Houstons Struggles Continue With Permitting Decline
Digested from Houston apartment permitting activity plunges amid oil slump
Houston Business Journal (1/8/16) Takahashi, Paul
Dropping oil prices have plagued the Houston market, where energy sector job growth had been driving impressive development and rent growth. Industry professionals noted the markets softening rent growth in 2015, as well as potential decreased development in the year ahead, as job growth slowed.
A recent Axiometrics report supports those observations, noting that permitting activity in the city dropped 10 percent year over year in November 2015 while, nationally, permitting increased 39 percent. Also, Dallas took Houstons spot as Texas' largest apartment construction market.
Houston isnt the only market to suffer amid the flailing energy market, though. North Dakota also is experiencing setbacks amid sector layoffs. Williston, N.D., saw a spike in construction activity in 2013, but job cuts in September and October have caused decreased cash flow at hotels and multifamily developments built during that boom. Commercial mortgage-backed loans originating in 2013 and 2014 are now in trouble and likely wont improve until the energy sector does.