Jump to content

Growth, But No Boom

Recommended Posts

Jan. 1, 2005, 9:44PM

Year of growth, but no boom

A mixed 2004 could mean more of the same during 2005


Copyright 2005 Houston Chronicle

Houston's real estate industry made some positive strides in 2004.


ChevronTexaco bought the empty Enron building; an 11,000-acre master-planned community was announced in northwest Houston; and home sales shattered records.

But it still wasn't the boom some were hoping for.

While oil prices soared, energy companies didn't hire many more employees or lease additional office space.

And the huge number of Houstonians who bought homes left scores of apartments vacant.

In a word, 2004 was mixed.

While it's hard to sum up a year of real estate in one column, here's a look at how some of the sectors performed.


Month after month, sales of used homes hit new plateaus.

By November of last year, more than 65,600 used homes had sold in Houston, far surpassing the number of properties sold in 2003.

The demand was driven by still-low interest rates, affordable properties and loads of first-time mortgage programs.

New-home sales also hit new levels.

In the third quarter, 10,845 new properties sold, up 14.6 percent over the third quarter of 2003, according to Metrostudy, a housing consulting firm.

But also in the third quarter, the median price for a used home fell 1.2 percent to $137,500.

Some said that decline was a sign that the days of big appreciation were over.

The year ended with further cause for concern: foreclosures.

In Harris County 6,553 homes were foreclosed on and 19,866 properties were posted for foreclosure.

The number of foreclosures was the highest since 1991.

And the number has almost doubled since 2000.


Apartments in Houston had a less than stellar year.

Developers built some 14,000 apartments in 2004, and another 15,000 are under construction.

This abundant new supply comes at a time when low mortgage rates are encouraging renters to buy homes.

Occupancy for apartments was around 87 percent in the third quarter of this year, according to O'Connor & Associates.

For apartment dwellers, that means free rent and other bonuses.

But apartment developers, already faced with rising construction costs, might want to think twice about new projects.

"Next year is going to be an ugly apartment market for Houston, Texas," Ric Campo, CEO of Camden Property Trust, said at a recent real estate luncheon.

Campo, who has several new apartment complexes in the pipeline, said he won't start building until the end of 2005.


Houston's office market finally started to shed the Enron stigma, which came with two downtown skyscrapers left empty by the bankrupt energy trader.

ChevronTexaco purchased one of those buildings, but the other still remains vacant.

"Downtown's still got a bigger hill to climb," Doug Little of PM Realty Group said.

Indeed, at the end of the third quarter, the vacancy rate for all types of office buildings downtown was 20 percent, according to Trione & Gordon/CBRE, a realty brokerage firm.

But industry watchers said the worst looks to be over. And as the final numbers trickle in, the amount of office space leased should end the year on a positive note.

"2004 was the year of the turnaround," Mike Boehler of Staubach Co. said.

The prospect of plentiful concessions packages had tenants on the prowl for new office space.

But while many building owners are still offering perks like free parking and other allowances for tenants, some are starting to hold back.

"When you see landlords here and there putting the brakes on, you know times are changing," Boehler said.

Other office markets around the city fared much better in 2004.

By the end of the year, the big blocks of space in the Westchase District and the Energy Corridor were mostly gone.

At 250,000 square feet, one of the largest leases was inked last year by Citgo Petroleum in West Houston.

And in The Woodlands, Huntsman Chemical signed a deal to move into more than 130,000 square feet, scrapping a long-term lease in the Galleria area.


Retail was one of the hottest markets in Houston last year.

In the third quarter of 2004, retailers ranging from mom and pops to major supermarkets moved into more than 1.1 million square feet of space.

Demand was the highest it had been since 2000, real estate research firm O'Connor & Associates said.

Neighborhood centers

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...