What’s Helping Houston Home Values?
Despite low oil prices, compensating factors could bolster Houston home values.
Houston is a far cry from the blue-collar oil town of the 1980’s. We’re far more diversified than we’ve ever been in the past with a booming medical center and a rapidly expanding port. But with oil prices in the doldrums for the time being, how will Houstonians’ home values be affected? There are some projections that indicate the downward trend that began in late 2015 will likely continue through this year. But, that doesn’t mean there aren’t several factors defying that trend which bolster Houston home values.
Factors helping Houston home values:
- A large white-collar workforce: Unlike the mostly blue collar workforce of the 1980’s, today’s worker pool skews white collar with many young professionals in diverse industries ranging from medical administration to IT and technical support. A robust white collar sector is critical for maintaining home values in the face of falling oil prices. While upstream drillers and frackers, as well as their substantial blue-collar employees, are suffering at the moment, downstream companies are taking advantage of cheap oil with 32.7 billion dollars in direct investment in the works.
- Texas ship channel expansion: As we previously mentioned, lower natural gas and oil prices are feeding a building boom along the city’s ship channel. Furthermore, the $5.25 Billion Dollar Panama Canal Expansion is expected to spark an explosion of shipping traffic through Houston’s ports that will create thousands of jobs and contribute to increased home values.
- The growth of the Houston Medical Center: More than 100,000 people work in the Houston Medical Center. Strong growth predicted across the board for the healthcare industry, will continue to fuel demand for housing in the city. Furthermore, hospital construction is seeing strong growth in the suburbs.
- Population growth: Americans are flocking to the Southwestern states, and Texas is at the forefront of this new great migration. And while many come in search of jobs in a variety of sectors, not only in the oil and gas industry, others have come simply for warmth, sunlight, and a metropolis with the nation’s third-lowest cost of living index. Coupled with strong immigration from all over the world, net domestic migration to the city will continue to drive up home values in desirable locations.
While Houston’s economy depends on oil and gas, many legitimate factors could offset any decline in the market as a result of oil and gas and provide substantial benefits to the Houston real estate market.
If you’re looking to move to Houston, move into a new home, or sell the one you have, we would be glad to serve you at David Young & Company.