The shrinking job market in Midland-Odessa has some people in panic mode, with rumors of multifamily developments poised for certain collapse should renters renege on their leases and abandon their apartments. Should we worry about Midland Real Estate?
Not so fast, says this story by WFAA. Sure, part of the oil and gas industry’s workforce is slipping, but oil-and-gas-related lawsuits could bring an entirely different tenant to town. Home builders are still building, but at a gradual pace, that’s for sure. The big question remains, though: Will there be a burst bubble in the near future?
“Well, Midland is certainly in store for some major changes and mild-to-heavy shocks to the local economy and housing markets,” said Economist Jim Gaines at the Real Estate Center at Texas A&M University. “From what I understand, the changes are happening, but not in the fashion of a total collapse. It will take some time for the full effects to be realized.”
“It felt like there for a while things would just fall into your lap,” added Leah Watkins, a Realtor with Legacy Real Estate.
But not anymore.
Watkins said she used to close on four houses a month. Like many, she now strives to get at least one. That caused her and her husband to cancel a trip to California last weekend so they can start saving more money.
“We used to eat out like crazy and bring friends and family,” Watkins said. “Now we’re at home making meals.”
House prices have fallen a little, but they no longer sell as quickly, she said.
Prices for older homes, without updates, reach as high as $266 a square foot. Even one-bedroom apartments in average complexes around Midland can rent for $1,450 a month.
“We have more people moving from ownership to renting because they don’t know what’s going to happen with their job,” Watkins said.
That’s the big concern. No one knows how long this will last.
“Even if we’re here for just a year, people’s mindsets are different now,” she said.
That falls in line with what Gaines predicts.
“A lot of the oil and gas workers who came to Midland either brought their housing with them or occupied temporary units – like hotels – while they were there,” Gaines said. “Fortunately, there was nowhere near a major over-building spree that would have caused major problems. For most of the folks in Midland (and Odessa), they had seen all of this play out before and weren’t carried away with the boom, so they won’t get so caught up in a bust.”
Of course, any savvy Midland-Odessa resident who played their cards close will come out on the other end relatively unscathed, ready to ride into the next boom. Some real estate brokerages may see a temporary uptick in days on market, but those who are prepared to weather the drought of buyers will find themselves in a good position afterward.
“That doesn’t mean there won’t be some readjusting and some local pain,” Gaines added, “but it probably won’t be anywhere near as severe or catastrophic as some might think.”
What are your thoughts?