Energy slump bleeds into housing market in Western Pennsylvania
Foreclosures increased last year in energy-producing regions, including Washington County, suggesting that the struggles of oil and gas drillers are beginning to be felt in the housing market.
Foreclosure filings in Washington County jumped 11 percent in 2015, more than any other county in the Pittsburgh metro area, according to data released by RealtyTrac.
Energy-rich states such as Texas, Oklahoma and North Dakota also had more foreclosures last year. The trend highlights the impact that the energy industry's downturn is having on otherwise stable housing markets even as foreclosures decline nationwide, said Daren Blomquist, RealtyTrac's vice president.
“Markets that were relatively unscathed by the last housing crisis are seeing increases in 2015 in foreclosure activity,” Blomquist said. “We do believe that's very likely related to the weakness in the oil industry.”
Pittsburgh home prices didn't skyrocket like other markets in Florida or Nevada, and didn't fall as hard when the bubble burst in 2007 and 2008.
But volatility in oil and gas markets is starting to be felt in the broader regional economy.
Natural gas prices have declined about 50 percent over the past year, recently reaching a 16-year low. Companies in the Marcellus shale have responded by laying off workers, among other cuts, as their revenue is crimped by low prices.
So far, the impacts on Pittsburgh's economy have been muted because energy companies provide only about 1 percent of the region's jobs.
Other Western Pennsylvania counties where the gas industry is less prominent had declines or more modest increases in foreclosures. Foreclosure filings in the seven-county metro region last year increased 1.85 percent. Even with that bump, Pittsburgh remains a healthy housing market, Blomquist said. It ranks 144th out of 214 metro areas for foreclosures.
“I think Pittsburgh has a diverse enough economy that it seems to be holding up pretty well despite some weakness in the oil industry,” Blomquist said.
The statewide trend tracked Pittsburgh, with foreclosures increasing 1.86 percent. Nationwide, foreclosures declined 3 percent to a nine-year low in 2015.
Chris Fleisher is a Tribune-Review staff writer. Reach him at 412-320-7854 or email@example.com.