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COMMERCIAL ARTICLE FOR November 21, 2010

The “Texas Triangle”, outlined by Houston, San Antonio and the Dallas/Fort Worth metroplex, with Austin inside the Triangle is renowned for being THE catalyst in Texas economy. Relatively close and connected by major highways, the cities give the Triangle sides of 268, 199, and 243 miles. According to Forbes Magazine, “Although the Triangle cities make up only 62 percent of Texas’ population, they provide 68 percent of the state’s wage and salary jobs and 71 percent of personal income. Houston Business Journal described these cities’ rapid growth as the primary reason for the convergence of Texas’ per capita income to U.S. income levels.
Texas Economic Indicators publication for November 2010 from the Dallas Federal Reserve Bank reported that Texas employment increased somewhat in September, in line with the modest recovery taking place in the state’s economy.
Improvement in the Texas housing market is raising slightly, as housing starts, single-family housing permits and existing-home sales increased from their August levels. Also noted was Texas exports edged up in August, and the Texas Manufacturing Outlook Survey indicated Texas factory activity increased in October. A key measure of state manufacturing conditions, the production index, was positive for the second straight month and slightly higher than its September analysis.
Actions of general business conditions rose noticeably in October, signifying the broader economy strengthened. After four months in negative territory, the general business activity index rose sharply from MINUS eighteen in September to a POSITIVE three this month.
Texas monthly exports edged up 2.3 percent in August after falling 3.3 percent in July. The most exciting news was the the August level of real exports was twenty four percent higher than a year earlier!
Good news is that the current Texas employment stands at 10.37 million. September showed a gain in Texas jobs at 7,400 after losing 5,400 in August. The Texas unemployment rate edged down from 8.3 percent in August to 8.1 percent in September. The Texas unemployment rate remains below the U.S. rate, which was 9.6 percent in September.
Commercial real estate investment, according to real estate investment adviser, CoStar, has” picked up dramatically”. In August, for all types of property acquisitions, real estate funds and companies brought in $9.18 billion. That is more than double what was raised in July according to CoStar.
Of course, $63.26 billion raised this year is pocket change compared to the industry’s pre-2007 heyday, when real estate investments took in $200 billion annually. Still there is money to be made in careful commercial investing.
Norm Miller, CoStar consultant, says, “It’s not a bad time to buy, but I’m not going to tell you we’re at the bottom on prices.”
Our take on this is that investors should take a watch commercial market conditions closely. Seek someone who knows the market in your area. If a good deal comes along, perhaps investors should “seize the moment”. After all prices are edging up ever so slowly.
We found the following very interesting. Here are the Top Ten Worst Cities for Real Estate Investing:
1. Lakeland-Winter Haven, Florida
2. Reno-Sparks, Nevada
3. Orlando-Kissimmee, Florida
4. Deltona-Daytona Beach-Ormond Beach, Florida
5. Port St. Lucie, Florida
6. Las Vegas-Paradise, Nevada
7. Boise City-Nampa, Idaho
8. Cape Coral-Fort Myers, Florida
9. Phoenix-Mesa-Scottsdale, Arizona
10. Warren-Troy-Farmington hills, Michigan
Please note that these states were those whose real estate values rose more than 30 percent and as high as 50 percent annually. Remember we have said that Texas, and Houston area especially, did not have that huge “bubble”.
Remember a few months ago when we wrote that Susan Combs, Texas Comptroller, said that “if Houston were a nation, its economy would be 25th largest in the world, just behind Norway’s economy…??
Truthfully, we all need to be so very thankful that we live in this area so close to Houston, Texas.
From our family to yours:
HAVE A VERY BLESSED THANKSGIVING!