Texas’ economy is shrinking and there are no signs of recuperation in 2009. Businesses have grind to a halt last year particularly the construction and financial companies in Houston and San Antonio. Home building companies have gone exasperated by the existing conditions in real estate. Worse, lending firms are restricting credit to avert any further losses. The mortgage fiasco is putting a lot of borrowers off the fence.

Home sales throughout the state are on a slump. Consumer confidence has waned rapidly when interested buyers have found their finances unable to afford the higher prices of goods. Also, foreclosures are spiking as defaulting borrowers comprise majority of the laid off workers in 2008. Unemployment has indeed a lot of influence in foreclosures and Texas is one fine example.

What blights the Houston economy is that the unemployment rate in the city has gone above 5 percent. Homeowners are fearful if their industries will be the next target of the crisis. So far, financial and construction jobs are at risk. The city has been rocked by corporate scandals involving Enron and Dynegy Inc. Current plunging oil prices are also hitting the city’s economy.

Houston became a seller’s market when the country’s leading metropolitan areas were caught in the financial crisis. Home sales outnumber the demand for housing units and this puts pressure to the average home value. RealtyOutlook.com predicts home values to fall by 8.5 percent this year.

The Dallas housing market is also in bad shape. Home to telecommunication companies, the Prairie City is trying hard to regain its real estate prime years during the 1980’s. Today, home values are tumbling and inventory is poorly matched by demand. RealtyOutlook.com forecasts an 8.5 percent drop in home values because of poor sales.

In Amarillo, home sales are down after a terrible performance of the entire industry. The local economy is having trouble with the sales reduction in the food processing, meat packing, retail and aviation facilities in the area. The housing market is in a minimal depreciation that would hold enough until next year. RealtyOutlook.com expects a 3.5 percent fall in home prices. The nearby Lubbock area once attracted residents because of its low cost of living advantage. However, home values this year will deflate by 4 percent.

In San Antonio, the real estate sector took advantage of the property boom. It is still one of the most affordable markets in the coutry with a low unemployment rate and increasing popultaion the supply of real estate is being absorbed.

El Paso is another case of property bust. It had a housing construction spree during its real estate peak in 2006 but saw declining sales in the following years. First-time home owners are substituting other similar areas for home prices lower than 10 percent. Job cuts are also evident in the manufacturing and call center industries. Small businesses are also hurt by the recession. In 2009, El Paso will have home values lower by 5 percent.

Austin’s home prices once experienced an impressive scale during the housing boom. Today however, the market is taking a nosedive as home sales are also on a free fall. A few high-end areas such as Westlake, Tarrytown, Northwest Hills and South Austin are now selling at least 25 percent lower. Furthermore, mortgage providers are tightening their credit. RealtyOutlook.com expects a 4.5 percent drop in home values this year.