Why don't new MPCs build starter homes anymore? (Houston, Dickinson: renting, mortgage)

[gwarnecke]

IMO, new homes made terrible starter homes even before recent price increases. A new starter home is likely wayyy out beyond the established suburbs, on a small treeless lot. Any purchase price savings will be eaten away at by extra time and $ spent commuting and increased electricity usage and energy bills with no shade trees. Also, there's a real risk of the neighborhood declining if too many of the nearby homes become rentals (I've got no problem with SFH rentals in general - plenty of them are very nice - am just wary of too many in one area, especially at the lower end of the market).

With a starter home budget, your $ will go much further in a nice 20-30 year old neighborhood with decent schools, long-term residents and mature trees.

[NTexas2010]

Originally Posted by Corridor Chick

How are the schools Tamarron is zoned to? I'm not familiar with it.


I'm not asking because I'm looking to move, honestly just curious. And I guess, looking again at my question, it's really not so much that MPCs don't have starter homes, more that the ones that do aren't zoned to desirable schools (i.e. Grand Mission).

For the time being, Tamarron is zoned to Fulshear HS, one of the top 2 (three if you add Foster as a 3rd place finisher) high schools in LCISD. However, the next two high schools are projected to relieve overcrowding at Fulshear and Foster HS, which means attendance zone boundaries are guaranteed to shuffle.

And my comment slighting Tamarron is less about the presence of "starter homes" and more about the proportion of under 250k builds compared to high end builds, and the sheer volume of them. A "good" (subjectively) MPC keeps a pretty even mix of entry level, mid-tier, and high end price points throughout the community. Tamarron lacks that balance and high end makeup for an otherwise very large development.

There is absolutely nothing wrong with "pocket" starter neighborhoods that max out at, say, 100 homes.

Examples that come to mind that struck this balance are CCR, New Territory, Greatwood, Cinco Ranch, et al developments from the likes of Johnson and Newland.

[hbcu]

Look at it like this - less starter homes fuels more demand for multifamily living or investor driven rent property which is worse than starter homes as those same folks who could own are now crammed in with folks creating that same vicious cycle

There's a reason these new communities are popping with tons of multi family options cause folks can't afford to start anymore.

So again - starter homes or apartment glut?

[LocalPlanner]

Originally Posted by hbcu

Look at it like this - less starter homes fuels more demand for multifamily living or investor driven rent property which is worse than starter homes as those same folks who could own are now crammed in with folks creating that same vicious cycle

There's a reason these new communities are popping with tons of multi family options cause folks can't afford to start anymore.

So again - starter homes or apartment glut?

Exactly, the demand from middle class 1st time buyers has to be satisfied somehow.

The mentality that once you've reached the upper middle class that you and your kids have to be completely insulated from regular middle and working class people (because somehow you'll be harmed by them, I guess?) is utterly ridiculous.

[bu2]

Originally Posted by Corridor Chick

This is a question that I have wondered about more and more lately. When you look at real estate listings for older MPCs like Clear Lake City, Copperfield, First Colony, etc., you can find 3/2 homes (I've even seen 2/2 in the Chimneystone neighborhood of FC) as small as or even smaller than 1500 square feet. Not so in Sienna, Cross Creek Ranch, etc. Why is that? Is it not cost-effective for the builders? Or something else? Just curious.

In addition to all the other answers, the average size of a home has gone up since they were built. People are demanding more space.

https://www.newser.com/story/225645/...by-decade.html
Average by decade:

1920: 1,048 square feet
1930: 1,129
1940: 1,177
1950: 983
1960: 1,289
1970: 1,500
1980: 1,740
1990: 2,080
2000: 2,266
2010: 2,392
2014: 2,657

[NTexas2010]

Originally Posted by LocalPlanner

Exactly, the demand from middle class 1st time buyers has to be satisfied somehow.

The mentality that once you've reached the upper middle class that you and your kids have to be completely insulated from regular middle and working class people (because somehow you'll be harmed by them, I guess?) is utterly ridiculous.

Sure. Ideally, IMO, that demand would be better met if 1st time buyer price point homes were more evenly distributed among the MPCs, rather than large scale development that only tops out at 1st time and possibly 1st + 1 tier above price point homes. I think in this instance the high tide raises all boats and ensures property values remain stable and secure if you have a healthy mix of all price points in MPCs.

Of course, you have to get developers (and the buying public) to be on board with the idea of sharing a community between 200k homeowners and $1M homeowners.

[mojo101]

Our builder used to build such starter homes,first it was 3 bedrooms with fireplace 2 car garage,formal dining room,2 bathrooms ,one with shower,walk in closet,large lot.
then it skipped the dining room on smaller lot for 95K.
BUILDER went under.
THere is no money made in starter home given all the material and labor are sky high

[LocalPlanner]

Originally Posted by NTexas2010

Sure. Ideally, IMO, that demand would be better met if 1st time buyer price point homes were more evenly distributed among the MPCs, rather than large scale development that only tops out at 1st time and possibly 1st + 1 tier above price point homes. I think in this instance the high tide raises all boats and ensures property values remain stable and secure if you have a healthy mix of all price points in MPCs.

Of course, you have to get developers (and the buying public) to be on board with the idea of sharing a community between 200k homeowners and $1M homeowners.

Having a range of price points and product types is generally a good strategy that reduces risk for the developer.

But you have to remember, the volume of buyers at lower price points is generally much larger than the volume at the high end. It's a pyramid. By lower price points, I mean $250K - $325K, which is now the "starter home" price range for new SF homes in the Houston region. And I'm not even sure $250K is doable much of the time because of development and construction costs.

And furthermore, no MPC developer can guarantee school zoning that will assure the buyer of a $600K home than children from another development of $280,000 homes won't also be in their classroom. Nor should they be able to.

[ganadocoog]

I’ve seen several times that there is more money to be made if builders build higher end and larger housing. Don’t know the exact numbers but think something like it might cost them $225K to build a starter home that they can sell for $250K. $25K profit on that lot. Bigger home might cost them $450K to build but they can sell for $500K. $50K profit on same size lot. Numbers are just guesses but that is the general idea.

[NTexas2010]

Originally Posted by LocalPlanner

Having a range of price points and product types is generally a good strategy that reduces risk for the developer.

But you have to remember, the volume of buyers at lower price points is generally much larger than the volume at the high end. It's a pyramid. By lower price points, I mean $250K - $325K, which is now the "starter home" price range for new SF homes in the Houston region. And I'm not even sure $250K is doable much of the time because of development and construction costs.

And furthermore, no MPC developer can guarantee school zoning that will assure the buyer of a $600K home than children from another development of $280,000 homes won't also be in their classroom. Nor should they be able to.

That's fair on the price point distribution. And I have to recalibrate my idea behind an MPC equating to one local elementary where all of the price points end up zoned together (which is mostly how I grew up); it is not uncommon for some of these larger scale developments to have 2, 3, 4+ elementaries zoned to two different high school tracks, possibly even different ISDs if they straddle school boundary lines. And that is where you end up with the haves and the have nots in the same MPCs.