Real Estate Round-up
Cash for chandeliers: Houston's mansion market is booming
Don’t look now, Daddy Warbucks, but it looks like the mansion market is making a rebound.
Sales of Houston’s upper-end homes — those priced $500,000 or more — were up 49 percent in March over March of last year, according to the most recent statistics from the Houston Association of Realtors.
John Daugherty Realtors, which specializes in River Oaks, West University Place, Memorial and other upscale neighborhoods, had 28 homes priced at $1 million or more go under contract in April. That’s an impressive pace.
“The upper end market is moving extremely well,” says Realtor Shad Bogany of ERA Bogany Properties, which is marketing a 23,000-square-foot, eight-bedroom home in the Rivercrest area. That house is priced at $3.9 million.
“And we are seeing a lot of cash deals,” Bogany says.
Paying cash for a $4 million house takes a well-fixed client. But cash is easier to come by since the stock market has revived from the debacle of 2009.
Although there is still a significant inventory of expensive homes for sale, Houston’s housing market has been fairly steady without the major crashes that have been seen in other states.
“We didn’t have the crazy inflation or appreciation in the housing market the last seven or eight years like the rest of the country did,” Daugherty says. “We have a very stable, healthy market and if the sellers listen to what the buyers are telling them the market is, they can sell their home in a very reasonable period of time.”
Daugherty has already closed some impressive mansion sales so far this year. His firm sold a classic mansion, built in 1935, in River Oaks with a list price of $6.9 million.
And then, Daugherty dealt a French Château — a 200-year-old home built in France, disassembled and rebuilt on a 2.4-acre parcel in Houston’s Memorial neighborhood. The mansion, priced at $6.5 million, is illuminated by more than 75 ornate chandeliers.
For Realtors, the big-ticket item is not a thing of the past.
The apartment market has taken some hard knocks. Some areas have an oversupply of apartments. And the federal tax breaks for first-time home buyers have encouraged people to buy homes instead of renting.
So at many apartment complexes, rents are up and vacancies are down.
Doesn’t sound like the right time to start an apartment company, does it?
Well, think again. Paul Forbes and Will Harper, a pair of Houston apartment executives, have launched Allen Harrison Co.
The mission of Allen Harrison is to buy, manage or develop new apartment projects in Texas.
“The volatile current market brought on by the credit crunch has created opportunities,” Harper says. For 2010, the new company’s goal is to acquire 2,000 apartment units and secure sizable contracts to manage projects for other landlords.
Before starting the new firm, Forbes and Harper were with Houston-based Hanover Co., one of the largest multi-family organizations in the nation.
Houston’s population is going to boom over the next 25 years. The Houston area will add about four million people, taking the population to 9.5 million by 2035.
The growth is going to require a lot of construction.
“We’re going to need 852,000 new homes,” said University of Houston economist Dr. Barton Smith, as he gave his 25-year forecast to area business people last week.
That means home builders can start an average of 34,075 new homes every year and be in-step with projected demand, Smith said.
In addition to the single-family homes, the Houston area will also require 331,000 new apartment units to be built over the 25 years.
For the commercial markets, 112 million square feet of new office space and 90 million square feet of retail space will have to be built.
Harris County won’t be able to handle all of this growth, so it will spill over into adjacent counties. Fort Bend and Montgomery counties will swell to more than one million in population, Smith said.
It won’t just be people moving to the suburbs. Companies will be locating their offices in the outer suburbs and lessen the need for commuting.
Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of RealtyNewsReport.com.