Houston Demand for Large Home Sites Expected to Grow Amid Oil Recovery

Houston Business Journal

During the oil slump, demand for large home sites fell as luxury home sales slowed. However, as oil prices have climbed back above $50 a barrel, demand for large home lots is expected to grow, said Steve Spillette, president of Community Development Strategies.

“We’re hearing increased interest from builders and consumers about larger-sized homes,” Spillette said. “Moving forward, I wouldn’t be surprised if demand for larger lots comes back.”

Community Development Strategies recently released its bi-annual lot price survey, which polled developers in 100 communities across the Houston region about the cost of their home sites during the second half of 2016.

The Houston-based real estate research firm found that demand for smaller home lots is still going strong as homebuilders have rushed to construct more affordable homes during the energy downturn. In most Houston neighborhoods, prices for 50- and 60-foot home lots have climbed consistently while prices have seesawed for 70-foot and larger home lots.

In master-planned communities, the average price for a 50-foot home lot increased by $2,000 year over year to $52,000, while the average price for a 60-foot home lot increased by $5,000 year over year to $62,000, according to Community Development Strategies.

“We saw pretty healthy increases in the 50- and 60-foot lots, but it’s not quite as prominent as our last report (in early 2016),” said Ty Jacobsen, senior market and GIS analyst for Community Development Strategies. “The trend toward smaller lots is still there, but it’s not quite as pronounced.”

However, homebuilders and developers have started to notice an uptick in inquiries for larger home sites as Houston’s economy starts to recover from the oil slump, Spillette said. This shift toward larger homes on larger lots is represented in recent reports from the Houston Association of Realtors, which found that the luxury home market is making a rebound.

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