COMMENT OF THE DAY: AFFORDABLE HOMES NEED SMALLER LOTS “Large houses are not the cause of being priced out of the Heights, theyâ€™re the effect. With land values approaching $75/sf at the peak of the market, thatâ€™s almost half-a-million dollars for a full-sized lot. If you put a 2000-sq.-ft. house on that lot (at $150/sf construction cost), youâ€™re looking at $800k. Or $400/sf. Thereâ€™s a very thin market for that size house at that price point.
There are tons of more affordable options in or near the Heights, but they arenâ€™t going to come with 6000 sq. ft. of dirt. The secret to providing more affordable housing is to just build more housing. In the Heights, thatâ€™s generally come in the form of replacing one bungalow with two modest two-story houses. In Shady Acres, itâ€™s usually replacing TWO bungalows with SIX townhouses. There are literally hundreds of reasonable-sized houses (2000-2500 s.f.) that have been created this way in the Free Heights over the last decade. Without them, a lot MORE people would have been priced out of the neighborhood.” [Angostura, commenting on Comment of the Day: Aren’t these the Heights Design Guidelines We’ve Been Asking For?] Illustration: Lulu
AÂ more permanent fence has taken over forÂ the one previously wrapped around the lot at 3482 Inwood Dr., whereÂ possibly-murdered apartment tycoonÂ and singer Harold FarbÂ was midway through building a house for himself and his wife at the time of his death in 2006. The property initially hit the market partial-house-and-all, with the expectation that future buyers could finish upÂ the construction of a 17,404-sq.-ft. estate overlooking the River Oaks Country Club’s golf course. After a steady price decay from $14.75 million to about $10 million by mid-2010, tactics changed; the property got a demo permitÂ and a subsequent smoothing over, and was relisted in October of 2012Â (and again in December of 2014, then to the tune of just under $9 million).
The fully re-undeveloped landÂ hit the market again last Thursday, now for $8.5 million, Here’s the current view of the front gate, and what’s inside it:
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Green in River Oaks
COMMENT OF THE DAY: GETTING THE MAXIMUM PRICE ON A MINIMUM LOT SIZE “All things being equal, restricted property is worth less than un-restricted property. However, property for which NEIGHBORING properties are restricted can be MORE valuable. Property owners accept MLS [minimum lot size] restrictions on their own property in return for MLS restrictions on their neighborsâ€™ property. If the value they give up by accepting the restriction on their own property is less than the value they gain by ensuring they wonâ€™t end up living next to a townhouse cluster, then it can be in their interest to accept the restriction.
If you own a tear-down, MLS restrictions will (probably) reduce the value of your home. If you own a valuable structure on a block with one or more tear-downs, MLS restrictions will probably INCREASE the value of your home.” [Angostura, commenting on Flyer Sent to Very Near Northside Warns of Dangers of Minimum Lot Size Designation] Illustration: Lulu
COMMENT OF THE DAY: BIG LOTS “In regards to crazy land values inside the loop, I have an opinion as an active RE broker. Anything that is 2 to 5 acres seems to be in huge demand from institutional multi-family developers. They have lenders that want to lend on apartment projects and the scarcity of larger in-fill tracts result in the $75psf average that hits a range between $60 to $85psf. What is missed here is that owners who sit on dirt in the same dense areas with smaller parcels way under 2 acres, have no market driving forces paying anywhere over $50psf. Home builders used to drive the market, but they have gone on a diet. Hope this helps put it all in perspective; there is just a higher premium paid for larger tracts.” [Janak, commenting on West Ave-Style Apartments and Retail Planned for Dunlavy Fiesta Site?]
COMMENT OF THE DAY: KEEP HOUSTON CHEAP “. . . low property values are a positive for the people of Houston and the city. Inflating property values with use restrictions just accrues big profits to established landowners, drives up rent, limits competitive experimentation to find the best use of property, and enriches politically connected individuals savvy enough to navigate the various agencies charged with approving exceptions. Ask any average person living in or thinking of moving to London to list things that are bad about the city, and the inflated property prices will be high on their list 9 times out of 10.” [Kevin, commenting on Did Weingarten Realty Just Bury the 1939 Art Deco Interior of the Alabama Theater in Concrete?]
DOWN IN THE DYNAMO DISTRICT, FEELING THE LAND RUSH What’s happening to land values around the East Downtown site of Dynamo Stadium at Texas and Dowling? “Dave Cook with Cushman & Wakefield of Texas Inc. said he has six properties listed for sale in the area with an asking price of $50 per square foot, or nearly $2.2 million per acre. ‘Thatâ€™s what the value will be when the soccer stadium is an actual reality,’ he said. Cook said property sold for $30 to $35 per square foot before the stadium site was acquired. An investor signed a contract last week, Cook added, to buy an 11,000-square-foot building on a one-acre tract at 2020 McKinney thatâ€™s leased to the City of Houston for parking administrative offices. The asking price was $2.2 million. ‘We got very close to that,’ said Cook, who would not reveal the actual sales price.” [Houston Business Journal]
GALLERIA POCKET PARK FIGHT ENDS WITH TIRZ REACHING INTO POCKET Twin septuagenerian veterinarians Jock and James Collins, whose property on the corner of San Felipe and Post Oak Ln. adjacent to BLVD Place was taken by eminent domain 2 years ago, settled their dispute with the city this past August after receiving a $990,000 payment from the Uptown TIRZ, reports Mike Snyder: “The amount of the settlement is less than the $1.4 million Wulfe offered the brothers for the property in 2006, an offer they refused because they wanted a lump sum rather than payments over several years. However, it’s more than twice the $433,800 that the city asserted the land was worth in December 2006, the agreed-upon date for settlement discussions, [the Collins brothers’ attorney, J. Cary] Gray said. The brothers contended the land was worth $1,012,000, Gray said. The Collins brothers, along with leaders of some government watchdog groups, contended the park was a pretext for providing a landscaped entrance to [Ed] Wulfe’s [Blvd Place] development at public expense. Documents obtained by the Houston Chronicle last year showed that the condemnation helped Wulfe close a $12.5 million land deal for a planned residential tower within the development, although plans for that project have been delayed because of the recession. [Mayor] White repeatedly denied that political considerations were a factor. The need for land to widen San Felipe wasn’t disputed, and White said it was a better deal for taxpayers for the city to take the entire parcel.” [Houston Chronicle; previously on Swamplot]
The Swamplot Price Adjuster needs your nominations! Found a property you think is poorly priced? Send an email to Swamplot, and be sure to include a link to the listing or photos. Tell us about the property, and explain why you think it deserves a price adjustment. Then tell us what you think a better price would be. Unless requested otherwise, all submissions to the Swamplot Price Adjuster will be kept anonymous.
Location: 4901 Evergreen St., Bellaire
Details: 6,890 sq. ft. lot, marred by only by existing house. “BEING SOLD AS LOT VALUE ONLY***DRIVE BY ONLY***Great Corner Lot***Lots of Trees**”
History: Listed at the current price since late May.
Note: Story updated below.
The reader who’s nominating this Bellaire lot wonders why it’s priced like a Bellaire house:
This is probably priced more than double what it should be. While Bellaire is not a cheap neighborhood, there are plenty of nice 3700-4000 square foot homes selling in Bellaire for this same price or lower. It isn’t even a big lot. The appraisal district appraises it at $254,069 for a price difference of $445,931 . . .
It is also a corner lot, and there is a stop sign in front of the house. I know there is an older house on the lot, but the agent is selling it “As-is” without scheduling appointments . . .
There is a beautiful 4400 sq foot house also on Evergreen a block or two away (5113 Evergreen) on a similar size lot that
is selling for 825 [was recently reduced to $799K].
What would be a better price for this little piece of Bellaire?
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That plan by the owners of Otto’s Bar B Q and Hamburgers on Memorial Dr. to shut down the restaurant, sell the land, and retire on the proceeds didn’t end up going so well after all, the Houston Business Journal‘s Allison Wollam notices. The 58-year-old restaurant
was slated to be demolished to make way for the sale of the high-profile Memorial Drive land, but the restaurant has now fully reopened after the owners were unable to find a buyer for the property. The hamburger side of the two-sided restaurant has remained in business, but the portion selling barbecue closed for a time. A sign on the door says the barbecue side of the restaurant celebrated a grand reopening on April 15.
But word of the reopening seems to be spreading slowly. The once-bustling parking lot of the restaurant, for example, was only sparsely populated during lunchtime on a day earlier [last] week.
The owners, June and Marcus Sofka, were told they might be able to get as much as $150 a square foot for their property when they listed it with Cushman & Wakefield at the end of 2007. But a real estate broker tells Wollam the 1.3-acre Otto’s property at 5502 Memorial Dr. and the 17,000-sq.-ft. shopping center the couple owns next door might be worth a little less than half of that today.
Photo: Flickr users Bob & Lorraine Kelly
POST OAK LANE PARK DOLLAR TIMELINE: ALL THE OFFERS AND COUNTERS Following up on the overview of the controversy he and Carolyn Feibel published last week, Bradley Olsen provides this updated summary of all the offers made for James and Jock Collins’s 7,230-sq.-ft. property at the the corner of San Felipe and Post Oak Ln., adjacent to Boulevard Place: “In April 2002, the Uptown Development Authority offers the Collins brothers $289,000 for their property to widen San Felipe and for other purposes (they bought it for $363,750 in 1982). They declined. In February 2004, Uptown offers the Collins brothers $398,035 for their property. They declined. Wulfe & Co. begins negotiations with the brothers to buy the property in 2004. In early 2006 (one side says March, the other says May), Wulfe and Co. offered the Collins brothers $1.985 million, which included a $1.46 million cash offer plus financing of $525,000 over five years. The brothers declined that offer, both sides confirm. The brothers counter-offer by asking for $1.7 million in cash, according to Cary Gray, their attorney. In June 2006, Wulfe and Co. responded with a $1.46 million cash offer, which they withdraw in July, according to both sides. In October 2006, the city notifies the Collins brothers of its intent to seize the land through eminent domain powers. Before filing its eminent domain lawsuit, the city gives the brothers a final offer in May 2007 of $433,800. They declined. In February 2008, a panel of special commissioners appointed in Harris County Civil Court voted to award the Collins brothers $723,000. They declined. The legal proceedings between the city and the brothers are still ongoing and are in the discovery phase.” [Houston Chronicle]
That parking lot at the corner of Richmond and Post Oak, where the Steak & Ale and Mason Jar used to be? Very popular:
In 2007, Houston-based Hines Interests LP sold 9.4 acres to Rich Oak Properties LLC, an affiliate of Boymelgreen Developers LLC of New York. Sources put the purchase price at $86 per square foot, or roughly $33 million . . .
Rich Oak ultimately opted out of building on the site and chose to sell the entire 9.4 acres.
On Dec. 21, 2007, the land was acquired by Lasco/Hicks Ventures Ltd. Sources estimate the purchase price was $140 per square foot, or roughly $57 million.
A $24 million profit? Not bad for a few months’ work. And they said the days of the Houston land flip were over!
On the same day, Lasco/Hicks flipped six acres to Elegant Development Group Inc. The buyer is affiliated with Elegant Development and Investment Inc., a Houston-based construction services company that does commercial and residential work . . .
Less than two weeks later, Elegant Development flipped the six acres to Deyaar Development.
Deyaar Development is based in Dubai, and likes tall towers.
You couldn’t invent a street address this good. But hey, maybe it’s your lucky day: The market’s down and the owner’s got to give it up.
Huge price drop too, as of this week: from $250,000 to $189,900. And that’s for a 4.24-acre lot — where you can build. With real integrity, of course.
What’s that address?
0 Player St.
Straight shooters only.
How’s that River Oaks “you loved the book, now try the home” marketing tie-in going?
Well, Stephen Fox’s volume on The Country Houses of John F. Staub is currently ranked #10,535 on Amazon.com, which probably isn’t so bad for a book about a dead architect. It is heavily discounted, but it’s collected several favorable reviews online.
The reviews aren’t looking quite as good for the Staub ranch-mansion at 3740 Willowick: The asking price was dropped earlier this month from $7,495,000 to $6,950,000. For a 2.3-acre River Oaks lot with Buffalo Bayou frontage, that’s a healthy step closer to . . . yes, land value. And looky at all the excitement just down the street!
Here’s the problem with these sleek houses on full-acre lots in River Oaks: They’re selling for too damn cheap! The gorgeous land at the southern boundary of Memorial Park fronting Buffalo Bayou at 3840 Willowick — hogged by this eighties-modern home designed by New York architects Stonehill and Taylor — got swept up for between $45 and $57 a square foot at the end of August.
At that price, wouldn’t your head be spinning with the themed-towering-mansion possibilities? Bring on the demo and stucco crews!
Well, the stucco and foam cornice pieces will probably take a while, but the big machines with the giant claws are on their way, according to this morning’s demolition report.
Photos, plans, and details of the house-that-got-in-the-way — including some fine examples of how to distract from a River Oaks land sale — after the jump:
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