A study released by House Canary looks at the impact of recent oil price drops on the real estate market. In many markets, oil price changes are a leading indicator to housing value changes, however the impact varies based on the make up of the local economy. While some markets positively correlate and have a dampening effect on home prices, others negatively correlate and can be stimulated by falling oil prices. JP Ackerman, President, House Canary said, “understanding leading indicators in the market is critical to forecasting the markets and sound real estate investment. The data sciences team tracks thousands of variables across all US markets and zip codes to provide insight into market movement.”
Due to falling oil prices, House Canary’s forecast for house prices has adjusted down to 10% cumulative growth through Q3 2017 in Odessa, Texas. The impact was smaller on Houston, dropping to only 17% cumulative growth for the same time period. In contrast, over the last 40 years, the Detroit economy has repeatedly been stimulated by falling oil prices resulting in a bolstered home price forecast to 23% cumulative growth.
House Canary CEO and Cofounder. Jeremy Sicklick commented, “savvy investors and real estate developers are harnessing the power of big data to understand leading factors to maximise investment returns and get a competitive advantage. And according to the Chief of Research and Cofounder, Chris Stroud, “strength in oil prices from 2014 are still fuelling market conditions, but if low oil prices persist, the impact on home values will be more material.”
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/refining/08042015/oil-and-house-prices/