Oil Price Slump Shows Two Sides of Houston Real Estate Market
While the decline of nearly 70 percent in gas pump prices since June 2014 provides a windfall to many consumers, this same decline had impacted many oil dependent areas such as Houston in many other ways. According to a report from Forbes.com, the effect is not only deep but also has long term consequences in Houston's real estate sector.
One of the most affected sectors is Houston's commercial real estate sector. As of the moment, according to Colliers, there is about 8 million square feet of space available for office lease. There is also an expected 22 new office buildings for completion in the near term, adding more inventory to an already glut market. This has other far reaching effects, such as the risk of default for loans on these commercial properties, should they remain unoccupied for any length of time.
On the other hand, the housing real estate market of Houston registers a different tune compared to its commercial counterpart. According to a report from the Houston Chronicle, the city's housing market was stable for February. This stems from the increase in sales of single family units for the first time since September 2015 in the midst of oil price recession and its effects on the local economy.
In data obtained from the Houston Association of Realtors, it showed that demand increased for homes priced between $150,000 and $500,000. More expensive properties listings had softened, as more luxurious properties remain available for sale. The numbers indicated an increase of 2.2 percent volume from the previous year. This translates to about 4,602 homes sold during the month of February.
HAR Chairman Mario Arriaga had described the local housing market as "health" even if the energy industry, the city's primary income generator, has been mired for quite some time. With more and more houses becoming listed, the longer time it takes for homes to be sold at right prices.