HOUSTON – Don’t write off the Houston economy just yet.
Demonstrating the healthiest hiring pattern in 33 years, Houston created 125,300 jobs in the last 12 months.
It was the strongest job growth for Houston since August 1981 when 127,700 jobs were added.
Over the last year, Houston’s strongest sectors for hiring were energy and construction. Houston has been leading the nation in job growth in recent years.
A remarkable drop in oil prices generated widespread concern about the Texas economy this fall. West Texas Intermediate, priced over $107 a barrel in the summer, fell sharply this fall and went below $55 a barrel late last week. Drillers are expected to cut back spending in 2015 and oil patch layoffs are forecasted. Wall Street security analysts are anxious about companies with major exposure in Houston and some REIT stocks have been downgraded.
But the Houston economy is not going to suddenly skid from 100 miles per hour to 10 MPH.
Houston overall economy – and its realty markets have been showing incredible strength in 2014. Houston’s inventory of single-family homes for sale is near a record-low, only a 2.7 months supply. When the annual sales results are tallied Houston is expected to have more than 91,000 home sales this year – the highest sales total ever.
And the office market is tight. Houston’s huge Energy Corridor submarket, where 16 office projects are under construction, has a Class A vacancy rate of only 2.6 percent.
Houston’s industrial market is very strong and has a shortage of crane-served industrial buildings, says industrial developer Welcome Wilson Jr. of the Welcome Group.
“Low oil prices are temporary, and with the backlog of industrial activity in Houston, we can coast through it,” Wilson said at the recent BoyarMiller forecast breakfast.
Overall, the Houston area economy had 4.4 percent employment growth for the 12 months ending in November, according to the Texas Workforce Commission.
The rest of Texas is doing fine, as well. The Dallas/Fort Worth ranked second, adding 111,500 jobs, followed by San Antonio with 29,100 jobs and Austin had over 28,000.
Without a doubt, falling oil prices will put a dent in the Texas economy in 2015. But Texas has been shining brighter than any other state this year and even with a little tarnish in 2015, the Lone State State economy will still be better than most.
By Ralph Bivins – Editor, RealtyNewsReport.com