Houston, we have a problem: Downtown Houston’s high-rise condo market is still struggling.

The single-family home market in Houston has started to see signs of improvement, but the high-rise condo market is still waiting to hit rock bottom.

It is now common to see downtown Houston developers either scratching plans for new developments or renting out their high-dollar condo homes because they simply can’t sell them.

Sales and Prices Continue to Fall

In fact, sales and prices of condos in Houston’s Inner Loop have consistently fallen every quarter for the past two years. For example, according to the Houston Association of Realtors, the last quarter saw sales plummet nearly 17 percent from the same period in 2008; prices were also down 20 percent during this time.

Although Houston’s downtown high-rise market is suffering, it still doesn’t hold a candle to areas like Miami, where there are tens of thousands of units sitting vacant, unsold. In contrast, there are currently 486 unsold condo units in Houston.

The Problem in Houston

Unlike other areas of the country where property values went through the roof because of overzealous investors, many of the developers in Houston simply misread the demand for high-rise condo living. Many developers, as a result, have since pulled out of the market after having nearly no luck in pre-selling their condo units.

Many developers in Houston were thrown off course when they began to set their sights here, mainly because of Houston’s thriving population and success in the energy industry. What they didn’t consider was that many Houston residents were instead choosing single-family living over high-rise condo living because of the large price difference.

Lending Woes

The lending market didn’t help matters in Houston, either. Because of the countless condo loans that went sour, lenders became hard-pressed to offer financing for high-rise Houston condos; particularly the very expensive ones. Government-backed lenders also changed their rules regarding condo loans, thereby making it nearly impossible to land financing for a condo.

Amazingly enough, however, there are many industry analysts who say that, despite the woes of the high-rise condo market, the market in Houston remains strong.

Many high-rise condo developers are reporting an increase in sales, including Edith Personette of Highland Tower. She reports that units in this new, 16-story building have begun selling once again.

Downtown Houston is home to some of the finest residences in the city. From the Commerce Towers to 7575 Kirby Drive, downtown Houston condos are a lesson in luxury, convenience and a truly superb lifestyle.

However, is condo living right for everyone? Although the downtown Houston condos offer nearly everything a Houston professional needs, from a close proximity to nearly any area of Houston, to some of the finest and most exciting surroundings, condo living may not be for everyone.

What to Remember when Considering Downtown High-Rise Living:

• Lack of Storage Space – Although many of the Houston high-rise buildings boast spacious floor plans and personal storage rooms, it is important to understand that there is still likely a considerable less amount of space in a high-rise condominium than say, a townhome or a single-family home.
• Lack of Privacy – Unless you are one of the lucky few to reside in a penthouse condominium, a lack of privacy is often a concern for condo dwellers. Let’s face it: your neighbors are right next door, and you will almost always run into other condo residents as you make your way to and from your home, or when you partake in one of the building’s amenities, such as the fitness center or swimming pool.
• HOA Fees – Homeowners Association Fees, also known as HOA fees, are charged usually on a monthly basis to cover such building expenses as amenities and services, landscaping, maintenance and staff pay, for example. HOA fees can range from building to building, and can cover a wide array of expenses, from trash pickup to lawn care.
• Parking – Parking is typically limited in high-rise condominium buildings, although some of the more upscale condo buildings feature private parking spaces for condominium owners. Parking spaces are usually either covered in the HOA fees or are paid for as a separate expense. Your visitors and guests may also have trouble finding adequate parking.