Across the city, waiting for the fallout from falling oil...

A longtime dealer in office furniture says he can "smell" change in the air. Companies that not long ago were buying desk chairs and conference tables without concern for cost are now looking to sell.

"That's kind of spooky," said Cecil Perry, who's been in business here for 35 years.

The city's real estate community, after a years-long rally from the depths of recession, has lost much of its exuberance as oil prices tumble and energy companies issue pink slips by the thousands. The financiers who funded all those cranes and concrete trucks from downtown to the farthest suburbs are red-lining new projects.

"What I've heard is everyone has decided to push the pause button and see what happens," said Alfred Meyerson, a real-estate lawyer with vivid memories of the knee-buckling economic crash of the 1980s. "Everybody wants to wait and see how this is going to shake out."

And at Tommie Vaughn Ford, a dealership that sells not just cars and pickups but also high-dollar leather goods to attire the men and women who drive them, the hope is that cheaper gasoline prices will convince enough people to buy cars to make up for the all-but-guaranteed slowdown in fleet sales of work trucks to the oil and gas industry.

"I think I'm going to lose a lot of business," said general sales manager Kirby Janke.

For five years, a domestic oil boom has created a bounty of high-paying jobs and a general climate of prosperity here. But as the rest country starts to see signs of economic revitalization, many of Houston's biggest companies are slowing down. Both phenomena are due at least in part to the precipitous slide in the price of crude.

Halliburton, Schlumberger, Weatherford and Baker Hughes have dominated headlines with news of their layoffs, but the vast array of nonenergy businesses that feasted on their good fortune also are coming to the realization that the boom may finally have run its course.

That was clear in a series of interviews last week, in which even the most sanguine business owners agreed things could change dramatically over the next several months.

A financial planner whose customers include oil and gas executives said he's advising clients to start "hunkering down." A prominent hotelier is warning managers to get ready for "some belt-tightening." A high-end real estate broker predicted builders could soon be offering incentives - "closing costs, appliances, upgrades" - in a market that only recently had homebuyers writing plaintive letters to sellers and paying well over asking price to get their second- or third-choice house.

"Nobody should be afraid, but people should be concerned," added Patrick Jankowski, senior vice president of research at the Greater Houston Partnership. "We will feel the impact, even outside of energy. We just haven't felt it yet."

Little diversification

By almost every metric, Houston's economy flourished during the domestic energy renaissance. The biggest impact has been jobs: nearly 485,000 added to the region in the last five years, according to Jankowski. The impact of those workers, whose wages are about double the local average, extends far beyond the energy sector itself, as they buy homes, purchase cars and spend money around town.

Optimists look to the medical, shipping and logistics industries to offer a cushion. But it's naive to believe that if Houston thrived during the energy boom, it won't suffer as the sector struggles.

Bill Gilmer, director of the Institute for Regional Forecasting at University of Houston, noted that although Houston's economy has diversified since the oil bust that rocked the region in the 1980s, about half the region's economic activity is still affected by the oil industry.

"I don't think we have seen any significant diversification," he said.

If the price of crude oil settles at $50 a barrel, the city would narrowly avoid a recession. But at $40 it won't, said Mark Zandi, chief economist at Moody's Analytics, in an interview earlier this month.

Prices are at the tipping point now, and oilfield-services companies based in or with major operations in Houston already have announced more than 30,000 layoffs worldwide. Producers like Apache, Shell and BP have dispatched an unspecified number of workers as well. Companies can also shed jobs by cutting contracts with outside firms that provide services like personnel management and accounting, losses not reflected in layoff announcements.

Oil industry layoffs tend to start in the field, then migrate to machine shops and manufacturing plants. Eventually, they ensnare the white-collar jobs at headquarters.

"Where I think we are today is kind of in Phase One," said David Novelli, a financial adviser at Morgan Stanley. "Unfortunately, it's the people out in the field ... who are going to immediately suffer distress and have the greatest risk of job losses or wage disruption. Those regions are not in Houston."

The pain could spread here soon, though.

"I think these companies have to at least be looking at staffing across the board," said analyst Brian Youngberg, who covers exploration and production companies for Edward Jones. "Probably a lot of these companies have hiring freezes and wage freezes. The next step is layoffs."

With Gilmer citing statistical models showing every job loss in the energy sector taking four others with it, the pileup could happen quickly.

"Ultimately, this affects us widely," he said.

Cutting back

When workers begin to worry about layoffs, their spending habits change, said Ralph Schroeder, a financial planner with Ameriprise Financial. He's telling clients, including energy honchos, it's time to cut back on personal spending, maybe start eating at home more.

"There's nothing you can't cut, other than stuff you need to basically live," he said.

John Moore, owner of Moderno Tacos & Tex Mex near several energy companies' offices in Westchase, understands that.

"We've come off two years in Houston where the economy has basically been on fire," Moore said. "Restaurants have been doing great, with double-digit sales growth."

That pace has already begun to slow, he added, and he is hopeful that things are headed "back to a normal, slower-growth type of situation."

Travel and auto sales

The travel industry, and in particular hotels, has been another beneficiary of Houston's oil growth, as oil and gas officials from around the world travel here.

Nick Massad, president and CEO of American Liberty Hospitality, which owns 18 hotels across the Houston area, said about 30 percent of his company's business is tied to the energy industry. He reported little impact so far from oil's rapid decline.

"But it's early," he said.

"We're telling our managers to be prepared to do some belt-tightening for one to two years because we may experience some revenue declines," he added, stressing that he doesn't anticipate gloom but rather a modest drop in corporate business travel.

Stan Skadal, senior director of sales and marketing for downtown's 947-room Hyatt Regency Houston, said he, too, hopes to avoid the drastic travel cutbacks seen in previous downturns. The hotel has not yet seen a dip in transient corporate business or group bookings, he said, but he is keeping an eye on the oil and gas market.

"We're watching the stocks of our biggest companies we do business with to see if we can anticipate any trends," Skadal said.

At Tommie Vaughn Ford, which last year opened a King Ranch Saddle Shop inside its dramatically renovated dealership on North Shepherd, Janke said low oil prices could decrease sales of fleet vehicles like F-150 and F-250 pickups to the energy industry.

But he quickly added that cheap oil means cheap gasoline for retail customers, who bought 22 percent more vehicles last month than in January a year ago. That has Janke expecting a strong 2015.

"I think it will be a net positive," he said.

Rent to slide down

Despite a growing number of signs the city's booming real estate market is heading for a slowdown - office towers and apartment buildings under construction will go forward, but those in the planning stage aren't expected to follow - observers are not predicting a 1980s-style crash.

Back then, said Meyerson, a partner and office leader for the Houston office of Thompson & Knight, banks required little equity from developers to finance new buildings. The result was vacant skyscrapers and insolvent financial institutions.

Lenders today now require at least 20 percent down, Meyerson said, "so they're all resting pretty comfortably that their loans are in good shape."

Yet at the end of last year, there was 14.4 million square feet of office space under construction in the Houston area, according to the Avison Young real estate firm. Just over half of that was preleased.

Overall office vacancy in the region was 10.4 percent in the last quarter, however, with higher-end buildings in the single-digits. Commercial rents are likely to fall, but Meyerson said he hasn't seen it yet.

"It lags behind the current reality," he said. "Rental rates don't trade every day. Rental rates lock in for five and 10 years and there's not a lot of vacancy right now."

A slowdown in residential real estate may frustrate sellers, but it could cause some relief from soaring rents and home prices. Tens of thousands of rental units are expected to open this year and the giveaways have started, mostly in the brand-new developments.

There is "abundant free rent" in the Energy Corridor, particularly in new properties, Stacy Hunt of Greystar, an apartment development and management firm, said in an email.

Falling oil prices have also shifted the calculus of homebuying.

"The psychology of the people in Houston was this was a boom town," said Jacob Sudhoff, who arrived in 2010 from Corpus Christi to start a high-end real estate brokerage firm, Sudhoff Cos. "People were making more money off their homes than they ever made. Appreciation was happening at a record pace."

With the catalyst for much of that growth now stalled, homeowners should now expect flat or single-digit annual growth in their home values, said Jankowski, of the Greater Houston Partnership.

He and others agreed that the approaching decline will not be as devastating as the one three decades ago.

Not like the '80s

Steve Zimmerman survived that downturn with a sense of humor that he is carrying into the next one.

Zimmerman, who operates La Colombe D'or, a European-style hotel and ballroom on Montrose Boulevard, recently revived a dining promotion tied to the price of oil that garnered international headlines three decades ago. The "Oil Barrel Special" offers a three-course meal for the price of a barrel of oil.

So far, the promotion hasn't taken off like it did in the 1980s when oil fell to $9 a barrel. People dining and drinking at La Combe D'or today are talking about the price slump, but no one seems to be in a panic. There's been no slowdown in weddings and Zimmerman said he doesn't anticipate to lose bookings for swanky parties during the annual Offshore Technology Conference this spring.

"When we really had the crunch in the mid-'80s, we were getting a tremendous amount of cancellations," he said. "We haven't had any of that. It isn't like the sky is falling."