Houston condos might be suffering, but agents aren’t worried about the luxury tier.
The median price of a Houston condo fell 21 percent year over year in September, according to CoStar. The city overall is in a buyer’s market, sharing with Dallas the stark distinction of having the largest percentage of discounted sales in the country in August.
Those trends seem to be concentrated in the lower tiers of the market, leaving a wave of new luxury condo developments in the Houston metro untroubled so far. Agents are working to fill residences under the Ritz-Carlton, Auberge and St. Regis brands. Despite weakening conditions for the overall market, they say demand for high-end condos remains strong.
“There’s been a big separation in Houston between aging inventory and new luxury product,” said Catherine Lee, president of new development for Douglas Elliman. “If anything, luxury has gone the other direction over the past year.”
The lower tier seems to be running opposite, thanks in part to Houston having more homes for sale than any other city in America. The market’s single-family inventory has been setting records this year, and some residents in older, lower-tier condos are seeing the appeal of cheap houses in the suburbs, according to Martha Turney Sotheby’s International Real Estate agent Rosie Meyers.
“If you take an old building that’s got lots of problems, then yes, just like Miami, you’re going to have a lot of depreciation right now because there’s work to be done,” Meyers said. “Our overall high-rise market is very strong because there’s no supply in Houston. I don’t see it devaluating this year in high-rises.”
Luxury residences like the St. Regis probably aren’t competing for buyers who might see condos as a rung on the ladder to the suburbs. Branded developments are banking on a particular demographic — generally older, downsizing couples, according to Lee.
“We’re seeing more locals being open to getting into condo living,” said Adriana Banks, a Douglas Elliman agent selling the St. Regis Residences.
Luxury condo developments also tend to offer significant points of difference thanks to more varied floor plans. That keeps them out of the sort of pricing competition that hits low- and mid-tier buildings, according to Douglas Elliman agent Misty Meredith, who’s selling the Mondrian and the Sophie.
“I think part of that is the life cycle of aging inventory here in Houston. There’s just not new product in that price point being built,” Lee said of cheaper condos. “And so you are starting to see some of those challenges with buildings that are greater than 15 years old.”
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