COMMENT OF THE DAY: EAST DOWNTOWN, BROUGHT TO YOU BY MONTROSE 
“I totally agree with what’s going on in EADO. Face it. It’s way too close to everywhere people want to be not to turn around. And I don’t see any bubble bursting as it’s not inflated at all. Things are still super cheap.
Our strategy for EADO, 3rd ward, and med center area can be summarized in 3 words: “BUY BUY BUY†(and sell in Montrose, at stupid high prices, to get the cash to do so).” [Cody, commenting on Townhouses Going Up in East Downtown] Illustration: Lulu
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Its stupid crazy how fast these homes sell. Too bad Hines didnt get the KBR lot. That would have been a great addition to the east side if they did their development along the Bayou.
For 3rd Ward, stay north old OST.
That area is facing redevelopment pressure with the medical center/Almeda corridor to the west, EODO to the east and midtown from the north. UH acts as a southern anchor. Parts of the area have very cool older homes some of which are in shape, others in need of major repair.
With all do respect to Cody (a person who puts his money where his mouth is), I don’t think EaDo is ready for the type of townhome developments that generated Cody’s comment. Townhomes are supposed to come after everything has been single family built out and the area is starting to undergo densification. There is still a ton of undeveloped land in EaDo. So what happens to the people who buy these townhomes when they want to sell 5 years down the line? They’re going to have to sell at a discount compared to the brand new homes and townhomes that are just being completed and come with whatever feature is trendy at the moment. And these discounted sales bring the possibility of slowing, or even reversing, the upward socioeconomic trend in the area. Yes, Eado is VERY likely to gentrify in the next couple of years, but putting the cart before the horse (denser developments before the area is built out) is not going to help that along.
That’s what we did, but left Houston altogether. If we had stayed, it would have been the East side for us.
The east side is the next big neighborhood, and always will be.
@Walt: That is sort of what the thought was about townhomes in Rice Military and other areas inside the loop. I recall a very prominent area realtor telling me that townhomes never appreciate and will only diminish in value over time. That comment was made when there was still a lot of land left on the west side of town inside the loop. That is no longer the case and townhomes have started to appreciate. Also, no one is going to build single family homes in the east end absent some minimum lot size restriction. Why build two 3000 sq ft house on a 12000 sq ft lot when you can build a dozen townhomes on the same lot?
I think the east side is a bit of gamble only for the reason that a lot of people are diving in not because of what it is, but what it might be in the future. All it takes is one good bust in the energy market and the future of the east side will be put on permanent hold.
@Old School A bust will put it on hold but it wont kill it. That area started developing back in 2002 and the 2008 drop off only slowed it down. Now with this recent resurgence and all the positives of NGL, Crude Condensate, Pipelines and Exports, it has at least another 5 years till we drop off in Houston again.
Back in the 90’s I worked at the Memorial Club apartments on the Washington traffic circle, (soon to give way to a Trader Joe’s I hear). Back then, the biggest obstacle to renting the $450 a month apartments was that sketchy neighborhood behind it, you know, Rice-Military. It didn’t take long for that to change and the same thing will happen with EaDo. Everything negative you say about EaDo could have been said about mid-town in 2000. There was nothing but vacant lots and bums there with a few townhomes and it turned.
Walt,
Your fears of a bubble being caused in this manner are unfounded. The sales of older homes (by Houston standards at least – still less than 10 years) have shot up in just the last 9 months. Sure, we always need to guard against bubbles, but I don’t think an EaDo-specific bubble is occurring, and certainly not because there aren’t existing single-family homes.
Teardowns of existing, livable (leaving out the shotgun shacks) single family homes have started (here, for instance). In the place of the teardowns are multiple townhomes.
There are some examples of irrational exuberance on the part of the developers, like the $500,000 asking price for the townhomes bounded by Nagle/Capitol/Delano/Rusk, but the recent high appreciation occurring is not out of line and has only been occurring for a few years, whereas places like the Heights and Rice Military have seen prices increases for many years, all without any neighborhood-specific bubble. Midtown, too, has avoided a bubble-then-crash and they have an even smaller stock of single family homes yards than EaDo.
EADO is the becoming the next hot hood to gentrify. It’s so close to downtown / it’s infrastructure is developing, new homes/restaurants/stadiums/etc. are going up. Of course it’ll be subject to economic ups & downs, as is ANY neighborhood. It is currently more affordable than Montrose,the Heights,etc. But give it a few years and it’ll be near/in the same price range.Demand is one of the price drivers.
i wonder what happened to the prices of all those townhouses that went up in 2002 thru 2006 in eado? up, down or stagnant? there is a lot of homeless and crime in that area, tough neighborhood.
Cody are you buying multi-family housing over on the east side or dirt for townhouse development?
dream
I bought a small piece of land (multi-family until about July) in the worst part of EaDo 5 years ago when NOBODY was interested in the area. I expected substantial LONG-term appreciation based solely on proximity to downtown. I have watched with pleasure the interest and development increase. (except for a stagnant 2008-2010) As of January-February of this year, the market has exploded and EaDo is all I hear when people talk about development in Houston.
Land is still very affordable, but new construction sells fast and for top dollar…. My favorite area in the city.
eiioi
Why the irrational exuberance comment on the townhomes bounded by Nagle/Capitol/Delano/Rusk? On a $/sq ft basis, these are right on top of and/or below other stuff going up there???
Eado has one of the lowest crime rates in Houston. Houses have been appreciating very rapidly. (I.E. a townhouse purchased for $250k in 2008 is now worth $350k+)
Love Eado.
@dream, the ones built in 2005 have gone up about 12 to 25% since they were built just north of the bayou and I-10. Im sure the ones in EADO did even better.
I gotta move to EaDo!
Tree House,
I don’t know what those ultimately sold for (two were sold last time I checked), but I think the $/sq. ft. they were asking for is quite high. The next block closer to downtown, with the same views, but closer to stadium, further from train horns, etc., would sell for around $150/ft.^2, if my data is correct.
The $564,000 asking price for the only one listed on HAR would be about $193. And that’s with 3 ridiculous flights of stairs, and no shared amenities like a pool, common party area, or gates.
Also, I wouldn’t expect the same $/sq. ft. when putting a much larger house in a given area. Outliers get pulled somewhat toward the median.
But good luck to them – whatever they can get for it. I guess if I really had inside knowledge, I would’ve made more money on real estate by now.
dream: Multifamily. We have a few lots but they’re normally ones we buy if we can get them and they’re contiguous to our multifamily properties.
For those wondering what happened to those that bought in the mid 2000’s….I bought into Eado back in late 2005 (when it had no names). Just sold my townhouse last week with about 3.6% annual appreciation. Is that great? I’ll say this, its not awful. And for those wondering about where we go next when we want more space or a yard, its just further east, whether its Eastwood, Idylwood or HCC Place.
And for those that say tons of homeless wandering around, crime, etc…had not one incident in 8 years over there. Are there some poor people still in the area? Sure of course, but most will just wave. Are there some cars broken into? Sure, but it is the city and somehow people don’t tend to break your windows when you’re parked in your own garage. And where we used to see no one using the Columbia tap trail, most mornings you’ll see a couple of dozen people out running each morning.
Eado is a great area, the future is only getting better….miss it already.
Love EADO. Neighborhood is really transforming and appreciation on home values are very strong (approx. +48% every 5 years)