At the beginning of 2016, the housing market in Houston was on the rise, and the year was looking as if it would prove to be even more promising as the months went on. In fact, for the past several years, Houston has been either on par with or above the national average in regards to the price of an average home.
However, that did not turn out to be the case, as the market fell a startling 8.8 percent in the month of July of this year. Most of this decline can be attributed to one thing—the recent slump in gas prices.
A year and a half ago, the gas prices began dropping faster and faster.
Now, gas is a mere third of the price per barrel that it was before. While this has many smiling while filling up at the pump, it is starting to take its toll on the house market, especially in Houston.
The city is highly affected by the rise and fall of the oil and gas industry, and that is made incredibly evident in the housing market.
When the gas prices were on the rise all across the country, from around 2009 to 2014, Houston’s house market was positively booming. Houses were being built at an astoundingly rapid pace.
Home Prices Are Falling
Though Houston’s average home price has remained fairly even with the national average since then, home sales have plummeted since earlier in the summer.
This fall in the average price of homes is found to be most dramatic in the Exxon Mobil development in Houston that began housing residents in 2014 and 2015. These homes were built when oil prices were at an all-time high, but now have a difficult time selling.
What Are Home Sellers Doing?
To combat this rapid fall of prices, builders are now working to do everything in their power to grow the market, sell more houses, and raise property value. These efforts mostly show up in the way of incentives for buyers and real estate agents alike.
Many home buyers have either renegotiated the prices of their homes or decided to hold off on signing a contract to purchase a home. This is due in large part to the fall in oil prices.
Plenty of potential buyers remain interested in properties—but are much more likely to ask for price cuts of up to tens of thousands of dollars. This is particularly common with buyers that work in the oil industry. As the price of oil remains low, the possibility of layoff becomes more of a reality for those that rely on oil’s profits for a living.
For those looking to purchase a home in the Houston area, this might just be the best time, as prices are in the buyer’s favor. Discounts are being requested and granted left and right, and houses are bought for way under their previous market value.
Buyers can essentially make a reasonable offer and walk home as a new homeowner. While there is no doubt that this drop in oil prices and home value is potentially detrimental in the long run, homes in the Houston area are now more affordable and available than ever.