Correlation Between Oil Sweet Spots and Real Estate Hot Spots

[GeoSciGuy + 74]

According to Realtor.com, Midland, TX is the hottest real estate market in the country, with the median list price rising 31% year over year for the month of May.  

https://www.realtor.com/research/reports/hottest-markets/

With the Permian now becoming overcrowded and facing pipeline bottlenecks, we're seeing some drillers leave the Permian for cheaper acreage as oil prices continue their recovery.  

It will be interesting to see how the next most prolific oil basin affects real estate prices in the given region.  

Being that a regional real estate boom like this lags behind the initial regional oil boom, an investor can use the trends of where oil companies are purchasing acreage to forecast where the next real estate boom will take place, and purchase some property early before prices begin to spike.  

I find this data fascinating!  

What are your thoughts on where the next boom will take place?  

I've read that most companies leaving the Permian are investing in the Bakken, the Eagle Ford, and the Austin Chalk.  Also in Oklahoma, the Cana Woodford and SCOOP/STACK plays.  

There was also a play in Rocksprings, TX in the Paluxy Formation that is shallow with thick crude that I'm having trouble finding in which I was interested.  The beauty of that area is that it is half way between Midland and San Antonio, maybe a little closer to San Antonio.  

Looking forward to hearing everyone's insights and speculations on this subject.  

[TraderTate + 186]

This is indeed fascinating. So we're talking about a 4-year gap here? That makes it tough to follow. I don't know anything about Rocksprings, but if it's half way between Midland and San Antonio, then regardless it's probably set for a add-on boost as interest expands a bit outwards. 

While not directly related to real estate, this article could also give us some interesting hints through banking trends: 

https://www.expressnews.com/business/eagle-ford-energy/article/Deposits-rise-again-at-Eagle-Ford-banks-but-12813232.php

[Rodent + 1,424]

Texas real estate, I would think, is also benefitting from the mass exodus out of California. 

[GeoSciGuy + 74]

7 hours ago, TraderTate said:

This is indeed fascinating. So we're talking about a 4-year gap here? That makes it tough to follow. I don't know anything about Rocksprings, but if it's half way between Midland and San Antonio, then regardless it's probably set for a add-on boost as interest expands a bit outwards. 

While not directly related to real estate, this article could also give us some interesting hints through banking trends: 

https://www.expressnews.com/business/eagle-ford-energy/article/Deposits-rise-again-at-Eagle-Ford-banks-but-12813232.php

If you change the market spotlight under the map to Midland, TX, it shows that the Midland real estate market was just as hot in 2014 before cooling slightly during the oil price crash.  Remember, the Permian was the oil shale basin still profitable during the price crash.  

If you go down to the state map and change it to North Dakota, you will see that the counties near the Bakken formation are amongst the coolest of real estate markets nationally.  The region is just now starting to make a comeback, so someone could interpret that as a buying opportunity.  

I'm more interested in observing the development of the Austin Chalk in Louisiana, as prices are depressed there.  

7 hours ago, Rodent said:

Texas real estate, I would think, is also benefitting from the mass exodus out of California. 

Yes, 

Texas is a popular state for people leaving California, but most people from California are moving to Dallas/Fort Worth, Austin, San Antonio, and Houston.  Unless you're from Bakersfield, California, I don't see many Californians moving to Midland, where oil is the dominant industry.  

Midland has actually had such a low unemployment rate that there is a shortage of labor, and restaurants are having trouble holding onto their servers, as the oil industry offers higher wages.  Higher wages and tremendous job growth have led to higher housing costs, as jobs have grown faster than housing supply.

[Rodent + 1,424]

re: the location of choice for Californian's, that makes perfect sense. 

Oil industry in the Permian is poaching lots of labor which is wreaking all sorts of havc: https://oilprice.com/Energy/Energy-General/Hiring-Frenzy-Spurs-Wage-War-In-The-Permian.html