This article is over 6 years old


Next Year May Spell End Of Oil Downturn, But Houston Real Estate Will Take Longer To Recover

Office workers will be the last to be affected by the recovery.



To embed this piece of audio in your site, please use this code:

<iframe src="" style="height: 115px; width: 100%;"></iframe>

Bruce Rutherford, international director with JLL, left, moderates a panel discussion on energy and real estate on Monday, Oct. 3, 2016.

Bruce Rutherford, an international director with real estate advisory firm JLL in Houston, said there will be more bad news for energy in the short run and as a consequence, for real estate.

"But we are coming to the end of this cycle," he said. "And we will see a dramatic improvement in demand for real estate from energy companies probably in 2018, 2019."

JLL will publish the 2016 edition of its energy outlook in a few weeks.

Rutherford said despite Houston's economic diversification, more than half of its economy is still directly or indirectly connected to energy. And the industry tends to pay its employees well, so the many layoffs have a big impact on real estate.

Some experts estimate that the price of oil will normalize by next year. But Rutherford said Houston's housing and office market will not immediately pick up.

"First they will hire people in the oil field, out in the field," he said. "And only later will they hire people to fill office space – and we have a lot of office space to fill here in Houston."

He said the current market does provide opportunity for companies that are doing well to acquire cheap real estate.

But those that are not doing well are better advised to get rid of theirs now, Rutherford said, because they may not survive until the market gets better.

Today in Houston Newsletter Signup
We're in the process of transitioning services for our Today in Houston newsletter. If you'd like to sign up now, fill out the form below and we will add you as soon as we finish the transition. **Please note** If you are already signed up for the newsletter, you do not need to sign up again. Your subscription will be migrated over.