Strictly a Buyer's Agent

Living in a City with NO ZONING

  Many people who move to Houston are shocked to hear that land use is determined at the neighborhood level, meaning there is no central zoning agency. And not only that, zoning has been put to a vote more than once and lost each time. I live in Montrose, which is a land-use nightmare (single-famly here, muli-family there, retail over there, etc,) but guess what? I can walk to three of the coolest coffee houses in the city in five minutes. So I like the mixed-up, eclectic nature of my neighborhood.

Developers have long had their way in Houston but now a very well-connnected neighborhood is up in arms about a towering high-rise planned for their area. Who can blame them? Their city council representative will introduce a new ordinance soon aimed at cutting back high-density residential development in areas that cannot withstand the traffic impact. I support the effort and hope they prevail. The developers have to be reined in somewhat. I love the business climate of Texas and lack of regulation, but a balance has to be struck for the preservation of a livable city.

The News is Bad . . . But Not Here

As far back as Fall 2005 the Wall Street Journal began to report that perhaps the housing market was peaking. I began searching for signs of it then in Houston and I'm still searching . . . Now the housing news elsewhere is quite bad, such as this article reporting that 10 US cities had a record drop in prices in November 2007.

It has not happened here and after compiling market conditions for ten price ranges in 19 popular zip codes five times per week since 2003 I can say things have pretty much remained the same. I noticed a slight upswing in inventory this week, but I think this is just a seasonal thing (time for new listings to come online) so the time to sort this all out will be after the end of the high season for buying and selling to see how much inventory is still out there unsold. I'll post again about this in the Fall. So far Houston has weathered the storm, or at least the areas of Houston that I work in.

Still Crazy About Old Sixth Ward

I spent more time showing buyers around Old Sixth Ward over the weekend and it was the first time they had heard of it. It's always interesting to see how people respond, since not all of the houses have been renovated and some areas are sort of seedy, but the charm and potential is there for anyone who looks carefully. The area is now "protected" historically, and I found this very cool video that was made of Sixth Ward homeowners before their neighborhood was granted protected status.

http://www.youtube.com/watch?v=Cig-JCOtXR8

What Makes a City Livable?

One of the things that upsets me most about living in a city where developers pretty much do as they please is the demolition of trees. Recently the pace seems to be picking up and now, apparently, 143 live oaks will be fed into shredders to widen Kirby Drive from Richmond to Westhemier in a drainage improvement project.

They will be replaced with smaller trees (the existing trees are about 20 years old) but really, does this make sense to you? Losing great trees to widen a street that doesn't need it? In my 30+ years of traveling on Kirby I cannot recall seeing an accident there.

What are your thoughts?

And the winner is . . . AFTON OAKS!

Don't you wish you would have invested in Afton Oaks about ten years ago? It has posted the highest gain per square foot paid (up 153%) over that period of all the most popular neighborhoods. The Memorial Park area fared the worst (65%), likley due to overbuilding.

To see more go here: http://www.westurealestate.com/appreciation.htm

Working on 2007 Apprecation Calculations

This is the time of year that I publish the appreciation calculations for the 19 areas that are featured in this web site. They should be ready in a day or two . . . early results appear to indicate that most of the most popular subdivisions have doubled in value since 1997.

Old Sixth Ward is one of the most interesting Houston neighborhoods

One of my clients recently bought a house in the Old Sixth Ward, a very interesting and historic neighborhood near downtown in zip 77007. This is an exciting neghborhood, especially since it was granted protected historic status last year. Many homes were built before 1900 and now they may not be demolished for new construction. If you love historic preservation, this is a wonderful neighborhood to consider.

The nearby Washington Ave is booming and I expect some announcements later this year of more interesting developments along that corridor. Monica Pope (of Tafia) has already opened a new restaurant in Old Sixth Ward on Sawyer called Beaver's Ice House. Catalina Coffee is also there, along with the Corkscrew Lounge. The Drake Lounge opened recently, and there may be a new restaurant or two opening soon.

Houston Area is The Most Undervalued Housing Market in the Entire U.S.

As of their most recent report Global Insight says that houses, including land, in the Houston area are undervalued by 29.1%, more than any of the other 330 metropolitan areas in the study as of the third quarter 2007. Thus, the Houston area has the MOST UNDERVALUED HOME PRICES IN THE US.

This is the question I am asked most often, especially by people moving here from other cities around the world. While it's hard to know for sure, I like the approach taken by Global Insight, the economics research unit of National City Corp., one of the ten largest banks in the US.

Link: http://www.nationalcity.com/content/corporate/EconomicInsight/HousingValuation/documents/3Q2007report.pdf

They start with the premise that houses in any given city should be related to 1) household incomes, 2) population densities, 3) any historical premiums or discounts metropolitan areas have exhibited over time and 4) interest rates. They examined these factors for 330 metro areas now accounting for 78% of all existing housing units in America and 92% of all related real estate value, to determine what home prices should be, using a massive mathematical model with over twenty years of past data.

Link: http://www.nationalcity.com/corporate/EconomicInsight/HousingValuation/default.asp?WT.mc_id=100206

High-Rise Market (Very) Difficult for Sellers

I have just done an analysis of the Houston high-rise market and it has not changed very much over the last five years. Yes, there have been many sales but the supply still is over-abundant in the Houston area. There are four areas where high-rises are concentrated: Downtown, Uptown, River Oaks/Greenway and the Museum District. Lately there have been many new projects announced, citing "unmet demand" but they don't look like a good investment to me and I always counsel my clients away from them.

I am not going to publish my high-rise market condition analysis because I know it is missing important data: Many of the available units are not listed in the MLS database and the developer is trying to sell them directly to the public. That's OK with me, but it means my data is not reliable, and I just hate that!

Counting "Motivated" Sellers

Today's calculation of seller's described as "motivated" by their listing agents in the MLS database shows that the percentage has declined to less than 4% in six of the most desirable in-town Houston MLS areas. It rose above 4% two times in the last two years: December 2005 and December 2007. I think it will continue to decline in these great neighborhoods during the upcoming high selling season: March, April, May. The neighborhoods include River Oaks, West U, Bellaire, Memorial, Tanglewood and others.

Link to chart: http://www.westurealestate.com/motivationindex.htm