Real Estate Markets: Houston’s Tepid Job Growth Has Not Destroyed

In Houston, Weakness in the energy industry undermined job growth in Houston in September, with only 6,400 new jobs created, as stated by the Texas Workforce Commission.

“Only a few sectors are creating jobs,” says Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. “We are definitely in a soft patch.”

Over the last 12 months, the Houston area has added 36,200 jobs. But most of that gain was generated in the fourth quarter of 2014. The economy has been much weaker since the beginning of this year and job losses have been widespread.

Some 4,000 energy exploration and production jobs have been lost in Houston since the end of 2014.

“I think the bulk of the blue collar job cuts are over. Now, we are starting to see white collar losses,” Jankowski said. He is predicting Houston will end the year to jobs gains of 20,000 to 30,000.

After reaching a high of $107 a barrel in June 2014, oil prices have fallen sharply. West Texas Intermediate crude is now less than $50 a barrel.

Houston’s real estate markets have done fairly well over the last year, despite the thrashing that the city’s energy industry has received. The office market has suffered the most, with the epicenter of pain in the Energy Corridor district where there’s still over 2 million sq ft of office space under construction.

But other commercial real estate sectors are doing fairly well and Houston’s home sales are outstanding. In fact, September was the best September ever for home sales, reports the Houston Association of Realtors.

“Despite the headlines, Houston’s regional economy is buoyant,” says Robert Kramp, director of research and analysis for CBRE.

Although 2016 may be tougher, so far, this economic downturn has been quite mild, compared to the brutal crashes in years past.

“Historically, when oil goes down, Houston’s economy declines,” says veteran economist Ted Jones of Stewart Title. “So this is the best oil downturn we’ve ever had.”