A New Economic Forecast: What's Next?

HOUSTON - The man who the knows the Bayou City economy better than anybody says Houstonians have much to be grateful
for.

Strange as it may sound University of Houston economist Barton Smith says when it comes to home values these days, steady and even stagnant, is good.

That's why in the struggle to endure this wicked recession, Houston, Texas has sustained less damage than the vast majority of the nation.

"As many as half of Americans are in upside down mortgages right now, that's just not true in Houston," explains Smith.

Plainly put, while home owners across the country have seen huge chunks of their net worth sucked away in the real estate bust, most homeowners here have held onto much of that wealth.

It's a blessing Houston's most respected economist believes will likely continue.

"Houston is weathering the storm remarkably well, better than I thought," says Smith.

"I am one hundred percent glad we had sanity here," laughs real estate agent Paul Silverman.

He's talking about the relative absence of reckless speculation which helped insulate the greater Houston home market from a sub-prime debacle backlash.

Silverman fully expects local sales to continue a surge sparked by the $8 thousand dollar tax credit for first time home buyers and now further fueled by a fresh round of stimulus spending.

"Now they are also going to give that credit to people who have been in their homes five years or longer, up to a $6500 dollar credit," says Silverman.

"It has a ripple up effect all the way through the housing market," he adds.

Meantime Smith's biggest concern going forward is the labor market.
With Houston still losing 6 thousand jobs a month he calls talk of a full recovery premature.