mollusk Posted February 19, 2016 Share Posted February 19, 2016 Let the debt stacking begin. I keep saying this and I'll say it again, we're going to see a lot of bankruptcies here in Houston. http://www.bizjournals.com/houston/morning_call/2016/02/houston-natural-gas-company-struggles-with-debt.html It would be far happier if it wasn't so, but it sounds like you are correct, good Sir. Quote Link to comment Share on other sites More sharing options...
brian0123 Posted February 19, 2016 Share Posted February 19, 2016 What neighborhoods/areas do you all think will be most impacted which are zoned to good schools? Curious if there will be buying opportunity to rent out later in some of these impacted areas. Quote Link to comment Share on other sites More sharing options...
swtsig Posted February 25, 2016 Share Posted February 25, 2016 the boom is dead. long live the boom. 2 Quote Link to comment Share on other sites More sharing options...
samagon Posted February 25, 2016 Share Posted February 25, 2016 There's this: http://www.cnbc.com/2016/02/25/mansion-sales-and-discount-dining-oil-rout-hits-houstons-rich.html Quote Link to comment Share on other sites More sharing options...
BigFootsSocks Posted February 25, 2016 Share Posted February 25, 2016 Idk, there was a pretty big gas leak at Capitol/Hamilton that screwed up the Green/Purple lines from running downtown. A misplaced cigarette might bring us another one... Quote Link to comment Share on other sites More sharing options...
jgriff Posted February 26, 2016 Share Posted February 26, 2016 I'm seeing downstream and chemical projects canceled now. Not because of oil prices but because of the terrible global economy. Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted February 26, 2016 Share Posted February 26, 2016 Fortune Magazine wrote an articles hat I read yesterday. Not favorable. While it ended on a bit of a high note (highlighting a bit of job growth last year), the thrust of the article was that pain is here and is building. It highlights a few anecdotal cases of the very wealthy cutting back spending and also the 9% drop in home prices for the " River Oaks" set.I also read yesterday that one of the oilfield service companies is laying off 5,000 people (8% of workforce).From the beginning of this thread I have been a hawk. Many pushed back on me and others who were similarly hawkish. The pain takes time to be felt. It doesn't happen right away. 18 months into this oil price collapse, the real pain is just starting. If oil does not start to climb, the real pain Will get worse, much worse. I feel that there will be a raft of bankruptcies coming and many more layoffs coming at firms who are still solvent but trying to stay that way.Buckle up. Quote Link to comment Share on other sites More sharing options...
Triton Posted February 26, 2016 Share Posted February 26, 2016 I'm seeing downstream and chemical projects canceled now. Not because of oil prices but because of the terrible global economy. Same. Was earlier forecasting that to be the bright spot of Houston, but that's going down as well. If there's anything left for Houston now, it's still likely to be the healthcare market and to a much lesser extent, aerospace. Quote Link to comment Share on other sites More sharing options...
BigFootsSocks Posted February 26, 2016 Share Posted February 26, 2016 Boeing has an office for their crew capsule in Houston, correct? Quote Link to comment Share on other sites More sharing options...
mollusk Posted February 27, 2016 Share Posted February 27, 2016 (edited) I have a friend who works for Boeing down at JSC. They are not feeling the pain of the oil market, however, Congress can make them pretty nervous. Edited February 27, 2016 by mollusk 1 Quote Link to comment Share on other sites More sharing options...
Triton Posted March 1, 2016 Share Posted March 1, 2016 Looks like more and more firms are starting to see the data I saw back in January: http://www.houstonarchitecture.com/haif/topic/31147-can-the-boom-continue/?p=522905 A multifamily research firm reports Houston’s apartment market is showing “significant signs of weakening” amid the oil slump and supply of new projects. MPF Research released a new report that looked at Houston apartment data from RealPage, a property management software. The Carrollton, Texas-based company found that while market surveys of apartment rents continue to show rent growth, leasing data points toward a market slowdown. http://www.bizjournals.com/houston/morning_call/2016/03/houstons-apartment-slowdown-has-certainly-arrived.html As I stated in January, I still forecast a recession to hit Houston sometime around Q3 to Q4 of this year. Quote Link to comment Share on other sites More sharing options...
swtsig Posted March 1, 2016 Share Posted March 1, 2016 nothing but HATERS bro. 1 Quote Link to comment Share on other sites More sharing options...
mollusk Posted March 1, 2016 Share Posted March 1, 2016 Any guesses about which current area with lots of somewhat older apartments will end up in a race to the bottom of the rental rates, with the resulting poor maintenance? Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 2, 2016 Share Posted March 2, 2016 Any guesses about which current area with lots of somewhat older apartments will end up in a race to the bottom of the rental rates, with the resulting poor maintenance?Man, the shifts in some Areas of town the last time this happened (back in the early to late 80's) were staggering. Areas when from being "a cool area with lots of young professionals" to being anything but in 5 years or so.I don't know the city well enough now to venture a guess what those areas might be this time around. Quote Link to comment Share on other sites More sharing options...
IronTiger Posted March 2, 2016 Share Posted March 2, 2016 Any guesses about which current area with lots of somewhat older apartments will end up in a race to the bottom of the rental rates, with the resulting poor maintenance?I don't think a "race to the bottom" will happen, at least with what isn't already there. First time around, Houston sprawled out to an amazing degree, and a lot of cheaply built apartments with many units were done because everyone thought it would keep growing, creating whole areas of apartments that just became slums (Hobby Airport, Sharpstown, Gulfton, Greenspoint). The last big boom mostly focused on inner city buildings which converted older houses and apartment complexes to bigger apartment buildings. Quote Link to comment Share on other sites More sharing options...
DrLan34 Posted March 3, 2016 Share Posted March 3, 2016 (edited) I don't think a "race to the bottom" will happen, at least with what isn't already there. First time around, Houston sprawled out to an amazing degree, and a lot of cheaply built apartments with many units were done because everyone thought it would keep growing, creating whole areas of apartments that just became slums (Hobby Airport, Sharpstown, Gulfton, Greenspoint). The last big boom mostly focused on inner city buildings which converted older houses and apartment complexes to bigger apartment buildings. "They became vacant overnight," Finger said of his projects in Bellaire, Webster and toward the Ship Channel. "It was a very difficult time generating enough revenue to pay for the debt service. I said 'Never again would I consider building on any tract of land that I didn't think was a Main and Main location.'" Edited March 4, 2016 by DrLan34 Quote Link to comment Share on other sites More sharing options...
cspwal Posted March 3, 2016 Share Posted March 3, 2016 Yeah, no one can say for sure but I'm betting that the inner loop will have decent occupancy while the suburbs may suffer. Marvy Finger once said in response to a question about the latest downturn that he will never build another complex that is not at "Main and Main". "They became vacant overnight," Finger said of his projects in Bellaire, Webster and toward the Ship Channel. "It was a very difficult time generating enough revenue to pay for the debt service. I said 'Never again would I consider building on any tract of land that I didn't think was a Main and Main location.'" He also said that while the projected income from his projects will fall, location will help keep occupancy high (but that may be at the expense of the outer loop apartments). Breaking: Marvy Finger confirms apartment project in TMC 8 Quote Link to comment Share on other sites More sharing options...
DrLan34 Posted March 3, 2016 Share Posted March 3, 2016 (edited) Breaking: Marvy Finger confirms apartment project in TMC Main and Main.JPG Edited March 4, 2016 by DrLan34 Quote Link to comment Share on other sites More sharing options...
plumber2 Posted March 6, 2016 Share Posted March 6, 2016 There is another Main St and Main St intersection just up the road from that one, (Main St and West Main St.), although South Main Baptist has taken over that part of West Main street as their own recently. Christian Annexation I guess. 1 Quote Link to comment Share on other sites More sharing options...
H-TownChris2 Posted March 7, 2016 Share Posted March 7, 2016 But wait, hasn't oil prices jumped in the past couple of weeks?http://www.oil-price.net/ Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 7, 2016 Share Posted March 7, 2016 But wait, hasn't oil prices jumped in the past couple of weeks?http://www.oil-price.net/Some think it's a Dead Cat bounce.I think that we may have formed a bottom. The next two months will tell. Quote Link to comment Share on other sites More sharing options...
august948 Posted March 8, 2016 Share Posted March 8, 2016 Any guesses about which current area with lots of somewhat older apartments will end up in a race to the bottom of the rental rates, with the resulting poor maintenance? I'd guess areas on the fringes of town. Weren't Sharpstown, Greenspoint, and Alief on the fringes in the early 80's when things went south? Quote Link to comment Share on other sites More sharing options...
cspwal Posted March 8, 2016 Share Posted March 8, 2016 I'd bet a lot of the Energy corridor area apartment buildings will go south like that 1 Quote Link to comment Share on other sites More sharing options...
IronTiger Posted March 8, 2016 Share Posted March 8, 2016 (edited) In general, I'd say that the denser the worse off, so the Energy Corridor would definitely be hurt. However, downturns also usually affect the poor the most, so I would imagine that the existing Greenspoint, Gulfton, and Sharpstown will drop their prices again and still be the bottom. Also, for a true "race to the bottom" to occur, wouldn't a mass exodus of people (like Michiganders leaving town) be required? Edited March 8, 2016 by IronTiger Quote Link to comment Share on other sites More sharing options...
Triton Posted March 17, 2016 Share Posted March 17, 2016 Moody downgrades Houston credit rating... seeing a negative outlook. Quote “The negative outlook reflects the recent weakness in economic and sales tax performance, fueled by energy companies’ reduced investments in personnel and capital, as oil prices have remained low,” http://www.bloomberg.com/news/articles/2016-03-16/houston-s-3-billion-of-debt-cut-by-moody-s-after-oil-price-drop https://m.moodys.com/research-preview/Moodys-downgrades-Houstons-TX-GOLT-to-Aa3-maintains-negative-outlook--PR_903168652? Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 18, 2016 Share Posted March 18, 2016 I have been bearish for 18 months. Anything but a Houston bull. but, I just feel that we have put a bottom in. The key concept is now the shape of oil's recovery. That shape will impact, for better or worse, houston's prospects. i hope that a bottom has formed! Quote Link to comment Share on other sites More sharing options...
Triton Posted March 18, 2016 Share Posted March 18, 2016 15 hours ago, UtterlyUrban said: I have been bearish for 18 months. Anything but a Houston bull. but, I just feel that we have put a bottom in. The key concept is now the shape of oil's recovery. That shape will impact, for better or worse, houston's prospects. i hope that a bottom has formed! I think we all hope the bottom for oil has been reached. However, you have to realize, it's coming in a wave. It's not a "oil down $10 today, homes sales down 10% tomorrow" type of thing... it will take time for us to reach the bottom of the real estate market fall. 1 Quote Link to comment Share on other sites More sharing options...
samagon Posted March 18, 2016 Share Posted March 18, 2016 Happy birthday Triton! I think the bottom has been reached, how long before it goes back up, now that's the question. Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 18, 2016 Share Posted March 18, 2016 3 hours ago, Triton said: I think we all hope the bottom for oil has been reached. However, you have to realize, it's coming in a wave. It's not a "oil down $10 today, homes sales down 10% tomorrow" type of thing... it will take time for us to reach the bottom of the real estate market fall. I fully agree and have said this very thing a number of times in this thread. It takes time for effects to ripple through the economy -- significant lags. Even if we have put in a bottom, it will take time for that to even be seen -- more lags. In the meantime, Houston will continue to feel negative impacts, IMO. Quote Link to comment Share on other sites More sharing options...
IronTiger Posted March 18, 2016 Share Posted March 18, 2016 I think oil is back up to $40/barrel now, but I think that there doesn't need to be a recession. Basically, I think it's going to be a "normal" economy. Layoffs will continue in O&G but will slow down BUT don't expect them to be hiring a lot of people. Prices will go down for housing in general BUT don't expect a "race to the bottom" for prices. Development in the suburbs will continue BUT don't expect a lot of big projects in the Inner Loop. Quote Link to comment Share on other sites More sharing options...
Triton Posted March 28, 2016 Share Posted March 28, 2016 Actually seeing some good data today. I said back in January that I would release some stats about the economy and about the recession that was forecast for later this year. Still seeing weakening across the Houston market but we may barely miss the actual definition of a recession by just a hair. I'll post the stats later today once I'm off work. 4 Quote Link to comment Share on other sites More sharing options...
Triton Posted March 29, 2016 Share Posted March 29, 2016 (edited) Let's start off with the five big sectors.... office, industrial, retail, multifamily, and hotel. Starting with the worst, office is by far the worst hit and will remain relatively weak for quite some time. Expect almost all proposed office projects to be cancelled or indefinitely postponed, however you want to look at it. Vacancy rates will likely reach 15.2%. Industrial is slowing rapidly across the state, however, the Houston submarket is actually seeing the strongest activity even in this downturn, as petrochemical and third party logistics dominate tenant activity. Next multi-family.... If there wasn't before, there is clear evidence of oversupply in the Class A property type across the Houston market. After two years of record construction, we will see a rapid tapering of Class A construction. On the plus side, however, Class B is rising quickly and will be the next part of the multi-family market to keep an eye on. With the Houston population continuing to grow, Class B properties are strengthening with an occupancy rate rising to 93.6%. Retail... the hot spot. With limited supply, constrained construction cycle, and strong population growth, we are seeing a continued driving force behind retail and expect it to perform well for quite some time. Houston absorbed 2.5 million sq ft in 2015, the most in ten years. Last but not least... hotel... the hottest spot. Hotel occupancy is at 70.5% and room rates are at record highs of $108.10. Although hotel is doing well, we will likely see this start to dwindle in 2016. The energy sector is no longer the top contributor to Houston... It's the Port of Houston at $178.5 billion, Energy Sector at $103 billion, Airport System at $27.5 billion, Texas Medical Center at $14 billion and Aerospace at $1.8 billion... those numbers are the economic impact we see on the Houston economy. The quite troubling area we are seeing is building permits being issued... there is a significate slide in single family with a modest drop in multi-family. Edit: I'll release more later. Edited March 29, 2016 by Triton 5 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted March 29, 2016 Share Posted March 29, 2016 Triton: i am curious on one stat above. The numbers from the Port of Houston and the Energy sector:. Have those been normalized? By this I mean, a LOT of goods that flow through the Port are actually energy (oil, gas, chemical, drill pipe, etc). Are you counting the "value" of these goods twice? (Once for the port and once for the "energy sector"?) just curious. Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 29, 2016 Share Posted March 29, 2016 16 hours ago, Triton said: Let's start off with the five big sectors.... office, industrial, retail, multifamily, and hotel. Starting with the worst, office is by far the worst hit and will remain relatively weak for quite some time. Expect almost all proposed office projects to be cancelled or indefinitely postponed, however you want to look at it. Vacancy rates will likely reach 15.2%. All things considered, that is remarkably good news. Some metro areas think anything below 20% vacancy is a tight market (and you don't have to look far to find such a metro area). 1 Quote Link to comment Share on other sites More sharing options...
Triton Posted March 29, 2016 Share Posted March 29, 2016 6 hours ago, UtterlyUrban said: Triton: i am curious on one stat above. The numbers from the Port of Houston and the Energy sector:. Have those been normalized? By this I mean, a LOT of goods that flow through the Port are actually energy (oil, gas, chemical, drill pipe, etc). Are you counting the "value" of these goods twice? (Once for the port and once for the "energy sector"?) just curious. I don't work in the Houston research department but from what they've told me, these are all "direct" numbers... obviously the airport traffic will be affected by oil execs/personnel/investors travelling and the same goes for the port as well. However, those figures are actually not as recent as I thought but the rest of the data above it is. Still have more info to post such as the banking sector but I'll do that later. It's actually better than I originally thought, especially compared to the 80s. Quote Link to comment Share on other sites More sharing options...
The Pragmatist Posted April 4, 2016 Share Posted April 4, 2016 Here's an interesting article to read speaking on Houston's increased diversification from O&G reliance. http://www.seattletimes.com/business/once-wedded-to-oil-houston-economy-carries-on-despite-bust/ Quote Link to comment Share on other sites More sharing options...
swtsig Posted April 4, 2016 Share Posted April 4, 2016 Houston has been incredibly resilient this downturn, no doubt. which isn't to say that there hasn't been a lot of pain with more to come. but as a whole we are still seeing a relatively vibrant economy even if growth has been greatly tempered. restaurants and bars are still routinely busy, at least those in the urban core. and to have the final four and superbowl to help provide if even a modest boost is a big plus. 4 Quote Link to comment Share on other sites More sharing options...
Triton Posted April 5, 2016 Share Posted April 5, 2016 On 4/4/2016 at 5:17 PM, swtsig said: Houston has been incredibly resilient this downturn, no doubt. which isn't to say that there hasn't been a lot of pain with more to come. but as a whole we are still seeing a relatively vibrant economy even if growth has been greatly tempered. restaurants and bars are still routinely busy, at least those in the urban core. and to have the final four and superbowl to help provide if even a modest boost is a big plus. Completely agree. Going on the info I posted above (I know, I said I would talk about the finance sector...), looks like the news outlets are seeing the data I've been seeing... From me: Quote The quite troubling area we are seeing is building permits being issued... there is a significate slide in single family with a modest drop in multi-family. From Biz Journals: Quote The city issued building permits for new home projects valued at $112.2 million in January, down 35 percent from $191 million in January 2015. Although Houston’s new home construction market is cooling, the city is seeing an uptick in home additions and remodeling. The city issued $28.4 million worth of permits for remodeling work in January, a 46 percent increase from the $19.5 million worth of permits issued in January 2015. http://www.bizjournals.com/houston/news/2016/04/05/residential-construction-activity-slows-down-in.html?ana=RSS%26s=article_search 1 Quote Link to comment Share on other sites More sharing options...
IronTiger Posted April 6, 2016 Share Posted April 6, 2016 Wasn't the other downturn also tied with a massive savings and loans scandal that contributed to a lot of the banks going down? Quote Link to comment Share on other sites More sharing options...
Triton Posted April 6, 2016 Share Posted April 6, 2016 1 hour ago, IronTiger said: Wasn't the other downturn also tied with a massive savings and loans scandal that contributed to a lot of the banks going down? Correct, but although there is an ever-growing amount of debt due to oil that's being serviced by the banks and there are certainly companies that are going bankrupt during this downturn, the financial sector looks actually a lot better than I thought it would be, again based on the data. Probably won't be able to release numbers anytime soon so let me just say.... basically the banks are in a lot better position to handle this debt than in the 80s. A lot of them have a lot more money on hand, especially after the regulations/lessons of the 2008 financial crisis. Quote Link to comment Share on other sites More sharing options...
Urbannizer Posted April 20, 2016 Share Posted April 20, 2016 http://www.bizjournals.com/houston/news/2016/04/20/houston-cre-exec-lenders-are-running-for-the-hills.html There's another roadblock stopping Houston commercial deals from getting done in addition to the price of oil. Investors and developers are faced with near-impossible demands from lenders, multiple executives from Houston-based NAI Partners said at an April 20 event. "Debt financing is incredibly difficult to get," said Jon Silberman, managing partner at NAI Partners. "Lenders are running for the hills … they want no risk." A noticeable chunk of national and international lenders are turning away from Houston for two major reasons. Either they have too much exposure in Houston and can't afford additional risk, or they have little-to-none Houston exposure. And in a strong national economy, where most investors are doing pretty well right now, Houston may not be attractive for someone with an otherwise robust balance sheet. There are too many negative, national headlines scaring away out-of-Houston capital, they said. Even still, Pappas is working with a seed fund to build a roughly $200 million to $250 million investment portfolio for NAI, he said. He's looking at several properties in Dallas, a couple in Houston and some retail and office properties in San Antonio. Regarding the Houston acquisitions, the Galleria submarket is the biggest hotbed for investment activity, he said, because it's hit a dry spell but remains historically successful. It's not as risky as the Energy Corridor, which is far from a turnaround, Silberman said. "It's not going to be a 12- to 24-month fix (in west Houston). There's no way," Silberman said. "It'll be a three- to five-year problem in west Houston." 1 Quote Link to comment Share on other sites More sharing options...
swtsig Posted April 23, 2016 Share Posted April 23, 2016 debt is definitely the main hurdle now - underwriting projects in houston has become incredibly difficult and practically impossible for office and multifamily. even projects which seemingly would have had debt secured a while back aren't immune... morgan's whole foods development in midtown comes to mind. not really surprising, though. why expose yourself to unnecessary risk? 1 Quote Link to comment Share on other sites More sharing options...
Triton Posted May 18, 2016 Share Posted May 18, 2016 (edited) The economic report from Bill Gilmer that everyone is talking about this week.... it's actually not that bad and pretty much reflects the data that we've been seeing all along in my office. He's right.. the Houston oil market got a historic shock but Houston has been remarkably resilient due mostly to the overall US's strength. There's certainly more pain ahead as we all know but even his data agrees... as long as the US economy stays together, we see an uptick in the Houston economy starting in 2018. It could also be the year we see a strong rebound in development projects, (edit) though it is now more likely to start in 2019. As I've been saying for 2 years now, we'll still be seeing random projects pop up here and there, but nothing at the rate of 2014. We could see that growth again late 2018, especially 2019. Edited May 18, 2016 by Triton 3 Quote Link to comment Share on other sites More sharing options...
brijonmang Posted May 18, 2016 Share Posted May 18, 2016 (edited) 26 minutes ago, Triton said: HOUSTON WILL BE BUILDING A NEW SUPERTALL IN 2019 Quoted this for future reference. I'm excited!! Edited May 18, 2016 by brijonmang 6 Quote Link to comment Share on other sites More sharing options...
Triton Posted August 19, 2016 Share Posted August 19, 2016 Houston now has among the slowest job growth in the US: Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted August 20, 2016 Share Posted August 20, 2016 (edited) On August 19, 2016 at 1:10 PM, Triton said: Houston now has among the slowest job growth in the US: It would he news if that was not the case. Do you have a link so we could see the rest of the data? Edited August 20, 2016 by Houston19514 Quote Link to comment Share on other sites More sharing options...
Triton Posted August 20, 2016 Share Posted August 20, 2016 7 hours ago, Houston19514 said: It would he news if that was not the case. Do you have a link so we could see the rest of the data? http://www.bloomberg.com/news/articles/2016-08-19/these-are-the-cities-with-the-fastest-and-slowest-job-growth-in-america This is for major metros. Austin is in the top 10 at least. Quote Link to comment Share on other sites More sharing options...
Urbannizer Posted August 29, 2016 Share Posted August 29, 2016 Houston’s retail market leads the Nation in construction activity Quote Houston’s retail market continues to expands with 3.9M SF under construction. According to our data provider, CoStar Property, Houston ranks first in construction activity when compared to other U.S. markets. Northern New Jersey was second with 3.7M SF and Dallas/Ft. Worth third with 3.5 M SF. Approximately 82.6% of the 3.9M SF of retail space under construction at the close of Q2 2016 is pre-leased. Despite the 1.8M SF of new inventory delivered in Q2 2016, Houston’s average retail vacancy rate remained under 6.0%, decreasing to 5.8% over the quarter from 5.9% in Q1 2016. 4 Quote Link to comment Share on other sites More sharing options...
BeerNut Posted September 29, 2016 Share Posted September 29, 2016 Unemployment Rates for Large Metropolitan Areas, Not Seasonally Adjusted Better than Detroit 1 Quote Link to comment Share on other sites More sharing options...
UtterlyUrban Posted September 29, 2016 Share Posted September 29, 2016 But not as good as Camden! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.