Low energy prices have taken a toll on the once-robust Houston economy, though the forecast for the market is brightening, reports HomeUnion’s Research Services team. Job growth has been able to remain slightly positive, as job gains in other industry sectors have offset cuts related to the energy industry. Nonetheless, the downturn in prices has lead to thousands of losses in the manufacturing, oil extraction, and professional and business services sectors. In fact, much of the local manufacturing sector is dedicated to the oil sector and white-collar energy jobs are evaporating as companies consolidate or enter bankruptcy. On a more positive note for Houston real estate investors, oil prices have climbed since mid-January and are currently close to the $50-per barrel range. At these current levels, it’s anticipated that many of the large producers will be able to hold their payroll levels steady.
Although the market is stabilizing, demand for rental properties will be eclipsed by new construction in the apartment sector this year. Developers moved thousands of apartments into the pipeline when job growth was healthy, and many of those projects are still coming online. Underway inventory currently accounts for 3.8 percent of existing stock, which will put upward pressure on single-family and multifamily vacancy this year.
Forecast for Houston Market
From employment trends to projected home prices, find out what is in the works for Houston’s market by downloading the full report. This market report evaluates multiple sectors of the economy that affect risk-and-reward for single-family real estate investors.