There has been a ton of speculation that continues out there about oil and Houston……..problem is none of it jives with what is happening on the ground…

The problem is that not a single piece I have read so far (like this one from CNN Money today) mentions the other half of any economic equation…supply. They all focus on “demand falling” and do not even consider supply. With supply at 2.5mos (an all time low and 1/2 the national average) demand is going to have to completely collapse worse than the 2008-’11 recession levels before prices take any type of considerable hit.  To give you some perspective, Houston went into the 2008 recession with a monthly supply of homes of 6 to 7 months. What did home prices there do during the “greatest recession since the great depression” from December 2007 to December 2011 when oil (USO) collapsed from $149 to $49? They rose….

From the Houston Business Journal:

The Woodlands Development Co. is moving forward on an exclusive island neighborhood of luxury homes formerly known as Mitchell Island.

Since late 2013, the Houston-based developer — a division of Dallas-based The Howard Hughes Corp. (NYSE: HHC) — has been quietly developing the 22-acre, man-made island.

Preliminary plans called for a high-end, gated neighborhood of 19 homes on 1-acre lots, which developers called the most exclusive address in The Woodlands.

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To date, the company has put in the streets and built a $3 million bridge, which connects the island across Lake Woodlands to the East Shore neighborhood at Timberloch Place and Majesty Row. Currently, work is underway on the island neighborhood’s gate and guardhouse, said Paul Layne, Howard Hughes’ executive vice president of master-planned communities.

“We’re working to establish development guidelines and with all the regulatory agencies to get permitting required to sell lots on the water,” Layne said. “We’ve been very quietly talking to a few individuals who have a high level of interest.”

The Woodlands also is working on coming up with a new name for the gated neighborhood, Layne said. A name was never formally announced but had been widely reported as “Mitchell Island” both in the media, the public and internally within the company.

George Mitchell, the late founder of The Woodlands, created the island and its surrounding 200-acre Lake Woodlands during the mid-1980s. Mitchell had originally intended for the island to house the corporate headquarters of Mitchell Energy & Development Corp.

Mitchell’s energy company never took up residence on the island. However, the name “Mitchell Island” stuck and has been used by The Woodlands executives ever since.

Now, Howard Hughes Corp. is working with its marketing studio in New York to come up with a new name and brand for the community, Layne said. He declined to discuss the reason why. A call to the Cynthia and George Mitchell Foundation was not immediately returned.

Over the past decade, The Woodlands has proposed building all kinds of projects on the island, from hundreds of condominiums and townhomes to commercial offices and even a clubhouse for the East Shore residential neighborhood across the lake.

The Woodlands has about 2,000 residential lots left to sell — about three years’ worth of homes, Layne said. Demand for homes in The Woodlands is growing as Exxon Mobil Corp.(NYSE: XOM) builds out its new corporate campus in Springwoods Village just south of The Woodlands.

As The Woodlands nears buildout, the development company is focusing on creating luxury communities, like the island neighborhood, and higher-density, mixed-use projects to maximize its land use.

The company recently unveiled One Lakes Edge, an eight-story, 390-unit luxury apartment complex within Hughes Landing, a 66-acre mixed-use project with Class A offices, apartments, hotels, shops and restaurants on Lake Woodlands.