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Woodlands, Cinco Ranch are going strong

Their high housing start numbers are rarities in the U.S. as they capitalize on a rising economy
Katherine Fese, Houston Chronicle
Updated 1:01 pm, Tuesday, June 25, 2013

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  • Lakes, parks and open spaces are part of the plan in Cross Creek Ranch, a Johnson Development Corp. community in Fulshear, which is just west of Katy. Photo: Katherine Feser
    Lakes, parks and open spaces are part of the plan in Cross Creek Ranch, a Johnson Development Corp. community in Fulshear, which is just west of Katy. Photo: Katherine Feser

 

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Click here to see data on the Houston-area communities. 

The Woodlands and Cinco Ranch again led the area in housing starts in 2012, as strong job and population growth fueled demand across the entire Houston region.

Builders started 989 houses in The Woodlands, north of Houston, just three more than in 2011, housing consulting firm Metrostudy reported. Cinco Ranch in the Katy area had 940 housing starts, a 4 percent rise over 2011.

"The Woodlands and Cinco Ranch are still two of the most popular in the country, not just locally," said David Jarvis, Houston director of Metrostudy. "The bad news is, they're running out of land. The buyers' opportunity to get to live there is kind of growing short."

Builders could finish out the remaining lots in The Woodlands in another 18 to 24 months, and Cinco Ranch isn't far behind, Jarvis said.

Grand-scale communities where close to 1,000 houses are built each year are rare nationally, Jarvis said. Only The Villages in Ocala, Fla., and Irvine Ranch in Orange County, Calif., posted more sales than Houston's top two.

"Houston is home to the master-planned community," Jarvis said. "We invented them, and we've had more of this kind of development than anywhere in the country."

Today's developments, however, are no longer built on such a vast scale, Jarvis said. Tracts such as the 28,400 acres carved out of the forest to create The Woodlands in 1974, and the 8,700 acres that comprise Cinco Ranch, which opened in 1991, are harder to come by.

Scrambling to catch up after a major slowdown, builders started construction of 23,480 houses in the Houston area in 2012, a 30 percent increase over the previous year, Metro-study reported. That's up from a low of 18,500 in 2009, but less than half of the peak of 50,000 in 2006.

Riverstone, a 3,700-acre community straddling Sugar Land and Missouri City in Fort Bend County, ranked No. 3 on the Metrostudy list, with 486 starts in 2012, a 79 percent rise over 2011. Bridgeland, an 11,400-acre community in the northwest Houston area, ranked No. 4 with 417 starts, a 30 percent increase. Shadow Creek Ranch, a 3,500-acre community in Pearland, came in at No. 5 with 362 starts, up 28 percent.

Johnson Development Corp., developing Riverstone, Sienna Plantation, Cross Creek Ranch, Woodforest and four other communities in the Houston area, saw new-home sales shoot up 65 percent to 2,058 in 2012. Sales accelerated in 2013.

Low mortgage rates combined with easier-to-get loans and an increase in general wealth are contributing to the demand for new houses, said Doug Goff, chief operating officer of Johnson Development.

Buyers gravitate toward master-planned communities, where recreational amenities and shopping and services are close at hand and houses are available in a variety of price points.

"I think people are becoming much more secure in their current situations where they are making housing choices and buying new homes," Goff said. "We've added a number of new builders and new products that expand our offering."

In Riverstone, for example, Taylor Morrison created a gated neighborhood called Avalon at Riverstone offering homes in a "production price range" of about $300,000 to more than $800,000, Goff said. That's lower pricing than most of its other gated communities.

While the demand has been healthy in the $200,000 to $400,000 range, sales from $500,000 to more than $800,000 have really taken off across all of Johnson Development's communities.

"What's changed is the strength of the higher-end market," Goff said.

Woodforest, a 3,000-acre development just north of The Woodlands with lower prices, experienced the biggest percentage rise in the number of starts in 2012 among the top 20 communities. Builders broke ground on 266 houses, up 108 percent from 128 in 2011. Fairfield, a Friends-wood Development community northwest of Houston, saw 284 starts in 2012, up 87 percent from 152 in 2011.

Houston's annual job growth of 4.2 percent placed it No. 1 among big cities, according to the Bureau of Labor Statistics. The Houston area added 111,200 jobs in the 12-month period through April.

In terms of population growth, Houston was second only to New York City with an annual gain of nearly 35,000 people, according to the latest Census Bureau report.

The Woodlands is a major employment center, home to the expanding corporate campus of Anadarko Petroleum Corp., Huntsman, Chevron Phillips Chemical Co. and others. Just south of The Woodlands, Exxon Mobil Corp. is building a campus to house more than 10,000 employees.

That's spurring sales and driving up prices of new and used houses in the region.

"The Woodlands is the only master-planned community that grows their own jobs on-site," Jarvis said. "They have a tremendous economic development effort and have for decades."