Houston’s oil and gas industry is creating new construction and jobs for the area, improving the economy.
It’s no secret Houston has one of the most booming housing markets in the nation, and a lot of that is due to the oil and gas industry. Large companies such as Phillips 66 and Exxon Mobil Corp are spending billions of dollars on new buildings and bringing in more employees, expanding the workforce.
Oil and Gas Industry Creates New Construction
According to The Chicago Tribune, Texas’s economy grew 4.8 percent last year, the fastest pace among the big U.S. states. New workers, many of which work in the oil and gas industry, are moving to Houston, which needs new offices for the 100,000 jobs it added last year. Houston is on track to add another 80,000 this year.
The Chicago Tribune reports that demand for new construction in Houston is so high that banks will loan money for a new building without demanding developers first have a tenant. There are 56 office buildings totaling at least 11 million square feet under construction in and around Houston, according to real estate services firm CBRE Group Inc. That is the equivalent of 190 football fields.
Despite the fact that the oil and gas industry is boosting Houston’s economy right now, economists are warning people to not get too comfortable with the way things are.
“The Texas oil and gas industry is not known for long periods of stability,” said Karr Ingham, economist for the Texas Alliance of Energy Producers in an interview with The Chicago Tribune. “Nobody wants what happened (in past busts) to happen again.”
From 1980 to 1986, developers constructed 88.9 million square feet in Houston, according to real estate research firm, Reis Inc. However, after the market crashed and vacancy rates soared due to a decrease in oil prices, it took almost two decades for Houston to recover.
Is Houston’s Economy Still Strong?
As of now, Realtors are not seeing any reason to worry about Houston’s economy. Broker associate Pam Harris of Coldwell Banker United, who specializes in the Northwest Houston area, has been seeing a lot of activity in the market, specifically lots of new construction in The Woodlands area.
“The demand for new construction has been very heavy, and it’s really caught up with us,” she said. “Houston is doing really well right now, and I hope it continues to stay this way.”
Realtors just outside the Houston area are staying busy as well. Tom Huckabee of Keller Williams in Lake Conroe said his company had a very successful month, with the most closings they’ve ever seen in their office.
“Texas has a strong economy,” he said. “There is building everywhere. In every neighborhood around me, if there’s a vacant lot, they will put something on it. People are flocking to Texas because we have jobs. Houston is booming.”
With the positive effect the oil and gas industry is having on Houston and the job market, it is safe to say that Houston’s economy is still going strong.