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March 2014

Houston’s High-Rise Evolution

The development of the 610 Loop in the 1960s supported Houston’s growth as “arguably the  most sprawling, least dense, most automobile-dependent major city in America.”  Houston has more than 15 “activity centers,” essentially concentrations of employment, retail outlets and residences spread over 10,000 square miles. So unlike other major metropolitan cities in which high-rises are concentrated in a central urban area, Houston’s initial residential high-rises were developed close to affluent, single-family communities, such as Lamar Tower (1963) and Inwood Manor (1963) both in River Oaks.

As Houston’s population growth expanded in the 1970s and 1980s, developers added 12 residential towers, mostly in the Galleria and River Oaks areas.  Unfortunately, most of this development added more than 2,000 residences in a just a few years to a city that would lose 221,000 jobs while most of these buildings were under construction or nearing completion.  The result was a glut of inventory that ended up being leased and then converted back to sales years later as institutions like Citibank and Chase resumed underwriting condo mortgages..

The next wave of high-rise development was more deliberate with regard to number of units and location.  Six of the 12 developments between 1995 and 2010 were in the Galleria area with the other 6 scattered throughout Houston.  During this same timeframe, the Uptown District was officially formed and expanded north to include Interfin’s Uptown Park development consisting of 50 boutiques and high-end restaurants.  And today, BLVD Place is the District’s newest mixed-use development, ideally located at the corner of San Felipe and Post Oak Boulevard.  This 20-acre development will be anchored by a 55,000sf Whole Foods and include 205,000sf of retail, 1.4 million square feet of office space a 275 room hotel and over 1,000 residences.

Unprecedented Timing for Condominium Development

According to the Institute for Regional Forecasting and The Texas State Data Center, the city of Houston will need an additional 32,000 – 52,000 new homes per year to support the job growth predicted from now through 2020. There were 25,627 new home starts in 2013, representing a 13% increase over the 22,685 new home starts in 2012. And while residential permits set an all-time record in 2013 at $2.3 billion, demand continues to outpace supply at an unprecedented velocity.  As of January 31, 2014, there were only 2.6 month’s supply of inventory reported, the lowest in the city’s history.  Months inventory represents the number of months it will take to deplete current active inventory based on prior 12 months sales activity – 6 months is considered equilibrium.

This housing shortage is presenting unprecedented opportunity for high-density urban development as with more jobs comes more people and more people means more traffic.  And with the major employment centers of Downtown, Medical Center, Uptown and Greenway Plaza hovering in or around the 610-Loop, employees are becoming auto-minimalists and want to live inside the loop to eliminate or mitigate commute times.  However, the scarcity of land, coupled with the difficulty in attaining construction financing for mid-rise and high-rise product, has resulted in the small footprint “tall & skinny” home becoming the dominant “for-sale” product type in Houston’s urban cores.  These 6 – 10 home neighborhoods of bricks-and-sticks are typically zero lot line homes, 4-5 stories high with little or no green space or controlled access.

Single-story living, with services, amenities and controlled access, is highly desirable in America’s 4th largest city. In the 26 high-rise condominiums throughout the city housing over 4,500 residents, there are only 79 homes available for sale, and in the top five buildings selling for $498sf – $713sf, only 9 residences are available.

Houston Real Estate Market

Houston’s real estate market has been on fire in the past, and 2014 looks like it will be even better than before.  The Urban Land Institute recently ranked Houston the No. 2 market to watch in its “Emerging Trends in Real Estate 2014” report.  That’s up from No. 5 in 2013.  There are many great areas in Houston to live in, including the Woodlands, Inner Loop, and Sugar Land.

The Woodlands features a beautiful montage of living at its best.  In this beautiful city you will find magnificent homes, winding nature trails, parks, shops and places of worship.  There are also many entertainment venues including two movie theaters, over 150 restaurants, dancing waterfalls with music, and the Cynthia Woods Mitchell Pavilion, summer home of the Houston Symphony and catering for many large acts (rock bands to classical).  Another attraction of the Woodlands is Market Street, which is an old style “Main Street” pedestrian shopping district, home to a movie theater and a variety of shops and restaurants.  Most schools in The Woodlands have the honored rank of an exemplary school, the highest school ranking in Texas.

Sugar Land is located in Fort Bend County, 20 miles southwest of downtown Houston.  It is one of the most affluent and fastest-growing cities in Texas.  Not only has the area grown more than 158% in the last decade, but in the time period of 2000 – 2007 Sugar Land saw a 46.24% job growth.  Residents of Sugar Land have a large array of shopping, dining, and local entertainment options within their community.  Other features include year-round golf, major museums, theatre, symphony, and saltwater, freshwater, and off-shore fishing that are all in close proximity.  Another benefit to residents who live in this area is Houston’s unsurpassed economic opportunity.

The Inner Loop area is made up of the cities of Bellaire and West University, as well as those parts of Houston located inside Loop 610.  Bellaire has the old charm of an inner city neighborhood with an abundance of tree lined streets and sidewalks that make its real estate very valuable.  The City of Bellaire has property zoned for light industrial, commercial, and mixed-use residential and commercial uses.  Bellaire also has some high-rise office buildings along Interstate 610.  West University is nicknamed “The Neighborhood City”, and as of 2011 is the fifth highest fraction of households with incomes of $150,000 or greater.  The city’s civic-minded citizens and small town government, combined with a proximity to major business, educational, cultural and scientific centers, have contributed to a steady increase in property values.

There is no question that Houston’s real estate market is hotter than ever, and this is expected to continue throughout all of 2014.  For anyone thinking of moving to Houston, now is the time, and there are many great areas to choose from.

Personette Group Blog

Welcome to the official blog of the Personette Group!  We would like to take this time to share a little bit about who we are and what we do.

The Personette Group started in the mid – 1980’s, and since then has worked with developers throughout Texas  to help program, market and sell their high-rise, mid-rise, loft and townhome developments.  Over the years we have also expanded to market and sell branded residences, master-planned communities and destination properties throughout Texas, the Western Caribbean and Mexico.  Our custom and comprehensive real estate services help take projects from concept to close-out.

The professionals at Personette Group approach every development with a disciplined process proven to maximize your profits.  We offer fully integrated sales and marketing solutions, while applying our unique approach to optimizing the efficiency of your investment.  When it comes to sales, our professionals are dedicated to selling your property and are not allowed to take other listings.  Before we start developing a marketing and advertising plan for our properties, we conduct an in-depth market analyses to identify relevant trends and understand the competitive set. You can rest assured knowing we have survived the housing economic highs and lows by applying a proven, systemic market-data approach to development.  We have worked with more than 30 developers on 40 projects in eight Texas cities, as well as four countries, to generate more than $2.5 billion in sales.

When it comes to working with the professionals at the Personette Group, our insight into how to bring a successful development to market is unmatched by any traditional residential real estate company in Texas.  If you would like to learn more about our services, you can contact us by clicking here.