February 2016 H OUSING N EWS R EPORT

some. But I think we’re not seeing huge layoffs. We’re not the city we were in the 1980s.” Low oil prices are hurting Houston’s once-booming housing market. Houston is the only major metro market in the state to see a significant softening in home buying, home prices and new home construction. In Houston, sales began to decline in October, and the median home price has fallen for three months in a row following 41 consecutive months of price increases, according to the Houston Association of Realtors (HAR). The Houston-area housing market continued to weaken in December amid growing concerns about the regional economy, but it ended the year with a near-record number of home sales for all of 2015. Houston buyers purchased 73,724 single-family homes in 2015, reported HAR. Overall, Houston home prices fell by 2.4 percent in 2015. Houston-area buyers closed on 5,879 single-family home sales in December, a 9.7 percent decline from December 2014. The chairman of HAR blamed falling oil prices, saying the real estate market was cooling off after years of being red hot. “With oil dropping to levels around $30 a barrel, I think it’s fair to say that the Houston housing market is going to remain

cooler for at least a little while,” said Mario Arriaga, chairman of HAR in a statement. “The good news is the local economy is vastly more diversified than it was during the oil bust of the 80s and other industries are continuing to hire, so it really is going to come down to consumer confidence.”

Weak Employment Data

No one knows where the Houston economy is headed in 2016, but Houston energy companies and manufacturers could shed another 18,000 jobs in 2016, in addition to the 29,000 jobs lost in 2015, according to a report by the Greater Houston Partnership. Additionally, according to the Labor Department, unemployment in Houston rose from 4.0 in December 2014 to 4.6 percent in December 2015. Still, that’s below the national unemployment rate of 5.0 percent. But growth in health care, construction, government and other industries will alleviate some of the pain inflicted by anemic oil prices, helping create 21,900 new jobs in Houston in 2016 even as energy companies and manufacturers appear poised to cut jobs. However, Houston’s economy isn’t nearly as reliant on oil as it was in the 1980s, when the city grappled with a slump in oil Continued Next Page

SOURCE: U.S. Census Bureau


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