Mansion sales and discount dining: oil rout hits Houston's rich

quote:

---

HOUSTON (Reuters) - Prices for mansions in Houston's swankiest neighborhood have tumbled in lock step with crude prices. The Houston Opera has offered free season tickets to patrons who lost their jobs in the oil bust. A fancy restaurant offers cut-price dinners. Twenty months into the worst oil price crash since the 1980s, well-heeled residents of the world's oil capital are among the hardest hit largely because tanking energy firm shares make up much of oil and gas executives' compensation.

In River Oaks, a neighborhood of palatial mansions and lush gardens, the average sales price of a home has tumbled to $1.3 million from $2 million in the middle of 2014 when oil began its more than 70 percent slide, according to data from the Houston Association of Realtors and Keller Williams. Median property prices in the area have already fallen further in this downturn, which is not yet over, than the 16 percent drop in the previous oil slump in 2008 and 2009.

For example, former oil executive, Kolja Rockov, whose extravagant wedding with dancers and acrobats became a local online sensation three years ago, briefly put his unfinished mansion on the market for $6.9 million, according to listings. Work appeared to stall on his house as an SEC filing showed he involuntarily sold 239,000 shares of the company's tanking stock he had used as a collateral for a loan. Rockov lost his job as Linn Energy LLC's (LINE.O) CFO in August.

Luxury car sales are also slower in Houston than in other parts of the state and the country. "If you’re working for an energy company, you see all this stress around you, it might nick your purchase confidence, even if you are fairly high income,” Earl Hesterberg, chief executive of Houston-based Group 1 Automotive Inc (GPI.N), told Reuters. He said excess inventory was most acute for top line BMW (BMWG.DE) and Mercedes-Benz (DAIGn.DE) models in Texas and Oklahoma.

In a nod to the downturn, Ouisie's Table, a River Oaks institution, is now offering its "Oil Barrel Bargain," a three course dinner for the price of a barrel of oil, now around $30.

---