Texas is hot, in more ways than one. The Lone Star State escaped the worst of the last housing market collapse, then came back even stronger than the rest of the country on the energy of the oil investment boom. But now oil prices have tanked, and the industry's future is cloudy. That means the Houston market might cool off a little — but it probably won't go cold.
The Houston Chronicle has this report (see: "Local housing slows at end of near-record year," by Nancy Sarnoff). "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, a report shows. Buyers closed on 73,724 single-family homes last year, falling just 2.4 percent short of the market's 2014 sales peak, the Houston Association of Realtors said Wednesday."
The overheated pace of the last few years couldn't continue, local economic analyst Steve Spillette told the paper. ""We have to remember the housing market from 2012 through 2014 was really quite extraordinary. It was really an overheated market." The oil industry's hiring binge that fueled that population growth is over, Spillette said.
On the other hand, Houston crane operator Josh Hernandez pointed out, what's bad news for the oil industry is good news for the petrochemical industry, another big Houston employer and a consumer of crude oil. When things slow down on the oil refinery side of town, he said, they pick up on the chemical producing side of town.
Not to worry, Zillow chief economist Svenja Gudell told the Houston Business Journal (see: "Economist: No need to worry about Houston’s housing market ... yet," by Paul Takahashi). “I don’t think there’s any reason to be concerned with the housing market yet,” Gudell said. “Houston was getting too hot before oil prices spilled over. You can’t be hot forever."