The most common question we are asked is how the economy and housing markets are doing. People have been surprised this last year when we tell them that the economy is doing great. The truth is, we are in very good position. I do not want to say that 2016 will be a momentous as 2013 or 2014.
Nonetheless, 2016 will stand on its own as a very good year. So let’s discuss the negatives first because that is what everyone has been talking about recently. Yes, oil prices are down and most experts don’t think they will be rising to 2013 levels anytime soon. Yes, there have been some layoffs in the oil industry. And when there were similar price dips in the past, the Houston real estate market crashed. However, that is just not happening this time around. So in this article we will discuss what the market did in 2015, what the market will do in 2016 and, most importantly, why the Houston market is doing so well.
1) The number of home sales were down roughly 10% in 2015. Still, unless you are a Realtor®, this does not affect you. Home prices still climbed 4%. Remember, 4% is solid growth, especially when you consider that this is on top of the aggressive growth the market experienced in 2013 and 2014. The reason the market held was there was no net job loss in Houston in 2015. While jobs may have been lost in the oil industry, other types of jobs were added at a similar rate. As a result, the market held up as a whole. (Note See TIM Sell was actually up double digits in 2015 when most real estate professionals were down due to the volume drop).
2) Projections for 2016 are similar. Volume is expected to be off slightly, but home prices are expected to climb. Yes, homes will sit on the market a little longer, yet the days on market will still be less than 6 months on average. This means we will still be in a seller’s market. Note that in 2013 and 2014, Texas was one of the top states in terms of job growth. Last year Texas was number 25. Therefore, while not performing at past levels, job growth was still solid.
3) Finally, why is the market doing so well when there are so many projections of doom and gloom? As previously mentioned, there was no net job loss in Houston. While upstream oil jobs have been hit, downstream oil jobs have held solid and even grown. The Houston Ship channel is performing at an incredible level right now and will benefit greatly from the expansion of the Panama Canal. Look for more jobs to hit that area. Additionally, with the expansion of the Canal, look for more manufacturing facilities to move closer to one of the most important ports in the Western hemisphere. There is even more to be excited about, as there is currently over 130 Billion dollars of plant production going on in the South Texas area to take advantage of a large petroleum find.
Thus, the market is strong and will most likely continue to hold. Yes, when oil prices go up the market will be better. Even so, we are very blessed with a strong economy. If you need a real estate team that understands the market, please contact us at 877-313-SELL or find out what your home is worth now at seetimsell.com.