Barton Smith at Houston Apartment Association Conference and Expo

The current economic crisis in Greece may be a world away from Texas, but it will negatively impact Houston due to the impact of European economy on oil industry, among other global interrelations. That is what University of Houston Institute for Regional Forecasting Director Barton Smith predicted at the Houston Apartment Association’s 2010 Education Conference and Expo, where he delivered the keynote presentation on the current and future economic and market conditions in the greater Houston area and beyond.

Greece’s crisis is resulting in the re-forecasting of European economy as pessimistic, as well as the International Energy Association re-evaluating at where to set oil prices.

But this may be mild in comparison to what happened in 2009, which “was not a good year in Houston” or anywhere for that matter. In the spring, Houston lost more jobs in one month, than during any one month of the 1980s oil bust. Houston has since stabilized. What is different from the 1980s, is the number of foreclosed homes. It tripled between 1982 and 1987. Such high increase in foreclosure rates was not observed this past year, despite a 1,000 houses being foreclosed each month in Houston.

Anyone who went to a business lunch in town last year heard the refrain that “Houston was the last to enter the recession and will be the last to leave.” But that is only partly true. We did enter the recession a year later than the rest of the country, but we are also getting out of the recession early. In fact, while Houston has been gaining jobs since September 2009; the nation did not show a job gain until February of this year. Currently, Houston is gaining about 1,000 new jobs a month, which is less than the 5,500 per month to which we have become accustomed.

Houston is resilient, but not bullet proof. We are outperforming the country now, but that is not always the case. Remember 1989 when oil dropped to less than $10 per barrel?

Speaking of energy, economy seems to be bullish about oil (based on the demand) and bearish about natural gas (due to excessive supply).

But it’s a small world after all because both the energy sectors and the energy-independent sectors are dependent upon recovering the national and global economies. Good news is, there have been some measurable improvements in the national economy. Job growth at last, job growth at last!