty clear why Austin has such a multi-faceted and dynamic economy, capable of growing at such high rates," said Angelou.

The population isn't growing on its own, job growth is up too. In Angelou's presentation, charts showed job growth in Austin rising much faster than other cities across the nation; 4 percent here compared to 2.8 percent in Seattle.

"Austin seems to be in a growth market, and it's been for quite a while attracting new technical companies," said Christian Gallo who works in Austin business.

There are more than 3,000 technology companies in Austin. About 14 percent of the city's job force works for them, but technology is just one of three main keys to Austin's healthy economy.

"Being the state capital of the second most populous state in the country helps, but there are almost 160,000 workers in the state and local government. Secondly, UT -- UT is a wonderful economic boom for Austin. And thirdly, it's our workforce, it's our talent," said Dave Porter of the Economic Development at the Austin Chamber of Commerce.

While some of the jobs in Austin pay higher wages than across the nation, Angelou warns some employees are getting left out.

"Nearly 25 to 30 percent of the jobs are still taking place in retail and leisure hospitality, paying less than $20,000 a year, hardly a living wage for our region," said Angelou.

With nearly 30 percent of the jobs at lower wage, Angelou says the biggest challenge in Austin's economy is the housing market. New home construction was down 31 percent in Austin during 2007, and that decline is expected to continue.

Although the population is Austin is growing, and the demand for housing is high, Angelou says developers are reacting to the national trends.

"[Thirty-one percent is] very close to what the national averages have been; which indicates that a lot of the national developers are perhaps over reacting for this market because this is a different market than what we see in other parts of the country. Not a lot of cities can point out that they're growing their population base by 42,000 people a year," said Angelou.

The lack of new homes will push buyers into existing homes. That's expected to keep prices stable. Commercial real estate, like downtown condos, is expected to remain strong as well. <script type="text/javascript"></script>