Today’s housing fantasy
| August 28, 2012 |
Most major media outlets are gleefully reporting a rise in home prices this month. The Case-Shiller index has finally risen above the zero line.
But as blogger Barry Ritholz points out, almost all this price improvement comes from the sale of distressed homes. We’re not out of the woods on housing yet, not by a long shot.
But…last week I flew from Dallas to San Antonio, Texas; a route I know very well. And from the air I saw lots of new homes and developments in and around the I-35 corridor. Homebuilding seems to be fairly healthy in the Lone Star State.
Why Texas and not the rest of the country? For starters Texas has strict laws on mortgages, making it harder for banks to crank out liar loans and for unqualified applicants to get mortages. Second, Texas is a relatively easy place to do business, with low taxes and reasonable regulations-yet they don’t stint on education. Finally, Texas is awash in hardworking Hispanic immigrants and their contributions keeps the small business end of the economy humming along very well.
Oh, and I almost forgot. Texas only lets its state legislature meet once every two years. That makes it hard for the politicians to mess with everybody’s business.