Reasons For The Texan Economic Boom

How is the real estate market different in Texas than in California?

Well, much of California’s land, particularly by the coast, is off-limits to development.

With less land available to develop, land prices in California have skyrocketed over the past 30 years (the length of time that California has been dominated by land use restrictions).

By contrast, Texas has comparatively few land-use restrictions. Hence, its housing market is stable. It did not boom as much and it has not gone bust as California’s has.

When home prices soar, people have to use risky financing to purchase a home. When home prices are stable, you don’t have to use risky financing to purchase a home.

Dr. Thomas Sowell points this out in his book The Housing Boom and Bust.

Dennis Prager called the following article a “crack-up.” Why? What’s so funny? The article does not mention the lack of regulation and state income taxes in Texas. Perhaps that was a cause of the state’s boom while California and company declined?

The USA Today reports:

Texas became the USA’s second-largest economy during the past decade — displacing New York and perhaps heading one day toward challenging California — in one of the biggest economic shifts in the past half-century.

The dramatic realignment of the nation’s economy was illustrated by North Carolina, Virginia and Georgia all overtaking one-time industrial powerhouse Michigan in economic size from 2000 to 2010. The economic winners of the last decade are states that focus on raw materials, government and senior citizens. The big losers are places that make things — industrial states and even California.
USA TODAY examined each state’s gross domestic product to determine how the country’s economic output has shifted within its borders. The data, recently released by the Bureau of Economic Analysis, reflect population growth and income increases — in short, the economic weight of each state.

I write about real estate, refinance and the mortgage industry:

June 19, 2011

June 16, 2011

About Luke Ford

I've written five books (see Amazon.com). My work has been followed by the New York Times, the Los Angeles Times, and 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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