Another non-scientific peek in consumers' home-buying brains (Houston, Howe: low income, apartments)

[LocalPlanner]

OK, your annoying planner-researcher is back with a poll and question. The scenario:

You are a prospective home buyer looking in the mid-outer suburbs. You have a good-paying job and a spouse who works part-time and takes care of your two children, ages 3 and 5, the remainder of the day. Your incomes allow you to afford a house in the $250K-$270K range, but you've found a place in what seems to be a "nice" ordinary suburban neighborhood (could be in a masterplanned community or not) that is less than 5 years old, is the right size, adequate lot, decent commuting time/distance. Best of all, you can get the house for around $205,000, allowing you to put more money away for other things (kids' college, life savings, etc.).

It's in a still-developing area with several significant tracts nearby that are still vacant.

You and your spouse are well-educated with you having a masters degree and your spouse a bachelors - you care about education quality and want adequate public schools for your children (they don't have to be the absolute pinnacle of reputation, just reasonably good). You're close to signing the contract, but then...

You find out that a production home builder will build a subdivision of 75 or so "entry-level" homes on one of the vacant tracts that is not directly adjacent to your neighborhood, but is zoned to your schools. The prices on the homes will range roughly from $105,000 to $120,000.

What do you do?

[JaqueCosto]

I'm not aware of anyone building new homes in Texas for under $120k anymore.

[LocalPlanner]

Yes, since the financial crunch that market has been pretty limited due to mortgage availability for buyers looking at that price range. However, $125,000 new homes are being built. So, indulge me by playing along with the scenario...

[studiobtm]

Not buy. Having grown up in the gutter I prefer to not view the world through rose colored glasses.

[AK123]

Originally Posted by LocalPlanner

You find out that a production home builder will build a subdivision of 75 or so "entry-level" homes on one of the vacant tracts that is not directly adjacent to your neighborhood, but is zoned to your schools. The prices on the homes will range roughly from $105,000 to $120,000.

It seems just about impossible to find a school zone that has zero "entry level" homes (newer or older), apartments or townhomes zoned to them. Even the nicest areas of town have one or more of these. Seems a bit unrealistic to strive for, if that's the main factor at least. You just want to make sure these aren't overwhelming the area, and look at the individual school ratings.

[JaqueCosto]

Yes the criteria is impossible in Houston due to its lack of zoning. I'd buy the $205k home, couple is nowhere near peak earnings and can later move to another home if they so desire.

[mingna]

Originally Posted by LocalPlanner

OK, your annoying planner-researcher is back with a poll and question. The scenario:

You are a prospective home buyer looking in the mid-outer suburbs. You have a good-paying job and a spouse who works part-time and takes care of your two children, ages 3 and 5, the remainder of the day. Your incomes allow you to afford a house in the $250K-$270K range, but you've found a place in what seems to be a "nice" ordinary suburban neighborhood (could be in a masterplanned community or not) that is less than 5 years old, is the right size, adequate lot, decent commuting time/distance. Best of all, you can get the house for around $205,000, allowing you to put more money away for other things (kids' college, life savings, etc.).

It's in a still-developing area with several significant tracts nearby that are still vacant.

You and your spouse are well-educated with you having a masters degree and your spouse a bachelors - you care about education quality and want adequate public schools for your children (they don't have to be the absolute pinnacle of reputation, just reasonably good). You're close to signing the contract, but then...

You find out that a production home builder will build a subdivision of 75 or so "entry-level" homes on one of the vacant tracts that is not directly adjacent to your neighborhood, but is zoned to your schools. The prices on the homes will range roughly from $105,000 to $120,000.

What do you do?

Is the house also within walking/biking distance to amenities such as shopping/supermarkets, parks, playgrounds, restaurants --- WITH bike paths?? If yes, then I'd buy it.

Really, for me (and many others, I suspect) it boils down to school, commute, and safety (amenities also would be nice). So I'd buy with the caveat that the adjacent starter homes are well-maintained (strong HOA?), occupants are good neighbors (no loud music/barking dogs at all hours of the night), and the pricing doesn't somehow bring in rampant criminal activity.

[mingna]

Originally Posted by AK123

It seems just about impossible to find a school zone that has zero "entry level" homes (newer or older), apartments or townhomes zoned to them. Even the nicest areas of town have one or more of these. Seems a bit unrealistic to strive for, if that's the main factor at least. You just want to make sure these aren't overwhelming the area, and look at the individual school ratings.

Regarding bolded statement, I think for the average suburbanite this would be an important point.

As for the role of school ratings in influencing home purchasing trends, this has been a source of frustration for me during the course of my own home purchasing efforts in Houston. It's really upsetting when you are looking at paying over $600K for a house, with it's accompanying exhorbitant taxes, only to have the public school zoned for child be mediocre at best. Private school is not the preferred option.

However, if a zoned school is only OK/average, but everything else checks the criteria list, what's to say it can't improve with enough parents buying in who value education enough to facilitate improvments through parental and community involvement with that school? I think this has happened in certain parts of the Heights. It clearly needs to be more widespread.

[Failed Engineer]

I wouldn't buy. Those KB homes like communities have a way of popping up near each other once one is put somewhere (probably because other builders are scared to develop near them).

Established schools which already have a build out pool of students will have poor students zoned to them via apartments or what have you (as has already been noted), but the good schools know how to manage their demographics and have been doing so for long periods of time. I wouldn't risk buying in a area where the student pool is growing, and many of those students come from KB type home developments.

I will say that many people my wife and I know are similar demographically to your hypothetical, and would probably not have a problem buying if they found the home appealing.

[crone]

Run like the wind.

The ISD demographers are saying a low income school population around about 25% is ok. When you get to 50-65% the rest of the subdivisions will suffer decreased value.

I know this because I bought into a 400K subdivision and watched while the low income at my high school went from 8% to 65%. The demographer used by my district testified at a hearing in FT. Bend county regarding a housing development.

Her testimony informs me that my ISD has flushed an entire community of homes. We are walking distance to another high school, but are bused to the 65% low income district. Our values dropped an average of 45% last year.