Mobility-driven growth

Single-family developers are hoping to capitalize on higher demand in Spring and Klein after segments F-1 and F-2 of the Grand Parkway open in February, builders said.

Laurel Glen—a 310-home master-planned community—is being developed by international real estate firm Hines near the Grand Parkway and FM 2920. The development—which will feature putting greens, a 26-acre lake and a dog park—will see its first homes available in early February, said Andrew Pear, a home sales consultant for Highland Homes, which is building homes in the community.

CalAtlantic Homes is constructing two new Spring-area neighborhoods—Laurel Park and Vistas at Klein Lake—and building four new communities within Gleannloch Farms. All  developments are less than 3 miles south of the Grand Parkway’s intersection with FM 2920.   

“Land is plentiful and cheap [near the Grand Parkway], and [builders] need large parcels,” said Barbara Thomason, president of the Houston Northwest Chamber of Commerce. “Single-family developers need a lot of land, and there aren’t too many other places that have it.”

The Grand Parkway also provides the key advantage of serving as a buffer from through traffic, Thomason said. With fewer entry and exit points than most traditional freeways, traffic is more likely to remain on the Grand Parkway and not travel through the neighborhoods, she said. 

A buyer’s market?

Interest is still high for single-family homes within Springwoods Village, a master-planned community situated near I-45 and the Grand Parkway, said Karen Travelstead, director of sales and marketing at Sullivan Brothers Builders, the company building Harper Woods—a subdivision in Springwoods Village.

However, lately many prospective homebuyers are hesitant to purchase a home without accommodations along with their acreage, such as price discounts, she said. Harper Woods has sold 23 of the 88 homes and townhomes it is constructing as demand presents itself.

“We are seeing steady traffic, but the buyers are showing a bit of reluctance,” Travelstead said. “The price of oil is stalling some buyers, and those still looking expect buyer concessions to be included.”

In Spring, the oil and gas industry has a large presence, especially near high-growth areas, such as Springwoods Village, the Vintage and FM 2920. Springwoods Village is anchored by the corporate campuses of oil companies ExxonMobil and Southwestern Energy, which announced in January it will lay off more than 1,000 employees.

However, a diverse Spring and Klein area economy is still healthy and able to ward off the foreclosures that ravaged real estate and created a stiff buyer’s market during the Great Recession, said Myeshi Briley, president of the Spring Klein Chamber of Commerce.

Industries like health care will supply enough employment growth to keep single-family sales from struggling, she said.

“It’s more than oil and gas that’s here in this area,” Briley said. “We have health care, and while the oil and gas industry is [slumping] there’s still other entities and employers that are having employees move into the area.”

Longterm, some real estate agents expect new and resale single-family homes in the area to retain their value, said Felicia Collins, owner and broker at Collins Malone Realty.

“Foreclosures—to me that’s an indication it hasn’t really affected the market that much because there are very few foreclosures,” Collins said.

Rise in rentals

Many potential homebuyers who could keep the market afloat already live in the area, said Trendmaker Homes President Will Holder. Holder said many of the residents in rental homes are saving up to make a purchase once uncertainty subsides and more millennials begin starting families.

“There’s a lot of people in rental homes right now,” Holder said. “So these people in rental homes are not going to rent forever. They’re going to unfold out into the marketplace over the next 24 months.”

Yet, rental market has picked up over the past year after increased demand has led to higher prices in Spring and Klein, Collins said. More individual buyers see rental properties as a more stable investment than stocks, she said.

“You have a lot of cash buyers out there [who] are buying homes and fixing them up and renting them out,” Collins said. “I think maybe with all of the shows on HGTV and with the stock market—it’s up and it’s down—people are looking for something that’s more steady as part of their retirement plans.”

Despite a continued increase in renting leading to more potential buyers, Holder said he still expects a slower real estate market in 2016 until the oil and gas industry stabilizes. Developers and builders will adjust, and there will be fewer home starts, he said.

“We have lots of people living in rental homes and apartments—that’s the good news,” Holder said. “The next thing is—with the decrease in new jobs—there’s going to be a decreased amount of people coming to town that are going to be net new households. So that will impact things, and we’re going to see a slower market over the next 12-24 months.”