Slowdowns in the volume of home sales in some areas and worries over the mortgage mess are leading Texas real estate markets to mixed forecasts in 2008. Some markets are forecast to appreciate while others will see home prices deflate.

Houston has seen its booming market slow to the slowest level in more than a decade, and prices are beginning to fall in most areas. The national mortgage meltdown has hit the oil capital and the inventory of homes and condos are increasing nearly every month.

As the state's largest urban center, Houston has had a history of modest appreciation with few pockets of deflation. Houston has experienced big booms in the oil business, but real estate has been a whole different story. The market is weakening and is forecast by Housing Predictor to weaken further through the remainder of 2008, as homes devalue an average of 3.2% across the board.

In Dallas the impact of increasing foreclosures are taking a toll on the market place. A glut of foreclosures will further damage the Dallas housing market. The boom wasn’t particularly strong compared to many other urban areas of the country in Dallas, where sales were stalled in mid-2006 as a result of higher foreclosures due to subprime borrowers. Then a summer spike produced more home sales and appreciation flourished.

Dallas real estate has had a history of erratic battles, but nothing as dramatic price-wise as major east and west coast markets. Dallas is forecast to see its fortunes fade all together through the remainder of the year, accounting for 3.8% average deflation.

In Austin, where the high-tech business has drawn a youth culture of working class professionals, the market still shows many signs of strength and should sustain that growth through the year. The state’s capital will see relatively healthy home sales carry it through what will be an otherwise tough year in many housing markets.

Austin will witness appreciation of 4.0%, mainly because of first time home buyers who want to get into their first home. This highly white-collar town will carry itself strongly through the credit crisis storm.

San Antonio has grown into being one of the top 25 metropolitan centers in the nation. New homes were built to fill the demand, but an over abundance of risky subprime loans and new creative financing have fed an onslaught of foreclosures on to the market.

San Antonio is still seeing an influx of new businesses moving into the area, but growth has begun to slow as a result of the mortgage crisis nationally. The crisis is beginning to have a severe economic impact on San Antonio, where the inventory of homes on the market is growing. The slowdown hit San Antonio earlier than many expected and will force home values southward, forecast an average loss in values of 3.9% in 2008.

Over in the Texas panhandle, in less populated Lubbock and Amarillo prices are lower and fewer foreclosures are affecting the markets. Both areas will see fewer home sales in 2008 and will experience modest appreciation. Lubbock is forecast by Housing Predictor to finish the year with average home prices at 2.3% higher. While Amarillo looks forward to appreciation of 2.4% in 2008.

Down on the Mexico border, El Paso has experienced a booming market amidst the credit crisis, despite higher foreclosures. El Paso's economy is expected to grow from almost $18 billion in 2006 to $21.6 billion by 2009 measured by personal income, which should have produced a healthy real estate market for the year. But massive mortgage fraud and higher foreclosures are beginning to show signs of impacting the market.

The growing El Paso economy is attracting many new employers, but prices are forecast to deflate nonetheless through the remainder of the year a forecast 3.8% in 2008 as more and more people find it harder to get a mortgage.