Texas has some of the best housing markets in the country. That's no secret. While many areas in the U.S., particularly the sand states, have seen home prices plummet during the past few years, cities like Houston and Midland have seen home prices move upward. While home prices in Detroit are 52% less than they were a decade ago, the Bayou city and the Permian Basin have seen a recent growth in demand for housing.
Bloomberg economist Edward Glaeser attempts a data-mining exercise to explain why some housing markets have fared better than others. Being a Harvard economics professor, you'd think Glaeser would have a better grasp on macroeconomic trends affecting housing. After weighing factors such as weather, education and technology, Glaeser seems to overlook the elephant in the room. I grew up in the Permian Basin, and I've now spent 15 years in Houston. I can tell you with a fair degree of certainty that any economist or professor who doesn't grasp the relationship between Texas housing markets and oil needs to polish their research skills.
Supply and demand are the ultimate driver of housing markets. Both Houston and Midland have benefited from a quick rebound in oil and gas exploration and energy prices in general. Most real estate markets in Texas were already experiencing lower than average home inventory levels, so the recent strength in the energy sector has only served to boost demand for housing in two of Texas' top-performing real estate markets.