Looking just in tony River Oaks, almost every home there has been reduced, from a $14 million spread that was once asking $19 million, to a 2,100-square-foot starter ranch now at $699,000, down from $840,000. Reuters reports that folks are pulling together with oil prices at their lowest since, well gosh, the 1980s. They are calling it the worst oil price crash since the 1980s, in fact. Even the Houston Opera is pitching in, offering free season tickets to patrons who lost their jobs in the oil bust. At least one restaurant is offering a complete meal for the price of a barrel of crude: $30.
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
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.
But the article goes on to say that despite the price ranges hardest hit are homes priced over $500,000. Data shows overall sales of single family homes fell 2 percent in January, while those over $500,000 were hit hardest — a decline of 9 percent. Yeow.
Thankfully, Houston’s economy is more diversified now than it was in the 1980s when the city lost a whopping 13 percent of its jobs, essentially creating a depression in the Bayou City. Job loss during the Great Depression of the ’30s was 25 percent. Houston is home to 5,000 energy related firms, and because of federal laws enforcing “performance-based” pay, executive compensation with stock options has increased.
“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.”
