HOUSTON - Houston home sales surged in November toward a record-setting year, but the Houston Association of Realtors (HAR) warns that falling oil prices will bring a slowdown in 2015.
HAR is predicting that home sales activity will drop 10 to 12 percent over the next year.
Falling oil prices could reduce job creation in Houston, which is known as the Energy Capital of the World, next year to only 65,000 new jobs — nearly half of the 120,000 new jobs gained in 2014.
Houston is having its strongest year ever for home sales in 2014. So even if sales slowdown more than 10 percent in 2015, the local housing market will still be fairly good.
The low-end of the housing market will be getting a boost from new rules just established by the government-chartered Fannie Mae and Freddie Mac, which will allow some buyers to get a mortgage with only 3 percent down payment.
The lenders have many of stipulations and require homebuyers to have a minimum FICO credit score of 620.
The lower down-payment programs could also help the home building industry, which has been highly focused on upscale homes with few low-priced offerings for first-time buyers.
Houston home sales have been stampeding ahead in a bull market for several years, showing amazing gains in sales velocity and prices. The question has been: “How long can it last?"
It appears the bull run in Houston housing is about over.
Nobody can predict oil prices and they could rise again in 2015. But 2014 will be the strongest year ever for Houston and the records set this year may not be broken for years.