‘Affordable’ brand a moneymaker
New singlefamily home sales posted their second consecutive annual decline in Houston in 2016, a trend that persisted into the first quarter of 2017.
Area builders raised 26,949 homes in Houston last year, down from a recent peak of 28,509 in 2014, when the shale boom turned bust and slowed the pace of Houston’s growth.
The modest downturn pales in comparison with the last, when Houston homebuilding peaked at 48,157 in 2006, before the Great Recession, then bottomed out at 18,558 in 2011.
Given the scope of local job losses in the oil bust, Will Holder, former president of the Greater Houston Home Builders Association, said he would have expected “horrible famine beyond famine” in the housing market. But it wasn’t so.
“We actually have a pretty strong market,” said Holder, also president of Trendmaker Homes. “Its resilience has surprised a lot of builders.”
The strongest areas of housing growth included Sugar Land and Cypress, he said, while the northeastern submarket won the title “most improved.”
As the oil slump put a drag on the Houston economy, builders have turned their focus to more economical options, Holder said.
The local ranking for the top homebuilders was little unchanged from a year before. No company left or joined the top five, and DR Horton retained the top spot it took from Lennar in 2015. The company reported 2,728 closings, buoyed largely by construction of its “affordable” brand, Express Homes.
“The biggest story is DR Horton’s Express Homes brand,” said Lawrence Dean, regional director of Metrostudy in Houston. “This brand was just introduced about three years ago and has seen starts volume increase by 65 percent over the last two years.”
DR Horton credited the success of its Express line to economies of scale, an attractive land bank and offering fewer floor plans with fewer options.
“We are excited about the solid performance of Express Homes during its rollout, especially in the Houston area, and anticipate that our Express Homes offerings will continue to grow nationwide,” the company said in a statement.
DR Horton has eight Express Homes projects in the Houston area: two near Texas 288, one in Mission Bend, one near Katy, two near Spring, one near Beaumont Place and one near Baytown.