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Is Houston Real Estate Market Weakening?


student4life

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Hello I have been planing and searching to buy some land to build a small house on with a nice size yard to live in for about 2 years now in the Houston area... I have been waiting patiently for a good deal... I would like to build as close to downtown as possible in a good area with low crime... I have been hearing rumors of developers getting ready to sell land in preparation for a softening market... Has anyone heard these rumors as well?

Also the link that prompted this post is on CityData so I just wanted to get some members thoughts on the Houston situation since I am still looking and waiting patiently...

Thanks!

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If you are waiting for values in inner city Houston to decrease substantially or even marginally, you better grab a seat.

flipper

I haven't seen any softening of the market along the west side of town (inside the Beltway/ Uptown/Memorial corridor). In fact, the prices of new construction seems to have even gone up. The hardest part about this area is that no one is selling because they can't afford to move up at this point. So many people are packing into the area that it makes it a supply and demand thing. In the burbs ( a good 20 miles from downtown or more) I have noticed a 10% slide in the past six months.

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Hello I have been planing and searching to buy some land to build a small house on with a nice size yard to live in for about 2 years now in the Houston area... I have been waiting patiently for a good deal... I would like to build as close to downtown as possible in a good area with low crime... I have been hearing rumors of developers getting ready to sell land in preparation for a softening market... Has anyone heard these rumors as well?

Also the link that prompted this post is on CityData so I just wanted to get some members thoughts on the Houston situation since I am still looking and waiting patiently...

Thanks!

Job growth rates in every major market in Texas is significantly higher than the national average. Houston is no exception. On the average, I don't think our land prices are going to decline. But on average, the U.S. land market is clearly less tight than it had been, all without having had too much of an effect on us yet. Averages are often misleading.

Where are you looking for land? If it is an area where the predominant consumers of undeveloped land are developers that develop communities with home prices below $150,000, land prices are likely to decline because there are fewer construction starts. If it is an area where home prices tend to be over about $225,000, construction starts in that range have actually continued to increase, so land prices will likely continue to rise.

If you're looking at the inner city, it gets more complicated, but just keeping the discussion on single-family lots, I think that'll remain a good investment.

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Job growth rates in every major market in Texas is significantly higher than the national average. Houston is no exception. On the average, I don't think our land prices are going to decline. But on average, the U.S. land market is clearly less tight than it had been, all without having had too much of an effect on us yet. Averages are often misleading.

Where are you looking for land? If it is an area where the predominant consumers of undeveloped land are developers that develop communities with home prices below $150,000, land prices are likely to decline because there are fewer construction starts. If it is an area where home prices tend to be over about $225,000, construction starts in that range have actually continued to increase, so land prices will likely continue to rise.

If you're looking at the inner city, it gets more complicated, but just keeping the discussion on single-family lots, I think that'll remain a good investment.

Thanks Niche, Yes lets stay on single-family lots topics in order to narrow down and focus the discussion. I have looked at various places around 15-20min from the downtown area... I have even looked at the Acres Homes area since I know of a Houston artist with a TALL fence that stays in that area... I always keep an open mind and quality of life is always at the top... When I attended Houston's Art Crawl I did discover some promissing areas...

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Thanks Niche, Yes lets stay on single-family lots topics in order to narrow down and focus the discussion. I have looked at various places around 15-20min from the downtown area... I have even looked at the Acres Homes area since I know of a Houston artist with a TALL fence that stays in that area... I always keep an open mind and quality of life is always at the top... When I attended Houston's Art Crawl I did discover some promissing areas...

How big a lot do you need? Just looking at land prices on a per square foot basis, it's hard to beat Acres Homes for the mix of reasonable cost and large lots. If you haven't had a chance, check out the Art Guys' compound up there...really neat.

But if you only need something that's pretty small on which you can go vertical, I'd suggest you stick to the East End, Greater Third Ward, or Near Northside.

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When I made an offer on a house on McKinney in Eastwood, I did so primarily because the lot next door was for sale. I don't know if this is typical: a narrow corner lot maybe 6,000 sqft was asking $79K. As far as I know it's still for sale. The Patranella family owns it and whomever I spoke to a couple of times did not seem interested at all in budging on price. Is this a reasonable price in Eastwood? I've never seriously shopped for lots.

One in the 4600 block of Walker should be going up for auction any day now. Back taxes due are about $30 K. But the guy restoring the house adjacent will probably get in on it before anyone else does. Rumor has it at our little civic assoc that the whole east end is rife with people with big back tax bills, I've just never spent enough time on HCAD's website to look.

Acres Homes. Now that's a commitment.

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Rumor has it at our little civic assoc that the whole east end is rife with people with big back tax bills, I've just never spent enough time on HCAD's website to look.

In my experience that seems to be the case. I run across more properties with back taxes owed in 77023 than anywhere else that's decent and close in.

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When I made an offer on a house on McKinney in Eastwood, I did so primarily because the lot next door was for sale. I don't know if this is typical: a narrow corner lot maybe 6,000 sqft was asking $79K. As far as I know it's still for sale. The Patranella family owns it and whomever I spoke to a couple of times did not seem interested at all in budging on price. Is this a reasonable price in Eastwood? I've never seriously shopped for lots.

One in the 4600 block of Walker should be going up for auction any day now. Back taxes due are about $30 K. But the guy restoring the house adjacent will probably get in on it before anyone else does. Rumor has it at our little civic assoc that the whole east end is rife with people with big back tax bills, I've just never spent enough time on HCAD's website to look.

Acres Homes. Now that's a commitment.

I sold that one on the corner of Rusk & Eddington, which was a little larger for $99,900 maybe 18 months ago. McKinney is a good street and with that one being a corner, they should be able to get it.

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If you really don't mind a bad neighborhood, you might look within the Kashmere Gardens area to the northeast, Fifth Ward, near the City of South Houston, or in Sunnyside.

wow. TheNiche hit it out of the park with the bad neighborhood list. Other than "Southwest Houston" (which isn't a neighborhood) those are some of the worst neighborhoods.

Acres Homes... do it.

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Looks like another builder might be planning to dump some land... 40 cent on the dollar...

Does anyone have the inside scoop on Lennar?

http://www.chron.com/disp/story.mpl/ap/fn/5348357.html

With Perry and Lennar getting rid of some land maybe I might find me something nice at a reasonable price...

They're hurting in most markets, just like all the other homebuilders. It comes as no surprise that they'd want to dump excess inventory in such places; holding costs are a delicate flower.

I'm not sure that this is a trend that applies to Houston very well, though.

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They're hurting in most markets, just like all the other homebuilders. It comes as no surprise that they'd want to dump excess inventory in such places; holding costs are a delicate flower.

I'm not sure that this is a trend that applies to Houston very well, though.

You are probably right but if I hear of something I will definately let you know... Just hope its not kept within certain circles... I knew I should have invested in Golf lessons! ;-)

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I think the Houston market is weakening. As for how this is affecting builders, I have heard that Newmark Homes is in trouble due to the severe financial problems of its parent company, TOUSA. Rumor has it that TOUSA will sell Newmark. So how is this affecting the Newmark developments in Houston? The jury is still out, but I know that in Shadowcreek Ranch (Pearland) Newmark has sold many of their unsold lots to other builders.

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  • 6 months later...

If anyone is interested...

http://www.businesswire.com/portal/site/go...amp;newsLang=en

50 Builder Model Homes to Be Auctioned July 27th in the Deal of a Lifetime!

HOUSTON--(BUSINESS WIRE)--Attention Houston home shoppers! The housing downturn has reached Houston resulting in sellers offering new home inventories at public auction. To move inventory quickly, market-driven deals on 50 brand new builder model homes, built by Lennar and KB Homes, will be offered to the public in a unique auction on July 27, 2008.

The July 27 auction will be held at the Hilton Post Oak in the Galleria area at 1:00 PM and offers buyers previously shut out of the booming Houston area housing market a once-in-a-lifetime opportunity to put down roots in the some of Houston

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