Lower oil has now hit the Houston housing market!
Historically single family sales and price levels are fairly predictable as the year comes to a close. Beginning in July the housing market begins to slow and prices begin to fall. The lowest level is eventually witnessed in October before prices begin their uptick heading into the following year. This year however the behavior is different.
Oil prices have fallen thus causing the energy sector to reduce their workforce and decrease both hiring and transfers. There was hope of some stability when oil was deemed to have found a floor near $60 a barrel in May, but June started another free fall with oil now nearing $30 a barrel. Some economists are predicting close to $20 before it finally finds a bottom. So, how has this impacted the housing market?
Beginning in June the sales price began a decline of almost a linear pattern. October normally experiences the lowest decline in prices but Single Family Home Prices actually rose in 2015 only to see a significant dip in November. This dip resulted in values below those witnessed in November of 2014. At CCLR and Holub Realty and Property Management we still expect another increase in sales as the summer approaches. However the level of increase will be far below what Houston has experienced over the past few years. We are uncertain if the values will remain below the 2014 level at this time, but we are certain that if oil remains below $40 the impact on housing will prevent homes values increasing upwards of 8-10% as seen in previous years. Later this month we will receive the December data and hopefully the drop in prices will have halted.