Although the local housing market has thrived in recent years, real estate officials and developers say the oil and gas downturn taking its toll on the Greater Houston area economy is starting to trickle down to Cy-Fair home sales as well.
Single-family home sales in 2015 fell 2.56 percent compared to 2014, with 6,002 homes sold in the Cy-Fair area in 2015 compared to 6,160 in 2014, according to data from the Houston Association of Realtors.
Despite the dip in home sales, housing experts remain confident that Cy-Fair’s housing market will remain strong because of a diverse economy, the opening of Grand Parkway segments F-1 and F-2 and pent-up demand for houses.
“We are seeing less job growth in the area so sales will be slower on new and existing homes, but the latent demand is really softening the blow,” Trendmaker Homes President Will Holder said.
Many workers who moved to the Greater Houston area in the past five years are just now beginning to consider purchasing homes, Holder said. According to the Greater Houston Partnership, the region added 491,500 jobs since 2010.
“It’s important to consider how big our market is and that Houston has been adding roughly 100,000 new jobs a year [for]the past few years,” he said. “The area should have built 33,000 homes a year but instead we’ve been building around 26,000 a year, so we’re seeing pent-up demand.”
The 12 ZIP codes throughout the Cy-Fair area showed an 8 percent increase in jobs between 2008 and 2013, according to a GHP study.
The study showed school employment, followed by oil and gas, and then health care jobs experienced the most growth during that time.
GHP projections concluded that job growth would continue at 8 percent through 2018.
Trendmaker is the developer behind Hidden Arbor, a new 126-lot community located off Mueschke Road in Cypress. Holder said Trendmaker presold six homes during the community’s opening week of sales in mid-February.
“That really has to do with the pent-up demand in the market,” he said. “Houston is the No. 1 homebuilding city in America, and I do not think that is going to slow [down]or even that we’ll slide into the No. 2 spot.”
Demand for single-family homes is not expected to slow anytime soon. Demographics firm Population and Survey Analysts predicts Cy-Fair ISD will add nearly 30,000 single-family homes by 2024, with thousands of new homes expected to break ground in communities such as Bridgeland, Towne Lake and Miramesa.
Canyon Lakes West introduced Miramesa, a 780-acre master- planned community off Fry Road, in March 2015. Through Miramesa and other projects, Canyon Lakes West is expected to build around 1,927 new homes by 2024 to keep up with the Cy-Fair housing demand, according to the PASA study.
The same study projects developer Caldwell Companies to add 2,584 new homes to the Towne Lake master-planned community located off Barker Cypress Road in Cypress.
“The [housing]demand has continued to be strong in the area,” said Peter Barnhart, executive vice president for Caldwell Companies. “Price points have moved down a little and it won’t be as good as it once was, but it will be all right.”
Lower price points
Although the market is stable, experts say buyers have shifted away from more expensive homes in favor of more affordable options.
“There is certainly a shift that is related to the loss of jobs in the oil market,” said Peter Houghton, vice president of master-planned communities with The Howard Hughes Corporation. “Those upper-end houses are typically supported by oil, but I think the downfall is partially mitigated by the Grand Parkway, the new high schools and other parks and developments in the area.”
Houghton said home sales in Bridgeland are slightly ahead of last year, although the master-planned community is seeing a greater demand in the lower end of the market. Builders and developers have responded to the drop in oil prices by slowing down projections and plans.
“You will see going forward that smaller lots will be developed in an attempt to address the lower end of the market,” Houghton said. “I think most communities will rely on lower price points going forward.”
In 2015, single-family homes priced between $150,000 and $250,000 saw a year-over-year sales increase of nearly 5.7 percent, according to Better Homes and Gardens Real Estate Cary Greene.
“The homes that are really selling are the ones in the low $100,000-$200,000 price range,” said Janice DiVenanzo, a Realtor with the RE/MAX Realty Cypress branch. “Homes ranging from $200,000-$250,000 are selling like normal, and the higher-end homes are selling a lot slower than they used to sell. That’s all related to the oil market.”
Holder said he expects the market to shrink over the next few years with developers and builders adding around 18,000 new single-family houses to the market, down from about 26,000 new single-family homes per year over the past few years.
“Right now, the housing market is well within the bounds of what is considered normal,” Holder said. “When you come off of a very busy couple of years and it begins to slow [down], it feels a little painful. We’re going to feel bad, but our market is not really bad.”
Home sales will thrive at a lower price point until oil prices are stabilized, DiVenanzo said. Much of the hesitation in home sales stems from uncertainty in the economy related to dipping oil prices, she said.
“It’s a sellers market, and the high end of the home range is sitting a lot longer than it used to,” she said. “Frankly, people are worried about their jobs, so they’re thinking twice about spending money.”
With no surplus of inventory, Houghton said the Cy-Fair-area real estate market has responded well to the drop in oil prices.
“Yes, we are dependent on the oil market. But we still have a very diverse economy,” Houghton said.
According to DiVenanzo, the diversified economy with multiple industries is helping to keep the Cy-Fair market strong and helping houses keep their value.
“Cypress is still booming,” she said. “I think a lot of people are worrying because of oil prices, but they’re not realizing that we have a very diversified economy and that we’re not solely reliant on oil.”