Let’s begin with a pop quiz.
- How many spec new construction houses have sold in River Oaks priced above $10 million, ever?
- Zero
- 1
- 10
- 15
Answer: Zero
- How many spec new construction houses are actively on the market or in the pipeline in River Oaks priced above $10 million?
- 2
- 4
- 6
- 8
Answer: 8
But the good news is that one of them is in contract and set to close after Labor Day.
For those of you who can’t quite reach that $10 million-plus market, you’ll be glad to know that there are yet another eight offerings lining up in the $7 million to $9 million range.
We mention the activity in the nosebleed section of River Oaks, because by the end of June of this year it seemed that the high end was turning a corner, in a completely new direction. There were regular sightings of very wealthy prospective buyers swooping around the most expensive listings.
Offers were even being made, and some of them became actual pending contracts. One newly listed property across from Sleepy Hollow priced in the $9 millions came on the market in June, went into contract and closed, all within a fortnight. And for $1 million over asking.
By then end of June you could be forgiven for thinking that Houston had become destination real estate. You know, like Aspen, Beverly Hills and Manhattan.
For old hands like us it was perplexing.
Don’t take this wrong. We love Houston, and River Oaks is our favorite stomping ground. But why the sudden splurge? We’ve said it many times here, people don’t buy real estate in Houston unless they work here or have roots in the city.
Well, it turns out that Houston has not metamorphosized into Gstaad; rather, California, Colorado and New York have been coming to Houston.
This is not the same tide of attorneys and investment bankers that ushered in the newly restructured energy industry starting in 2014. Many of those lawyers have gone back to Chicago, the money men have started returning to Manhattan.
In this new wave are the investors and entrepreneurs. They are coming in small numbers, but they are carrying large amounts of cash, have different sensibilities about price, and are therefore getting a lot of attention from the real estate industry.
Anyway, things seemed to fizzle out with the arrival of July. Several contracts evaporated. But we don’t think it’s just the summer heat to blame. Real estate at the high end can be highly emotional, too. Perhaps some locals were whipped up into excitement by the tourist dollars and then thought better of it.
We will know more about the momentum of the high end in River Oaks after the grande rentrée following Labor Day. We hope September begins vigorously, if for no other reason than to clear out that backlog of inventory priced over $4 million – much of it higher than $6 million.
