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Houston Housing Market Shows Strength
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Houston Housing Market Shows Strength

Economy

Houston Housing Market Shows Strength
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RENEE MONTAGNE, host:

On Fridays, we focus on your money. And for many, home is their biggest investment.

Lately, the news has not been good. New home sales declined sharply in February. The National Association of Realtors says the crisis in subprime mortgages could make things worse.

One place where the story is different, Houston. That city is in the midst of a housing boom. Ed Mayberry of Houston Public Radio reports.

ED MAYBERRY: To get a sense of Houston's real estate market, head to 7526 Baldwin Crossing in Sugar Land, southwest of Houston.

Mr. ERIC BEARER(ph) (Realtor): Hi, John(ph). Eric here.

JOHN (Buyer): Hi, Eric.

Mr. BEARER: With Trendmaker Homes(ph).

Unidentified Woman: (unintelligible).

Mr. BEARER: Enjoy. Nice to meet you both. Welcome to our lovely model home.

Unidentified Woman: Thank you.

JOHN: Thank you.

Mr. BEARER: Very important. What you see is largely what you get.

MAYBERRY: Realtor Eric Bearer shows off a massive two-story $400,000 home to a couple. It's one of several for sale in this upscale neighborhood.

Mr. BEARER: We got a lot of local buyers and we get a lot of people from other parts of the country where housing has become not affordable anymore.

MAYBERRY: Unlike a lot of other big cities that are hemmed in by geography, the Houston area is in the midst of a building boom.

(Soundbite of construction)

MAYBERRY: Downtown neighborhoods are being revitalized and new housing tracts sprout up seemingly overnight. Rob Cook, with the Houston Association of Realtors, attributes part of Houston's success to land availability.

Mr. ROB COOK (Board Chairman, Houston Association of Realtors): We're not landlocked, and that's a big help for us. We've expanded in every direction -north, south, east and west. A lot of land, old farms, ranches, and things like that people are taking, converting, developing into single-family residences.

MAYBERRY: This housing surge is also due in part because Houston added 100,000 jobs last year, the most of any city in the country according to the U.S. Bureau of Labor Statistics, and homes have stayed affordable. Nationwide, the Commerce Department says the median sales price of a single-family residence is $250,000. In Houston, it's just $146,000. Houston mayor, Bill White, says it's all down to the city's quality of life. Even though it does get hot and humid here.

Mayor BILL WHITE (Houston, Texas): I know some of us may complain about the weather in August. But, you know, this is a city that has one of the largest amounts of parks per capita. We have good schools and schools that are improving Houston right now is on a roll.

MAYBERRY: Besides land availability and job growth, a lack of government regulations also fuels Houston's real estate boom. Joe Zimmerman with KB Homes says for one thing, there are no zoning laws.

Mr. JOE ZIMMERMAN (President, KB Homes): You have a very well networked transportation system, and parcels available off those major highways that makes it pretty easy to pick up land at an affordable level so that you can build a subdivision.

MAYBERRY: Houston has lower labor costs and has made the permitting process easier for developers. But the lack of zoning laws means a jumble of development. Realtor Eric Bearer says that translates to other problems.

Mr. BEARER: You can only expand so far out before you have traffic issues and commute times become longer and longer. So we may see a spike in prices here, similar to what has happened in the larger cities on either coast.

MAYBERRY: Big builders like Lennar and Toll Brothers have seen steep home sale declines in recent months. While it's true Houston's market is soaring, realtors here remain cautious. Total property sales increased nearly nine percent in January, but only two percent in February.

For NPR News, I'm Ed Mayberry in Houston.

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