WSJ says Houston housing is hot (inc. downtownhomes)The Wall Street Journal today has an article on shifting strength in the housing markets, declaring Houston one of the new hot centers along with Dallas and Atlanta. We're the only city in their list where housing inventory has actually dropped over the last year, a sign of market strength (sorry about the small graphic - it's the largest Blogger would let me do for some reason). The relevant excerpts:
Reinforcing that trend is this story in the Houston Business Journal about downtown townhomes - or downtownhomes for short.
As home sales cool on the East and West coasts, some cities that missed out on the real-estate boom are becoming the strongest markets.
A look at inventories of unsold homes, prices and employment trends points to generally positive signs in Houston, Dallas and Atlanta -- cities that have seen only modest home-price gains in recent years.
Metropolitan areas whose housing markets look less healthy, at least in the short term, include Boston, Los Angeles, Miami, Minneapolis, New York, Philadelphia and San Francisco. All of them have growing inventories of homes and relatively weak job growth. As a result, houses that a year or two ago might have sold in hours now are languishing on the market for months, and some sellers are cutting prices.
Texas has been a laggard in recent years, partly because job markets were weak in some cities and land for new houses is plentiful. Now, the state's job market is strong, as cities there are benefiting from the oil boom and an influx of people from abroad and elsewhere in the U.S., and housing demand is keeping up with the relentless spread of new subdivisions as Texas cities sprawl. Investors, many from California, are adding to the demand.
Texas home prices could rise 6% to 9% annually over the next several years, up from an average of 4.5% over the past 15 years, says James P. Gaines, an economist at Texas A&M University's Real Estate Center in College Station. He says the state is attracting residents and employers because its housing remains very affordable by national standards.
"I don't see a slowdown coming," says Lorraine Abercrombie, chairwoman of the Houston Association of Realtors and director of marketing for Greenwood King Properties. Last week, Greenwood listed a five-bedroom home in Houston's Wilchester West neighborhood. Within three days of the first showing, the home was under contract for $465,000, well above the asking price of $449,000.
"Perfect storm" may be pushing it a bit - office vacancy is still high downtown and not getting absorbed very quickly - but there's certainly a lot of healthy non-office growth and development going on.
Upscale home builder Frank Liu is planning to build what will be the first traditional residential subdivision in downtown Houston.
Liu is planning a five-home community called Leeland Square Subdivision on approximately 7,500 square feet of land at the southwest corner of San Jacinto and Leeland.
Although downtown's residential contingent is made up mostly of apartments, lofts and condominiums, some builders have ventured into row townhome development in and around the edges of the Central Business District. But Liu's project will differ in that each freestanding home will have its own lot, similar to neighborhoods in more suburban settings.
This project is one component of what Baer sees as a "perfect storm" brewing downtown. The economic boost is being aided by Chevron U.S.A. Inc.'s recent deal to lease 465,000 square feet of office space at 1600 Smith St. and by the $200 million Houston Pavilions mixed-use project, as well as the pending development of the 13-acre Central Park in front of the George R. Brown Convention Center.