Steady rebound predicted for Katy-area home starts
Projections indicate it may take years for Katy’s housing market, affected by the slumping oil industry, to return to its previous ferocious pace.
But area real estate officials say the market is still healthy, and housing starts, which mark the beginning of construction on homes, are predicted to climb in coming years.
“It’s true that the oil depression is affecting buyer confidence,” said Christi Borden, a Realtor at Better Homes and Gardens Real Estate Gary Greene-Katy. “People are hunkering down. Years ago, you had more buyers and sellers. But it’s good to keep perspective. Back in 2013 and 2014, we had an extreme market. Our market is more balanced now.”
The housing market in the Katy Independent School District, which stretches from about FM 2855 east to Eldridge Road, ranks second among districts in
the Houston region for housing starts, behind Fort Bend ISD, according to Metrostudy, a company that analyzes the market.
In 2013, KISD had 3,760 housing starts. The number fell to 3,611 in 2014 and to 2,742 in 2015. In the fourth quarter of last year, the district’s total of 558 starts was 198 less than for the same period in 2014.
The nearby Energy Corridor’s oil slump, which started in 2014, has affected the Katy market. More than 20,000 Katy-area residents work in the energy industry, according to the Katy Area Economic Development Council.
Fewer lots are available as large communities such as Cinco Ranch become built out while new ones such as Cane Island are just beginning, Borden said. Interest rates are also rising.
In Katy, the period it would take to sell every available house on the market was about 18 days three years ago, Borden said. Now, it’s four to five months, she said.
That worked to the advantage of a recent buyer in Katy, Jodi Schallhorn.
She had several options on homes, reflecting increased inventory in the market.
Schallhorn, an insurance broker, bought a $200,000 home in Cinco Ranch in January after living in Houston for several years.
“I knew I didn’t have to purchase right away. I had options,” Schallhorn said.
The Katy market is still strong, especially given the energy industry woes, said Kerry Gilbert of Kerry R. Gilbert & Associates, which has designed multiple developments in the Katy area.
Housing starts are headed upward, and prices have not dropped for homes below the $400,000 range, Gilbert said.
For the 12-month period starting in October, 2,470 area starts are projected, according to Population and Survey Analysts, Katy ISD’s demographer. Starts are expected to continue rising to 3,014 for the same period ending October 2020.
The market experiencing the worst slowdown is for homes costing at least $500,000 because not as many buyers can afford high prices in West Houstons’s current economy, Gilbert said.
As the new communities develop, the pace will pick back up, he said.
“Is there a slowdown? Yes. But (Katy’s market) still ranks as one of the best in the nation,” Gilbert said. “It’s going to take two to three years to catch back up.”
Schallhorn believes Katy will be a destination for homebuyers despite any economic situation.
“I have no doubt it will pick back up, both the oil industry and (housing) market,” she said. “The growth will continue because the area and schools are awesome. It will keep being an attractive place.”