Fears of Broad-Based Houston Decline ‘Overblown’
According to the HOUSTON (CBRE, Real Estate Center) – A report released yesterday by CBRE said that while lower oil prices will affect Houston’s commercial real estate market, fears of broad-based decline are “overblown.”
The report said that the degree of impact will vary based on the magnitude of change in employment, and by property type, with expected impact being negligible to the retail sector and modestly negative to the office sector.
Real Estate Center Research Economist Dr. Harold Hunt said many people fear that the current downturn in oil prices is a replay of the ’80s oil bust, but it’s not — for a number of reasons.
“Houston’s economy is much more diversified today than it was in the ’80s,” Hunt said. “And the perverted federal income tax laws of the ’80s that drove massive overbuilding are not in place today. We had no interstate banking system to help troubled Texas banks back then. Finally, the U.S. economy is currently in an upswing, which was not the case during much of the ’80s.”