Unique Original Articles » US Economy on the verge of a recession but Texas real estate is skirting it all

Depending on who you talk to the US economy is either facing a ‘critical slowdown’ or we are in the ‘middle of a recession’. The latest figures published in the London Times show that:

US headline inflation is expected to have risen by 0.3 per cent in March, taking the annual rate to 3.9 per cent, against 4 per cent in February. Figures due out on Wednesday are tipped to show that core consumer price inflation rose by 0.2 per cent, taking the annual rate to 2.4 per cent, up from 2.3 per cent in February.

US housing starts Figures due out in April are expected to show that US housing starts fell to 1.02 million in March, down from 1.06 million in February. Building permits in America are tipped to have dropped to 975,000, down from 984,000 in February.

US factory prices The cost of goods leaving US factories is tipped to have risen by 0.6 per cent in March, up from 0.3 per cent in February, in figures due out tomorrow. The core producer price index is tipped to have risen by 0.2 per cent, taking the annual increase to 2.6 per cent, up from the 2.4 per cent that was reported in February.

US retail sales Data due out today are tipped to show that retail sales in America remained flat during March, after a 0.6 per cent fall in February.

In plain speak the figures give us what we already know. Yes, our economy is suffering but it has not quite yet hit that critical downward curve which would signal a full-blown recession.

Inevitably this has affected the housing market and real estate in particular but within that picture there are still areas where real estate activity goes against the national trend. Texas Real Estate has experienced an inevitable drop off but nothing like that experienced nationally and there are many good reasons for that:

1. Variety – arguably no other land in the world can offer such a combination of mountain properties, hunting properties, lakefront homes, houses by the river, surf and turf, recreational properties and properties which can be bought a second home, as a main home, as a holiday home or as an investment.

2. Value – Texas real estate still offers the best value for money. During the housing boom Texas home and Texas land prices remained steady and there was a marked resistance to jump on the bandwagon of rapidly rising real estate price tags. The result is that Texas real estate continues to deliver even in this gloomy market.

3. Demand – Texas is seen as the place to get a ranch or a recreational property in irrespective of who you are. From US presidents to Hollywood stars, a Texas ranch is where the good life is at.

4. Size – when it comes to real estate size really matters and Texas is such a vast territory that it still has to offer a huge number of properties that belong to a first-tier in terms of quality and value.

If the US economy continues to drop it may well be that Texas real estate will eventually be affected by the chill, particularly as the global credit crunch is affecting equally international buyers as well as those who are in the continental USA. But at the moment the mood is optimistic if cautious.

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