Do low oil prices hurt home prices?
If you’re worried about lower oil prices and the effect on the state’s economy, there’s research that could put your mind at ease. While there is some relationship between the two, Jim Gaines, Ph.D., a research economist with the Real Estate Center at Texas A&M University, says historical data shows that this relationship is only correlation, not causation.
“They do tend to have some relationship to each other, but there’s nothing that says just because the price of oil goes from X to Y that the monthly home sales are going from A to B,” Gaines told Texas REALTOR® magazine.
“Historically, the state has had substantial and strong home-sale activity even without extremely high oil prices,” he says. At the same time, there are cutbacks in the oil industry, which means job losses for some Texans. However, Gaines says there are other influences on the housing market, including employment growth in non-energy sectors, population growth, and low mortgage-interest rates.
Explore this topic in depth in Jim Gaines’s article, “Texas 2015 Housing Market and the Price of Oil” in Tierra Grande.
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About Donna Edwards
Realtor/Broker in Odessa, Texas who takes a unique approach to selling homes – combining powerful technology solutions with top notch service to create a more efficient & seamless experience for her clients.View all posts by Donna Edwards →