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Houston’s Economic Forecast

Traditionally, the Houston area has experienced highs and lows in terms of economic impact. Today the Houston area supports a Gross Area Product that amounts for more than $300 billion. Barely a handful of nations across the world, other than the United States, can lay claim to a GAP which exceeds that of Houston, Texas.

In the next quarter century, Houston is anticipated to outperform the rest of the country in terms of both population and employment. While other areas of the country may be suffering from the effects of the lending crisis, Houston appears to still be going strong despite the ill effects of the submprime lending market. Factors which have helped to contribute to the continued boom in Houston include increases in crude oil prices, a booming energy sector and job gains in the trade, transportation, business services and government sectors. As a result, the economy in Houston remains strong.

While the demand for homes priced at below $150,000 may have been somewhat dampened by the subprime crisis, this has not affected the mid and high priced housing markets. In fact, those markets remain among the strongest in the entire country. This has helped to anchor the real estate market in Houston during times when other markets across the nation have not been so fortunate.

While the Houston area was predominantly reliant on the energy industry during the 1980s today the economy of Houston is far more diversified. This has created a more vibrant and stronger local economy. Today the energy sector accounts for about 40% of the regional GDP. The broad spectrum of industries included in the Houston economy include medical research, high technology, health care delivery, oil and gas exploration, petrochemical production and basic petroleum refining. The diversification of the economy in Houston has allowed further diversification of the workforce to the point that most sectors are only slightly, if at all, affected by changes in energy prices.

Estimates indicate that some 60,000 new jobs will be added to the Houston area through the year 2009. It is anticipated that as a direct result of this rent will increase next year and available office space will begin to decline. This, of course, is excellent news for both the Houston housing and apartment market as well as the overall Houston economy. The demand for housing for incoming employees is expected to provide a boost to all sectors within the economy in the local Houston area.

Overall, the economic outlook for Houston appears to be rosy and will sustain continued growth and expansion throughout the next several years. Individuals considering moving to Houston will find continued employment opportunities, stable housing prices and a relatively low cost of living.