Expert view of Houston's financial future

November 5, 2009 5:11:45 PM PST
One of Houston's top economic experts gave his impression of the economic situation here in the Bayou City. Professor Barton Smith says the good news for Houstonians is that the worst may almost be over. He said while our community is not quite ready for recovery, next year should bring a period of transition. Head to any job search center and there is no shortage of people looking for work. Mary Anne Derasoltis remembers her husband's six month long job search

She said, "It was really hard just not knowing when it would change. We had wanted to buy a house but we had to put it off, because we didn't know what was going on with that."

In fact, the lack of job growth is the main reason that Professor Barton Smith says we're still in a recession.

"We've made significant progress," he said. "The economy is showing signs of improvement. But until we see stabilization in the labor market, we can't say there is a recovery."

Professor Smith gave his bi-annual forecast of the Houston economy this afternoon, saying Houston's energy sector is faring well, though its long term growth depends on the global energy consumption.

"The health of the global economy is important for the international oil market," Prof. Smith said.

But in general, Houston is faring better than the rest of the country.

Prof. Smith explained, "The primary reason why we're going to weather the storm better, is that the housing market problem in Houston is much less severe, because home prices never got involved a bubble."

One realtor we talked to say that's certainly what he's seeing. People are still buying homes, but everyone's looking for a bargain.

"I've had the best year I've ever had," he said. "But it's people buying in the low end of the market, not the upper end of the market."

Prof. Smith went on to say that while residential prices have not dipped a lot, he is concerned about the future of commercial real estate. He says in the Houston area that has not hit bottom yet. In addition, Prof. Smith says unemployment in the greater Houston area should top off around nine percent. That is his prediction for 2010.

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