As we ease into February, I am happy to see that oil prices remain steady at just over $50 per barrel. This sense of relief seems to be reflected in the real estate market, as most Realtors involved in relocation report an increase in activity with showings and homes going under contract.
While many of the housing reports indicate that Houston’s real estate market was not affected by the drop in oil prices in 2015-2016, agents that have been in the trenches trying to sell homes priced above $200,000 report that 2016 was a tough year for selling homes. We are all optimistic that Houston’s economy no longer relies on the oil industry, but the reality is that most industries felt the trickle down effect of decreased spending.
The oil industry is a big driver in Houston’s economy and real estate market. I met with a client and friend yesterday in the medical industry, and she shared that her hospital saw business drop last year, which resulted in lay offs. Likewise, many area restaurants are reporting a 25-30% drop in business.
However, Houston will survive this down turn, just like we have survived many others. 2017 is already showing a reaction to stabilizing oil prices. If oil prices remain stable, we should see the real estate market rebound by the end of 2017.