...Investors often ask us, "How will the Houston housing market perform given the decline in oil prices and announced reductions in employment and capital expenditures?" In July 2015, Fitch Ratings met with five issuers and toured 11 multifamily and homebuilder communities in Houston. This report is a cross-sector collaboration combining on-the-ground takeaways with data and opinion from the oil and gas, REITs, homebuilder, public finance and structured finance teams. Headwinds for Oil Industry: Oil, gas and related industries comprise an estimated 35%40% of Houston's GDP and have a multiplier effect on consumer confidence and market psychology. With oil at $42/barrel, down from $100+, and Fitch's long-term price deck of $70 through 2017, we expect continued pressure on employment and capital expenditures, which have historically been outsized relative to those of other corporate sectors. Headcount reductions have been a key part of the industry's adjustment to lower oil prices, and capex...
