Houston Update by the Federal reserveNovember 2006

"The Houston economy continues to boom. Seasonally adjusted unemployment has fallen to 4.7 percent, the lowest rate since 2001. Allowing for known data revisions to come, Houston has created 99,000 wage and salary jobs in the past 12 months. While there are dark clouds in the distance—most notably, a slowing U.S. economy and rising natural gas inventories—the immediate problem in key local industries remains labor shortages, backlogs and long lead times...

"Strong job growth is supporting most of Houston’s real estate markets. Existing-home sales were up 18 percent in September from a year earlier, with the median price rising 3.1 percent. New-home sales were up 6 percent. The office market has made dramatic absorption and occupancy gains in recent months, led by Class A and central business district space. Industrial real estate remains strong, but the retail market has softened. The post-Katrina apartment market continues to move in reverse, with falling occupancy and lower rents over the past six months..."

Bill Gilmer, Houston Economic Update, the Federal Reserve Bank of Dallas