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Houston Real Estate Market is cooling off

By
Real Estate Agent with (408) 425-1601 CA bre 1519182

                                                      Sam Shueh 

                                                      

Many US cities still experience strong demand in housing which has driven up home prices.  There are some cities that have experiencing the opposite.

 

 

 

These are cities that depend on a major industry for jobs.  With the crude oil price erosion started last summer, a barrell of crude at $59.80 has dropped to $30.50.  Some sources suggested there are 200,000 workers in the industry out of work. While many are overseas, many here in the US are already affected.

 

Bayou City(Houston's nickname) is one that is seening the opposite in terms of real estate.

 

Houston Real Estate market has seen disappointing home prices in both November and December 2015 compared to a year ago.  HOUSTON REAL ESTATE MARKET    Both November and December total sales and volume are off 2.4% and 9.9% respectively.

 

Oil dependent industry has a high probabilities to face housing price correction than more diversified cities.  According to a risk assessment made by Arch Mortgage insurance in California that the following cities are likely to have higher risk Real Estate Risk than other US cities.

 

1. Dallas & San Antinio  moderate risk 

2. Houston                        moderate risk

3. West Palm Beach        moderate risk

4. Austin                            moderate risk

5. Irving, CA                      low risk

 

It is not clear how long the crude will remain low. Many oil rich countries do not have that much cash to survive low crude oil price and can default like Greece. From what I read a couple of years this will stay low for sometime to come. The sharp price increase as tried in the past is long gone.  Granted Houston has a more diversified industry base today than in the 1980s.  To get retrenched oil workers to work in hospital industry is probably not an option.

 

Sam Shueh Realtor

 I've called San Francisco South Bay home for over 37 years. We love this area and all it has to offer, and I enjoy sharing what I know about homes.  I documented in several books about Silicon Valley history. I have much expertise in real estate...please give me a call.   SamShuehRealtor at Gmail (Four-O-Eight) 425-1601 

 

 

 

 

 

 

 

Comments(8)

Joan Dickie
Keller Williams Premier Realty - La Crosse, WI
Keller Williams Premier Realty

Good analysis of the issue.  Are you expecting the down trend to continue, I expect, and do you expect gradual decreases or more sharp decreases?

Jan 13, 2016 08:05 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Joan Dickie 

My relatives lost their restaurant business at Galleria(Mall) when all a sudden local oil executives and those flown in from Mexico stopped coming. I heard the Mall had 50% vacancy rate. But Houston is more diversified today. I expect a gradual with higher inventory(It was 5.6 month then vs 2.4 month today). This is a result of newer technology squeeze every drop of oil out of depleted shale.... 

I am in Silicon Valley I smell a stabilization in housing price increase as well....

Jan 13, 2016 08:27 AM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

All the eggs in one basket story.  I thought Austin had climbed to be a very 'tech orientated' work force as well?  Maybe misinformed there.  Mark

Jan 13, 2016 09:36 AM
Sam Shueh

Calculated model based on economic, unemployement, income.....


for Austin as well.


 

Jan 13, 2016 09:59 AM
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-739-3843

Sam, we in Oregon are at the other end of this spectrum. I just heard that we are the fasted growing state in people moving here. I don't have facts and figures, but Portland and surrounding areas are BOOMING. 

Jan 14, 2016 02:02 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Gayle Rich-Boxman Fishhawk Lake Realtor (503)755-2905 

If local stocks keep tanking I think the peak may be passing us....  Time will tell.

Sam Shueh

Jan 14, 2016 10:24 AM
Gayle Rich-Boxman Fishhawk Lake Real Estate

I believe that stocks are only PART of it. To me, real estate has always been a better way to go. 

Jan 14, 2016 10:27 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Sam

It's fascinating to see how different markets change over time and for different reasons.

Jeff

Jan 14, 2016 02:22 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

There will be many markets across the country that will be "cooling off", but not going to focus on that stuff, going to focus on all the opportunities that are available. How about you?

Jan 15, 2016 03:10 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Joe Petrowsky 

With the stock market tumbling so far, I think Apple(I am across from the Space Ship), Netflix, Yahoo the best thing happening can be home owners have to sell if the unemployment rate is moving up.  I just can not envision old two bedroom condo near Google will fetch 1 million dollars here and only 100K elsewhere .

The opportunity is affordability and reality check.   

Jan 15, 2016 08:40 AM