Wednesday, February 24, 2016
Building permits awarded in January by the city of Houston fell 31 percent, with declines in both commercial and residential sectors, according to a report from the Greater Houston Partnership based on city permit data.
January saw $400 million worth of permit activity compared with $580 million last year, according to the report. The 12-month total fell 7.3 percent to $8 billion at the end of January.
Multifamily building permits saw the steepest drop, declining 94 percent to $3 million. The slowdown was expected as there are more units under construction than there likely will be demand for.
Across the area, there are close to 30,000 apartment units under construction, but only 4,380 are needed based on job projections, the partnership said. As a rule of thumb, every five new jobs creates demand for one apartment, and the partnership's 2016 employment forecast is for 21,900 new jobs.
Houston's downtown is getting a makeover for Super Bowl LI in 2017. Look for sidewalk dining, landscaping and new stages.
So many bulldozers and cranes and jackhammers and orange cones are swarming downtown Houston, it looks like a "Bob the Builder" cartoon in real life. Or any highway in Houston.
Earlier this week, I took a walk around - with a few detours here and there - all the construction going on outside the George R. Brown Convention Center, getting our city ready for the 2017 Super Bowl.
The 1,000-room Marriott Marquis Houston hotel opens in October, a 100,000-square-foot pedestrian zone with outdoor cafes is planned in front of the convention center, retail stores and 15 restaurants are being built along Avenida De Las Americas, and space has been cleared for enormous sculptures.
Things to do in downtown Houston after dark!
It's called "Houston First Corp.'s Convention District Improvement Plan." It's costing $240 million, funded by a combination of hotel occupancy tax, parking revenue and money from venues. Houstonians are not being hit up for a dime. Fingers crossed on that.
It looks like a total makeover of the "Convention District," running from Toyota Center to Minute Maid Park, from the GRB to Caroline - more than 20 blocks long.
Maybe we shouldn't get too excited, though. I remember when we had the Super Bowl in 2004. Downtown was jumping with clubs and restaurants and outdoor stages. People got dressed up to go out. And downtown was only going to get busier and more robust. There were big plans …
Then the Super Bowl left, and most of those restaurants and clubs pulled up stakes or couldn't make it. Downtown became a ghost town after dark again.
I asked Peter McStravick, chief development officer, and Holly Clapham, chief marketing officer for the Houston First Corp., how we can be sure that downtown's rebirth 2.0 won't disappear after our next Super Bowl - like it did after our last Super Bowl.
"This project is based on five years of historical information and guidance from several studies," McStravick said. "Based on that information, the city approved the Downtown Living Initiative to boost new residential development. There are 3,000 units currently under construction, plus the existing units. So we will have a critical mass that will support new retail."
"New development along Avenida De Las Americas includes businesses that will be supported by people visiting Discovery Green, Minute Maid Park, Toyota Center, BBVA Compass Stadium and additional conventions filling up the Marriott Marquis and existing hotels," he said. "There will be more pedestrian traffic generated by the new east/west light rail line. So, yes, these projects are permanent and sustainable."
Clapham put it more succinctly: "We know what we're doing this time."
In 2004, the Houston Texans and NRG Stadium were relatively new. There was only one light rail line, also new. It was a work in progress.
The 2004 Super Bowl still was a memorable success. Record numbers attended downtown events. New England beat Carolina in a thriller, 32-29. At the time, it was the most-watched Super Bowl ever. Some sportswriters called it the "greatest Super Bowl of all time." You might recall that the halftime show suffered an unintended "wardrobe malfunction." Right, unintended.
Since then, the Houston booster club has been "under new management," and this crowd is super eager to bring more Super Bowls, more NCAA Final Fours, more All-Star Baseball games, more festivals and conventions, more Paul McCartney and Taylor Swift concerts and help the Houston Livestock Show and Rodeo grow even bigger. Houston recently sent word to World Wrestling Entertainment - we want another WrestleMania.
"We did study a study of what happened in 2004," Clapham said. "One of the primary reasons that businesses dried up was lack of a residential base and active sidewalks. We have already experienced the effect of new development. We ended 2015 with 762,000 hotel rooms booked in advance for 2016 and 2017. That's a record for the city, and 29 percent over 2014. We have 3,000 apartment units being built."
When all of the construction is done, target October, Houston will have a true downtown for people to gather in on New Year's Eve. There will be a sports bar at street level of the Marriott, partnered with a "Houston sports legend." I couldn't get anybody to name a name … but I'm guessing it's a former Astro who's in the Hall of Fame. You have two choices. By next year, maybe three. (Good luck, Jeff Bagwell.)
Currently, there are 5,000 hotel rooms in downtown. By Super Bowl 2017, there will be 8,000 rooms.
The Houston First Corp. is negotiating with restaurants that want in along the Avenida. The new Pappasitos on the ground level of the Hilton Americas-Houston is absolutely killing it; it's packed.
"As the culinary and cultural capital of the South, local flavor and local chefs are a focus and will definitely be included in the mix," Clapham said.
I did mention that she's the downtown's chief marketing officer, right?
An enormous (25-foot-by 35-foot-high) mobile sculpture called "Wings Over Water" will hover above the Fountain of the Americas on the south side of the pedestrian concourse. That will be a terrific meet-up place "if any of us gets lost."
The pedestrian zone will be brightly lighted, encouraging late-night strolls. No spooky danger corners or creepy alleys. There will be large open areas for festivals and entertainment.
"I see this district as the epicenter of major-league entertainment for Houston," Clapham said. "It's bookended with Minute Maid Park and Toyota Center. BBVA Compass Stadium is just blocks away. Discovery Green is thriving. Light rail connects the convention district to our theater and historic districts, the Museum District, Texas Medical Center and NRG Park. It's quite a concentration of attractions."
Tuesday, February 23, 2016
Saturday, February 20, 2016
HOUSTON — The Houston housing market kicked off 2016 with a strong month of sales, only about 2 percent off the January record, despite the ongoing effects of strains in the energy industry. Single-family homes priced between $150,000 and $250,000 saw year-over-year sales increase by nearly 9 percent while total property sales remained unchanged.
According to the latest monthly report prepared by the Houston Association of Realtors, January single-family home sales were down 2.1 percent versus January 2015 with a total of 4,024 sales compared to 4,109 a year earlier. An increase in new listings helped buoy a growth in inventory from a 2.5-months supply to 3.3 months.
“A lot of folks have nervously anticipated that falling oil prices would have a devastating effect on real estate, but so far, the Houston market has weathered the energy downturn without dramatic shifts in sales and pricing,” said HAR Chairman Mario Arriaga with First Group. “The most noticeable impact has been declines in the luxury market, but mid-range housing actually saw a healthy sales volume in January and inventory levels grew. HAR will continue to closely monitor the economic climate.”
In the February edition of The Economy at a Glance, the Greater Houston Partnership reports that 23,200 jobs were added across the Houston metropolitan area in 2015, an increase of less than 1 percent, according to the Texas Workforce Commission. GHP is forecasting the creation of approximately 22,000 jobs in 2016.
In January, the single-family home average price eked out a fractional 0.3 percent year-over-year increase, reaching $262,663. while the median price — the figure at which half of the homes sold for more and half sold for less — rose 5.3 percent to $200,000. Both figures represent all-time highs for a January in Houston.
January Market Comparison
January delivered a mixed bag of indicators compared to home sales readings for January 2015. On a year-over-year basis, single-family home sales declined slightly, total property sales and total dollar volume were flat and average and median sales prices rose.
Month-end pending sales for single-family homes totaled 5,714. That is up 9.1 percent compared to last year. Total active listings, or the total number of available properties, at the end of January rose 15.8 percent from January 2015 to 32,260.
Houston’s housing inventory has held above a 3.1-months supply since May 2015, climbing to a 3.5-months supply last summer and settling at a 3.3-months supply in January. That compares to a 2.5-months supply in January 2015. For perspective, the national supply of homes reported by the National Association of Realtors currently stands at 3.9 months.
Single-family home sales totaled 4,024 in January, down 2.1 percent from January 2015. That marks the fourth consecutive monthly decline.
The average price increased a fractional 0.3 percent to $262,663 while the median price rose 5.3 percent year-over-year to $200,000. Both are record highs for a January in Houston. Days on Market, or the number of days it took the average home to sell, edged up to 61 days versus 57 in 2015.
Broken out by housing segment, January sales performed as follows:
$1 to $79,999: decreased 40.6 percent
$80,000 to $149,999: decreased 16.2 percent
$150,000 to $249,999: increased 8.8 percent
$250,000 to $499,999: decreased 1.0 percent
$500,000 and above: decreased 9.3 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 3,403 in January, down 1.6 percent versus the same month last year. The average sales price rose less than 1 percent year-over-year to $246,019 while the median sales price climbed 6.7 percent to $186,690.
Sales of townhouses and condominiums shot up 15.6 percent in January. A total of 393 units sold compared to 340 properties in January 2015. The average price was flat at $183,076 and the median price edged up 2.4 percent to $140,000. Inventory grew from a 2.4-months supply to 3.0 months.
Demand for single-family lease homes rose 2.8 percent in January while townhomes/condominiums saw demand increase 12.2 percent. The average rent for single-family homes climbed 4.2 percent to $1,742 while the average rent for townhomes/condominiums rose just under 1 percent to $1,568
Thursday, February 18, 2016
Rice University Confirms Houston’s Pothole Repair Rate
How reliable are the city of Houston’s claims about its one-day pothole repair efforts? The city says, “Don’t take our word for it,” and asked researchers with Rice University for an analysis.
FLORIAN MARTIN | POSTED ON FEBRUARY 17, 2016, 5:11 PM
Mayor Sylvester Turner’s pothole initiative started shortly after he was inaugurated on Jan. 4.
Since then, the city says it has filled more than 2,000 potholes reported by residents. Of those, it has fixed 96 percent by the next business day, according to its website.
But how do we know that’s true?
To answer that question, the city asked Rice University’s Kinder Institute for Urban Research to independently analyze the numbers.
Kyle Shelton and Kelsey Walker went through data of 311 reports, service requests and work orders for potholes between Jan. 4 and Jan. 21.
“The numbers as presented, the 93 to 96 percent average, we confirm that,” Shelton said.
He said the city could be clearer about what that percentage means, which is not of all potholes reported but of those that have eventually been filled, “by potentially displaying other information such as here are the other categories that things could be classified as and here are some of the numbers about the on-time assessment, either within the same time period or just the numbers that are either pending repair or open within the 30-day window.”
Turner said he now wants to focus on more complicated road issues, such as where whole sections of a street need to be repaved.
The goal here is to fix problems within 30 days after they are reported
By Darla Guillen
Soaring home prices in the Heights area are nothing new.
But now those hefty price tags are beginning to spill over into surrounding neighborhoods, where appreciating land values are calling for historic bungalow renovations. And the remodeled structures are anything but tear-downs.
At 1,000 square feet or smaller, these notable homes may not be "tiny", but they are definitely smaller than the average Bayou City dwelling:
1203 Walton: Situated within the Brooke Smith subdivision, this Heights bungalow is the only home in this roundup that occupies a full 1,000 square feet (on a 5,000-square-foot lot). In addition to the cozy two-bedroom home is a detached, 724-square-foot apartment that can be used as additional space or as a rental unit to bring in extra income.
Listing price: $365,000
1514 Ovid: Sawyer Heights has a bright pop of color in this tiny 750-square foot house. With just two bedrooms, the compact space offers Victorian style on a 3,848-square-foot lot. The home, built in 1945, saw a recent renovation and has newly installed appliances.
Listing price: $419,000
706 West Sawyer: Built in 1920, this two-bedroom, 960-square-foot house was the 2009 recipient of a Good Brick Award for historic preservation. The Craftsman-style bungalow was completely renovated in 2008 and rebuilt to meet LEED standards.
Listing price: $299,000
604 Archer: Even despite a major remodel, this 975-square-foot bungalow's historic charm endures. Built in 1920, the quaint two-bedroom structure welcomes guests with a front porch which leads into a shotgun-style interior. Its 3,000-square-foot lot also has a shed area and long driveway.
Listing price: $339,000
Tuesday, February 2, 2016
This is a interesting analysis by Lukr Kawa, but hard to say how much of such prognostication will prove accurate as it relates to Houston this time around. It's too early to tell what impact lower oil prices will have going forward on the real estate market. Has there been layoffs already? The answer is yes. Many oil companies have announced layoffs. Have we seen real estate activity slow down. Yes, but very little to be significant enough to cause concern at this point. The unemployment rate has ticket up but it remains a wait and see how bad things will get. The reason it might not be as bad as we think is that much of the refineries - which Houston has many of - will do well in a environment of lower gas prices. Those are good paying blue collar jobs. That reason and the fact Houston has a much more diversified economy than the 1980's will keep the impact to a minimum. The layoffs in the oil industry to date have not had a significant impact on real estate or employment numbers. Mostly white collar jobs are being cut by oil companies - which means certain pockets will be impacted more than others. Areas where there are refineries - like the East, South and South East will not be impacted greatly or at all. Overall, the employment picture remains good.
History doesn't repeat, but it does rhyme. Or so the saying goes.
Sometimes history indeed repeats. Our latest example: how the distribution of growth across the U.S. is strikingly similar to what took place in the mid-1980s, which is the last time the country grappled with fallout from a supply-driven plunge in oil prices.
The Philadelphia Fed uses four variables (non-farm payrolls, average hours worked in manufacturing, real wages, and unemployment rate) to produce a monthly coincident activity index for each state. Neil Dutta, head of U.S. economics at Renaissance Macro Research, compared the annual change in each state's coincident activity index in December 2015 with those in December 1986 to get a sense of how analogous the distribution of growth has been.
His results show that, by and large, the winners in 2015 were also the winners in 1986:
"Basically, the idea is that a positive supply shock in the energy sector hurts oil-producing states and helps oil-consuming ones," explained Dutta. "It is surprising, frankly, how well this works."
Amid raging debate as to whether the U.S. is already in, or headed for, a recession, it's important to emphasize that most states are enjoying an uptick in activity. The large cluster of states in the first quadrant shows that the vast majority are seeing improved activity relative to the previous year, similar to the situation at the end of 1986.
The small number of states in the second and fourth quadrants of the graph signal that, on roughly 90 percent of occasions, the reaction to low oil prices has been the same as it was in the mid-1980s: States that were doing better as oil fell at that time are also doing well now. While the reaction itself seems intuitively apropos, the degree of similarity spanning 30 years is uncanny.
The inclusion of manufacturing as an input to these indexes also suggests that the pain in this sector is more localized than has been commonly acknowledged—or at the very least, isn't significant enough of a drag to sink the headline growth number in many states."