Houston Real Estate Recovery
Over the last several months, the price of oil was shattered, falling 57%. Cash-strapped consumers were thrilled… Falling oil meant falling pump prices.
But it also destroyed the oil industry.
We watched as drillers filed for bankruptcy. Oil driven economies were ravaged by recession, as I noted in February 2015.
Oil-thriving economies - like Houston, Texas – ran into a problem, too, I noted. Demand for offices went dry, as oil companies announced waves of job cuts.
And as we all know, fewer jobs mean less demand for office space. Demand for office space is “going to basically stop,” said Walter Page, director of office research at property data firm CoStar Group, as quoted by WSJ at the time.
Houston – named the top real estate market to watch for 2015 – fell into a slump. According to the Urban Land Institute (ULI), Houston ranked as top in investment and development expectations for the year. Austin is No. 2 because folks like the industrial base, and lower cots of doing business. It’s top choice for the office sector and single-family housing sectors.
The year is far from over, though.
Once the smoke clears and we begin to see a recovery in oil, commercial real estate investors could be presented with considerable opportunities. “There will be some pent-up demand when we come out of this cycle,” notes The Houston Business Journal. “Once energy stabilizes, you’ll see leasing activity tick up quickly.”
Houston is well worth paying close attention to, especially when energy prices begin to firm.
It’s only a matter of time.