A good tract of land is getting harder to come by, which has driven up prices
Because of increasing demand for land from developers, it has become more difficult over the past year to find an available tract of land in Cy-Fair that is both outside of the flood plain and already has access to utilities, such as water and sewer lines, Edwards said. He attributed the ongoing developer interest in Cy-Fair to several transportation projects that were either recently or soon-to-be completed—the Grand Parkway extension, the Hwy. 249 widening and the Hwy. 290 widening.
Land tracts are seeing high demand from industrial and residential developers, Edwards said. He said Caldwell Land recently closed several land sales for industrial purposes, including an 80-acre tract for an industrial park at the Grand Parkway and Cypress Rosehill Road and 1.5 million square feet of industrial space coming to Telge Road and Hwy. 290 across four major developments.
"[The highway projects] just opened this section up," he said. "With all this industrial development, it brings in residential, and when you have rooftops you get retail, and then the medical."
The increase in demand has led to an increase in price, which has led developers to seek land farther outside of Houston, Edwards said.
"This is driving the growth farther and farther from Cypress to Waller, Tomball [and] Magnolia," he said. "I think FM 2920 [at] Hwy. 249 all the way around to Hwy. 290 ... that’s going to be the next growth pattern. You can still find some larger 200-500 acre tracts. You don’t find that in Cy-Fair."
Harris County is in the process of remapping its flood plains, which are used to set insurance rates and play a role in how new development is regulated. Edwards said much of the land currently in the 500-year flood plain could end up in the 100-year flood plain after the remapping, which means developers would have to meet higher standards meant to keep their developments from making flooding worse.
"It is more difficult now to develop in the flood plain, which is going to hinder some development, especially on the north side of Hwy. 290," he said.
Almost all land purchases in Cy-Fair moving forward will go to users, not investors
Potential buyers who are interested in land are far more likely to be users as opposed to investors, Edwards said, meaning they want to actually build something on the land instead of holding it as its value increases with plans to sell it later.
Investors are less likely to buy land when prices are higher, Edwards said, noting that prices have been going up in Cy-Fair for the last ten years. A buyer looking for 100 acres for a residential project in 2000 could have found a tract for about $25,000 per acre, a price that today would be closer to $50,000 per acre, he said.
"You can’t find an investor in Cypress," Edwards said. "It’s priced for users. Going out along I-45, the same thing happened to Spring, Conroe and Willis, and now an investor is going to go to Huntsville."
The future of single-family development will involve smaller communities
Because of the high demand for land in Cy-Fair, Edwards said it is not likely for many more large tracts to go up for sale. Instead, he said developers will likely look to build smaller communities on smaller tracts. He said more developers could look to multifamily projects as well.
Edwards said some recent Caldwell land sales include 60 acres to Newmark Homes for the Copper Bend community near Tomball and 30 acres to Pulte Homes.
"I think you’re going to see smaller pods—30-acre, 60-acre developments," he said. "You’re not going to see the Towne Lakes and Bridgelands. It’s not going to be your 1,000-acre [communities]."
