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The recent plummet in oil prices could lead to decreased home values in energy sector-heavy markets — and higher values in Northeast and Midwest markets — in two years, according to a Trulia report released today.

Oil prices have dropped from more than $100 per barrel in July 2014 to approximately $50 per barrel in early January 2015. Historically, major slumps in oil prices have been correlated with job losses and diminishing home prices in areas involved in the energy sector. For example, the economies of Houston, Oklahoma City, Tulsa and New Orleans were walloped by drastically cheaper oil prices in the 1980s, the study notes.

Trulia examined year-over-year trends in oil prices, jobs and home prices from 1980 to the present in the 100 largest metros. In oil-producing regions, home values usually followed oil prices, with a delay of about two years.

Trulia Chief Economist Jed Kolko writes: “For instance, in the 1980s, the largest year-over-year oil price declines were in early- and mid-1986. In Houston, job losses were steepest in late 1986. But home prices didn’t slide most until the third quarter of 1987. Since 1980, employment in oil-producing markets has followed oil-price movements roughly two quarters later and home prices have followed oil-price movements roughly two years later.”

However, home prices in non-oil-producing markets tend to rise when oil prices fall; less expensive oil means lower fuel and indoor heating costs. This is especially true in the Northeast and Midwest, where residents may spend more on driving and home heating than their counterparts in more temperate climates.

So where are we now? Last month, Houston was among the top 10 US metros with the biggest leaps in asking price; the city ranked No. 7, with an increase of 13.4 percent year-over-year and 5.6 percent of its jobs related to energy production.

In the seven large metro areas in which the energy sector accounts for at least 2 percent of the jobs, home prices increased an average 10.5 percent year-over-year in December 2014, outpacing the 7.7 percent increase for the 100 largest metros overall.

Below are the home prices changes in the nation’s biggest oil-industry regions:

home price changes oil

Image: Trulia

The takeaway? The impact of the mid-2014 slump in oil prices won’t be felt in housing markets until late 2015 or in 2016, and only oil-industry markets will be negatively affected, according to Kolko.

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