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On the Money: High value homes amidst an oil crunch

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Saturday, January 24, 2015 • Page 1B

On the Money

Will it ever lease?

Contributed Photo

Contributed Photo $1 million homes like this residence offer extravagant living for those willing to pay the price. According to local experts, prices of higher priced homes in the area have soared in the last six months, but there is some worry of how the recent energy crunch could impact the market.

How the $1 million home is becoming a reality in the Leader area despite oil crunch By Betsy Denson betsy@theleadernews.com What used to be just a catchphrase or sound bite in the area – the $1 million home – is now a growing reality in Leader communities, even with the oil market standing on shaky ground. According to the Houston Association of Realtors website, there are 28 homes selling for over a million in the 77018 zip code, with most of those in the Oak Forest area. Caroline Schlemmer with Greenwood King Properties said that there are currently two homes priced between $995k and $1.1 million for sale in the Heights, with an additional 21 homes offered for between $1.2 million to $1.7 million. But just what makes a home a million dollar investment in our area? And with the volatility in the Houston job market thanks to the dropping price in oil, will it continue? Shawn McGregor, the owner of Alleanza Custom Homes, builds high end homes in the area, including a few million dollar homes in Oak Forest with a couple more coming down the pike in Garden Oaks. McGregor said that about 75 percent of the reason for the rise in the $1 million home is the increase in land costs. “It’s the free market,� McGregor said. “There are only a set number of properties available.� In other words, people educate themselves and when it comes time to sell their lot, they are going to go for the best possible price. They may call five different builders and start a bidding war that inches the price up. “In the past 24 months of this the cost of a lot has inched up as much as $150,000 in some cases,� said McGregor, who notes that the going price for a lot in the Garden Oaks and Oak Forest area is between $300,000 and $350,000. The other roughly 25 percent is the cost of

labor, McGregor said. There has been a building boom going on and only a finite number of people to do the work, so skilled craftsmen are also in demand. McGregor said he has a loyal team, but it’s also a necessity to pay them well lest they go elsewhere. Then of course there are the details – the devil isn’t in them but the money is. “What separates the pros from the rookies is the specifics, the things that a knowledgeable buyer would look at and be willing to pay top dollar for,� McGregor said. “It’s the way you finish things. Every square foot needs to be thought out.� While $1 million homes might be a relatively new phenomenon in Oak Forest, the Heights has been seeing them for longer. Ashley Day with Circa Real Estate has sold two homes in the million dollar range recently and said that they are becoming more common. “Prices have soared in the last six months,� Day said. “Inventory was low, and multiple offers ensued, resulting in sales price well over list price in many cases. Then higher sales prices made for better comps.� Day said that the details in homes that made the difference for buyers were custom features, like a built in butler’s pantry, kitchens with two dishwashers and sinks, a coffee bar in the master bath, his and hers closets and even a panic room. “The Heights certainly has a luxury market,� Day said. She’s even attending training put on by the Institute for Luxury Home Marketing at the end of this month to earn their designation for a luxury home specialist. Location, size are top draws The reason people are looking to move to the See Million, P. 3B

In the case of the old Eckerd/CVS at 1925 E. T.C. Jester Blvd., which has been vacant for at least 10 years, the answer is affirmative. Leasing agent Hunter Jaggard with Avison Young said that a contract was signed last week on the 15,000 square foot space. It will be a 24-hour medical center. The center’s name is not known at the present time but the company also operates a clinic in Sugarland. Jaggard has been working to lease the space for a year and at one time was talking with a brewery who was interested in the property, which backs up to White Oak Bayou, but said, they “couldn’t make it work.� Is there a commercial space or building you’re interested in knowing about? E-mail betsy@ theleadernews.com

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Contributed Photo It’s not uncommon for such $1 million homes to feature large foyers, vaulted ceilings and open floor plans, but how will the luxury market be impacted in Houston by falling oil prices?

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