Real Estate Markets: Houston Oil
A full version of this article originally appeared in PREA Quarterly, Spring 2015
The ultimate intermediate- and long-term impact of cheaper oil on the US economy and its property markets depends largely on the answers to two questions: how low will oil prices go, and how long will prices stay there? Answers to those questions are as elusive as divining where interest rates might be headed, which means investors should not get caught in the trap of trying to add insight. Instead, it’s usually best to think that the prevailing price level for most assets serves as a decent mid-range estimate of where prices might be down the road. In other words, it is best to assume oil prices will stay range bound for some time and work from there.