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re: When will the oil bust hit real estate in Texas' big cities.
Posted on 3/29/16 at 2:22 pm to tigerang
Posted on 3/29/16 at 2:22 pm to tigerang
I do more commercial than residential, but I've always heard/seemingly seen that in town, perpetually desired areas fare far better in downturns, at least in the last couple of decades.
Atlanta's more prosperous in town areas held value relatively well during the housing collapse, as I'm sure places like River Oaks, Park Cities, etc. did in Texas. I do think the prices now are in gross excess of pre-2008 prices in a lot of in town areas, but I would attribute that more to the surge of in town living in places like Atlanta and Dallas than any dip. You simply can't get into U Park in Dallas for under a million anymore, hence prices are rising in the rougher stretches of Inwood and in places like Lake Highlands.
Atlanta's more prosperous in town areas held value relatively well during the housing collapse, as I'm sure places like River Oaks, Park Cities, etc. did in Texas. I do think the prices now are in gross excess of pre-2008 prices in a lot of in town areas, but I would attribute that more to the surge of in town living in places like Atlanta and Dallas than any dip. You simply can't get into U Park in Dallas for under a million anymore, hence prices are rising in the rougher stretches of Inwood and in places like Lake Highlands.
1
Posted on 3/30/16 at 3:08 am to Pettifogger
My $0.02
The layoffs that I have seen have come from low level employees and employers that companies were trying to get rid of any way. Solid to top performers and mid to upper level managers have not been cut nor are they feeling the heat.
The last 3 layoff stories I heard all came from "safety engineers" .
Houses are selling in my neighborhood, but instead of 24-48 hours, it takes 1-2 months. The people who are selling don't really need to unload the home. I don't see the Houston housing market collapsing unless we go to $10-$20 / bbl.
The layoffs that I have seen have come from low level employees and employers that companies were trying to get rid of any way. Solid to top performers and mid to upper level managers have not been cut nor are they feeling the heat.
The last 3 layoff stories I heard all came from "safety engineers" .
Houses are selling in my neighborhood, but instead of 24-48 hours, it takes 1-2 months. The people who are selling don't really need to unload the home. I don't see the Houston housing market collapsing unless we go to $10-$20 / bbl.
Posted on 3/30/16 at 9:08 am to crazycubes
quote:
The layoffs that I have seen have come from low level employees and employers that companies were trying to get rid of any way.
That was the case until this past month. I've seen mid level and above people get the axe at the big 3 service companies. Yes, they were in "non-essential" or "luxury" positions. But would have though they would have been repositioned before being let go (at least the one's I personally knew of). Those are the people who will find work though most likely. Their resume likely gets them attention in any industry, so they aren't losing their home I'm sure. But it's worse than I thought it would get.
Posted on 3/30/16 at 9:27 am to KG6
There could also be a pile of bankruptcies still to come. I would bet not all of them will be allowed to do workouts either. I would look for things to cool some more later this year into next year.
Posted on 3/31/16 at 3:19 pm to TigerDog83
quote:
There could also be a pile of bankruptcies still to come. I would bet not all of them will be allowed to do workouts either. I would look for things to cool some more later this year into next year.
Agreed...the blood bath will come in the oil industry. We are only 8 years into an oil bear market. No way for sure to say this bear will last as long as the one that started in the 80s, but that one lasted 20 years.
Posted on 3/31/16 at 6:34 pm to dabigfella
The unemployment rate in Houston this month is 4.8%. I don't think you are going to see any major price drops until that rate gets much higher.
Posted on 3/31/16 at 6:44 pm to LSUFanHouston
quote:
While most members of the public enjoy the low prices at the pumps, these same low oil prices negatively impact upstream – the exploration and production process – aspects of the oil and gas industry. “However, the downstream market – which includes refineries and petrochemical facilities – is in fact positively impacted by these same low prices,” said Johri. As a result, downstream-based businesses and the real estate market in the coastal areas where these are located are currently thriving.
In The Woodlands – while largely energy based like much of the region – is home to a substantially larger number of white-collar jobs, unlike the blue-collar refinery and processing plants farther south and closer to the Gulf of Mexico. “This unfortunately means that we are in some ways being more negatively impacted – jobs wise and real estate wise – than some other areas,” said Johri. Adding to the local woes is the fact that the period of growth that The Woodlands expected – with the moving of a major Exxon-Mobil campus to a newly developed area here – failed to fully materialize. The popular expectation was that tens of thousands of employees would flood the area on two fronts: corporate employees who were previously based in the downtown Houston headquarters would move their families closer to The Woodlands campus; and the Exxon employees from other parts of the country such as Virginia would move down into the same area. “Instead, the Houston-based employees for the most part opted to remain in their homes and commute – against rush hour traffic – out to The Woodlands,” said Johri. “Additionally, a larger than expected percentage of Exxon employees opted to take early retirement or otherwise remain at another job in Virginia rather than relocate.”
According to Johri, many local homeowners saw their property values rising on real estate websites and thought they would receive top dollar for their homes if they waited until for the arrival of the Exxon employees. The fact was that Exxon moved its employees continuously over a number of months throughout 2014. This was a period where Johri’s prior experience in the energy industry helped her clients. Believing that the Exxon move would not have as big of a positive impact that others believed, she told her clients to sell earlier rather than later, and those that listened to her were able to benefit before the competition saturated the market with a large amount of homes.
I saw the above article on residential and interesting one (below) on commerical.
quote:
The plunge has led office vacancies in the so-called Energy Capital of the World to more than double from the final quarter of 2014 to the end of last year, leaving some 8 million square feet of space available as office-leasing activity declined more than 50%, according to Colliers. Most of that space had previously been leased to energy companies.
Houston we have a problem
Posted on 3/31/16 at 6:54 pm to TigerintheNO
Interesting TigerintheNO. To be fair, living in west U we do an annual block party on my street and so I know all my neighbors, not 1 works directly for an O&G co, most are attorneys or doctors, So I guess places like the energy corridor are going to be more prone to the energy bust than west u. Still though, I imagined a return to 2010 levels. Homes are still up id say 50% from then, thats when I purchased my place and Im glad its held up, but I was definitely hoping to buy something else if it didnt.
Posted on 3/31/16 at 7:44 pm to dabigfella
I would think a significant number of people inside loop have such high upper management / c-suite jobs that they are going to be the last to go. You also have a lot of old money in that area. If someone bought in that area before the runup, it ran up so high that even if it drops 25%, they are still going to be in good shape.
There are two areas where I'm curious to see what happens.
1) The eastern ends of the Katy area - places that were built in the 70s and 80s like Green Trails, Kelliwood, etc. They don't have the cachet of the newer homes going up just a couple miles west, and they are not close enough to the loop to make a major difference in commuting vs living west of the grand parkway.
2) A stretch from say Tanglewood east to say Dairy Ashford. I know a lot of people that were in oil and gas who were living in far West Katy - think the southwestern portions of Cinco, Seven Meadows, etc, that moved to this area in 2010-2012 because they wanted to be closer to work. They were way, way overleveraged in their housing. If they lose their jobs, or even their bonuses, they may have difficulty paying the note.
There are two areas where I'm curious to see what happens.
1) The eastern ends of the Katy area - places that were built in the 70s and 80s like Green Trails, Kelliwood, etc. They don't have the cachet of the newer homes going up just a couple miles west, and they are not close enough to the loop to make a major difference in commuting vs living west of the grand parkway.
2) A stretch from say Tanglewood east to say Dairy Ashford. I know a lot of people that were in oil and gas who were living in far West Katy - think the southwestern portions of Cinco, Seven Meadows, etc, that moved to this area in 2010-2012 because they wanted to be closer to work. They were way, way overleveraged in their housing. If they lose their jobs, or even their bonuses, they may have difficulty paying the note.
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