While many U.S. real estate markets are cooling off, this Wall Street Journal ($) article reports that the Houston real estate market continues to march forward:

This sprawling city missed the real-estate boom that sent home prices soaring on the East and West coasts. Now, with much of the nation’s housing market in retreat, it has yet to feel even a tremor.
In September, local sales of single-family homes and condominiums were up 17.7% from a year earlier, logging their 32nd straight month of increase, according to the Houston Association of Realtors. The median price of an existing single-family home: $143,400, up 3%.
By contrast, nationwide sales of residential real estate fell 14.2% in September, according to the National Association of Realtors. Home prices nationally were down 2.2%, retreating in such former hot spots such as Washington, Boston and San Francisco. The national median sales price for September for existing single-family homes was $219,800, according to the Houston Association of Realtors.

Houston’s gains are nothing like those seen in the past decade in the Northeast and California, but that may be the secret to Houston’s success and the reason a bubble is unlikely to develop here. Land here is abundant, and the city has some of the least-restrictive land-use and construction rules in the nation. Those factors help supply to keep pace with demand and keep prices within reach of a broad range of potential buyers.
“We haven’t had a bad year in the past decade,” says Lorraine Abercrombie, chairwoman of the local Realtors group and marketing director for Greenwood King Properties.
Houston’s model is in stark contrast to cities such as Boston and San Francisco, which have strict zoning, exacting building codes and laws governing historical preservation. Some economists, including Edward Glaeser of Harvard University, say excessive regulation in such cities has slowed construction to the point where demand has outstripped supply, fueling a run-up in home prices.
In the once-sizzling markets where home prices are falling, housing costs are double, triple or even quadruple those of Houston. The danger, says Dr. Glaeser, is such places have priced out today’s highly skilled “knowledge workers,” forcing them to live in a more affordable locale where their contribution to the economy might not be as great. “These are places where only the elite can live,” Dr. Glaeser says.
Not so Houston. Confined by neither oceans nor mountains, the Houston metropolitan area has plenty of room to spread out. What is more, the city has no zoning, weak historical-preservation rules and few tools to preserve open space.

University of Houston economics professor Bart Smith is Houston’s leading expert on the local economy, and he has made the point for years that Houston’s energy-based economy has traditionally been countercyclical to the national economy. This characteristic has lessened over the past 20 years or so as the local economy diversified in light of the relatively low energy prices over much of that period. But the the continued strong local real estate market indicates that at least certain Houston markets remain countercyclical to U.S. markets generally even though Houston’s overall economy now tends to track the national economy to a much greater extend than in the past.