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Market Profile: Houston
If you’re looking for a bright spot in the housing industry, the Houston market just might be the place
HousingZone.com Staff
October 21, 2009
HousingZone
If you’re looking for a bright spot in the home building industry, the Houston market just might be the place. Real-estate consultants have praised the area’s resilience amid a national economic decline. The surging population — about 1 million additional people since the last census — is afforded a high quality of life for middle class folks. The average home price, according to the U.S. Census, hovers around $125,000, and the home supply has matched demand. Houston’s infrastructure is increasing to match the traffic. Houston is also a haven for the building industry. Major manufacturers such as Owens Corning, Grainger, USG and Weyerhaeuser have production facilities or distribution centers within 25 miles of the city. HoustonFacts.org recently reported the construction industry was a key factor in adding more than 50,000 jobs to the area in 2008. The energy and health care corridors contribute to job growth as well. There are plenty of reasons pulling people to buy a home in Houston
Here’s an overview of how the production, custom home building and remodeling markets are faring:
Production home market:
Kimberly Paulus, vice president of sales for Pulte’s Houston Operations, is happy to report sales have been steady. “We never saw the same price appreciation run-up other areas did, so we’re not seeing run-downs,” Paulus says. “Volume is a little off, but we’re not off in price, and that’s important.”
There’s a long list of pluses about settling in the Houston area, but some home buyers are still a little nervous, her team observes, but home buyers seem to be finding security in master planned communities.
First-time home buyer trends are similar to those found nationwide, Paulus says. She notes entry-level buyers can get a lot of home for their money in Houston and thus might be privy to more upgrades than other areas. Still, “we’re seeing across the board that people are more financially conservative than in the past, and that’s not a bad thing.”
Although foreclosures in the are have begun to rise in the past few months, Pulte reports isolated foreclosures that tend to occur geographically.
Custom home building:
Houston’s growing job market, particularly in the energy and medical sectors, is expected to give custom-home building a boost. New medical facilities will bring in new doctors and their support personnel, earning salaries that will allow many of them to afford custom homes. There’s anecdotal evidence that it’s already happening.
“A Realtor I work with told me that, since August of this year, he’s seen more activity in home sales over $1 million than in the entire previous year,” says Stephen Hann, president of Hann Builders in Stafford, Texas.
Local builders and designers indicate that two Houston suburbs, Katy and Sugar Land, are particularly ripe for a surge in custom building. In Katy, recently named one of America’s boomtowns by BusinessWeek, construction and salaries skyrocketed between 2000 and 2008, and the average household income there is now $76,000 — $10,000 more than the U.S. average. Sugar Land made Forbes’ list of “America’s Top 25 Towns to Live Well” in 2009, with a median income of $103,997.
Remodeling:
The Houston remodeling market may not be totally immune to the slowdown hitting the rest of the country, but remodelers there say it has been a lot less severe.
While remodeling activity was down sharply the first few months of the year, remodeling picked up once spring hit, says Roland Younger, president of Living Improvements in Stafford, Texas.
“It started out slow at the beginning of the year with a lot of uncertainty, people just taking a wait and see approach,” he says. “It picked up in March, and by April we were right back on pace with last year.”
Jeff Hunt, vice president at Brothers Strong in Houston, echoed that sentiment, saying his company has seen a “tidal wave” of work since early summer. He credits Houston’s stable home prices for keeping the remodeling market steady.
Houston Market Videos:
Montrose Among 10 "Great Neighborhoods"
The electic southwest Houston neighborhood known to people in the Houston area as 'the Montrose' has been named as one of the ten Great Neighborhoods of 2009 in the U.S., according to the American Planning Association website. (click arrow to view video)
Houston's Budget Woes
Even as the struggling economy shows signs of sputtering back to life, the city of Houston’s budget appears to be getting much worse. (click arrow to view video)
© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.
