Everyone breathed a sigh of relief when Texas seemed to have been spared the worst of the worst regarding real estate because it didn’t experience the price bubble and overinflated housing markets that other areas of the country did.

However, a recent turn of events may have Texas homebuilders thinking twice about building in the upcoming year. Two of the state’s leading industries – oil and natural gas – have begun to change the direction of the housing market, and not for the better.

Although Texas is certainly not in the trouble that many other states are regarding new construction, it may not be the hot spot for construction like it has been over the last, few years.

For example, nationwide home prices fell by 14 percent in 2008, while many, major markets in Texas, such as Houston and Dallas, saw an increase in home prices during that same period. Those numbers are not expected to be reflective of the upcoming year.

Texas median home prices, however, fell four points in December alone. Eight out of the top 10 builders in the nation have operations out of Texas, which has many business analysts feeling uneasy about a rough road ahead.

Although Texas avoided the housing bubble like so many other states in the nation, it did, however, respond to the excellent job growth in recent years. Houston and Dallas saw a real surge in job growth, thanks to their energy and financial sectors and, as a result, home builders were anxious to take advantage of the healthy economy.

The Road Ahead

So, what can we expect in the upcoming year? As of now, the job growth in Texas has slowed, and Texas has experienced a loss of 111,000 jobs this year alone. And with job loss comes a rise in foreclosures.

The Texas housing market, and how it will react in 2009, will largely depend on the number of job losses and the number of foreclosures to hit the market.

Many builders don’t see the recent turn of events as doomsday, however, considering the state’s history of excellent job growth and its stable housing market.

All things considered, many Texas builders still consider this area to be one of the strongest regions in the nation. Most builders believe that, despite the recent downturn, Texas will not experience declines like we have seen in other markets and a recovery can not be far off.