LAUREL CREEK April 2016
Official Newsletter of the Residents of Laurel Creek
LAUREL CREEK
Volume 3, Issue 4
Laurel Creek’s Resiliency Admist Oil Downturn According to the Texas Workforce Commission, the Houston metro area finished 2015 with a 4.6 percent unemployment rate, slightly above the state’s 4.2 percent but below the nation’s 5.6 percent. As recently as March 2015, Houston’s unemployment rate stood at 4.0 percent, the lowest point in the business cycle. During the Great Recession, Houston’s unemployment rate peaked at 8.8 percent. During the oil bust of the 1980s, unemployment hit 12.9 percent. The current rate, however, might not reflect Houston’s true unemployment picture. The region’s labor force has lost more than 43,000 workers since it peaked at 3,289,820 in November 2014. Some of the lost workers may have become discouraged and stopped looking for employment, others may have retired, still others may have returned to school for additional training. If all the lost individuals were still in the labor force and without work, Houston’s true unemployment rate would likely be above 5.5 percent. Energy Continues to Struggle — The story of the energy industry in 2015 can be summed up in four points: 1. West Texas Intermediate, the U.S. benchmark for light sweet crude, opened the year at $52.72 and closed the year at $37.13. In the current cycle, WTI has fallen nearly 80 percent from its June 2014 peak of $107.95 per barrel. 2. The North American rig count traced a similar path, opening the year at 1,811 and ending the year at 698. In the current slump, the North American drilling fleet has fallen more than two-thirds from its September 2014 peak of 1,931 working rigs. 3. The industry drilled only 19,503 oil and gas wells in Texas last year, 10,000 fewer than it drilled in 2014, the peak for the recent boom. 4. Energy industry consultant Wood Mackenzie estimates the oil price collapse has cancelled or delayed more than $380 billion in upstream energy projects. The near-term outlook for the industry isn’t much better. Barclays expects North American exploration budgets to fall another 27 percent this year. The U.S. Energy Information Administration does not expect crude to breach $40 per barrel until sometime next year. Decline in Houston area Home Sales — Houston area realtors sold 73,724 single-family homes in 2015, down 2.4 percent from Copyright © 2016 Peel, Inc.
75,535 sold the prior year, according to the Houston Association of REALTORS®. After a record-breaking 2014, Houston recorded its second-highest sales volume in 2015. Houston home sales in the first three quarters of 2015 outpaced the first three quarters of 2014 by 0.6 percent. The highest onemonth sales volume for 2015 occurred in July, with 7,895 homes sold, while the lowest one-month sales volume was in January, with 4,109 home sold. But single-family home sales began to slow in the fourth quarter of 2015 with sales totaling 16,361, which represented a ten (10%) percent decrease from 18,183 in the fourth quarter of 2014. The slowdown in sales allowed for inventory to grow from 2.5 months, the lowest level on record, to 3.2 months in December 2015. Single-family home sales totaled 4,024 in January, down 2.1 percent from January 2015. That marks the fourth consecutive monthly decline. In 2016, the decline in oil prices has correlated with a decline in property sales in the Houston area. Broken out by housing segment, January sales performed as follows: •$1 - $79,999: decreased 40.6 percent •$80,000 - $149,999: decreased 16.2 percent •$150,000 - $249,999: increased 8.8 percent •$250,000 - $499,999: decreased 1.0 percent •$500,000 and above: decreased 9.3 percent The decline in home sales is particularly discouraging given that the number of total listings is significantly more than last year. In 2015, the Multiple Listing Service had 27,865 active listings, but January this year reflected 32,260 active listings. Laurel Creek’s Home Sales Outperform – According to the Houston Area Realtors, the average price of homes for sale in Laurel Creek is $294,940; the average square feet of the homes in Laurel Creek is 2,595 square feet, and the average rent in Laurel Creek is $2,150 at an average price of 1 per square foot. Notwithstanding the downturn in the Houston employment and real estate market, there are only five listed homes for sale in our subdivision (on the date of the submission of this article). Laurel Creek still commands, on average, sales prices of 113.65 per foot and outpaces with respect to (Continued on Page 3) Laurel Creek - April 2016
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