I believe the state will continue to surpass national growth at least through 2011, extending a six-year run. In short, the past success of the Texas economy positions it for more success as a national and global expansion continues to emerge in 2011.
That is not to say that Texas is fully back on track. The jobless rate in Texas has stalled this year, while the national unemployment rate is inching lower.
Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.
Why the stalled jobless rate?
In part, Texas may be suffering from its own success. Both a below-average unemployment rate and a relatively stable housing market likely are sustaining the state’s reputation as a safe haven for job seekers, luring job applicants from other states, boosting the labor force and heightening competition for jobs.
What about housing?
Texas home prices are no longer as low relative to the rest of the nation as they were during the housing boom.
That is because home prices outside Texas have fallen more sharply on average since the housing boom ended.
However, the median price of an existing home in Texas is still roughly 15 percent below the national average, sustaining some incentive to move to Texas. Moreover, foreclosure rates in Texas are below the national average, according to the National Association of Realtors. The lower foreclosure rate should limit further downward pressure on Texas home prices.
Texas home prices never soared as they did in some other notable states. Annual price gains, as gauged by the Federal Housing Finance Authority (FHFA), never exceeded 7 percent, much less rivaled the peak gains seen in Arizona (33 percent) and California (25 percent). But, likewise, neither have Texas prices cratered.
Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.
What is the biggest attraction to Texas?
The biggest lure for migrants to Texas, as anywhere else, is the availability of jobs. On that score, the latest trend has been encouraging. Over the first nine months of 2010, non-farm jobs have increased at a 1.9 percent annual rate. That is more than three times as fast as the increase in jobs nationally.
What accounts for the accelerated hiring in Texas?
Several key sectors contributed disproportionately to the accelerated hiring: mining, manufacturing, and professional and business services. The first is no surprise: given that it reflects the rebound in drilling activity. Since the end of last year, the Baker-Hughes rig count has increased by 65 percent as producers have responded to the increase in economic activity and the rebound in energy prices.
The strength in manufacturing also is unsurprising. Texas has a somewhat larger manufacturing sector than most states, and it is factory output that has been by far the strongest source of cyclical recovery.
The strength in professional and business services is a reflection of Texas’s favorable business climate. Over the past decade, the state has developed an increasingly diverse and dynamic set of industries. Texas has been a magnet for first-rate companies and individuals looking for an attractive place to relocate. Increasingly, the United States is a knowledge-based economy, and that is exactly where Texas has performed so strongly as is reflected in the strong growth in professional and business services.
What do you see for Texas, looking forward?
Looking forward, I believe that Texas will continue to outperform the national economy at least through the end of 2011. It’s a familiar story in many regards. The favorable growth trends in the state will continue to attract businesses and households looking to relocate. Texas’s relatively mild housing woes will help sustain its growth advantage, too.
Continued global growth promises to bolster the energy sector. Finally, the state will continue to benefit from its above-average exposure to manufacturing, a sector where demands are likely to grow faster than the overall economy.