Is low oil prices affecting the Houston economy (Vega, Mustang: home, employment)

[chris_ut]

The layoffs will be at service companies, contractors first as they start dropping rigs.

[Jonathz]

Today news: Halliburton to buy Baker Hughes for about $35 billion. How big is the merger going to affect Houston employees in the two companies ?

[SouthernBoy205]

Originally Posted by hendersj31

I know that there is already talks of budget cuts for next year at many of the O&G companies. The majors can generally deal with budget cuts without mass layoffs at first. In my experience layoffs would come later.

This...

[bmantx512]

Originally Posted by Jack Lance

Remember oil prices have been sliding since the beginning of the summer..

Technically yes. But July was still very strong. We were paid $101.26. From there it fell to $95.49 in Aug, and $92.51 in Sep. Those are still good prices for our business.

The biggest hit just now came in. My Oct statements arrived at $83.12. So I wouldn't be too fired up about Sept economic data. Lets see how we look next month.

[JohnStein]

Problem is this oil slide does not seem temporary, looking out on the forward curves, demand, etc..

I used to be the nat gas space, financial side. We had many reductions when prices dropped from $12 to $4. And now I am in non-oil/gas, budget is also tighten as we're expecting less spending from the majors. There may be impact in the commodities trading houses as well...

One can argue that the lower gas will stimulate consumer spending, but I think the higher oil prices is more beneficial to the Houston economy.

[PDXNative2Houston]

Services companies will take a hit, but the E&P folks are mostly hedged out (price fixed) for 5+ years at $90 a barrel of oil or more. This drop is nothing but the eb and flow of global demand and supply. We'll stop drilling, slow production, supply will go down...global demand will go up due to the low pricing, and prices will rise again.

Similar to this, what happened with those people saying that we'd see permanently depressed real estate prices after the crash in 08'?

[julia1999]

For anyone still interested in buying properties at Houston now, please have a look at Pine Mill Ranch, their inventory houses are priced to sell, more than 10% off asking price. A friend of mine bought one of them, originally 450k, now 400k.

[Rip808]

Originally Posted by julia1999

For anyone still interested in buying properties at Houston now, please have a look at Pine Mill Ranch, their inventory houses are priced to sell, more than 10% off asking price. A friend of mine bought one of them, originally 450k, now 400k.

They priced them crazy high to begin with and you think you are getting a great deal when they "slash 10% off"...I have seen how fast prices have increased over the past 2-3 years. Some homes have doubled in value over the last couple of years. Its been crazy.

[bmantx512]

There was a story on Culture Map Houston a few weeks back that said Houston was number 1 in the nation in office building construction. Over 50 under construction, more than twice as many as NYC who is number 2.

They even mentioned the great phrase created during the last bust, "See Through Buildings" But one of the head guys at CBRE didn't seem too worried about it as long as it tapers off now. I'll see if I can find the story. It was a good read.

[julia1999]

Originally Posted by Rip808

They priced them crazy high to begin with and you think you are getting a great deal when they "slash 10% off"...I have seen how fast prices have increased over the past 2-3 years. Some homes have doubled in value over the last couple of years. Its been crazy.

Really? My friend's house is 4100 SQFT at the price of 400k, less than $100 per SQFT. It is difficult to find such low per SQFT price in Katy, especially for new house. I guess such lower per SQFT price can only be found at some much older communities, such as Oak Park Trail, Memorial Parkway...

IMO, the price in Katy will not move up due to the current oil price, so it is better to wait until the situation settles down.