Texas – The Growing Economy

Our Texas Economy is Larger than Mexico, India or Australia

courtesy: Dan Henniger, Editorial, The Wall Street Journal, November 3, 2011

Rick Perry says Texas is the most successful state in America. He's right. Texan economic output exceeds Mexico's and Australia's and rivals India's. Rick Perry has been governor of Texas for nearly 11 years. Does the logic of politics lead us to conclude that the governor of the nation's most successful state, ipso facto, is the best man to be president of the economically gasping United States?
We are about to find out. Getting lost, however, among the governor's adventures in the lovely hamlets of New Hampshire is that Texas, with or without him, has a story the rest of the U.S. should hear—the parts of the country that want a better economy than they've got now.
Texas, unlike California, isn't America's most beautiful state. Through October this year, parts of Texas had 90 days of 100+ temperatures. Yet companies and people keep moving into the high heat of Texas.
Rick Perry's argument for himself is rooted in accounts of his efforts to bring companies to Texas. But the desire of businesses to sample Texas trail dust pre-dates Rick Perry. In 1990, one of the world's biggest companies, Exxon Mobil, left New York City for Dallas. Exxon's former CEO, Lee Raymond, says the move in part was indeed about costs and New York State's notoriously overbearing tax authority. But it was also about working amid a culture of competence. "It's just the attitude in Texas of getting things done and doing them well," he says.
Mr. Raymond remarks that the economic policies that in time trapped the Northeast and Rust Belt in spirals of decline never touched Texas. But this is about something beyond low taxes and no unions: "In Texas the people tend to be farmers or individual businessmen, and they have this attitude: We have to make do with what we have and work together to get things done and survive. It's can-do. That attitude permeates everything there."
A more recent corporate immigrant, Alan Boeckmann, until recently CEO of Fluor Corp., the engineering and construction firm, says regulatory and legal hassles pushed Fluor out of California. Congress passed Sarbanes-Oxley, but "California had its own version." There were constant class-action suits over Fluor's benefits. "It could have been settled, but not in California. That's how the game is played there."
When word of the 2006 move got out, "California made no attempt to keep us." In Texas, "things started to happen quickly, without us initiating them." The Irving Chamber of Commerce did orientation sessions for employees and spouses, even helping with new-house searches. Or "little things": Irving on its own renamed a street Fluor Drive, which in California or the Northeast would be laughable. Those Texas rubes!
Ed Trevis, a smaller fish, is also happy. A California-educated Brazilian immigrant and tech entrepreneur in Silicon Valley for 25 years, Mr. Trevis moved Corvalent Corp. to Austin for similar reasons. He had to hire a firm just to do California's compliance. "In California," he says, "you are always doing something wrong."
"What I found in Texas is that from the standpoint of running a business, cost of living, education, the labor pool, quality of life, it just blew other states out of the water." I heard this constantly—people enjoy being in business in Texas.
"Austin," says technology consultant Bob Barker while taking a visitor around the nearby hills, "may have more Ph.Ds driving taxis than any city in the country." Austin's famed population of big and small technology companies has suffered layoffs. "But," said Mr. Barker, "no one wants to leave." They stay, plugging into Austin's numerous business-support networks. In Austin you discover a primary reason beneath Texas' success: It's about competition plus collaboration. It seems everyone in Texas high-tech knows everyone, and if they can help each other, they will.
David Booth, who moved Dimensional Fund Advisors's headquarters to Austin from Santa Monica in 2008, puts Rick Perry's role in perspective: "He understands his job isn't to get in the middle of everything." (Fluor's Alan Boeckmann seconded that.) But Mr. Booth and others said this is also true of the Texas lieutenant governor, its attorney general and the comptroller.
"They are very supportive of business," says Lee Raymond, "in the sense of moving things along. If there is a rock in the road, they want to know what they can do to move it out of the way."
This isn't merely the "pro-business" bias of a Rick Perry or any other governor. Texas' pro-business bias goes back about 175 years—and never died. "It's just that they believe in the whole Horatio Alger myth down here," said Mr. Booth. "It's hard to understand if you haven't lived here."
And so Perry's Paradox: Rick Perry is a success because he nominally presides over an American tiger state, a genuine free-market economy that doesn't much need—or want—his tender loving care. If the job before us is unwinding an unimaginably vast, smothering national government, is Lone Star Gov. Rick Perry the man for that job?
This much is obvious: Texas, not California, better be the American future. Somewhere inside of him, Rick Perry of Texas understands this distinction. He should stick to explaining what he knows. Let voters figure out if he can explain it to Washington.

courtesy: Dan Henniger, Editorial, The Wall Street Journal, November 3, 2011

TODAY’S HEADLINES-Housing Recovery to begin in 2012

Housing Recovery to begin in 2012
Even after the housing market begins its comeback in mid-2012, the recovery is predicted to be modest at best. Nationwide, Fiserv is projecting that home prices will climb just 2.4% between June 2012 and June 2013.
CNN Money, November 1, 2011
DFW Area Foreclosures Drop
“Unless there’s a flood of year-end filings, 2011 will have the fewest home foreclosure postings North Texas has seen since 2008.  Through the first 11 months of the year, lenders have posted just over 51,000 Dallas-Fort Worth area homes for foreclosure.  That’s 12 percent fewer than this time in 2010, according to Foreclosure Listing Service. And it’s 9 percent fewer than for the same period in 2009. “

courtesy of: Dallas Morning News, November 2, 2011

Some real estate sellers better off as landlords

 

Financial factors to consider if you must move now

By Dian Hymer
Inman News™

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November 01, 2011

Hopes of a housing recovery in the second half of 2011 were dashed when low consumer confidence, high unemployment and the debt crisis debacle were exacerbated by Standard & Poor's downgrade of the United States' credit rating. In August, S&P demoted the U.S., Freddie Mac and Fannie Mae (two government-sponsored mortgage entities) from AAA ratings to AA+.
The first-ever downgrade of the U.S. was expected to cause interest rates to rise. Instead, it had the opposite effect. Low interest rates have set off a new surge in refinance applications, but it has done little to help most homebuyers who can't qualify under current strict lender requirements.
Nationally, home prices declined approximately 5 percent between March 2010 and March 2011, according to Fiserv, a company that provides data analysis for the financial services industry. Fiserv expects home prices to decline another 3.1 percent by March 2012 and possibly increase 2.7 percent nationally in the first quarter of 2013.
It's not a great time for home sellers. That is, unless you're a homeowner who in lives in Tacoma, Wash., where Fiserv expects prices to increase nearly 25 percent by March 2013, or near Silicon Valley in the San Francisco Bay Area, which is generating jobs at a rapid pace. Otherwise, what should you do if you want or need to move now?
One option is to sell your home, even though the market is soft. But before going to the expense of preparing your home for sale, find out what your chances are of selling in your local market.
Some sellers in hot niche markets are breaking even, depending on when they bought. Others are bringing cash to closing because they can't sell for enough to cover the loan payoff and closing costs. Others can't sell at all without discounting the price significantly.
Find out how many homes like yours in the neighborhood have sold recently, along with the sale prices and how long it took to sell. If the market is still declining in your area, plan on selling your home for less than the most recent sale.
How many homes like yours are currently for sale? If there are few and buyer demand is high, the odds are in your favor. Keep in mind that listings that sell in this market are usually in move-in condition. If your home isn't in great shape or doesn't show well, are you willing and able to do the improvements that will be necessary to sell?
HOUSE HUNTING TIP: While you're researching selling, consider whether it makes sense to rent the property rather than sell at this time. The rental market is hot in some spots. Even so, make allowances for tenant turnover, vacancies and the possibility of lower rents in the future.
A major consideration should be whether the prospective rent will cover the costs of carrying the property. Will you need to pay each month to make up the shortfall, or will the property generate cash? If you'll take a beating on price by selling but you'll receive a good income from renting, then renting it out might be the best option.
To make sure your property is properly maintained, consider hiring a property manager if you can't manage the property yourself. Find out if there are any rent control ordinances and how they might affect you.
Consider the tax consequences of converting a primary residence into an investment property. Consult with your financial adviser and accountant to understand how this will impact you tax-wise, particularly if the rent does not cover your carrying costs. And, ask you financial consultants for advice on whether it's better for you to sell or rent.
THE CLOSING: Finally, if you're interested in renting only for the short term, you might be better off selling today. The market may stabilize in 2012 or 2013, but it could take a lot longer.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

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By Dian Hymer
Inman News™