Heights, Shady Acres, Sunset Heights, Montrose...bubble? (Houston, Katy: sale, real estate)

[hougoblin]

Hello there!

First post, but I have lurked for awhile, and really appreciate the wisdom of the city-data crowds.

We are (sigh) house-shopping, and yes, we're looking in the Heights (including Shady Acres, Sunset Heights, etc.), and the Montrose-ish area (all that hovers around Westheimer, West of downtown).

"Why those neighborhoods" is probably the subject of debate for another post, but for now I am curious about your answers to the following:

Is this the peak of the Heights real estate bubble?
Are Shady Acres & Sunset Heights at their peak too?
What about Montrose?

Basically, is it a stupid time to buy in these neighborhoods, or is it probably as good a time as it will be five years from now?
Follow-up question: If now is bad timing, where does one find rental house listings here? HAR is sparse, and Craigslist appears to be full of rental agencies hawking apartments for large complexes.

We just haven't been in town that long (a year), but I get the feeling the Heights is super bubbly right now. My impression is that pricing in the Montrose area has always been elevated.

I don't mean for this to be a rant about gentrification, I'm just surprised (and dismayed) at how quickly things fly off the shelves, and at what price points–especially in the Heights.

Thanks!
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"A foolish consistency is the hobgoblin of little minds"
- Ralph Waldo Emerson

[HookTheBrotherUp]

You are right about Montrose; I don't think we are at the height of a bubble in Montrose, not from what I see anyway, but I am not a real estate expert, just observations. Since buying in Montrose last year, I've noticed something.... first, houses go very fast, some in a few of days, others within a few weeks. There are some that do stay on the market a while though, but usually because they are over priced.

Another thing I've noticed is that there are still a lot of "wood" homes, meaning very old. These are closer to downtown/Midtown. I guess logically the older the home is, the closer to downtown it will be. Unfortunately, they seem to be demolished one by one it seems. The cost of the dirt alone is usually betweek 250-300K alone. Developers are looking for any properties in the area and there are constantly people on the prowl for a sale.

One other thing I've noticed is that some residents advertise the sale of a home by word of mouth to other neighbors, so some never show up on HAR.

My advice is to keep searching every day, use the automatic alerts from HAR, and drive, or walk around the neighborhood and keep an open eye. I did not use an agent during my search becuase I was not in a hurry, and I did not want to bother, or take an agent's time, but if you want to move "soon", then I would recommend to use an agent, tell the agent exactly what you want, and let the agent do some of the work for you, but keep the search on yourself too and alert your agent when you see anything that may interest you.

In Montrose, you don't have the luxury of being able to think about it for a week, or longer, it will be gone. Also, I used to see those HGTV shows where bidding wars would break out and always laughed because it does not happen in Katy much, but I've seen it happen in Montrose. So know what you want and keep an open mind, then bid as soon as you can.

[coconutbutter]

I bought my first house in November last year, but researched my butt off during this time.

Honestly, you couldn't have picked a worst time to buy in or around the Heights. I had been looking around the Heights as well as its surrounding areas and noticed that the prices have been going up. Most homes are on the market for a few days; a week if you're lucky (and if they were there longer, they were either 1) incrediby overpriced or 2) something was horribly wrong with it). The ones I managed to look at had an offer on the table come Monday.

I ended up buying in Brooke Smith (or incorrectly spelled Brookesmith) - 77009; below Calvacade between Main and 45 - and I'm very happy with my new home. Brooke Smith is primarily working class, but many owners maintain their homes and are updating them. It's still affordable, but prices there are also increasing.

I lived in Montrose before in an apt, but I knew that I could never afford to own anything there. Montrose isn't a bubble; it's just that expensive.

I don't see the neighborhoods going significantly down in value in the next five years unless something catastrophic happens to the Houston economy or if those neighborhoods turn to crap.

[marksmu]

I do not think the Heights is a bubble for a few reasons 1) More high income families are moving in and displacing the lower income residents. 2) The new construction is much much nicer than the older homes that they are displacing 3) location is superior to most other neighborhoods in its price range 4) still room to build out.

A bubble implies that values are inflated without warranting the inflation. The class (economic class) of people moving into the Heights has increased drastically as has the size and quality of the construction that is on going. More and more young professionals and dual income families...The lower income residents have basically been priced out with the exception of the plethora of run down apartments that still dot the heights.

The Heights has certainly increased in price drastically but I don't think its a bubble...there just are not many areas in town left that you can still build (especially without restrictions) and still live in a safe area close to town.

As an aside -Ive been in the Heights for 7 years...in the 7 years Ive been here it has changed tremendously....The hike and bike trail has done wonders for the neighborhood. The only bad thing I've seen was the historic ordinance - which has had a negative impact on property values inside its boundaries.

[RCH99]

Originally Posted by marksmu

The only bad thing I've seen was the historic ordinance - which has had a negative impact on property values inside its boundaries.

How so? I'm interested in understanding this from your perspective. The whole 'camelback' loophole around the historic ordinance seems absurd to me. Is that the negative you perceive, or the fact that those within the boundary can't cash out proportionately, even if they want to?

[Mr. Krinkle]

Originally Posted by marksmu

The only bad thing I've seen was the historic ordinance - which has had a negative impact on property values inside its boundaries.

The historic ordinance is a good thing in my opinion. Otherwise those beautiful older homes would be torn down and replaced by ugly 3 story townhomes.

[HookTheBrotherUp]

Originally Posted by Mr. Krinkle

The historic ordinance is a good thing in my opinion. Otherwise those beautiful older homes would be torn down and replaced by ugly 3 story townhomes.

The flip side to that, and I think what marksmu was referring to, is that you cannot do what you want with your home anymore. For example, if I purchased a home a few years ago with the intent of making modifications, but could not because of the economic situation, and was now ready, I would not be able to make one single change because of the historic designation, even though I may not have agreed to be in the historic zone initially.

This is America where people are free to decide, but not with certain ordinances it seems. It lowers the value of homes because one, you cannot improve a bungalow that needs updating, and two, people buying know that they cannot make any changes without a lot of red tape, if they are allowed to make changes to begin with, so they won't be buying; I won't be able to sell at my price.

I'm not arguing one way or the other, I'm just saying what I think those who don't care for them might be thinking.

[marksmu]

Originally Posted by RCH99

How so? I'm interested in understanding this from your perspective. The whole 'camelback' loophole around the historic ordinance seems absurd to me. Is that the negative you perceive, or the fact that those within the boundary can't cash out proportionately, even if they want to?

There are lots of older non-historic houses that are in need of being torn down. Many can not be rehabbed, and were either builder owned or individual owned rentals. The ordinance came in and said those properties even though in need of being destroyed can not be destroyed...they must be rebuilt, and they must be rebuilt with period appropriate exteriors (wood siding) that are inferior building materials and much more expensive not just to build with, but also to maintain.

They took lot value homes and put restrictions on them that 1) were not there when the original owners bought 2) decimated the market value of the lot....I know of several people in the districts who bought a lot (with a tear down) they intended to build on once their plans were complete (not townhomes) and now are stuck with a rental they can't sell and a set of plans that cost them $18,000 that are specific to a lot that they can't build on....There are not many people who really want the hassle of having a board of snobs (HAHC) tell them what their house must look like.

Not only that, almost all of the newly rehabbed homes in the historic districts are Camelbacks, which absolutely without a doubt is the ugliest form of architecture (if you can call it that) The Heights was not being turned into town homes even before the ordinance...it was almost exclusively stand alone homes being built. The only town homes that have popped up are isolated to what was until the ordinance came around undesirable parts of the South West Heights and a few areas along Shepherd.

What made the heights awesome was the diversity of homes, and good neighbors...and a bunch of old bitties who were getting priced out of their houses and a few snobs who felt the need to control others property got together and ruined it for everyone. They came in and said were doing it my way. They pretend they had support, but in reality the process used to create the historic districts was the absolute most dishonest process I have ever witnessed.

[RCH99]

Originally Posted by marksmu

What made the heights awesome was the diversity of homes, and good neighbors...and a bunch of old bitties who were getting priced out of their houses and a few snobs who felt the need to control others property got together and ruined it for everyone. They came in and said were doing it my way. They pretend they had support, but in reality the process used to create the historic districts was the absolute most dishonest process I have ever witnessed.

This ^ is what I was wondering. So, there is no pathway to a variance, even if the rehab numbers don't work in any manner.

[marksmu]

Originally Posted by RCH99

This ^ is what I was wondering. So, there is no pathway to a variance, even if the rehab numbers don't work in any manner.

If you are in the district and you can show that the house is not historic or that it is so far dilapidated that it can not be repaired then they will give you permission to destroy it. HOWEVER, even if given permission to destroy, the new build must meet the guidelines dictated by the HAHC so, they still get to approve/disapprove of your new house...

They make the new house look like the old houses, and that usually includes materials like wood siding. It adds about 20% to the cost of construction to get the plans approved and build the house...which may be nothing like what you wanted originally.