Houston Home Sales Fall for the First Time in Six MonthsJohn Gittelsohn and Prashant Gopal
Houston home sales fell in February for the first time in six months, a sign lower oil prices are spooking buyers.
Sales of single-family houses dropped 5.8 percent from a year earlier to 4,521 homes, the Houston Association of Realtors reported Wednesday. Purchases fell among residences costing less than $150,000 because of tight supply, and among properties selling for more than $500,000 as wealthier buyers paused amid economic uncertainty, said James Gaines, research economist at Texas A&M University’s real estate center.
“They don’t know what the real impact of falling oil prices is,” Gaines said in a telephone interview from College Station, Texas. “We’re living in the twilight of uncertainty.”
Houston, capital of the U.S. oil industry, is home to the headquarters of companies such as ConocoPhillips and Halliburton Co., which have been hurt by the plunge in crude prices since last year. Halliburton said last month it’s cutting 8 percent of its global workforce of more than 80,000. Houston-based Cal Dive International Inc., a marine contractor for the oil industry, filed for bankruptcy protection last week.
Michele Marano, an agent with Champions Real Estate Group who is a former energy commodity broker, said the housing market has softened because buyers are taking their time.
“Since oil has been down, there has been a pause in our market -- people are more cautious” said Marano, who specializes in houses for energy-industry professionals. “People know right now that time is on the buyers’ side.”
Listings increased 0.7 percent from a year earlier to 27,990 properties, the Houston Association of Realtors reported. Inventory remains tight, at 2.7 months of supply, compared with 4.7 percent nationally.
Marano said she’s in the market for a new home in the Woodlands, a high-end master-planned community near where a new Exxon Mobil Corp. corporate campus is being built, and is waiting for prices to drop before buying.
“There’s a lot of brand new construction, and it’s not like it’s moving fast,” Marano said. “When we look at houses, the selling agent calls me back 10 times asking if we will come in again.”
Home sales also are expected to suffer in Texas cities such as Midland-Odessa, San Antonio and Corpus Christi, where oil drilling and related services play a big role in the local economies, Gaines said.
Slowing sales may not completely negative for Houston, which has had one of the nation’s hottest real estate markets, he said. Last year, a 83,160 homes sold in the area, surpassing the previous record in 2006.
“A 6 percent decline is still a good year,” Gaines said. “But it’ll take six to 12 months before the full impact is felt.”