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Houston In Its Own Market

(The housing market is in a terrible slump, downfall and it's going to crash?)

Well, don't say that to homeowners and investors in Houston; they'll laugh.

Apparently that housing boom the United States experienced from 2000 to 2005, didn't make everyone in the country who owned a property rich. Houston, Texas never really had a chance to experience the pleasures of a booming market, that is, until now.

The article, "Houston Missed the Real-Estate Boom of East And West Coasts, but Now It's Payback Time" written by Thaddeus Herrick and publish November 6, 2006 in The Wall Street Journal, explains how Houston is booming now while the rest of the country wishes it could travel back in time.

"In September, local sales of single-family homes and condominiums were up 17.7% from a year earlier, logging their 32nd straight month of increase, according to the Houston Association of Realtors. The median price of an existing single-family home: $143,400, up 3%."

These are amazing figures considering the current status of the rest of the U.S. market. According to the National Association of Realtors (NAR), including Houston's figures, nationwide residential real estate sales declined 14.2 percent in September. And home prices were down 2.2 percent in September, which included the former hot spots of Washington, Boston and San Francisco.

While Houston's current boom may not be of epic proportions, the city has a more well-rounded market that may prevent such a sharp correction like the rest of the U.S. is experiencing.

"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."

"'We haven't had a bad year in the past decade,' says Lorraine Abercrombie, chairwoman of the local Realtors group and marketing director for Greenwood King Properties."

Houston's city model is directly contrasting of major urban locales such as Boston and San Francisco, in the sense that Houston does not have to abide by strict zoning, building and historical preservation laws. With a lack of foundation to build on in Boston and San Francisco the demand has far outweighed the supply, which lead to the increase in home prices. Those prices rose so high that the bubble eventually burst. This was not a problem in Houston.

"These [Boston and San Francisco] are places where only the elite can live," Dr. Edward Glaeser of Harvard University said.

"Not so Houston. 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."

As the rest of the country eagerly wait for the morning newspaper to produce good news of a turnaround in the market, Houston is perfectly comfortable living one day at a time in a market that supports both buyers and sellers.

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