Houston's gains are nothing like those seen in the past decade in the Northeast and California, but that may be the secret to Houston's success and the reason a bubble is unlikely to develop here.
Land here is abundant, and the city has some of the least-restrictive land-use and construction rules in the nation. Those factors help supply to keep pace with demand and keep prices within reach of a broad range of potential buyers.
Confined by neither oceans nor mountains, the Houston metropolitan area has plenty of room to spread out. What is more, the city has no zoning, weak historical-preservation rules and few tools to preserve open space.
Houston's economy is humming, thanks in part to a sustained boom in oil and gas and the city's burgeoning medical industry, which attracts patients from all over the world.
Affordable housing has played a significant role. James Gaines, an economist at the Texas A&M University's Real Estate Center, says a Houston developer can be "cutting roads and building houses" within a year of buying 500 acres. The same project would take a developer in Florida three years and as many as eight years in California, substantially pushing up the price, says Dr. Gaines.
Texas had six markets where home prices rose at a rate of between 6% and 12% and another nine markets where prices increased 12% or more, the survey showed. Richard J. Dekaser, chief economist for National City, says, "It's like revenge of the nerds."
Houston Residential home sales statistics for residential properties and new homes listed by 22,000 REALTORS throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties
Information gathered from the Wallstreet Journal's Thaddeus Herrick.