Depressed Oil Prices Pulling Some Real Estate Markets Down
The continued low price of oil clearly is affecting a number of real estate markets. While some homes are being sold off in shorter periods of time, some oil dependent markets do not share that same predicament, as found in a recent study by Trulia as reported on CNNMoney.com.
One of the hardest hits metropolitan real estate markets is Houston, TX. In April 2015, the 30 day holding period of sales of homes was at 50 percent of total sales. For the same period in 2016, 66 percent of homes placed on the market go beyond the 30 day period.
According to Trulia Chief Economist Ralph McLaughlin, "It's a combination of demand side decreases because of the drop in oil, and supply side increases because the city builds so many new homes. Those effects combined make for a pretty noticeable drop.
Houston homes have a median price of $182,500. It also home to the second largest oil industry in the United States. Other areas with lengthy turnover rates are Oklahoma City and Tulsa, both in Oklahoma and Fort Worth, another Texas city. These are the top four cities which are largely dependent on the oil industry.
Another city, this time in Canada has been struggling from the continued low prices of oil. Calgary, the largest oil producing area in Canada, make US city struggles seem like a cake walk. In a report from the Wall Street Journal, home sales volume for March 2016 fell another 11 percent on a year on year basis.
The effect has affected both the high end and low end property market. Brokers have resorted to all sorts of incentives in order to sell a home, which is between the CA$500,000 to the CA$700,000 price range. The buyers are few and far between, opting to hold on to their money instead of purchasing homes.