The Houston housing market is being impacted by struggling oil industry because people are having to sell homes and turn to renting and downsizing if not relocating altogether. Last year the real estate market was booming, but layoffs are causing instability. Over 250,000 people have been laid off globally since the price of oil started to fluctuate at the end of 2014. Texas alone experienced at least 50,000 layoffs. Currently, the price of oil is still below $35 a barrel.
Many of the oil and gas companies have talked about the restructuring that needs to take place so that future dips in oil price will not cause massive instability. The restructuring started with the blue collar jobs and is moving towards mid and upper management. According to a CNN Money report, oil rig workers make an average of $100,000 salary in 2012. The families of oil workers are having to drastically change their situation with the dramatic change in income. Many of the people who lost their jobs are having to move and figure out what is next for their families future.
One of the largest issues is that the supply continues to flood the market driving the price further and further down. There have been talks to control the supply to let the market strengthen and rise back up.
Future for the Oil Industry
As of the Summer of 2014, the price of oil has dropped 70%. Currently, oil industry leaders are expecting the price of a barrel to start to increase in the last half of the year. While this does mean cheaper gas for most of the U.S. it also means a loss of jobs and stimulation in the global economy. Thankfully for Texas, the energy sector only accounts for 11% of the state’s economy. In the 1980s when Texas’s economy was nearly 40% energy sector, which would have devastated most of the state.