WALTHAM, Mass., Jan. 26, 2016 /PRNewswire/ -- This month Pro Teck Valuation Services' Home Value Forecast examines the impact domestic oil prices are having on the nation's housing market—particularly in areas like Texas where a shrinking oil industry is impacting home values.
"Many of us are enjoying the benefits of oil at its lowest price in over 12 years, in the $30 a barrel range as of this release," said Tom O'Grady, CEO of Pro Teck Valuation Services. "The impact on the U.S. oil industry, however, has been alarming."
For comparison, in the end of December 2014 there were 1,882 active oil rigs in the United States. One year later there are 714. In Texas, in 2015, the rig count dropped by more than 62%.
According to data included in this month's HVF, six of the bottom 10 real estate markets are located in Texas: namely Abilene, El Paso, Houston, Killeen, McAllen, and Midland.
Midland, Texas Real Estate Market
Perhaps hit the hardest by the economic downturn, Midland's real estate market is showing many concerning signs, including these changes from a year ago:
- Active homes on the market rose from 399 to 885.
- Months of remaining inventory (MRI) has gone from 3.4, a "hot" sellers market to 7.65, a "balanced" market. While 7.65 MRI is not bad, the speed of the shift is troubling.
- Sold Days on Market (58 to 70) and Active Days on Market (56 to 96) have both increased dramatically.
- Foreclosures as a percent of sales, while still under 5%, have increased by more than 40% since this time last year. If trends continue and oil prices stay low, we anticipate this will continue to go up.
Making matters worse in Midland is the lack of a diversified industry base—25% of men work in mining, quarrying and oil and gas extraction, not exactly the diversified industry base needed to lesson the impact of the oil downturn.
Another community that dropped from "strong" to "soft" in HVF ranking is Houston. Because of its more diversified economic base, the impact has not been as dramatic:
- Sales and Days on Market have stayed relatively consistent.
- There has been a 47% increase in Active homes on the market from a year ago.
- Active Days on Market and MRI have both increased, 46% and 24% respectively since this time last year. These are the signs that the market is slowing down.
"With each closing there are workers laid off – not only in the oil industry but in manufacturing, restaurants, stores and other industries that service the market," said O'Grady. "We will keep an eye on these markets as the oil market stabilizes."
Top CBSAs this month include:
- Bend-Redmond, OR
- Boise City, ID
- Chico, CA
- Eugene, OR
- Medford, OR
- Ogden-Clearfield, UT
- Oxnard-Thousand Oaks-Ventura, CA
- Portland-Vancouver-Hillsboro, OR-WA
- Salt Lake City, UT
- Vallejo-Fairfield, CA
As has been the trend, CBSAs in Washington, Oregon, Idaho and California continue to lead HVF's Top Ten. New this month are two Utah CBSAs, Ogden and Salt Lake, both showing very healthy markets with homes selling fast and active prices on the rise.
Bottom CBSAs this month include:
- Abilene, TX
- El Paso, TX
- Houston-The Woodlands-Sugar Land, TX
- Killeen-Temple, TX
- McAllen-Edinburg-Mission, TX
- Saginaw, MI
- Midland, TX
- Atlantic City-Hammonton, NJ
- Jacksonville, NC
- Detroit-Dearborn-Livonia, MI
"Atlantic City is facing state takeover because of financial issues – impacting the real estate market," added O'Grady. "Revenues from Atlantic City's casino industry fell to $2.6 billion in 2015 – half of what they took in during 2006. Property values peaked in 2006 also, and a rebound is not forecasted in the next five years."
To read the entire post, including additional data, visit www.proteckservices.com/home-value-forecast/.
About Home Value Forecast
Home Value Forecast (HVF) is brought to you by Pro Teck Valuation Services. HVF provides insight into the current and future state of the U.S. housing market, and delivers 14 market snapshot graphs from the top 30 CBSAs.
HVF is built using numerous housing and economic data sources. The top 750 CBSAs as well as data down to the ZIP code level for approximately 18,000 ZIPs are available with a corporate subscription to the service. To learn more about Home Value Forecast and Pro Teck's full suite of residential real estate valuation products, visit www.proteckservices.com. You can also find Pro Teck on Twitter at @ProTeckServices.
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SOURCE Pro Teck Valuation Services