When you live in an oil-producing state, chances are your memory of oil prices and dates are very keen. A few years ago, was memorable in the Energy Capital of the World and if you are like me, a Real Estate Agent – ex Energy Commodity Broker, you will correlate the energy industry to Houston’s real estate market.
In the early part of summer 2014, we saw oil prices start a decline that lasted over 2 years and affected all aspects of our economics, including job layoffs and housing price declines. Over the past year, crude oil has tested the $50 mark a number of times, but until now – with a new President Elect Trump- there weren’t many positive factors to reinvigorate Houston’s energy sector or housing market. I am feeling confident things will change starting in 2017 and during Trumps’ tenure as President – hopefully more than 4 years. Here are my indications that point to higher crude prices and a housing bump in the near 18-24 months.
- President Elect Trump: That’s right. You might want to thank our country who voted for him – even if you did not. The direction of our country will drastically change, as will the way our government is run. The Trump administration will unravel the past – years of policies that were not particularly in favor of our country and years of global focus – unwarranted treatment to nations which appeared to delegitimize the priority of our own.
- The economy will turn faster than we’ve ever seen. With the house of Representatives and the Senate both controlled by the Republican party and with a Republican President, it will most likely be easier for laws to pass, even though Democrats will throw tempers – and tantrums. Trump’s plan to cut taxes, lift regulations, renegotiate trade deals, repeal and replace Obama care and trim the fat of government spending will have an immediate impact on the future of our economy. Our new Presidents’ “get the job done” work ethic means there’s no time to waste. He has essentially started working weeks prior to his inauguration.
- A Mind Full Administration: This administration is taking a different approach, carefully and mind fully interviewing and selecting successful business people and others – high-ranking generals – all fully capable of making a difference in the positions which they will serve. Trump has identified individuals who will represent the most important posts in our government. A new America is being formed and things will get done. You will see a country run on principles of business rather than politics and political correctness.
- Jobs on the way: The most important aspect of the Trump administration is stimulating the economy to increase jobs in our country. With the huge number of companies who have left the US, Trump will offer benefits to retrieve them and penalties for those who have left, thinking business as usual. As new tax laws take effect, which will be lowered for both individuals and corporations, all will have the opportunity to benefit. Lower taxes free up company dollars, which encourages reinvestment in future business dealings – growing business, adding jobs. In addition, lower taxes will allow new businesses to emerge, another plus to the Houston economy.
- Stability in Oil Prices + US Shale: The loss of 200,000 jobs in the energy sector was a shock to our nation when oil prices dropped in 2014. In the meantime, we’ve gotten somewhat comfortable with lower gas prices at the pump, but still seeking stabilization for the price of crude oil. Trump’s new selection of Rick Perry for Secretary of Energy, Rex Tillerson, as Secretary of State and Scott Pruitt to head the EPA – Environmental Protection Agency will play an important hand in stabilizing US oil – mainly as it pertains to the ability to produce. Trump is in favor of an “energy revolution” but we can only wait until he is sworn in to see if the Trump admin will strategically outmaneuver OPEC, known for historically dominating global oil prices. Trump wants to dismantle regulations on the energy industry, increase production, decrease imports, make the US more independent and not so tied to OPECS influence over global influence of prices.
Savvy picks, strategic thinking, “negotiations are key” and “oil is money” are words I would use to describe the Trump mindset. No more bureaucratic thinking, (or acting) because decision-making positions will get the jobs done. Our new government is business people, CEOs, deal makers, successful people – in general, which equates to our country running on principles of business – not politics. Obviously, a huge change in the direction we’re going will give us a bump in the markets we’ve needed.