The key to buying a home in Houston is to figure out the next up-and-coming neighbourhood before it arrives. For in the US’s fourth most populated city there is always a new area coming into its own as residents seek out regions as liveable, affordable and close to downtown as possible.
The tendency is to buy old houses, generally built in the 1940s or 1950s, and either refurbish them or tear them down to be replaced with the latest trend – whether it be granite countertops or French doors leading to the backyard or, these days, “green’’ investments such as energy-efficient heating and cooling, double-pane windows or walk-in showers instead of bathtubs.
Momentum is building in Westbury, a 20-minute drive from downtown. Here the tree-lined streets sell suburbia: they are quiet, close to good schools (both public and private), the Medical Center – a key employer in Houston – and the Galleria shopping mall that anchors Houston. Yet they are set back from the highways and urban sprawl that characterise any big US city.
Before Westbury hit the radar of local estate agents it was Meyerland, which followed Bellaire, which followed West University, as the circle of sought-after areas around downtown Houston steadily widened.
Steve Hajizade, an estate agent himself, bought a house in Westbury in 2007. He paid $147,000 at $79 a sq ft; houses in the area are now selling for $100 a sq ft, or more. As of November 18, Westbury had 80 listings on the market, and 20 of them were either “option pending”, or “sale pending”.
“It’s affordable,’’ Hajizade says. “A lot of people are getting priced out of Meyerland and Bellaire.’’ In those two neighbourhoods an average home that needs updating costs $340,000 and newly constructed residences easily top $1m.
Hajizade looked to Westbury because he could see its potential: “It was one of the last areas near the Galleria and downtown where you could get the square footage and a fairly large lot.’’ The houses here generally run close to 2,000 sq ft, with backyards big enough to install a pool or family-sized jungle gym. Hajizade’s home is 1,860 sq ft.
Peggie Kohnert, an agent for Keller Williams Realty, says there is less than a six-month supply of properties listed in Westbury, which makes it a seller’s market. The average is about 12 sales a month, leaving about 4-5 months of surplus housing on the market.
She takes me to see a house on Redstart that was built in 1959 at 1,895 sq ft and has been updated with wooden floors, new carpet in the bedrooms, a remodelled master bathroom, kitchen and plantation shutters.
It is listed at $298,000, a price Kohnert says would have been unheard of in Westbury three or even two years ago. The backyard has a covered patio and landscaping with built-in sprinklers. It is certainly move-in ready. The street is quiet, nearby schools are good and the neighbourhood has been laid out so that there is very little through traffic. It is ideal for a young family with one or two children.
The second home we see is a bit further out, with the distance reducing prices a touch. But that is offset by the fact that it is only a block away from a park and the local elementary school, where mothers are walking with their prams to pick up their children for the day.
It was built in 1959 and remodelled in 2005, with modern ceramic-tiled floors with granite inserts throughout most living areas, refinished hardwoods in the formal living and dining areas and new double-pane windows – a plus for those looking to reduce their energy bills.
This house, along McKnight Street, is listed at $220,000. It has custom mouldings and trim throughout, double French doors open from the den to the patio, where a sprawling oak creates a picturesque backyard. This is a barbecue town and the residents have made sure it will be suitable for one, with a custom-built deck ready for lounge chairs and entertaining amid the professionally landscaped yard.
Our final stop today is along Dryad Drive, is listed at $105,900 and is in dire need of fixing up. But for someone with the right eye, the possibilities of making this into a stylish home are very real.
As we walk in the back door, which has been left open because, truly, there is nothing here anyone would want, Kohnert talks about ripping out a wall and adding a sink to the bar that is now at the centre of the house for entertaining in the living room, which is marked by a fireplace in the corner. It is just 1,460 sq ft but, with a lot at 8,280 sq ft, there is room to build on to the home with any upgrading and convert a small closet opening to the backyard into a utility room, and so on.
The listing notes sum it up: “Great investment in a growing neighbourhood. House needs tender loving care and has a lot of potential. Bring all offers.”
With the rest of the country facing a housing crisis, there has not been any significant change in much of Houston. The economy, bolstered by the energy industry and the Medical Center, has held on, so property values have only dipped slightly.
According to the Houston Association of Realtors, the (latest available) September single-family home median price was $156,200, up 0.2 per cent from one year earlier and the fifth straight monthly increase in median price.
Property sales are a bit harder to dissect because in September 2008 Hurricane Ike tore through the region, disrupting home sales with power outages, flooding and, in some cases, wholesale destruction. September 2009 volumes of single-family home sales across the greater Houston area rose 32 per cent, compared with September 2008. Total property sales climbed 30.4 per cent year on year.
“Stacking these numbers up against a month in which Hurricane Ike devastated the local real estate industry and many other businesses is a bit unfair,’’ says Vicki Fullerton, association chair. “Nonetheless we have recently begun to see indicators suggesting that we are working our way out of the market downturn and we expect to see continued improvement.”
And this means Westbury is not the only up-and-coming neighbourhood. Expanding on the other side of downtown is the Almeda area, where Kohnert notes new constructions ranging from $185,000 to $724,900. There are currently eight sales pending, with prices ranging from $262,500 to $559,900.
Almeda is close to the city’s universities and a range of restaurants serving everything from Mexican to Jamaican food as well as coffee shops that feature poetry readings on Saturday nights. It might be better suited than Westbury for couples without children as it offers better access to nightspots and the museum district. It is also on the map for a new light rail line to take residents either downtown or into the Medical Center. The area needs more work than Westbury, which makes it more palatable to those without children, who can see the potential but do not require the good schools and refurbished playgrounds.
There are still pockets of empty lots and broken-down buildings but the 1.5-mile stretch that has been renovated, with new pavement dotted with street lamps as well as new storm and sewage drains, is already attracting attention.
Keller Williams Realty, tel; +1 713-664 6400, www.kw.com
Sheila McNulty is the FT’s US energy correspondent