web stats Web Analytics by Logaholic

Houston Luxury Real Estate Articles and insights to the Houston area luxury home real estate market as observed by local luxury home expert Mark A. Fuller.

Real Estate Trends

A decade of a roller coaster recession not quite over until more jobs created

In 2000, 136.89 million people in the United States were employed, representing 64.4 percent of the total population.

This is the employment-to-population (E-P) ratio. In 2009, the E-P ratio dropped to 59.3 despite the fact that more people — 139.88 million — were employed, a declining proportion of a growing population. By September 2010, the E-P ratio stood at 58.5. The last time the E-P ratio was that low was in October 1983, when it was 58.4.

Lack of jobs and unemployment are the most serious problems facing the country today. The number of people unemployed in 2000 was 5.69 million, roughly 4 percent of the measured labor force. By 2009, that number had grown to 14.27 million, an unemployment rate of 9.3 percent. And that does
not include the number of people working part time or underemployed.

Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.


Texas, by comparison, fared better in job retention and employment. Jobs continued to be created in the state through 2008 but declined in 2009.

Overall, the decade saw positive growth in number of jobs and total employment. The decade started with 9.43 million jobs in Texas and increased 9.3 percent to 10.31 million by 2009. During that time, private
sector jobs increased from 7.9 million to 8.5 million, a nearly 8 percent increase.

Although the total number of Texans employed climbed from 9.9 million to 11.02 million during the decade, the number unemployed doubled from 452,000 to 911,000, raising the unemployment rate from 4.4 percent to 7.6 percent. Texas was not immune to the economic ills besetting the country, and owing to a rapidly increasing population, the state’s E-P rate
decreased from 47.3 percent to 44.5 percent.

Texas was also the fastest growing state in the nation based on total population increase from 2000 to 2009. The total U.S. population increased about 24.8 million or 8.8 percent, from 282.17 million to 307.01 million. Texas added nearly four million, growing from Growth in the number of households, the basic demand unit for housing, is a major factor in the housing market. Total U.S. households increased by 12.5 million or 12 percent during the decade, from 104.7 million in 2000 to 117.2 in 2009.

The decade may be remembered for keeping homeownership in the spotlight despite the fact that the rate of homeownership ended the decade roughly where it started.

Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.

The estimated homeownership rate in first quarter 2000 was 67.1 percent; by fourth quarter 2009, it was 67.2 percent.

Between those years, the rate was as high as 69.2 percent(fourth quarter 2004).

Total owner-occupied U.S. housing units increased from 69.8 million to 74.8 million, a 7.2 percent increase. In Texas, the number of owner-occupied units increased from 4.7 million units to 5.4 million, a 15.1 percent jump, more than twice the national rate.

Home sales during the 2000s experienced a wild roller coaster ride. The market had a significant upswing in the late '90s that carried forward for the first few years of the decade, exploded through the middle years, then dropped during the last three years.

Texas home sales exhibited wide annual variance in totals, reflecting a sales volume bubble but not a price bubble. Home sales numbered 188,738 in 2000 and 213,294, about 13 percent more, in 2009. Sales reached a peak of 292,805 in 2006, more than 100,000 sales more than in 2000, but fell each year thereafter.


Home foreclosures have been a primary component of the Great Recession and a major hurdle the last three years of the decade. According to the Mortgage Bankers Association, the overall mortgage delinquency rate in first quarter 2000 was 3.73 percent. By fourth quarter 2009, it had grown to 10.44 percent, a 180 percent increase.

Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.

Right now the housing market, like most industries, needs job formation
to bring it out of its recessionary depths.

The roller coaster ride of the past ten years isn’t over just yet. Before the housing market can return to normal, the large inventory of available properties needs to be sold. That could take between 1.5 and three years.
to 9.67 percent during the same period, or from 477,825 mortgages to almost 4.3 million, an 800 percent increase. The number of loans in foreclosure similarly jumped from 1.17 percent of all loans or 325,032 mortgages to 4.8 percent or 2,034,722, a whopping 526 percent increase in home loan foreclosures.

Texas delinquency and foreclosure rates increased dramatically but at a substantially slower pace than the United States.

The state's delinquency rate doubled, going from 5.14 percent in first quarter 2000 to 10.3 percent in fourth quarter 2009.

Properties in foreclosure increased 137 percent from 0.86 percent (15,641 properties) to 2.04 percent (61,693 properties).

Texas' foreclosure rate has consistently been less than half of the national rate.

It is hard to tell how fast the economy will revive. In past recessions, the housing market led the economy out of its doldrums. That is unlikely this time. In fact, right now the housing market, like most industries, needs job formation to bring it out of its recessionary depths.

How long will it take to regain "normalcy?"

It depends on how long it takes for the market to clear the vast inventory of properties available, so that it can reach a balance between supply and demand. There is a sizeable inventory that must clear the market.

Not all of the 4.1 million mortgages seriously delinquent will end up foreclosed and available for sale, but a substantial proportion probably will. And the "other" vacant and REO properties may include some double counting. Based on different assumptions about those properties, the total inventory that needs to clear the market probably ranges from 9 million to as many as 12 million homes. Annual home sales of new and existing houses (total demand) were relatively consistent except for the housing boom during the middle of the decade. The time to clear the current inventory could range from 1.5 to as many as three years, depending on average annual sales during the coming years. This would mean that the housing market probably would not recover and see substantial growth until sometime between mid-2012 and 2014.

Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.


While Texas did not entirely avoid the boom and bust cycle during the 2000s, the state's economy and housing market did significantly better than the nation. The population continues to grow and signs of job growth are appearing. Whatever happens, Texas is poised to be one of the states leading the recovery because of its projected job and population growth and
the relatively low overhang of homes to be sold.