There is always a high demand for high quality housing inside the loop. There is a stronger demand now that many Californians have fled East to find jobs.

Several of our apartment development clients are moving forward in the Metroplex, Austin, and San Antonio. We are moving forward with site plans for infrastructure on three of them. The DFW apartment job we were awarded just last week is located in the Castle Hills area along SH 121 between Lewisville and The Colony. It is the first phase of a 250-acre mixed development. The apartments are first.

You are right about the Houston market having some saturation. None of our clients or moving on the Houston market right now since so much supply has been put on the market in the last couple of years.

The idea that the financing isn’t available is a myth. It’s there for those that qualify.

Most of our land development and site development clients anticipate San Antonio to rebound first of the Texas metros. Austin and Houston will come back next then DFW for single family specifically. DFW suffers from having to many municipal entities allowing development of smaller subdivisions. Many of these came online simultaneously flooding the market (even when it was hot). There wasn’t a clearing house for developers to gauge accurately the supply entering the market through looking at plats and permits being filed. So now the DFW area has much more supply than Houston, San Antonio, and Austin. In the Houston and San Antonio area, the majority of development occurs within some purview of a planning commission that has a large jurisdiction. Outside of the planning commission’s coverage there are only a couple of separate entities. It’s easier to keep track of the plats and permits being filed. In the Houston and San Antonio region.

As for apartments, San Antonio looks promising specifically on the south and east side. The Texas A&M expansion will generate some demand since no student housing is being added to the rapidly expanding campus. This is on the south side along Loop 410. The east side will see increase warehouse and distribution center construction to intercept trucks from Mexico. The east side is also where SH 130 is being built which will serve as a bypass route of I-35 which is congested throughout the daytime hours from San Antonio to Austin. The activity on the east side of San Antonio will spur some renewal and new growth which will require apartment housing.

really?

of the local big players (ie camden, morgan, hanover, crow, gables, etc), not one is actively looking for new sites. it has never, ever been this difficult to obtain construction financing. to put things into perspective, it was easier to get a contruction loan in the late 80s and early 90s than it is today. lenders are requiring more “real” equity, limited rent growth (if any at all), higher debt to service coverage ratios, and full recourse (except for hud 221d4 loans).

developers today are focusing on their existing product and attempting to roll construction loans into long term financing. this is especially the case with merchant builders since cant sell their current properties. they have millions tied up and the last thing they want to do is chase bad money with good.

sure, some deals will break ground going forward but to proclaim developers are actively pursuing sites is not the case. if you were a journalist, i would call your reporting irresponsible and lacking facts. for example, you claim theres “limited space” in a sub 90% market. seriously? you may want to let the managers know because most are offering concessions of up to 2 months free, waived deposits, and look/lease specials. you never, ever see those deals in a tight market.

/ real life experince rant

I think the bigger factors in the higher priced areas will be the economy. Renting a fancy place requires a good salary.

If the new oil bubble collapses like the old one did, there could be more layoffs or salary cuts.

There are also stories of yuppies or whateve they are called these days moving back in wth the parents when things get bad.

As to developers, a bigger problem may be the financing. Banks are a lot stricter than they used to be.

From the site development group at my office, they are telling me that the apartment market will heat up if the housing slump holds or gets worse. Right now developers are scouring for new sites for apartment complexes if they haven’t already.

Re: my statement above about people renting out their homes and condos, even Treasury Secretaries are doing it :)
http://www.cnbc.com/id/31082378

This is also why new construction of apartment complexes will continue. There is limited supply of rental space. Current economic condition lends itself to renting since people want to be mobile. Houston also still having an OK economy has become a magnet for people moving. San Antonio is seeing this. Developers in the Metroplex are pushing for new apartment construction also. The far suburbs of Austin are also on the rebound.

The high-rise at Studemont will be open soon. New apartments along Richmond and Westheimer in the loop have been added. A new complex on the light rail line in Midtown is underway.

The other major project that may get underway would be Regent Square. The city is interested in pushing this project by annexing more land into TIRZ #5.

The place I rented is a nice renovated 1,500 sf bungalow (1,700 sf if you include the finished attic)on an ok street with central ac, hardwoods, granite/stainless and a 1 car detatched garage. Compared to what I’ve seen in Dallas though it is probably about $700 more than I’d have paid in a similar area.

When I was looking everything I saw of similar quality in Montrose/Upper Kirby/Rice Village/ Midtown (west of the highway) was similarly priced. I didn’t want to be downtown. Realtors tried to steer me to the Galleria and I didn’t want to be there either.

For grins last month I wanted to look at a 2 bedroom place on Cherryhurst that came on the market for sale at $499k but it sold in a week before I could get in to see it. High quality on good streets must still be selling.

The flip side of people losing homes or being unable to sell is that they have to live somewhere. I don’t think rents in town will go down very much at all because there will be more renters chasing the available inventory. There isn’t a lot of new construction going on to increase supply. The only way that equation will work to lower rents is if people are moving out of town and that isn’t really happening.

Take a look at HAR and you’ll see what I mean. Limit your search to 2 bedrooms between $1,000 and $3,000 in 77006 and you’ll find 37. Granted that doesn’t include “for rent by owner” or apartment complexes but that isn’t a lot of available units. The supply is even more limited if you want a garage or off street parking.