CURBED: Hot Houston Housing Market Chills As Energy Prices Dip
Metrostudy NewsMarch 4, 2016
BY ALEXEI BARRIONUEVO, CURBED, MAR 3, 2016
Houston is expected to lose its crown as the king of new home construction this year
When energy prices dipped to 12-year lows in December, Sullivan Brothers Builders decided to try to spur sales of its single-family homes in the Houston area by offering a $5,000 bonus—and payment of buyers’ electric bills for one year.
“The price of oil has stalled some buyers,” said Karen Travelstead, director of sales and marketing for Sullivan Brothers. “There were buyers ready to make decisions that kind of decided, ‘Let’s wait three to six more months before we decide.'”
Two months later Sullivan Brothers is still offering the incentives, and likely will continue them through the spring, to see if the global energy downturn deepens for the nation’s most important oil and gas corridor, Travelstead said.
Houston, the nation’s number one market for housing starts last year, is starting to show signs of a slowdown. Still, home prices in the metro area, whose job market is about 50 percent energy-related, may prove surprisingly resilient, in large part because supply has been struggling to keep pace with demand for the past few years – making for a hot market that more resembled San Jose, California, than any city in Texas, said Bill Gilmer, director of the Institute For Regional Forecasting at the University of Houston.
But due to the energy fall-off, Houston is expected to lose its crown as the king of new home construction this year to its in-state rival, Dallas. “In 2016 you will see Dallas be the leading market in terms of single-family growth, followed very closely by Houston,” said Scott Davis, the Houston regional director for Metrostudy.