By Austin Rucker, Midland Editor
Prior to Midland, my experience with trailer homes (or their upscale name, motor homes) came from working door to door sales where a guy once invited me into his motor home and played Online Poker while pointing out the best billet you could get would be a Warrant Officer in the Army since you get to fly, and “it’s cool, it’s chill, everybody calls you ‘Chief’ “. Then he spat some tobacco into his coke bottle. I don’t even recall if he signed up for cable and phone service, but he had a relaxed, low key trailer home existence and that stuck with me. Hs blood pressure at age 60 was probably lower than mine.
Contrast this to Midland, where you see BMW sports cars in the RV motorhome park. Here you find this 2015 Ford F450 Platinum, a $100K Montana Big Sky and a Jeep Wrangler of equal or lesser value cozy in an RV park with quick access to the open spaces and Horned Toads as only Midland can offer. It really puts the M-streets (the Conservation District!) in Dallas to shame. Many folks in Highland Park wish they had it this good.
I had to talk to the owner of this luxury get up, had to. Using my skills acquired in the door to door sales industry, I walked up, said hi, we shook hands. I had to know, being a transplant from Dallas, why he had a set up a mobile house instead of just buying some Midland dirt?
While he chose not to be identified, he provided valuable insight for my anthropological exploration.
Things look grim for the real estate market in Midland over the next 12 months, as home values are forecast to decrease by 5 percent over the next 12 months. In the second and third year, prices are forecast to decrease 2 percent and remain unchanged, respectively, according to new reports from Local Market Monitor.
In Odessa, home values are predicted to increase by 2 percent over the next 12 months. In the second and third year, prices are forecast to increase 1 percent and 2 percent. Nationally, prices are forecast to increase by 4.9 percent.
Most worrying, the reports have called investment in Midland real estate “dangerous,” giving it a -1.7 score, on a 1 to 10 scale. In Odessa, the rating is a 1.3, putting that city in the “speculative” category.
This is a marked changed from the market of three years ago, when the investment risk for both cities was in the “low risk” category.
According to RentCafe, all of the apartments completed in Midland-Odessa for 2015 were high-end units.
New affordable housing is hard to find in Midland-Odessa, as a recent study from RentCafe shows that 100 percent of the new apartments completed in 2015 were high-end units. Nationally, 75 percent of all apartments that came on the market last year were priced at luxury levels.
Considering how much the new construction in the single-family market is lagging, the limited number of new affordable rentals could be eroding would-be homeowners’ future buying power.
New numbers are in for the January real estate market in Midland, and the experts say the drop in oil prices are continuing to affect housing prices.
In Midland, the Local Market Monitor Report analysts predict a 1 percent decrease in home values over the next 12 months. Nationally, prices are forecast to increase by 4.4 percent.
In the last year, the price of West Texas Intermediate futures contracts has fallen almost 20 percent. Friday at the close of markets, it was $29.44 a barrel.
Many analysts say the worst isn’t over yet, and recently the CEO of ConocoPhillips Ryan Lance told investors the oil downturn could stretch into 2017.
“We believe this downturn could last a while longer,” Lance told the Houston Chronicle. “Just a few months ago, we thought the market would rebalance by the second half of 2016.”
But the Local Market Monitor reports predict an upturn in Midland before that: they’re forecasting a 3 percent increase in home values in the second year, and a 5 percent increase in the third.
They’re also saying home values for Odessa will increase by 4 percent over the next 12 months, and in the second and third years, prices will increase 7 percent and 8 percent, respectively.
We all know that a little DIY, a few renovations, and some artful staging are great ways to get your home noticed (and sold) fast, but what if you just don’t have the budget to do all that? Are you resigned to waiting around, twiddling your thumbs until the right desperate buyer comes in? Will you be forced to lower your asking price just to gain a little interest?
Fortunately, a tight budget doesn’t always mean a slow sales process, especially in the Midland-Odessa real estate market. You can still maximize your home’s value, up its appeal and get it noticed — all without a huge investment. You just have to be a little more creative about it.
Are you looking to sell your home, but don’t have a whole ton to pour into prepping it? Here are a few ways you can increase its value without a lot of cash:
It’s not all about San Francisco and New York City, says NerdWallet, the website that analyzed American metropolitan areas and came up with a list of the top 10 cities for young entrepreneurs. The list includes some of the spots you’d expect: Denver, Colo.; Seattle, Wash.; and Austin, Texas.
But we were happily surprised to see Midland on the list, ranking No. 8 above Boston (No. 9) and Fargo, N.D. (No. 10).
So what earned Midland a spot on the list?
The December housing numbers from Local Market Monitor Report are not painting a rosy picture of the real estate market in Midland, and home values are forecast to decrease over the next 12 months.
Since their peak in the first quarter of 2015, home prices in Midland have fallen by 3 percent. The average home price in this market is currently $179,091.
Over the past two years, the real estate market in Midland has gone from relentlessly enthusiastic, to more reserved, as the slump in the crude oil market drags on. On Monday, oil prices fell to their lowest level in 12 years, and futures of West Texas intermediate crude for February delivery came in at $31.41 a barrel, a 5.3 percent decrease.
“In June 2014, you had to shell out $110 to buy a barrel of Brent crude. By early 2015, that had plunged to $60,” writes Brad Plumer in his piece today for Vox Energy & Environment. “Today, it costs just $30 to buy a barrel of oil — a level not seen since 2004. It’s a staggering decline.”
Photo: Dan Moyle
Low oil prices might be great at the pump, but they’re causing problems for Midland and Odessa housing markets according to Dr. Jim Gaines, economist at the Real Estate Center at Texas A&M University.
“When your economic base is undergoing that kind of pressure, your local market is going to feel it,” Gaines told the Fort Worth Star-Telegram.
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