Texas Urban Areas to Experience Tremendous Growth!

Posted by Stiles Mund Group on Tuesday, February 26th, 2008 at 8:03pm.

I don't normally post entire articles, but I thought this recent article by Dr. Jim Gaines, research economist for the Real Estate Center at Texas A&M University was very relevant and interesting for those questioning the strength of the north Texas Real Estate market. Fort Worth is poised for greatness and real estate is historically a wonderful investment when held for the long term.

COLLEGE STATION, Texas--(Business Wire)--
Affordable housing is the state's ace in the hole in the predicted
future high-stakes real estate version of Texas hold 'em. In fact, the
state's leading expert on residential real estate is betting housing
affordability will be the "most significant growth stimulant" for
Texas over the next 25 years.

   "Texas is the most housing-affordable, high-growth state in the
nation," says Dr. Jim Gaines, research economist for the Real Estate
Center at Texas A&M University. "So far, skyrocketing home prices
common to fast-growing states like California and Florida have not
occurred in Texas."

   In mid-2007, the state's median-priced home was $151,000 - some
two-thirds the national median of $229,000 and about 75 percent less
than California's $589,000.

   According to the Texas Housing Affordability Index compiled by
Gaines, a Texas family earning the statewide median income has 152
percent of the income required to qualify for financing on the
median-priced home. Nationally, families have about 16 percent more
than is required.

   Other measures show just how affordable Texas homes are. One
expresses median house value as a multiple of median housing income.
The lower the multiple, the more affordable the housing.

   "In 2005, the national median home value was 3.62 times the median
household income," says Gaines. "In Texas, the median value was only
2.52. Current median prices to median household income multiplies are
even higher, and the difference between Texas and the nation are even
more pronounced."

   Gaines says housing affordability is just one card in a deck
stacked in the state's favor. The other winning cards include lower
cost of living and cost of business, greater employment opportunities
and an appealing lifestyle.

   "Events and circumstances point toward a Texas-sized boom between
2005 and 2030," Gaines writes in the latest issue of Tierra Grande
magazine, a periodical sent to all the state's real estate licensees.
"The state's population and economy -- as well as its housing and
commercial real estate markets -- are poised to explode in volume and
prices."

   Gaines says the real estate game is changing, and the stakes are
getting higher.

   "Things will change dramatically from what many Texas are used
to," he predicts. Population will be a key player at the table as
Texas is projected to grow by 13.6 million by 2030.

   "That's the equivalent of adding another Dallas-Fort Worth
metropolitan area, another Houston metropolitan area, another San
Antonio metropolitan area and another Corpus Christi," he says.

   "Growth and prosperity will spread throughout the state, but most
of the growth will occur in the state's urban areas," says Gaines.
"Four out of every five Texans will live in the Dallas-Fort
Worth-to-Houston-to San Antonio triangle."

   New Texans will bring new jobs.

   "Texas leads the nation in job creation. If Texas maintains its
average employment-to-population ratio as expected during the next 25
years, the state will add another 4.5 to 5.8 million jobs," says
Gaines. "Job growth is expected to be stimulated by overall U.S.
economic growth and enhanced by Texas' employment-friendly
characteristics."

   More people and more jobs will lead to higher personal income.

   "Extending the long-term trend that began in 1969 suggests the
state's total personal income could increase by $1 trillion by 2030,"
says Gaines. "The 2005 Texas median household income of $42,139 could
reach nearly $68,000 by 2030."

   With the gains will come pains, says the noted economist.

   "The projected population and employment boom will also strain
local and state resources to provide public services and
infrastructure," he said. "Texas will experience the same growing
pains as other high-growth states. State and local fiscal capacities
will be stretched, and Texans will debate the level and type of growth
they want in their communities."

   For more on Gaines' Texas economic outlook for 2030, including his
thoughts on what might disrupt the ideal game plan, see "Looming Boom:
Texas Through 2030" available online here.

   The Real Estate Center (http://recenter.tamu.edu) has been
providing solutions through research for 35 years. Funded primarily by
Texas real estate licensee fees, the Center was created by the state
legislature to meet the needs of many audiences, including the real
estate industry, instructors, researchers and the general public.

Real Estate Center at Texas A&M University
Dr. James Gaines, 979-845-2079
or
David S. Jones, 979-845-2039
or
Bryan Pope, 979-845-2088

Copyright Business Wire 2008
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