Ed Neuhaus Falling oil prices have been a blessing to the majority of consumers, especially during the recent Holidays, but some real estate professionals have become increasingly watchful of the trend’s effect on Texas’ real estate property values. Texas has been known for its overall prosperity, and higher oil prices have played a large role in the states’ economic drive, which has been reflected in the high home values.
Economist Amy Jordan recently stated that, “The main thing causing uncertainty and thus less optimism from our respondents (for the overall Texas economy as well as their specific businesses and industries) is declining oil prices and the unknown of how exactly businesses in Texas will be affected.”
However, economists have noted that a decline in real estate activity may be confined to rental rates, rather than investment sales, and that the lower oil prices may actually be a good thing in the long-term, likely shelving a lot of potential new starts.
The Austin area may have lost jobs in tech and manufacturing, but gained jobs in education, health care and hospitality. Things like the University of Texas and the state government help keep the job market relatively stable as well.
As jobs return, real estate inventory will reduce and that is good news for the Austin real estate market. Additionally, that means more opportunities for potential buyers. So, while the decrease in the price of oil has significantly affected the real estate market in Texas, real estate professionals in Austin can, for now, take a sigh of relief that they may be much less negatively affected.
Originally published on LinkedIn January 2, 2015
