The ongoing oil and gas slump has caused population growth in the Greater Houston area to fall short of previously projected totals, according to Metrostudy, a research firm that studies the residential construction industry. However, developers behind several major new home projects in Cy-Fair are showing confidence the local real estate market will remain strong.
The limited amount of land left in Cy-Fair is quickly being purchased by developers with plans for residential communities, mainly around the Grand Parkway and Hwy. 290, including Bridgeland, Towne Lake, Elyson and Dellrose.
“Our growth is certainly slowed compared to 2012 and 2014, but we’re still adding jobs and people are still moving to the market,” said Steve Sellers, president of Empire Continental Land, which started building homes in the new Cypress community Dellrose in 2015. “The Northwest side of Houston has for a long time been a very popular spot with homebuyers.”
Archie Dunham, chairman emeritus of Chesapeake Energy and former CEO of Conoco Inc., announced plans in November to build a new housing development called Dunham Pointe in Cypress. Up to 3,000 homes and 300 acres of retail development are planned for a land tract on the south side of Hwy. 290 between Mueschke and Mason roads.
Dunham said although he purchased the 1,327-acre plot in 2007, construction would not begin until summer 2017. Based on building cycles, financial cycles and oil cycles, development could take 10 years or longer, he said.
“The first thing you’ve got to do is create MUDs and get those approved by the state, county and city,” he said. “We have to build wastewater treatment plants, drill wells, then start with the main boulevards and putting the connecting streets in. It’s a very lengthy and expansive process that takes a couple of years to get off the ground.”
Challenges with the economy have not yet affected the development process for the community because the project is in the earliest stages, Dunham said. However, he said developers and homebuilders could adjust home price points based on the housing market, which can fluctuate over a short period of time.
“The price range depends on the kind of builder you can attract and the market at any one time,” he said. “At our Stone Creek [Ranch] property, houses in the $300,000-$450,000 range are selling easier than those in the $200,000-$250,000 range. That’s very different than what it was just 18 months ago, so you’ve got to be flexible.”
While many of the new master-planned communities in Cy-Fair are selling homes starting in the $200,000s or higher, the demographics research firm Population and Survey Analysts reports that the median home value in Cy-Fair is $199,278, and there are more than 8,000 vacant homes in the area.
Elyson, a new community located off FM 529 near the Grand Parkway, celebrated a grand opening in October. Builders started preselling single-family lots in August, but development started about two years ago, said Heather Gustafson, marketing director with developer Newland Communities.
While five neighborhoods in the community have already opened, about 6,000 homes will be built in the next 10 to 12 years, she said.
“With the West Houston area, we’ve got a lot of employment out here, very strong school districts and strong master-planned communities,” Gustafson said. “When people are making the biggest purchase of their life, they want something that’s a little more comprehensive from quality developers—[something] that they know is going to be around for a long time.”
Newland has developed additional neighborhoods, including 25-year-old Cinco Ranch near Katy. Gustafson said when homebuyers see that stability, they are comfortable supporting newcomer Elyson.
Gustafson said homebuyers will be hard-pressed to find homes under $250,000 in master-planned communities. Elyson homes start in the $200,000s and top out in the $600,000s.
“Newland is very focused on making sure we have price points that fit the needs of numerous families and different people,” she said. “Right now we haven’t introduced any larger products just because we don’t feel like there’s enough demand, and the market can’t bear that right now.”
However, in the future, Elyson plans to roll out pricier custom homes and more luxurious amenities, Gustafson said. Part of the reason the company chose to wait is because of the oil and gas market downturn, she said.
In November, work began on Lakeland Village, Bridgeland’s second of four planned villages. At build-out, the master-planned community will tout 19,000 homes and a 5 million-square-foot Bridgeland Town Center stretching across both sides of the Grand Parkway.
Sellers said nearly three years after acquiring the land, builders in Dellrose are looking forward to pushing out new amenities in 2017. He hopes to attract new residents moving into the area for the Daikin plant opening in the coming months.
Metrostudy-Houston Regional Director Lawrence Dean said population growth projections before the oil market downturn have led to rapid home construction across Houston. However, construction slowed following the downturn; the Houston market had 27,263 new homes under construction during the first quarter of 2016—down 3,089 from the same time in 2015, according to Metrostudy.
According to PASA, about 65 percent of the Greater Houston area relies on the oil and gas industry in some way. In Cy-Fair, where the top areas of employment are education and health care, however, the real estate market has not taken the same hit, officials said.
According to PASA, the median household income in Cy-Fair is $78,817 compared to the Greater Houston area’s $60,072.
Leslie Martone, president of the Cy-Fair Houston Chamber of Commerce, said she believes families with young children are still the No. 1 demographic flocking to Cy-Fair but noted an increase in senior residents as well.
While Cy-Fair ISD has an enrollment of 115,000 students, about 70 percent of those who live in Cy-Fair do not have a child in the school district, she said.
“A lot of people are getting frustrated with different states’ costs of living, and we see the trend with people moving, and they can afford to do that because they sold their home up north for that value,” Martone said. “I think people are starting to scoop up the land because it is starting to [cost] more and more. There is not an abundance of land out here.”
Based on a 2016 PASA report, 135 square miles of Cy-Fair have been built out, and another 25 square miles are either being developed or have development plans. This leaves about 25 square miles left in the region for potential future development, according to the report.
PASA projects more than 25,000 new single-family homes will be built within the region by the year 2025.
Amenities still prioritized
Although some developers in the Greater Houston area have responded to the slowing economy by reducing the size and scope of amenities within their communities, developers in Cy-Fair have shown no signs of slowing things down in this arena.
Larger communities like Towne Lake, located off Barker Cypress Road in Cypress, tend to incorporate more amenities into their neighborhoods. In addition to more traditional features, such as community clubhouses, fitness centers, pools and playgrounds, Towne Lake has boat docks, fishing holes, a waterpark and plans for an amphitheater with seating for 2,000 guests.
Meanwhile, Empire Communities is working on the next phase of development within Dellrose. It is planning amenities such as a recreation center and clubhouse, swimming pool, tennis courts and trails throughout the community. Waller ISD will also start construction on an elementary school within Dellrose, slated to open in 2018, Sellers said.
Amy Lippincott, a Cy-Fair area Realtor with Better Homes and Gardens Real Estate Gary Greene, said because homebuyers pay so much for their homes and homeowners association fees, community amenities can make the difference in purchasing decisions. Although the economy has affected home sales in the $500,000 price range and up, developers are still looking to keep up with competitors by providing bigger and better amenities, she said.
Amenity trends in Cy-Fair are focused on outdoor settings featuring walking and biking trails, arboretums, farmers markets and planned events, Lippincott said. Parents not only want to live in a well-rounded school district, but they want access to free conveniences in their own neighborhoods, she said.
“When we take people out and about, they’re asking where the pool is and how they can get out and be active with their family,” she said. “In Bridgeland, we have a tree house park, a heated lap pool and a dog park. People are looking for nature out in the suburbs.”
Editor’s note: This is the third story in a 3-part series regarding real estate trends in Cy-Fair. This story was published in the December issue of Community Impact Newspaper Cy-Fair, in mailboxes and online starting Tuesday, Dec. 13. Read the first story — Q&A: 3 questions with real estate developer Newland Communities and the second story — Demographer projects nearly 40,000 new housing units will be built in Cy-Fair by 2025.