Demographics influence residential developers[/caption]

As homebuilders prepare to dig into the last remaining undeveloped land tracts in the Cy-Fair area, developers are taking a variety of demographics into consideration when deciding what types of homes to build and what price tags to put on them.

Population and Survey Analysts demographers project more than 23,000 new single-family homes will open in Cy-Fair in the next 10 years. Around 17 percent of the 186 square miles that make up Cy-Fair is undeveloped, and most future development will be in the western region of Cy-Fair ISD’s boundaries, PASA President Pat Guseman said.

“Over time, this district annually had increased in student population more than the six New England states’ student population,” she said. “In terms of looking at developed land mass over the last 30 years, the district itself has over 500,000 population, so it’s an area to be reckoned with.”

More than half of these new homes are opening in master-planned communities where developers provide a broad range of price points.

Although several developers attest to the selling strength of higher-end homes, data from Coldwell Banker United shows the median price of homes sold in Cy-Fair through the first half of 2017 ranged from as low as $168,000 in the 77065 ZIP code to as high as $303,000 in 77433.

Steve Sellers, land development president for Empire Continental Land, the developer behind the Dellrose master-planned community, said he is keenly aware of the demand for more affordable homes in the area. He said Dellrose, located off the Grand Parkway and Hwy. 290 in Hockley, offers homes from the $200,000s-$400,000s, a price range that reflects Cy-Fair’s average buyer.

“We’re definitely [targeting] a younger-skewing demographic,” Sellers said. “We don’t really feel there are any disadvantages to that. First-time homebuyers, people wanting to raise a family, can get in at a lower price point and still have nice amenities and great freeway access.”

Cy-Fair’s advantage

Of the 23,000 new homes being built in Cy-Fair by 2026, Guseman said about 10,500 will open in the district’s five largest single-family developments: Bridgeland, Towne Lake, Westfield Village, Canyon Lakes West and Dunham Pointe.

Several factors that make the Cy-Fair area desirable to homebuyers—such as mobility improvements and the school district—also make the area more appealing to developers looking to introduce higher-end homes, Guseman said.

Improved mobility from major projects along the Grand Parkway and Hwy. 290 has incentivized developers to build northwest of Houston’s city limits, Guseman said.

PASA, which works for more than 30 Texas school districts, including CFISD, provides housing and population projections when districts plan school attendance boundaries and locations for new schools. 

Local school districts can also help bolster the real estate market in an area, Guseman said. District data—including what percent of students are economically disadvantaged and what percent are passing the State of Texas Assessments of Academic Readiness tests—can influence where developers and homebuilders choose to build and how to price homes, she said.

In CFISD, about 49 percent of students are economically disadvantaged, compared to the 59 percent state average. District students rank 14th out of the 63 largest Texas districts in STAAR passage rates. Guseman said young parents are attracted to high-performing school districts, and 15 percent of Cy-Fair’s population is between the ages of 25 and 34.

“We emphasize percent disadvantaged and STAAR because that’s what developers and builders look at our data for and ask us for daily,” she said. “We’re getting an understanding of the competitive advantage that this school district has over its neighbors.” 

In addition, 35 percent of Cy-Fair’s residents have at least a bachelor’s degree—compared to 31 percent in Houston—and the median household income is about $16,800 higher in Cy-Fair than in Houston, according to PASA.

“The in-migration of the young population has slowed, but the good news is that [Cy-Fair is] just a tiny bit more oriented to attracting the millennials,” Guseman said. “So at some point, we will see [the leap in births] again.”

Supply and demand

Developers of Cy-Fair communities said they are doing what they can to keep up with demand for new homes across a variety of price points.

Sales are up about 34 percent year over year in Bridgeland, according to Heath Melton, vice president of master-planned communities with The Howard Hughes Corporation, which developed the community.

Guseman said the Greater Houston area saw a 12 percent decline in housing starts during the oil and gas downturn, but because Cy-Fair was a regional leader in the housing market, it was affected more than neighboring districts.

While the economic downturn caused by the fall in oil prices put pressure on some of the higher-priced homes in 2015 and 2016, Melton said things started looking up toward the end of last year.

Bridgeland recently opened new neighborhood Parkland Village and plans for hundreds of new homes in the next few years ranging from $200,000 to more than $1 million.

“Our builders do a lot of their own marketing, so they really target the buyer,” he said. “But we don’t do strategic marketing to [target demographics] per se. We’re selling the community more than we are just one single product.”

Despite economic downturn, Melton said Trendmaker Homes has had success in the $500,000-$600,000+ price range this year.

Trendmaker Homes President Will Holder said the Cypress area is among the most active markets because buyers are attracted to the schools and the rural atmosphere. 

Trendmaker’s houses start in the $300,000s in Cy-Fair communities Bridgeland, Hidden Arbor and Elyson.

“We’re generally looking for people that are professional or have a pretty good income,” he said. “But there [are] young couples out there that maybe both earn $75,000 [salary], and with $150,000, you can buy a lot of home.”

In Houston’s competitive market, housing supply and demand are high, even among sellers of high-end homes, Holder said. If a home does not have exactly what a buyer is looking for, he or she can move on to another neighborhood and likely find it, he said.

“The homes are so competitive here, and technology and how we’re building homes is quickly evolving,” he said. “There’s a lot of fashion in homes, and in two or three years, it’s completely different.”

For real estate below $350,000, clients know if they do not purchase a home, someone else will within a few weeks, Holder said.

In Dellrose, Sellers said he is anticipating an influx of new residents both from within and outside of the region.

“We’re anticipating an influx of people from [Daikin Industries], but other than that, it’s mostly been locals just wanting to move to a different part of the area or looking to buy their first home,” he said. “With close to 1,500 homes [at build-out], we’re just getting underway.”

Employment effects

Guseman said Harris County’s unemployment rate has been higher than ideal at 5.7 percent in March, but she expects it to slightly decline following job growth in 2017.

“If parents don’t have a steady job and feel the least bit secure, they’re not going to relocate,” Guseman said. 

In the next two years, FedEx Ground’s new Cypress facility will create 2,200 new jobs. Daikin Texas Technology Park manufacturing plant in Waller will ultimately bring about 5,000 jobs, and many of those families are looking to move within CFISD, Guseman said.

Kari Durham, senior vice president of human resources at Daikin, said transitioning employees have mainly settled in Waller, Cypress, Katy, Magnolia, Tomball and The Woodlands. In addition, Fairfield, Cypress Creek Lakes and some smaller communities in Cy-Fair have been popular, she said.

“Employees were paired with real estate agents in advance of their home-finding trips,” Durham said. “Several area homebuilders also helped us to accommodate our employees’ needs. To date, our employees have not reported any significant issues in identifying homes in their particular price points, whether new construction or existing home inventory.”