Despite the oil and gas industry slump that began in early 2015, local real estate experts say the growing medical field is absorbing most of its effect on the housing market in The Woodlands. However, while starter homes are moving quickly on and off the market, a surplus of luxury homes are at a standstill.

Home to the headquarters of Anadarko Petroleum Corporation, Chevron Phillips Chemical Company and, most recently, a large ExxonMobil campus just south of the community, for years The Woodlands housing market has been driven by the oil and gas industry, local real estate agents said. Although the price of oil has been volatile since late 2014 leaving many area residents jobless, the rising medical industry is permeating the community with new health care facilities and physician relocations. 

“We’ve got a lot of things happening and with the hospitals coming and the expansion of [Memorial Hermann The Woodlands Hospital], the whole structure of The Woodlands is changing,” said Vicky Fullerton, Realtor with RE/MAX-The Woodlands & Spring. “We’re not just oil-based or development-based; health care is going to become a huge part of who we are in Montgomery County.”

In 2015, houses spent an average of 48 days on market in The Woodlands; this year, that timeframe has jumped to 58 days, according to the Houston Association of Realtors.

Between June 2015 and June 2016, the median sale price of homes in the 77382 ZIP code dropped 33 percent, while homes in the 77381 ZIP code dropped 22 percent, according to Heritage Texas Properties.

“We definitely saw an appreciation in sales prices during the ExxonMobil move,” said Christine Hale, Realtor with RE/MAX-The Woodlands & Spring. “Since that time, the prices on homes have leveled out and as the inventory of homes has increased, we have seen prices in some cases, begin to decrease.”

Oil, gas and health care

Fullerton, a longtime resident of The Woodlands, has worked in the local real estate industry for nearly four decades. As the incoming chairwoman-elect of the Texas Association of Realtors and former HAR chairwoman, Fullerton said she has seen the housing market in The Woodlands go through many ups and downs.

“If anybody says that the oil and gas industry hasn’t impacted The Woodlands housing market, they’re being less than honest,” she said. “Our high-end homes are moving slower because we’ve had some executives who have lost their jobs. Yes, we’ve seen an impact, but there are other fields like health care that are moving in and absorbing it.”

In The Woodlands, entry-level homes priced at $300,000 and below are in short supply and high demand, making that price range a seller’s market, Fullerton said. On the other end of the spectrum, a large inventory of high-end homes priced $500,000 and above are available but in low demand, putting that price range on the buyer’s side.

Local Realtors agreed the housing market split is due largely to uncertainty in job security.

“The midlevel executives are the ones typically buying houses in the $300,000-$500,000 range, and those have really slowed down as well as high-end homes,” said Amy Smythe-Harris, broker and owner of Urban Provision Realtors. “I think that will pick back up at the end of the year, but right now a lot of those midlevel executives are not sure if they’re going to have jobs in oil and gas.”

Bob Kulpinski, vice president of sales and marketing for Darling Homes, said as a result of the lack of resale inventory in The Woodlands, new home sales in Creekside Park are thriving.

“We are pretty much on pace with the same unit count that we had in 2015 year-to-date for Darling Homes,” Kulpinksi said. “We are on track to be the No. 1 builder in The Woodlands for the third straight year, so we’re very happy about that. In general, things slowed down in the beginning of the year, but things have started to pick up now with some of the new hospitals opening up.”

Industry trends

As the seventh-fastest growing county in the nation, Montgomery County has become an attractive location for baby boomers, ages 55 and older, as well as millennials, ages 18-34, Fullerton said. Between the baby boomers, who are most often in the process of downsizing, and the millennials, who are just starting their families, these two groups are also contributing to the high demand for smaller homes and the low demand for luxury homes.

In addition, a surplus of homes for lease in The Woodlands is also affecting the supply and demand disparity at both price points, Hale said.

“We have not really seen more people wanting to lease homes necessarily, but what we have seen is a significant increase in [rental] homes on the market,” Hale said. “Many sellers have opted to put their home on the market for sale or lease, and many investors who see our real estate market as a solid investment have purchased homes. Because of this, we have a higher inventory of [rental] homes on the market, and as a consequence, owners and investors have had to lower their monthly rental rates.”

Luis and Vanessa Esparza, Realtors with Keller Williams in Conroe, said these trends are influencing the construction of newer communities in the area for adults age 55 and older. The rapid growth is also causing traffic congestion, making areas closer to I-45 more popular residential locations.

“With the increase in population, traffic has become a big issue for commuters in and out of The Woodlands,” Luis Esparza said. “Villages that are closer to I-45, Waterway Square, The Woodlands Mall and Market Street are a plus for buyers since this location cuts their commuting time.” 

With the price of oil beginning to stabilize, local real estate agents predict the housing market will strengthen over the next few months as companies begin rehiring residents.

“Overall, our area is doing very well,” Fullerton said. “It’s had better days, but it’s had far worse days as well. We’re a strong market and we’ll continue to be a strong market, but we have challenges just like any other areas do and that is dealing with all the growth and the challenges of the oil and gas downturn.”