Are you thinking about moving to Houston, but worried that the drop in oil prices will affect Houston’s economy?
All signs are pointing to the fact that Houston’s economy is still growing, despite the ups and downs of oil prices.
While it’s true the oil industry has contributed to Houston’s overall growth, this single industry isn't responsible for the whole story. The job market is predicted to continue increasing, especially as other industries in Houston grow.
In fact, according to Forbes Magazine (Nov. 2014), Texas employment gains represent 30% of the jobs added in the United States since 2000, which is more than twice as many as any other state.
Think that sounds too good to be true? Read on for the proof that Houston’s economy is still growing.
Job Forecasts Are Up
The Greater Houston Partnership Annual Employment Forecast still expects that the metro area will add thousands of jobs in 2015 alone. The unemployment rate in Houston was also lower this past April than it was a year ago – 4.2%, as opposed to 5.4%. In comparison, the unemployment rate for the US is still 5.6%. Houston also ranks 3rd among areas in Fortune 500 headquarters – 26 Fortune 500 companies are based in the area. This means a lot for the strength of the economy and job opportunities for those outside the oil industry.
Housing Sales Are Still Increasing
If you’ve been reading up on Houston’s housing market, you may have heard analysts are predicting that construction growth and appreciation of homes will decrease.
However, according to a recent Wall Street Journal article, statistics say otherwise: “James Gaines, a research economist at Texas A&M University’s Real Estate Center, said last quarter’s sales of existing homes in Houston were 4% greater than a year earlier and prices rose by 7% to 8% in that span.”
Houston’s Economy Isn’t Completely Dependent Upon Oil
In the past, low oil prices haven’t stopped Houston’s economy from growing. Back in the 90s, oil prices dropped from $30 during the first Gulf War to an average of $19.73 for the decade. Despite that, Houston still added more than 500,000 jobs that decade.
According to the most recent Energy Update from the Greater Houston Partnership, there’s no cause for worry. Oil prices have fallen in the past, and only twice have they had a huge impact on Houston’s Economy. Both of those times, Houston’s job market recovered within a few years.
Furthermore, the Greater Houston Partnership emphasizes that the media is creating an unnecessary frenzy over potential job losses. Its recent Global Economy report states, “…the Partnership doesn’t expect a draconian downturn, and certainly not a drop of the magnitude the national media have portrayed.”
Beyond that, Houston has seen growth in other sections such as education, health, professional and business, construction, and technology. Houston has been 13th in the nation for job growth potential in the last 3 years (Source: John Burns Real Estate Consulting LLC), which is above Denver, CO, San Francisco, CA, and Austin, TX. Need more proof Houston’s growth can still hold steady? The region has led the top 5 major US metro areas in job recovery since December of 2011.
Keep in mind that Houston is 23.7% of Texas’ population – yet, it accounted for 32.3% of the state’s job growth from July 2012 to July 2013.
Conclusion
It’s important to do your research and not fall for all the hype the media is creating around oil prices dropping. While Houston is not creating as much new jobs as it was when oil price was above $100 a barrel, it is still creating new jobs these days, thanks to its diversified economy.
Don’t let the news outlets hold you back from moving if you’ve fallen in love with Houston, especially as home values are still on the rise.
