With low gasoline prices, come slumping housing markets. This is what happened to communities in the central United States that were recently affected by the shale-oil fracking boom in the area, The Columbus Dispatch reports.
Home sales have been down for certain areas this year and sharply in North Dakota and the western Texas cities of Midland and Odessa. Other areas that have seen slowing sales are El Paso, and more recently in Houston.
Several states became a destination for tens of thousands of workers who found jobs running the rigs and provide the equipment and services needed for the operations. This boom came when the oil prices reached its peak and in the discovery of oil fields.
However, oil prices dropped, plummeting by half in late 2014 and this year seen levels not seen since the Great Recession. This led oil companies abandoning their drilling projects leaving workers without any work to do.
"When your economic base is undergoing that kind of pressure, your local (housing) market is going to feel it," said Jim Gaines, chief economist at the Real Estate Center at Texas A&M University.
Despite the slow home sales, oil-reliant markets have seen prices mostly held up. But Texas and North Dakota will continue to see a weak housing market, unless oil could rebound strongly, which is something sill in the far distant for experts.
Odessa and Midland were Texas' most affected areas with the collapse of crude prices.
"They are going to bear the brunt," Gaines said. "They're right there at the point of the spear in the energy sector."
Dorothy Martwick, broker-owner of Century 21 Action Realtors in Minot, N.D., said, "In 2011, you could ask whatever your wanted for your house and you might get someone to pay it. Now, you have to realistically put it on the market for what it's worth."
