Nine reasons to Invest in TEXAS

hile making presentations across Texas, Real Estate

Nine reasons to invest in Texas!

  W

Center researchers frequently are aware of high-networth

investors in the audience. These people may

live in New York City, Miami or San Diego, but they invest in

Texas real estate.

Why do investors find Texas so attractive?

Let us count the reasons: (1) Texas is leading the United

States in the current economic recovery, (2) Texas’ economy is

big and growing, (3) Texas’ economy is profitable, (4) Texas has

a growing population, (5) Texas’ economy is an international

economy, (6) the tax burden is less in Texas, (7) Texas has an affordable

housing sector, (8) Texans have entrepreneurial spirit,

and (9) Texans are mobile.

Texas Leading Nation

in Economic Recovery

   The Great Recession ended in June 2009, according

to the Business Cycle Dating Committee of the

National Bureau of Economic Research. The committee

noted that “a trough in business activity

occurred in the U.S. economy in June 2009. The

trough marks the end of the recession that began

in December 2007 and the beginning of an expansion.”

The Texas economy suffered less in terms of lost jobs and

outputs in the Great Recession than the nation as a whole

(Figure 1). The duration of the recession, measured by the number

of months of job losses, was shorter for Texas while the

intensity, measured by the highest job loss rate in the trough

month, was smaller for Texas than for the nation.

While the U.S. economy experienced its first month of

job losses in May 2008, Texas continued to create jobs for

eight more months, until January 2009 (Figure 1). The state’s

economy posted job losses for 16 months, from January 2009

to April 2010, compared with 28 months for the nation, from

May 2008 to August 2010. The largest year-on-year annual job

loss rate for the United States was 5.1 percent in August 2009;

it was 4 percent for Texas that month.

The state’s private sector suffered 17 months of job losses

with a trough of 5 percent job loss in August 2009 compared

with 28 months of job losses and a trough of 5.9 percent in

June 2009 for the nation.

Texas’ Economy is Big

and Getting Bigger

   With a gross domestic product (GDP) of more

than $1.2 trillion, Texas’ economy was the 14

th

largest in the world in 2010 (Table 2). It was the

second largest economy in the nation in 2010,

larger than New York’s (Table 3). The state’s GDP

accounted for 8.3 percent of U.S. GDP compared

with 13.1 percent for California and 8 percent for New York.

A growing economy offers more job opportunities and

attracts more population, leading to further growth in the

regional economy. By offering more investment opportunities,

a growing economy can further promote growth and development.

Revenues generated by a growing economy enable local

and state government to impose lower taxes.

Texas’ share of U.S. GDP increased from 7.3 percent in 1997

to 8.3 percent in 2010 (Table 4). The state’s share of total personal

income (wages, salaries, interest and dividend incomes)

generated in the U.S. increased from 6.7 percent to 7.9 percent

during that period