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Recent headlines about Houston’s residential real estate market have been dominated by news of stalled or canceled luxury condominium projects.
During the energy boom, developers announced more than a dozen luxury condo projects across Houston. But since oil prices plummeted, developers have stalled or canceled four luxury condo projects: Sims Luxury Builders’ Aurora, a 16-story, 40-unit condo project in Uptown; Butler Brothers’ Flats on Fairview, an eight-story, 14-unit condo in Montrose; Al Ross Luxury Homes’ The Monroe, a seven-story, 10-unit condo near Buffalo Bayou; and Riverway Properties’ 3615 Montrose, a seven-story, 34-unit condo in Montrose.
However, one Houston developer is capitalizing on a growing demand for more affordable condos in the Bayou City.
Surge Homes is under construction on Parc at Midtown, an 80-unit condo and townhome communityon 1.7 acres at 2401 Crawford St., a few blocks west of Interstate 45 and Highway 288, in Midtown. The homes range in size from 465 square feet for a one-bedroom condo unit to 1,528 square feet for a three-bedroom home, and in price from $172,300 to $430,260.
The gated Modern-style community features 58 one- to three-bedroom condos, half of which sold in 90 days. Since sales began in March, Surge Homes has sold 39 condos — or 67 percent of the units in Parc at Midtown. In fact, Meyers Research, a California-based research firm, ranked Parc at Midtown one of the top-selling residential communities in Houston during the first quarter of 2016.
Louis Conrad, a co-founder of Surge Homes along with Ben Lemieux, attributed the condos brisk sales to its affordable price and location. A recent Texas Association of Realtors report found that despite the oil slump,condo sales in Houston saw an 11.2 percent increase year-over-year during the first half of 2016, with the median price sold at $130,000.
“We have the right product at the right price at the right place,” Conrad said.
Surge Homes, which developed condos and master-planned communities in Canada and the U.S., conducted several focus groups and surveys to determine the right homes to develop in its new wave of communities across Houston. At its Midtown location, the Houston developer found that micro-units, units less than 500 square feet, and more affordable condos would do well.
“Condos inside the Loop is the future,” Conrad said. “Our stats show that as a whole, despite the price of oil, the condo market is growing and will continue to eat up the share inside the Loop of single family home detached and attached townhomes. Houston is becoming a more dense city.”
Although sales have cooled in Houston’s luxury housing market, demand is growing for more affordable homes inside the Loop, Conrad said.
“Houston’s condo market is healthy, but it needs a variety of condos,” Conrad said. “It can’t take an oversupply of luxury condos all at the same time. Even a healthy person can’t eat four birthday cakes in an hour.”
Paul Takahashi covers residential and multifamily commercial real estate for the Houston Business Journal. Follow him on Twitter for more.
