Houston Community News >> Houston Wealthy Fight Over Expensive Homes
6/10/2006 Houston -- Emily Burguieres and her fiancé started house-hunting in Houston's most expensive neighborhood during December, expecting an easy search. What they found was a market where buyers must move fast.
"We made an offer on one that we were really excited about, but it was priced at a point where it had four other offers in one day," Burguieres, 32, said of a $1.5 million house in the city's River Oaks area. "Our Realtor told us it went over the asking price." As housing prices slow in much of the U.S., homes in River Oaks are selling faster, in larger numbers and at higher prices than a year ago. Growing demand at the top end reflects strength throughout the Houston market, which is getting a lift from soaring oil prices. The fourth-largest U.S. city is known as the world's energy capital.
"The energy business is making a lot of people wealthy," said Mike Inselmann, president of Houston-based researcher Metrostudy. "Business is good for those folks, and they're spending money." First-quarter home sales in River Oaks rose 28 percent from a year earlier, and the value of homes sold jumped 55 percent to $32.3 million, Houston real-estate firm Greenwood King Properties said. The median selling price was $1.2 million, up from $940,000.
Burguieres, a financial analyst, and her husband-to-be, an energy trader, finally closed on a $1 million River Oaks home last week. Crude-oil, natural-gas and gasoline prices surged to all-time highs last year, spurring record profits for Houston-based ConocoPhillips, Halliburton and other energy companies. Producers and service providers, wary because of past boom-bust cycles, initially were reluctant to use their burgeoning cash flows to increase spending. That's changing, as shown by the 51 percent jump in exploration spending planned this year by Houston-based Marathon Oil. "The oil industry has slowly come to believe that price incentives can be trusted this time and has finally begun to act on them," the Federal Reserve Bank of Dallas said in March.
That means good times in the Houston market, including River Oaks, an area east of downtown with tree-lined streets that attract oil barons, surgeons and lawyers. Some mansions sit on three-acre lots, boasting more than 10,000 square feet of space and price tags topping $10 million. That's in a city with a median home price of $147,000.
The largest River Oaks property for sale is a 22,364-square-foot home built in the 1980s by a Saudi prince. Now owned by a real-estate developer, the nine-bedroom home sits on a 3.2-acre lot overlooking the Buffalo Bayou. The asking price: $8 million. River Oaks' $2 million-and-over properties are selling within nine months, compared with 12 months a year ago and 21 months in 2003, according to Judy Thompson, a buyer's agent and publisher of WestURealEstate.com.
"Normally, you list a $2 million-plus property, you tell the seller it could take two years to sell," said John Daugherty, president of John Daugherty Realtors, which specializes in River Oaks. "Today, we're seeing that they can sell them in six months." The oil boom is boosting home sales in other price levels as well. With half of Houston's jobs tied directly or indirectly to oil and gas production or refining, wage gains "quickly filter through the rest of the economy," the Fed said.
(Contributed by Seattle Times)