Avossos Posted July 24, 2014 Share Posted July 24, 2014 Just had a conversation with some coworkers who think the oil boom will last another 3 years. After that... What does that do to the Houston economy? Should we expect all growth to cease? Does Houston's livelyhood truely rely completely on oil? Link to comment Share on other sites More sharing options...
swtsig Posted July 24, 2014 Share Posted July 24, 2014 Why is this in the going up section? Link to comment Share on other sites More sharing options...
Avossos Posted July 24, 2014 Author Share Posted July 24, 2014 Why is this in the going up section? Where does this belong swtsig...? Feel free to move this wherever. I didn't have to the time to comb through the dozens of thread categories. Link to comment Share on other sites More sharing options...
Triton Posted July 24, 2014 Share Posted July 24, 2014 Where does this belong swtsig...? Feel free to move this wherever. I didn't have to the time to comb through the dozens of thread categories. Not to be rude but it only took me 5 seconds to go over to the Houston discussion forum: http://www.houstonarchitecture.com/haif/forum/27-general-houston-discussions/ Link to comment Share on other sites More sharing options...
Triton Posted July 24, 2014 Share Posted July 24, 2014 Anyway, based on economic studies that I've seen passed around at the CBRE offices (and they are released publicly too... I'll see if I can find one to post), the consensus among most analysts is that Houston will peak anywhere from late 2014 into late 2015 and some have said we have already hit the peak. Others (as has been posted here on HAIF) such as that one broker from CBRE fears that Houston is on the verge of overbuilding and that the rate of office construction needs to stop soon. I realize I'll need articles to back this up but hopefully someone not at work or not as lazy as me can find them to back this up... Most Houston business articles are saying that we shouldn't be expecting the level of economic growth that the city has experienced from 2013 to now. It will begin to slow down soon, with the suburbs such as the Woodlands and outlying Katy areas making up the bulk of new residential construction. Here's all the resources on the economic outlook for Houston and they are all very recently published: http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-2Q_CBRE_Houston_MarketView.pdf http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-2Q_PMRG_Market_at_a_Glance.pdf http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-2Q_JLL_Office_Insight.pdf http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-2Q_Cassidy_US_Office_Trends.pdf http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-2Q_CW_MarketBeat_Ofc_Snapshot.pdf http://www.downtownhouston.org/site_media/uploads/attachments/2014-07-21/2014-07-July_Transwestern.pdf Link to comment Share on other sites More sharing options...
august948 Posted July 24, 2014 Share Posted July 24, 2014 Just had a conversation with some coworkers who think the oil boom will last another 3 years. After that... What does that do to the Houston economy? Should we expect all growth to cease? Does Houston's livelyhood truely rely completely on oil? Just curious on why they hold that opinion. Are they in the oil business? I've gotten the impression that fracking has just gotten started and there's still a lot more to be done before it plays out. Link to comment Share on other sites More sharing options...
Metro West Posted July 24, 2014 Share Posted July 24, 2014 The experts are never wrong. They can't put anything on the internet unless it's true. The boom will be over before I finish typing this sentenc Link to comment Share on other sites More sharing options...
Avossos Posted July 24, 2014 Author Share Posted July 24, 2014 Not to be rude but it only took me 5 seconds to go over to the Houston discussion forum: http://www.houstonarchitecture.com/haif/forum/27-general-houston-discussions/ I saw that after I checked. I usually don't go outside the going up page, and neighborhood page. Still fairly new to the site I guess. Anyway, the articles you posted are good, but the latest I see it going back to is 1998. I am talking about 1983 - 1988. Coworkers are talking about that it would be even worse than that time. When I hear that kind of talk, I get pretty worried. Overbuilding may be an issue, and in a way, I think in order for any boom to slow down necessitates some level of overbuilding... I am fearful for another 20 year slump. I hope not. I am just expressing my fears here, but it is interesting to think about. If the oil industry implodes, where does that leave Houston? The answer is: It leaves Houston in slump. Link to comment Share on other sites More sharing options...
LarryDierker Posted July 24, 2014 Share Posted July 24, 2014 I saw that after I checked. I usually don't go outside the going up page, and neighborhood page. Still fairly new to the site I guess. Anyway, the articles you posted are good, but the latest I see it going back to is 1998. I am talking about 1983 - 1988. Coworkers are talking about that it would be even worse than that time. When I hear that kind of talk, I get pretty worried. Overbuilding may be an issue, and in a way, I think in order for any boom to slow down necessitates some level of overbuilding... I am fearful for another 20 year slump. I hope not. I am just expressing my fears here, but it is interesting to think about. If the oil industry implodes, where does that leave Houston? The answer is: It leaves Houston in slump. then I can afford one of those cool new highrises in downtown. Link to comment Share on other sites More sharing options...
swtsig Posted July 24, 2014 Share Posted July 24, 2014 I saw that after I checked. I usually don't go outside the going up page, and neighborhood page. Still fairly new to the site I guess.Anyway, the articles you posted are good, but the latest I see it going back to is 1998. I am talking about 1983 - 1988. Coworkers are talking about that it would be even worse than that time. When I hear that kind of talk, I get pretty worried. Overbuilding may be an issue, and in a way, I think in order for any boom to slow down necessitates some level of overbuilding...I am fearful for another 20 year slump. I hope not. I am just expressing my fears here, but it is interesting to think about. If the oil industry implodes, where does that leave Houston? The answer is: It leaves Houston in slump.The only thing that would "implode" the oil and gas industry is a global economic collapse.... You know, like 2008-2009. And do you remember how "bad" it got here when oil went from $145/barrel to $35 and nat gas from $8 to $2? Answer: it didn't. Even under those circumstances houston fared better than damn near any other city in the country. This isn't the oil boom of the 80's. Your coworkers are morons. No offense. Link to comment Share on other sites More sharing options...
Avossos Posted July 24, 2014 Author Share Posted July 24, 2014 This isn't the oil boom of the 80's. Your coworkers are morons. No offense.I appreciate your response. What you say sounds reasonable, and I hope it's true. I am glad there is confidence that Houston is recession resistant. Link to comment Share on other sites More sharing options...
arche_757 Posted July 24, 2014 Share Posted July 24, 2014 This isn't the oil boom of the 80's. Your coworkers are morons. No offense. Pretty much. Houston is much more diversified than it previously was. We needn't fear 250,000 jobs gone almost overnight (or the % of that figure that would be for today's population). Link to comment Share on other sites More sharing options...
JoninATX Posted July 25, 2014 Share Posted July 25, 2014 Houston economy will feel the pinch, but not like it did back in the 1980's. Houston economy is more diverse now. Link to comment Share on other sites More sharing options...
bachanon Posted July 25, 2014 Share Posted July 25, 2014 http://www.bizjournals.com/houston/news/2014/06/23/new-effort-launches-to-fill-thousands-of-jobs-in-3.html?page=all folks should do their homework. houston is frantically trying to figure out how to fill the 296,000 jobs coming to the houston area in the next THREE years. fueled by the large amount of oil, several 1-2 billion dollar refineries are being built or expanded in the gulf coast region by houston based companies. here are a couple: motiva/bechtel: http://www.bechtel.com/port-arthur-refinery.html chevron/phillips chemical: http://www.cpchem.com/en-us/news/Pages/Chevron-Phillips-Chemical-Breaks-Ground-on-Two-World-Scale-Polyethylene-.aspx the oil/natural gas boom has changed the socio-political power structure worldwide. the u.s. is becoming more and more independent by the day and mexico is about to open up it's natural resources for private investment; companies first in line to capitalize on mexico are almost all based in houston or have a huge presence in houston: chevron, exxon/mobil, shell, for instance. as much as russia would like to tighten its monopoly on europe's natural gas, the us is about to unleash liquified natural gas. we now have the technology to liquify natural gas at a port, load on ships to europe, deliquify...right into european homes. the world is trying to figure out how to use fracking technology that our oil and gas industry created. the demand for our technology and our people are through the roof. i think it would be premature to predict when houston's "boom" will end or to even predict how all of this will play out. way too many variables. right now, everything i see is positive for the foreseeable future. at the economic outlook conferences earlier this year, all multi-family residential that has been built is getting absorbed. absorption was static and predicted to be so for 2014. the new construction industry for single family homes can maybe produce 30K homes; demand is for 75K. consider this: population is growing slower than the available jobs in the houston region. rental unit construction is ONLY keeping pace with demand. new construction industry for single family homes could not keep up with demand even if it doubled its capacity to build. foreign investors are keen on houston. it's difficult to get our brains around this much construction especially since we are so very aware of it. although it is a lot of construction, it doesn't mean the demand isn't there. (not going to mention how important it is to get more mass transit in the pipeline but we are so going to wish we had) http://www.city-journal.org/2014/24_3_houston.html also, the panama canal expansion will bring larger freighters from the pacific ocean into the port of houston. http://www.portofhouston.com/business-development/capital-improvement-projects/ the port of houston is the number ONE port in foreign tonnage in the country. Link to comment Share on other sites More sharing options...
arche_757 Posted July 25, 2014 Share Posted July 25, 2014 ^Also, if you *add* Port of Houston + Port of Texas City + Port of Galveston together the tonnage is clearly the biggest shipping port in the Western Hemisphere (passing up the Port of Louisiana). The Port and TMC were possibly the best things to ever happen to the City of Houston - very forward thinking by our former civic leaders. The "boom" is on going and will carry over for a few years in a number of areas, but like bachanon mentioned the region will take years to absorb all the new residents and retail required. We may see a sharp decline in commercial highrise construction (no doubt) but that doesn't mean all architectural activity will dry up - far from it. I still think Downtown/Midtown will continue to add people like crazy once all these residential projects finish up and the demand for goods and services increases making both neighborhoods the hottest around. Link to comment Share on other sites More sharing options...
august948 Posted July 25, 2014 Share Posted July 25, 2014 ^Also, if you *add* Port of Houston + Port of Texas City + Port of Galveston together the tonnage is clearly the biggest shipping port in the Western Hemisphere (passing up the Port of Louisiana). The Port and TMC were possibly the best things to ever happen to the City of Houston - very forward thinking by our former civic leaders. The "boom" is on going and will carry over for a few years in a number of areas, but like bachanon mentioned the region will take years to absorb all the new residents and retail required. We may see a sharp decline in commercial highrise construction (no doubt) but that doesn't mean all architectural activity will dry up - far from it. I still think Downtown/Midtown will continue to add people like crazy once all these residential projects finish up and the demand for goods and services increases making both neighborhoods the hottest around. That reminds me, the Panama Canal expansion is set to be completed in 2015 and that's expected to bring a lot of business and jobs here as well. http://www.chron.com/business/article/Panama-Canal-expansion-means-big-changes-at-Port-2080267.php They talk about it as a game-changer since the big container ships can now sail directly here from Asia instead of having to offload on the west coast. Two words sum up what the Panama Canal expansion means to the Port of Houston: game changer.When the $5.25 billion project is complete in three years, the historic passageway connecting the Pacific Ocean and Caribbean Sea will be able to accommodate much larger ships.For the Port of Houston, the bigger trading lane will allow some larger ships sailing from Asia to deliver their containers here instead of West Coast ports. Big retailers preparedIn anticipation of the canal expansion, big box retailers Home Depot and Wal-Mart Stores have built distribution centers in the Houston area. They can import everything from sofas to nails to their Houston warehouses by sea and then send those goods to other U.S. destinations by truck or rail. And more of these huge warehouses may follow."Where the flagship big retailers go, the secondary and tertiary retailers go," Dreyer said.A 2002 labor shutdown on the West Coast also convinced many shippers and retailers to diversify to other U.S. ports. Link to comment Share on other sites More sharing options...
arche_757 Posted July 25, 2014 Share Posted July 25, 2014 Yes. Now - I believe those ports mentioned above are mulling over a new container terminal on Pelican Island. Obviously a new container terminal designed to hold the Panamax class of container ships would be huge and cost a ton of money, it would also open up the quickest route to most of America from the Panama Canal via the Houston area. I think something like this will eventually happen, but who knows? The biggest obstacle is land connections - a new causeway and rail connections to the mainland would be needed, and this would also impact the Inter-coastal Canal business. http://www.chron.com/business/article/Galveston-s-Pelican-Island-may-get-ship-terminal-1711952.php Then there is the Chinese firm exploring a 4.5 billion dollar methanol plant (I believe) in/near Texas City. I believe it would be built out in the bay on "reclaimed" land. That would also be a huge asset for the area. http://www.bizjournals.com/houston/news/2014/07/22/texas-city-site-in-the-running-for-multibillion.html http://www.galvestondailynews.com/free/article_8943475e-11c8-11e4-b644-0017a43b2370.html Link to comment Share on other sites More sharing options...
H-Town Man Posted July 25, 2014 Share Posted July 25, 2014 When oil is at a given price, it means 50% of investors think it will go higher and 50% think it will go lower. If there was good reason to think that oil is in for a drop, that expectation would already be priced in.In other words, no one knows what will happen.The bust of the 80's was caused by the OPEC embargo (which had caused the boom) coming to an end, and the market being flooded with cheap oil. It is hard to see something like that happening now, since there is no embargo. Most of what keeps prices high, besides demand, is political instability in the Middle East. Do you see that suddenly ending? Link to comment Share on other sites More sharing options...
Avossos Posted July 26, 2014 Author Share Posted July 26, 2014 When oil is at a given price, it means 50% of investors think it will go higher and 50% think it will go lower. If there was good reason to think that oil is in for a drop, that expectation would already be priced in.In other words, no one knows what will happen.The bust of the 80's was caused by the OPEC embargo (which had caused the boom) coming to an end, and the market being flooded with cheap oil. It is hard to see something like that happening now, since there is no embargo. Most of what keeps prices high, besides demand, is political instability in the Middle East. Do you see that suddenly ending?I think we are less reliant on the happenings in the Middle East, and more dependent on our supply here. We are about to start exporting crude which is a big deal. The thought is once the fracking drys up our remaining supply, the market will change and many companies will fold. Hopefully that is not for a long long time. Link to comment Share on other sites More sharing options...
bachanon Posted July 26, 2014 Share Posted July 26, 2014 Wait until fracking and new extraction technologies are loosed in Mexico by Texas companies. We do not yet know what resources are available that Mexico has been unable to extract or find. There is oil under the gulf of Mexico we have yet to reach. Houston is the epicenter of present and future oil & gas exploration, extraction, r&d, and refining for north and central Americas...and maybe this hemisphere. Houston's economy is exploding due to its global position and not one technology (fracking) or resource. Link to comment Share on other sites More sharing options...
gmac Posted July 26, 2014 Share Posted July 26, 2014 One good class 5 hurricane, on the other hand... Link to comment Share on other sites More sharing options...
bachanon Posted July 26, 2014 Share Posted July 26, 2014 One good class 5 hurricane, on the other hand...debbie downer! Link to comment Share on other sites More sharing options...
Montrose1100 Posted July 26, 2014 Share Posted July 26, 2014 One good class 5 hurricane, on the other hand...Extremely rare, and would only be a speed bump. Link to comment Share on other sites More sharing options...
H-Town Man Posted July 26, 2014 Share Posted July 26, 2014 I think we are less reliant on the happenings in the Middle East, and more dependent on our supply here. We are about to start exporting crude which is a big deal. The thought is once the fracking drys up our remaining supply, the market will change and many companies will fold. Hopefully that is not for a long long time.But if oil prices drop, then fracking, oil sands, deep water drilling are all affected, because it is no longer economical to do those things. If oil drops below $80 a barrel for very long, Houston is in bad shape. Link to comment Share on other sites More sharing options...
bachanon Posted July 27, 2014 Share Posted July 27, 2014 https://www.flickr.com/photos/21188379@N03/14753562765/in/photostream/ https://www.flickr.com/photos/21188379@N03/14753562765/in/pool-haif not sure if these will work. check out the google map links above. i've been adding the addresses of high-rises under construction or proposed. notice the line between waugh/allen parkway down to hermann park. the clusters uptown and downtown make me tingle... Link to comment Share on other sites More sharing options...
lithiumaneurysm Posted July 27, 2014 Share Posted July 27, 2014 https://www.flickr.com/photos/21188379@N03/14753562765/in/photostream/ https://www.flickr.com/photos/21188379@N03/14753562765/in/pool-haif not sure if these will work. check out the google map links above. i've been adding the addresses of high-rises under construction or proposed. notice the line between waugh/allen parkway down to hermann park. the clusters uptown and downtown make me tingle... What's that star in the East End? Link to comment Share on other sites More sharing options...
bachanon Posted July 27, 2014 Share Posted July 27, 2014 What's that star in the East End? oops. meant to remove that one. that's a property i wanted to remember. disregard the east end star! Link to comment Share on other sites More sharing options...
cloud713 Posted July 28, 2014 Share Posted July 28, 2014 Interesting.. So we will eventually have a + (plus) shaped skyline.. From the TMC to Waugh and Uptown to Downtown.. Looks to me like the intersection of that plus would be a great place for something huge. Heh.. Right around the area of Hines confidential development at Richmond (or is it Westheimer) and Montrose. Link to comment Share on other sites More sharing options...
bachanon Posted August 23, 2014 Share Posted August 23, 2014 http://www.bizjournals.com/houston/news/2014/08/22/demand-for-houston-apartments-is-at-an-all-time.html the demand for residential rental units is outpacing the supply. currently, overbuilding is not a worry. Link to comment Share on other sites More sharing options...
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