It requires a little bit of courage in this bearish economy to share optimistic views about any U.S. housing market, but Mark Dotzour with the Real Estate Center at Texas A&M University is doing just that.

Dotzour says the Lone Star State is finally walking down the trail of a housing recovery. Texas single-family building permits in the first four months of the year shot up 17.9% over the same period a year earlier, the Real Estate Center concluded.

While Dotzour expects the housing recovery in Texas to be gradual, he feels confident enough to suggest "homebuilding has apparently turned a corner" in the state.

The Odessa-Midland metro area experienced the largest jump in homebuilding permits, with filings up 55.9% over last year. Meanwhile, Houston saw permits rise 24.9% in the most recent report, followed by Dallas' 24.3% increase and San Antonio's 23.2% growth. Permits across the entire U.S. rose 18.7%.

"No one wants to say the housing market is in recovery anywhere, but it is recovering in terms of new construction and sales (in Texas)," Dotzour told Housingwire. "Our economy is still facing difficult issues, but once we get past that, Texas has laid the foundation for the next leg of economic expansion in real estate."

The surge in permits is linked to the state's job creation, especially the recent spikes in energy-related hiring, Dotzour asserted. "I think there are a couple of things going on," he said. "We have significant job growth in these oil- and gas-related communities— specifically, Odessa and Midland, but also places like Victoria and down in the Southern part of the state."

Dotzour said the oil and gas business is not only creating jobs, it's also creating richer land owners who benefit from royalties paid on leases. Those royalties have the potential to benefit the housing market as property owners increase their personal incomes, prompting them to acquire new properties.

Back in 2007, no one believed Dotzour when he sounded the alarm on serious problems within the housing market. Fast-forward another four years, and people are now skeptical about his recovery predictions for Texas, he said. "It's safe to say the real estate markets have bottomed out here, and we are going to begin a gradual, sustained recovery in the housing markets here," he said.

Research economist James Gaines, who is also with the Real Estate Center, said Texas markets are definitely improving, but they are doing so after coming off two-year lows.

Gaines says real estate prices and sales peaks reached in the 2000s were the result of an artificial market that is unlikely to return.

"But we don't have to get back to those peaks to have a robust and active market," he added. "We need to get back to our long-term norm trend and that can occur within the next decade."

Gaines says housing permits this year are in the mid-60,000 range. The state needs 120,000 to 130,000 filings, on average, to return to normal levels. 

Bill Head with the MetroTexas Association of Realtors says home sales are off the chart for the North Texas region his organization covers. "For example, May sales were up 22% compared to last year and sales through the month of May are up 16% from the same time period last year," Head said.

Homeowners in the region covered by the association — which stretches from south of Dallas to Sherman, Texas, — are experiencing multiple offers on properties in key neighborhoods.

"The inventory of homes on the market is incredibly low, so that has helped create a little more competitive environment," he said. The region currently has 29,466 homes in its sales inventory, Head reported.

The median price for a North Texas home is up 9% from $149,000 in May of last year to $162,000 this year.

kpanchuk@housingwire.com