Montana Trailblazer1

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.

Montana Bigsky LR

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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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midland odessa real estate marketFourth quarter numbers from Local Market Monitor Report are in for the Midland and Odessa real estate markets and the enthusiasm is being dialed back for both markets.

Notably, they have lowered the investment score for Midland to 2.7, making is speculative. Odessa’s number is now 4.9, making it medium risk. Reports earlier this year had both markets much higher.

midland odessa real estate market

The reports note in both Midland and Odessa, economic growth has been good since the recession because of the development of shale oil deposits and the large energy sector currently dominates the economy. Overall, job growth was good in recent months, but in Midland, growth in the energy sector was poor. In Odessa, job growth was good in recent months, and growth in the energy sector was fair.

Total housing permits in October in Midland were down 16 percent from last year. Single family permits were down 16 percent. In Odessa, total housing permits in October were down 23
percent from last year. Single family permits were down 23 percent.

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"Small land sales" in West Texas range from 500 to 8,000 acres and can average $1,637 per acre.

“Small land sales” in West Texas range from 500 to 8,000 acres and can average $1,635 per acre. Photo:

The Texas Association of Realtors just released the small land sales report, which showed double-digit growth and increases in average price for acre for the state. However, Far West Texas saw a price drop in 2014. Dubbed Region Two, land prices shrank by 47.24 percent to $1,635 per acre.

“Historically, the Texas land market has been closely linked to the performance of the oil and gas and agricultural markets, but right now that’s not the case,” said Charles Gilliland, an economist with the Real Estate Center at Texas A&M University.  “Oil, cotton and corn prices are significantly down, but small land sales in Texas remain robust and in high demand.”

The Real Estate Center defines a “small land tract” on a sliding scale depending on the region. It can be between 30 acres and 160 acres depending on the location. In Far West Texas, a small land sale can range between 500 and 8,000 acres.

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