Mansion sales and discount dining: oil rout hits Houston's rich

Reuters ^

[TigerClaws]

Prices for mansions in Houston's swankiest neighborhood have tumbled in lock step with crude prices. The Houston Opera has offered free season tickets to patrons who lost their jobs in the oil bust. A fancy restaurant offers cut-price dinners.

Twenty months into the worst oil price crash since the 1980s, well-heeled residents of the world's oil capital are among the hardest hit largely because tanking energy firm shares make up much of oil and gas executives' compensation.

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In River Oaks, a neighborhood of palatial mansions and lush gardens, the average sales price of a home has tumbled to $1.3 million from $2 million in the middle of 2014 when oil began its more than 70 percent slide, according to data from the Houston Association of Realtors and Keller Williams. Median property prices in the area have already fallen further in this downturn, which is not yet over, than the 16 percent drop in the previous oil slump in 2008 and 2009.

"When oil does well, River Oaks does well. When oil does bad River Oaks does bad," said Paige Martin, a Keller Williams broker who specializes in the neighborhood. "Not everybody can afford a $10 million house."

City-wide data also show that while overall sales of single family homes fell 2 percent in January, sales of those priced over $500,000 tumbled 9 percent. The overall median house price was $200,000, up 5 percent on the year, according to the realtors' association. MORE AT LINK

[knarf]

The boom/bust cycle is a healthy occurrence in the USA.

We learn to save and invest when we get it, and learn from our observation(s) during the bust (yep ... I was right)

A stronger, more useful and productive American emerges out from the cycle

Trump's children are a good observation to study

[wardaddy]

This will please free republics large populist envy the rich contingent

“They had it coming”

That sort of reasoning

[smokingfrog]

Many of those River Oaks homes are overpriced anyway. It’s more of a prestige thing to live there. Most of the homes are old and need a lot of work too.

[Buckeye McFrog]

I’ve talked to enough long-time Houston residents to know that they know this is just how things roll in the energy business. Been through it before, came back every time, and will do so again.

[smokingfrog]

Overall real estate sales haven’t gone down that much. The agents and brokers just have to work harder and get a smaller commission check now..

[PAR35]

Meanwhile, refugees from other parts of the country are pushing up home prices in Dallas, more than offsetting the oil losses.

[Wyrd bið ful aræd]

I think that contingent is far, far smaller than the “I respect these people and think they’re better than everyone else simply because they’re rich” crowd. Neither end has it right, although I will say that people who establish a lifestyle that relies on maintaining a large income from an unpredictable source get little sympathy from me.

[pgkdan]

Boo Hoo!

[Cowboy Bob]

I was living in Houston in 1988 - the year that things bottomed out. There were lots of 2-for-1 dining coupns. Ate at a lot of good restaurants for dirt cheap. But Pappasito’s still had a 45 minute wait for a table (and no discounts!)

[Tax-chick]

I’ve lived through four oil boom/bust cycles. This kind of “news” could just be rerun from the late 80s.

[Snickering Hound]

Back in early 2014 when the market peaked I got out of Houston selling my house to one of those Keller Williams brokers who paid well above my asking price in cash and I ran off giggling like a looter in the night.

They blew over $100,000 completely remodeling it and several months later when the market was already crashing tried to put it on the market.

Took them a year to finally sell it taking a huge loss.

[Texas resident]

A lot of those homes were built over 50 years ago. Beautiful homes and lots, but they all need work of one sort or another. Also the roads around there are narrow and worn out. And I would bet that the property taxes are frightening.