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Maybe if you guys weren't up all night posting on HAIF the economy would be doing better. tired workers are inefficient workers.

I'm sorry, I've been trying to keep my mouth shut for several days now but there is just too much misinformation to move on. HTXUSA, not sure whether you are a troll or whether you believe what you're

Are you hoping for a drastic downturn so you can afford to move out of your parents house?  

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http://www.bizjournals.com/houston/news/2015/07/27/hot-and-not-so-hot-houston-neighborhoods-for-new.html

 

However, more than six months after oil prices began to plummet, multifamily developers are returning to the Houston market, according to Kyle Drake, founder and president of Drake Realty Group LLC, a Houston-based commercial real estate firm specializing in land brokerage and investment advising for some of the largest apartment developers in town.

 

“Every week, I have a growing list of people who want to be in Houston, who say they have the capital and board sign-off for new deals,” Drake said. “They’re cautiously observing the market and carefully choosing what they do and where, but they still believe in Houston.”

 
Developers must be well-financed and experienced to get a new apartment off the ground these days, Drake said. To ensure a successful project, these seasoned developers are scrutinizing the location of new projects more closely than ever, looking for "main and main" locations, he added.
 
Suburban apartment deals have seen the least interest from developers amid the oil slump, Drake said. That’s because these outlying neighborhoods are riskier for developers to underwrite, he said.
 
“Katy is a great market, but it’s harder to do a deal there now. People don’t want to play ball west of CityCentre,” Drake said. “The main focus now for deals to get done is a main and main location in a core market.”
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So amidst the oil downturn, Houston still added net 56,000 new jobs in the first half of this year.

 

I wonder how that compares with other cities?

 

"The Texas Workforce Commission (TWC) monthly reports don’t reflect trends, and 12-month totals can be misleading, especially if growth in the early months differs greatly from that in the later months. Though the area created 62,300 jobs in the 12 months ending May 2015, most of those jobs came in the second half of 2014."

 

"Given the softness in the local economy, the Partnership anticipates the region will gain 20,000 to 30,000 jobs this year, not as robust as previous years but still in positive territory."

 

"At 4.2 percent, Houston’s May unemployment rate is well below the 5.3 percent national average."

 

http://thehiringsource.com/pressandnews/wp-content/uploads/2010/03/News-from-Hiring-Source-July-2015.pdf

Edited by DrLan34
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http://www.bls.gov/news.release/metro.t03.htm tells how it compares with other cities.

 

In the twelve months ending June:

 

Metro NYC:  +168,900 jobs

   Metro LA:  +152,000 jobs

 Metro Chic:  +61,200 jobs

SFO-Silicon:  +120,400 jobs

Metro DFW:  +117,800 jobs

DC-Baltimore:  +99,000 jobs

Phila-Trenton:  +37,500 jobs

Metro Houston:  +55,700 jobs

Metro Miami:  +71,100 jobs

Metro ATL:  +77,300 jobs

Boston-Worcester:  +61,600 jobs

Sea-Tac:  +71,700 jobs

 

edit:  forgot  SFO-Silicon Valley.  Added.

Edited by strickn
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http://www.bls.gov/news.release/metro.t03.htm tells how it compares with other cities.

In the twelve months ending June:

Metro NYC: +168,900 jobs

Metro LA: +152,000 jobs

Metro Chic: +61,200 jobs

SFO-Silicon: +120,400 jobs

Metro DFW: +117,800 jobs

DC-Baltimore: +99,000 jobs

Phila-Trenton: +37,500 jobs

Metro Houston: +55,700 jobs

Metro Miami: +71,100 jobs

Metro ATL: +77,300 jobs

Boston-Worcester: +61,600 jobs

Sea-Tac: +71,700 jobs

edit: forgot SFO-Silicon Valley. Added.

This is probably a dumb & lazy question, but are those brand new jobs created, or do they count people who transferred?
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Oil below $50, uh oh... would you build anything else in Houston right now? China stock market fall...hmmm....

 

https://ca.news.yahoo.com/oil-sinks-six-month-low-amid-weak-data-182418145--finance.html

 

Oil slides to lowest since March with Goldman Sachs forecasting a possible storage problem come fall:

 

http://www.bloomberg.com/news/articles/2015-08-05/oil-trades-near-lowest-since-march-amid-ample-u-s-inventories

 

 

If oil does hit the storage limit, we could see the oil industry here get rocked hard. As I and many others have been saying for many months, there is just way too much supply. OPEC is ramping up even more, Iran could enter the market this year, and the US is producing the most since the 70s. Honestly do not see that we've hit a bottom yet and I'd absolutely say, expect more layoffs in the Houston area.

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The population boom that is causing the institutional boom will, optimistically, help soften the landing. Healthcare is expanding and the education bonds are building new schools across the metro. 

 

Anyone in the the O&G business know what nat gas future will be like once a few of the export LNG terminals begin opening in the coming years? 

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I think we've established that the boom ain't continuing... and the thread's not even a year old yet. :ph34r:

I think you'd be surprised how many people are still in denial.... clinging on to whatever new project may pop up as a sign that all these forecasters are wrong about any slow down. Sorry to single this user out but I would imagine toxtethogrady believes that as he/she has indicated that opinion throughout HAIF.

toxtethogrady, what is your opinion about the Houston economy now?

Edited by Triton
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I think you'd be surprised how many people are still in denial.... clinging on to whatever new project may pop up as a sign that all these forecasters are wrong about any slow down. Sorry to single this user out but I would imagine toxtethogrady believes that as he/she has indicated that opinion throughout HAIF.

toxtethogrady, what is your opinion about the Houston economy now?

 

That's just it, it's one part of our economy. Granted, a very large part. Oil in Houston as of now is not booming, it is the opposite of said same. I work a lot with O&G, but as it isn't my main business I am pretty well insulated. Some companies I do work with just stopped receiving orders for new product one day. Sure, they are still making things, but it's a lot slower than it was a year ago. So yeah, that sector is certainly in trouble. As it is the largest sector of Houston's economy, we should be wary.

 

However, Houston grew by margins over the last 5-10 years. Demand could not keep up, you can see this in the cost for rental, the supply of new homes on the market. So people are still building apartments and new homes, and renovating old ones. There's the ship channel which is racing to be ready for the new ships through the expanded canal. There's downstream O&G which will continue doing very well for at least the rest of the year before they start feeling the pain of the O&G market.

 

So yeah, for people like the BP CEO, it probably does feel like 1986, but the rest of Houston, we still feel pretty good about the prospects in this town.

Edited by samagon
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At least he's not saying it feels like 1984, which was when the crater that began in '83 began to set up like concrete.  By 1986 things were stable, if not actually improving a bit.  A gentle recovery was firmly in place by '88 - '89.

 

One big difference between now and the early 80s is that we didn't have a real estate bubble suddenly disappear combined with a banking crisis.  Entire subdivisions became ghost towns due to foreclosures, and several large new office buildings had no tenants at all.  What is now the Mickey Leland building ended up in government hands because it had been foreclosed on, and the bank that had the paper disappeared.  Heritage Tower was see through for years.  People complain about the urine smell in a block or two of Main - in the early '80s, that was the bouquet of the sidewalk under the canopy at the Rice, along with much of downtown save for the plazas in front of the new buildings.  I could go on.

 

We are a much more diverse economy now; still, I'd feel better if it was spread out even further.  Yanking dead dinosaurs out of the earth and burning them isn't sustainable for several reasons; if nothing else, it's just not good stewardship of the resource.

 

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That's just it, it's one part of our economy. Granted, a very large part. Oil in Houston as of now is not booming, it is the opposite of said same. I work a lot with O&G, but as it isn't my main business I am pretty well insulated. Some companies I do work with just stopped receiving orders for new product one day. Sure, they are still making things, but it's a lot slower than it was a year ago. So yeah, that sector is certainly in trouble. As it is the largest sector of Houston's economy, we should be wary.

 

However, Houston grew by margins over the last 5-10 years. Demand could not keep up, you can see this in the cost for rental, the supply of new homes on the market. So people are still building apartments and new homes, and renovating old ones. There's the ship channel which is racing to be ready for the new ships through the expanded canal. There's downstream O&G which will continue doing very well for at least the rest of the year before they start feeling the pain of the O&G market.

 

So yeah, for people like the BP CEO, it probably does feel like 1986, but the rest of Houston, we still feel pretty good about the prospects in this town.

 

I think you are correct on the downstream work. I work mostly in downstream. We anticipate 10% more business in FY2016 than FY2015. We had some projects cancel in late 2014 but we've been steady since then. 

 

Our upstream division was decimated over the last 6 months.

Edited by jgriff
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Just saw an economist do a presentation about this.  His view was that, just as it seems, the Texas economy will slow down from the pace it grew over the past few years.  That said, there isn't any reason to panic.  Rather than a repeat of the 1980s he thinks it will just be a slower pace of growth.

 

 

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http://www.houston.org/pdf/research/quickview/Economy_at_a_Glance.pdf

 

Employment Update — The Houston metro area gained 55,700 jobs in the 12 months ending June ’15, according to the Texas Workforce Commission (TWC). The corresponding 1.9 percent 12-month growth rate is the slowest since November ’11. The employment numbers are somewhat misleading, since all the job gains occurred in the latter half of ’14. Since December, the region has posted a net loss of 5,600 jobs. Employment gains in the service sectors so far this year have not been able to offset losses in the goods producing sectors. Some of the losses date back to the fall of last year. The employment numbers reflect the weakness in the oil patch. The sectors still adding jobs are those which depend heavily on population growth, activity outside the energy sectors, or are benefiting from the momentum built up over the past five years of robust economic expansion.

Edited by DrLan34
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If WTI stays where it is or falls into the low 30's (as one "analyst" just predicted yesterday) and stays there for a year, Houston is in for a lot of trouble. If rebound quickly -- I.e. 2016 sees and improving pricing environment throughout the year --probably not so bad. Prices have only been falling for 8 months or so........ Another year of this - or more -- will do real damage to Houston, IMO.

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Just saw an economist do a presentation about this. His view was that, just as it seems, the Texas economy will slow down from the pace it grew over the past few years. That said, there isn't any reason to panic. Rather than a repeat of the 1980s he thinks it will just be a slower pace of growth.

I hope that he is correct.

I fear that he is not.

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Stalled Projects are Back on The Boards

 

You might think construction projects are stalling left and right in Houston. Not so, according to panelists at yesterday morning’s Bisnow New Construction & Development event.

Arch-Con CEO Michael Scheurich (right, pictured with McGriff Seibels & Williams’ Marc Boots) says a number of developments were put on pause at the end of last year/early this year. But now people are breathing again, and most are back on. Moreover, many of them are even expedited. To his amazement, even office developments are all systems go again. He says the only projects he’s had pause and not return are multifamily.

 

Ziegler Cooper senior principal Kurt Hull (right, pictured with moderator Thompson & Knight partner Bruce Merwin) has a slightly different experience but the same general sense. He hasn’t seen any multifamily developments stall because of oil. He has had office projects go on hold in Uptown and The Woodlands, but then he also recently received some new pure office assignments. (Those single-use buildings will become increasingly rare this cycle, he says—already, almost every project Ziegler Cooper’s working on has some mix of uses.) Kurt says developers are back to being aggressive because they’re looking at multiple years of design and construction lead time, and because no one’s making new land—if you’re going to take advantage of the best sites, you need to do it now.

Read more at: https://www.bisnow.com/houston/news/mixed-use/stalled-projects-are-back-on-the-boards-49062?utm_source=CopyShare&utm_medium=Browser

 

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What projects are they talking about? I can only think of a handful.

 

 

 

i'm of the belief there's still a lot more pain to come 2H15.

CB forecasts "pain" 2015 and well into 2016. This may be hard to fathom, but we probably won't see a recovery in the oil market until 2017. In 2016, Houston economy will probably be stagnant with a possible negative quarter or two. By the way, for those that don't know, at least two consecutive negative quarters is called a recession. On the grand scale, the Chinese economy is falling apart. We'll have to see what this means for the American economy going into next year. It's unbelievable that we face a lot of uncertainty right now and Yellen still hasn't raised interest rates. 

Edited by Triton
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If WTI stays where it is or falls into the low 30's (as one "analyst" just predicted yesterday) and stays there for a year, Houston is in for a lot of trouble. If rebound quickly -- I.e. 2016 sees and improving pricing environment throughout the year --probably not so bad. Prices have only been falling for 8 months or so........ Another year of this - or more -- will do real damage to Houston, IMO.

 

42.23 right now. Yea, it will definitely hit 30s in the next few weeks.

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Stalled Projects are Back on The Boards

 

Kurt says developers are back to being aggressive because they’re looking at multiple years of design and construction lead time, and because no one’s making new land—if you’re going to take advantage of the best sites, you need to do it now.

 

OK, we're officially toast.  That was the chant that was going around as the first leaves were starting to shake out of the economic trees in 1982.

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OK, we're officially toast. That was the chant that was going around as the first leaves were starting to shake out of the economic trees in 1982.

Question: will the price of homes go down? Or due to lack of inventory will they stay the same? I'm on the fence about buying soon, best to wait until 2017?
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Question: will the price of homes go down? Or due to lack of inventory will they stay the same? I'm on the fence about buying soon, best to wait until 2017?

 

The price of housing very well may go down.  Anecdotally, houses seem to be staying on the market longer in my corner of the Heights, and we're certainly not seeing the rapidly rising prices that we were a couple years ago.

 

Whether to buy now?  That depends on how long you plan to stay there.  If it's less than 3 - 5 years, the economics of buying are pretty marginal anyway. 

 

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Question: will the price of homes go down? Or due to lack of inventory will they stay the same? I'm on the fence about buying soon, best to wait until 2017?

If oils goes to $33 and stays there for A couple of years, it's best to wait.

If oil has an improving price environment during 2015 and 2016,it's best to buy.

Everything in between is judgement.

Nobody knows.

Edited by UtterlyUrban
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If oils goes to $33 and stays there for A couple of years, it's best to wait.

If oil has an improving price environment during 2015 and 2016,it's best to buy.

Everything in between is judgement.

Nobody knows.

Summer is peak oil season. PEAK. If we are in the peak....

 

http://www.bloomberg.com/news/articles/2015-08-14/oil-s-worst-ever-summer-signals-price-rout-is-nowhere-near-done

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Things are about to get messy.

I think that's pretty obvious after seeing Schlumberger buy Cameron. My coworkers sister works at Cameron and there are many thousands of layoffs predicted with this... and for those that don't know, they are headquartered off 610. We'll absolutely see a lot of mergers soon to cut down on cost, and with mergers come layoffs. With layoffs........well......................

Edited by Triton
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how messy? for how long? Will I have to start stripping again?

Who knows but it's coming. Obviously Schlumberger / Cameron will have a big impact, COP alledgedly sent out pink slips today (heard up to 2k), and everyone like halycon, linn and the others who will get crushed when hedges start rolling.

But who knows - if the Saudis and Iranians have an all out proxy war in Yemen oil could go back up to $80 next month. But truth be told the oil patch stateside could probably benefit from some attrition.

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other than Medical, any other industries in town doing good?

I've noticed the job postings have simmered to almost nothing in Maritime, and if one comes up, there are 100's of applicants.

It has gotten pretty bad. Enough to where I am planning a move just in case it gets worse. I wish Houston would diversify more. Not fighting harder and smarter for companies like United or luring others in like Toyota is coming back to bite us in the ass.

My friends in Dallas and LA are posting photos of the falling gas prices on Facebook. One friend in Dallas posted a sign that had gas under two dollars. Most of the nation is very happy to see these falling prices and it is having positive effects in other parts of those area's economy. In Houston, it is almost bittersweet seeing falling prices.

Edited by Trae
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Could be good news.

Or a dead cat bounce.

We'll know with more certainly soon enough.

There's a lot of uncertainty in this world right now, economically speaking. Oil will probably be volatile for a while till the global markets get some firm ground to stand on. We don't know where China is going... where Iran is going... even where our own Fed is going. Either way, I just want it to stay at $60. It's a good balance... not too much for the consumer and the oil industry can breathe a little easier.

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There's a lot of uncertainty in this world right now, economically speaking. Oil will probably be volatile for a while till the global markets get some firm ground to stand on. We don't know where China is going... where Iran is going... even where our own Fed is going. Either way, I just want it to stay at $60. It's a good balance... not too much for the consumer and the oil industry can breathe a little easier.

Yep. And add to that a slowdown in the Eurozone, Venzuela in a bit of internal turmoil, countries like Nigeria very cash strapped, and Russia lurching.

We are in a hurricane. The outer bands have already hit us. Unfortunately, we don't know two crucial things: 1) how long will it last and 2) is it a Cat 5 or just a Cat 3?

Edited by UtterlyUrban
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Does anyone else think the Fed raising interest rates (or the widely held belief that they are finally going to raise rates) would provide the impetus for a boost in building short-term?

 

For anyone that would be financing, it seems to me an outlook of higher interest rates going forward would be a great incentive to doing the deal now rather than a year or two later when your cost to borrow that money would be higher. We're at the bottom as far as interest rates go, surely many folks hope to capitalize on that. 

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Does anyone else think the Fed raising interest rates (or the widely held belief that they are finally going to raise rates) would provide the impetus for a boost in building short-term?

 

For anyone that would be financing, it seems to me an outlook of higher interest rates going forward would be a great incentive to doing the deal now rather than a year or two later when your cost to borrow that money would be higher. We're at the bottom as far as interest rates go, surely many folks hope to capitalize on that. 

You can argue that's what the last boom was about. They've already taken advantage of the lower interest rates... raising interest rates won't help but hurt.

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