Around the country, Americans are tightening their belts, scrapping vacation plans, eating more dinners at home, getting rid of their SUVs...
KERMIT, Texas — Around the country, Americans are tightening their belts, scrapping vacation plans, eating more dinners at home, getting rid of their SUVs and watching “For Sale” signs linger on front lawns. But in oil-and-gas rich West Texas, folks are living large — again.
Most homes sell quickly and command premium prices. Hotel rooms are in scant supply. Gas guzzlers are rolling off auto dealers’ lots. Jobs are plentiful in the oil and gas fields and the businesses that serve them.
Drillers and energy companies are reaping a bonanza from the run-up in oil that pushed the price past $140 a barrel this summer.
Most Read Business Stories
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- Boeing made an entire fake neighborhood to hide its bombers from potential WWII airstrikes
- Seattle artists worry potential sale of historic INS building could spell the end for their studios
- Amazon's telehealth arm quietly expands to 21 more states
This town of just over 5,100 people about 45 miles west of Odessa is awash in prosperity, and it’s the same story across the rest of the Permian Basin, where about 20 percent of U.S. oil is produced.
So far, the boom has brought in hundreds of millions of dollars to the region and more than 26,000 new jobs.
In Midland and Odessa, the backbone of the region, the unemployment rates are the lowest in Texas, at just over 3.1 and 3.7 percent for July. That compares with 4.7 percent statewide and a U.S. average of 5.7 percent.
“Help Wanted” signs hang outside many restaurants, which frequently turn away diners or close off sections when the crush of customers overwhelms the staff.
“There’s just not enough people to work in the restaurants. The pay is so much better” in the oil fields, said Roy Gillean, owner of the Barn Door Steakhouse in Odessa and the head of the Permian Basin chapter of the Texas Restaurant Association.
While plummeting home prices and record-high foreclosures have hit neighborhoods across the U.S., this region is seeing the opposite. In Midland County, homes typically stay on the market for only a month, and prices are up 16.5 percent from last year.
That’s not good news for many would-be homebuyers and others lured here by well-paying jobs.
Midland travel agent C.W. Porter and his wife have been looking for a home for about six months, about the time it takes to sell one in many other parts of the country. They have not found anything at the right price or location.
“Prices keep going up because they know they can get it,” Porter said of sellers. “Everyone’s got money.”
Some oil-field workers are moving into trailer homes instead.
“If you’re in the market for a travel trailer, good luck. They’re flying off the lots,” said Carroll Nall, who tracks sales for the Permian Basin Board of Realtors.
“I’m having to shop in Houston, Austin and San Antonio to find one.”
Don Burrito’s, a small Mexican restaurant, is crowded at lunch, and the gravel parking lot overflows with big pickups and SUVs — many of them newer models, some emblazoned with the logos of oil and energy companies.
Nationwide, RV sales have fallen as much as 25 percent because of rising fuel costs. Not so at Billy Sims Trailer Town in Odessa or other dealerships around the area.
Jed Heard, owner of a Cadillac dealership in Midland, said it’s not unusual for someone to plunk down $65,000 in cash for an SUV. Miles per gallon aren’t much of a concern for people whose livelihood is linked to oil.
Boom times are not new here. Neither are busts, and many people in and out of the oil business — homebuilders and developers among them — know the good times may not last.
This time, individuals and municipalities with bulging coffers are planning for the future more carefully, said Waco-based economist Ray Perryman.
“This is a much more measured, intelligent response than it was 25 years ago,” he said, referring to the last big boom in the early 1980s.
Vida Simpson, a 59-year-old Kermit-area native, recalled earlier oil heydays, when the town had several groceries, two movie theaters and a slew of other shops.
But the mother of two grown children also remembered the bust and the demise of her family furniture store.
And she recalled the unfortunate young people who took oil-field jobs instead of going to college.
“I’m just fearful that they don’t get caught up on a trap, like they did before,” Simpson said.