Builders go small as buyers seek affordability
DESPITE historic disruptions from Hurricane Harvey and the oil price slump before that, Houston’s homebuilding market is the second-strongest in the nation.
Builders across the region started 27,675 homes over the 12 months ending in March — a 7.3 percent jump over the previous year, according to residential data and consulting firm Metrostudy. Dallas/ Fort Worth builders started 33,601 homes during the same 12-month period.
Metrostudy is forecasting more modest growth ahead, although the Houston area should see gains of 3 to 4 percent for 2018.
Demand has been strongest for moderately priced homes.
“That is the growth piece of our new-home industry,” Lawrence Dean, Houston regional director of Metrostudy, said.
DR Horton, for example, has seen success with its affordably priced Express line of homes.
The Arlington-based builder retained its top ranking in the Chronicle 100 list of the 25 biggest homebuilders in the Houston area ranked by 2017 closings.
“We aim to provide homes in a broad price point for a variety of customers from first-time homebuyers to downsizing empty nesters, but we are currently seeing an increase in the under$250,000 segment,” the company said in an email.
With 10 percent market share, Horton reported 2,676 closings among its Express, Emerald and Freedom product lines.
The price of a starter home in Houston has roughly doubled over the last decade, to more than $200,000.
As builders strive to offer more affordable homes, they are increasingly going smaller.
The smallest lots, typically 50 feet wide, are shrinking even more as builders add more 45and even 40-foot lots in some planned communities.
“Our customers are selecting smaller homes on smaller lots, as long as they’re in areas with good features,” David Weekley Homes CEO John Johnson said.
Chesmar Homes offers townhomes priced from the low $200,000s.
“It’s another way to get a more affordable entry into a master-planned community with the good schools, good amenities and all those things people want,” Dean said.
Indeed, builders are moving beyond their cookie-cutter ways of the past.
From the inner city to the suburbs, buyers are looking for options, and builders are delivering for a range of demographic groups.
Empty nesters want urban living near shops, restaurants and theaters. Millennials — who make up 61 percent of newhome buyers in Houston — want a combination of close-in location and affordability, though many of them are buying in the suburbs.
Some families want homes they can share with their aging parents. That often means two master bedrooms or an additional suite with a bedroom, bathroom and kitchenette.