The macro-economics of the U.S. and, quite possibly, the world are reflected in the reviving micro-economies of the States of Florida and Texas. The diversity of properties and property-types and the demand for properties in both these States makes them prime examples of what will happen with the rest of the U.S.
Both Florida and Texas have defied the usual boom-and-bust cycle of real estate. Florida experienced a slump as early as 2005 because of huge appreciation of house prices which led to a correction and Texas has got off slightly with perhaps the softest of soft landings in its real estate prices and demand never, appreciably, dipping very much at all.
The reason both these States have got off so lightly despite having lenders exposed to the sub-prime mortgage market which has led to foreclosures is because they also manage to meet the criteria for recovery:
1. A correction that does not crash the market - real estate prices in Florida dropped and in Texas there has been a correction but in neither State was the drop so sudden and so dramatic as to crash the real estate economy and stop demand.
2. Steady development - Florida is currently awaiting the completion of a new international airport in Panama City which will greatly increase the number of people coming into the State and the demand on its housing. Texas is undergoing steady development of its lakefront and surf properties as well as its recreational properties which means that investors are constantly looking at Texas Real Estate as a means of making good buys with their money.
3. Fresh supply of properties- finally both Florida and Texas have seen no appreciable decrease in new properties hitting the market. Whether it's in the form of brand new housing or property developments or value properties coming in as the result of foreclosures both States show a healthy base of new properties and this is vital as it sis these which drive the overall engine of the real estate economy by attracting an influx of new buyers.
Summarizing, the micro-economies of Florida and Texas indicate that provided the three conditions I have just covered are adequately met then there is no reason to fear that the housing market slump is going to last any time at all. Recovery is probably just around the corner and as the pace of development continues house prices will continue to appreciate and this will offer both growth and the opportunity for growth which drive markets in an upward trajectory, attract first time buyers and investors and do much to inject the needed lifeblood of the local economy.