As I am on my way to the Formula One Race in Austin, which is where the U.S. leg of
the International F-1 series takes place, I marvel over the development that has been
created by the U.S. Shale boom in the last several years. I have lived in Houston since
1990, with relocations back and forth from the East Coast and I have seen the consistent
development of a city as it survived different economic turbulences. When you hear the
words oil boomtown, there is something nostalgic that comes to mind, like visions of
Williston, N.D., but with Houston, it reinforces an already established global presence,
echoing the vibrations of oil and energy markets.
Unlike Williston, N.D., whose history has been rewritten by the U.S. Shale boom,
Houston expanded this year alone by 35,000 new residences, while over 100,000 new
homes have been added and 119,000 plus job created. For every job lost since 2010, three
jobs have been replaced. The designing of my entity, Real Estate for the Energy
Professional was not created by accident either. Having worked for over a decade in
energy commodity markets and then Houston’s real estate, I realized the need for a
dedicated service to a city that obtained title to “Energy Capital of the World.”
Houston’s housing market skyrocketed over the past several years, after the initial breaks
on development were placed, following a recession that seemingly had no end in sight.
The city had an overwhelming economic expansion in all energy sectors, as well as
additional industries that drives Houston’s economy, however, housing supply was short.
Low inventory levels resulted in an increase in home prices due to people having to bid
over and above listing prices, which resulted in higher prices across the city. This helped
many neighborhoods in Houston that would not have likely seen price hikes, but did.
The idea of buying brand new construction feet away from railroads tracks would not
have been a first inkling for an out-of-towner, but there were requests for that too.
With people moving here from all parts of the world, different parts of Houston have
been developed to serve different lifestyles. Most of my clients have come from
everywhere but Texas, and many are from abroad, all vying for a home to which they feel
familiar. Over a half dozen new luxury high-rises were added to the Galleria and Inner
Loop locations. For $3,000.00, you can lease a 950 sq. ft. unit overlooking Post Oak
Blvd. or for $2,000/month you can get a 624 sq. ft. place at City Centre and a 3 bedroom
for $7,500/month. Last year at this time I showed the Penthouses at Hotel Sorella to an
energy executive and it cost $5,000/month for a 2 bedroom, 2 baths, with all the same
amenities as the hotel. This year, the prices have increased to $10,000/month and now
they have a new 1 bedroom for lease for $7,500/month.
The beauty of Houston is that as oil prices increase, so does its real estate and
development. The only real difference in watching oil price change versus real estate is
that oil changes instantly and real estate is the after-effect of it. Not everyone correlates
the two markets, but having worked in both energy commodities and Houston real estate,
I have witnessed the relationship of how it directly affects the Houston market. Now, as oil prices are dropping, and real estate supply has caught up with demand, prices will likely flatten to soften and a shift from a sellers market to a buyers will most likely be the
As for the Formula-One race in Austin, the world-class track draws attraction from
drivers and fans from all over the world. The Austin Circuit of Americas event is as
symbolic to the venue as oil is to the state; Texas sized and growing.
Michele Marano is a real estate professional with brokerage firm Champions Real Estate Group.