Is Texas Real Estate Poised for Success?

Capitol Building of Texas

While not unscathed by all of the recent real estate troubles, Texas has, in many ways, been buoyed by strong growth, in its economy and in its population. That growth—which has shaped Texas into one of the most sought-after places to live, and landed many of its cities on “Best of” lists for everything from lifestyle to job-seeking—will, it seems to me, continue to propel Texas’ real estate market in the decades to come, making today’s prices a rock-bottom bargain when compared to future growth. Here’s why:

How strong is Texas’ economy right now? Powerful indeed, when compared to national averages, and exceptional when viewed outright. According to the Federal Reserve Bank of Dallas, Texas was home to 43 percent of the net jobs created in the entire country, from June 2009 to May of 2011. That’s nearly half of all jobs in the country, created just in the Lone Star State. It’s clear that Texan business is booming. And with that boom comes jobs in manufacturing and the energy sector (among others), along with the intricate web of service sector jobs that support the modern lifestyle. People with jobs, of course, need somewhere to live, and it’s easy to suggest that a majority of those workers will, at some point in their lives, want to buy a house.

Thanks in part to job growth, population growth, too, has been strong in Texas, with continued gains in both domestic and international immigration. Travis county, part of which falls within the Austin-Round Rock-San Marcos metropolitan area, has seen a nearly 25 percent growth in population from 2000-2010; Williamson county has grown nearly 69 percent in the same period. Attracted by plentiful jobs, and a top-notch cultural and educational climate, places like Austin are moving forward toward the future, even while much of the nation has been stalled by the recent recession. And the numbers hold true all across Texas; a recent data release from the U.S. Census Bureau (as reported by Texas A&M University’s Real Estate Center) suggested that Texas will see a 43.5 percent increase in population from 2005 to 2030—that’s an additional 10 million people calling Texas home within the next twenty years!

Affordability, of course, is a major concern, and keeping sales prices tenable for both existing and new homes in Texas has been a priority for many leaders in the political and business arenas. Many families are finding that new home construction in the exurban areas of the state’s larger cities is helping to relieve price pressures, and providing affordable, desirable and financially-realistic homeownership options. Well-planned urban in-fill projects (like Austin’s Mueller) are also keeping Texas’ housing affordability reasonable, and providing buyers with lots of choices, at a variety of price points.

So the twin engines of regional growth—population increases and rising employment numbers—are here, and already shaping tomorrow’s Texan real estate market. New home construction is responding, and taking advantage of Texas’ abundant land to address the need for new homes. The question, of course, is what side of the fence today’s potential buyers will be on, once the market ignites and truly starts to rev.