Low Cost of Living

It pays to live in Houston, both literally and figuratively. Consider first that the cost of living in Houston falls nearly 11 percent below the national average. In fact, housing is nearly 27 percent less than the national average. This, of course, essentially means that you can expect to get much more for your real estate dollar in Houston than in other parts of the country.

Houston is also home to some of the finest neighborhoods in Texas. From historic homes to sprawling estates, Houston real estate is superb. Some of Houston’s most well known neighborhoods in terms of exceptional real estate include: the Woodlands, Medical Center, Museum District, Galleria, River Oaks, Katy, Sugar Land, the Heights, Montrose and Midtown and, of course, downtown Houston.

Downtown and Midtown Houston boast some of the best high rise condos in the city, and the Woodlands and River Oaks boast some of the best estates in the city.

Excellent Cultural and Entertainment Destinations

Houston is known for its great array of fun things to do. From downtown Houston to the Theater District, there is never a lack of things to do in Houston. In fact, the Theater District of Houston is home to nine, major performing arts centers and six performance halls, as well as the NASA Lyndon B. Johnson Space Center.

Houston Jobs

In addition to being a hub for technology, oil and engineering jobs, Houston is also home to the Texas Medical Center, the largest of its kind in the world. In fact, it employs over 52,000 Houston residents, and is therefore considered the backbone of the Houston economy. In addition, Houston is also home to 18 Fortune 500 companies and over 5,000 energy firms.

Weather

One of the most attractive parts of relocating to Houston may be, in fact, the weather. Houstonians enjoy year-round temperate weather, and is often a choice for retirees and empty nesters.

Last year was one of change for the commercial real estate market in Houston, as things came to a grinding halt due, in part, to lower oil prices and the poor national economy. As a result, commercial vacancies were way up in Houston, and rental prices began to free fall.

A Different Picture in 2010

Jump ahead to 2010, however, and many analysts are painting quite a different picture. With lenders now willing to once again begin lending, and with interest rates still near historic lows, many individuals have given much thought to the advantages of purchasing commercial real estate in Houston.

The next few months in Houston will be an interesting time for commercial real estate, as many investors are expected to jump into the ring and take advantage of low prices.

Houston is also expected to experience more job gains in 2010, thereby spurring a need for commercial space.  As more job gains materialize, a population growth will also likely ensue, thereby lifting the Houston economy, as well as the real estate market in whole.

As Houston continues to offer more jobs, it will continue to weather the national economic storm – and come out ahead.

Because of overbuilding last year, many building owners and developers are now anxious to sell or lease, thereby providing great opportunities for both renters and real estate investors. In other words, everyone seems to be coming out ahead in 2010.

What we can expect in 2010:

• A stronger demand for housing, due to an increase in population
• An increase in demand for commercial real estate, due to an increase in job opportunities
• A growing economy and a steady real estate market, buoyed along by a strong energy and healthcare sector

Midtown Houston is a hot spot for condominium living, and for good reason: this bustling urban atmosphere enjoys a close proximity to downtown Houston and its business district, and is also close by to a nearly endless array of shopping, dining, cultural and entertainment destinations.

The real estate in Midtown Houston provides a beautiful selection of upscale condominium homes, which are particularly ideal for young, urban professionals, small families and even empty nesters. However, with the struggling, national economy and the decline in home values, many would-be homebuyers are thinking twice about investing in a condominium home.

Make no doubt about it: purchasing a condo in Midtown Houston is different from purchasing a single-family home. As with anything else, there are a number of opportunities and challenges that exist for homebuyers who are interested in purchasing a condo property, not only in Midtown Houston, but across the country:

Challenges:

• Large down payment – Most lenders now require a much higher down payment for a condominium home than they would for a single-family home. This is due, in part, to a declining condo market throughout most of the country. Although Houston didn’t experience the boom and bust like many other markets did, it is still feeling the effects of tougher lending practices by lenders on condominiums.
• Tough financing – Many of Midtown Houston’s condo residences would be categorized under a “jumbo loan” because of their price; and, unfortunately, many lenders are now placing very strict restrictions on jumbo loans. In some parts of the country, such as Florida, many lenders have almost completely abandoned jumbo loans.
• Homeowners Association Fees – Along with a monthly mortgage payment, living in a Midtown Houston condominium also means paying HOA fees, some of which can be quite expensive.

Opportunities

• Excellent appreciation value – Because of the hot real estate market in Midtown Houston, condos here are likely to see impressive appreciation over the next few years, once the market has begun to rebound.
• No maintenance/carefree lifestyle – Often times, one of the biggest benefits to condo living is that maintenance is virtually eliminated. As a result, condo homeowners can enjoy a more carefree lifestyle.
• Amenities and Services – Most condo buildings boasts a great deal of excellent amenities and services, from concierge and porter service to swimming pools and fitness centers.

So, you’ve listed your home on the market, only to see that, in your neighborhood alone, there are a half-dozen homes on the market that are similar to yours. What can you do to make yourself stand apart from the competition?

The answer: plenty.

1. Offer new appliances – Most buyers would love to have new appliances in their new home, so consider purchasing new appliances before listing your home for sale. The few thousand dollar investment will certainly be worth your while.
2. Consider closing cost assistance – One of the most popular ways to gain a competitive edge is to market your home with the offer of closing cost assistance. Many buyers, particularly first-time buyers, would love the chance to save on their out-of-pocket expenses at closing. Many times, sellers will offer to pay half of the buyer’s closing costs, for example.
3. Price it right – There is absolutely no better way to gain a competitive advantage over other homes in your neighborhood is to price it right – from the beginning! If you want to sell your home in this market, you must price it to sell; otherwise, it will end up sitting on the market for an extended period of time –even after you lower the price.
4. Make it move-in ready – Buyers of today, because there is often such a large selection of homes on the market, want a home that is move-in ready. A turn-key Houston home is a home in which all repairs, upgrades and updates have been made; in other words, the only thing a buyer has to do is turn the key and settle in. Repairs and improvements to consider: replacing worn or stained carpeting; painting all of the walls with a soft, neutral color; updating all light fixtures and faucets; and performing any small repair jobs.

In contrast, the better part of 2008 saw escalating rent prices and a low vacancy rate. In other words, the commercial real estate market in 2009 started to feel the pain of the crumbling national economy and equally grim housing market.

Office Building Sales

Sales of office buildings were down nearly 56 percent in the last month of 2008, compared to the same time a year earlier. As office building sales decreased, the demand for office space also decreased, thereby prompting many companies to postpone moving or expanding their operations.

Office space vacancy was about 13 percent at the end of 2008, which was a 12 percent increase from 2007. As a result, it was quite reasonable to expect perks from landlords, such as free rent, parking concessions and other bonuses.

The slowdown of the Houston commercial real estate market in 2009 began happening at the same time builders were adding nearly five million square feet of office space to the Houston market. As a result, just 35 percent of that space was pre-leased.

Companies Pulling Back, Vacancies on the Rise

With falling oil prices, many companies in the Houston area have chosen to delay hiring new employees, and some have even been left no choice but to cut their workforce.

However, the Texas Medical Center and the Port of Houston continue to be strong points for Houston, and are expected to buoy rental prices.

Although the Houston commercial real estate market suffered alongside the many other large markets in the United States over 2009, it is important to keep everything in perspective: Houston saw a 56 percent drop in property sales, while nationwide property sales were down nearly 70 percent.

The real estate market in River Oaks has shown considerable growth, even throughout the past year and despite the poor, national economy, thereby allowing homes in this exclusive section of Houston to steadily appreciate over the last few years.

The Appeal of River Oaks

This affluent suburb of Houston is a draw for many investors, for several reasons: it is filled with exceptional homes on equally exceptional lots; it is surrounded by an old-world charm that gives it a distinct appeal; and it is just minutes from the opportunities of downtown Houston.

As a result, many professionals, CEOs and entrepreneurs call River Oaks home. River Oaks is now home to some of the most expensive properties and estates in Houston, if not Texas. The lavish lifestyle and superb, stately homes make River Oaks the crème de la crème of Houston high society.

Architecture and Opulence Reign Supreme

The homes of River Oaks are special in many ways. Aside from being magnificent in their luxury and opulence, many of the homes in River Oaks were designed by leading names in architecture of their time. As a result, the architecture and design of these homes are simply unsurpassed.

Ride down any of the winding, picturesque streets of River Oaks and you’ll immediately notice the grandeur of the period architecture.

Strict deed requirements in this affluent community have kept new construction to a minimum. New homes and commercial buildings in River Oaks must adhere to a narrow design element so that all of the structures here show cohesiveness in style.

The bottom line is that you can’t go wrong as an investor in River Oaks. The demand remains strong and the sales of homes in this community are a testament to the fact that River Oaks continues to remain a highly desired suburb in Houston.

Any gains in 2008 were erased – and then some – as 2008 saw a positive net absorption of 2.74 million square feet.

Currently, leasable office space in Houston stands at about 190.6 million square feet. An additional 5.4 million square feet worth of new office space was added to this sector last year, and another 2.4 million square feet of new office space is expected to enter the market in 2010.

Fourth Quarter Woes

The fourth quarter was, no doubt, the root of the problem in 2009, as the market experienced about a one million square feet net loss during this time.

There were, however, key markets that experienced a positive net absorption in 2009, including: Clear Lake, East, Energy Corridor, Greater Pearland and Katy Freeway.

Opportunities for Growing Companies

With Houston’s office space market struggling, a nearly 18 percent of all office space currently vacant, this may prove to be a great opportunity for thriving and growing businesses in the Houston region.

For many companies, 2010 may be the year to reevaluate your office space needs or to renegotiate your lease.

Houston’s office market has no doubt switched from a landlord market to a tenant market over the last year, thereby creating quite an opportunity for business owners everywhere. As businesses cut jobs and the weaker economic climate took over, vacancy rates climbed and office space absorption soared. Rental rates also saw a decline during this period, dropping nearly nine percent between the second and third quarters of 2009.

For renters, that means plenty of opportunities:

• Start looking into office space well in advance of your lease expiration.
• Start analyzing your office space needs – consider hiring an architect to perform a space analysis for you.
• Take a look at your office space efficiency and find ways to improve it. In other words, make sure you are efficiently utilizing your office space so you get your money’s worth. On the other hand, avoid getting into office space that is simply too large for your needs.
• When your lease contract is up, talk to your landlord about restructuring your rental rate to reflect the current market conditions.
• Consider upgrading your office location. With the current market conditions, you may be poised to advance to a better location, which may help your business succeed.

Whatever your reason for downsizing, it is often just a process that many of us will have to deal with at some point in our lives. However, it is easy to simplify and lessen the blow of downsizing by taking it slow and by giving yourself a chance to adjust to your new situation:

• Downsizing into a smaller Katy home often means downsizing your belongings, as well. This process can be emotionally difficult, so take it slowly, and tackle one room at a time. Don’t try to get through all of your belongings over the course of a day or two, as this will only prove to be mentally exhausting. Instead, start the process as soon as you know you are moving and make a promise to sort through your belongings in a more methodical manner. For example, you may choose to set a goal of sorting through a room’s worth of belongings every week.
• Consider donating, selling or gifting certain items in your home. Many times, the difficulties involved with downsizing have to do with getting rid of things that we once held dear. However, many individuals find that gifting certain items to friends and family, or donating items to charity, makes this process much easier. You may also want to consider holding a garage sale – what better way to earn money for your move to your new Katy home!
• Color code your boxes according to the room in which they came from so unpacking is made easier. It is much easier to look for all the red dots, for example, than to find boxes labeled “kitchen.” You can purchase colored dots from any office supply store.
• Take measurement of the rooms of your new home so you can determine how your furniture and other belongings will fit into your new space. This can eliminate the problem of moving furniture and other items that are simply too large to fit into your new space.

But even the Inner Loop has its share of woes, due, in part, to the national housing market mayhem and the poor, national economy.

The Demise of a New, Gated Community

Take for example the Willowick Court Townhomes. The owner of this property had big plans to redevelop it and turn it into a gated community of multi-million dollar estates. However, given the poor nature of the economy, these plans have been scrapped. The owner is expected to sell the existing units instead.

Right now, the plans for this development include selling the current 171 homes for between $235,000 and $295,000, while at the same time making some much needed structural and landscaping improvements.

The homes of the Willowick Court Townhomes, which are about 1,800 square feet in size, are not a condo arrangement; instead, the homeowners will own the entire structure, and not just the interior.

Original Plans Scrapped

The original plan, which was to be an 11-acre development called Willowick Place at River Oaks, was marketed last year and, as a result, the owner had pre-sold nearly 30 percent of the lots. However, because of the subsequent economic downturn, the owner felt that it would be prudent to forgo these plans and instead focus on selling the existing townhomes.

Inner Loop Real Estate

Many of the Inner Loop neighborhoods boast new construction, as many of the older homes are torn down in favor of more substantial homes. The lots, however, seem to be the driving force in the Inner Loop, as many home buyers are choosing to tear down the existing homes and instead build larger homes ranging in size from 2,000 to 8,000 square feet.

The older homes of the Inner Loop, however, often boast much charm and original character, which many homebuyers are searching for.

The Houston Heights Association is a nonprofit organization that was formed in 1973 for the “purpose of encouraging and promoting the enhancement of the Houston Heights community.”

As result, this organization has been responsible for much of Houston Heights’ revitalization and growth over the last 25 years. From establishing deed restrictions and community assistance programs to reducing crime and beautifying the city through historic preservation and revitalization, the Houston Heights Association works to “enhance the community by fostering a sense of identity and camaraderie.”

The Houston Heights Association, in 1983, worked to designate Houston Heights as a Historic Multiple Resource Area by the National Park Service; as a result, Houston Heights was listed on the National Register of Historic Places. There are currently more than 100 individually listed private and public buildings in Houston Heights.

In 1991, Houston also designated Houston Heights as a Historical District of the City of Houston.

Since the inception of Houston Heights as a master-planned community in 1891, this progressive city has proven that grand Victorian mansions can coexist beautifully with thriving business districts.

Houston Heights Association Committees

Some of the recent committees of the Houston Heights Association include: the Heights playground in Donovan Park; the restoration of the Fire Station; the Historic Lighting project; the Paul Carr jogging trail; and the Heights Boulevard beautification project.

Some of the annual events hosted by the Houston Heights Association include:

• The Spring Home & Garden Tour – A home and garden tour of six Houston Heights’ homes and gardens; to be held April 10 and 11, 2010
• The Heights Fun Run – A 5K Fun Run/5K Walk along Heights Boulevard; rated one of the best fun runs in Houston by the Houston Chronicle; to be held in June 2010
• The Heights Bicycle Rally – A 15-mile bicycle course beginning and ending at the Heights City Hall and Fire Station; to be held October 3, 2010
• The Holiday Home Tour -  A home tour featuring six homes decorated in the holiday tradition; to be held December 3 and 4, 2010