I’m amazed Houston has held up this long. It is like a snake with its head cut off and is still wiggling with the head watching. Surely the crap will hit the fan soon.
I drove clay and eldridge today. The plants are shuttering. They so over built for shale. So many new buildings that will soon be facing nearly empty parking lots down to maintenance workers and partial shifts. Two guys said goodbye today.
For the first time in 40 years the oilfield is collapsing and the rest of the economy is following it. Mid stream and the petrochemical downstream seem to still be doing OK. That is the East Side. North and West are going to become like a ghost town. Exxon will go on but there will be lots of empty offices. GE has three buildings on the West loop. I saw a lot of empty there today.
The EIA 2014 basis gasoline price is the lowest it has ever been since 1974. Inflation adjusted it is actually lower. This pit, compared to the lean winter years of ‘86 to 2000 look mild. That was 14 long years of living on shoe leather and creating solutions against the financial odds that finally capped with a hammering in ‘98 when OPEC / Saudi decided to euthanize the industry for a rebirth that got hammered again in 2001.
But they are still closing or tearing down small businesses and restaurants along Kirby, both north and south of 59 so they can build more multi-story condos and apartments. Not sure who they think will occupy the new buildings, particularly at the rate they now charge.
Some of my clients who have small offices in Houston renewed their leases as of 1/1/2016 and were given a choice between a three or a five year lease at a substantial increase.
The Houston city council was probably eagerly awaiting the increase in revenue from property taxes to help with their huge budget deficits. Turner has more on his plate to worry about than filling potholes.
Hopefully the economy diversified enough this time around so that we don’t have the collapse we had in 1985.