Dive Brief:
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Home prices may be on their way down in Texas, Oklahoma, Louisiana, and other energy-producing markets as oil prices tumble, Trulia’s chief economist predicted last week.
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In markets where the oil industry is a large employer, home prices tend to rise and fall depending on oil prices, according to economist Jed Kolko’s analysis of Trulia’s Price Monitor and Rent Monitor. Historically, real estate values take up to two years to react to fluctuations in oil prices, however, so it could be late this year or early next year before home prices tank in those oil-dependent economies, Kolko explained.
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Between July and January, oil prices plummeted from $100 a barrel to $50 a barrel.
Dive Insight:
As home values fall in oil-producing markets like Bakersfield, CA, where 6.9% of the population relies on energy jobs, cheap oil could boost real estate prices elsewhere as the cost of driving and home heating tapers off.
Historically, Kolko said, home prices in the Northeast and Midwest benefit from falling oil prices in the South.