Rise in jobs helps drive teardown market

Place, River Oaks and Southampton, where builders have been knocking down homes and rebuilding for years. But in some areas that have been discovered more recently, it’s a sign of prosperity.

‘ Bigger and bigger’

A few years ago, realestate agentMelodieMatlock started representing investors and small builders who were buying older homes to renovate in Oak Forest, just outside the 610 Loop in northwest Houston.

Today, she said, land has become so expensive that remodeling is rarely an option.

“Now you have to take the house down and build new,” Matlock said. The houses are getting “bigger and bigger ... to keep the cost per foot manageable.”

With fewer homes on themarket and a limited amount of land close- in, the only way to bring in new supply is often to tear down older homes.

“The inventory is just real low, so builders are trying to get as many lots as they can to build new construction so they can provide new inventory,” saidMark Holland, an agent with John Daugherty, Realtors.

Jobs and more jobs

Demand for property has been fierce.

Growth in the energy, medical and manufacturing industries has provided the Houston area with a steady stream of new jobs. Many people relocating here are doing so for high- paying positions.

The buyers of Princeton’s homes are doctors, lawyers and corporate executives, often in the energy industry.

“They’re selling to folks who are well off and don’t have to worry if they can qualify for mortgage or not,” Tollefsrud said.

Builders are often hard- pressed to find teardowns. Lots in Southampton near Rice University can be as high as $ 600,000, Holland noted.

Depending on size, property in the Heights can range from $ 270,000 to more than $ 350,000.

“I’mworking with a builder right nowtrying to find lots, and it’s really hard to find them,” he said.

Trying to get a leg up, builders or their agents will often contact homeowners in hopes they might be thinking about selling.

“I send out letters just trying to get that one phone call from someone who’smaybe going to assisted living and needs the equity they have in their home to pay for assisted living,” Matlock said. “Ormaybe someone’s getting a divorce or tired of being a landlord or wanting to sell now so they don’t have to pay capital gains next year.”

Larry Grisham has seen the surge in teardowns first hand.

The senior vice president of demolition firm JTB Services said business started to pick up about a year ago and is up asmuch as 40 percent this year.

The company is doing up to 20 single- family teardowns a month, he said, mostly in the city of Bellaire and other higherincome areas being targeted by custom builders.

Permits up

In Bellaire, 111 demolition permits were issued during the city’s fiscal year, which ended last month. That’s up 23 percent over the previous year, though the data did not differentiate between residential and commercial.

Building activity also has picked up in Braeswood Place, a collection of neighborhoods including Braes Heights, Ayrshire and other subdivisions near Brays Bayou and Buffalo Speedway.

Owners of 50 houses have submitted plans to rebuild or add on to their homes through Oct. 15 of this year, said Brenda Blackwood of the Braeswood Place Homeowners Association. During the same period last year, owners of 32 houses submitted plans.

A committee reviews and approves plans to make sure they comply with 36 sets of deed restrictions in the area.

In parts of the Heights where teardowns are restricted, builders will buy small bungalows and take on extensive remodeling projects that often more than double the home’s original size.

Mixed blessing

While new construction often lifts property values for everyone in the neighborhood, it can be a mixed blessing for homeowners.

Some worry about the character of their neighborhood changing or how the bigger homes will affect their taxes.

Others like the improvement.

Some of the older homes in Bellaire can’t be salvaged, said Abner Burnitt, co- owner of Bellaire Builders.

“Most of the people are thrilled to see some of the old stuff go,” he said.