Big Idea 2014: The Texasization of America

Glenn Kelman, CEO of technology-powered real estate brokerage firm Redfin, writes about how the economy is impacting not only politics, but demographics as well:

It turns out that over the past three years, Texas has been America’s fastest-growing state, adding 913,642 people, nearly the population of Rhode Island. Almost half moved from elsewhere in the U.S. Of the 22 markets Redfin serves, the three in our Texas business are growing the fastest, at an average of more than 300% per year. And why not? A home in Houston costs less than a third what it would in, say, San Francisco, and it averages more than twice the size.

This migration to affordable housing is accelerating because, for the first time in a generation, home prices are increasing faster than wages or credit.

… Newly mobile Americans, freed for the first time in five years from underwater mortgages, won’t just move across the street. They’ll move across the country.

It will be, in the most literal sense, a political movement. The conservatives tired of the taxes in coastal cities are already leaving, in a process of segregation that can only increase America’s polarization.

The bigger change will be that the rest of the political spectrum likes the cost of living in Texas too, and once there will likely move to the right. After all, your politics don’t just change where you live; where you live changes your politics. To hear conservatives tell it, even people who want to be liberal can’t afford it.

… This is why the move to Texas isn’t just a move, it’s a movement, of people, businesses and governments, for better and for worse.

Just as what happened to America in the 1960s, from beat poetry to psychedelic drugs, happened first in California; now it is happening in Texas, with its diversity, its small-government swagger, its megapolitan areas. Texas is, after all, a state of mind. And it’s becoming America’s state of mind.

Link: Big Idea 2014: The Texasization of America | LinkedIn.

Luring California businesses away is a growing phenomena, and Texas is rated at the top of the list of attractive destinations due to incentives offered to businesses.

There’s lots of room in the flyover states and home prices will forever be lower than coastal properties. And if the “small-government state of mind” can survive business success, there might be hope for us yet.

Posted December 15th, 2013 Filed in Economics and the Economy