Economist: National real estate attention focused on Texas

Austin Business Journal - 2:25 PM CDT Thursday, April 12, 2007

Dealing in residential real estate in Austin? You're better off than you would be elsewhere around the country, according to a state economist.

Texas continues to buck the trend of declining home sales that's sweeping the nation, aided by factors from net population growth to affordability, says Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University. He says national attention is being focused on Texas as markets decline elsewhere around the United States. Austin is further ahead of other Texas cities, with a very modest 3.2 months inventory of unsold homes, making it one of the tightest markets in the country. Still, recent figures show a slowdown in building permit activity in Austin, Dallas and San Antonio.

"Texas housing is still very affordable," Dotzour says, "and the low tax structure and pro-business climate makes Texas a destination for corporate relocation for firms that are striving to compete in the global marketplace."

The latest figures show Texas is increasing its population by about 400,000 people annually, says Dotzour.

"All of these people need homes or apartments in which to live," he says.

One caveat in the economists' rather positive forecast for the state could come in the foreclosure arena, particularly among houses priced under $200,000.

"Relaxed lending standards have increased the number of homeowners dramatically," Dotzour said. "Consequently, higher levels of foreclosures are to be expected."