To Buy A Loft Or Townhome?

[TheNiche]

WOW! all of this data.... Okay, if you're not buying at the 160k level, what's the point in spending 280k, when you can the same product in a more developed part of the inner loop????

Look at the listings. They're very clearly discounted to reflect the lower prevailing land values. You'll also note that as price points of comparable products increase, the warehouse district discount remains about the same but represents a lower % of the total property value. This should be intuitive; land prices reflect the value people place on location, construction costs reflect the value people place on improvements.

Different people, different priorities, and they will sort themselves accordingly.

Again, I present the retail, commerce, park activity level, bum activity level issue. Why not buy in parts of houston at the same price where it takes you the same amount of time to travel downtown to various grocery stores, and shopping (4 to 5 mins regardless of rush hour) versus an area where you must hope for a grocery store and the nearest coffee shop is the MAXWELL Refinery!!!

Better retail offerings will be forthcoming, and in the mean time I again present the 'you don't commute to and from retail five days a week during rush hour' counterargument. Park activity will be highly influenced by Discovery Green, which btw is set up to be very accomodating for children and pets (not that most prospective buyers in the downtown area even have children); RM actually isn't very well set up to access parks at all on account of that there aren't any continuous sidewalks connecting it to Memorial Park and that parking and access to Tinsley Park isn't as convenient as it could be.

The nearest coffee shop is probably Bohemeo's. They double as a restaurant, art gallery, and performance venue. I highly recommend it, especially as an after-dinner hangout following a meal at Kanomwan.

Also, where do the kids play in these areas.... Oh, i forgot you have to wait a few years for that. By the time the crack houses are gone and the 18 wheelers aren't dropping off items to the Wharehouses, the kids will be teenagers. Hey, but it'll be better than it was when they were 6!

What kids?

Truck traffic is actually pretty minimal these days, and decreases with each successive warehouse that is torn down for further development. Actually traffic altogether is minimal, which although not very advantageous for new retailers (especially the likes of CVS, gas stations, etc.), is actually much more positive for creating a nice pleasant neighborhood, more like RM than like Midtown.

And as far as crackhouses are concerned...I'd again point to the fact that the East Downtown Warehouse District was formerly a warehouse district, not a neighborhood.

As far as appreciation in the east end area, I'm sure you can get it, but how long must you hold??? You'd basically have to hold onto to your place until 2015.

Are you so deluded as to believe that appreciation occurs all at once? I've already explained the underlying mechanics in an earlier post. If you'd like to challenge my assertions, you're most welcome to.

do you know another reason why they are building this area??? It's alternative to those who can't afford to live in TMC, RM or Midtown. I'm just telling the truth... Go to the east end and kick up some dust with my peeps from the wards (2nd, 3rd, 5th) for a few years.....It's all good, they'll take good of you, your home and your car. That's a heck of a place to get sandwiched in between....

It's crazy that were arguing over the hood in here, it's really the hood and notorious for being the hood (All 3 of them), and it'll take a lot longer to clear this area, than it took to clear Allen Parkway projects and 4th ward...(they've been doing that since 1994) 13 years.....

I'm fully aware that most people considering the East Downtown Warehouse District are there because that's what they can and are willing to afford. And barring a total collapse of the Houston economy, which you explained away as unlikely in a previous post, those people aren't just going to go away one day. They're the first wave, urban colonists that make the neighborhood more palatable for wealthier more uppity people.

2nd Ward is across the tracks, 3rd Ward is across the freeway, 5th is across tracks, a bayou, and a freeway, and is basically in a different part of town altogether...if you're going to cite 5th Ward, you may as well cite Pasadena and Southwest Houston. The East Downtown Warehouse District is distinct from these neighborhoods. Compared to what had previously been RM, something that looked a lot like 2nd Ward, the Warehouse District actually has an advantage. And compared to 4th Ward, the Warehouse District doesn't have to contend with Section 8 housing or anything approaching that level of bum activity...yet the 4th Ward also is being transformed by new construction.

They've been trying to clean up the area East of the Ballpark since 1999...Look where we are now, this reminds me of Comiskey park in Chicago, where the WhiteSox play... It'll never be Wrigley Field or Wrigleyville(the neighborhood where the Cubs play). It doesn't matter how much gentrification occurs, East End will always be a 3rd or 4th Tier area. Let's not forget the amount of affordable housing in that area. It's not going anywhere...What high end area is the EAST END attached to?

Who was arguing that the East End would transform into a 1st or 2nd Tier area!? The East End is an area many times larger than the Warehouse District. Its progress as a whole is a topic for a different thread and is only vaguely relevent to what the original poster was wanting to discuss.

Please stay on topic. Also please elevate your level of discourse; if you're going to accuse myself or musicman of being liars, please back up your charges with valid premeses.

[sowanome]

Look at the listings. They're very clearly discounted to reflect the lower prevailing land values. You'll also note that as price points of comparable products increase, the warehouse district discount remains about the same but represents a lower % of the total property value. This should be intuitive; land prices reflect the value people place on location, construction costs reflect the value people place on improvements.

Different people, different priorities, and they will sort themselves accordingly.

Better retail offerings will be forthcoming, and in the mean time I again present the 'you don't commute to and from retail five days a week during rush hour' counterargument. Park activity will be highly influenced by Discovery Green, which btw is set up to be very accomodating for children and pets (not that most prospective buyers in the downtown area even have children); RM actually isn't very well set up to access parks at all on account of that there aren't any continuous sidewalks connecting it to Memorial Park and that parking and access to Tinsley Park isn't as convenient as it could be.

Okay once again, it seems that you pointed out your mistake of speaking only of the Wharehouse district and not the EAST END....Yet you place postings of the entire East END including the Wharehouse district? Yes, you did....maybe you should go back and EDIT...or was that part of the LIE?

Also, did you forget about Spotts, Cleveland and Buffalo Bayou Parks that are in RM? I rest my case...NICHE, find another person..

[TheNiche]

Okay once again, it seems that you pointed out your mistake of speaking only of the Wharehouse district and not the EAST END....Yet you place postings of the entire East END including the Wharehouse district? Yes, you did....maybe you should go back and EDIT...or was that part of the LIE?

I'm sorry, but I just don't understand you.

Also, did you forget about Spotts, Cleveland and Buffalo Bayou Parks that are in RM? I rest my case...NICHE, find another person..

I'd never heard of Spotts or Cleveland parks. That's my mistake.

Buffalo Bayou Park is Tinsley Park. I did mention that.

[KinkaidAlum]

Loft.

You already live downtown and you love it. Go for it.

[emirate25]

Loft.

You already live downtown and you love it. Go for it.

I know, the only thing that frightens me a bit is the maintanance fee. it averages from $350 - $550 a month.

[KinkaidAlum]

I know, the only thing that frightens me a bit is the maintanance fee. it averages from $350 - $550 a month.

People get frightened by a maintenance fee sand some do seem high, but remember, homes require $$$ for upkeep. The best bet is to compare each building and see what the fees cover.

The way I see the fees break down like this;

1) general maintenance- taking care of the lobby, elevators, common areas, etc...

2) utlities- sometimes a portion of the fees go to utility bills...you'd have these in a townhome

3) building reserve- this is actually a nice thing. When a problem does arise, your monthly payments along with your neighbors should cover it unlike in a townhome where'd you'd have a huge one time out of pocket expense if something happens that needs immediate repair (and things ALWAYS happen in a home!)

4) services- many of the newer buildings have club rooms, exercise rooms, doormen, valet service, etc... If these facilities are nice enough, you'd potentially be saving money on monthly gym memberships and even decorating expenses (you won't need to buy a pool table or game room type activities if there's a pool hall in your building)

[TheNiche]

People get frightened by a maintenance fee sand some do seem high, but remember, homes require $$$ for upkeep. The best bet is to compare each building and see what the fees cover.

Don't forget insurance. Familiarize yourself with the specifics of the policy taken out by the association so that you know what kind of insurance you'll need to take out to fully cover yourself.

The big downside to maintenance fees is that they can go up (or down) dramatically if an overzealous board is elected that tries to radically improve things (or tries to deeply cut costs). I'm in an an association where they're very frugal, for instance, and although that's the lesser of two evils IMO, there are some things that they could do to increase property values (like buying the aging strip center next door, giving it a face-lift, then re-tenanting, not only making the neighborhood nicer but possibly even realizing positive cash flow on the deal).

[KinkaidAlum]

Don't forget insurance. Familiarize yourself with the specifics of the policy taken out by the association so that you know what kind of insurance you'll need to take out to fully cover yourself.

The big downside to maintenance fees is that they can go up (or down) dramatically if an overzealous board is elected that tries to radically improve things (or tries to deeply cut costs). I'm in an an association where they're very frugal, for instance, and although that's the lesser of two evils IMO, there are some things that they could do to increase property values (like buying the aging strip center next door, giving it a face-lift, then re-tenanting, not only making the neighborhood nicer but possibly even realizing positive cash flow on the deal).

Yep, you're right. I totally spaced on the most obvious maintenance fee; building insurance. You're also right on the board. That's why if I ever purchased in a building like that, I'd want to be active on the board. Paying attention is the best insurance you can have.

That said, I still think people see the monthly fees and think what a huge added expense that is when added to the mortgage. While true, it's not like you aren't going to have the same expenses plus or minus a few with an individual town home. You're going to need insurance, utilities, general maintenance, repairs, etc... I tend to think of maintenance fees as a savings reserve for a rainy day...

[BryanS]

Regarding the fees... First - you can't write them off on your taxes, like you can the interest on your mortgage. Second - For every $100 a month you pay in maint fees, you could buy up to 15K+ more on a townhome/condo that does not have those fees (rough estimate). So... a 200K condo w/ 300/month maint fees OR ... a 245K condo/townhouse with no maint fees - for the same monthly payment, plus you get to write off the mortgage interest on your taxes. Need to look at the total picture, including your tax situation and what you could end up buying - absent those fees (or how much more you could buy into a property with lower fees.)

When I look at maint fees - I always ask what it covers, especially the insurance aspect. Insurance can run you -rough estimate- $100/month on a single family/detached/fee simple (i.e. no maint fee) townhouse. That is an expense, again, that you cannot avoid, nor write off on taxes. So... if a maint fee on a condo is say $200/month - but it includes insurance (for the basic structure of the building)... and maybe the water bill... then you could argue that that the fee is worth it. Problem is... you may still need insurance for the contents/interior of your condo unit. So you may end up paying for insurance on top of what is included in the building maint fee, none of which you can take advantage at tax time. To me, owning a condo is like owning and renting at the same time, once you take into account cash that gets dumped into fees and "extra" insurance - that could otherwise be avoided.

It all depends on, really, how comfortable you feel. I hate maint fees. I hate over zealous HOAs. I could care less what my neighbor's house looks like... but then again... I am that neighbor that would buy the ugly unit/townhouse/house - for the lowest cost as compared to other units - and just leave it (or improve it to my tastes, on my own terms - screw the would-be HOA, to hell with the neighbors) But that is me. If you don't like doing home repairs, don't care to do it, and don't mind paying a reasonable maint fee, then go for it. Just make sure you're not getting raped.

Edits: added a couple of words I missed... The vodka and cranberry is having an effect on me.

[TheNiche]

Regarding the fees... First - you can't write them off on your taxes, like you can the interest on your mortgage. Second - For every $100 a month you pay in maint fees, you could buy up to 15K+ more on a townhome/condo that does not have those fees (rough estimate). So... a 200K condo w/ 300/month maint fees OR ... a 245K condo/townhouse with no maint fees - for the same monthly payment, plus you get to write off the mortgage interest on your taxes. Need to look at the total picture, including your tax situation and what you could end up buying - absent those fees (or how much more you could buy into a property with lower fees.)

When I look at maint fees - I always ask what it covers, especially the insurance aspect. Insurance can run you -rough estimate- $100/month on a single family/detached/fee simple (i.e. no maint fee) townhouse. That is an expense, again, that you cannot avoid, nor write off on taxes. So... if a maint fee on a condo is say $200/month - but it includes insurance (for the basic structure of the building)... and maybe the water bill... then you could argue that that the fee is worth it. Problem is... you may still need insurance for the contents/interior of your condo unit. So you may end up paying for insurance on top of what is included in the building maint fee, none of which you can take advantage at tax time. To me, owning a condo is like owning and renting at the same time, once you take into account cash that gets dumped into fees and "extra" insurance - that could otherwise be avoided.

It all depends on, really, how comfortable you feel. I hate maint fees. I hate over zealous HOAs. I could care less what my neighbor's house looks like... but then again... I am that neighbor that would buy the ugly unit/townhouse/house - for the lowest cost as compared to other units - and just leave it (or improve it to my tastes, on my own terms - screw the would-be HOA, to hell with the neighbors) But that is me. If you don't like doing home repairs, don't care to do it, and don't mind paying a reasonable maint fee, then go for it. Just make sure you're not getting raped.

Edits: added a couple of words I missed... The vodka and cranberry is having an effect on me.

You bring up some interesting points, especially with the comment about condo ownership being like owning and renting at the same time. Personally, I'd take that a littler further still, saying that any kind of real estate ownership is only a mechanism by which you lease property from the government...it sounds really anti-American, but whether you like it or not, that's how the property tax system is set up.

But the thing with condos is that although they tend to be more amenity- and common-area-heavy, it isn't that you don't own a share of even those areas, it's that there's just more to have to maintain, and maintenance is expensive. But nobody is making a profit in the way that the owner of an apartment complex would. If the association can find a reasonable way to cut costs (i.e. installing seperate water meters), the savings is passed on to you.

[jscarbor]

You failed to mentioned supply and demand, and also the price point in which you are located....Yes, you hit it on the head with the psq prices, but it's the winter and we are basically in the middle of a recession, which in part is due to the subprime/creative lending stage that we went through from 2001-2005. But obviously, along with the supply of investors, your appreciation had nothing to do with this? Nothing, you are just blaming it on being at the right place at the right time....Have you ever taken Economics 101 or better yet Real Estate Economics? Again, I agree on what you are saying about specific prices and the current pricing slowdown. However, Houston is a very protected place and the reason there is a lack of demand, is bc buyers keep listening to the national market! Trust me, things that are happening nationally aren't heavily occuring in Houston, The 4th largest city!!!

With that being said, have you seen what's available in the East End and it's Price Points? It's ridiculously, over priced for the product and they have already pushed up the $psf to a level that's comparative to parts of the Med Center, RM, and Midtown. This makes no sense especially for the much of the sub-par product that's in the East END...

My other ISSUE, is the amount of time it's taking to develop this area......They've been toying with this area since 1999, when they were clearing the area that's visible from Minute Maid park. Please do your homework....It's been almost 9 years and I'm sure when you moved to RM you know exactly what I'm speaking of...Is it better than 9 years ago? Sure, but where is the retail/parks/commerce? Do we have to wait 10 years for hardy yards, bayou clean up, etc..

So you don't like the east end... thats fine. But man you need to atleast line yourself out with some real facts or atleast some form of a fact. The area is large and although not completely filled I would be surprised if there were not 400 homes built in the last 4 years over in the east end? I know for a fact that I built one of the first (sub par in your mind I guess) sets of townhouses on Dowling about 4 years ago not 9 years ago as you say when things were starting. Sure there were some rumbling 9 years ago but I don't think thats the starting point? If it is then you have to set RM starting point 15 years ago? Perry built a bunch and now Waterhill,Intown and HHN are really big in the area. Of course no matter what you think about these builders theye are also the same builders that built in Rice Military and midtown aren't they? So why are these builders good on the west side and not on the east side?

Since I first started my Dowling project there have been a few live music venues and some restaurants open in the area. Lucky's Pub is a bar that opened recently as well. The original ninfas, Villa Arcos, alamo tmales, District 7, bell and whistle, Vic and Anthony's, Strip house, The Grove and lakehouse....Options from one end of the spectrum to the other really! Its kind of amazing in fact.

So in summary, the east end doesn't float your boat...we get it. Some people actually like it. Its really quite amazing that not everyone likes the same thing, it really makes for a more interesting world doesn't it?

[UHCoog27]

So in summary, the east end doesn't float your boat...we get it. Some people actually like it. Its really quite amazing that not everyone likes the same thing, it really makes for a more interesting world doesn't it?

Thank you. I've lived in the East End for two months now. Is it River Oaks? No, and thank god, because that's not my scene. Instead, I'll "put up" with my lack of Starbucks, "settle" on Bohemeo's, and enjoy my 1.9 mile commute to work, all in a house that would have cost me double in "nicer" areas.

[considering]

Since I first started my Dowling project there have been a few live music venues

Off topic, I know, and nothing novel but I couldn't help but mention that Warehouse Live is hands down the best live music venue in Houston...other places are good, to be sure, but nothing parallels the class and still not-too-big feel of WL...IMO, of course, but I think I'm right on with this one.

Now if only all those bands that go to Austin would stop skipping Houston all would be well...

[barracuda]

I actually agree with TheNiche. With the amount of money being pumped into east Downtown and now the East End, land values are increasing faster relative to areas like River Oaks. Granted, the East End is still cheap by those standards, and it will never be River Oaks, but if you give it time you will definitely make out financially. Also, IMO, anything inside the loop is bound to increase in value much faster than areas outside the loop.

The advantage to areas like Midtown and the East End is you can buy newer and bigger townhomes in your price range rather than older and smaller townhomes in areas like River Oaks. Either way, the property value should go up nicely.

[sifuwong]

My friend lives around Live Oak St and Rusk(east Downtown). She bought it about 2 yrs ago. It is still a developing area, but prices aren't as high as other places. She bought her townhome for $229k at the time. It is now around $255k.