Population boom ignites high demand for housing

The populations in Pearland and Friendswood have grown steadily since 2000, and the number of homes and housing developments under construction in the region reflect that growth.

The population boom in the area has resulted not only in an increased demand for homes, but has caused home prices to rise and also decreased the amount of time a home stays on the market, local real estate officials said. Pearland issued more than 1,060 housing permits in 2014, continuing a trend of increased building in the city.

“We’re seeing multiple offers [on homes],” said Danny Frank, CEO of Keller Williams Realty Greater Northwest Houston. “We’re seeing houses come on the market today and going off the market tomorrow.”

Population boom
The city of Pearland saw the lion's share of the population increase in the region. Its population rose from about 37,000 residents in 2000 to more than 91,000 in 2010. The dramatic rise in population made Pearland the 15th-fastest-growing city in the United States during that span when compared to cities of 10,000 people or more. The 2015 estimate for the city of Pearland puts the population at 112,300.
The most rapid growth for Pearland was in the 2000s, but the city continues to expand by about 6,000 people per year, said Matt Buchanan, president of the Pearland Economic Development Corporation.

While the growth rate is not as pronounced as Pearland, Friendswood steadily added residents each year from 2000-10. With an annual growth rate of 1.85 percent, Friendswood increased its population from less than 30,000 to 35,805 in the 10-year span, according to the U.S. Census Bureau. The 2014 population in Friendswood was 38,484.

Real estate officials said the proximity of Pearland and Friendswood to a variety of employers in the region adds to the appeal of each city. Pearland is home to the Greater Houston area’s largest concentration of Texas Medical Center employees—about 10,000 people—and both cities are close to chemical plants along the Gulf Coast.

“There’s lots of different [job] opportunities for people moving to the Pearland and Friendswood markets depending on where they want to go and how they want to move,” Frank said.
Improvements to Beltway 8 and Hwy. 288 also bolstered the number of commuters and residents in the area, Buchanan said.

“The community really started growing back when Beltway 8 and [Hwy.] 288 were developed,” he said. “Both of those major freeway systems that were built in the last 20 years created access for people to live in our community and access the job centers in the Greater Houston region.”

In addition to its proximity to Houston, Pearland and Friendswood offer quality school districts and tight-knit communities, according to local real estate agents and homebuilders.
“It’s a small-town feel with all of the benefits of being close to a big city,” Beazer Homes Division President Bruce Craig said.

High demand, low inventory
The influx of new residents to both Pearland and Friendswood has expanded the need for more housing options in both cities.

“The Pearland market is dynamically going crazy in the number of housing starts,” Frank said. “It’s booming again.”

In Friendswood, the number of households rose from 10,351 in 2000 to 13,654 in 2014, according to the U.S. Census. Pearland had 31,222 households in 2010.
With the population in the region booming, homebuilders are finding it difficult to keep up with the demand for housing, which has resulted in a low inventory of available homes, officials said. Houses in the 77581, 77584, 77546 and 77089 ZIP codes were on the market for less than 40 days according to February’s sales data.

“The [housing] inventory is very, very low,” said Sheron Granere, Better Homes and Garden Real Estate Gary Green realtor. “Houses are coming on the market—or even sometimes before they get on the market—and they already have a contract on them. It’s just really a busy, busy time. Houses are moving very quickly.”The amount of developable land ultimately will factor into how much growth Pearland and Friendswood see going forward.

“Obviously we have to have a combination of people that want to live here and available land,” Buchanan said. “Those two factors—along with the strong job market here in the Houston region—have continued to lead to more housing development in our community.”

Frank said he believes Pearland is about 95 percent built out.

“There’s not a whole lot of room left to build in the city limits of Pearland because its boundaries are bulging,” he said. “We’ve built almost everywhere that we can.”

However, calculating how much remaining residential land is available and how many more people Pearland housing could accommodate is not easy, Buchanan said. Because a single-family house or an apartment with multiple floors could be built on a given plot, that number is hard to quantify, he said.

Seller’s market
With the high demand, housing price in the area have risen substantially. The median home prices in February jumped more than 22 percent compared to last year on homes in the 77581, 77584, 77546 and 77089 ZIP codes, Frank said.

“The pricing is going up quite a bit,” he said. “When you go in one year from [a median price of] $220,000 to $269,000, that’s a huge jump. It’s strictly a supply and demand issue.”

According to the National Association of Realtors, a healthy market has a housing inventory of six months, Frank said. The Pearland and Friendswood region is experiencing a 1.6-month housing inventory. Such factors make it a seller’s market, he said.

The stability of the housing market despite increased costs shows the willingness of buyers to pay more than in the past, Craig said.

“Prices continue to rise in our communities right now, and the demand is very strong,” he said. “Those two things would tell you that it’s probably a seller’s market. Having said that, I do believe that the buyers are getting good value for [their] money.”

Source: Community Impact News