Real Estate Round-up

Even in a bad economy, homebuilders never die; they just keep hammering away

M Street Homes, which recently opened its first model home in Sugar Land’sTelfair community
Photo by Ralph Bivins
The M Street model home sports a distinct Indian Fusion décor.
Photo by Ralph Bivins
The dining room in the M Street Home model home juxtaposes a deep purple arearug and dark wood floors against a backdrop of neutral green tones to highlightthe contemporary white chairs and the floral and glass centerpiece.
Photo by Ralph Bivins
A Partners in Building's creation at 4026 Aberdeen Way
Rustic dining room by Partners in Building
Home by Frankel Building Group
A lovely patio by Frankel Building Group
The turquoise walls in the M Street Homes model home’s master bath arestrikingly different.
Photo by Ralph Bivins

Remember when Gemcraft Homes, General Homes and U.S. Home were the big names in Houston’s suburban home building business? Ever heard of Fox & Jacobs or Nash Phillips Copus?

Home builders come and go. The biggest home builders in the nation have been through reincarnations, mergers and bankruptcies. Some brand names live on forever with different ownership.

Shake-outs in the home building business come along every decade or two. An economic meltdown or a recession ripples through the market, and home building companies come under financial pressure and fail.

The home building business has been on a big slide in the last two or three years. On a national basis, home sales fell in July to their lowest point ever, according to the U.S. Commerce Department. Houston has fared better than much of the nation, but home sales in Texas have been sluggish for a couple of years.

Even though the recession put a squeeze on the industry, the professionals who lead the home building firms don’t go away. Many builders find that the recession is a fine time to start a new company or hook up with a new organization.

Tough economic times can be a great time to start a new company. Houston’s Plantation Homes and McGuyer Homebuilders were huge success stories that rose from the ashes of the 1980s crash. Materials, labor and lots are cheaper when the housing market is down, making it advantageous for new ventures.

As 2010 has unfolded, a number of builders have been reinventing themselves.

Hanging up A Shingle

Bob Solomon, a 30-year building industry veteran, who had been president Ryland Homes Houston division for a number of years, has just launched his own firm.

Solomon has started M Street Homes, which recently opened its first model home in Sugar Land’s Telfair community.

M Street Homes has an interesting marketing twist with Asian-influenced designs. The M Street model home sports a distinct Indian Fusion décor. The dining room, for example juxtaposes a deep purple area rug and dark wood floors against a backdrop of neutral green tones to highlight the contemporary white chairs and the floral and glass centerpiece. The turquoise walls in the model home’s master bath are strikingly different.

Solomon is not just putting on a home decorating show. He’s trying to reach a vibrant market niche in Sugar Land. Over 60 percent of the homebuyers in the 2,000-acre Telfair community are Asian, according to M Street Homes.

It’s working. Sales of M Street’s patio homes have been strong in the company’s first few months of operation.

And Solomon is having fun. Instead of feeling pressure to satisfy Ryland’s shareholders and Wall Street analysts, he’s fully focused on the home buyers.

“At this stage in my life, I’m really enjoying going from feeding the huge machine of a public builder that needs ‘X’ number of sales each week, to feeding individual buyers what they want. I want to build a lot less homes and have fun. I want to know the people buy from me and make sure they’re happy,” Solomon says.

Lemming’s on the Move

Jim Lemming, who’s been building homes in Houston for years, recently became president of the Partners in Building firm. So far, things have been going well. Partners in Building brought home a truckload of Star Awards from the Texas Association of Home Builders, including three “best design” awards and an award for the best custom home over $1 million.

Being out front on home design trends has been a key weapon for the company during the recession, Lemming says. And Partners in Building has maintained respectable sales totals. The company will end the year with about 200 home sales. That’s not nearly as high as the company record of 260 homes sold in 2006, but it’s strong enough.

“Our company has been consistent through the whole downturn,” Lemming says.

Partners in Building builds custom homes in master-planned communities in Houston suburbs, in addition to a strong tear-down business in Bellaire, West University Place, southwest Houston and the Memorial area. Lemming says the company will sell about 50 houses in the close-in, Inner Loop area, in 2010.

Another reason Partners in Building has fared well in the downturn, is the company’s market niche (its average sales price is about $650,000) has performed fairly well, Lemming says.

Lemming, who has worked for and owned a number of building firms, is a pro’s pro who is respected by his peers. Will Holder, president of Trendmaker Homes, calls Lemming “one of the best people in the city in the home building business.”

Surviving the Downturn

When the crash hit in 2008 with a sudden decline, many builders had to cut prices to make their homes sell. But cutting prices alone did not guarantee survival.

Frankel Building Group cut prices on existing inventory, but the company carefully evaluated the pricing and made sure not to slash prices too deep, says Kevin Frankel, vice president of sales and business development for the Houston firm. Frankel also adapted its product making it more efficient in size and design and putting greener technology in its homes, he says.

Frankel kept building during the downturn, avoiding over extending, but keeping the wheels turning vigorously.

For the most part, Houston’s home builders have responded with intelligence to the downturn. Unlike what happened in years past, builders put the brakes on construction early. So there has been no overwhelming inventory of unsold homes sitting on the ground.

“Houston’s new home inventory is relatively in balance,” says Houston housing consultant Pamela Minich of Minich Strategic Services. “The Houston housing market will recover gradually as job growth returns and the local and national economies show more definitive, sustained signs of recovery.”

Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of RealtyNewsReport.com.

unspecified

your friends and neighbors

Pioneering East End development brings cohousing to Houston

Digital image of a a finished cohousing development with people in the foreground.

Render provided by CoHousing Houston

A digital rendering of the finished CoHousing Houston.

Houston's East End neighborhood will soon welcome a bold new experiment in housing in the next couple of months, one dedicated to communal space and curing the epidemic of isolation plaguing modern America.

Called CoHousing Houston, the development occupies a property at 114 Delmar St. that consists of 33, individually-owned units built around a central courtyard. This layout isn't much different from a modern apartment complex, but there are architectural deviations and governing principles that gently nudge the residents toward in-person interactions.

One is the common house, a massive gathering space, kitchen area, and work station that serves as a community center and event hall. While the individual units do have their own kitchens and bedrooms, they are short on extra rooms. This encourages people to move their hobbies and activities to the common house or to the shared outdoor porches and balconies when the weather is nice.

The idea of communal housing is as old as humanity itself and is practiced by groups as different as hippy communes and the U.S. Army. However, few Americans live in communal housing after they reach adulthood, preferring privacy and a large space to call their own. CoHousing Houston is aiming to be the best of both worlds.

One resident is Kelli Soika, a married mother of three who lived in a similar cohousing unit in Colorado before moving to Houston in 2018. She found the cohousing model incredibly liberating, and worked to create the first one in the Bayou City.

"You have this great place to solve problems you didn’t even know you know you had," she tells CultureMap. "I would have to go to the grocery store with the three kids, and it was hard. Now, I can ask a neighbor to watch the girls for an hour. I hear it’s like living in a small town in the past, though I'm not old enough to remember that. It's the kind of place where if you leave the door open, someone will check to make sure you're okay. In a regular house, you could fall down and it might be days before someone found you."

Soika emphasized the power of community connection. Surrounded by multi-generational households that are funneled into the communal spaces by design, she can draw on the innovation of young couples or the wisdom of the elderly. With one kid starting college, it's nice for her to be able to talk to someone close by who has gone through the same thing. Her husband can drop into an evening bike riding group whenever he wants without having to arrange various schedules. In her opinion, little neighborly touches like that are worth the slight loss of privacy or space that are inherent to cohousing.

"If the power is out and you don't know what’s going on at CenterPoint, you've got a group going through it with you," she says. "These things keep happening, and when I moved into cohousing, it's just not a crisis because you've got other people to help you and be with you in it."

Isolation and loneliness is a major problem in America, studies suggest. Increased workloads and the explosion of social media have led to a sharp decline in time spent in "third places," locations that are not home or work. According to some estimates, people stopped going to third places as much as 37 percent between 2014 and 2017, and that was before COVID sent people into deeper isolation. In Houston, soaring temperatures and poor public transit keep some people out of parks and other outdoor activities even as the city invests heavily in park improvement. Some activities such as pickleball and live-action gaming centers have picked up the slack, but these still involve planning that many tired workers simply don't have the energy for.

In that world, cohousing seems like a viable alternative to increase social engagement, though it may be too big a change for Americans, who are famously individualistic.

Soika says that there are weekly meetings in the common house to deal with issues that affect the entire campus, such as parking disputes and insurance. Residents own their $300,000 to $525,000 homes, but there is still an HOA, and governance is democratic. CoHousing Houston tries to make sure that the majority of people can still attend and have their voices heard in the regular meetings. Those disinclined to group gatherings can still participate in small groups that handle specific matters, but like all democracy it involves more work than simply owning your own home. There's also the worry that such a governing structure tends to empower people who have time and resources to attend meetings, such as single income households.

"You don’t want to have the decisions dominated by people who have managed to dominate the meeting structures," says Soika. "We have rounds where we laboriously go through each person and have them talk about it. It helps the quieter ones. We want everyone to be heard."

Another concern is safety. Soika was unable to say of there was any kind of provision for what to do if a resident became a problem, such as exhibiting violent behavior against other residents.

"I guess we would call the police," she says. Having lived in cohousing since 2012, she says she's never come across such a situation.

CoHousing Houston is expected to open fully this fall. Soika already lives on site, and most of the units in the $300,000 range have been sold. Units in the $450,000-525,000 range remain available. Interested buyers can find more information at CoHousingHouston.com.

homes-for-sale cohousing houston cohousing