oil prices west texas

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.

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midland home values

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.”

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