Houston Builders Moving Away from Starter Homes

By Maria Scinto and DeeinAustin™ (editor)

Houston real estate developers are turning away from entry-level housing. "Starter homes" are typically priced below $150,000.

New home starts in the area are down to about 9,725 single-family homes for third quarter 2007. The Houston Chronicle reported the recent data, which had been gathered MetroStudy. and they say that this number is 28% below the number of new home starts for third quarter 2006. Turns out, though, home starts in the $225,000+ range were actually up 6.5%.

This was balanced by the fact that housing starts for homes priced $150,000 or below were down 36%.

DEMAND FOR ENTRY LEVEL HOUSING

Mike Inselmann, President of Metrostudy, says that most Houston builders are cutting way back on their entry-level housing starts, and some are even getting out of this area altogether and concentrating on building pricier models.

As a freelance writer and single mom, I think this is unfortunate. People who may be a little lower down the income scale still have housing needs.

There is a need for high-end housing, but starter homes still have their market. Developers need to keep in mind that there is demand for starter homes. Also, part of Houston's charm is its affordability. It would be nice if it could remain the kind of place that's attractive to people at all income levels.

You may be interested in our previous story on Houston real estate developing underground.

Check out Metrostudy's website.

Comments

[Dee Copeland]

my opinion is that the builders are not trying to get away from lower-priced homes because they don't care. The entry-level market has been saturated for some time now. Since the subprime market is no longer viable, builders need to start expanding on the type of housing product that they provide.

There's still a very good market for homes just above entry-level and smart builders are simply adjusting. We can see that, even though the mortgage market shifted, homes have steadily appreciated in both Austin and Houston.