Mansion Sales And Discount Dining: Oil Rout Hits Houston's Rich

[Purveyor]

Prices for mansions in Houston's swankiest neighborhood have tumbled in lock step with crude prices. The Houston Opera has offered free season tickets to patrons who lost their jobs in the oil bust. A fancy restaurant offers cut-price dinners.

Twenty months into the worst oil price crash since the 1980s, well-heeled residents of the world's oil capital are among the hardest hit largely because tanking energy firm shares make up much of oil and gas executives' compensation.

In River Oaks, a neighborhood of palatial mansions and lush gardens, the average sales price of a home has tumbled to $1.3 million from $2 million in the middle of 2014 when oil began its more than 70 percent slide, according to data from the Houston Association of Realtors and Keller Williams. Median property prices in the area have already fallen further in this downturn, which is not yet over, than the 16 percent drop in the previous oil slump in 2008 and 2009.

"When oil does well, River Oaks does well. When oil does bad River Oaks does bad," said Paige Martin, a Keller Williams broker who specializes in the neighborhood. "Not everybody can afford a $10 million house."

City-wide data also show that while overall sales of single family homes fell 2 percent in January, sales of those priced over $500,000 tumbled 9 percent. The overall median house price was $200,000, up 5 percent on the year, according to the realtors' association.

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http://www.reuters.com/article/us-oil-houston-idUSKCN0VY152

[BillZBubb]

1. It's all Obama's fault!

I'm not sure why, but it has to be.

[SammyWinstonJack]

2. aww.

[hifiguy]

3. Boo-boo kitty.

Let them eat Spam.

[Doremus]

4. Poor little rich folks.

I'm all choked up for them.

[NCjack]

5. Newt, Mitt, Sarah, and cohorts are keeping their heads down on this: "Drill Baby Drill".

I'm looking forward to the videos of the debt collectors cleaning out the houses in River Oaks and auctioning the houses. And, in their own words when the cry out for some relief, my response to them: "Get a Job."

[nichomachus]

6. But they did well during the boom

So, it all evens out. On average, they're still doing quite well. If they thought the bubble was going to last forever and didn't make provisions for the hard times, that's their problem. Maybe they'll learn this time (although they never learn).

[gratuitous]

7. "Not everyone can afford a $10 million house"

It's quite strange to me. Of all the negative effects of tumbling oil prices and tanking oil company stock prices, the one effect that's sure to get some attention in the popular media is the plight of folks who formerly could afford $10 million houses, season tickets to the Houston Opera, and the fine dining establishments that are cutting their menu prices.

How often do you hear about the just-getting-by retiree who has seen his monthly benefit shrink by 25%?

[Rex]

8. It is not just the vipers den, all of Texas is feeling the hit from dropping gas prices.

Well, not consumers really. Just the folks that invested a lot in fracking and Exxon. A lot of destroyed rich folk. Now just middle class folk...time to slide down the poverty scale. Those that were middle class are poor and those that were rich are middle class. I know of at least one family fortune destroyed over this. Should be interesting watching them try and eek out a living in the middle lower class ranks.